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THE NEW YORK TIMES: Chávez, Seeking Foreign Allies, Spends Billions

Published: April 4, 2006
CARACAS, Venezuela — President Hugo Chávez is spending billions of dollars of his country's oil windfall on pet projects abroad, aimed at setting up his leftist government as a political counterpoint to the conservative Bush administration in the region.
With Venezuela's oil revenues rising 32 percent last year, Mr. Chávez has been subsidizing samba parades in Brazil, eye surgery for poor Mexicans and even heating fuel for poor families from Maine to the Bronx to Philadelphia. By some estimates, the spending now surpasses the nearly $2 billion Washington allocates annually to pay for development programs and the drug war in western South America.
The new spending has given more power to a leader who has been provocatively building a bulwark against what he has called American imperialistic aims in Latin America. Mr. Chávez frequently derides Mr. Bush and his top aides. In March, he called Mr. Bush a “donkey,” a “drunkard” and a “coward,” daring him to invade the country.
But with the biggest oil reserves outside the Middle East, Mr. Chávez is more than an irritant. He is fast rising as the next Fidel Castro, a hero to the masses who is intent on opposing every move the United States makes, but with an important advantage.
“He's managed to do what Fidel Castro never could,” said Stephen Johnson, a scholar at the conservative Heritage Foundation. “Castro never had an independent source of income the way Chávez does. Chávez is filling a void that Castro left for him, leading nonaligned nations.”
It remains unclear exactly how much the government has spent, because the state oil giant, Petróleos de Venezuela, has not made detailed financial records public, and its balance sheets have been shielded from independent audits. Mega-projects, like Mr. Chávez's utopian plan of building a gas pipeline through the Amazon from Venezuela to Argentina, are not likely to materialize.
But Mr. Johnson estimates that Venezuela pledged $3 billion in aid last year to its neighbors, including generous bond purchases that made the government a lender of last resort across the continent.
The Center of Economic Investigations, an economic consulting firm in Caracas, issued a study recently that said Mr. Chávez had spent more than $25 billion abroad since taking office in 1999, about $3.6 billion a year, while First Justice, a leading opposition party, put the figure at $16 billion, based on Mr. Chávez's own declarations.
What is clear is that upward of 30 countries as far away as Indonesia have received some form of aid or preferential deals.
His government has purchased $2.5 billion in Argentine debt, the Venezuelan finance minister, Nelson Merentes, recently said, and was selling oil at cut-rate prices to 13 Caribbean countries and buying a big stake in Uruguayan gas stations. Some projects are as ambitious as the planned $3 billion purchase of 36 Brazilian oil tankers. Others are as modest as the $3.8 million in aid Venezuela has provided to four African countries.
Critics see the spending as a reckless exercise in populist decadence intended to burnish Mr. Chávez's image as the region's leading statesmen while embarrassing the Bush administration, the Venezuelan leader's principal obsession since American officials gave tacit support to a failed coup against him in 2002. Venezuela may be enjoying record high oil prices, they say, but it remains poor and mismanaged.
Mr. Chávez is “spending considerable sums involving himself in the political and economic life of other countries in Latin America and elsewhere, this despite the very real economic development and social needs of his own country,” said John Negroponte, the American director of national intelligence, in February at a Congressional hearing in Washington.
Antonio Ledezma, an opposition leader and one of the president's more determined foes, said the policy's aim was to build “a political platform with an international reach.”
Mr. Chávez celebrates the spending as revolutionary largesse, intended to further his dream of unifying Latin America in a way Simón Bolívar could only dream of.

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