Cuba Business

Cuba oil supply hinges on Venezuela vote - Heritage Foundation Opinion

Posted August 14, 2004 by publisher in Cuba Business.



SUNDAY is a red-letter day for democracy and for the price of oil: Venezuelans vote on a referendum on whether to recall President Hugo Chavez.

Long a friend of the United States and since 1958 one of Latin America’s most stable democracies, Venezuela stands at a crossroads, headed for either democracy or Cuban-style socialism.

Elected fair and square in 1998, Chavez took office with sky-high popularity on a reform platform. But he has since donned the cloak of political strongman, run the economy into the ground and helped roil world oil markets. Plus, he’s a good buddy of Cuba’s Fidel Castro.

“Dictator” isn’t used very often to describe Latin American leaders anymore — beyond Castro, that is. But Chavez, a cashiered army colonel who was once jailed for his leading role in a 1992 military coup, could make it two.

Though now highly unpopular (30 percent approval), Chavez may well survive the no-confidence vote. Polling is expected to be rife with voter intimidation, fraud and other voting irregularities.

Certainly, his record to date makes that chicanery seem likely. He has already rewritten the Constitution to give himself more power, sucked up power over the state oil company (PDVSA) and stacked lower and Supreme Court(s).

He’s also made a good start on purging the armed forces, misusing them for partisan political purposes and social programs. Threats to freedom of the press include physical attacks on journalists.


The fractious opposition has mostly been peaceful ó though a botched, bloodless coup nearly toppled Chavez two years ago. But his misrule has pushed political and class tensions to such a fever pitch that some fear civil war.

El Presidente has also made a shambles of Venezuela’s already impoverished economy. Per-capita income has dropped 25 percent since 1998, propelling the economy backward to the 1950s. Inflation is running at a household budget-busting 30 percent, unemployment hovers at 18 percent and 33 percent live in extreme poverty despite massive social programs.

And that’s had worldwide repercussions, because Venezuela is a major oil-producing nation ó the world’s fifth-largest, with one of the biggest energy reserves outside the Middle East. It provides 15 percent of U.S. oil needs, making it one of our top four oil suppliers (after Canada, Saudi Arabia and Mexico).

Even now, the possibility of another Venezuelan oil strike continues to keep the oil market skittish, helping keep prices at record $45-a-barrel levels.

Adding insult to injury, Chavez has also encouraged OPEC to raise its prices, too. In one of his anti-American fits of rhetorical rage, El Presidente has even threatened to cut off oil supplies to the United States. That would certainly he a blow to the U.S. economy (even with this week’s welcome Saudi announcement of increased oil supply.)

But then, Chavez is a big chum of Cuba’s communist Cold War-holdover, Fidel Castro. (He’s also been friendly in the past with Iraq’s Saddam Hussein and Libya’s Moammar Khaddafy.) In exchange for getting Caracas oil on favorable terms, Havana is providing doctors and teachers ó and military advisers. Venezuela is also knee-deep in Cuban intelligence (DGI) officers.

There’s no telling what Castro’s political plans for Venezuela might be. Chavez already has stated his desire to unite Latin America in a Castro-inspired campaign against U.S. policies. And U.S. officials have expressed concern that Chavez’s government is supporting the Colombian narcoterrorist FARC rebels.

Democracy is under assault. Chavez is a throwback to the military strongmen who once ruled Venezuela. What Chavez calls his “Bolivarian Revolution” (after Latin American independence leader Simon Bolivar) is in fact fashioned in part on Castro’s Cuban revolution.

Washington has supported the referendum as a democratic solution to Venezuela’s political turmoil ó one that offers the possibility of peaceful regime change. But with Chavez in charge, it would be shocking if the voting were free and fair.

Unfettered international election monitoring should be a prerequisite, but it’s unlikely. Chavez has insisted on stringent controls over any poll observers. The (Jimmy) Carter Center and Organization of American States will field teams, but the European Union declined to participate under these restrictions. (In a hysterical effort to add “international credibility” to the referendum, Chavez’s election monitor invitee list does include Barbra Streisand and Michael Moore.)

If the referendum turns out to be flawed ó or if Chavez resorts to “extra-constitutional” actions ó the global community should withhold Venezuela’s international privileges until the democratic process is honored.

For instance, the United States should encourage the World Bank to suspend all loans to the Venezuelan government. And the OAS should consider suspending Venezuela’s membership in the group.

Latin America has made great strides in embracing freedom and democracy. Today, 22 of 23 Latin American countries are considered to be democratic. (Cuba is the exception.) But some states, especially those with leftist-leaning leaders and economic problems (such as Ecuador and Argentina), might folow Venezuela’s path. This would be a significant setback for the hemisphere and its people.

The U.S. and the international community should stand shoulder to shoulder in defense of Venezuela’s proud democratic traditions and aspirations. With other Latin American democracies leading the way, the United States should help ensure that the term Latin American dictator is relegated to the dustbin of history once and for all.

Peter Brookes, a Heritage Foundation senior fellow, served in Latin America while on active duty in the U.S. Navy.

E-mail: .(JavaScript must be enabled to view this email address)

Member Comments

On August 16, 2004, Jesus Perez wrote:

Mr. Brookes talks about 22 of 23 countries in Latin America being considered to be democratic and he also talks about Venezuela’ proud democratic traditions. I submit that Mr. Brookes should spend some time talking to the many millions of poor whites, black, mulato and indian peoples and see what they think of his idea of democracy.

On August 17, 2004, Ralph wrote:

‘I am in line with the Jesus Perez,Mr.Brookes has an idealistic
concept of Democracy,but in spite of that misconception,Democracy,my dear friends is a beautiful thing.
In respect t Venezuela,I have been to and I know the reality
of the Cerritos,the situacion in Veracruz, in Maracaibo,etc,
they need desperately a change for the better,a change for
justice,some people have said Chavez is a dictator,maybe Chavez
want to be that,but the fact is his goverment so far is very
democratic,it plays on a democratic platform,it is bound for
the democratic management,but the very important of Chavez
regime is that it is a Hope in capital letters for the majority
of venezuelan,that’ why Chavez won the recall,that’why chavez
survived the coup d’etāt,that’ why he subdue the oilstrike,
hey Chavez could never do that without the staunch support of
the poor,I am not comunist,but its very clear to my humble vi-
sion of the world political situation,that the poor have to be
accountable for,the injustice creates terrorism,chance for the
bad people,poor or rich,take advantage in scary agendas.So demo-
cracy is very much more than the respectful opinion of mr.Brookes