Since January 2007, Venezuela has pledged over $8.8 billion in development aid, financing, and energy funding to Latin America and the Caribbean. The amount far surpasses the $3 billion in US foreign aid delivered to the region in 2005 and will likely continue to grow as Venezuelan President Hugo Chavez continues his Bolivarian Revolution, nationalizing industry and reaping windfall profits from Venezuelan oil production.
Of note, the US total does not include US private investment and trade, which dwarfs the contributions of both governments in the region, or the almost $7.5 billion in debt relief agreements from the Inter-American Development Bank (IDB) and World Bank of which the US is a principle contributor.
Regardless, Chavez’s commitments to Latin America and the Caribbean, at least in the eyes of many Latin Americans, far exceed that of the US, and his geopolitical standing, as a result, is on the rise.
The Geopolitical Game
Venezuela’s foreign aid comes with few conditions, unlike other foreign aid. Venezuelan dollars are buying electricity generators for Nicaragua, funding housing, an airport upgrade, and scholarships in the Dominican Republic, and paving roads in Bolivia, to name a few. With a very high profile, Chavez is instituting change in countries sympathetic to his socialist vision and regional integration. Venezuela’s financial aid promises are the largest of any Latin American country, and Chavez is using these commitments to bolster his agenda of assisting leftist nations lean further away from the US, though he vehemently denies being in competition with Washington.
US influence in Latin America is challenged in no small part due to Chavez’s aid packages. International Monetary Fund debts dropped from $49 billion in 2003 to just $694 million in 2007, largely because of early repayments, many financed by Chavez. The result is a Latin America with a large poor population that trusts not in free trade or debt relief programs from the US, but Venezuela’s ability to demonstrate visible, quick results.
A Changing of the Guard
In recent elections, several Latin American countries turned towards leaders with leftist agendas, many of whom are allied with Chavez. This trend will likely not cease in the near-term as Chavez allies will be able to promise the poor unprecedented growth in infrastructure and development due to Chavez’s willingness to aid allied countries.
Consequently a new door has opened for increased investment and relations with Latin America. With China spreading its influence throughout the region and countries like Iran and Russia making highly publicized energy and military deals with Nicaragua and Venezuela respectively, the US will continue to face a broad spectrum of competition and challenges in the region.
Thinking Long-Term
Venezuela’s political process is largely powered by oil money, meaning the revolution may last only as long as the oil does, and the revolution is only exportable to countries that have such natural resources or can fully rely on Venezuela for continued funding. Opponents often question how long Chavez can sustain such “haphazard spending abroad” since government revenues are highly dependent on fluctuating oil prices, as well as the availability of the oil. It is also important to note that due to a lack of transparent accounting, the tally of $8.8 billion in aid is based on public pledges rather than what has actually been spent. It is impossible to know how much of the Venezuelan money has actually been delivered and how much is promised for coming years. If oil prices fluctuate, there is a shortage of oil, or alternative fuel comes in to play on a larger scale, Chavez may find himself having to break many of his promises.
As for now though, Chavez is making headway in securing his revolution both at home, with the nationalization of industries and elimination of term-limits, and abroad, with his anti-US sentiment and deep pockets.
The US has begun responding in subtle ways to Chavez’s influence by providing more humanitarian relief to Latin Americans. For example, the US Navy medical ship Comfort is on a four-month, 12-country voyage to Latin American ports where it will treat as many as 100,000 people with free vaccinations and other health care needs. Additionally, the US is giving money to fund small business loans with low interest rates.
Despite US efforts, Venezuela is winning the propaganda war in winning the hearts and minds of many Latin Americans. Whether or not President Chavez can successfully carry out his promised aid packages remains to be seen. However, the promises are positively influencing the masses.
