US-Venezuela Relations

Recent Tension

• President Hugo Chavez claims (Oct 2005) to have information that the US is planning an invasion to overthrow him

• Chavez has cultivated ties with other countries that have strained relations with the US - chiefly Cuba and Iran

• US television evangelist, Pat Robertson, has called for Chavez’s assassination

Hugo Chavez

• Head of MVR Party– Anti-corruption, anti-poverty, populist platform– “Bolivarian” ideology

• Simon Bolivar (led revolution from Spain by what are now Venezuela, Colombia, Ecuador, Peru, Panama and Bolivia)

– Social democrat• Expropriation from the rich• Land grants to poor• Opposition to neo-liberalism (global free trade)• Has used oil profits to pay for schools & other poverty-fighting

measures– Accuses the US of fighting terror with terror– Blames the US for attempted coup in 2002

Robertson’s Quote• “If you look back just a few years, there was a popular coup that overthrew him; and

what did the United States State Department do about it? Virtually nothing; and as a result, within about 48 hours, that coup was broken, Chavez was back in power. But we had a chance to move in. He has destroyed the Venezuelan economy, and he’s going to make that a launching pad for communist infiltration and Muslim extremism all over the continent. I don’t know about this doctrine of assassination, but if he thinks we’re trying to assassinate him, I think we really ought to go ahead and do it. It’s a whole lot cheaper than starting a war, and I don’t think any oil shipments will stop. But this man is a terrific danger, and this is in our sphere of influence, so we can’t let this happen. We have the Monroe Doctrine, and we have other doctrines that we have announced, and without question, this is a dangerous enemy to our south, controlling a huge pool of oil that could hurt us very badly. We have the ability to take him out, and I think the time has come that we exercise that ability. We don’t need another 200-billion-dollar war to get rid of one strong-arm dictator. It’s a whole lot easier to have some of the covert operatives do the job and then get it over with.”

Is Chavez a dictator?

• Chávez won the 1998 presidential election on December 6, 1998 by the largest margin — 56.2% of the vote — won by any candidate in four decades of Venezuelan democracy.

• These results were independently audited and verified by, among others, the Carter Center– (source: Wikipedia)

• By siding with the poor, however, Chavez has pitted himself against US companies operating in Venezuela

• Main goal of US companies is to obtain raw materials like oil and coffee beans at low cost and return maximum profits to American stockholders

Has Chavez destroyed the Venezuelan Economy?

• Venezuela– Economic

growth in 2004: 16.8%

– real income in the poorest sectors of society grew by 33% in 2004

Venezuela’s GDP

So what’s the real problem?

• Chavez raised royalty percentages on joint US-Venezuela oil extraction contracts

• The oil ministry has restructured CITGO's profit structure (the outlet for Venezuelan oil in the US, a subsidiary of Petróleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned petroleum company.) – Result was a large increase in dividends and income taxes paid

to Venezuela

• This means less of the natural resource wealth of Venezuela can be appropriated by US investors and more of it remains in Venezuela

What can history tell us?• Salvador Allende was elected President of Chile in 1970, was

overthrown by Augusto Pinochet in 1973– Allende was a democratically-elected socialist and Pinochet was a

military dictator– The US supported Pinochet and assisted in the coup

• Pinochet liberalized the economy• The US overlooked the killing and torturing of thousands of people by

Pinochet’s regime • CIA documents show that the CIA had close contact with members of the

Chilean secret police, DINA, and its chief Manuel Contreras– US was fully aware of “Operation Condor” through which the military

dictatorships of Bolivia, Brazil, Paraguay, Uruguay, and Argentina suppressed opposition through the use of torture and intimidation of the families of opponents (caused 50,000 deaths and 30,000 disappearances in South America)

Have the times changed?