Thursday, August 24, 2006

Chavez cutting a deal with China for oil

In the lead-up to Chavez's visit, Venezuela offered to export between 500,000 and one million barrels of oil a day to China if the South American nation reached a goal of producing 5.8 million barrels of crude by 2012.

In the short term, it's unlikely that Venezuela is going to cut back on exports to the US, despite Chavez' political stance. They simply depend too much on the US buying the majority of their oil. This offer is based on Venezuela increasing its total amount of output. That means there's no short-term danger of us seeing even higher gas prices based on this action.

It should be noted however, that this is more than simply a business deal for Venezuela.

"The visit constitutes the consolidation of the two nations' strategic alliance," said Rocio Maneiro, Venezuela's ambassador to Beijing.

"China is a natural ally for Venezuela, with the same foreign policy objectives as Venezuela."

Chavez is fashioning himself into Washington's staunchest adversary in Latin America along with Cuba's Fidel Castro.

And just like the Soviet Union was once a strong Cuban ally, boosting the Caribbean nation as it defied the American superpower, so China would be a welcome friend for Venezuela, observers argued.

"In China, Chavez sees an emerging power quietly growing and challenging US dominance," Caracas Metropolitan University political expert Elsa Cardoso said.

As far as the political support Venezuela can expect to receive from China, it's not likely that it would anywhere like the aforementioned relationship with Cuba. Venezuela's just not as important because its physical location makes it a complete non-threat to the US. Cuba, of course, wasn't important for anything else. This deal appears to be more of a posturing point for Chavez than a real basis for the kind of support he imagines, but that probably serves him pretty well anyway.

It's not inconceivable that two nations that are on such opposite ends of the spectrum (Chavez is a leftist, after all) could be strong allies, but in reality this is only happening because Venezuela can gain political capital from backing China instead of falling in with the US. The danger, if there is any, is that this obviously provides an anchor for anti-US sentiment in South American countries. Not, of course, that we don't deserve some animosity for our actions (not just under Bush's reign either), but Venezuela may enable other South American nations to become much more politically independent of the US.

The reason that seems even possible is because that's what Chavez seems to have in mind, at least a bit. Chavez is no sheikh or emir, hoarding the money to himself. His plan is to build his country's infrastructure. As reported in this story:

China will boost investment in Venezuela under a series of accords covering oil exploration, telecommunications, railways and other industries, Venezuelan President Hugo Chavez said Sunday as he prepared for a trip to Beijing.

Chavez - scheduled to depart for China on Monday - read off a list of agreements to be signed this week, saying they include plans for Chinese help in setting up farm irrigation systems and a national fibre-optic communications network.

So this is not some minor, temporary thing. Chavez has plans to really turn Venezuela around. It's hard to imagine that's not going to have an effect on his neighbors. The simple fact of his proximity means that he could offer Colombia rail lines or power. Plus the wealth of his oil could be spent in other ways, like on law enforcement. If any South American country finds it politically advantageous to get help from him when all they have to do is repudiate us, I would say we could be looking at a major loss of influence in the south. The US has typically treated S. America as our playground, but a few strong countries in the south that don't depend on us could turn that all around.

At this point I'm not too sure there's anything we can offer them either (unless, of course, we could make and live up to a commitment to quit ruining their countries by financing drug lords). My suggestion, again, is to quit needing oil. Chavez' whole plan still depends on exporting the majority of his oil to the US. The China deal will be a significant addition, and in the future he might be talking to India as well (that's just a rumor, but it makes sense). He still needs us. If we could demonstrate that that need is more one-sided by stepping down our demand for oil, he might quiet down a little. Alternatively, and I know this isn't going to happen, we could start paying attention to what he's saying and try to be friendly. Chavez is so ardently anti-US because of Bush's policies. If the next administration could demonstrate that we're not going to run roughshod over other nation's rights, Chavez wouldn't have nearly as big a problem with us.

But that's just my two cents. I mean, I'm just a damn liberal who believes that you get respect by giving it, not taking it. I'm a pansy who thinks cooperation is a good word and coercion is a bad one. What would I know?

No comments: