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Falling on deaf ears: Venezuela's firebrand overreaches, consigning his populist message to the dustbin.


Washington worries a lot about how best to rein in bombastic, inflammatory Venezuelan President Hugo Chavez. They needn't bother. Lately, he's begun to sabotage his own message more effectively than a trainload of State Department pros working overtime.

The Venezuelan leader has blatantly meddled in two presidential campaigns and turned himself into a hot-button issue in another. He angered Latin America's biggest nation and walked out of the five-country Andean Community trade bloc, saying it was "fatally wounded" once Colombia and Ecuador signed free trade pacts with the United States.

In Peru, Chavez openly supported Ollanta Humala against Alan Garcia, whom he lumped with incumbent Alejandro Toledo as "crocodiles from the same water hole." Garcia, a leftist and populist, branded Chavez "a midget dictator with a big wallet" and said in his victory speech that Peruvians had sent a message that they wanted no part of the "militaristic, retrograde model that he has tried to impose in South America." As it became clear that Humala, a Chavez wannabe, was going to lose, Humala spokesman Carlos Tapia told reporters: "Chavez can go to hell."

In Nicaragua, Chavez signed a 25-year agreement with the Sandinistas to sell oil on credit to the party's mayors, giving presidential hopeful Daniel Ortega a key campaign issue in November. President Enrique Bolanos charged Chavez with violating Nicaraguan election law.

In Mexico, leftist Andres Manuel Lopez Obrador smartly distanced himself from Chavez after attack ads by conservative rival Felipe Calderon called the two men ideological soul mates. Chavez's previous rift with Mexican President Vicente Fox--he once called the center-right leader a "lapdog of the empire" for his support of free trade with the United States--did not sit well with many Mexicans.

Leftist Brazil President Luiz Inacio Lula da Silva was reportedly irate over Chavez's prominent role in advising Bolivian leader Evo Morales to nationalize the natural gas industry. Brazil's state-owned energy company, Petrobras, has as much as US$2 billion in investments in the country. At that time, the cover of Veja, Brazil's leading newsmagazine, showed Lula with an oil-drenched footprint stamped across his rear end. "That one hurt!" ran the headline.

Chavez is correct in spending oil money to overcome wealth disparity that has long characterized Venezuela and the region. And his Bolivarian Alternative for the Americas makes valid points in calling for Latin American unity to counter U.S. hegemony. But Chavez attacks free trade without offering a real alternative. He does not appear to have a serious development plan to end the country's economic dependence on a single, volatile, dollar-priced product. Worse still, since assuming the presidency in 1999, and despite a tripling of oil prices, poverty has increased in Venezuela.

Preparing for an imaginary U.S. invasion, Chavez spent $720 million on 24 jet fighters from Russia. He plans to build the first Kalashnikov arms factory in South America and acquire a fleet of naval vessels from Spain. His actions have antagonized even Carlos Fuentes, a leftist intellectual and frequent U.S. critic, who has begun calling the Venezuelan a "tropical Mussolini."

It's a no-brainer that the way of Chile's left--social concern married to competitiveness and engagement in the realities of the global economy--is the model for other Latin American governments, not Chavez's Bolivarian revolution. Since its return to democracy in 1990, Chile's mix of free trade, sound fiscal policy and social programs has created Latin America's most stable economy while reducing poverty by half.

Chile has serious inequality issues. Many retirees do not get a living wage from its privatized social-security system. But Chile's leadership--ever pragmatic--has not been timid about intervening. Most recently, socialist President Michelle Bachelet ordered an increase in state pensions for the poorest. "You need strong and powerful social policies by the state to resolve the problems of income and equality of opportunity," she rightly told the New York Times.

The United States should follow the World Bank's lead and help Latin America fight poverty more aggressively. By creating jobs and making consumers out of the 43% of the population that is poor, a potential market of 222 million people, Washington and Latin America could neutralize chavismo forever.

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Title Annotation:economic effects of Hugo Chavez's Leftist policies
Author:Epstein, Jack
Publication:Latin Trade
Date:Sep 1, 2006
Words:694
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