The other day one of my readers challenged me to go beyond pointing out problems and recommend some solutions. In particular, he wanted me to suggest how to reduce the threat posed by Venezuela’s President Chavez, and to identify some ways in which the US could limit its energy problems over the next five years. Tall orders, both. I'll tackle the first part of this today, and follow up on Friday.
Venezuela represents a serious problem for the US, as I suggested in Monday’s posting. Here’s a country that has historically run neck-and-neck with Saudi Arabia for second place in the list of our most important oil suppliers, after Canada. American and other western companies made large investments in Venezuela’s upstream oil sector, after the government liberalized its rules in the 1990s, and these ventures currently account for 45-50% of the country’s oil production. But in the last several years, the Venezuelan government has turned decidedly anti-American, and President Chavez’s policies and rhetoric have grown increasingly inimical to American interests in the hemisphere. Doubtless his attitude towards us wasn’t helped by our perceived complicity in the failed attempt to oust him, or by our support for his political opponents in last year's referendum on his rule. (I'm not counting Pat Robertson's recent assassination rant, here.)
Direct confrontation at this point would likely only serve to bolster Sr. Chavez’s image and appeal within his country and with the less affluent throughout South America. Instead, it seems timely to apply Zhou En Lai's clever inversion of Von Klausewitz--that diplomacy is the continuation of war by other means--and to pursue aggressive efforts to restore the flagging image of the US in Latin America. (There were some alarming statistics about these trends in this week’s Economist.)
After all, even with its fortunes buoyed by high oil prices, Venezuela's entire GDP is about the size of that of Louisiana, pre-Katrina. If President Chavez can offer his neighbors a better deal on trade and development than we can, then there’s something fundamentally wrong with the way we are looking at the problem. I’m not sure which specific measures would work best, whether a host of new bi-lateral trade deals, a generous Latin American development fund, or something else entirely, but we must surely have economic and political levers available to us that Sr. Chavez can’t hope to match.
By reducing Chavez's influence in the region, we would effectively isolate him and make him look more like the tinpot dictator that he is. That seems more fruitful than confronting him and building him up as the people's hero, who can poke his finger in the eye of the US and make us like it, because of his oil.