Chavez uses petro-dollars to help the poor - in America

Sheldon Alberts
CanWest News Service

Tuesday, December 05, 2006

CARACAS, Venezuela - Hugo Chavez coasted to another six-year term as Venezuela's president on the strength of petro-dollars and promises to spread more of his country's oil wealth to the poor.

But as Chavez struggles to alleviate poverty for eight million of his own citizens, the 52-year-old leftist leader is using his oil riches in an unlikely way - by paying the winter heating bills for hundreds of thousands of underprivileged Americans.

Even as Chavez demonized the United States as an evil imperialist empire during campaign events leading to his re-election Sunday, Venezuela's state-owned oil company renewed a deal to provide 40 per cent discounts on furnace oil to 400,000 people in 15 U.S. states and the District of Columbia.

The act of generosity is dismissed by Chavez's critics as pure propaganda - an attempt to embarrass the Bush administration - and it is drawing mixed reaction among Venezuelans.

''I think he is just giving the money away,'' huffs Carmen Herrara, a retiree who lives in a suburb of east Caracas. ''There is a lot of poverty in this country that needs to be solved first.''

The heating-oil program offered by Venezuelan-owned Citgo is but one element of an incredibly complex, carrot-and-stick relationship Chavez and the U.S. have with each other, one revolving predominantly around the politics and economics of oil.

Chavez won Sunday with 61 per cent of the vote.

In Washington, the Bush administration expressed hope the U.S. could improve relations with Venezuela even though Chavez called his victory another "defeat for the devil."

Sean McCormack, the State Department spokesman, said "we hope that we could have a positive constructive relationship" with Chavez in the future.

"There are, of course, well-reported frictions on some issues. From our standpoint, there don't have to be any frictions," said McCormack, who added the U.S. was awaiting reports from international election observers before passing final judgement on the election.

Chavez had rankled President George W. Bush in August 2005 when he offered to ship emergency fuel supplies to New Orleans in the wake of Hurricane Katrina.

He followed up by personally endorsing a plan by Citgo, the U.S. subsidiary of state-owned Petroleos de Venezuela S.A., to offer the heating oil discounts through a non-profit Massachusetts-based group called Citizen's Energy Corp.

The latest public-relations bonanza from that venture was a splashy press conference two weeks ago at the home of 75-year-old widow Matilda Winslow in Dorchester, a hardscrabble neighbourhood of Boston.

With Venezuelan officials present, Winslow took delivery of a winter's worth of heating oil.

''No matter the differences we might have, there is always room for co-operation,'' said Bernardo Alvarez, the Venezuelan ambassador to the U.S.

In a telephone interview Monday, Winslow said she had no qualms about accepting discounted oil from a country whose leader called Bush ''Mr. Danger'' following Sunday's elections.

''Bush bothers me, not Chavez,'' said Winslow, who has survived on Social Security since the death of her husband five years ago. ''I figure that Bush should wake up and think about the elderly and low-income people out here.''

American critics of Chavez are not as impressed.

In an editorial last week, the Wall Street Journal questioned Chavez's motives. The Venezuelan leader ''is trying to shape U.S. public opinion in the hope that more gringos will come to see the Chavez government as benevolent,'' the newspapers said.

But Brian O'Connor, a spokesman for Citizens Energy, said the Venezuelan oil is vital to low-income families because funds for a U.S. government heating-fuel assistance program have failed to grow in line with rising energy costs.

''It's about need, not politics,'' said O'Connor, who said Citgo was the only major company to respond to appeals for assistance to poor U.S. families.

Despite the political differences between governments in Washington and Caracas, Venezuela and the U.S. have a mutually dependent relationship.

Venezuela exported almost 560-million barrels of oil and petroleum products to America last year - not only from Citgo but from U.S. companies such as Chevron and Exxon, which have major operations here.

''What Citgo is doing is providing 2.4-million barrels, which is one half of one per cent of all the oil products sold into the U.S. from Venezuela,'' said O'Connor. ''So how do you criticize that tiny fraction that is used to help the poor?''

Chavez's anti-U.S. rhetoric, however, is threatening to damage his nation's oil industry.

After the Venezuelan president called Bush ''the devil'' at the United Nations in September, the 7-Eleven convenience store chain announced it was dropping Citgo as the gasoline supplier to more than 2,000 stations across the U.S.

''Regardless of politics, we sympathize with many Americans' concerns over the derogatory comments about our country and its leadership,'' 7-Eleven said in a statement.

Citgo's heating-oil subsidies in the U.S. are modeled after Chavez's PetroCaribe program, which provides oil to a dozen Caribbean nations, including Cuba. The program, which allows countries to defer payments for 25 years on low interest, has helped Chavez gain influence over the U.S. in Latin America.

Venezuelans benefit too - gasoline here sells at about 17 cents a gallon thanks to government price controls.

But some domestic opponents say Chavez's penchant for peddling discount oil comes at the expense of Venezuelans.

An estimated 33 per cent of the country's 25 million residents live in poverty.

Chavez has also used oil revenues to pay for infrastructure in countries such as Bolivia and Uruguay.

''He has been using very audaciously money from oil to buy support, in the same imperial way of the United States,'' says Teodoro Petkoff, editor of Caracas' Tal Cual newspaper and a senior opposition party strategist.

''This country can afford to be generous. But if you give money for a hospital in Uruguay when the majority of Venezuelan hospitals are worth nothing, then people resent that.''

But not everyone.

In Caracas neighbourhoods such as Petare, a sprawling hillside barrio, many residents approve of Chavez selling low-cost oil, even to the richest nation in the world.

''He is not giving it to the government of the United States,'' says Manuel Jose Petate, 46. ''He is giving it to poor people who need it, who live in poor neighbourhoods like this. If it is necessary, then I think it is good that some of these Americans have it.''

CanWest News Service

EDs: Updated with U.S. reaction to Chavez win in firstoptional cut

© CanWest News Service 2006