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Open Letter to the US State Department re Venezuela

By Aleksander Boyd

London 02.05.05 | With the purpose of continuing with the previous article I shall comment today upon the main reason for Hugo Chavez's sustained popularity in Venezuela; his ability to win political allies throughout the region and the foundations upon which his alliances are built.

To begin with the unravelling of the Chavez phenomenon one must look out for the X factor, that 'thing' that makes him irresistible in the eyes of people. Ideological affinities and charisma aside I am of the opinion that Chavez's 'charm' is the US Dollar. Having dismantled the meritocratic system that had governed Petroleos de Venezuela for 26 years, Chavez effectively took the reins of the company. PDVSA, as it was known in the energy world, no longer exists, what is left now is a highly inefficient and non-auditable oil conglomerate controlled by the State. As it happens the State and Hugo Chavez are one and the same; thus to say PDVSA or Chavez's Petroleum Corporation is exactly the same.

Venezuela is the fourth largest oil provider to the USA, that buys in the region of 1.5 MBD. The paycheck that Uncle Sam sends regularly to Hugo is the X factor. Chavez uses the oil income at his own discretion for revolutionary purposes, i.e. to buy weapons, consciences, votes, etc. But what would happen if the USA were to stop buying Venezuelan oil? Who's funds would maintain the revolution then? Are those economically stagnant nations receiving Venezuelan oil at below-market prices under favourable payment schemes (Caracas and San Jose Accords) in any position to supplant the top dollar received from the USA? I think not.

Thus the best way for the USA to cut short the expansion of the revolutionary continental project of Hugo Chavez is to take its business someplace else for I am sure the 1.5 MBD can be bought elsewhere. A strapped for cash Chavez would alienate his present day's allies, triggering his own demise. It's a win-win situation.

With respect to the issue of PDVSA operating its Caribbean affairs from Cuba, the USA should extend the embargo to the company and treat it as if it were Fidel Castro's own oil conglomerate.

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