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U.S.-Venezuelan Relations: Preparing for another Term with Chavez

Authors: Richard Lapper, Latin American Editor, Financial Times; Author Living with Hugo: U.S. Policy toward Hugo Chavez’s Venezuela, A New Council Special Report, and Julia E. Sweig, Nelson and David Rockefeller Senior Fellow and Director, Latin American Studies, Council on Foreign Relations
December 1, 2006
Council on Foreign Relations


OPERATOR: Excuse me, ladies and gentlemen. Thank you for your patience in holding. We now have our speakers in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of the presentation, we will open the floor for questions. At that time, instructions will be given as to the procedure to follow if you would like to ask a question.

I would now like to turn the conference over to Julia Sweig. Ma’am, you may begin.

JULIA E. SWEIG: Well, thank you very much, and thanks to all of you for coming. I’m Julia Sweig. I direct the Latin America program here at the Council on Foreign Relations. And we have released this week the council’s special report which is entitled Living with Hugo: U.S. Policy toward Hugo Chavez’s Venezuela.

Our author is Richard Lapper, who, as you know, is the Latin America editor for The Financial Times. We have him on the line, and what we’ll do is, I’ll start off with a couple of questions, we’ll go for five or six or seven minutes between the two of us, and then we’ll open it up to your questions.

So, Richard, thank you very much for taking the time to write this report and to come today to do this briefing.

Let—what’s the big deal about this election, Richard, by comparison to previous Venezuelan elections? And what does it portend, should Hugo Chavez in fact be reelected again, for domestic intuitional, political, economic dynamics within Venezuela, first?

RICHARD LAPPER: Hi, Julia. Hello, everybody else.

Yeah, I mean, this is obviously the issue of the moment, isn’t it, the election on Sunday. And I think why it’s an important election is that in the run-up to it—well, it’s something—in the longer terms and since the referendum of August 2004, there’s been a progressive radicalization in terms of economic measures.

Laws that were on the books before, on the statute books in Venezuela, are being put into effect. You know, in the land reform, for example, there’s been action for—the most concerted action. There’s been a real stepping-up in the rhetoric. Chavez has been on overdrive in terms of, you know, anti-Americanism, in terms of making common cause with anyone that the U.S. doesn’t like. I mean, there’s a kind of Manichaean view of the world.

And there have been suggestions—I mean, more than suggestions, open statements—from the government about this stage in the—in what they call the Bolivarian Revolution, this stage which began with Chavez’s first election victory in 1998, coming to a close and entering a new stage, you know. And the implication is—and Chavez said this very explicitly last week at a rally to launch one of the “misiones”—that this new stage would be about a deepening and a radicalizing of the revolution that would stretch until 2021.

And you know, so this will require—if this is to take place, this will require, of course, Chavez to stay in power beyond the six-year term that he’s, I think, likely to win on Sunday. I mean, I say he’s likely to win it because the balance of opinion polls—I mean, overwhelmingly—shows that Chavez has a lead of—for whatever reason, has a lead of something like 20 percentage points, on average. So he’s likely to win on Sunday.

He’s likely to seek a way to extend his term, indefinitely, possibly, but certainly—I mean, there’s been clear signs that he wants to be there until 2021. And that does mean a constitutional change to allow for his reelection.

There’s also been a lot of talk in official circles about change to the political arrangements in Venezuela whereby the various political factions that surround Chavez would be converted into a single revolutionary party.

And there’s no suggestion, by the way, at this point—and nor would we expect it, I think—that there’s—that this is going to be a one-party state. We’re not talking about that. But we are talking about a single revolutionary party which would unify this movement, which has become quite fragmented in some ways in certain areas, around Chavez, and reinforce some of the centralizing characteristics of this government.


LAPPER: So—and then there’s—we can talk more, but I mean, then there’s all sorts of talk about economic radicalization, extending the space that—in the economy that’s being devoted to cooperatives and workers’ “cogestión,” which is the kind of state-owned companies that are half-run by trade unions. We’re going to have trade union representatives responsible for hiring and firing decisions on—in private companies, according to some proposals that are around, which is a very radical move, will be—cause all sorts of worries for the private sector, and so on and so forth.

And then I think the other thing to single out is the way they’re going to use control over foreign exchange to promote national industry. And this was spelled out earlier this month very, very explicitly—talk about, you know, not making foreign exchange at the preferential rate available to stuff that Venezuela itself produced. This is the kind of very old-fashioned kind of policy and import substitution policy which Latin America—was very common in Latin America, in fact, in the ‘70s and ‘80s, and I think we’re going to see that kind of thing.

And all these things, really, are very—we’ve seen before in Latin America as typical features of populist governments in Argentina or Brazil or whatever.

SWEIG: So given those various elements of the consolidation/radicalization that you’ve just ticked through, what does this portend, in your view, for U.S. policy toward Venezuela or the relationship between the two countries, but not only the bilateral dynamic; also speak a bit about Venezuela’s hemispheric ties as well and how the other major countries in South America especially regard Venezuela.

LAPPER: Let me think. So we want to talk now about—

SWEIG: Because I want to get to the more international dimension.

LAPPER: Yeah. Sure. Sure.

SWEIG: First the United States and then the other Latin American countries.

LAPPER: Well, I think what it means is that, you know, Chavez and the government will continue to seek to make to—I mean, one of the points about and one of things why it’s so difficult for the United States to respond to this is the way that anti-American Bolivarianism uses—the domestic use of that. So one of the reasons that Chavez is so rhetorically antagonistic to the United States is that it plays very well in terms of his domestic support base at home.

And you know, one of the reasons he made this speech comparing George Bush to the devil at the U.N. General Assembly in mid-September was precisely that. You had to kind of—it was a kind of a—he likes to present himself at the head of a kind of anti-Bush crusade and in particular pick up on the—you know, this kind of—you know, subject, you know, that you Julia have written a lot about, this growing anti-Americanism throughout the world. He likes to see himself as a crusader in that particular battle and likes to position himself at the head of that. You saw that in terms of his bid—unsuccessful bid, and I think quite importantly unsuccessful bid to get onto the U.N. Security Council.

SWEIG: Did that hurt him—the fact that he overplayed that anti-American aspect of his sort of public persona, did that hurt him domestically at all?

LAPPER: I think it’s—I don’t think so. I mean, you know, it’s difficult to say. I mean, how do—you know, I mean, the point is the opposition has fought in Venezuela as good a campaign as any opposition has fought, and I think Rosales has emerged as a strong candidate, whether that’s to do with this—I think a miscalculation by the Venezuelans. I think they generally thought they would win this seat, and in fact, they were defeated by quite a big margin. I mean, Guatemala’s not a very good candidate from an opposition point of view, and yet, you know, they got 40 more votes. And I think there was a bit of a miscalculation internationally.

You know, domestically, Chavez’s poll ratings, any reputable pollsters are really up in the sort of 20 percentage point difference. He’s getting between 50 and 60. None of the polls had him losing.

SWEIG: Yeah.

LAPPER: So it’s difficult to say. But, I mean, the point is that we’re going to see—you know, they love—I mean, Chavez loves to have a U.S. enemy, and I think one of the things that might make life difficult for him is the—I mean, there’s two things, really. One is the weakening—you know, Bush’s weakness as we come up to the next presidential election and particularly the Democratic control of the Congress is—the move in the U.S. towards a more pragmatic and less ideological foreign policy is bad news for Chavez in a way because he really wants to be called—yeah, he wants—he loves when Rumsfeld called him Hitler and made that comparison. He loves that because he just—he can—it gives him an excuse just to let vent all this vitriol, and it goes—you know, that kind of plays well domestically.

SWEIG: Well, that’s—why don’t we open it up now for questions. We’ve got a number of people on the call. If you could, Operator, start taking those calls and make sure that people introduce themselves, that would be terrific.

OPERATOR: Thank you. At this time, ladies and gentlemen, we will open the floor for questions. If you would like to ask a question, please press the star key, followed by the one key on your touchtone phone now. Questions will be taken in the order in which they are received. If at any time you need to remove yourself from the questioning queue, press star two. Please limit yourself to one question at a time. Again, to ask a question, press the star key, followed by the one key on your touchtone phone now.

Our first question comes from Jim Dingman (sp) with IMN World Report. Please go ahead.

QUESTIONER: Yeah, can you hear me?

OPERATOR: Yes, sir.

QUESTIONER: I’d like to know, Richard, first of all, what has been the concrete income redistribution inside Venezuela since Chavez took power, since in your report you talk about how the oil prices have given him an immense surplus to deal with. So what concretely has he done in terms of income redistribution to solidify his support internally?

LAPPER: Okay. I mean, the most—you know, in terms of income—in terms of broader figures on the statistics, the evidence is just not there at this point. But I mean, in terms of the programs, there’s no question that there has been a reduction in poverty. So in terms—I was talking about the figures in terms of inequality, but in terms of poverty, there has been a reduction of several percentage points. You know, you’ve got to bear in mind that it’s not only the surpluses, the oil surpluses that are being invested in social programs, roughly half the budget, which is itself five times bigger this year in 2006 than it was in 2000, roughly half, though, between a third and a half is going into social programs. And extra money, which is not accounted for to the budgetary process is also going into social programs. What’s it going into? It’s going into this network, really, of missions. Now, just a bit of background here—very important these missions.

Back in 1999, Chavez tried to use the existing machinery of the state, you know, the Health Ministry, the Education Ministry, to try to get it to be more responsive to the needs of the poor. It didn’t work, partly because there was opposition from trade unions. And what he did in—beginning really from 2002, was to launch this kind of parallel state, initially around health care, a program called “Barrio Adentro.” And then through education. So there’s a lot of literacy. We’ve got all sorts of separate programs which are very big. You know, there are roughly 20,000 Cuban doctors and dentists and sports trainers involved in “Barrio Adentro.” The Venezuelan government is training a lot of their own doctors in social medicine. And this has had quite a big impact in poorer areas of Venezuelan cities; very noticeable in Caracas.

And that’s, clearly, one of the reasons—certainly if you look at the polling evidence, at all the anecdotal evidence. I was out in some of the barrios last week, and very clear that for all the criticisms on one or two other things, particularly on crime and security, these programs—health and education—are hugely popular and do open up opportunities for people.

SWEIG: Do we have another question?

OPERATOR: Thank you for your question, Mr. Dingman.

Our next question comes from Mike Williams with Cox Newspaper. Please go ahead.

QUESTIONER: Yes, hello.

LAPPER: Hi, Mike.

QUESTIONER: You mentioned sort of tension within Chavez’s inner circle. Is that—how big a factor is that? When I was there last, I heard a lot about corruption in the upper circles. And some of the opposition people were saying they thought eventually this could come around and really bite at Chavez’s heels and popularity.

LAPPER: Yeah, I think there’s a certain—there’s a lot of talk in Venezuela about what in Chavista circles they call the “Boli-bourgeoisie,” which is the Bolivarian elites really, people who have been allied with Chavez and done pretty well materially out of this process. There’s an awful lot of money around in Venezuela. You know, we’re talking about an economy that’s growing at 9, 10 percent a year for three years in a row, where credit is being injected into the economy with abandon. And there is a lot of money being made in finance as the government tries to—partially because of the way the government is trying to control some of the inflation pressures that result from this. And, you know, so there’s an awful lot of opportunities to siphon off.

And I mean, anecdotally, one can talk about—you know, there’s lots of anecdotal talk about corruption. There’s been one or two—the CATO Institute came out with a report a week or so ago on this. And certainly, judging by the polls, you know, there’s as much concern, or nearly as much concern about corruption, even at a micro level, as there is about crime, which is probably the big problem, I think, that Chavez faces at a popular level.

So corruption, yeah, very—it’s not new. I mean, we’ve had corruption—I mean corruption was, in fact, the problem of the previous regime that Chavez overthrew back in ‘00—or took over from in 1998. Corruption has been a—is a phenomenon that very often you see with oil-producing states. But, in terms of divisions within the hierarchy—it’s very difficult to be very concrete. There’s all sorts of talk about different factions around like, “Hail the dirty president,” there’s supposed to be a faction; there’s Davo Cavello (ph), who’s a leading Chavista, is said to be ill at ease with the way that things are going. There’s a certain amount of resentment among some of Chavez’s lieutenants about, you know, Chavez staying in power so long. Of course, if he does get the constitution changed to allow for unlimited election—he’s relatively a young man; he’s 52—we’re going to see him there for—he’s going to put the kabash on other people’s potential political aspirations. So there’s a certain—I think there’s a certain, you know, sort of discontent about that. But it’s very difficult to be more precise because this is not, after all, the most transparent government in the world.

QUESTIONER: Well, the other thing I heard most when I was there last was that—you know, just let oil prices tumble and his popularity will too. I’m not sure oil prices are going to tumble.

LAPPER: Yeah, sure.

QUESTIONER: But what—do you think that would—could be a scenario that might play out down the road in a few years?

LAPPER: Oh, I think there’s no question that if oil prices fall substantially, there will be political repercussions. There’s no question about that.

The—you know, you’ve got to—this is— Venezuela is on the backs, sitting on a, you know, six-year rise in prices. It’s—one local economist I was talking to last week said this is the best scenario, in term of the oil markets, that Venezuela’s experienced in its history, you know, this kind of constant rise in prices.

Venezuela is—its asset position—it’s got a fantastically strong reserve position, but it’s also got huge amounts of money built up in two funds called Funden (ph) and FONDESPA. The latter is managed by PDVSA, the oil company. This is—you know, there’s a huge cushion before a fall in prices is going to kick in. Nonetheless, I think it will have an impact.

The other thing that might have an impact is signs of growing inflation. Venezuela is doing well economically in terms of the headline numbers, you know, 9, 10 percent growth, but there’s a real problem in terms of production and jobs, I think. You know, Chavez has put an awful lot of emphasis into stimulating formation of cooperatives and these cogestión companies and so on; the private sector is not happy, obviously, and it’s not investing. And so many, many Venezuelan companies are operating at full capacity, despite the ease with which they can obtain credit, relatively. I mean, interest rates are negative. It makes also a lot of sense to borrow money in those kind of conditions, but no one has got much confidence, and I don’t think they’re going to have any more confidence, frankly, after this Sunday’s election.

QUESTIONER: Mm-hmm. Well, thank you very much.

SWEIG: Operator?

OPERATOR: Thank you for your question, sir. Our next question comes from Sam Logan with ISN Security Watch.

Sir, please go ahead.

QUESTIONER: Hi, Richard.

LAPPER: Hi, Sam.

QUESTIONER: Thank you for an interesting piece.

I wanted to sort of zoom out a little bit to the international level.


QUESTIONER: And I’m interested in your comments on the so-called Iran-Syria-Cuba-Venezuela axis. What threat do you think this axis poses for the U.S. as Chavez hardens his position inside Venezuela?

LAPPER: It’s really difficult to say and to be precise about it. I think what one can say is it needs careful watching.

The tricky thing about this is to tease out, you know, what serves rhetorical, political—you know, the rhetoric from the reality on the ground. I mean, there is close cooperation with Iran. I mean, you know, we know that Venezuela and Cuba have been the most staunch defenders of Iran’s nuclear ambitions in terms of nuclear energy and so on in international forums. We know that Chavez and—has been to Iran several times, that there are economic cooperation programs, that the Iranians are building tractors in Venezuela.

Beyond that, you know, I think that there’s an awful—I mean, in many ways, it suits—I mean, Chavez can’t ratchet up the tension too much, all right, because he’s still heavily dependent—all these social programs are heavily dependent on the U.S. market for his oil. I mean, he’s still getting half of his export revenue in oil from the U.S. And, you know, geography would indicate that is not going to go away very easily. I mean, he can look at diversifying the market; it won’t be that simple, and it’s going to be quite long term.

And it’s not at all clear that China is going to rush to the—you know, especially if it causes some sort—if it’s part of the broader political instability. The Chinese are certainly not going to kind of precipitate things, although, you know, there is this long-term oil agreement that Chavez signed with the Chinese early this year. But I just think—and I’m sure, you know, the new head of security, appointed in the last few days, Norman Bailey, will be looking very closely at all this. But I mean, I just—I think it just has to be watched.

QUESTIONER: Right. I’d like to follow up with a question concerning the red lines that you mentioned in your piece. Do you think closer ties between Venezuela and Iran, militarily speaking, may be one of those red lines?

LAPPER: Yeah. And I think it obviously—you know, you’ve got to kind of be slightly concerned about that.

I think that more importantly, really, are the kind of shifts in the—these kind of shifts in the, you know, the constitutional arrangements, the potential—you know, the growing—there are signs of growing authoritarianism, the coercive—the way the state’s being used in a coercive way; the way that, you know, increasing—I mean—(word inaudible)—is nothing—again, nothing new in Latin America, but it is clearly becoming a feature of Venezuelan politics now.

And I think—you know, there is for all sorts of reasons the Organization of American States, which has—you know, Venezuela’s a member, and it’s a signatory to the democratic charter of 1991, and that should keep it on the kind of democratic path, but I think what we’re seeing in the report is that it would be useful to have—for the U.S. to engage in a broader discussion with regional allies—you know, people like Lula in Brazil, the Chileans, the Argentines—about these kind of issues because—you know, the OAS is quite a slow-moving organization. People—they have to—again, they have to be watched very carefully.

SWEIG: Do we have another question, Operator?

OPERATOR: We have a question from John Sweeney (sp) with Argus Publications. Please go ahead.

QUESTIONER: Richard, how are you?

LAPPER: Hi, John.

QUESTIONER: I’m calling from Caracas. You and I have met between before a couple of times—


QUESTIONER:—(inaudible). I have a couple of questions—


QUESTIONER:—well, three, actually. Number one, it would be—I would like to hear your views on the economic situation. You mentioned that there is problems with production and jobs, but the reality on the ground here is that all this growth is driven by public spending, and there has been no real stable job creation now going back close to eight years. I would appreciate you addressing that.

The second question is—relates to the surveys that you mentioned. You said that all the polls show Chavez well in the lead, and that’s quite true. But when you take polling methodology, which I know you’re aware of, and you contrast the polls and have a neutral, anonymous methodology with those where the person answering the questions is identified, there’s a huge difference in how the polls split. All the anonymous polls show a very, very tight race. I would appreciate your commenting that.

And the third question or the third area is—you know, maybe down here on the ground I’m seeing some strange things, but this is one of the more heavily armed elections that I remember seeing going back 30 years in this country. And I’m wondering what prospects or chances you think there are for violence starting next Sunday.

LAPPER: Right. Right. Okay. Well, on the first question first, on the economy, no question, I mean, I should have said before, I mean, governments—government investment, public investments is very much part of this economic growth we’re seeing, very noticeable these big infrastructure projects and partly Caracas metro being extended, the big project to rebuild the bridge on the road to the airport—very big projects and that will help in terms of jobs.

But a lot of the growth is about consumption, you know, and consumption and consumer lending has been increasing very, very quickly. And yet, you know, despite that, there’s a great deal of reluctance to invest, I think understandably, given the kind of confusion and opacity about the rules of the game. The private sector doesn’t have confidence, and so you’re not getting jobs a lot of jobs in the private sector. So a lot of these people who are in the barrios benefitting from the programs they’re expecting to get jobs when they finish their education, but the question mark, of course, is when they come out of the rivas misión or the alma mater misión (sp) in the universities, they’ve got their kind of titulo from the Bolivarian University or whatever, what they’re going to do. And I think that is an issue going forward, and it’s something the governments going to have to give quite a lot of attention to if it wins this next Monday.

In terms of the polls, I mean, I don’t know about alternative methodologies and conventional methodologies. I mean, if you look at Caracas Chronicles, the—which is a blog that’s quite supportive of the opposition, published—publishes regularly an update on those polls. There are 16 polling organizations that conduct polls by conventional methodologies and three that looked at alternative methodologies. The long and the short of it is that the 16 using conventional methodologies do show a lead for Chavez between I think 10 and 35 percent.

Now, the alternatives—there’s I think one—one of the alternative polls shows Rosales in the lead. But this is—I think, you know, in terms of pollsters I talk to in Venezuela, there’s not an awful lot of doubt that Chavez is in the lead. And, of course, you know, there is this issue of, as you say, there is wide talk about the fear factor in Venezuela, that people will vote for Chavez because they think their vote is being—is not secret. There are worries that the fingerprint machines that will be in polling stations in I think eight states on Sunday will be used to record votes. There’s no evidence that that will happen, but there is a perception that it will happen. And that may well influence people, especially those people who are vulnerable, who work in the state or who have got contracts with the—who work for the state, I should say, and they will vote Chavez when they maybe favor the opposition. But it’s difficult to be concrete about this, but this is just reporting on the perceptions.

I think that comes on to your third point. It is a bit of a febrile atmosphere at the moment in Caracas I found last week, partially because of this incredible consumer boom and the fact that people are spending money like there’s no tomorrow. You know, the streets are clogged with cars. I mean, some of the traffic jams are unbelievable in Caracas at the moment. And it’s kind of as if the place is on steroids.

And, you know, I think Rosales has fought a good campaign, and I think the opposition has begun to—you know, has displayed perhaps greater unity and has begun to reach parts of Venezuelan society it’s not reached before. And there’s a sense among some opposition organizers that they could be fairly close to a breakthrough. You know, we’ll have to see on Sunday.

Violence—I mean, I think one has to be—obviously, the memories of 2002 and the kind of explosion that preceded the military coup against Chavez is a forewarning on that. There are a lot of guns around. There’s an awful lot of gun crime. And yeah, it could be quite a stormy few days. Without being—I wouldn’t want to be overdramatic about it. It may not be a stormy few days, but one has to bear in mind that tensions are running very high.


SWEIG: Do we have another question, Operator?

OPERATOR: Ladies and gentlemen, if you would like to ask a question, please press the star key followed by the 1 key on your Touchtone phone now.

We have another question from Jim Dingman with IMN World Report.

Please go ahead.

QUESTIONER: Yeah, hi. Richard, can you hear me?

LAPPER: Sure, Jim.

QUESTIONER: Okay. First of all, what do you think of the question that in the past the United States has confronted foes during the Cold War, and of course we can have a debate about the relations with China and Russia today, but nevertheless, commercial relations are ongoing with both those societies, certainly with China. Angola, we fought a covert war with. So why can’t there be a possible—just let this guy do his thing and let it be, and let it calm down because of the force of the economic relations, which is sort of the thrust of what I see in your report.

LAPPER: Yeah. I think a radical policy in the U.S. which would seek to isolate Venezuela in the way the U.S. has sought unsuccessfully for the last 40 years to isolate Cuba, wouldn’t be very sensible in our view. It would probably be exactly what Chavez would want to strengthen his own domestic position, I think.

That’s why we’re arguing—I mean, I think, you know, from the U.S. point of view here, the options are very tightly circumscribed. I mean, you have a country which is ten times smaller in terms of its economy, at least 10 times smaller than you are; you’ve got a history that also makes it quite difficult. I mean the fact that the U.S. is perceived to have supported, by many Venezuelans, is perceived to have supported the 2002 coup, makes it quite difficult. It’s certainly Chavez’s belief—and he may be right, may be wrong—but I mean it’s certainly his belief that the U.S. was in favor of that coup and actively involved in it. There’s not an awful lot of evidence to that effect, but that is a belief in Chavista circles, and that also makes it very difficult for the U.S. to act here.

So I think, you know, what we’re arguing, in a sense, is that the U.S. has got to be very pragmatic. It’s got to look for, you know, what in the trade they call back channel diplomacy. It’s got to be sensitive about these kind of historical realities, and it’s got to work closely with regional partners such as Brazil and Chile and Argentina. And it’s also got to bear in mind that—and this is pretty important, I think—that the popularity of Chavez is directly related to these social programs. And that, you know, insofar as Chavez has influence elsewhere in Latin America among the poor is because of the social programs. You know, Chavez is seen to have addressed the problem, which in my view is still the outstanding problem, economic and social problem in Latin America—social exclusion. He’s seen to have done something about it.

Now, that doesn’t mean to say he’s the most popular leader in the region, because he’s clearly not. And many Latin Americans, especially in more sophisticated countries like Brazil or Argentina or Mexico, are deeply suspicious about this kind of—(word inaudible)—you know, the sort of—the big man riding in on his horse. And it’s almost kind of— Latin America is much more democratic than that. And I think there is a lot of suspicion in the region about this kind of rather crude, old-fashioned style that Chavez exudes.

QUESTIONER: What do you think of the kind of intervention or support that Chavez has given to elections throughout Latin America? What kind of insights can you share with us since you’ve—

LAPPER: Well, I mean, clearly, he supported Ollanta Humala in Peru, and he supported Evo Morales. My suspicion is that the financial support was not the key element in all this. In terms—elsewhere, there’s obviously a close link with Correa in Ecuador.

But again, I mean—I think the rules in these countries that make it quite difficult to receive. I mean, certainly in Ecuador, it’s a classic case where they, you know, candidates who get help from outside could find themselves impeached pretty quickly. And that happened, in fact, to—one of the charges against Lucio Gutierrez, who preceded this current president, Palacio, was precisely that—that he received help from the outside.

So I think one has to be slightly careful about saying that these are leaders directly sponsored and paid for by Chavez. I mean, I think it’s more complicated than that. And whether Chavez was there or not, Evo Morales in Bolivia would be there. I mean, Evo Morales has been in politics for, you know, 10, 20 years, he’s got a very solid support base amongst the indigenous population and, you know, he’s speaking in a sense to the same kind of sense of social grievance that Chavez is addressing. I mean, he’s—why is he there, fundamentally? Because Bolivia is a very unequal society where the indigenous majority have felt excluded for a few centuries. And I mean, he reflects that much more than he reflects any kind of mechanical dependence on Chavez.

And I think, you know, in terms of the bigger countries—you know, Chavez obviously supported Lula in the Brazilian election, and Lula returned the favor recently, in a visit to Venezuela. But I don’t think that in any way that support either was, you know, a decisive factor. And I think that, you know, Chavez and Lula—the talk in Brasilia is that Lula does not particularly get on with Chavez. I mean, there’s a kind of, they’re good old boys together, they’ve got this kind of joint left-wing past, but I think that Lula doesn’t kind of see eye to eye on the way Chavez conducts politics. And there are certain amounts of suspicions about, resentments about the way that, you know, Venezuela might have had an impact in terms of the Bolivia dispute over gas, which went directly against Brazil’s interest.

So, you know, it’s complicated, basically. And Chavez does have an influence in the region, but it shouldn’t be exaggerated.

QUESTIONER: And how do you see the argument being made that Chavez is, in a sense, an instigator for a resuscitation of the Bandung movement, of the Non-Aligned, sort of putting juice in it in a new way, that it would be similar to the effect it had politically in the ‘50s?

LAPPER: Yeah, I mean, Chavez is a great fan of multi-polarity. He wants to build alternative centers of power to the U.S. And, you know, that’s clearly his intention in the bid to win a seat on the U.N. Security Council, one of the temporary seats—clearly one of his intentions.

What’s the—is that a viable project? Yeah. I mean, to some extent, it is. I mean, the world is becoming—we are, you know, moving toward—there are alternative centers of power. You know, China is becoming much more important economically; you know, it’s pretty logical that Venezuela would look to deepen its links with China, you know, the radical Arab regimes in the Middle East.

Yeah, I mean, he’s certainly into doing that. Extent to—you know, it’s a very different world, isn’t it, because we don’t have—you know, the Soviet Union is not around. You know, Cuba was a big Non-Aligned—was a big fan of the Non-Aligned Movement, too, but it was really heavily subsidized by the Soviet Union. I think, yeah, he’s going to—he clearly wants to do that, that’s no question. He wants to build the Non-Aligned Movement, and we’ll see more of that.

QUESTIONER: Finally, we have today in Lebanon the culmination of several months of political turmoil where the Hezbollah leaders have announced that they will essentially want a coup de main to overthrow the government. And we know that during the summer, Chavez supported Nasrallah, you know, with a—seeing a holocaust in Lebanon, with the campaign that went on there. And I was wondering how you see these issues playing into U.S. domestic politics. You already have discussions about a “who lost Iraq” debate, which some are arguing about. And I know that it’s not the same—it’s not like the Cold War, it’s not like the late ‘40s with the “who lost China” debate, et cetera. But how do you see these issues of Chavez playing out in American domestic politics in the next few weeks?

LAPPER: Well, I think that the answer to that question is really—I think there’s a kind of—in some ways, I think it’s slightly—I mean, because of the Democratic victory in the congressional elections and this pragmatic shift I talked about earlier on in U.S. policy, I think we’re kind of moving away from a very ideological approach to the kind of approach that saw Chavez as a part of the “Axis of Evil” and so on. We’re moving away from that kind of approach because it kind of hasn’t worked in Iraq.

So I don’t know. I mean, you know, clearly, we’re going to find—you know, Chavez is not going to popular in the U.S. media and in Fox News or whatever. He’ll be bashed regularly and so on. But it’s difficult—I think unless—you know, if relations—if this situation is stabilized, it may well not be much—I mean, I doubt it would be much of an issue in U.S. domestic politics. And Latin America doesn’t really figure that much. And there’s no—you know, it’s not like Cuba, where there’s a very active lobby group promoting the issue in the U.S.

QUESTIONER: Right. Well, look—but then—just as the last question, you know, the question of Colombia. You know, you have the whole drug war issue that’s sort of subsided because of the events of the past several years, but nevertheless, the issue of Chavez providing sanctuary to FARC or support to it—how do you see—is that true or how do you see that issue evolving?

LAPPER: Historically, there have been kind of low-level links between FARC and, you know, sort of the radicals in Venezuela. Chavez is not stupid. I mean, he’s not kind of—I don’t think there’s any kind of explicit promotion of FARC activity and so on.

I think what happens is that—(brief audio break)—time to time, you know, FARC people come over into Venezuela and people turn a blind eye, you know. It’s not—I don’t think there’s active complicity.

I think Colombia—you know, the war is still going on. It’s maybe more localized than it was five or six years ago, but it’s going on quite intensely in the jungle. And I’m not sure that, you know, the—it’s been that—the counternarcotics efforts have been that successful. I mean, there is a bit of a reduction in coca, in acreage turned to coca, but it’s not—overall, you know, we’re still finding as much cocaine coming out of Colombia as was before.

I think there’s a broader issue there. I mean, the surprising thing, in a sense, is that Colombia is not on the news agenda at all, really. I mean, it’s—it excites virtually no interest whatsoever in the U.S. But the lobby to maintain the—you know, this is the biggest recipient of U.S. aid in the region, and the lobby to maintain that effort is quite strong in Congress and doesn’t show signs of becoming any weaker.

But I don’t think the link is maybe—is that—there’s all sorts of talk about a lot of drugs going through Venezuela right now, and I think that’s one of the issues that, you know, the U.S. would look to talk to the Venezuelans about, you know, as part of the counter-drug strategy. That’s—

QUESTIONER: Well, thank you, Richard. Thank you. Thank you for briefing us.


SWEIG: Operator?

OPERATOR: There are no further questions in the queue at this point.

SWEIG: Well, I think we’re coming to a close. In any case, Richard, if you have anything that you feel like we didn’t cover, now’s the time to chime in. Otherwise, I think we can thank everybody for calling and Richard for shouldering this paper and getting it to completion. I think it’s a smart and wise approach to the issue, and I want to thank you. So chime in now, Richard, for a wrap-up.

LAPPER: No, I’ve not—I think we’ve kind of covered all the bases, really.

SWEIG: Great. Terrific.

LAPPER: I think we’ve probably covered them to death.

SWEIG: Okay. (Chuckles.)

LAPPER: (Chuckling.) So I think we’re fine.

SWEIG: All right. Well, thank you very much.

LAPPER: In case—if anyone wants to read a kind of—my actually up-to-date version and a more up-to-date version than the paper, there’s a big piece in the FT today on the pre-electoral outlook, which does cover the economic issues we’ve talked about, in greater detail.

SWEIG: There you go.

LAPPER: (So read that ?).

SWEIG: All right. Thanks, all, for the call.

LAPPER: All right. Thank you very much.

SWEIG: And we’ll speak to you soon. Thank you. Bye-bye.









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