WESTERN HEMISPHERE: VENEZUELA, CHAVEZ'S REGIONAL AND

UNCLAS SAO PAULO 000042

SIPDIS

SIPDIS

STATE INR/R/MR; IIP/R/MR; WHA/PD

DEPT PASS USTR

USDOC 4322/MAC/OLAC/JAFEE

E.O. 12958: N/A
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: WESTERN HEMISPHERE: VENEZUELA, CHAVEZ'S REGIONAL AND
INTERNATIONAL INFLUENCE; MERCOSUL SUMMIT IN RIO DE JANEIRO; SAO
PAULO



1. "From Venezuela To The World"

Political columnist Eliane Cantanhede commented (1/18) in liberal,
largest national circulation daily Folha de S. Paulo: "When Hugo
Chvez speaks about a '21st Century socialism,' each one understands
it as he/she wishes. [Brazilian] Foreign Minister Celso Amorim, for
example, believes that this is just a slogan. Chvez's most powerful
weapon is oil, of which Venezuela is the world's fifth main
producer. When he invests in the neighboring nations' presidential
elections, when he buys Kirchner's support by acquiring Argentine
bonds, when he is the first leader of the region to exchange crude
oil from Ecuador for processed oil products, and when he helps
Paraguay to renegotiate its bonds, Chvez has behind him not only
his personality and impulse, but oil - high cost oil. This is why he
has already cut Venezuelan production and is negotiating with OPEC a
10% oil price increase in the international market. Iranian
President Mahmud Ahmadinejad's presence in Ecuadorian President
Rafael Correa's inauguration was almost unnoticed.... Iran produces
oil, has a closed regime and has been listed among the US's main
adversaries, a latent Iraq. Any coincidence?.... Chvez's horizon
is not in Bolivia, or in Argentina, or in Brazil. This is just the
beginning."


2. "Mercosul's Condemnation"

The lead editorial in center-right national circulation daily O
Estado de S. Paulo maintained (1/18): "Only nations that adopt a
democratic regime can become Mercosul partners. But the bloc's
democratic clause is cleverly vague. It neither defines what
democracy is nor lists violations of the democratic order that would
result in expulsion from the bloc.... Venezuela became a full member
of Mercosul in August when President Hugo Chvez had just eliminated
all traces of democracy in that nation, except elections.... Like
Venezuela, Bolivia is not a democracy. There were elections in both
nations, but they lack other fundamental [democratic] requirements.
In Venezuela, all powers are concentrated in Colonel Hugo Chvez's
hands.... In Bolivia, the Judiciary has just suffered a deadly blow
with the creation of community courts, the Legislative is
inoperative, and the Constituent Assembly's work depends on what
President Evo Morales will decide.... Morales-controlled 'social
movements' are eliminating by force any vestige of democracy in the
country. It is exactly the entry of Bolivia in Mercosul as a full
member that the Brazilian government is supporting.... But Mercosul
is not a benevolent entity. It is an organization of political and
commercial coordination and is structured as a customs union.... In
practical terms, this means that the customs union, which was
already fragile, will be dead and buried as a result of Bolivia's
association. But what is worse is that with the entry of Bolivia
following that of Venezuela, Mercosul will become a bloc of
differing and conflicting tendencies. The four original partners
(Argentina, Brazil, Paraguay and Uruguay) have been increasingly and
consistently committed to a market economy. The two newcomers have
fostered extravagant experiments of socialization of production....
And being a political and ideological mess, how will Mercosul
present itself as a political unity or be taken seriously in global
negotiations? The entry of Bolivia as a full member as happened
with Venezuela, does not enlarge or strengthen Mercosul, but
condemns it inexorably, if not to death, to irrelevance."
McMullen