Venezuela can no longer finance Chavez socialist agenda

NY Times:

President Hugo Chávez’s push to extend his sway in Latin America is waning amid low oil prices and disorder in Venezuela’s own energy industry.

In recent years, Mr. Chávez has used his nation’s oil wealth to drive his socialist-inspired agenda at home and draw other countries in the region into his sphere of influence, helping to consolidate a leftward political shift in parts of Latin America.

But more than a dozen big projects intended to broaden his nation’s reach are in limbo — including a gas pipeline across the continent and at least eight refineries, from Jamaica to Uruguay — as Venezuela grapples with falling revenues and other troubles in its national oil company.

Venezuela is also cutting back sharply on other types of financial support for its neighbors, a cornerstone of its regional influence. One recent study by the Center of Economic Investigations, a financial consulting firm here, found that Venezuela had announced plans to spend only about $6 billion abroad this year, down from $79 billion in 2008.

That includes proposed spending on everything from military purchases to aid, and points to a major weakening of Mr. Chávez’s oil diplomacy. Gone, for instance, are multibillion-dollar outlays to buy Argentine bonds, replaced by modest loans like $9 million for growing rice in Haiti.

Now countries that have been dependent on Venezuelan aid are turning elsewhere. Argentina locked in a $10 billion deal with China to help it buy Chinese imports, while Ecuador, a close ally of Venezuela, is rekindling ties to the International Monetary Fund, the kind of Western-dominated institution that Mr. Chávez scorns.

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Brazil has also emerged as an energy rival after discovering large amounts of oil and natural gas off its Atlantic coast. Now it is increasing exports to the United States, Mr. Chávez’s top customer, while Venezuela’s national oil company faces declining output from its oil fields.

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While Brazil is a more sane supplier, I find it disappointing that the kind of energy find they have that allows them to export is the kind that the Democrats are blocking in US offshore waters. Chavez is about to find out who his friends are now that he can no longer buy them.

His government is still trying control freak economics which will further drive capital away from Venezuela as well as foreign owned business.