Hugo Chavez, Venezuela's president, greets supporters after casting his vote in an intra-party election in Caracas, Venezuela, on June 1, 2008. Photographer: Susana Gonzalez/Bloomberg NewsChavez's Cheap Oil Gives Him Sway Over U.S. Allies,
Aid Funds -- Bloomberg
Aid Funds -- Bloomberg
Oct. 6 (Bloomberg) -- President Hugo Chavez has figured out how to use Venezuela's vast oil reserves to increase his regional influence while diminishing U.S. clout: He all but gives it away.
The self-proclaimed socialist revolutionary is allowing impoverished U.S. allies such as Honduras and the Dominican Republic to buy discounted oil with low-interest loans. Then he rebates the revenue back to those countries in the form of aid - - attached to strings he controls.
Venezuela's oil wealth gives it ``much more capacity for an aggressive foreign policy,'' says Jose Manuel Puente, a professor at the Center for Public Policy at the Instituto de Estudios Superiores de Administracion in Caracas. ``You can cultivate and multiply your revolution, and you can create more friction with the U.S.''
Record oil prices have allowed Chavez, 54, to boost spending on such agreements this year. Crude exports from Venezuela, the Western Hemisphere's biggest oil exporter, exploded since 2007.
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My Comment: What will happen if the oil price goes downward. Raising expectations .... and then taking them away .... this usually upsets a large number of people.