Today's date:
Winter 2001

Globalization From Below

Hugo Chavez, the controversial president of Venezuela, has been called "Fidel with oil." Before he ran for office and was elected in 1998, Chavez had been imprisoned for two years after leading an attempted coup in February 1992 when he was an army colonel.

Chavez has raised diplomatic hackles around the world by attacking "neo-liberal globalization," praising Fidel and the Cuban revolution and meeting with Saddam Hussein despite US opposition and UN sanctions.

Venezuela, the largest supplier of oil to the United States and the largest source of oil outside the Middle East, is the present chair of the OPEC oil cartel.
In late September, OPEC held its first summit in 20 years in Caracas. NPQ editor Nathan Gardels spoke then with Chavez.

NPQ | There seem to be two models of development emerging in Latin America-Mexican president-elect Vicente Fox's vision of a "North American Common Market" and your vision that might be described as "Bolivarian anti-globalization"-a South America united against domination by the neoliberal policies of the United States.

Do you see it the same way?

Hugo CHAVEZ | No, I don't see that dichotomy. The model we are pursuing is not, I insist, anti-globalization but globalization with a conscience -for human development, equity and democracy; globalization from the bottom up, that doesn't leave the poor behind.

Our project is in fact integrationist, just as Simon Bolivar himself saw the unification of Latin America at the Congress of Panama in 1826. It is a project that is not only economic, but political, cultural and ethical as well.

But what we propose is integration by stages. Integration is a process which we are promoting very actively in South America, Central America and the Caribbean. For example, we are working hardest to bring together the Andean countries. At the same time we are trying to link up the Andean bloc with MERCOSUR [the trade zone that includes Brazil, Uruguay, Chile and Argentina-ed]. In turn, those two blocs should link up with the Association of Caribbean States and, later, with NAFTA. And why not, one day-with the proper social policies-put a South American common market together with the North American one that Fox proposes?
In other words, we have to start with this "internal globalization" of our region and then move on.

Vietnamization of the Amazon
NPQ | You have called the US-backed anti-drug "Plan Colombia" a recipe for "the Vietnamization of the Amazon." Can you explain what you mean?

CHAVEZ | The Colombian conflict has been going on since 1948. Today, the guerrillas of the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN) control a large part of the country.
All the time now, the conflict spills over into our territory because much of the border with us is controlled by the guerrillas.

The problem with Plan Colombia is that it has a very strong military component, which will intensify the clashes. Plan Colombia will have the impact of an elephant splashing around in a pool-it will spill the conflict across all the bordering countries in greater proportions than ever before.

If you want peace, you can't get it with more weapons. If you want peace, you need to reduce military tensions, not build them up. Just the very announcement of Plan Colombia has increased the conflict inside Colombia, with people fleeing into the Brazilian Amazon in one direction, across the border in our direction and toward Panama as well.

NPQ | Because they share your Bolivarian vision, you are said to support the FARC in this fight and want to bring them into the government in Colombia as a way to end the war.

CHAVEZ | No. We don't support FARC. We support peace. It is up to the Colombians to determine the composition of their government, coalition or otherwise, not us. I repeat: I don't support the FARC or the ELN. I support peace.
Fidel With Oil

NPQ | One of your top goals when you came to power two years ago was to revive OPEC discipline and cut production in order to boost oil prices. At that time, oil prices were less than $8 a barrel; now they are around $30 a barrel.

How much of that price increase is due to the cutbacks and adherence to quotas by OPEC producers that you engineered? How much is due to other factors?

CHAVEZ | It is true that this effort has been successful in part due the intensity and persistence of our oil diplomacy. OPEC had actually decided to cut production before we took office, but had not been successful in coordinating its efforts. Like Venezuela, the other OPEC countries had come to realize the necessity, even the obligation, of production cuts in order to defend themselves. All of us were taking too big of an economic hit with oil prices at $7 a barrel.

I personally went to every single OPEC country, often going from one place to the next without sleeping, traveling by helicopter and even by land through the scorching desert to reach Baghdad. I went to the other side of the world, to Jakarta. In each place I saw the highest political authority. My message was: We need to restore the internal discipline of OPEC, cut production quotas and stick to them.

King Fahd of Saudi Arabia and President Khatami of Iran saw the potential that would come for renewed cooperation. Even Iraq and Iran agreed to get closer on this. Libya, too. President Olusegun Obasanjo (of Nigeria) understood he needed greater revenues to support the new democracy there.

The crowning accomplishment of those efforts was the extraordinary summit of the heads of state of the OPEC countries held recently in Caracas.

In order to reach a balance between consumers and producers, we proposed in Caracas that OPEC accept as a target a flexible price band between $22 and $28 a barrel. At first, nobody wanted to accept that. But after intensive campaigning, all OPEC members agreed and ratified this position. Everyone agreed on the need for balance-for a guarantee of secure and stable supplies, but at a fair price.
Beyond all this, you have to understand that OPEC controls less than half the world's oil. We alone cannot determine prices.

For example, refining capacity is not being totally utilized. In the US, refineries are not operating at full capacity. Because of climate change, winters have been colder, resulting in rising demand for fuel. Then there are high taxes on gasoline-more so in Europe than in the US-that affect the end price at the gas pump. And on top of all that, there is the uncertainty caused by violence in the Middle East that could disrupt oil supplies.

NPQ | UN Secretary General Kofi Annan has called on OPEC to establish "a fair and stable price" of oil because, he says, it is the non-oil-producing developing countries that suffer most from high prices. Would you tell Kofi Annan that $22-$28 per barrel is a fair price?

CHAVEZ | Yes. You know, a barrel of shampoo costs three times more than a barrel of oil at such a price. A barrel of mineral water costs more than a barrel of oil.
I also agree, however, with my friend Kofi Annan. The poorest will suffer, even with this fair price. That is why Venezuela has just concluded an energy agreement with the Central American states and Cuba. We will sell them oil at the market rate, but through a debt instrument they will be able to pay for over 15 years at a low interest rate, around 2 percent.

As a responsible world organization, I believe OPEC is obligated not only to invest in finding oil, but also in research into alternative energy resources such as solar and natural gas for developing countries. In fact, we plan to open an OPEC-funded institute for scientific and technological research in Caracas for this purpose. Oil prices and development needs must be balanced.

NPQ | So, OPEC has done what it can to bring prices down?

CHAVEZ | Our goal in OPEC is not to lower or raise oil prices, but to seek a level of production that ensures stability of supply and guarantees a fair price; no gluts, no shortages. It is necessary to increase the level of our security not for this year, or even for five years, but for the 21st century. We need to protect ourselves so that we can reliably count on oil revenues in order to develop our societies.

NPQ | Do you need to protect yourself from the longer range drop in demand?
For example, former Saudi oil minister Sheik Ahmed Zaki Yamani has said that, despite high oil prices today, the world is facing the "end of the oil age" because, over the next 20 years, the large consumer countries will adopt hybrid fuel automobiles that require far less petroleum.

CHAVEZ | Some people also said that 20 years ago. But, well, here we are.

NPQ | Some Saudi princes have been calling on the oil-producing countries to show solidarity with the Palestinians in their fight with Israel. As before, during the oil embargo of the 1970s, might OPEC take sides in this conflict?

CHAVEZ | No. OPEC is an economic organization, not a political one. We should not get mixed up in such issues.

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