Between Ideological Affinity and Economic Convenience

A Web Feature




by | Sep 18, 2008

Foreign relations between Venezuela and Argentina became closer after Néstor Kirchner took office as president of the latter country in May 2003. He came to power with a meagre 22.3% of the popular vote, thanks to former president Menem’s refusal to run in the ballotage. At that moment Argentina was trying to emerge from the deepest political, economic and institutional crisis in its history. A massive social protest around the country, asking for a wholesale renewal of the political class and summed up by the shout “¡Que se vayan todos! (Everybody get out), had ousted the Radical Party-led government of Fernando de la Rúa on December 2001, amidst a collapsing economy and bank system and after nearly freezing economic activity by trying to achieve IMF budget-cutting targets.

Without foreign investments, the newly elected President Kirchner turned to oil-rich Venezuela for help. This was the only country that bought Argentine debt bonds while the rest of the world still viewed with great distrust the possibilities of this country to overcome default, as Francisco Corigliano reminds us in his October 2007 article in Boletín Isiae on the challenges for Argentina’s foreign policy for the new government. And Venezuela was also the only country at that moment that showed any interest in investing in Argentina. Taking advantage of oil revenues, and notwithstanding a domestic opposition that thought the country’s money was being squandered, President Hugo Chávez seized the opportunity of forging a strategic alliance with Kirchner.

Venezuela has now become Argentina’s most significant financial supporter. As of early 2007, for example, Venezuela had purchased $US 4,250 million in Argentine debt bonds. At the behest of the Argentine government, Venezuela provided $US 135 million to leading Argentine dairy producer SanCor to ward off a takeover by the American financier George Soros. The total loan, as in other cases, is being repaid with SanCor exports of milk powder to Venezuela (3,000 tons per year).

Chávez frequently allows countries to pay back loans with goods or services. This practice began with Caribbean countries, which were seeking to carve out an economic role for themselves in the region. As Chávez said during his February 2005 visit to Argentina, “We are exchanging diesel for milk” (Del nacionalismo revolucionario al socialismo, Ediciones Madres de Plaza de Mayo, Buenos Aires, 2005).

Relations between Venezuela and Argentina are based on the principles of complementarity and cooperation. In that sense, both presidents have signed several bilateral agreements regarding agriculture, oil exploitation and technology. Chávez has also promoted joint projects that include not only Argentina, but also Brazil and Bolivia.

One of these projects is the construction of a 10,000-kilometer pipeline from eastern Venezuela to Buenos Aires to provide natural gas to Bolivia, Paraguay, Uruguay Brazil and Argentina. But this pharaonic project, facing serious environmental challenges, now appears to have been put on hold. As most energy experts in Venezuela have argued from the very beginning, the high costs—an investment of almost $23 billion dollars—make the project not profitable for Venezuela and the other beneficiary countries.

Another project also announced by Chávez is the creation of the Bank of the South, a South American alternative to the World Bank and the Inter-American Development Bank, to finance regional development projects. The Bank, which was launched in December 2007, will promote investment in infrastructure and will help to stimulate regional integration. An initiative originally promoted by Chávez and Kirchner, it now has the participation of Paraguay, Uruguay, Ecuador, Bolivia and Brazil. The Bank will start operations in 2008 with an initial capital of $7 billion dollars.

Chávez’s foreign policy has sought Latin American integration as one of its principal goals, as suggested in the qualification of “Bolivarian.” Named for the 19th century revolutionary leader Simon Bolívar, it evokes his old project of a united Spanish America that, brought to present time, also means building a regional power bloc to resist U.S. imperialism. Like other Latin American presidents, including Kirchner and Lula in Brazil, Chávez argued against the Free Trade Area of Americas (FTAA) promoted by the United States. With the support of the Kirchner administration, Venezuela became a full member of Mercosur to assert its independence from the United States, expand the organization and promote regional integration.

The growing rapprochement between Venezuela and Argentina is partly based on a shared ideological affinity. In addition to their common position against the FTAA, both President Chávez and former President Kirchner have always emphasized the state’s role in stimulating production and controlling the financial system from the stance of a national-populist ideology. The current Argentine president, Cristina Kirchner, former President Kirchner’s wife, who took office in December 2007, also shares these ideological positions.

However, some important differences exist between the stances of the two countries. Chávez is more of a classic example of populism based on mass-mobilization than is Néstor Kirchner, despite his Peronist heritage. While the Venezuelan president always maintains a clear anti-United States position, the Argentine administration cultivates ambiguity, according to its own political and economic convenience. Besides, Chávez’s rapprochement with Iran cannot be supported by the Argentine government, since the country issued international warrants against former Iranian government officials as a result of the 1994 terrorist attack on the Argentine Israelite Mutual Association (AMIA) building.

Confronting strong criticism because of his closer ties with Chávez, Néstor Kirchner has always affirmed that strictly economic interest, rather than ideological affinity, motivated this strategic alliance with Venezuela. But even if Kirchner’s public rationalization of his alliance with Chávez is fully sincere, we cannot ignore that there are indeed points of commonality of vision that transcend pragmatic calculation.

Chávez’s foreign aid, based on oil revenues, has not only helped to bail out Argentina, improving its finances and standing among creditors, but it has also helped Kirchner to develop his economic program. However, this seems not to be the only way Chavez brings financial support for Argentina. In August 2007, during the Argentine election campaign, Venezuelan businessman Antonini Wilson flew to Argentina on a charter flight with Venezuelan and Argentine oil officials and attempted to bring in a suitcase with about US $800.000.

As a result, Claudio Uberti, one of Kirchner’s key negotiators of energy deals with Venezuela and who came back to Argentina in the same flight, had to resign, despite the fact that the Venezuela state oil company PVDSA appeared to be responsible for placing Wilson aboard the aircraft, as Chávez, who arrived in Argentina two days after the incident, attested. This confusing incident ended up in a U.S. federal inquiry in Miami because three Venezuelans and one Uruguayan were charged with acting as agents of a foreign country within the United States. The case also involved Chávez and the current President C. Kirchner. According to the criminal U.S. complaint, the money was intended to be a secret contribution made by Venezuela to her political campaign.

Whether true or not, what is certain is that Chávez has taken advantage of the rising price of oil to construct a regional network with other Latin American countries, showing his own leadership capacity. The rescue operation of hostages held by the FARC in Colombia, led by former President Kirchner and coordinated by Chávez, tried to bring glory to both of them and to enhance the Venezuelan president as an effective and necessary mediator and a capable Latin American leader.

This explains in part why Chávez has always tried to extend his influence on other social and political actors. Presenting himself as an alternative to the hegemonic domination of capitalism, even before the Kirchner presidencies, he managed to achieve the support of some leftist and Peronist groups in Argentina, such as the Madres de Plaza de Mayo Association led by Hebe de Bonafini, the Communist Party, the Land and Housing Federation of Luis D’Elía (the piqueteros movement), the Movimiento Evita, and the Revolutionary Communist Party, among others.

These groups sympathize with Chávez’s anti-imperalistic rhetoric and share a similar ideological view, identifying themselves with the Bolivarian Revolution. They have become a local political structure that contributes to validate his pretensions to regional leadership. Most of these groups, however, are not opposed to the Peronist government. Though some of them, such as D’Elía’s movement, receive some money from Chávez, the most important ones support the Kirchner presidencies. If in March 2007 Chávez’s anti-Bush rally in Buenos Aires, organized by Bonafini’s Madres de Plaza de Mayo Association with D’Elía’s piqueteros movement, took place without the assistance of President Kirchner or of any important political official, it does not mean that this demonstration took place in opposition to the Argentine government. On the contrary, when Nicholas Burns of the U.S. State Department criticized Argentine government for allowing Chávez’s act, Kirchner publicly reminded the American official that Argentina was a sovereign country.

But this kind of influence could at times be considered as external interference in domestic affairs. That happened in November 2006, when Chávez removed his Ambassador in Buenos Aires, Roger Cappella, as a result of President Kirchner’s protest against financial aid given by the Embassy to social and political organizations, including some opposition groups, and because the Ambassador encouraged Argentine officials to publicly support Chávez’s position in favor of Iran. This was the case of Luis D’Elia, at that moment Undersecretary of Land and Habitat and member of Kirchner’s team, who visited the Iranian Ambassador in Buenos Aires, ignoring the government position. But Chávez’s quick reaction, naming a new ambassador and promising an $80,000 dollar check to help SanCor, was interpreted as a friendly gesture towards the Argentine government.

Chávez has based his foreign policy in moving money to create a wide sphere of influence at different levels in Argentina. As Kirchner always has said, Chávez is a “good friend” of Argentina. He has helped the Argentine government to obtain easy access to credit and to cheaper oil. That is why Chávez’s influence in Argentina has been increasing since 2003.

Despite Chávez’s impulsive management style and the fact that he has also been funding some groups opposed to the Peronist government, the relation between Argentina and Venezuela is likely to remain the same. Cristina Kirchner has adhered to her husband’s foreign policy and wishes to preserve close ties with Venezuela, despite prognostication to the contrary. Ideological affinity and political and economic convenience form the core of this strategic alliance between the two countries.

Fall 2008Volume VIII, Number 1

María de los Angeles Yannuzzi is a Professor on Political Theory at the University of Rosario (Argentina). Her research focuses on democracy, charismatic leadership and political identities. She is author of Democracia y sociedad de masas (Homo Sapiens, Rosario, 2007).

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