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Putin & Chavez Ink Space, Military Trade Pact


 

On Vladimir Putin’s first visit to Venezuela, the Russian Prime Minister has offered to help Venezuela set up its own space industry infrastructure and capabilities — including, importantly, a satellite launch site – for the South American nation.  Venezuelan President Hugo Chavez announced the offer by Russia hours before Putin arrived, saying officials would discuss the possibility of setting up what Chavez described as a “satellite launcher and a factory,” and that “Russia offers help so that Venezuela can have its own industry for the use of its outer space,” Chavez said Thursday night. He didn’t give details or say how much that might cost. The two countries are also discussing new weapons, energy, agriculture and space deals, Chavez said in televised remarks, without giving details. Chavez’s government has already bought more than $4 billion in Russian weapons since 2005, including helicopters, fighter jets and 100,000 Kalashnikov rifles. Chavez said last year that Russia agreed to loan Venezuela up to $2.2 billion for additional arms deals.

Russian and Venezuelan officials said they planned to sign new agreements for energy projects in Venezuela, as well as industrial, commercial and agriculture projects. Chavez also reiterated that Russia will help Venezuela develop nuclear energy — a plan he has mentioned previously that has yet to take shape. “We aren’t going to make an atomic bomb, but we are going to develop atomic energy with peaceful aims,” he said. Chavez, whose country is a major oil exporter and OPEC member, says “we have to prepare ourselves for the post-oil era.”

Chavez has grown increasingly close to Russia, Iran and China while fiercely criticizing U.S. policies, and his calls for countering U.S. influence to create a “multi-polar world” have found resonance in Moscow.

Venezuela also intends to buy Russian-made Beriev Be-200 amphibious cargo planes, which are used for dousing blazes, Chavez said. Fires in El Avila national park in the mountains above Caracas have at times blanketed the city with a smoky haze from nearby mountain wildfires.

Chavez has grown increasingly close to Russia, Iran and China while fiercely criticizing U.S. policies, and his calls for countering U.S. influence to create a “multi-polar world” have found resonance in Moscow.

The U.S. State Department spokseman, however, made light of Chavez’s suggestion that Venezuela may set up a space industry with Russian help, saying: “We would note that the government of Venezuela was largely closed this week due to energy shortages,” spokesman P.J. Crowley told reporters. “To the extent that Venezuela is going to expend resources on behalf of its people, perhaps the focus should be more terrestrial than extraterrestrial.” In recent days, worsening electricity shortages have prompted Chavez’s government to decree public holidays throughout this week to save energy. A severe drought has pushed water levels to precarious lows in the dam that supplies most of Venezuela’s electricity.

And while the U.S. might find contentment in poking fun at Chavez, no one can doubt the seriousness of these development in terms of international relations, and the threat that closer ties between Russia and Venezuela pose to American national, as well as hemispheric interests.  Allowing Russia and China to establish trade and strategic toe-holds in Venezuela and Brazil, respectively appears — at least to me — to be, at least partially, a concession of America’s historic Western Hemisphere hegemony.  In addition, allowing Russia, a global trade competitor to U.S. business interests, to establish and compete in agricultural and weapons trade undermines American marketshare in the region.  This point seems to be lost in the State Department’s whimsical response.

The only thing that really unites Russia and Venezuela is that they don’t want to see a unipolar world,” dominated by the U.S., said Sergei Mikheyev, an analyst at the Center for Political Technologies in Moscow.   

Fast friends

Fast friends

Political analysts say Russia is drawn to Venezuela because of oil reserves as well as its strategic proximity in the Western Hemisphere – strategically considered a ‘

U.S. sphere of influence.’  A number of recent business and infrastructure development deals have helped cement the growing relationship – possibly setting up Venezuela as a Russian client-state“The only thing that really unites Russia and Venezuela is that they don’t want to see a unipolar world,” dominated by the U.S., said Sergei Mikheyev, an analyst at the Center for Political Technologies.   Mikheyev also noted that the United States has so far failed to react to Russia’s plea to cut drug traffic from Afghanistan to Russia’s Central Asian borders. Russia has also spent years trying to convince the U.S. to scrap Cold War measures that have restricted U.S.-Russia trade.

Venezuela is also a very lucrative arms and technology market, and Mikheyev said “without the [nature of the businesses] involved, the anti-American rhetoric wouldn’t be enough to unite Russia and Venezuela.”  In addition, Venezuela and Russia announced a joint venture earlier this week to drill for and process heavy crude oil in eastern Venezuela, saying they expect to start producing 50,000 barrels a day this year and to build an upgrader facility to eventually process about 450,000 barrels a day — giving a significant boost to Venezuela’s oil output.

As part of Putin’s visit, he and Chavez toured the Russian tall ship Kruzenshtern, which is docked in Venezuela on a visit.  Chavez chatted with Russian sailors through an interpreter and presented a copy of a sword used by South American independence hero Simon Bolivar, telling Putin he would show him the real sword used by Bolivar — the namesake of Chavez’s socialist-inspired “Bolivarian Revolution.” Putin also visited Bolivar’s tomb in Caracas before holding talks in private at the presidential palace.

(AP writers Nataliya Vasilyeva, in Moscow, and Matthew Lee, in Washington, contributed to this report.)

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Source:    UK Mail Times / AP Wire                           Photo: Associated Press

 

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Elison Elliott

Elison Elliott , a native of Belize, is a professional investment advisor for the Global Wealth and Invesment Management division of a major worldwide financial services firm. His experience in the global financial markets span over 18 years in both the public and private sectors. Elison is a graduate, cum laude, of the City College of New York (CUNY), and completed his Masters-level course requirements in the International Finance & Banking (IFB) program at Columbia University (SIPA). Elison lives in the northern suburbs of New York City. He is an avid student of sovereign risk, global economics and market trends, and enjoys writing, aviation, outdoor adventure, International travel, cultural exploration and world affairs.

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Market Trends; International Finance; Global Trade; Economics

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