Posted on 09/08/2002 11:56:22 PM PDT by Cincinatus' Wife
Venezuelan President Hugo Chavez has said his government is restarting supplies of subsidised oil to Cuba five months after they were suspended during a failed coup against him.
The decision to resume the shipments of 53,000 barrels a day has been particularly controversial in the oil-rich South American nation which is going through an economic crisis.
Mr Chavez's opponents have accused him of giving away oil because of his friendship with Cuban leader Fidel Castro.
Opposition parties have begun legal action against Mr Chavez at the country's Supreme Court, saying the deal was never approved by Venezuela's parliament.
Venezuela's charismatic leader was characteristically bullish when he announced the resumption of the country's oil supplies to Cuba.
He insisted the agreement was commercially sound and did not represent a gift to his friend, Mr Castro.
Shrugging off his opponents' legal challenge, he said:
"If they want to indict me, then I'm waiting here for them to put on the handcuffs."
'Fill her up'
The two-year-old deal is vitally important to Cuba and its troubled economy but it has become a sticky political issue for Mr Chavez.
With rising unemployment, inflation and a shrinking economy, Mr Chavez's opponents say Venezuela cannot afford to give away subsidised oil.
In fact, Cuba does pay market prices for the Venezuelan crude but it can pay for part of the supplies over 17 years at an extremely low interest rate of 2%.
Some managers at the country's state oil company, Petroleos de Venezuela, who vowed to end the supplies during the failed coup against Mr Chavez in April, say the government is not giving away crude - it is giving away money.
They point out the government has to borrow money on the international markets at rates of up to 16%.
They also say Cuba has run up a debt of 142 million dollars and will likely do so again.
Once an agreement on re-financing that debt was reached, Mr Chavez ordered oil workers to start loading up a tanker which is due to sail on Monday.
What is unclear at the moment is whether the Supreme Court will agree with his decision.
One of the major disagreements centered on the Ministry's insistence on adhering to OPEC production cuts, but forcing PDVSA to continue producing surplus oil that has now filled every available storage facility. Although PDVSA cannot sell the oil, the catch is that it still must pay royalties for producing it to the central government, Lameda revealed after his departure.
"I started warehousing" when prices were $26 per barrel, he told El Universal newspaper. "They're now $16. The barrels are worth less every day. I told the minister that I have to go out and ask for $500 million in loans while I have $300 million in the warehouse."***
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***More ominously, the same sources with direct access to the highest levels of the Venezuelan military tell INSIGHT that the Cuban connection remains strong, directly contradicting U.S. press reports that the Cubans have soured on Chavez. Indeed, sources in the U.S. intelligence community tell INSIGHT that the Cubans have their claws deep into the chaotic Chavez regime. One senior U.S. official reveals that the entire security force protecting Chavez is made up of Cuban military personnel and that Venezuela's elite military intelligence force also has been largely penetrated by Cuba's intelligence services. *** Source
Venezuela May Raid Bank Reserve Deposits For Cash *** The cash crunch has led to infighting among members of Venezuela's economic team, with Planning Minister Felipe Perez accusing the central bank of sabotaging government bonds sales by issuing its own short term bills at better rates to control liquidity.
Meanwhile, Nobrega is under investigation after he issued a VEB190 billion, 2 1/2 year bond in a private placement his critics said was done without the requisite transparency. A National Assembly decision on whether he's guilty of wrong doing is expected in the next 10 days. Analysts have said the feuding will probably exacerbate Venezuela's already dire economic outlook, and work against hopes to attract buyers for foreign debt during a short road show in the U.S. slated to begin Sept. 16. ***
Corrupt Latin leaders could lose assets in U.S., Bush envoy says*** WASHINGTON - The top U.S. envoy to Latin America said Friday the Bush administration is studying whether it can seize properties that corrupt officials in the region purchase in the United States. Voicing dismay at public corruption, Otto Reich, the assistant secretary of state for the Western Hemisphere, said the Bush administration has ''pulled quite a few visas'' of Latin officials recently but wants to expand its anti-corruption drive.
…. Reich, a Cuban-born lobbyist and former ambassador who took his post in January, has made fighting corruption a key element in U.S. foreign policy. In his public remarks, Reich mentioned that U.S. officials have withdrawn the visas of officials linked to corruption in Nicaragua and Ecuador. Both nations are embroiled in malfeasance scandals. 'I don't want to get overdramatic here. The use of the term `war' has been overdone. But we have declared war on corruption, and we're going to win it,'' Reich said. Corruption in Latin America, he said, ``undermines the very systems that we are trying to support, the democratic systems, the development of societies.''
In the interview, Reich said the Bush administration is not only revoking the visas of corrupt public officials in Latin America but also of private business owners or bankers who steal from governments or from helpless citizens. ''These people are destroying lives. They are stealing food from the mouths of children and the poor. The money, if it's public money, should go to health, education, nutrition [and] housing,'' he said. Reich said he was ''gratified'' at the reaction from some high-profile U.S. visa revocations in the region, adding that some sitting Latin American presidents have personally thanked President Bush.
''It has had a tremendous impact, to be honest with you,'' said Reich, who traveled to Nicaragua and Honduras in late August. U.S. officials have revoked more than 20 visas of prominent Guatemalans so far this year, including a retired army general, and have pulled the visas of a number of former officials who worked under Nicaraguan President Arnoldo Alemán, who left office earlier this year, according to news reports. Reich declined to provide numbers, saying he didn't want to get into ``a body count.'' ***
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