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Chavez, Seeking Foreign Allies, Spends Billsions - New York Times

Ch�vez, Seeking Foreign Allies, Spends Billsions - New York Times:

"CARACAS, Venezuela — President Hugo Chavez is spending billions of dollars of his country's oil windfall on pet projects abroad, aimed at setting up his leftist government as a political counterpoint to the conservative Bush administration in the region.

With Venezuela's oil revenues rising 32 percent last year, Mr. Chavez has been subsidizing diverse items like samba parades in Brazil, eye surgery for poor Mexicans and even heating fuel for poor families from Maine to the Bronx to Philadelphia. By some estimates, the spending now surpasses the nearly $2 billion Washington allocates annually to pay for development programs and the drug war in western South America.

The new spending has given more power to a leader who has been provocatively building a bulwark against what he has called American imperialistic aims in Latin America. Mr. Chavez frequently derides Mr. Bush and his top aides. In March, he called Mr. Bush a 'donkey,' a 'drunkard' and a 'coward,' daring him to invade the country.

But with the biggest oil reserves outside the Middle East, Mr. Chavez is more than an irritant. He is fast rising as the next Fidel Castro, a hero to the masses who is intent on opposing every move the United States makes, but with an important advantage.

'He's managed to do what Fidel Castro never could,' said Stephen Johnson, a scholar at the conservative Heritage Foundation. 'Castro never had an independent source of income the way Chavez does. Chavez is filling a void that Castro left for him, leading nonaligned nations.'

It remains unclear exactly how much the government has spent, because the state oil giant, Petroleos de Venezuela, has not made detailed financial records public, and its balance sheets have been shielded from independent audits. Mega-projects, like Mr. Chavez's utopian plan of building a gas pipeline through the Amazon from Venezuela to Argentina, are not likely to materialize.

But Mr. Johnson estimates that Venezuela pledged $3 billion in aid last year to its neighbors, including generous bond purchases that made the government a lender of last resort across the continent."

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