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Eric Ehrmann

Eric Ehrmann

Posted: April 1, 2010 12:06 PM

Is Hugo Chavez the Kremlin's Useful Idiot?

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With the Communist Party finding a second life in Russia one wonders if trust is wearing thin between prime minister and ex-KGB man Vladimir Putin and Moscow's top ally in South America, the unpredictable Venezuelan leader Hugo Chavez. The two leaders hold discussions in Caracas tomorrow.

In the wake of the bombings at the Lubyanka metro station, the close ties between Venezuela and Iran may be a concern that takes priority over Kremlin efforts to expand its footprint in world energy markets and South American politics.

Chavez has been tag teaming with Iran to produce global instability, politicizing OPEC, rolling out the welcome wagon for Middle Eastern extremists and drug gangs with murky Russian connections back to Europe, and developing closer ties with Tehran's nuclear program.

The pattern, which also includes Venezuelan support for the FARC quasi-nation inside Colombia, resembles Libya's rogue behavior of the 1970s that was a Cold War sideshow, with leader Muammar Kaddhafi providing training and support to radical Levantine groups, IRA provisionals and the Red Brigades. As was the case with efforts to free the Iran hostages, methods used by the Carter administration had little success in shutting down or containing these groups.

To counter Chavez and his Kremlin backers the Obama administration expanded a network of bases in Colombia that effectively turns the Amazon into the new Rio Grande. The deal was part of the Bush team strategy to deal with narcoterrorism issues in the region and is being carried out at the Pentagon under Bush holdover defense secretary Robert Gates.

Regional power Brazil has been conducting a balanced policy in the region, maintaining communication with the FARC. Brazil played a key role in mediating the recent release of Colombian army sergeant Pablo Moncayo, who was held for 12 years by FARC. While Venezuela has purchased 24 SU-30 fighters from Russia, Brazil has refused to get involved in a Latin arms race. President Lula recently informed the defense ministry that an air force request to purchase new jet fighters was being passed on to the winner of the October presidential vote. Brazil also questions the value of sanctions against Iran at this time.

Russia covers its political and military agenda in South America with business ventures. Venezuela needs $20 billion to expand its Orinoco heavy oil fields and Russian state firm Rosneft and private operator Lukoil have committed to the project, which experts say will require 40 years to complete.

But with the Russian state and private players already dominating global hydrocarbon markets this deal has more strategic significance than ROI opportunities and will help cement relations between Caracas and the Kremlin after Chavez and Putin exit stage left. It keeps Russia in Venezuela on a long term basis much as the port deal between Panama and China-friendly firms keeps Beijing at both ends of the Panama Canal.

Putin's problem with Chavez turns on Venezuela's nuclear relations with Iran and the extent to which Caracas provides Tehran with a platform that reaches into Ecuador, Bolivia, Brazil, Guyana and Trinidad. Iran has developed a modest influence base among ethnic Middle Eastern populations in the region. The wild card is the linkage between FARC and Islamicist groups working in concert under the protection of the Venezuelan leader.

Russian state and private firms want to have it both ways and as a result Putin and his business allies could face steep economic and political costs. At the same time Putin has questioned sanctions against Iran and in general, saying that they "do not always help to resolve such issues and that sometimes they can have a counterproductive impact."

Iran, with the world's second largest proven conventional oil reserves, faces new US sanctions over a nuclear program that could dampen its hard currency earnings. Russia's Lukoil has temporarily withdrawn from a big oil project with the Ahmadinejad regime, citing the impact of sanctions. And US firm Conoco Philips may be impacted. The Kremlin meanwhile, continues to help Tehran complete the Bushehr nuclear reactor, which is at the center of the current non-proliferation controversy.

For a nation its size and with substantial oil revenue one would think Iran would have the capacity to refine sufficient gasoline for domestic use. Instead, successive governments have made substantial investments in arms and nuclear facilities, with oil refinery infrastructure given less importance. Iran ranks just behind #1 USA as the world's #2 importer of gasoline; the government rations gasoline and could run a political risk if it rations it more. Information coming out of Iran, however, suggests the nation will become an exporter of gasoline three years from now.

Propaganda generated by neoconservatives characterizing the Caracas-Tehran-Moscow alliance as a rogue axis can't belie the fact that the US remains Venezuela's #2 oil customer, providing billions in hard currency that helps underwrite the cost of Chavez shopping at Moscow's arms bazaar.

This is one more example of how spending on weapons and military posturing trumps the nation building process, recycles capital back to globalist superpowers, perpetuates the pathology of underdevelopment and keeps poor nations poor. Nobody wants a war in Latin America because everybody struggles and nobody wins. Putin needs to tell Chavez he doesn't want a war because right now, the world can't afford another one.