Chávez opens his wallet wider to boost Latin American influence

In his book, Confessions of an Economic Hitman, John Perkins outlines how the World Bank and the International Monetary Fund have become tools which the west uses to rob poorer countries of their resources by giving them loans which we know they will not be able to repay, and then demanding access to their resources when they, inevitably, fail to meet repayments.

Venezuela recently repaid all monies owed to these organisations and now Chavez is setting out to free other South American country's from the grip of the World Bank and the IMF. He has already announced that he will buy up $1billion in Argentinean bonds, even before his tour takes him to Uruguay, Ecuador and Bolivia.

"We need to unite and the north American empire doesn't want us to unite," the president told reporters in Buenos Aires. "It is a battle of interests, but we will win this battle."

Argentina, thanks to Chavez, will now be able to meet it's international commitments this month - which come to around $2.5 billion - at a time when Argentina was having difficulty attracting credit.

"This is a big effort for Venezuela, but we are doing it because we know what is at stake. Argentina is freeing itself from Dracula, it is cutting ties with the IMF," said Mr Chávez.

In January 2006, Argentina repaid its entire remaining $9.6bn debt to the IMF, giving President Néstor Kirchner kudos at home for restoring national pride and sovereignty.

Mr Chávez's latest cash injection was a reminder to Mr Kirchner's politician wife, Cristina, that she too will owe Caracas if she wins the presidency in October's election after her husband steps down.

Some critics say the first couple have merely swapped one master, the IMF, for a more radical and controversial one. Argentina was now "Chávez-dependent", said Joaquín Morales Solá, a columnist with the daily La Nación.

The criticism is to be expected. But Chavez has set out to unite South America in a way that was previously unthinkable. George Bush's apparent lack of interest in what is going on in this region - apart from his brief embrace of the failed attempt to have Chavez replaced - has left the space for South America to unite. Already the South has elected an unprecedented number of socialist leaders. This is the very point when one would normally expect the World Bank and the IMF to intervene. Instead, what we have is Chavez touring the region and offering aid to his neighbours.

This is part of his overall plan to form an alliance against the US, which has even gone as far as to see him entering deals to build tractors with Ahmadinejad.

The socialist radical is using Venezuela's vast oil wealth to strike commercial and political deals with countries that challenge the US such as Iran, Belarus, Russia and China, as well as much of Latin America and the Caribbean, to rebuff what he refers to as the "empire".

"Chávez is a global player because right now he has a lot of money that he is prepared to spend to advance his huge ambitions," said Michael Shifter, an analyst with the Inter-American Dialogue thinktank. "He has worked tirelessly to upset US priorities in Latin America."

Supporters say he has worked tirelessly to support the poor and marginalised, for example through a $250,000 (£121,000) loan to help farmers in Bolivia's lowlands build a coca industrialization plant, part of an effort to turn the leaf into cakes, biscuits and other legal products instead of cocaine.

"For years we have wanted to do this but no one would support us," said Leonardo Choque, leader of the Chimoré federation of coca growers. "Then the Venezuelans come and offer us a loan with very low interest rates. And no conditions." Venezuela is also funding a new university nearby.

There can be no surprise that Chavez is seeking to unite the South where a great number of citizens live in dire poverty. The United States have consistently intervened in this area to prevent what it describes as Socialism on it's doorstep, as if Latin America's citizens have no right to choose the kind of government they would like due to their proximity to America.

Usually this has been done surreptitiously, by claiming to be part of a "war on drugs", but at other times it has simply been overt intervention.

Chavez challenges US domination of this region like no leader before him, simply because he is backed by oil cash. His strong resistance to the Bush administration's Free Trade Area of the Americas (FTAA) has severely set back, if not derailed entirely, the US's long-held hemispheric agenda.

It is understandable that other Latin American country's will question why he is being so generous and what he actually wants in return. I suspect he simply wants South America to be independent enough to be able to resist US intervention. And, with US history regarding Nicaragua, Chile, Cuba and many others, that's no bad thing.

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Tags: Chavez, Venezuela, Argentina, Uruguay, Ecuador, Bolivia, US regional domination, South America