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Hugo Chavez' Lat - Am "Axis Against the USA"

By Alexandra Beech

During his State of the Union address to Congress yesterday, President Chavez described the new Latin American axis against the United States - “not an axis of evil”, he joked, but a union between Venezuela, Brazil, and Argentina to combat the evils of free trade promoted by the US government.

While no one can deny that Chavez, Lula, and Kirchner share things in common – a love of Cuba for one – Chavez is no Lula.

Lula, for instance, knows how to turn enemies into friends by promoting sound economic policies. Chavez, on the other hand, knows how to turn friends into enemies by running the economy to the ground. Lula has promised to deliver on social programs by concentrating on economic growth. If he remains on course, Lula will one day help the vast Brazilian poor out of poverty. Chavez has sacrificed economic growth while spending uncontrollably on social programs. While the poor receive short term benefits, Venezuela’s growing fiscal deficit will one day make social programs unfeasible. Without a diversified economy, Venezuela’s poor will remain dependent on the state, (a lesson well-learned from Castro.) Moreover, Lula has befriended the private sector, creating a safe and attractive environment for both local and international investors. Chavez, on the other hand, has bankrupted his country’s private sector, forcing thousands of businesses to close during his administration. Lula has passed important reforms, including a revamp of Brazil’s social-security program which reduced benefits and raised retirement ages. Far from reforming the state, Chavez’s government is the most corrupt and inefficient in modern history. Lula today enjoys a position of leadership among Latin American leaders. Chavez, on the other hand, has completely isolated himself from most leaders. It is no accident that he didn’t attend many functions during the summit. He simply was not wanted there.

Concerning free trade, Chavez seems to have missed Lula’s boat there too. Lula supports free trade; his main contention is that US markets be as open for Brazilians as Brazilian markets would be for Americans. Lula wants Brazilians to be able to export into the United States agricultural products, citrics, textiles, and steel, and therefore to further enhance the benefits of trade for Brazilians. Chavez, on the other hand, wants to close the Venezuelan borders and have as little trade as possible so he can have complete control over the Venezuelan economy. Lula wants to provide more jobs for Brazilians through trade, whereas Chavez wants to be the sole provider of jobs for Venezuelans. Not surprisingly, Venezuela had the highest unemployment rate in the world (except for some African nations) in 2003 due to inept policies, while Brazil had high unemployment last year because it pursued sound policies to gain many more jobs in 2004. Brazil is starting the year with such sharp capital inflows, that Lula just might deliver on those jobs. Moreover, Lula managed to keep a flat economy in 2003 implementing neo-liberal, IMF-loving economic policies, while Chavez managed to drive the economy into a -13% recession last year, the worst in the country’s modern history.

Under Kirchner, the Argentine economy is still growing. It has a primary surplus that is almost 3% of GDP, and it about to start engaging in debt restructuring negotiations to normalize relations with the rest of the world. For all of Chavez’s rants against neo-liberal capitalism, he continues to pay foreign bondholders handsomely for his spending spree, while isolating himself from the world. Needless to say, his rhetoric rarely matches his actions.

Those who rotate on Chavez’s axis are the FARC, Fidel Castro, Evo Morales, and the old lady in Argentina who celebrated when the Twin Towers fell.

The rest of us are plain dizzy by now.



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