Saturday, April 03, 2010

Putin’s visit to Venezuela strengthens Russian Venezuelan relationship

Sources: Financial Times – Russia and Venezuela eye strengthened ties / Business Week – Putin Signs Accords with Chavez in Venezuela Trip / Business Week – Putin Visits Chavez in Russian Bid to Grow in Obama’s Backyard / CBS World News – Putin, Chavez Deepen Ties with Space Deal / Reuters – Putin bolsters oil, defense ties with Venezuela / BBC – Putin signs energy deals with Chavez on Venezuela visit

Russian Prime Minister Vladimir Putin made his first visit to Venezuela on April 2 to meet with Venezuelan President Hugo Chavez. Mr. Putin also met with Bolivian President Evo Morales during the trip. These meetings provided Mr. Chavez with a much-needed political boost. Mr. Chavez’s popularity has suffered recently as a series of water and energy shortages have forced Mr. Chavez to declare a number of “public holidays” over the past few weeks that effectively shut down the country. During the meeting, Mr. Putin and Mr. Chavez strengthened their countries commitments on a number of policies and projects. At the conclusion of the trip, Mr. Chavez stated, “Russia and Venezuela will be closer each day."

The countries cemented their commitment to energy development in both crude oil and nuclear energy. Earlier in the week, the countries announced an agreement to drill and process heavy crude oil in the eastern Venezuela Orinoco belt through a joint venture. The countries anticipate that the venture will eventually produce 450,000 barrels a day. In a move that is sure to rattle the nerves of some of Venezuela’s neighbors, Mr. Putin also agreed to provide Venezuela assistance in setting up a nuclear power plant. Mr. Chavez stated, “We aren’t going to make an atomic bomb, but we are going to develop atomic energy with peaceful aims."

Mr. Chavez reaffirmed his commitment to continued arms purchases from Russia. Over the past five years, Venezuela has purchased more than $4 billion in military equipment from Russia. Last year Russia agreed to provide Venezuela with up to $2.2 billion in credit so that the country could purchase additional arms from Russia. Mr. Chavez has asserted that the arms purchases are necessary to protect Venezuela from a US invasion and has frequently criticized America as being an imperialistic force in Latin America. US Secretary of State Hillary Clinton has expressed concerns that Venezuelan arm purchases from Russia could trigger a Latin American arms race.

While Mr. Putin and Mr. Chavez have agreed to joint oil production and arms sales, some experts openly question whether this will actually occur. Pavel Baev stated, “It’s much more a political project.” “Chavez has already signed up for more weapons than he can buy, and Russian energy companies aren’t really interested in exploration and production in Venezuela.” Fyodor Lukyanov, a Russian editor in the magazine, Global Affairs, stated, “In the present economic situation, Gazprom won’t be ready to invest serious money in Venezuela.” He went on to add, “It’s more symbolic, a reminder that Russia is still the biggest player in the hydrocarbon market.”

Mr. Chavez also announced that Prime Minister Putin offered Venezuela assistance with creating a space industry. Mr. Chavez boasted about plans of potentially creating a satellite launcher. Following Venezuela’s announcement of its space aspirations, the United States Assistant Secretary of State of Public Affairs, P.J. Crowley mocked Venezuela. In a response to a question about Venezuela’s space aspiration, he replied, “We would note that the government of Venezuela was largely closed this week due to energy shortages.” “To the extent that Venezuela is going to expend resources on behalf of its people, perhaps the focus should be more terrestrial than extraterrestrial.”

Questions:

Are Venezuela’s nuclear ambitions solely for power or is President Chavez pursuing a nuclear bomb?

How will a stronger Russian presence affect regional stability?

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