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The Rise of Rafael Correa Ecuador and the Contradictions of Chavismo

It now looks as if Rafael Correa, a leftist candidate in Ecuador, has handily won his country’s presidential election. As of Monday morning, with about 21 percent of the ballot counted, Correa had 65 percent compared to 35 percent for Alvaro Noboa, according to Ecuador’s Supreme Electoral Tribunal. If Correa wins, he will preside over Ecuador for a four year term.

It’s yet another feather in the cap for Venezuelan President Hugo Chavez, who had long cultivated the aspiring leader’s support. What’s more, it’s a stinging blow against the Bush administration which now must confront a much more unenviable political milieu in the region. Ecuador now joins other left leaning regimes such as Brazil, Argentina, Uruguay, Bolivia, Nicaragua and Chile, all of which are sympathetic to Chavez.

Bush cannot dismiss the Correa victory as inconsequential: Ecuador is currently the second largest South American exporter of crude to the U.S. The small Andean country hosts the only U.S. military base in South America, where 400 troops are currently stationed. Correa opposes an extension of the U.S. lease at the air base in Manta, which serves as a staging ground for drug surveillance flights. The U.S. lease expires in 2009.

"If they want," Correa has said ironically, "we won’t close the base in 2009, but the United States would have to allow us to have an Ecuadoran base in Miami in return."

It’s no secret that Chavez and Correa had a personal rapport. During a short stint in 2005 as finance minister under the regime of Alfredo Palacio, Correa brokered a $300 million loan from Chavez. As a result of his diplomacy, Correa was forced out of the government. Allegedly, Correa pursued the loan deal behind Palacio’s back. He later visited Chavez’s home state of Barinas, where he met with the Venezuelan leader and spent the night with Chavez’s parents.

"It is necessary to overcome all the fallacies of neoliberalism," Correa has declared. Borrowing one of Chavez’s favorite slogans, Correa says he also supports so-called "socialism for the twenty first century."

Correa: "Whipping" Ecuador’s Politicians, and the U.S., into Shape

Unlike Chavez, Correa does not come from a military background but grew up in a middle class family; the young politician also dresses impeccably. He got his doctorate in economics from the University of Illinois and is a follower of left wing economist and Nobel prize winner Joseph Stiglitz.

To his credit, Correa spent a year volunteering in a highland town called Zumbahua and speaks Quichua, an indigenous language. Natives from Zumbahua remember Correa as a man who walked two or three hours to remote villages in a poncho and broken shoes to give classes.

Correa pursued an amusing campaign. During rallies, he would bounce on stage to his campaign anthem, set to the tune of Twisted Sister’s "We’re Not Going to Take It." As the music blared, Correa would break out a brown leather belt, which he would flex along to the music.

For Correa, the belt became the chief slogan of his campaign: "Dale Correa." In Spanish, the phrase means "Give Them the Belt." Correa promised to use that belt to whip Ecuador’s politicians into shape.

Correa campaigned on pledges to prioritize social spending over repaying debt. He has even stated that the Andean country might want to default. He also declared that he would renegotiate contracts with foreign oil producers doing business in the country. Correa says he wants to increase funds for the poor and opposes a free trade deal with the U.S.

"We are not against the international economy," Correa has stated, "but we will not negotiate a treaty under unequal terms with the United States."

Correa, too, has nothing but contempt for George Bush.

When he was recently asked about Chavez’s "devil" diatribe against the U.S. president at the United Nations, Correa remarked amusingly, "Calling Bush the devil offends the devil. Bush is a tremendously dimwitted President who has done great damage to the world" [after he was defeated by Noboa in the first round of voting Correa toned down his rhetoric, stating that his comments about Bush were "imprudent" and that Ecuador would like to continue its strong tries to the United States]

Noboa Plays the Chavez Card

In an effort to scare voters, Alvaro Noboa, a banana magnate in Ecuador, sought to label Correa as a Chavez puppet. Noboa, in an allusion to Chavez’s military background, labeled his adversary "Colonel Correa."

Correa, the Noboa campaign charged, was being financed by Venezuela. In a bombastic tirade, Noboa even declared, "the Chavez-Correa duo has played dirty in an effort to conquer Ecuador and submit it to slavery." If he were elected, Noboa promised, he would break relations with Caracas.

Correa denied that his campaign was financed by Chavez and in a biting aside declared that his friendship with the Venezuelan leader was as legitimate as President Bush’s friendship with the bin Laden family.

"They have pursued the most immoral and dirty campaign against me in an effort to link me with communism, terrorism, and Chavismo," Correa explained. "The only thing left is for them to say that Bin Laden was financing me."

Chavez, perhaps fearing that any statement on his part might tilt the election in favor of Noboa, initially remained silent as regards the Ecuadoran election. But at last the effusive Chavez could no longer constrain himself and broke his silence.

The Venezuelan leader accused Noboa of baiting him in an effort to gain the "applause" of the United States. Chavez furthermore expressed doubts about the veracity of the voting result in the first presidential run off in October, in which Correa came in second. In his own inflammatory broadside, Chavez accused Noboa of being "an exploiter of child labor" on his banana plantations and a "fundamentalist of the extreme right."

In Ecuador, Chavez said, "there are also strange things going on. A gentleman who is the richest man in Ecuador; the king of bananas, who exploits his workers, who exploits children and puts them to work, who doesn’t pay them loans, suddenly appears in first place in the first [electoral] round."

The Noboa campaign, in an escalating war of words, shot back that the Venezuelan Ambassador should be expelled from Ecuador due to Chavez’s meddling.

Ecuadoran Indigenous Peoples and Chavez

Judging from the early electoral returns, Ecuadoran voters, many of whom are indigenous, disregarded Noboa’s fire and brimstone rhetoric. Indians, who account for 40% of Ecuador’s population of 13 million, are a potent political force in the country. Correa has capitalized on indigenous support. He represents Alianza País, a coalition that garnered the support of indigenous and social movements which brought down the government of Lucio Gutierrez in April 2005.

What does the Correa win mean for Chavez’s wider hemispheric ambitions?

As I explain in my book, Hugo Chavez: Oil, Politics, and the Challenge to the U.S. (recently released by St. Martin’s Press), Chavez has long sought to cultivate ties to Ecuador’s indigenous peoples. Ecuadoran Indians have long feared that their traditional lands were being exploited to serve a rapacious United States intent on corporate expansion. U.S. missionaries have fueled the resentment. According to indigenous activists, the missionaries hastened the penetration of U.S. corporations. A key example, according to Huaorani Indians, was the petroleum industry which worked with the missionaries to open up traditional lands.

Chavez has done much to cultivate the support of indigenous peoples. He plays up his own indigenous roots, for example. He also expelled the Protestant New Tribes Mission from Venezuela, which he said was collaborating with the CIA.

"We don’t want the New Tribes here," Chavez declared. "Enough colonialism! 500 years is enough!"

In opposing the missionaries, Chavez has echoed the agenda of Ecuador’s indigenous peoples, who called for the expulsion of North American missionaries from their country. CONAIE, Ecuador’s indigenous federation, in fact endorses many of Chavez’s positions such as an end to U.S. militarization in the region and an end to neo liberal economic policies. CONAIE, like Rafael Correa, wants Ecuador to terminate the U.S. lease at the Manta military base. CONAIE, as well as the movement’s political wing Patchakutik, has backed Chavez. CONAIE in fact has condemned the "fascist" opposition in Venezuela and derided U.S. interventionism.

Chavez has not only cultivated political ties with hemispheric leaders but also with social movements from below. In an innovative move, Chavez has sponsored something called the Bolivarian Congress of Peoples in Caracas. CONAIE officials attended the Congress, as did Humberto Cholango, president of the Kichwa Confederation of Ecuador. Cholango remarked at the time, "no one can stop this [Bolivarian] Revolution in Venezuela, we will keep on defeating the Creole oligarchies and the Yankeesthe time has come for South America to rise up to defeat the empireLong live the triumph of the Venezuelan people."

Cholango is an important link in the future Chavez-Correa alliance. His Kichwa Confederation has backed Correa. In a communiqué, the Confederation wrote, "We will not let Noboa, who owns 120 companies and made his fortune by exploiting children in his companies, take control of the country to deliver water, deserts, oil, mines, forests and biodiversity to big private transnational corporations."

Ecuadoran Oriente: Area of Conflict

Chavez has exchanged oil for political influence throughout the region in such countries as Nicaragua, as I explained in my earlier Counterpunch column [see "A New Kind of Oil Diplomacy: In Nicaragua, a Chavez Wave?, November 7, 2006]. In Ecuador, Chavez may opt for a similar strategy but here the Venezuelan leader has to watch out for pitfalls that could reveal serious contradictions within his movement.

With a Correa administration in place, Chavez will be in an advantageous position to advance his plans for hemispheric energy integration. Ecuador’s state oil company Petroecuador has been involved in longstanding negotiations with Venezuela to refine its crude. Ecuador is also interested in acquiring Venezuelan diesel and gasoline to cover its own internal demand. Ecuador’s growing energy ties with Venezuela have been applauded by important figures such as Luis Macas, long associated with the CONAIE.

The dilemma for Ecuador is that, while oil represents about a quarter of the country’s GDP, many disadvantaged communities have been unhappy with development. The north eastern section of Ecuador, the "Oriente," has long been the scene of serious social unrest. I know something about the social and environmental conflicts in the area, having written a couple of articles about the Huorani Indians for the Ecuadoran magazine 15 Dias and the Quito daily Hoy.

In 1992, having just completed a reporting internship at WBAI radio in New York, I headed to Quito. At that time, North American as well as Ecuadoran environmental groups were concerned about Maxus Corporation, a Texas-based energy company. The influential company had the support of the government, the press, and North American Protestant missionaries. The Huaorani had just traveled to Quito, where they had carried out a protest in front of Maxus headquarters.

The Indians demanded that Maxus halt its construction of a highway in block 16, which fell in their traditional homeland. I flew out to the Amazon and interviewed the Indians who were living in deplorable health and sanitary conditions. In my articles, I dissected Maxus’ unconvincing propaganda and warned about imminent environmental problems.

Venezuelan Involvement in the Ecuadoran Oil Industry?

I left Ecuador in late 1993, and not surprisingly the unrest continued. In 2002, the government declared a state of emergency following protests in Sucumbios and Orellana provinces. Protesters hit the streets, demanding greater investment in their communities. Indigenous peoples in the area had long felt that they had not adequately shared in the benefits of oil development. The military used teargas to break up protests which blocked oil wells.

In August 2005 the disturbances continued, with an oil strike hitting Orellana and Sucumbios. At that time, Chavez came to the aid of Ecuadoran president Alfredo Palacios by agreeing to send Venezuelan crude to the Andean nation. At the time, Chavez expressed sympathy with Ecuador "because we [Venezuela] have already passed through this type of thing with the oil sabotage [the oil lock out in 2002-3 encouraged by the Venezuelan opposition]."

Early this year, Petroecuador was forced to suspend exports when protesters, unhappy about longstanding environmental damage, demanded the departure of U.S. oil company Oxy and took over a pumping station vital to the functioning of a pipeline. Protesters, led by local politicians from the Amazon province of Napo, demanded that the government pay them funds for infrastructure projects in local communities.

In March, the government put three provinces under military control when workers initiated a strike for unpaid wages and improved working conditions. At one point, the government declared a state of emergency in Napo, when protesters demanded that the oil companies invest more of their profits in the area.

Guadalupe Llori, the prefect of Orellana, remarked "If we are treated like animals we are going to react like animals. We could join the workers and demand the government respect our rights." Petroecuador technicians and troops finally took control of oil facilities and cleared strikers from vital sites.

In May, Petroecuador took over oil wells belonging to Oxy’s block 15 oil concession; the Ecuadoran state wants the Venezuelan state company PdVSA to refine 75% of the 100,000 barrels per day within the old concession. According to the Venezuelan newspaper El Universal, Ecuador is considering Venezuela as a possible partner in the fields formerly operated by Oxy.

Chavismo and Its Hemispheric Contradictions

If PdVSA had a presence in block 15, this would lead to a potential problem for Chavez. Having proclaimed its support for social and environmental justice, as well as indigenous rights, Venezuela would now be operating in an area long marked by social unrest and discrimination of indigenous peoples.

In the short term, Chavez may take some pride in the fact that Bush received another black eye in South America; what’s more Venezuela can now count on Correa’s support as well as the indigenous movement. But in the long term, Chavez could run the risk of alienating many of his supporters if Venezuela is perceived to be an accomplice in misguided development schemes.

In the coming years, will Chavez maintain his political support amongst disadvantaged peoples throughout the hemisphere, or will his popularity be tarnished by oil diplomacy? Up to now, Chavez has certainly used oil as an effective geopolitical instrument, but it may prove his Achilles Heel if he is not careful.

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Beware Venezuela, Here Come the Democratic Hawks: the Return of Tom Lantos

With the Democrats now taking over Congress, the question is: what will the change in leadership mean for U.S. policy towards Venezuela? While it's heartening that some progressive legislators will be headed to Washington, unfortunately some hawkish figures stand to influence Latin America policy. Unless he is upended by Representative Howard Berman, Tom Lantos will become the Chair of the House International Relations Committee.

Lantos, who represents California's 12th congressional district in San Mateo, supported the October, 2002 "blank check" resolution granting authority to George Bush to wage preemptive war. According to John Nichols of the Nation magazine, Lantos is "reasonably solid" when it comes to supporting a liberal domestic agenda. "But," Nichols comments, "It's a different story on foreign policy matters."

Back in 2002 Lantos ignored anti-war activists who protested at his office, preferring instead to pursue a pro-war agenda in Congress. According to Nichols, Lantos said it was his "privilege" to deliver 81 pro-war Democratic votes for Bush. More recently, Lantos has criticized the execution of the war, and claims that the White House misled him about pre-war intelligence. Nevertheless he supports Bush's moves to fund the U.S. military effort in Iraq and Afghanistan. Additionally, Lantos has been one of the House's consistent backers of the Patriot Act.

Congressman Lantos: Venezuela Hawk

Given his hawkish positions, it's not surprising that Lantos would take an aggressive position towards the leftist government of Hugo Chavez. The bad blood between the Venezuelan regime and Lantos goes back to 2004. Lantos, along with fellow lawmakers such as Republican Henry Hyde, sent a letter to Chavez complaining that the Venezuelan government was abusing its power when it accused Sumate, an opposition group, of conspiring with the U.S. to topple the Chavez regime.

In the letter, Lantos and others admit that Sumate had been financed by the U.S. taxpayer funded National Endowment for Democracy (NED) but that this financing would help encourage Venezuelan democracy. Lantos's letter elicited a sharp rejoinder from Venezuela's ambassador to the U.S., Bernardo Alvarez, who commented that the U.S. government was inconsistent when it came to democracy, and that the U.S. was the only country in the hemisphere to recognize the illegitimate Carmona regime which came to power in a brief coup d'etat in April 2002.

Lantos Snubbed in Caracas

Things deteriorated further last year when Lantos was allegedly refused entry into Venezuela and was stopped at the airport. Lantos had gone to the South American country as part of a high-level delegation headed by Republican Henry Hyde, the same legislator who had defended NED the year before.

Lantos and the delegation claimed they were actually harassed and held onboard their aircraft by customs officials at Caracas's Simon Bolivar International Airport. The delegation, which sought to repair troubled U.S.-Venezuelan relations, was set to meet personally with Chavez himself. After two hours, the delegation claimed, they left when government officials said that they could not guarantee that the party would be allowed to disembark or pursue its schedule on the ground. The Venezuelan Foreign Ministry denies the charges, claiming that it never held the congressmen who simply opted to continue on their way.

The incident provided fodder for xenophobic nationalists like CNN's Lou Dobbs, who told his viewers that the Venezuelan government's actions constituted "a Chavez insult to America." El Universal, a conservative Venezuelan newspaper, suggested that Chavez may have wanted to snub the delegation as payback, since the U.S. had refused to grant a visa to many members of Chavez's security detail when the Venezuelan president went to visit the United Nations in New York.

Lantos Goes On the Offensive

Snubbed by Chavez, Lantos went on the rhetorical offensive this past summer. During a hearing of the House's International Relations Committee, the California lawmaker accused Chavez of financing the electoral campaign of Sandinista leader Daniel Ortega in Nicaragua (the Venezuelan leader has denied the charges). Lantos added fuel to the fire by remarking that in Venezuela, "the basis of democracy is being systematically suffocated by a demagogic leader."

Lantos went on to demonize Chavez for his ties to Cuban leader Fidel Castro, and for creating "a one party state in Venezuela." Lantos added, "To insure the recently elected and soon to be elected Presidents of Latin America are not pressured into accepting the oil slick promises of dictators with dollars, we must reengage with the region."

Lantos's remarks were countered by some other Democrats including Howard Berman, a fellow California legislator. The U.S. was hypocritical in harking on democracy in Latin America, Berman argued. "I was in Nicaragua during the last presidential election [in November, 2001]," he said, "and it appeared to me that the U.S. Embassy was very involved in guaranteeing the defeat of Mr. Ortega."

Berman is currently Lantos' rival to run the House's International Relations Committee. According to a recent article in the Jewish Daily Forward, Berman, who represents parts of Los Angeles and the San Fernando Valley, has often "been less conciliatory to the GOP" than Lantos. "Ousting Lantos," according to the Forward, " could signal that Democrat leaders, including presumed Speaker of the House Nancy Pelosi, intend to usher in an era of more overtly partisan confrontation."

Lantos and Democrats Provoke Chavez on Media

But in the end, will the new "Madame Speaker" have the nerve to stand up to the hawks in the Democratic Party? She herself called Chavez "a thug" when the Venezuelan leader recently traveled to the United Nations and insulted George Bush. Unfortunately, the Democrats hardly inspire confidence and have more often than not joined with the Republicans in bashing Venezuela. A key example of this is the Democrats' handling of the Venezuelan media issue.

I recently returned from an extended six week trip to Venezuela, where I was struck by the stridently anti-U.S. tone in much of the government media. One edition of the pro-Chavez paper Diario VEA had a screaming headline reading, "General Baduel Warns: Foreign Aggression is Possible." Again and again on Vive TV, a state owned station, the channel would broadcast a short segment showing stark, bombed out images of Iraq.

"Imagine if your city was invaded and destroyed by a foreign army," intoned a solemn voiceover. It had been some years since I'd been back to Venezuela, and the state media had clearly ratcheted up the rhetoric against the Bush administration's foreign policy.

Perhaps more controversially from the point of view of Washington, Chavez has also launched Telesur, a hemispheric wide satellite news station. Oil-rich Venezuela supplies 51% of Telesur's budget, with Cuba, Argentina, and Uruguay providing the rest of the funding. I frequently watched the station during my time in Venezuela and was struck by the coverage of the war in Iraq, which was much more graphic and critical of the conflict than our own U.S. media.

Since its initial launch in 2005 Telesur, which aims to rival other news stations such as Univision and CNN en Espanol, has certainly come a long way professionally. When I had first watched the station in the U.S. via Telesur's Web site, there had been frequent technical glitches. But now, I could scarcely tell the difference between Telesur and CNN from a technological standpoint.

In July 2005, Congressman Connie Mack, a right wing Republican from Florida, sponsored a measure to authorize U.S. supported radio and television broadcasts to Venezuela. Mack, a vocal critic of Hugo Chavez, has said that Telesur spreads "anti-American, anti-freedom rhetoric." Mack's legislation was approved as part of an amendment to the Foreign Relations Authorizations Act. Under the amendment the U.S. government could provide radio and television broadcasts, through the independent Broadcasting Board of Governors (BBG) for up to 30 minutes a day.

Though the legislation was supported by many Republicans, it also attracted support from Democrats and passed easily in the House. Again, it was Lantos who went on the attack, remarking that as Chavez "ramps up his information campaign, we should be prepared to present balanced news to the people of Venezuela." During the vote on the House floor on Representative Mack's media proposal, no Democrats spoke out against the measure. What's more, according to the Venezuela Information Office based in Washington, D.C., no liberal Democratic legislators have spoken out against Republican legislation designed to set up anti-Chavez media.

Predictably, Mack's amendment spread nothing but further ill will between the United States and Venezuela. Chavez called the amendment "a preposterous imperialist idea that should not surprise us because we know what the U.S. government is capable of." The Venezuelan president vowed to jam the signals if the U.S. tried to transmit broadcasts to Venezuela.

Colombia: An Opportunity for Democrats to Mend Fences with Chavez

Given all of the acrimonious history between Democratic hawks and Chavez, it is going to take a lot to restore trust. But perhaps, if the Democrats start to restrict U.S. aid to the Colombian military, Chavez's paranoia might be allayed somewhat. For years the U.S. has spent billions arming the Colombian military, ostensibly to fight drug trafficking. Chavez regularly denounces the drug war as a thinly disguised excuse to extend U.S. military control over the Andean region (for a more detailed discussion of Chavez's position on the drug war, see my recently released book, Hugo Chavez: Oil, Politics, and the Challenge to the U.S). The Venezuelan president recently charged that the Bush administration might even be considering an invasion of Venezuela through Colombian territory.

While such rhetoric might seem overblown, Chavez has some reason to feel concerned. Paramilitaries allegedly tied to the U.S. funded Colombian military routinely cross over the frontier into Venezuela, creating friction along the more than 1,200 mile border. The Paramilitaries have pursued refugees into Venezuela, where they have killed or kidnapped those fleeing the violence. Even worse, the Chavez government claims that Colombian paramilitaries cross the border and fire on Venezuelan security forces. Ongoing clashes have led to the untimely deaths of Venezuelan military personnel.

Chavez has claimed, plausibly, that he needs to protect the border. In recent years the Venezuelan leader has acquired military hardware from Spain and Russia. Prior to the Democratic takeover, the right wing Republican majority in Congress showed no sign that it was willing to change course in Colombia and vociferously supported President Alvaro Uribe's calls for greater military aid. In a recent move, the State Department inexplicably "certified" that the Colombian armed forces had improved their human rights record, thus freeing up frozen military aid.

To his credit, Democratic Senator Patrick Leahy of Vermont disputed the certification.

As the ranking Democrat in charge of foreign assistance, he temporarily halted the aid. Now that the Democrats have taken Congress, there is a possibility for greater scrutiny of human rights in Colombia as Leahy is now responsible for writing the basic draft of the foreign aid bill each year.

If Leahy and progressive legislators start to limit or put greater conditions on military aid to Colombia, tensions might be lessened in that war torn nation and this in turn could lead to greater peace and stability along the Venezuelan border. If Chavez perceives that Washington is serious about reining in the Colombian military, he might be prompted to reduce his own military expenditures.

Hopefully, Congress may restore some restore some semblance of rationality and humanity to U.S. policy in South America. The Democrats must now choose: will they continue the bombastic rhetoric that we have seen from the likes of Lantos? Will they promote counter productive legislation on the media which will only serve to agitate the Chavez government further? Will they continue to fund the Colombian military to the tune of billions of dollars with little oversight, leading to more strained relations with the Chavez government? In the weeks and months ahead, we shall see which wing of the Democratic Party prevails on these vital questions.

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In Nicaragua, a Chavez Wave?

Initially, it seemed as if Chavez was perfectly poised to capitalize on a wave of anti-American discontent felt throughout the hemisphere. But then, a series of dramatic reversals cast doubt on Chavez's ambitions to become a truly hemispheric leader and a lightning rod against U.S. influence.

 

Over the last few months, I had begun to doubt whether Venezuelan President Hugo Chavez would indeed have the kind of political staying power that I described in my book, Hugo Chavez: Oil, Politics, and the Challenge to the U.S. (recently released by St. Martin's Press).

Initially, it seemed as if Chavez was perfectly poised to capitalize on a wave of anti-American discontent felt throughout the hemisphere. Throughout South America, Chavez exchanged oil for political influence with newly emerging leftist regimes in Uruguay, Argentina, and Brazil; the election of Evo Morales in Bolivia, a key Chavez ally, seemed to underscore Venezuela's rising influence.

 

But then, a series of dramatic reversals cast doubt on Chavez's ambitions to become a truly hemispheric leader and a lightning rod against U.S. influence.


Chavez's Reversals, from Peru to the United Nations

 

In Peru, Chavez openly endorsed the nationalist candidate Ollanta Humala in the country's presidential election. But Chavez's strategy backfired when Humala's opponent, Alan Garcia, charged that the Venezuelan leader was interfering in Peru's internal politics. Garcia successfully exploited the issue to his advantage and went on to beat Humala in last April's election.

 

In Mexico, pro-business PAN candidate Felipe Calderon ran a negative campaign against his leftist challenger Andres Manuel Lopez Obrador. In his TV ads, Calderon linked Obrador to Hugo Chavez, proclaiming "Lopez Obrador is a danger to Mexico." Though Lopez Obrador cried fraud in Mexico's July presidential election, the Electoral Tribunal ruled that Calderon had won the election and rejected Obrador's allegations. Calderon is set to assume office in December.

 

The next set back for Chavez came in Ecuador, where the Venezuelan leader's would be protégé, Rafael Correa, went down in defeat in the first round of the country's presidential election last month. A Correa win would have added another oil-rich country to Chavez's anti-American alliance.

 

Correa, a leftist economics professor, denied that Chavez had funded his campaign and the Venezuelan leader, chastened by his defeats in Mexico and Peru, was uncharacteristically quiet about the Ecuador election.

 

However, it's no secret that the two had a personal rapport. Correa in fact visited Chavez's home state of Barinas in August, where he met with the Venezuelan leader and spent the night with Chavez's parents. Correa, who opposes an extension of the U.S. lease at an air base in Manta, which serves as a staging ground for drug surveillance flights, has nothing but contempt for George Bush.

 

When he was recently asked about Chavez's "devil" diatribe against the U.S. president at the United Nations, Correa remarked amusingly, "Calling Bush the devil offends the devil. Bush is a tremendously dimwitted President who has done great damage to the world."

 

But Correa was shocked by a strong last minute showing by his challenger, pro-U.S. banana magnate Alvaro Noboa. Like Lopez Obrador, Correa has cried foul and declared that his campaign might have fallen victim to electronic fraud on the country's voting machines. He will face off with Noboa in another runoff election in November.

 

Then there was Venezuela's failed bid to secure a non permanent seat on the United Nations Security Council. When the United States proposed its own candidate, Guatemala, things turned ugly. Chavez characterized the race as a struggle against U.S. domination throughout Latin America; Venezuelan diplomats went so far as to describe Guatemala as a U.S. stooge.

But in the end, Venezuela failed to come up with the requisite votes. Chavez could take some satisfaction that Guatemala too failed to come up with the necessary votes at the United Nations, and had to withdraw in favor of Panama.

 

The reality, however, is that despite Chavez's frenetic shuttle diplomacy throughout Africa and calls for Third World solidarity, he could not muster more votes than a small Central American country with very little regional influence and an appalling human rights record.

It was hardly an impressive showing.


The Chavez-Ortega Alliance

 

Events in Nicaragua, however, suggest that it won't be so easy for the Bush administration to roll back Chavez's ambitions. It now seems as if the Sandinista candidate Daniel Ortega will cruise to victory in the country's presidential election and avoid a run off. As of Monday night, preliminary results show Ortega with about 40 percent of the vote, more than enough to avoid a future runoff.

 

For the White House, it's a nightmare that officials had long sought to avoid.

 

Though Ortega, who was president from 1985 to 1990 during the U.S.-fueled Contra War, is a pale shadow of his former self, having jettisoned his leftist rhetoric and hostility towards his northern neighbor, nevertheless Washington must now recognize that it has patently failed to isolate Chavez diplomatically. Nicaragua now seems poised to join the wave of left leaning regimes throughout the hemisphere inspired by Chavez.

 

When Ortega traveled to Venezuela for a meeting with Chavez last year, the friendship between the two began to bear fruit. During the meeting at Miraflores, the presidential palace, Ortega remarked that Latin American unity was necessary to confront globalization. He added that Chavez's electoral victory convinced him that revolutionary change could be achieved through the ballot box. "I thought that they were going to overthrow Chavez," Ortega remarked, "and that he would meet the same fate as Salvador Allende."

 

Ortega later alarmed Washington by remarking that if he won the election he would make sure that Nicaragua would join ALBA, Chavez's Bolivarian Alternative for The Americas. Chavez's trading plan, which is designed to sideline traditional corporate interests and Bush's Free Trade Agreement of The Americas (FTAA), is based on barter agreements between Latin American countries. Recently, to the chagrin of U.S. policymakers, Bolivia joined Venezuela and Cuba in ALBA.

 

Chavez, Ortega and ALBA

 

"Without a doubt," Ortega declared during a Cuban summit meeting with Morales, Castro and Chavez, "we have to look towards the south, we have to look towards integration, and ALBA is an open door, it is Latin American and Caribbean integration."

 

Ortega later added that he opposed U.S.-backed trade deals. "Central America's trading future lies not with the U.S. but with Venezuela, Brazil and Argentina," he said.

 

Ortega, smarting from three successive electoral defeats after the fall of the Sandinistas from power, added that he was "convinced after 16 years of neo liberal policies in Nicaragua that the conditions are ripe for the Sandinista Front to retake power, now via the ballot box."

In the Plaza de La Revolucion in Havana, Chavez approached Ortega and remarked, "Daniel, we are inviting you next year to come here as the president of Nicaragua."

 

According to Ortega, Chavez followed up on his promising words by offering to help Nicaragua join in ALBA. Speaking before hundreds of workers in Managua, Ortega said that Chavez and the president of the Venezuelan Economic and Social Development Bank (known by its Spanish acronym Bandes) had pledged to help open a development bank in Nicaragua. "Venezuela is willing to provide support so that this bank will become a reality and campesinos will have credits and a secure market," Ortega told supporters.  According to Ortega the Venezuelan aid formed part of ALBA.


Chavez, Ortega and CAFTA

 

In seeking to recruit Ortega for his ALBA scheme, Chavez found a willing ally in Ortega. Indeed, Nicaragua's experiment in "neo-liberal" economics since the fall of the Sandinistas in 1990 has not been a very happy one. Like Venezuela, which experienced political unrest as a result of neo liberal policies pushed by Washington, Nicaragua has been buffeted by "savage capitalism," as Ortega has put it.

 

Today, Nicaragua is a bleak place. Per capita income is a paltry $700 and more than 70% of the population lives on less than $2 a day. Successive governments have failed to restore Managua from a 1972 earthquake. Within yards of the presidential palace lie slums and empty buildings; beggars and barefoot children splash around in the gutters of Managua instead of heading to class.

 

Like Chavez, Ortega has spent a lot of time over the past years criticizing U.S.-led free trade deals. For example, the Sandinista led the charge against CAFTA, the Central American Free Trade Agreement. Ortega pledged to pull Nicaragua out of CAFTA and "end savage capitalism when we win." CAFTA, Ortega argued, was an effort by the U.S. to exploit poor countries in a rush to the bottom and cheap labor.

 

"Bush is taking up CAFTA," Ortega remarked in an interview with the Christian Science Monitor, "because it is his way of keeping Central America from looking south." Ortega furthermore suggested that Washington was seeking to splinter Nicaragua's solidarity with the Left in Latin America such as Chavez's regime.

 

CAFTA was pushed ruthlessly by U.S. trade representative Robert Zoellick over the objections of labor, environmentalists and human rights groups [for more on Zoellick, see my profile of the diplomat in my book].

 

"CAFTA is the opportunity of a lifetime," Zoellick remarked in an address given at the Heritage Foundation. "If we retreat into isolationism, Daniel Ortega, Hugo Chavez and others like them, leftist autocratswill advance."

 

Zoellick's efforts to link Ortega and Chavez in order to ram through CAFTA were echoed by paranoid, red baiting Republicans in the House and Senate. Oklahoma Republican James Inhofe warned his fellow Senators: "These Communists, these enemies of the United States, Chavez, Ortega, and Castro, are all in opposition to CAFTA. If you want to be on their side, you would vote against CAFTA."

 

In the House, Republican Rep. Mike Kirk of Illinois took the fear mongering prize by arguing that Chavez was "Venezuela's Mussolini." Chavez, claimed Kirk, was purchasing weapons in order to fight a new war in Central America. "Let us enact a free trade agreement with Central America to lock in democratic growth and stability," Kirk exclaimed, "and let us make sure that President Hugo Chavez's Venezuelan agents find no fertile ground in America's back yard."

 

In the end CAFTA passed narrowly in Congress. In Nicaragua, CAFTA was opposed by the Sandinistas in the National Assembly as well as key figures in civil society, including the president of the country's largest agricultural organization, who warned that the agreement would give rise to greater poverty in the countryside.

 

According to experts, CAFTA stood to encourage the growth of more maquiladora assembly plants, but any positive benefit would be offset by the loss in farm jobs as a result of the influx of cheap U.S. agricultural goods. Despite domestic opposition, Nicaragua passed CAFTA in October 2005.


Efforts to Demonize Ortega and Chavez

 

Despite its CAFTA public relations victory, the Bush administration was clearly still worried and kept up the pressure on Ortega during the run up to the presidential election. Paul Trivelli, the U.S. Ambassador to Nicaragua, warned that Ortega's victory would signify "the introduction of a Chavez model" in Nicaragua.

 

Meanwhile the conservative press flew into a tirade against Ortega, with the Washington Times remarking that "Ortega will take Nicaragua out of CAFTA and into Mr. Chavez's Bolivarian Alternative for the Americas, and almost synonymous with this is a move to nationalize industry, much like Evo Morales did in Bolivia."

 

The Washington Post was similarly hostile, remarking in an editorial that Ortega "is about to return to power and increase the alliance with non-democratic countries [such as] Venezuela." The Post, interestingly criticized the Bush administration for reacting too slow to the Chavez and Ortega threat.

 

On the pages of National Review, Otto Reich, a former State Department official who dealt with Venezuelan opposition conspirators in the run up to the coup against Chavez in 2002, remarked that "The emerging axis of subversion forming between Cuba and Venezuela must be confronted before it can undermine democracy in Nicaragua."

 

As per the case in Peru, the Nicaraguan right sought to link its Sandinista opposition to Chavez in an effort to instill fear in voters. Presidential candidate Jose Rizo remarked that Chavez and Ortega were "a threat to regional and hemispheric stability," and claimed that the Venezuelan leader was financing Ortega's campaign [both Venezuela and Ortega deny the accusation]. "Ortega will become Chavez's lieutenant in Central America and the Caribbean in the same way that he represented the extinct and failed Soviet Bloc," Rizo added.


Ortega Unlikely to Radicalize

 

Unlike Peru however the opposition's strategy of trying to scare Nicaraguan voters proved unsuccessful and at long last Ortega has prevailed in his drive to reach the presidency. Despite the hyperbolic claims by the U.S. and conservative politicians in Nicaragua however, Ortega is hardly in a position to become Chavez's steward overnight. Unlike Venezuela, Nicaragua is poor and foreign investment and aid accounts for 35 percent of the budget. That money could disappear if Ortega started to radicalize the country and expropriate industry.

 

In an effort to appease jittery investors, Ortega recently signed a pro-business pact in which he pledged to promote the private sector. Though he has spoken about the need to renegotiate aspects of CAFTA, Ortega now says he will build on free trade agreements. Ortega will have to tread lightly: the U.S. is Nicaragua's largest trading partner and accounts for about one fifth of the country's imports and approximately a third of its exports. About 25 wholly or partially owned subsidiaries of U.S. corporations operate in Nicaragua.

 

With so much at stake, Ortega has predictably moderated his rhetoric by stating that he would work with the International Monetary Fund, the World Bank, and Inter American Development Bank.

 

Carlos Fernando Chamorro, son of former president Violeta Chamorro and editor of the weekly Confidencial newspaper, is not too concerned about a radical Ortega agenda. He argues that Ortega is a pragmatist and will try to appease the United States. Observers believe that the right wing Liberal Constitutionalist Party (known by its Spanish acronym PLC), the main opposition to the Sandinistas, will hold onto its many seats in the National Assembly following this election, which would further complicate any radical agenda.

 

But, Chavez's Oil Diplomacy in Central America Could Be a Factor

 

Nevertheless, Chavez seems to be trying hard to bring Nicaragua into its political orbit. Chavez has enhanced his stature in South America by trading oil for other goods, and seems to be pursuing a similar strategy in Nicaragua. Venezuela has in fact already provided cheap fuel to Nicaragua through Sandinista mayors. Speaking on his television and radio program Alo, Presidente!, Chavez told Ortega that Nicaragua could pay for Venezuelan oil with meat, milk, cheese and other goods.

 

Ortega and Chavez have held personal discussions about setting up a mixed Venezuelan-Nicaraguan company that would import the cheap oil. Chavez is apparently willing to invest in Nicaragua to set up necessary oil infrastructure. Best of all, Chavez's offer could prove politically beneficial to Ortega since restive students have protested any move to raise transportation costs. Farmers meanwhile would not have to increase their production costs.

What does it all add up to? Despite some setbacks, Chavez stands to at least gain some diplomatic and political leverage in Central America. Ortega will be hampered in bringing about radical change, but will at least look upon Venezuela as an important regional ally and friend. Try as it might, the Bush administration has not been able to isolate Chavez. To the contrary, the U.S., through its efforts to demonize both Chavez and Ortega, has unwittingly brought them together.

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