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Losing Influence in South America E. Ralph Hostetter Over the years the United States has fallen out of favor with one country or another. To lose favor with an entire continent would seem a difficult task, until we take a closer look at South America. I used to joke about the stability of South American governments by referring to their longevity in RPMs, or "revolutions per minute." Usually these disturbances occurred on a country-by-country basis, and the United States would adjust its foreign policy to meet the situation. But something quite different has been developing over the recent years, perhaps caused partly by the preoccupation of America in the Middle East. In a recent column, some weeks before President George W. Bush's whirlwind tour of South America, it was noted there was a major shift of most of the principal nations of that continent toward socialism. President Bush was met in those nations he visited with a number of anti-American demonstrations, and his trip appeared to be mostly ineffective. Much has happened in recent weeks to confirm the shift. Venezuela's President Hugo Chavez has taken charge. Within the last week, Chavez announced two dramatic changes in governmental policies. He notified the world's largest oil companies, BP PLC, ConocoPhillips, Chevron, ExxonMobil Corp., France's Total SA and Norway's Statoil SA, to turn over their Venezuelan oil assets valued at $30 billion to Petroleos de Venezuela SA, Venezuela's state oil company, meaning eventual confiscation. In addition, he announced he would formally pull Venezuela out of the International Monetary Fund and the World Bank. With these moves, Venezuela now reportedly controls three-quarters of the world's oil reserves, larger than Saudi Arabia.
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With IMF and World Bank gone, it is expected that smaller nations surrounding Venezuela may follow suit. Published reports state that Chavez, in anticipation of this, is providing alternative forms of credit and financial support for countries in the region, establishing what he calls the "Bank of the South." Eight of the 10 major countries of South America have now elected leftist presidents. Some of these leaders have indicated their intention of taking the countries more to the left, even to socialism. Now that Venezuela is leading the way, other countries could follow suit.
Nicaragua is reaching out to communist Cuba to strengthen their relationships. Chavez is offering aid to President Ortega of Nicaragua and President Rafael Correa of Ecuador, who promises "swift radical political changes" in his country. Both are aligning themselves more with Chavez. Hugo Chavez has formed an alliance with Iran and a closer relationship with Russia, witnessed by the fact that Venezuela's newest addition to its military is a group of Russia's newest jet fighters, part of a planned increase in armed influence in South America.
Just a few weeks ago, in mid-April, all the nations of South America with the exception of French Guiana, were represented at the founding of the Union of South American Nations (UNASUR) during the continent's first Energy Summit on Margarita Island in Venezuela. All this will give Chavez greater access, combined with his oil wealth, to create more control in South American politics. This costly loss of Western and capitalistic influence in South America is largely due to two closely related subjects: One is oil itself, and the other is the cowardice of the U.S. Congress which should have provided full energy independence for the United States but, instead, collapsed in the face of opposition from the far left, the anti-capitalist Greens, the Marxists and worse. Hugo Chavez's path to power can be laid directly on the transference of American wealth to his doorstep through excessive crude oil pricing. The United States is financing armament buildups in a number of areas in the world by this same manner. Had the U.S. needs for petroleum been satisfied by its own development of energy, the price of oil would have remained stabilized in the range of $15 to $20 per barrel. Forgotten are the memories of the Arab boycotts of the mid-1970s into 1980s when the price of oil went from $4 per barrel to $40 per barrel, an increase of 1,000 percent. America's economy was saved at that time by the vast oil reserves of Alaska and the Alaskan pipeline, both of which came on line in the 1970s and '80s which brought the price of oil down to as low as $10 per barrel. Obviously there were brighter bulbs in the congressional chandelier at the time. It is America's need for oil that provides the lightning rod for our enemies. There is no shortage of oil in the world. The supply easily meets the demand. The oil issue has become the "Great Game" of the day — "How many ways are there to make America squirm?" They're laughing at us, folks.
E. Ralph Hostetter, a prominent businessman and agricultural publisher, also is a national and local award-winning columnist. He welcomes comments by e-mail: eralphhostetter@yahoo.com.
Editor's note:
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