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The Promise of Oil: Venezuelan Ambassador Bernardo Alvarez
The Washington Diplomat / May 2003

By Larry Luxner

Exactly one year after Venezuelan President Hugo Chávez was nearly overthrown in a coup attempt that many suspect had the Bush administration's tacit support, the country's ambassador to the United States -- Bernardo Alvarez -- says he wants to repair Venezuela's damaged relations with the United States.

"We are at a moment where, because of the complexity of the Venezuelan process and the influence of many people who don't want the United States and Venezuela to have a good relationship, there might be some differences," Alvarez told The Washington Diplomat. "Probably there is a perception problem."

That's putting it rather lightly. Cháez, a former army paratrooper who attempted to overthrow President Carlos Andrés Pérez in 1992, was elected only six years later with the overwhelming support of millions of poor people who had never shared in the country's enormous oil wealth. But since then, the Venezuelan president's heavy-handed tactics against opposition parties at home —not to mention his well-advertised friendships overseas with dictators such as Cuba's Fidel Castro, Libyaís Moammar Gadhafi and Iraq's Saddam Hussein —have alienated even many of his initial supporters.

This year, the Venezuelan economy is expected to shrink by 10% as a result of continued strikes, work stoppages and sometimes violent protests orchestrated by those hoping to force Chávez to resign. As a result, Chávez has a largely negative image in the United States.

But that's simply because people aren't giving Chávez a chance, says Alvarez, a political appointee who worked hard to get his boss elected in the first place.

"In Venezuela, we have had a major political transformation," he says. "We used to have a two-party system that went along from 1959 until 1998, when the whole system collapsed and President Chávez won the election. The two traditional political parties [Acción Democrática and COPEI] made an alliance against Chávez and have been against him since the beginning of his mandate."

Today, says the ambassador, Venezuela's 26 million people have a bigger say in their government's policies than at any time since liberator Simón Bolívar freed the country from Spanish rule and declared independence in 1821.

"We've developed human rights to an extent never before seen in Venezuela. There are no political prisoners in Venezuela whatsoever," says Alvarez. "In the past, political parties used to talk about change, but in the end, they became corrupt. The main promise of Chávez and his supporters was the need for a change in the constitutional process."

In 1999, the Venezuelan people, voting in a national referendum, approved the adoption of a new constitution that changed the country's name to the Bolívarian Republic of Venezuela. Yet during this time, Chávez began antagonizing the business sector with his incendiary rhetoric. Among other things, he lashed out against the "predatory oligarchs" of the Venezuelan establishment, calling them corrupt servants of international capital and describing oil executives as "living in luxury chalets where they perform orgies, drinking whisky."

As protests against Chávez mounted, the president's popularity fell from a high of 80% shortly after his election to around 30%. Relations with the United States took a further dive after the Sept. 11 terrorist attacks, when Chávez accused Washington of "fighting terror with terror" during the war in Afghanistan.

Bilateral ties worsened following the April 2002 coup attempt, which was applauded by several mainstream U.S. newspapers, including The Washington Post, The New York Times, The Miami Herald and Long Island's Newsday.

In a statement to the press last month, Alvarez blamed the coup on "officers in the Venezuelan army — financed, guided and encouraged by incredibly wealthy interests, both domestic and international, and aided by a subjective and partisan national press — terrorized, arrested and jailed our president."     

"The overthrow of the democratically elected president lasted no longer than an ordinary weekend," Alvarez said. "In a continent that has faced authoritarian regimes that spanned years, even generations, this forced takeover ended, in part, because the plotters forgot an important principle — a concept that all legitimate leaders know and understand: A revolution without popular support is like a fire without air; it just burns out."

Even so, "Chávez does not want to have a confrontation with the United States," says Alvarez.

"There are some people who are trying to present us as anti-American," he continues. "Some people see Chávez as a dictator because he comes from the military. I tell them to look at his human rights record and compare that with any other country. During the former democracy in Venezuela, all economic and political guarantees were suspended for 10 years. Chávez has never declared a state of emergency, even in the middle of an attempt to paralyze the country."

Alvarez, 46, is originally from the city of Barquisimeto, located halfway between Caracas and Lake Maracaibo, center of the country's oil industry. He holds a degree in political science from the Universidad Central de Venezuela and a master's degree in development studies from the University of Sussex in England.

A longtime Chávez supporter, Alvarez visited Washington several months before Chávez's election in an attempt to persuade State Department officials to accept the coup leader-turned-presidential candidate in the event he won the election.

"At that time, the opposition was telling voters that the U.S. would not recognize Chávez as president, that the U.S. would never give him a visa," says the ambassador. Following the landslide 1998 election, Chávez visited President Clinton at the White House, with senior U.S. officials portraying the meeting as a success.

Before his current post, Alvarez was Venezuela's vice minister for oil and gas— an important position in a country that derives 80 percent of its foreign exchange from petroleum exports.

In 2002, Venezuela — a founding member of the Organization of the Petroleum Exporting Countries (OPEC) — ranked as the fourth-largest crude oil supplier to the United States after Canada, Saudi Arabia and Mexico, providing 12-14% of all U.S. oil imports. Of the some 2.9 million barrels of oil produced by Venezuela every day, about 1.2 million goes to the United States, where government-owned Petróleos de Venezuela SA (PDVSA) owns a number of refineries as well as the Citgo gas station chain.

But last year's nationwide strike by PDVSA management forced Venezuelan oil production to tumble to only 150,000 barrels a day, crippling the country's economy and driving up world prices already boosted by the prospect of war with Iraq. And even though the strike ended on Feb. 4 and production is nearly back to normal, the U.S. State Department recently warned Venezuelan energy officials that its future as a strategic oil partner is in doubt.

"Conflict in Venezuela has damaged its reputation as a reliable oil supplier," said Alan Larson, undersecretary of state for economic, business and agricultural affairs, on March 4. "It has been clearly demonstrated that Venezuela's democratic institutions and its reputation as a reliable supplier appear no longer matters of primary importance to President Chávez. We are disturbed by measures taken by President Chávez and the government of Venezuela that can only be seen as polarizing the conflict and eroding Venezuela's democratic institutions."

Alvarez, however, has a different take on things.

"Even people who criticize our government have to recognize that we have a rational and consistent oil policy," says the diplomat, who for a while was head of Venezuela's delegation to OPEC. "It has been a historic position of Venezuela not to use oil as a political weapon internationally. Even during the Arab oil embargo [of 1973 to 1974], Venezuela never stopped production."

The ambassador adds, "There was no PDVSA strike in Venezuela. It was more of a walkout. Medium- and high-ranking managers abandoned their jobs because they want to pressure the president to resign or call for early elections. They abandoned their jobs for political reasons. Imagine if the managers of Exxon decided that they didn't like President Bush and tried to paralyze the country's oil production. Do you think people who do that are real managers?"

Alvarez clearly shows little sympathy for those thousands of "unpatriotic" PDVSA officials who walked off their jobs, causing an estimated $2 billion in losses for the oil industry in an attempt to "blackmail a legitimate and constitutionally elected government."

Nor does he hide his hostility toward opposition Venezuelan newspapers and television stations, which he says have worked tirelessly to bring down the Chávez government.

"The role of the media has taken on the role of political parties in Venezuela," says Alvarez. "When you have all four private TV channels presenting only political advertisements from the opposition, what does that tell you? On April 11, 2002, the president was detained, and on April 13, the armed forces restored him to power. During that time, TV channels were broadcasting only Tom and Jerry reruns. It gives you a clear indication that they were involved in the whole coup d'etat."

Washington's displeasure with Chávez isn't limited to his actions at home. The Clinton administration was not amused when in 2000 the Venezuelan leader became the first head of state to visit Iraq since the Gulf War. Following a meeting with Saddam Hussein, he called the Iraqi dictator a "brother" and promised to help end U.N. sanctions against Baghdad.

Another issue that particularly irks the United States is the close personal friendship between Chávez and Fidel Castro. Many of Chávez's strongest critics accuse the Venezuelan president of wanting to set up a communist dictatorship modeled after Castro's Cuba.

In a Feb. 27 editorial, The Washington Times warned that "the current Venezuelan government is not merely a left-wing populist regime, but may be evolving into a police state. If Mr. Chávez does not pull back into constitutional government, it will be a tragedy for the Venezuelan people and the beginning of a substantial foreign policy danger for the hemisphere."

Comparisons between Chávez and Castro — aboth of whom usually appear in public in their military uniforms —are invariable and are underscored by the fact that last year, Venezuela was Havana's largest trading partner thanks to a program under which Cuba buys up to 53,000 barrels of oil a day under preferential terms.

Alvarez points out, however, that Venezuela never supported the U.S. embargo against Cuba — even before Chávez came along — and it has no intentions of doing so now.

"We have friends all over the world, and we respect the sovereignty of other countries to deal with their own internal issues," he says. "Of course, the Cuban-American community has a great deal of influence in the United States, and they try to distort what is a normal relationship between two countries that have historical ties. They say we are giving away oil to Cuba. This is complete nonsense."

In late March, Iraq's ambassador to Venezuela, Taha Al-Abassi, called on the world's oil producers to halt shipments to the United States and Great Britain and proposed an international trade boycott to protest the war against his country. Meanwhile, Chávez repeated sharp condemnation of the war, questioning the right of the United States to launch such a massive assault, which he said was killing innocent civilians.

Nevertheless, Alvarez says "Our policy is that we have been a reliable supplier to the U.S., and we have never stopped. Our responsibility is with the world and the consumer, and we will be there to provide oil."

Alvarez says that ever since the Bush administration launched its energy policy in 2001, Venezuela has promoted ties with the United States "not only at the federal level, but at the state level as well." Since 1970, he says, Venezuela has been an international affiliate of the U.S. National Energy Council (along with the Canadian provinces of Alberta, Nova Scotia and Newfoundland).

"We want to find ways of improving the relationship between Venezuela and oil-producing states," such as Texas, Oklahoma and Alaska. Along those lines, Alvarez says his country's new hydrocarbons law has opened 100 percent of the Venezuelan natural gas sector to private investment. Three exploration licenses have already been granted to international consortia, including one to Chevron-Texaco, which predicts that by 2015, the United States will have a deficit of 38 trillion cubic feet of natural gas per year. Venezuela, with its 100 trillion cubic feet of reserves, can easily supply that demand.

"What we'd like to do is use the energy investment momentum to encourage other opportunities. The traditional approach was to produce only oil, but we want to industrialize the oil and gas industry. For example, we are discussing the building of an olefin plant with Exxon-Mobil that will allow Venezuela to rapidly grow in the plastics sector," Alvarez says.

But significant new investment from the United States isn't likely to flow into Venezuela until the political situation calms down. And given this country's bitter opposition to Chávez, that probably won't happen as long as Chávez remains in power.

In the meantime, says Alvarez, "We have a strategic relationship with the United States. We have many more coincidences than differences. My mission is to enhance the coincidences and manage the differences."

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