Record world oil prices have filled Venezuela's treasury and helped President Hugo Chávez and his "Bolivarian Revolution for the poor" win two elections in recent months. Now, freed from worries about domestic political opposition, Mr. Chávez is using his new wealth to extend his influence beyond his nation's borders - and perhaps escalate his long-running confrontation with Washington, say observers.
In recent months, Chávez has expanded Venezuela's policy of supplying oil at below-market prices to poor neighbors. He has also made a major arms purchase from Russia and pushed for the creation of a regional petroleum corporation. A firebrand populist and admirer of Cuba's Fidel Castro, Chávez has often spoken of spreading his leftist vision across this continent, in contrast to the conservative economic policies that swept South America in the 1990s.
"Without a doubt, Chávez has very great pretensions of increasing his influence" in the region, says Alfredo Rangel, who heads the Security and Democracy Foundation, a think tank in Bogotá, Colombia. "Chávez wants to extend his Bolivarian project to new places."
More than ever, Chávez may be in a position to act. Domestically, he renewed his mandate with a victory in an Aug. 15 referendum, and regional elections in October gave his allies control of 21 of 23 state governorships. Meanwhile, crude oil prices have pushed foreign reserves above $20 billion and have enabled Venezuela to sell oil to Cuba, Paraguay, and elsewhere below the current $45 a barrel.
Another way Chávez has used his oil resources is by working to create a continent-wide petroleum corporation called PetroAmerica, in which the region's state-owned oil companies would participate. The idea has generated interest in Brazil and other energy- hungry neighbors. The Venezuelan government says PetroAmerica would enable Latin America to end exploitation by huge petroleum corporations, but some analysts see it as a mechanism to leverage Venezuela's oil resources into greater regional influence.
"Countries want to do what they can to improve their standing on the world stage," says Roger Tissot, an energy policy analyst based in Washington, who follows Latin America for PFC Energy, an industry adviser. "And the only thing Venezuela has is oil."
Chávez has already used his petroleum power at least once. In September 2003, after charging that a former Venezuelan president was plotting against Chávez in the Dominican Republic, Venezuela temporarily cut off oil exports to the poor island nation. When El Salvador denied political asylum earlier this month to two former Venezuelan police officials facing charges stemming from the April 2002 temporary overthrow of Chávez, many Chávez critics suggested that a thirst for Venezuelan oil influenced the Salvadorans' decision. Officials of both governments denied oil played a role.
Chávez said recently that Venezuela would expand its social and medical programs for the poor, the backbone of his "Bolivarian Revolution," into neighboring nations. Chávez has not hesitated to take positions on issues in other countries, such as landlocked Bolivia's right to a seaport; and he has befriended Bolivian politician and coca farmer leader Evo Morales, who shares Chávez's anti-Washington and antiglobalization viewpoints.
A third Chávez announcement, that Venezuela will purchase 100,000 Russian assault rifles and 33 military helicopters, suggested to some observers that Chávez is investing his oil wealth in a different kind of muscle. The announcement followed reports, denied by Venezuelan authorities, that Venezuela is negotiating the purchase of 50 Russian MiG-29 fighter jets.
The arms purchases generated concerns in both Washington and Colombia. An unidentified Bush administration official accompanying the president in Canada recently told reporters: "Millions of dollars are going to be spent on Russian weapons for ill-defined purposes," and added: "We shoot down MiGs."
Chávez says the arms are for protecting Venezuela's long and porous border with Colombia, which is embroiled in a 40-year civil war. In recent months, Venezuelan troops have been killed along the border by unidentified armed groups. "Venezuela is a nation which does not attack anybody," Chávez told reporters while in Cuzco, Peru, for a meeting of South American presidents. "We have a right to defend ourselves."
Mr. Rangel and others agree that the helicopters and rifles would help control the border, but say a fighter-jet purchase would be more troubling. Venezuela and Colombia also have outstanding border disputes, and Venezuela claims a huge swath of Guyana, its poor eastern neighbor. The Venezuelan arms purchase has also generated concerns about a regional arms race. Sen. Rodrigo Pardo of Colombia has called for reaching an arms control agreement with Venezuela.
"In the future, Colombia's aircraft purchases might be at least a billion dollars to confront Venezuela's challenge," he predicted.
At home, Chávez has created a number of new health and education programs that are popular with the poor, but an increasingly oil-dependent economy has left millions unemployed as other sectors have been neglected. And over the past few weeks, the National Assembly has approved a law regulating television and radio content and another expanding the supreme court to fill it with loyalists, generating criticism from some that the Chávez government is becoming "authoritarian."
Chávez's regional push is similar to an effort by Libyan President Muammar Qaddafi in the late 1990s in Africa. The Libyan leader had visions of creating a sort of United States of Africa and spent billions of dollars in oil money to garner the support of African nations. But while the governments gladly received his cash infusions and cheap oil, his vision was never realized, say analysts.
Adam Isacson, who follows Venezuela for the Center for International Policy in Washington, suggests Chávez may worry that the US might push for a censure vote against Venezuela in the Organization of American States - on human rights or democracy issues, for example, as it has many times against Cuba.
In that case, Mr. Isacson says, the small states' gratitude for cheap oil and social programs would be invaluable to him. "If it comes down to the Bush administration saying 'it's them or us,' Chávez is ensuring that someone will side with him," he says.