Venezuela and Bolivia to Cooperate on Coca and Gas

Caracas, Venezuela, May 29, 2006—The new left-wing alliance of Venezuela and Bolivia, supported by Cuba, took some important steps forward last week in Bolivia. In the coca-region of Chapare, Bolivian President Morales and Venezuelan President Chávez, accompanied by Cuban vice-President Carlos Lage, signed several trade deals in the fields of agriculture and energy. During his visit President Chávez accused by the US Embassy in the Bolivian capital of planning a coup against President Morales. Last week, US President Bush already spoke out his fears for an "eroding democracy" in Bolivia and Venezuela. Morales, who last week described the cooperation between his country and Venezuela and Cuba as "the axis of the good," agreed on Chávez's warnings about a possible coup. The Venezuelan leader proposed to increase military cooperation between the two countries and made an appeal to set up a military structure similar to the NATO for Latin America.

Chávez does not only want to improve military cooperation in the region. After announcing the withdrawal by Venezuela from the Community of Andean Nations (CAN) last month, Chávez announced on Sunday that he is willing to consider the proposal for the creation of a so-called Bolivarian Andean Confederation (CBA), a proposal made recently by re-elected Colombian President Àlvaro Uribe. Despite the fundamentally different opinions about free trade between the USA on the one hand and Latin American countries on the other, Uribe had made the proposal out of respect for Hugo Chávez. Chávez, a clear opponent of bilateral free trade agreements between the USA and Colombia and Peru, is the driving force behind the ALBA, the "Bolivarian Alternative for America" and the so-called Trade Agreement of the People (TCP), which was signed last April in the Cuban capital of Havanna.

The main reason for Chávez's visit to Bolivia was the signing of several trade agreements. Both heads of state signed deals to industrialise the production of soy, milk, tea, coffee and coca. "We will make clear that coca is not cocaine," said Morales. Morales further announced a radical land reform in Bolivia, to be based upon the same ideas as the "war on latifundismo," which Chávez already started last year in Venezuela. In both countries, roughly 90 percent of arable land is owned by less than ten percent of the population.

In the field of energy cooperation, Venezuela announced it would provide Bolivia with 200,000 barrels of diesel per month for preferential prices. In reaction to comments by the Venezuelan opposition, Chávez said that "Bolivia will pay for the diesel, we will not give away anything for free. The money will however not be paid directly to us. The roughly 100 million Dollars will stay in a special fund, located in Bolivia. From this fund, we will create a Bank of the South."

According to Chávez, this money will be available for Bolivian farmers. "The farmers will pay their loan back in cash or with their products. I hope that the farmers will produce soy of good quality. The value of the products is more important than the monetary value. We will destroy the dogmas of capitalism. Our model of socialism is based on solidarity."

Venezuela and Bolivia agreed on an alliance between Venezuelan state oil company PDVSA and the Bolivian oil firm YPFB. Venezuela will invest roughly $1.5 billion in the Bolivian oil- and gas industry, which was nationalized by President Morales in the beginning of May. Bolivia has the second largest gas reserves in Latin America, only to be topped by Venezuela. PDVSA will exploit new gas- and oilfields in Bolivia, and invest in the petrochemical industry.

Not only Venezuela came to agreements with Bolivia. Cuba is involved in improving Bolivia`s health and educational system, just as it was during the last years in Venezuela. Bolivia is already enjoying similar literacy programs as poor Venezuelans were enjoying during the last years, with the aim of eradicating illiteracy in Bolivia in the next two to three years. Hundreds of Cuban doctors have arrived to Bolivia as well, in order to provide primary health care to the poorest, just as tens of thousands of Cuban doctors are already doing in Venezuela`s Mission Barro Adentro.