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Chavez offers billions in Latin America

(AP)
Updated: 2007-08-27 09:45

His group calculates that nearly half of US aid to the region goes to military and police programs. However, US Treasury Secretary Henry Paulson also has pointed to the US government's work with the IDB to mobilize up to $200 million through private lenders to support small business loans.

When a Brazilian plastics factory was shuttered in 2003 by its indebted owners, hundreds of workers formed a cooperative. They appealed for help in a private meeting with Chavez, who offered subsidized raw materials in exchange for the technology to produce plastic homes in Venezuela. The factory soon hummed back to life.

"I know there are people out there criticizing Chavez for helping us. They say he is interfering with the internal affairs of Brazil," said Salviano Jose da Silva, a security guard at the Flasko factory near Sao Paulo. "But all he's doing is helping to guarantee our livelihood - something the government should be doing but isn't."

When floods hit Bolivia this year, the US provided $1.5 million in a planeload of supplies and cash. Chavez promised 10 times more and sent in teams that helped victims for weeks. In all, Chavez's pledges to Bolivia total over $800 million, more than six times the US commitment this year.

He also offered money for new garbage trucks in Haiti and an Argentine dairy cooperative.

Opponents say Chavez is spending haphazardly on "giveaways" abroad at a time when more than a quarter of Venezuelans still live on less than $3 a day. They question how long he can sustain it since government revenues are highly dependent on fluctuating oil prices.

While Venezuelan asphalt paves streets in Bolivia's capital, a sign recently protruded from one of Caracas' potholes reading: "Why for Bolivia yes and for me no?"

Chavez argues much of the funding brings benefits back to Venezuela, including oil-related investments and other cooperative exchanges. He says billions more are being spent within Venezuela, and cites social programs credited with helping to reduce poverty.

His recent commitments in the region exceed those of the World Bank and the Inter-American Development Bank. Each lent nearly $6 billion in 2006, but their influence has declined as nations repay their outstanding loans. Regional International Monetary Fund debts dropped from $49 billion in 2003 to just $694 million this year, largely due to early repayments, some of them financed by Chavez.

Chavez offers funds in unconventional, sometimes spontaneous ways. Summing it up is difficult due to a lack of transparent accounting, so the AP tally is based on public pledges rather than what has actually been spent. Some of the money is expected to be paid over multiple years. The tally also cannot cover undisclosed spending, such as aid to Cuba or Venezuela's share in building a $5 billion oil refinery in Ecuador.

Venezuela's funding differs from US aid because it includes investments that in the US would come from the private sector and purchases of bonds that are later resold.

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