Venezuela: the Brazil connection

Two giants of the Latin American left, Luiz Inacio Lula Da Silva and Hugo Chavez, talked late into Thursday night in Caracas’s presidential palace, Miraflores, finishing their four-hour meeting around midnight.

Although Chavez said that they spoke about “imperial aggression against oil countries” – not just the sanctions that the US recently slapped on Venezuela, but also Libya – the presence of another man at the encounter suggested there were other motives for the visit too.

Emilio Odebrecht, leader of one of Brazil’s largest conglomerates and its biggest construction company, may have wanted to raise the small matter of an $800m debt that Venezuela has with his company, Odebrecht, which has carried out several major infrastructure projects in the country, including much of the Caracas metro system. Perhaps a gentle nudge from Lula might have bolstered his cause.

But that $800m doesn’t include a major hydroelectric project that Odebrecht is working on, the first stage of which is due to be ready next year, when presidential elections are due. Odebrecht has another bargaining chip in that Chavez is surely keen for this to finish on time, since Venezuelans suffer sporadic blackouts thanks to electricity shortages largely because of the government’s failure to invest enough in the sector. The blackouts have been damaging for Chavez’s popularity.

Doubtless other Brazilian commercial interests came up, with Brazilian exports to Venezuela having risen more than five times since Chavez came to power (Venezuelan exports to Brazil, in contrast, barely grew 10 per cent, with companies hampered by a hugely overvalued currency).

In particular, Brazilian food companies benefited greatly when Chavez froze commercial relations with Colombia, causing Brazil to replace Colombia as Venezuela’s second biggest trading partner. Again, sporadic but persistent food shortages in Venezuela have been politically damaging for Chavez, and Brazil can help.

In fact, Lula’s visit precedes Chavez’s own trip to Brasilia on Monday, his first official bilateral meeting with Dilma Rousseff since she took office in January, which was oddly deferred several times.

There was another issue that must have overshadowed the meeting between these heavyweight leftist leaders, though. Elections in Peru on Sunday provide a chance for another leftwing leader to take power in the region: Ollanta Humala.

The last time he tried for the presidency in 2006 he lost in large part because of his open association with Chavez, whom he now denies stumped up $12m for that election campaign. This time round Humala is at pains to persuade Peruvians that he prefers the more moderate Lula’s leadership style. Whether or not Humala wins, the election is one more piece of evidence for Chavez’s waning star amongst the Latin American left.