Venezuela: Good Will from Petropower

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An OPEC member helps bankroll its less well-off neighbors

In Jamaica, the conservative government of Prime Minister Edward Seaga discovered shortly after its election last October that it desperately needed $100 million in operating funds. Seaga passed the word to a group of visiting U.S. and Venezuelan businessmen who were looking at ways to revive the island's near bankrupt economy. Shortly thereafter, Jamaica received a $50 million grant from a confidential Venezuelan government discretionary fund that may total as much as $500 million. An additional $50 million from Venezuela is now being funneled into the island, earmarked for road and airport development, housing, water supply and electrification.

Throughout Central America and the Caribbean, governments are benefiting from a remarkable spirit of generosity on the part of oil-rich Venezuela, a founding member of OPEC and, with 2.2 million bbl. per day, currently the second largest producer in the cartel. In the Dominican Republic, Venezuelan money is helping to finance the construction of a $64 million hydroelectric project, housing, and a $2.3 million alcohol distillery. The tiny island state of St. Lucia (pop. 120,000) has opened a $400,000 asphalt plant, courtesy of Caracas. In Panama, officials are planning to erect a $100 million bridge to span the canal—with Venezuelan backing. An estimated $100 million in Venezuelan money has flowed into embattled El Salvador to prop up the civilian-military government headed by Christian Democratic President José Napoleón Duarte, who spent seven years of exile in Venezuela. Even the right-wing regime of Guatemalan President Fernando Romeo Lucas García, no friend of Venezuela's democratic government, has received an estimated $200 million in oil subsidies.

Venezuelan teachers and technical advisers have fanned out across the Caribbean and Central America; since 1980, in combination with Mexico, Venezuela has offered low-interest loans to needy neighbors to cover as much as 30% of the cost of oil imports. Total Venezuelan foreign aid since 1975 has amounted to some $4 billion, making Caracas the single largest donor in Latin America. (U.S. assistance to the region over the same period totals $2.9 billion.)

As one of only four democracies in South America, along with Colombia, Ecuador and Peru, Venezuela has long been enthusiastic about using its petrodollars to spread its concept of democracy elsewhere in the region. Venezuelan President Luis Herrera Campíns, 56, calls his country's assistance program a campaign in favor of "democracy for the poor." Says Energy Minister Humberto Calderón Berti: "Venezuela's oil is the main stabilizer of the democratic system."

Behind the rhetoric, there is hardheaded self-interest. As a relatively rich country with many poor neighbors, Venezuela (pop. 17 million) would rather help pay today for political and social stability than run the risk of eventual political radicalism in the area.