In the event called “How to do business with Venezuela”, the visiting high rank Venezuelan officials explained details concerning tariffs, customs, taxation, currency exchange, and competitive advantages, with the intention of deepening bilateral trade.

The encounter between Chile and Venezuela was held in an atmosphere of noticeable improvement of the bilateral political relations, after they had deteriorated to the point of withdrawal of both ambassadors. The meeting was also an occasion to reactivate the Economic Complementation Agreement (ACE) No 23, subscribed by both nations in 1993, and which had not been put into effect for more than decade.

Relations between both countries are now reaching a stage of rapprochement and cooperation. Chilean president, Ricardo Lagos has twice requested a meeting with president Hugo Chávez, who has manifested his willingness to have the encounter as soon as possible. The minister of Foreign Affairs, Soledad Alvear, invited her Venezuelan colleague, Jesús Arnaldo Pérez, to Chile.

The minister of Energy and Mining, Rafael Ramírez., will also travel to Santiago shortly, to hold meetings with the minister of Economy and Energy, Jorge Rodríguez Grossi. Venezuela offers interesting possibilities in the energy business for a country that imports most of its hydrocarbons from Nigeria and the Middle East. Oil and natural gas are the main products in Venezuela’s commercial agenda with Argentina, Brazil, Colombia, and other countries in the region. Furthermore, Brazil is building a second bridge over the Orinoco river; a work of engineering regarded as the most complex in this part of the world.

Bilateral trade has registered a deficit for Venezuela, which buys more from Chile than it sells. Although the trade balance has turned out unfavorable for Venezuela, its imports of Chilean products have grown 60.6%, while its exports have grown 44.4% in the second quarter of 2004 in relation to the figures in the same period of 2003. Between January and June, Venezuela exported 79.2 million U$ in lubricants, mineral coal, and petroleum derivatives, while Chile sold 121.9 million U$ in cellulose, fruits, preserved fruits, wines, tomatoes, and beans, among other primary products. The semestral balance was 423.7 million in favor of Chile.

Business opportunities in Venezuela allowed a Chilean-Swiss consortium, Unique IDC, to undertake the administration, for twenty years, of the Margarita and Coche airports; two Caribbean islands that are competitive in the world tropical tourism market.

CorpBanca, which is among the six most important banks in Venezuela., belongs to Alvaro Saieh, a Chilean businessman -who is also the owner of the Chilean newspaper La Tercera.

The Chilean corporation Masisa-Terranova, a manufacturer of wooden panels of the Pathfinder group, owns forests in Anzoátegui state, in the east of Venezuela.

Another sign of the new stage in the economic relations is the recent reactivation of the Chilean-Venezuelan Chamber of Commerce, which had been inactive after the death of its former president Domingo Said, and that is now under the presidency of Domingo Calorio.

A packaged meat producing company received an important purchase order of sausages for the Mercal popular nutrition program network in Venezuela.

Moreover, one of the members of the board of directors of the chamber is in the business of large-scale tours to the Margarita island.

Most of the Chilean investors are almost unanimously first rate strong Pinochet supporters. At a local level, they openly defend their extreme right-wing ideology, and participate in Chilean internal politics with their organizational “unions”. Nonetheless, they are somewhat pragmatic in their international expansion, as with China. This economic pragmatism seems to have “contaminated” Ricardo Lagos, a vehement supporter of the neo-liberal dogma, who in general terms is not too friendly towards the more humane type of capitalism promoted by Hugo Chávez, and whose government officially justified the coup on April 11th 2002 against him.

The future of Chilean-Venezuelan relations

The solidity of Chávez’ government, and the greater international approval it gained with his victory in the recall referendum, intended to remove him from office, was also a severe defeat for the Chilean Christian Democratic Party (D.C.)-which is part of the government-, and for its international organization. The additional beating inflicted by Chávez’ victory on the “mass media party” and on the other foreign and domestic power groups backed by Washington, was not overlooked by Lagos’ government, whose foreign policy towards Latin America -greatly inspired by the American Christian Democratic Organization (ODCA)- has rendered very poor results in Bolivia, Peru, Argentina, and other countries in the region, including the blatant defeat of his attempt to have his minister of Internal Affairs, José Miguel Insulza, appointed as Secretary General of the OAS.

The political decision of improving relations with Venezuela will inevitably go through some diplomatic changes. Soledad Alvear minister of Foreign Affairs, and wife of the chairman of the ODCA, Gutenberg Martínez, will have to resign her post in November, after the Asian-Pacific Countries (APEC) meeting to be held in Chile, in order to run against ex-president Eduardo Frei Ruiz for the presidential candidacy.

The only tumor in this diagnose of political and economic harmony would be the controversial presence of Favio Vío as Chilean ambassador in Venezuela. This diplomat acted more as representative of the Christian Democratic (D.C.) party, than as an appointee of the Chilean State before a “friend” government; perhaps forgetting the fact that his country belonged to the “Group of Friends of Venezuela”, which, after all, also includes the U.S.. Vío did quite well, but as an advance guard for the D.C. against Chávez’ government, thus leaving a very poor impression of Chilean diplomacy, and illegitimatizing it before the Venezuelan public opinion. The solution seems to be the adoption of a non partisan, foreign policy of State; based on principles and values of solidarity, self-determination, tolerance, and regional integration.

Vast Venezuelan political sectors, which include the national entrepreneurial organization Fedecámaras, as well of other members of the political spectrum, which gathered the 40% of the constituency that opposed Chávez in the referendum, wish to strengthen the links between Venezuela and Chile; not only to close good deals, in the atmosphere of friendliness that prevailed in the Chávez- Lagos, interview in Iguazú , Argentina, during the Common Market of the South (Mercosur) meeting. The need to appoint a more tactful ambassador seems more than obvious.

Published in Quantum No.31

Ernesto Carmona