Relations between the Bolivarian government of Venezuela and Argentina have started a trend that could draw a new political map in South America. Regardless of whether it is a strategy of State or not, the relevant fact is that the process is already underway and showing some of its effects. The coordinates of this new map are gas oil, fuel oil, satellite and petroleum engineering, agricultural food products, medicines, joint investments and industrial tools for Pdvsa’s (Venezuela’s State owned oil company) industrial system.

As a business, it could represent several billion U$ in 5 years. To begin with, 9 million barrels of liquid fuel in only 5 months (from May to October 2004). Nevertheless, the aim is to completely redraft the slow trade flow between both countries, which in 2003 was below 1% and 0.5 % of the Argentinean and Venezuelan GNP’s respectively. These figures will leap upward as soon as Pdvsa anchors its first tanker in Buenos Aires, and shakes the sometimes turbulent waters of energy and bilateral trade.

Of the 142 purchase orders received by Argentina from Venezuela, 96 have a high aggregated value, since they are orders from Pdvsa.

But the borders of this new map are not limited to commercial bills, as many “market” operators expect inside and outside both governments. It will all depend on the legitimacy it gains among both peoples, on one hand; and on the other hand, on the degree of integration with the Common Market of the South (Mercosur); assuming that it will not die out again. In neither case has the final word been said.

After the referendum

The victory in the referendum, gave Chávez’ government greater international weight, sitting at the top of a mountain of petrodollars. This new hemispherical legitimization can be both beneficial and dangerous for the revolutionary process his society is undergoing. For one part, Chávez’ government has manifold his appeal to the proletarian sectors of the continent, who anxiously watch Venezuelan reforms in hopes of redemption.

But there is something certainly novel. The business sector, initially distrustful of the “Bolivarian revolution”, now bears expectations of business opportunities, almost with the same eagerness with which people in Washington wish to reach an entente cordiale with the wayward mulatto from Caracas.

A love affair born out of two crises

Initially, this possible modification of the sub-regional map originated out of two unexpected, as well as perilous events for both government.

In Argentina, the 2004 energy crisis; regarded as the most serious since 1929, because it threatened to destroy what was still left of the country’s service and production structure built in that period.

In Venezuela, on the other hand, a fortuitous event. The most efficient sabotage on its oil industry resulted in the re-nationalization of Pdvsa. Something unexpected.

The country lost 7 billion U$ in 2003 in direct commercial damage in its income. But Pdvsa was recuperated with the courage and determination of the people, and was put at the service of the government, its social plans, and its international relations.

The first important approach in the commercial relations was from July 2003 to June 2004.In this period, there were 800 new applications for the purchase of oleaginous products, meat, cereal, milk and sugar. Venezuela is a traditional purchaser of 46 Argentinean agro-alimentary products.

It is difficult to know how much of this was made effective. But we must certainly add the 80 million U$ that were put into movement in the Mega Business-round in Margarita, Venezuela (July 2004), to what will be negotiated in the next business round to be held in November, with the possible attendance of president Chávez himself.

We are talking about a new bilateral commercial reality. The projections of an Argentinean consultant are that five years from now, integrated bilateral trade, “including investments” could reach 4 or 5 billion U$

If this takes place, Colombia might be displaced as the Bolivarian government’s first business partner after the U.S.. There are precedents in the field of industrial relations. Between 1993 and 1997, Venezuela became the first destination for investments of Argentinean capital in the hemisphere. But in those years, neo-liberalism reigned as the official capitalist policy in our countries. It is not the other way around nowadays; but it is not the same either. Especially in Venezuela, where a nationalist project is consolidating.

The Caracas stock market was baptized by The Economist as the “magnet for continental business”, and in Argentina, the one-on-one currency exchange gave its entrepreneurial monopolies illusory power, although not less real when it came to counting the profits.

Today, neither of them exists. This reality, and a different social and political situation - as demanding as the market- is the context of the new business relations between Argentina and Venezuela.

Published in Quantum No 31

Modesto Emilio Guerrero