Chávez lends large hand to Argentina

President Hugo Chávez has launched an intensive tour of South America to shore up Venezuela's influence over the region and to loosen the grip of western creditors. The socialist leader promised to buy up to $1 billion of Argentinian bonds and to help fund a $400 million gas plant, bolstering his reputation as a benefactor of Buenos Aires's economic recovery. Chávez was expected to announce other economic and energy deals during visits to Uruguay, Ecuador and Bolivia, underlining his ambition to forge a common Latin American front under his leadership. "We need to unite and the north American empire doesn't want us to unite," the president told reporters in Buenos Aires. "It is a battle of interests, but we will win this battle." The four-nation tour, which started on Aug. 7, is an attempt to flex Venezuela's muscle after a series of setbacks in South America, including stalled or diluted initiatives by Caracas for a pan-regional bank and a gas pipeline. Flush with oil revenues, Chávez said his government had bought $500 million of Argentinian bonds and would buy $500 million more in coming months, bringing to more than $5 billion the amount of Argentinian bonds bought by Venezuela in two years. It confirms Venezuela's position as one of Argentina's prime lenders and will permit Buenos Aires to meet its foreign commitments this month, which total $2.5 billion, just when it was having difficulty attracting foreign investment and credit. The deal will also help Chávez to soak up some of the liquidity in Venezuela, which has pushed the country's inflation rate close to 20 percent, the region's highest. It has also cast Chávez as the man who helped a proud ally recover from a 2002 economic crash which had threatened to make Argentina a basket case at the mercy of organizations such as the World Bank and International Monetary Fund, both widely loathed in Latin America as instruments of western domination. "This is a big effort for Venezuela, but we are doing it because we know what is at stake. Argentina is freeing itself from Dracula, it is cutting ties with the IMF," said Chávez. In January 2006, Argentina repaid its entire remaining $9.6 billion debt to the IMF, giving President Néstor Kirchner kudos at home for restoring national pride and sovereignty.