Iran and Venezuela join forces on economic, social projects

Venezuela's Hugo Chávez and Iran's Mahmoud Ahmadinejad said on Jan. 13 that they would help finance investment projects in other countries seeking to thwart US domination during talks in Caracas. The two countries had previously revealed plans for a joint $2 billion fund to finance social investments in Venezuela and Iran, but the leaders now say the money would also be used for projects in friendly countries throughout the developing world, especially in Africa and Latin America. "It will permit us to underpin investments... above all in those countries whose governments are making efforts to liberate themselves from the (US) imperialist yoke," Chávez said. "This fund, my brother," the Venezuelan president said, referring to Ahmadinejad, "will become a mechanism for liberation." Ahmadinejad, who was starting a tour of left-leaning countries in the region, called it a "very important" decision that would help promote "joint cooperation in third countries." It was not clear if the leaders were referring to investment in infrastructure, social and energy projects–areas that the two countries have focused on until now–or other types of financing. Iran and Venezuela are members of the Organization of Petroleum Exporting Countries (OPEC). Chávez said on Jan. 13 that they had also agreed to back a further oil production cut in the cartel saying the world market was oversupplied with crude, and OPEC should act to stop falling prices. "We know today there is too much crude in the market," Chávez said. "We have agreed to join our forces within OPEC ... to support a production cut and save the price of oil." OPEC reduced output by 1.2 million barrels a day in November, then announced an additional cut of 500,000 barrels a day, due to begin on Feb. 1. Dow Jones Newswires reported on Jan. 12 that OPEC is discussing holding an emergency meeting later this month to reduce output by another 500,000 barrels a day. Venezuela and Iran have been leading supporters of production cuts within OPEC. Ahmadinejad's visit–his second to Venezuela in less than four months–comes as he seeks to break international isolation over his country's nuclear program and possibly line up new allies in Latin America. Nowhere has Iran's search for allies in Latin America been more fruitful than in Venezuela. The two countries have signed an array of agreements in recent months, pledging to work together in Venezuela in exploring for oil, building low-income housing and assembling tractors and bicycles, among other ventures. Venezuela has a long history of close relations with Middle Eastern countries, dating to the founding of OPEC in Baghdad in 1960 by Venezuela, Iran, Iraq, Kuwait and Saudi Arabia. Chávez has strengthened those ties through overtures to Iran, and more recently Syria, where Venezuela and Iran have plans to build an oil refinery capable of processing 150,000 barrels a day. Chávez and Ahmadinejad have been increasingly united by the deep-seated antagonism aimed at them by the Bush administration. Chávez has become a leading defender of Iran's nuclear ambitions, accusing Washington of using the issue as a pretext to attack Tehran. The US believes Iran is seeking to use its nuclear program to develop an atomic bomb. Tehran says its program is peaceful and geared toward the production of energy. Some Venezuelan critics of Chávez fear the alliance will worsen the country's already hostile relationship with the United States, the country's top oil buyer. Venezuela is among the top five suppliers of crude to the US market. In a speech earlier on Jan. 13, Chávez called for the US government to accept "the new realities of Latin America," as he brushed aside restrictions that limit presidents to two consecutive terms. He vowed to stay in office beyond 2013, when his term expires, saying he would revise the constitution to get rid of presidential term limits. Ahmadinejad also visited Nicaragua and Ecuador during his trip to South America. On Jan. 14 Ahmadinejad and Nicaragua's newly elected President Daniel Ortega said at a meeting in Managua that they will open embassies in each other's capitals in an effort to link the two countries as part of a broad effort to offset Washington's global influence. On Jan. 15, Ahmadinejad attended the inauguration of Ecuador's new president, Rafael Correa, and met with Bolivian President Evo Morales, both critics of the Bush administration and its policies in Latin America, particularly its emphasis on free trade agreements.