Hugo Chávez has been busy lately. On July 22, the Venezuelan president arrived in Moscow to finalize a number of bilateral energy and military agreements, including several arms deals that (according to a Russian newspaper) are reportedly worth around $2 billion. (His previous weapons acquisitions from Russia total some $4.5 billion.) On July 31, he announced plans to nationalize the Spanish-owned Bank of Venezuela, his country's third-largest bank. That same day--the last day of an 18-month period during which he could exercise extraordinary powers granted by Congress--Chávez enacted 26 new laws that expanded considerably his control over the economy, the armed forces, and national elections. A few days later, on August 3, he vowed to "accelerate the socialist revolution" after Venezuela's November elections.

Even though he has been embarrassed repeatedly over the past year, Chávez remains brazen and blustery. Flush with oil wealth, he continues to project a powerful image. But in reality, Chávez is rapidly losing influence in Latin America, and he has been for some time now.

In a recent New York Times piece, Simon Romero and Alexei Barrionuevo noted that Brazilian President Luiz Inácio Lula da Silva "is discreetly outflanking Mr. Chávez at almost every turn in the struggle for leadership in South America." Indeed, "Venezuela's most pervasive influence remains limited to a handful of the region's poorest nations--Bolivia, Cuba, Dominica, and Nicaragua--members of ALBA, a trade alliance championed by Mr. Chávez. Another Chávez ally, Ecuador, is not a member." (The list of Venezuelan client states should also include

Whereas Chávez has championed radical anti-capitalist policies and sought to move Venezuela backward, Lula has proved to be a pragmatic, market-friendly modernizer. It is the Lula model that has far greater appeal throughout the region.

After all, what has Chávez really done for Venezuela? Although the full extent of his mismanagement has been camouflaged by high energy prices (which have been a boon to the oil-rich country), he is wrecking the Venezuelan economy. The healthcare system has deteriorated alarmingly, and food shortages remain a persistent problem. Corruption is widespread, and rampant crime has earned Caracas its reputation as the most dangerous city in the Western Hemisphere.

Meanwhile, Chávez has eroded Venezuelan democracy and sought to create an authoritarian governing structure. Last December, his thinly veiled power grab--a proposal to amend the Venezuelan constitution--was rejected by voters in a national referendum. However, the 26 laws he decreed hurriedly on July 31 introduced many of the measures rejected in that referendum. Chávez has also barred certain opposition candidates from competing in the November elections. In the past week, such antidemocratic behavior has sparked street protests in Caracas.

With his "Bolivarian" revolution discredited both at home and abroad, Chávez's desperate hope is that militaristic nationalism will strike a chord. He claims, absurdly, that he is preparing for a U.S. invasion. In fact, his military buildup is intended to consolidate his power and intimidate his neighbors. Chávez also wants to curry favor with the Venezuelan armed forces. (Remember, he was very nearly deposed by a military coup in 2002.)