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 Argentina. Chávez has close ties to Néstor and Cristina Kirchner, the former and current president of Argentina, respectively, and the Venezuelan regime has invested billions of dollars in Argentine bonds.)
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.)
How should the United States respond? What we should not do is engage the Venezuelan populist in a war of words. Instead, we should take practical steps to strengthen relations with Colombia, Brazil, Peru, and other South American democracies. It is utterly shameful that Democratic House leaders have refused to schedule a vote on the U.S.-Colombia free trade deal. How can we treat Colombia so poorly and expect other countries to view us as a credible partner? If U.S. lawmakers understood how their rebuke of Colombia was hurting America's image in the region, one hopes they would reconsider and approve the trade pact immediately.
Beyond Colombia, Washington must stay engaged on a range of trade, energy, social, and security issues that affect South America. We must remember that, broadly speaking, the region is moving in a positive direction: Economic growth rates have been strong, living conditions have improved, and democratic institutions have been bolstered.
Have many countries elected candidates of the left? Sure. But it should be clear by now that Chávez does not speak for the South American left. In 2003, a center-left Chilean government signed a free trade agreement with the United States. In Brazil, the center-left Lula government has pursued a sound, market-oriented economic agenda and worked with the Bush administration to promote ethanol production. Peru's center-left president, Alan García, has embraced market reforms and free trade. In early 2007, the United States and Uruguay signed a "Trade and Investment Framework Agreement." Uruguay, too, has a center-left government, led by President Tabaré Vázquez.
In other words, Chávez is losing the ideological battle, and we should not inflate his stature or the extent of his influence. Thanks to computer files recovered earlier this year by the Colombian military, we have learned more about Venezuelan support for the narco-terrorists of the FARC. These revelations have further damaged Chávez's standing in the region. Now is the time for Washington to boost its own standing in Latin America and deepen cooperation with its democratic partners.
Jaime Daremblum, former ambassador of Costa Rica to the United States (1998-2004), is director of the Center for Latin American Studies at the Hudson Institute.