The economic reforms and nationalist policies being advanced by Hugo Chavez, the populist president of Venezuela, are liberating Latin American nations from the suffocating grip of the international financial oligarchy.

The wide-ranging reforms promoted by Chavez are being financed by the immense oil wealth of Venezuela, the world’s fifth-largest exporter of oil. The year 2006 brought increased state control of Venezuela’s oil production.

Venezuela, with the largest proven oil reserves outside of the Middle East, produces more than 3 million barrels of oil per day. On Jan. 1, Venezuelan Oil Minister Rafael Ramirez announced that 32 privately operated oil fields had come under state control with the start of 2006.

In 2001, Venezuela passed a law requiring oil production to be carried out by companies in which the government held the majority share. The deadline for the oil companies to convert their operations to joint ventures in which the state oil company Petroleos de Venezuela SA (PDVSA) has the controlling stake expired at midnight on Dec. 31, 2005.

The oil fields that came under state control on New Year’s Day produce about 500,000 of Venezuela’s declared production of 3.2 million barrels a day. The Venezuelan state could own as much as 90 percent in some of the new ventures, depending on how much the private companies had invested in the field.

The soaring price of crude oil has allowed Chavez to support other nations and economic reforms across the region. From Argentina, for example, Venezuela purchased more than $1 billion in bonds in 2005 and may buy as much as $2 billion more.

“Venezuela has been supporting Argentina in freeing it from International Monetary Fund debt, and we will continue, as much as we can, to help Argentina end its dependence on the IMF,” Chavez said.

The Venezuelan investment allowed Argentina’s President Nestor Kirchner to completely pay off its $9.8 billion debt to the IMF on Jan. 3.

“With this payment, we are interring a significant part of an ignominious past,” Kirchner said.

Many Argentines believe that the IMF was responsible for the disastrous economic policies that caused the financial crisis of 2001 and then abandoned the country to recover on its own.

BANK OF THE SOUTH

Chavez has proposed the creation of a new multilateral bank to free the region from IMF influence and the increasing “dollarization” of the region. He called on Brazil and Argentina to contribute some of their international reserves to help fund the new regional bank.

During a recent speech in Brazil, Chavez called for the creation of the “Bank of the South” to “allow us to manage all this money for our own interests,” he said. “Venezuela would bring a part of its reserves; Brazil would bring a part of its reserves, Argentina, too, and other countries.”

Chavez said South American countries should disinvest from rich countries that “manipulate, lend and make a lot of money off our resources.”

Venezuela’s central bank, for example, sold $10 billion of U.S. bonds and other U.S. assets in the first half of 2005.

“How stupid we’ve been,” said Chavez. The Bolivian president-elect, Evo Morales, met Chavez in Caracas as he began a seven-nation world tour. Morales said he and the Venezuelan president were united in a “fight against neo-liberalism and imperialism.”

Morales and Chavez represent a growing number of Latin American leaders who are opposed to U.S. attempts to impose a “free trade” agreement on the region.

Morales, a Socialist, is the first Bolivian politician to be elected with an absolute majority having won 54 percent of the vote. Morales is also the first Indian to come to power in Bolivia where 85 percent of the population is indigenous.

During the trip, Morales discussed his plans to nationalize Bolivia’s vast natural gas holdings, the second largest in South America. “Hydrocarbons and their nationalization—we’re going to talk about that,” Chavez said as he met Morales at Caracas’s international airport.

If the United States “wants bilateral diplomatic and commercial relations, it will have them, but without submission, without subordination, without conditions and without blackmail,” Morales said in Cuba.

On his return from Cuba, Morales held a private meeting with U.S. Ambassador David Greenlee. Representatives declined to give details.

“We join in the task of Fidel [Castro] in Cuba and Hugo in Venezuela to respond to the needs of the national majorities,” Morales said in Caracas the following day, Jan. 3. “The time of the people has arrived. This is the new millennium of the people.”

“We are going to change Bolivia. We are going to change Latin America,” he said. Chavez referred to the three nationalist presidents as “an axis of good.”

Chavez offered to provide Bolivia with diesel fuel, trade benefits and financial assistance for the social reforms Morales has proposed. Venezuela provides some 200,000 barrels a day of subsidized oil to Cuba and 12 other nations in Central America and the Caribbean Basin.

Chavez said Venezuela would supply 150,000 barrels of diesel fuel monthly to Bolivia. “I won’t accept you paying us a cent, you are going to pay us in agricultural products,” Chavez said.

Venezuela will also donate $30 million to Morales’s government following his Jan. 22 inauguration, Chavez said. Iran’s President Mahmoud Ahmadinejad welcomed a proposal from Chavez to develop three-way cooperation between Tehran, Caracas and La Paz on energy.

Chavez proposed cooperation in the field of oil and gas and asked Iran to supply Bolivia with the technical assistance required to help the Morales government nationalize its oil and gas industry. Morales said he intends to nationalize Bolivia’s vast natural gas holdings but not touch foreign oil and gas companies.

“I don’t want to prejudice anybody. I don’t want to expropriate or confiscate any wealth,” Morales said on a recent trip to Santa Cruz, the center of Bolivia’s gas production. “I want to learn from the businessmen.”