Chavez pulls out of IMF and World Bank
By Andrew Buncombe in Washington
Published: 02 May 2007
Venezuela's leader Hugo Chavez has underlined his intention to develop
an alternative economic vision for Latin America by pulling his
country from the World Bank and the International Monetary Fund -
organisations that have long had a controversial role in the region.
He is also to nationalise operational control of four oil field
projects currently run by foreign companies.
Though Venezuela has paid off its loans to the two international
lending organisations, Mr Chavez's announcement that he intends to
quit the organisations is powerfully symbolic. It is likely to lead to
other smaller nations to question their membership and demand a
greater say in the organisations' policies.
"We will no longer have to go to Washington, nor to the IMF, nor to
the World Bank, not to anyone," said Mr Chavez. "I want to formalise
our exit from the World Bank and the IMF."
Despite Venezuela's close trading relationship with the US over oil -
it is the fourth largest supplier of crude in the United States - Mr
Chavez has long been critical of US interference in Latin America, be
it political, military or economic. He has long derided the IMF and
the World Bank for being controlled by US and Western interests and
has said their policies of tight budget controls, privatisation and
open markets have benefited foreign companies while leaving much of
Latin America in grinding poverty.
Venezuela recently repaid its remaining debts to the World Bank five
years ahead of schedule and paid off its debts to the IMF shortly
after Mr Chavez first took office in 1999. He has steadily worked to
provide alternative forms of credit and financial support for
countries in the region, backed up by Venezuela's oil wealth. He has
referred to such a project as the "Bank of the South". He has also
invested millions of dollars on social programmes inside Venezuela
that have reduced poverty and increased access to education and
Mark Weisbrot, director of the Washington-based Centre for Economic
Policy Research, which studied Venezuela's economy, said Mr Chavez was
likely driven by several factors, one of which was the IMF's support
of those involved in a 2002 coup which briefly led to his ousting.
"The IMF is not really an independent actor," said Mr Weisbrot. "I
don't think there's anyone in this town who would tell you with a
straight face that it is not controlled by the US Treasury. There was
no reason for Venezuela to remain a member... I think it's possible
that other countries will pull out."
Mr Chavez made his announcement on Monday, a day after criticising the
lending organisations during a meeting with leaders from Bolivia,
Nicaragua, Cuba and Haiti. He predicted that "sooner or later, those
institutions will fall due to their own weight".
On Monday, Mr Chavez announced that some of the world's largest oil
companies would lose operational control over projects in the Orinoco
Belt reserve in Venezuela. Britain's BP, the United States'
ConocoPhillips, Chevron and Exxon Mobil, Norway's Statoil and France's
Total agreed to obey a decree to transfer operational control. The
move came a year after the Bolivian President Evo Morales took control
of his country's gas fields.
"President Chavez has ordered us to take full control over the
sovereignty of our oil, and we are doing that today," said Venezuela's
Oil Minister Rafael Ramirez.