Venezuelan president Chavez pledges energy loans to Bolivia

AEN News

Washington- Venezuelan president, Hugo Chavez, pledged $1.5 billion in energy loans to Bolivia through his country's state-owned oil company, PDVSA, which will invest in exploration and production projects in Bolivia, South America's poorest country. Chavez's move strengthens his grip over Bolivia. Rightist opposition leader Jorge Quiroga told reporters on Thursday Bolivian president Evo Morales was becoming Chavez's "puppet."

Bolivia has South America's second-largest natural gas reserves after Venezuela, the world's No. 5 oil exporter, and the government is keen to attract new investment in that sector, especially in exploration. Morales just nationalized Bolivia's vast natural gas fields and threw out the American energy company, Occidental, that had invested a fortune in those wells and production facilities. Morales was looking for a partner to invest when Chavez stepped to the plate.

Morales, an ex-coca farmer, wants to develop ways of industrializing coca for the poor farmers and as a way to stop the drug traffickers who export cocaine. Coca is the main ingredient for cocaine but is also traditionally grown to make tea and for medicinal purposes. Venezuela plans to aid Bolivia in creating jobs by funding projects to produce organic tea, coffee, dairy and legal coca products. Chavez also pledged to donate computers to schools in Chapare, where Morales farmed coca before running for president.

Chavez warned Morales Friday about the United States, saying his country could be over run by the U.S. and not to give in to the Bush administration. Joining Chavez was Cuban vice president Carlos Lage, on a visit to bolster ties between the three socialists.

Monday, President Bush said that he was concerned about the erosion of democracy in Bolivia and Venezuela. "If the U.S. president says he's worried the democracy is eroding in Bolivia, this simply means that he's already given the green light to start conspiring against the democratic government of Bolivia," said Chavez.

Chavez, an ally of Cuba's Fidel Castro, has repeatedly accused the United States of trying to overthrow him to seize his country's vast oil reserves. U.S. officials have denied that.

The U.S. state department called Chavez's comments on the United States overthrowing Morales ludicrous.