VENEZUELA: EMERGING ON THE WORLD SCENE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002600160001-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 9
• Document Creation Date: December 12, 2016
• Document Release Date: April 3, 2002
• Sequence Number: 1
• Publication Date: July 2, 1975
• Content Type: IM

Approved For Release 2002/05/09: CIA-RDP79T00865AO0260016/4 9--
Secret
Intelligence Memorandum
Venezuela: Emerging on the World Scene
Secret
July 2, 1975
No. 0741/75
Approved For Release 2002/05/09 : CIA-RDP79T00865AO02600160001-7
 25X1 Approved For Release 2002/05/09 : CIA-RDP79T00865AO02600160001-7
Approved For Release 2002/05/09 : CIA-RDP79T00865AO02600160001-7
 Approved For Release 2002/03)6C*&fzDP79T00865A002600160001-7
Venezuela: Emerging on the World Scene
Summary
July 2, 1975
President Carlos Andres Perez, a shrewd, energetic, self-made career politician
with strong charismatic appeal, has taken advantage of his country's growing
nationalism and prosperity to emerge as the unchallenged political leader at home.
Abroad, he has presented himself as a hemispheric spokesman. Venezuela's position
as a founding member of OPEC has thrust that country nearer the world's power
center and into incipient confrontation with the US.
Now into his second year in office, Perez has given high priority to defining a
new working relationship with the US, using as a starting point Venezuela's role as a
traditional and reliable supplier of petroleum. At the same time, political and
economic ties with Latin and Third World countries are being intensified. Venezuela
sees its interests served by pursuing a foreign policy that allies the country with the
interests and aspirations of developing countries vis-a-vis the industrialized world. It
will not go so far, however, as to jeopardize its relations with the US--the main
market for Venezuelan petroleum.
Comments and queries on the contents of this publication are welcome. They may be directed to
bf the Office of Current Intelligence,
25X1A
Approved For Release 2002/0 9C&FDP79T00865A002600160001-7
 Approved For Release 2002/058P79T00865A002600160001-7
An Auspicious Beginning
Under the aggressive leadership of President Carlos Andres Perez,
Venezuela is rapidly becoming a hemispheric power. It is utilizing some of its
oil revenues to propel its ambitious drive to assert leadership in Latin
American political and economic affairs and to expand its influence in the
Third World. Despite the anti-US tone of President Perez' vigorous efforts to
establish a "new international order," he has indicated receptivity to a
dialogue that would lead to a new definition of relations between the two
countries.
Venezuela's new assertiveness stems from rising nationalism and a
new-found wealth resulting from its position as one of the world's major
petroleum exporters. The belief that oil revenues are a temporary phenom-
enon is at the heart of its strong promotion of high international oil prices.
Venezuela has categorically rejected classification with the rich countries;
instead it identifies wherever possible with commodity-producing LDCs.
Carrying this line to its logical conclusion, Venezuela also insists that high oil
prices are not the root cause of the present world economic problems.
Rather, it pictures the present structure of the world economic order as one
that discriminates against all commodity-supplying nations, including oil
producers.
To win support for this interpretation, Perez has personally initiated
bilateral contacts with all Latin and Caribbean countries and has also sought
a wider role for Venezuela among the non-Latin nations of the Third World.
By joining the vanguard of the "poor" against the "rich," Perez hopes to
deflect criticism of Venezuela's oil-based wealth and the prominent role it
has played in working toward higher petroleum prices in OPEC and in
defending these increases in world forums. The Perez administration has
apparently decided that its long-term political strategy is better served by
identification with the LDCs, whether in Latin America or elsewhere.
The Leading Architect
In contrast to previous administrations, in which the foreign minister
usually played an influential if not dominant role in the formulation and
execution of foreign policy, President Perez is the major force behind recent
diplomatic initiatives. Foreign Minister Ramon Escovar Salom and his
predecessor, Efrain Schacht, have been little more than executors of deci-
sions made in the presidential palace. Perez has ordered a reorganization of
the Foreign Ministry to reflect the nation's increased international commit-
ments and its position as a major oil exporter. Petroleum attaches are being
assigned to most major countries, and diplomatic relations are being ex-
panded on the African and Asian continents.
SECRET
Approved For Release 2002/05/09 : CIA-RDP79T00865A002600160001-7
 Approved For Release 2002/Q ~. A fDP79T00865A002600160001-7
Perez is not a foreign policy expert by training, but he understands well
the politics of international. relations. He is quintessentially a product of his
Democratic Action Party-pragmatic, relatively informal, open,
He is rlotivated by no particular ideology, making it
feasible for Venezuela to maintain close relations with countries of widely
disparate political philosophies. Perez listens carefully to the advice of
professionals, but the decisions he makes are very much his own. Seldom
does he rely for advice on "party elders," but rather turns to a small coterie
of young, apolitical advisers for suggestions. He approaches most foreign
nolicy decisions without awe, fear, or sense of inferiority.
Venezuelan - Latin American Relations
In recent months Perez has launched a strenuous diplomatic offensive
in Latin America aimed at strengthening political and economic relations and
convincing others of the need for more economic regional cooperation. He
has succeeded in broadening Latin America's alertness to issues affecting the
region and has infused new vitality into the drive for new modes of regional
cooperation designed to free the area from dependence on the US. He was
instrumental in the recent decision by ten Latin American nations to form a
multinational merchant fleet, a move that will increase competition for
foreign ship operators in the region. Earlier, Perez played a prominent part in
the Ayacucho sesquicentennial celebrations in Peru last December and
hosted a meeting of Central American presidents in Venezuela the same
month. Recently he has proposed a meeting of all Latin American chiefs of
state sometime later this year. Perez has sent personal emissaries to most
Latin American countries to lobby for a Latin American economic organiza-
tion that excludes the US. In return, he is receiving a growing number of
high-ranking foreign visitors.
In March, following a "triumphal" return from the conference of OPEC
chiefs of state in Algiers, he visited Mexico and later participated in a
mini-summit in Panama City with leaders of Colombia, Panama, and Costa
Rica, taking advantage of his visit to pledge Venezuelan solidarity with
Panama in the canal negotiat.ons. Further official visits in the hemisphere are
under consideration, and at least one, to Bolivia in August, has already been
announced. These activities demonstrate Caracas' new interest in Latin
America as a potential "sphere of influence" that can be achieved through
vigorous diplomacy and a moderate outpouring of financial credits and
assistance. Venezuela contrasts this involvement in Latin American problems
with what Venezuelan leaders describe as US disinterest.
Besides providing large sums partly for development assistance to inter-
national lending. agencies, V:nezuela has negotiated petroleum-related agree-
ments with some Latin countries intended to ease their balance-of-payments
25X6
25X6
25X6
Approved For Release 2002/05/b.E'EP79T00865A002600160001-7
 Approved For Release 2002/fRDP79T00865A002600160001-7
difficulties in part caused by the high cost of imported oil. Although some
Venezuelans describe these offers as an example of one Latin brother helping
another, it is clear to the recipients of this assistance that they will come
under some pressure to follow Caracas' lead in a variety of hemispheric
political affairs. Caracas has also proffered assistance and advice on setting
up a coffee stockpile by Central American countries producing coffee that is
particularly vulnerable to price fluctuations in the international market.
Venezuela sees itself as a leader in the region and one that the US must deal
with on the basis of equality.
In its foreign policy, Venezuela assigns a high priority to the Caribbean,
especially with the diplomatic and economic isolation of Cuba drawing to an
end. The Venezuelans look upon the Caribbean as "mare nostrum." They
also view it as the best alternative for their country's maritime aspirations
and as an appropriate balance for its relations with the South American
continent and its ties with the Andean Pact countries. The Venezuelan
foreign minister has recently created an office dealing with Caribbean affairs
to sharpen the focus of government activity in the area. Key elements of this
policy include the expansion of trade and investment, formation of closer
cultural and political ties with all states whether Spanish-speaking or not,
and assertion of a Venezuelan role as a champion of the interests of the
smaller states vis-a-vis the world's great powers, especially the US. This
policy may also be intended to pre-empt an expected increase in Cuba's role
in the Caribbean.
Venezuela intends to foster these ties even in the face of opposition by
other potential political leaders of the region, such as Trinidad's Prime
Minister Eric Williams and the Dominican Republic's President Balaguer. A
major factor turning Venezuelan attention toward the Caribbean may be a
perception that the gradual withdrawal of the British and the Dutch from
the area is leaving a vacuum. Indeed, there have been complaints in the larger
English-speaking islands and also in the Netherlands Antilles that Venezuela
is trying to gain an economic, foothold in the smaller islands in such areas as
petroleum refining in the Antilles, bauxite processing from Jamaica and
Guyana, sales agreements with Surinam, and petroleum exploration. The
Venezuelans are being careful, however, not to offend and are stressing the
mutual advantages that can accrue from joint ventures.
Nevertheless, charges of "imperialism" leveled at Caracas have stung
Venezuelan officials, who have denied that the Perez administration harbors
any aggressive designs on the islands or that it has any colonial ambitions. To
ease their fears, Caracas cites the fact that it is attempting to negotiate
border disputes with neighboring Colombia and Guyana and a territorial sea
dispute involving possible oil-bearing deposits with the Dutch Antilles.
Approved For Release 2002/03109Pt'Iia. DP79T00865A002600160001-7
 Approved For Release 2002/Q A j f DP79T00865AO02600160001-7
25X6
Having made his politic,.l career in the rough and tumble of Venezuelan
party politics, Perez believes that he must be equally tough in foreign affairs.
The temptation, therefore, to seek out a dramatic confrontation with the US
is politically almost irresisti'ble. In encounters with the US over the removal
of Cuban sanctions., petroleum pricing policies, and the US Trade Reform
Act, Perez has relished his assumed role of David against the US "Goliath."
Perez insists that US-Venezuelan relations must be firmly grounded on
US recognition that Venezuela, is no longer a weak and unstable democracy,
but that it is strong and has a. growing economy fueled by a commodity vital
to the US.
While criticizing the US for its policy shortcomings and broken
promises, Perez frequently reminds Washington of Caracas' historic ties of
trade and friendship and its role as a reliable supplier of petroleum during
the Arab boycott--a role h-, says he is prepared to play again should it
become necessary. Perez is also aware of his own limits. He probably knows
that in the final analysis he needs the US oil market at a time when the US is
diversifying sources of supply. Yet despite this fact, Perez has made it clear
that Venezuela is prepared to use its leverage-as an important and reliable
supplier of petroleum-as a irnajo:r negotiation instrument to obtain economic
Approved For Release 2002/05MP79T00865A002600160001-7
 Approved For Release 2002//pI -RDP79T00865A002600160001-7
and. commercial benefits as well as needed modern technology for its
economic development program.
Perez has responded favorably to US proposals for preliminary working-
group talks to reduce or eliminate problems that have disturbed relations in
recent months. These discussions have not yet focused on such substantive
issues as oil prices, the US Trade Reform Act, and Venezuela's strong
backing for a new and exclusively Latin American economic system. Out
several meetings held thus far in Washington were viewed very positively by
Venezuelan officials. They are pleased that an attempt is being made to
listen to their problems and that the US is willing to work out a new
understanding.
Because Venezuela has been a long and reliable supplier of oil to the
US, Perez and others believe that Venezuela deserves more than high prices
and an assured market. What Caracas really seeks from the US is techno-
logical cooperation in developing new petroleum fields before the present
conventional reserves run out some twenty years hence. Declining reserves
will eventually require development of the Orinoco Tar Belt, which is said to
contain about seventy billion barrels of recoverable heavy oil. Foreign
technology, particularly of the type possessed by US petroleum firms, will
be required to tap this wealth. Perez is also seeking access to US markets for
non-traditional exports such as metal products and petrochemicals to
diversify Venezuela's economy and lessen its dependence on petroleum sales.
In return, Perez probably would be prepared to discuss a long-term petro-
leum supply and pricing arrangement. Unrealistically convinced that Caracas
holds the advantage, Perez will be a hard bargainer, but not intractable.
Approved For Release 2002/( PA+RDP79T00865A002600160001-7
 Approved For Release 2002/05/09 : CIA-RDP79T00865AO02600160001-7
Secret
Secret
Approved For Release 2002/05/09 : CIA-RDP79T00865AO02600160001-7