Chavez seeks Arab support for oil-backed currency
Riaz K Tayob
By Brian Murphy
Associated Press
via The Globe and Mail, Toronto
Tuesday, March 31, 2009
http://www.theglobeandmail.com/servlet/story/RTGAM.20090331.wchavez0331/...
DOHA, Qatar -- Venezuelan President Hugo Chavez sought Arab support
today for a proposed oil-backed currency to challenge the U.S. dollar in
his latest swipe at Washington's dominance in global financial affairs.
It's highly unlikely Chavez will gain any serious momentum for his
"petro-currency" proposal at a summit of South American and Arab League
leaders, but it represented another attempt to undercut the dollar's
standing as the world's leading commercial currency.
China has struck deals -- most recently this week with Argentina -- to
conduct trade in currencies other than the dollar. Iran has proposed
replacing the dollar with the euro or other currencies to set worldwide
oil prices.
Mr. Chavez plans to visit both Iran and China following the one-day
Qatar gathering, whose agenda focuses on trade issues but also touches
on Arab worries about rival Iran's growing influence in Latin America.
Key oil-producing members of the Arab League, such as Saudi Arabia and
Gulf states, have close ties to Washington and will almost certainly
reject any plan to shun the dollar. But the summit kicks off another
high-profile foreign trip for Mr. Chavez in his efforts to build
economic and diplomatic links to confront the United States.
"A new world is being born. Empires fall. There is a world crisis of
capitalism. It's shaking the planet," Mr. Chavez told Venezuelan state
radio after arriving in Qatar.
OPEC members -- including Venezuela and many Arab Leagues states -- have
been hit hard by falling oil prices, which edged toward $50 a barrel
(U.S.) on Tuesday. Leaders also are seeking to boost the current $21
billion (U.S.) trade between the two regions, which includes oil and gas
from the Middle East and steel and agricultural products from South America.
Delegates also plan to discuss ways to expand technology exchanges,
including nuclear engineering. Argentina helped build one of Egypt's
nuclear reactors and hopes to continue civil nuclear co-operation.
Brazilian President Luiz Inacio Lula da Silva told the gathering that
the economic crisis is having "deep repercussions" on all economies, but
it offers an opportunity "to correct the financial system and restore
balance to global trade." He repeated his appeals for major developing
nations to have a greater voice in global financial bodies, such as the
International Monetary Fund.
Commercial ties are a way for Arab leaders to counter Iran's increasing
footholds in Latin America, particularly through Mr. Chavez and Bolivian
President Evo Morales. In November, Mr. Chavez was hosted by Iranian
President Mahmoud Ahmadinejad in Tehran and said the two nations were
"united like a single fist."
Mr. Chavez's bonds with Tehran give Arab leaders pause.
He is wildly popular among ordinary Arabs for his public support for
Palestinians, including cutting diplomatic relations with Israel in
response to the offensive into Gaza that ended in January. In a recent
interview with Al-Jazeera television, Mr. Chavez said he saw no
immediate chance to restore ties with Israel.
But his close rapport with Mr. Ahmadinejad is viewed with suspicion by
governments in many Arab capitals.
Mr. Chavez said he plans to seek Arab League backing for his proposed
new currency, which would be supported by the oil reserves of major
producers such as Venezuela and other OPEC members, according to a
government statement. Mr. Chavez also backed the Arab League's
declaration Monday to reject the International Criminal Court charges
against Sudanese President Omar al-Bashir for alleged war crimes in Darfur.
"Why don't they order the capture of (former President George W.) Bush?
Or the president of Israel?" Mr. Chavez said on Venezuelan state
television. "It's a monstrosity of justice and a disrespect to the
people of the Third World."
Other South American leaders at the summit include Mr. Morales and
Chile's president, Michelle Bachelet.