Chavez pulls out of IMF and World Bank

belfast news
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 healthcare.

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.