A chess piece has fallen in Latin America. The road to prosperity and peace for the citizens of many countries -- probably even yours -- runs through the recent death of Venezuelan President Hugo Chavez and a counterintuitive deal between two nations.
Depending on whom you speak to, Chavez was either a jerk or a hero whose face should be immortalized as a two-tone T-shirt decal. What cannot be denied is that Transparency International rates Venezuela the most corrupt country in South America. Couple that with the fact that inhabitants of a country sitting atop the planet's largest oil reserves experience regular power outages and electricity rationing, all while Chavez touted his plan for "21st century socialism," and that's all anyone really needs to know about Hugo Chavez.
Chavez fans and America-bashers have been predicting that the U.S. will seek to exploit the power vacuum Chavez left behind, regardless of who replaces him after the upcoming April election. But they should really be concerned about China's hegemonic empire-building in the region much more than America's.
The U.S. has significantly cut its oil imports since Chavez took power in 1999. America has sought to decrease dependence on foreign oil outside of North America. Growth in oil imports from Canada corresponds with simultaneous reductions in imports from Saudi Arabia, Venezuela and other OPEC nations. America has been trending away from Venezuelan and foreign oil all on its own, independent of Venezuelan policy.
By contrast, in what Chavez called a move toward nations prone to supporting his "21st century socialist revolution," Venezuela agreed to a $16 billion oil production deal with China in 2009 and a $20 billion deal with Russia in 2010. China also awarded Venezuela a 10-year financing loan for oil exploration in 2010.
Granted, America is still Venezuela's largest oil buyer, and China gets less than 20 percent of Venezuela's oil, but it wouldn't be a stretch to figure that China wants a lot more -- of everything. Especially when it is so desperate for raw natural resources. And although China and Russia are currently in a mutually servicing geopolitical marriage, Russia needs to watch out: If China gets cozy enough with Venezuela to get its hands on cheaper resources in Venezuela than Russia is selling, Russia could find itself in a love triangle. Because whatever China will be getting from its new squeeze will likely mean China satisfying and courting Russia less through trade as a result. China was importing 230,000 barrels of Venezuelan crude a day in 2011, compared with 395,000 barrels a day from Russia, according to FACTS Global Energy.
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