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1 May, 2007 09:18

Hugo Chavez announces exit from World Bank and IMF

Hugo Chavez announces exit from World Bank and IMF

Venezuela’s President Hugo Chavez has said he wants to pull his country out of the World Bank and the International Monetary Fund (IMF). He added Venezuela no longer needed money from the Washington-based lending institutions.

The announcement was made a day before lucrative oil projects by major U.S. and European companies are turned over to state control.

ConocoPhillips, Chevron, ExxonMobil, BP, Statoil and France's Total, all grudgingly signed agreements to give the government majority stakes in projects in the Orinoco River basin.

And with high oil revenues, Hugo Chavez, it appears, can get by without loans from the International Monetary Fund and the World Bank.

“We do not need to go to Washington, not to the IMF, nor to the World Bank, nor to anything. In fact I want to formalise the exit of Venezuela from the World Bank, from the IMF, and from all of that. We do not need anymore to have a governor or a representative there. We do not even want to be there and they return our money to us because now they owe us,” Hugo Chavez proclaimed.

There is nothing new about Hugo Chavez's rhetoric against anything associated with the U.S. government. But the plan to pull out of both organisations will institutionalize this stance and put the country further on a collision course with Washington.

The bold announcement comes at a time when Hugo Chavez is clearly feeling strong. Securing an absolute majority when he was re-elected last year, he counts on the support of the Venezuelan people – particularly the poor. He relies on the country's natural resources.  To finance his ambitious leftist agenda, he now believes he has the means to pay for his ambitious social agenda in a country where more than a third of the population live below the poverty line. Whether he actually will, remains to be seen. There is also a sense of unrest at his heavy-handed approach to nationalization.

Thousands of people took to the streets in April to protest against Chavez’ decision to take the country's oldest private TV station off the air. Waving the national flag, they accused the President of squeezing freedom of speech and democratic rights. They said Radio Caracas Television's broadcasting licenses had not been renewed to silence government criticism and give a warning to other stations.

But Chavez was not afraid to confront his critics on this issue either.

“Now, they say they are suing us for violating the freedom of expression and, above all, the decision we have taken (regarding RCTV) burns them, it burns them to not renew the license to a television channel that was 60 years in the hands of the oligarchy. That television channel belongs to the people and it will be returned to the people, to the national country, to the national interests,” he said.

Hugo Chavez has bigger plans for the future. He says he wants to set up a new World Bank for the South American Continent.

On his quest to wrest South America from  U.S. control, Chavez is not alone. His ailing friend – Cuba's Fidel Castro – has repeatedly pledged his support for Venezuela's leftist road map. And his close ally, Bolivian President, Evo Morales, ordered troops to seize his country's oil fields, exactly one year ago, on Labour Day.