Moscow is delighted with Venezuelan President Hugo Chavez' latest weapons shopping order : the immediate tab is one billion dollars,and the final reckoning could reach three billion !
According to Russian Information Agency Novosti :
Venezuela has a $52 million agreement with Russia for the supply of 100,000 Kalashnikov assault rifles and munitions, and two agreements worth $474.6 million on the construction in Venezuela of a plant to produce the AK-103 assault rifles under a license, along with a plant to manufacture 7.62 mm ammo for them. This time the two sides signed a contract worth $484 million for the delivery of 38 Mi-17V-5 helicopters, which combine transport, gunship and reconnaissance and rescue operations, and Mi-35M fire-support helicopters, as well as an agreement for the supply of Su-30MK2 multirole fighters.
(In case your calculator wasn't working, Russian officials say the initial tab would be over $ 1 billion.)
But wait ! That's not all el Presidente wants for his struggling people !
According to RIA Novosti : Chavez wants more than fighters, choppers and rifles from Russia. He also wants to buy several Amur Class (Lada Class, in NATO terminology) submarines, the Tor-M1 and Osa-10(Strela 10) air-defense missile systems, infantry fighting vehicles, and other equipment worth $3 billion. That is nearly half Russia's total arms export revenues for 2005.
To put this rather massive arms purchase agreement in proper perspective,Venezuela is heavily dependent upon its oil revenues,which,according to the CIA Country Factbook,pay about 47% of the national budget: the remaining 53% coming from an aggressive tax system.(Those fields are beginning to run dry,and there is considerable interest in off-shore drilling-very possibly in partnership with Cuba.)
Unemployment averages 12.5 % , inflation is about 16% per year,and 47% of the population have earnings "below the poverty line".
The nation's infrastructure could best be described as " improving somewhat " : the Bolivarian Republic of Venezuela (as it is properly called) has just over 96,000 miles of roadway-of which approximately 64,000 is unpaved.
Looking at Venezuela's "transnational issues" ,it has a long-term dispute with Guyana,and claims "all areas west of the Rio Essequibo".
There is a similar boundary dispute with Colombia over ownership of the Los Monjes Islands,and there are some disputes about ownership of Continental Shelf areas bordering on Aruba-(which,reading between the lines,probably relate to offshore oil reserves.)
Checking further to see what else might motivate this large an arms purchase,there have been paramilitary incursions into Venezuela from Colombia...and Venezuela has armed and supported Marxist guerrilla bands which have penetrated into Colombia.
Venezuela is considered a "major transit point" for drug smuggling,and is believed to engage in a considerable amount of money laundering.
From time to time-(about once a month)- Presidente Chavez puts his nation on high alert : declaring an invasion by the United States (which buys over 55% of the Republic's exports) is imminent; and it is supposed the citizenry will accept this as a reason for the arms buildup-at least for a little while.
It seems doubtful the United States has anything to fear from the Bolivarian Republic of Venezuela ; but there is growing concern on the part of Venezuela's neighbors: Do the 8 stars on the new flag of the Republic really represent the 8 regions of Venezuela,or are they advance warning of Hugo Chavez' designs on 7 of his neighbors ?
Only time will tell.