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Venezuela's Weapons, Energy Deals Raise 'Arms Race' Concerns

Venezuela's President Hugo Chavez is leading a new diplomatic effort to strengthen ties with a set of distant partners. He signed a new billion-dollar arms deal with Russia, and has promised to ship gasoline to Iran to circumvent possible international sanctions.

Hugo Chavez is no stranger to foreign capitals, and he has just completed an 11-day tour of Africa that included stops in Libya, Iran and Russia. One of the outcomes was a deal to buy 100 Russian battle tanks and air-defense rockets - with all the funding coming from Moscow.

"The Russian government approved a $2.2 billion loan for weapons," Mr. Chavez said. "And we must thank them."

Mr. Chavez announced the deal only days after voicing support for pro-Russian separatists in South Ossetia and Abkhazia. Nicaragua is the only other nation in the world community to recognize those regions' breakaway from Georgia.

Some Latin American leaders fear the Venezuelan deal is part of an arms race. Uruguay's President Tabare Vazquez expressed his concern at a meeting in Washington.

"We have already expressed time and again our position against an arms race," Mr. Vazquez said. "We believe it is quite inconvenient for the region to devote such significant economic resources to purchasing arms."

Secretary of State Hillary Clinton says Mr. Chavez has not been clear about how the weapons will be used.

"So there is concern that we have expressed, and we'll continue to raise with other countries in the region. And we hope that we can see a change in behavior and attitude on the part of the Venezuelan government," Clinton said.

The Venezuelan leader says the deals with Russia, which also include fighter jets, are for self-defense. Tensions are rising with Colombia, since Mr. Chavez denounced his neighbor for opening Colombian military bases for use by U.S. anti-drug missions.

Venezuela's oil sector, crucial to the national economy, also has been watching the new agreements Mr. Chavez signed.

Jorge Pinon is a former executive for Amoco Oil and a researcher at the University of Miami.

"There are a lot of people concerned, even in the energy sector, with what we see in the region as an arms race. There is no need," Pinon says, "I am not aware of any armed conflict going on between two Latin American countries."

Pinon says the concern is that Venezuela's struggling oil sector may lose much-needed investment. Production has yet to recover from a major strike in 2002, and slumping world oil prices have reduced government revenues.

Mr. Chavez also risks pushing away Western nations.

During his travels, Mr. Chavez slammed Israel as "genocidal," and he pledged to send 20,000 barrels of gasoline a day to Iran to offset possible U.N. sanctions arising from Tehran's nuclear development program.

But Jorge Pinon says that may be a hard promise for Venezuela to keep."In the last 60 days, Venezuela has had problems with its refinery structure, and is actually importing gasoline from Brazil. Anything Venezuela does today, you have to look at it," he adds, "Is it really a political issue, or is there an economic foundation behind it?"

Over time, Mr. Chavez's actions will show which alliances are more important to his government.