Energy key to Chavez armaments deal

Venezuelan President Hugo Chavez has presented his recent arms deal with Russia as necessary to strengthen Venezuela's defences, but the weapons purchases outstrip those of any other country in the region, prompting concerns about a Latin American arms race.
Under the deal, Hugo Chavez got a wish-list of tanks and anti-aircraft missiles, plus a $2.2 billion loan to pay for them. Russia got another country to recognise the independence of the breakaway Georgian republics of Abkhazia and South Ossetia, and an effective subsidy for its arms industry. The Russians also paid a lot - some say as much $1 billion - for the rights to exploit Venezuela's Orinoco oil and gas field.
Chavez has already called his visit to Russia "the most successful" of his recent 11-day world tour (which also took in Africa, the Middle East and the Venice film festival), and has been far more forthcoming about the details of the deal than the Russians.
While President Dmitry Medvedev demurely told the press that weapons deals, while important, "are not always signed in public," Chavez enthusiastically listed the hardware the Venezuelan military is about to receive (it includes T-72 and T-90 tanks, and S-300 and S-400 missiles).
But Russia's ties with Venezuela and Latin America in general are, more than anything, economic.
"Venezuela wants to boost its defensive capability. We need to boost our exports. Selling these weapons benefits the Russian arms industry, boosts our exports, and creates jobs," said Vladimir Davidov, head of the Moscow-based Institute for Latin America. "It's an anti-crisis measure more than anything else."
Not everyone is prepared to divorce the economic from the political, however. The United States has already voiced concern about the danger of sparking an arms race, and a State Department spokesman said that Venezuela's arms build-up "poses a serious challenge to stability in the Western hemisphere".
Davidov dismissed the suggestion that the sales could contribute to instability in the region. "They are not strategic, but conventional weapons - tanks and anti-aircraft missiles. They are for defensive purposes," he said.
US involvement in Colombia, which is allowing US forces to use bases for counter-narcotics missions, has created its own tensions, said Alexei Mukhin, head of the Centre for Political Technologies: "Venezuela in this case may be asymmetrically answering the challenge, but it must."
Nor should the deal be seen as a blossoming of Russian influence in Latin America. If anything, Russia is playing catch-up. "In both Africa and Latin America, China is several steps ahead. It picks up all the profitable contracts for raw materials, and all that is left for Russia is military-technical partnership," said Mukhin.
Even the recognition of South Ossetia and Abkhazia was a formality, "which Chavez knows perfectly well means nothing," he said.
In that sense the oil deal is more interesting than the arms sales. The deal sees a Russian consortium investing in production in the Orinoco basin, both heavily and long-term: investments of $30 billion are envisaged over 40 years. But insofar as it allows Russia to catch up with China in access to natural resources in the developing world, it is a coup for Moscow. Yet despite talk of diversification, weapons have long been the mainstay of Russia's manufactured exports. For the foreseeable future, they will also be the basis of Moscow's friendship with Caracas