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27.05.2006 International

Investment boost for Bolivia

By Reuters
Investment boost for Bolivia

Hugo Chavez, the Venezuelan president, has pledged $1.5bn in energy investments in Bolivia.

Shouts of "Viva Venezuela!" rang out as Chavez spoke in Shinahota, a town in the coca-growing Chapare region about 600km southeast of La Paz.

Venezuela is the world's fifth-largest crude exporter and Chavez has taken many aid and investment initiatives within the region backed by oil wealth. He has offered to buy the debt of some neighbouring countries and provided subsidised oil, even to the US where a Venezuelan scheme helps the poor to buy fuel.

Chavez addressed the crowd flanked by Evo Morales, the Bolivian president, and Carlos Lage, the vice-president of Cuba.

During his speech he responded to the latest attack from George Bush, the US president, who had said earlier this week that Venezuela and Bolivia were suffering from "an erosion of democracy".

Morales won an absolute majority in presidential elections in Bolivia last December to become the country's first indigenous leader. Chavez's presidency was endorsed by a referendum in 2004.

Chavez said that Bush had "given the green light to conspire against the Bolivian democracy".

Gas reserves

"Bolivia has found its path because the Bolivian people have found the leader they were lacking," Chavez said.

Rafael Ramirez, Venezuela's energy minister, said his country's state-owned oil company, PDVSA, was investing in exploration and production projects in Bolivia, South America's poorest nation.

Ramirez signed deals later with Bolivia's state-owned energy company, YPFB, that include building two gas-processing plants and exploring for more natural gas reserves.

Bolivia has South America's second-largest natural gas reserves after Venezuela and the government is keen to attract new investment in that sector, especially in exploration.

For the good of humanity

Venezuela plans to help Bolivia reduce unemployment by funding projects to produce organic tea, coffee, dairy and legal coca products. Chavez also donated computers to schools in Chapare.

Morales said: "Our three nations [Bolivia, Venezuela and Cuba] are talking about industrialising the coca leaf. We want to tell the whole world coca is not cocaine and we're going to industrialise it for the good of humanity."

Morales has vowed to seek legal uses for the plant as a way to fight cocaine trafficking and protect the livelihoods of peasant growers.