Chavez seeks Arab backing for 'petro-currency'

"A new world is being born. Empires fall. There is a world crisis of capitalism, it's shaking the planet," Venezuelan president says in Qatar.

March 31, 2009 17:03
2 minute read.
Chavez seeks Arab backing for 'petro-currency'

chavez Arab summit 248.88. (photo credit: AP)


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Venezuelan President Hugo Chavez sought Arab support Tuesday for a proposed oil-backed currency to challenge the US dollar in his latest swipe at Washington's dominance in global financial affairs. It's highly unlikely Chavez will gain any serious momentum for his "petro-currency" proposal at a summit of South American and Arab League leaders, but it represented another attempt to undercut the dollar's standing as the world's leading commercial currency. China has struck deals - most recently this week with Argentina - to conduct trade in currencies other than the dollar. Iran has proposed replacing the dollar with the euro or other currencies to set worldwide oil prices. Chavez plans to visit both Iran and China following the one-day Qatar gathering, whose agenda focuses on trade issues but also touches on Arab worries about rival Iran's growing influence in Latin America. Key oil-producing members of the Arab League, such as Saudi Arabia and Gulf states, have close ties to Washington and will almost certainly reject any plan to shun the dollar. But the summit kicks off another high-profile foreign trip for Chavez in his efforts to build economic and diplomatic links to confront the United States. "A new world is being born. Empires fall. There is a world crisis of capitalism, it's shaking the planet," Chavez told Venezuelan state radio after arriving in Qatar. OPEC members - including Venezuela and many Arab Leagues states - have been hit hard by falling oil prices, which edged toward $50 a barrel on Tuesday. Leaders also are seeking to boost the current $21 billion trade between the two regions, which includes oil and gas from the Middle East and steel and agricultural products from South America. Delegates also plan to discuss ways to expand technology exchanges, including nuclear engineering. Argentina helped build one of Egypt's nuclear reactors and hopes to continue civil nuclear cooperation. Brazilian President Luiz Inacio Lula da Silva told the gathering that the economic crisis is having "deep repercussions" on all economies, but it offers an opportunity "to correct the financial system and restore balance to global trade." He repeated his appeals for major developing nations to have a greater voice in global financial bodies, such as the International Monetary Fund. Commercial ties are a way for Arab leaders to counter Iran's increasing footholds in Latin America, particularly through Chavez and Bolivian President Evo Morales. In November, Chavez was hosted by Iranian President Mahmoud Ahmadinejad in Tehran and said the two nations were "united like a single fist." Chavez's bonds with Tehran give Arab leaders pause. He is wildly popular among ordinary Arabs for his public support for Palestinians, including cutting diplomatic relations with Israel in response to the offensive into Gaza that ended in January. In a recent interview with Al-Jazeera television, Chavez said he saw no immediate chance to restore ties with Israel. But his close rapport with Ahmadinejad is viewed with suspicion by governments in many Arab capitals. Chavez said he plans to seek Arab League backing for his proposed new currency, which would be supported by the oil reserves of major producers such as Venezuela and other OPEC members, according to a government statement. Chavez also backed the Arab League's declaration Monday to reject the International Criminal Court charges against Sudanese President Omar al-Bashir for alleged war crimes in Darfur. "Why don't they order the capture of (former President George W.) Bush? Or the president of Israel?" Chavez said on Venezuelan state television. "It's a monstrosity of justice and a disrespect to the people of the Third World." Other South American leaders at the summit include Morales and Chile's president, Michelle Bachelet.

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