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Wednesday, April 25, 2012

Venezuela: Issues for Congress


Mark P. Sullivan
Specialist in Latin American Affairs

The United States traditionally has had close relations with Venezuela, a major supplier of foreign oil, but there has been friction and tensions in relations under the government of populist President Hugo Chávez. Over the years, U.S. officials have expressed concerns about human rights, Venezuela’s military arms purchases, its relations with Cuba and Iran, and its efforts to export its brand of populism to other Latin American countries. Declining cooperation on antidrug and anti-terrorism efforts has been a major concern. The United States has imposed sanctions: on several Venezuelan government and military officials for allegedly helping the Revolutionary Armed Forces of Colombia (FARC) with drug and weapons trafficking; on three Venezuelan companies for providing support to Iran; and on two Venezuelan individuals for providing support to Hezbollah. In December 2010, Venezuela revoked its agreement for the appointment of Larry Palmer, nominated to be U.S. Ambassador to Venezuela. The United States responded by revoking the diplomatic visa of Venezuelan Ambassador Bernardo Alavrez. Despite tensions in relations, the Obama Administration remains committed to seeking constructive engagement with Venezuela, focusing on such areas as anti-drug and counter-terrorism efforts.

Under the rule of President Chávez, first elected in 1998 and reelected to a six-year term in December 2006, Venezuela has undergone enormous political changes, with a new constitution and unicameral legislature, and a new name for the country, the Bolivarian Republic of Venezuela. Human rights organizations have expressed concerns about the deterioration of democratic institutions and threats to freedom of expression under the Chávez government. Venezuelans approved a constitutional referendum in February 2009 that abolished term limits, allowing Chávez to run for reelection in 2012. In September 2010 legislative elections, opposition parties won 67 out of 165 seats in the National Assembly, denying President Chávez’s ruling party a supermajority and providing the opposition with a voice in government. Venezuela is scheduled to hold its next presidential election on October 7, 2012, with President Chávez running against Henrique Capriles Radonski, the unified opposition candidate. While Chávez’s continued popularity and use of state resources bode well for his reelection, high rates of crime, inflation, and other economic problems could erode his support. A wildcard is the health status of President Chávez, who has had three operations and treatment for an undisclosed form of cancer since mid-2011.

As in past years, there are concerns in the 112th Congress regarding the state of Venezuela’s democracy and human rights situation and its deepening relations with Iran. Several measures have been considered or introduced related to Venezuela. H.R. 3783, approved by the House Committee on Foreign Affairs on March 7, 2012, would require the Administration to develop a “a strategy to address Iran’s growing hostile presence and activity in the Western Hemisphere.” H.R. 2542, approved by the House Subcommittee on the Western Hemisphere December 15, 2011, would withhold some assistance to the Organization of American States unless that body took action to invoke the Inter-American Democratic Charter regarding the status of democracy in Venezuela. H.R. 2583, approved by the House Committee on Foreign Affairs July 19, 2011, includes a provision that would prohibit aid to the government of Venezuela. H.Res. 247, introduced May 4, 2011, would call on the Secretary of State to designate Venezuela as a state sponsor of terrorism.



Date of Report: March 29, 2012
Number of Pages: 57
Order Number: R40938
Price: $29.95

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Monday, April 16, 2012

Chile: Political and Economic Conditions and U.S. Relations


Peter J. Meyer
Analyst in Latin American Affairs

Since its transition back to democracy in 1990, Chile has consistently maintained friendly relations with the United States. Serving as a reliable but independent ally, Chile has worked with the United States to advance democracy, human rights, and trade in the Western Hemisphere. Chile and the United States also maintain strong bilateral commercial ties. Total trade has grown 290% to $24.9 billion since the implementation of a free trade agreement in 2004, and the countries signed an income tax treaty designed to boost private sector investment in February 2010. Additional areas of cooperation between the United States and Chile include promoting clean energy development, supporting regional security and stability, and investigating dictatorship-era human rights abuses.

Sebastián Piñera of the center-right “Coalition for Change” was inaugurated to a four-year presidential term in March 2010. Piñera’s electoral victory was the first for the Chilean right since 1958, and brought an end to 20 years of governance by a center-left coalition of parties known as the Concertación. Since taking office, Piñera has largely maintained the open economic policies and moderate social welfare policies of his Concertación predecessors while proposing reforms designed to boost economic growth and reduce poverty. Although his political coalition lacks majorities in both houses of the Chilean Congress, Piñera has been able to implement portions of his policy agenda. He has struggled, however, in dealing with a series of large-scale protests over issues ranging from energy policy to the education system. The Chilean populace has resorted to such tactics to demonstrate its increasing dissatisfaction with the country’s political system, which it views as unresponsive to citizen demands. As the generalized sense of discontent has spread, Piñera’s approval rating has steadily declined. Halfway through his term, 29% of Chileans approve of Piñera and 64% disapprove. The political opposition has not benefitted from Piñera’s unpopularity; just 21% of the public approves of the Concertación.

With a gross national income of $173.2 billion and a per capita income of $10,120, Chile is classified by the World Bank as an upper-middle-income developing country. Successive governments have pursued market-oriented economic policies that have contributed to the development of what many analysts consider the most competitive and fundamentally sound economy in Latin America. This solid economic framework has helped the country weather recent shocks, such as the global financial crisis and a massive February 2010 earthquake. After a 1.7% contraction in 2009, the Chilean economy grew by 5.2% in 2010 and 6.2% in 2011. Strong economic growth—paired with targeted social assistance programs—has also contributed to a significant decline in the poverty rate, which fell from 38.8% in 1989 to 15.1% in 2009.

Congress has expressed interest in a number of issues in U.S.-Chilean relations in recent years. During the 111th Congress, both houses passed resolutions (S.Res. 431 and H.Res. 1144) expressing sympathy for the victims of the Chilean earthquake, and the House passed a resolution (H.Res. 1662) commending the country’s rescue of 33 trapped miners. The 112th Congress could take up issues such as the U.S.-Chile bilateral income tax treaty that was signed in 2010 and is awaiting submission to the U.S. Senate for ratification.

This report provides a brief historical background of Chile, examines recent political and economic developments, and considers current issues in U.S.-Chilean relations.



Date of Report: April 6, 2012
Number of Pages: 23
Order Number: R40126
Price: $29.95

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