Tuesday, May 30, 2006

Bilateral Relations: Venezuela and Bolivia forge closer ties

Venezuela and Bolivia, supported by Cuba, have signed several trade deals in the fields of agriculture and energy. Both heads of state signed deals to industrialise the production of soy, milk, tea, coffee and coca.

According to Venezuelanalysis.com President Chavez, also proposed to increase military cooperation between the two countries and made an appeal to set up a military structure similar to the NATO for Latin America.
Venezuela would provide Bolivia with 200,000 barrels of diesel per month for preferential prices. The money will however not be paid directly to Venezuela but will stay in a special fund, located in Bolivia. From this fund Chavez said, "we will create a Bank of the South."

An agreement was also reached on an alliance between Venezuelan state oil company PDVSA and the Bolivian oil firm YPFB. Venezuela will invest roughly $1.5 billion in the Bolivian oil- and gas industry, which was nationalized by President Morales in the beginning of May.