Otto Reich to Newsmax: Chavez’s Re-election Will Decimate Venezuela’s Economy

Monday, 08 Oct 2012 05:51 PM

By Todd Beamon and John Bachman

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Venezuela's economy will continue to deteriorate under a third term of socialist President Hugo Chavez, former Ambassador Otto Reich tells Newsmax TV in an exclusive interview.

“Chavez has presided over the collapse of the oil production and the complete disappearance of the non-oil industry in Venezuela,” Reich, who served as U.S. ambassador to the country under President Ronald Reagan, tells Newsmax. “When Chavez came in, oil represented about 80 percent of Venezuela’s income and, today, it represents, 94 percent, not because it has increased – it’s actually gone down – but because the rest of the industries have just gone away.

Watch the exclusive interview here.



“Venezuela will be a much weaker country economically, but that oil money that is coming in, because oil prices are at historic highs, are giving Chavez billions of dollars to use to try to spread his socialist ideology throughout Latin America – and that’s what’s going to cause friction with the United States, regardless of who’s in the White House.”

Chavez was elected to another six-year term on Sunday. He won by a 10-point margin, beating Henrique Capriles Radonski of the centrist Justice First Party, 55 to 45 percent. Venezuela long has had tense relations with the United States, and the countries’ embassies have been without ambassadors since 2010.

Reich, who also has served under Presidents George H.W. Bush and George W. Bush, has been the President's Special Envoy for the Western Hemisphere, Assistant Secretary of State for Western Hemisphere Affairs, and Assistant Administrator of the U.S. Agency for International Development.

Chavez has said he would like to have "normal" relations with the U.S. government, but he has been devoting much time to solidifying relations with such socialist and Communist nations as Cuba, Ecuador, Bolivia, Nicaragua, and Argentina.

“Those are the countries that Chavez has been spending the most money on in trying to solidify the 21 st Century socialism regimes in those countries,” Reich said.

Perhaps the greatest secret this election season has been the state of Chavez’s health, he said. Six months ago, the president was near death from cancer.

Chavez' health is one of the great mysteries of South American politics, Reich said. “It’s a state secret. They call it a state secret. Nobody really knows what the real progress of the cancer is. He had cancer, perhaps has cancer. Nobody knows.

“He claims that the cancer has been extricated. It has been eliminated. However, he appeared in this election period to be extremely tired. He wasn’t his same, old, energetic Chavez of 12 years ago when he was first elected – or 14 years ago.

“A lot of people think he has been given so much medicine, so many steroids and other medicines just to keep him alive and to keep him going for the election so that he could win, as he apparently did.

“I have my doubts,” Reich added. “I always think that when you have a government that is this dishonest and this fraudulent, there’s a very high probability that this was a fraud.

“But we have to prove that — and I have no way of proving that from 2,000 miles away — but Chavez’s health will very soon emerge as a major subject of discussion in Venezuela.”

Venezuela has no elected vice president — and Chavez will have to select one, Reich said. Otherwise, the nation’s constitution designates a Minister of Interior — essentially, a chief of police — as its No. 2 official.

“But the Minister of Interior has always been someone of the utmost confidence of Hugo Chavez and will continue to be that person. However, that doesn’t necessarily make that person a popular politician. In fact, usually it makes them a very unpopular one because they’re the ones cracking down on deceit.

“So what happens if Chavez dies?’ Reich asked. “It’s probably chaos, probably the destabilization of the political structures of Venezuela.”



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