Chávez's Latest Victory an Opportunity for Obama

President Hugo Chávez's successful referendum to lift term limits didn't lift spirits in Washington. Venezuela's fiery leader now has the green light to run again in 2012 and beyond. So perhaps President Obama's best choice is to re-establish relations with the petro-president now, while oil is cheap and Chávez may be open to talking. (Article continued below...)

On the campaign trail, Obama repeatedly included Chávez among controversial foreign leaders with whom he might be willing to meet, going so far as to promise a "new alliance of the Americas." Venezuela's cooperation is far from guaranteed, but the referendum could be just the chance Obama needs to begin a new age of cooperation in the hemisphere, defuse one of America's harshest critics and prepare for crises elsewhere in the world.

For a decade, Chávez has reveled in his role as foil to the great American superpower. With a blend of populist politics, anti-imperialist rhetoric and a seemingly limitless supply of petrodollars, the Venezuelan leader shrewdly expanded his country's political and economic influence in Latin America, all the while defying and deriding George W. Bush and his few remaining regional allies.

But with oil prices a third of what they were last year, and the global financial crisis quickly creeping its way toward Caracas, even Chávez has recognized the need for improving relations with the United States. The day before the referendum, Chávez declared that "any day is propitious for talking with President Barack Obama" so long as it is on "equal terms." These comments were an about-face from last month, when the Venezuelan leader said Obama had the "same stench" as his predecessor.

Is this turnaround nothing more than the political maneuvering for which Chávez is already famous? The timing is telling. "He's got pollsters; he's a smart man who'll be watching the pulse of the country," said political scientist Dan Hellinger of Webster University in St. Louis, ahead of the election. With a lead in the polls, Chávez made a calculated decision to discard a decade of Bush-bashing by reaching out to Obama. Chávez's big win—on the heels of a similar victory in state elections in December—has given him new momentum, despite the looming recession. Now, it seems, he's risking his new political capital on rapprochement with the United States.

The change in tone is a risky one for Chávez, but it makes sense. Young, liberal and of mixed race, Obama has disrupted the Venezuelan leader's traditional critique of an American war machine running roughshod over developing countries. Gone—at least temporarily—is the easy antagonism of the Bush years, which began when a 2002 coup d'état attempt against Chávez was treated as welcome news in Washington. Obama, on the other hand, enjoys a relatively clean slate for the region. He has a chance to "put aside the record of American intervention, or interventionism, with which he is not personally associated," says John Coatsworth, dean of Columbia University's School of International and Public Affairs and an expert on U.S.-Latin American relations.

With the financial crisis adjusting priorities for Obama and Chávez, there are plenty of incentives on both sides for improving relations. Among these, oil looms largest. Despite the diplomatic freeze of the Bush years, Venezuela still exports a majority of its petroleum to the United States. At more than a million barrels a day (roughly 10 percent of America's crude-oil imports), this isn't business the United States can easily do without. With Obama focusing on America's ailing economy, ahead of longer-term problems such as energy independence and climate change, Venezuelan crude remains as attractive as ever.

Chávez, meanwhile, now has more than enough incentive to talk—and trade—with the United States. Though Venezuela's relatively isolated economy has so far proved slow to catch the recession virus, Chávez himself has acknowledged that the good fortune will not last. Inflation, already at 30 percent, is expected to top 40 percent this year. With oil at rock-bottom prices, Chávez has already withdrawn $12 billion (30 percent) of the nation's reserves, largely to fund his popular misiones, or social programs. Most important, Venezuela faces a serious credit crunch as the easy capital from the oil bonanza dries up. By privately courting Western oil companies in recent months, Chávez has already signaled his readiness to reverse his previous moves to push the corporations out, in order to fund the misiones. As strange as it sounds, the revolution may need the empire, or at least its liquidity.

Repairing relations with Venezuela may also allow Obama to halt the region's recent drift away from American influence. The Obama administration has suggested it will employ a broader approach to Latin America than did the Bush team, which myopically focused on drug trafficking and terrorism. But addressing economic integration, development, human rights or trade issues—not to mention poverty—will require tackling ideas put forth not only by Brazil's rising star, Luiz Inácio Lula da Silva, but also by Chávez. Moreover, given the Venezuelan's role in Latin America's leftward tilt, talking to Chávez could also help Obama break ground with Venezuela's radical allies in Bolivia, Ecuador and—eventually—even Cuba.

Still, don't expect to see Chávez strolling into the White House any time soon. Plenty of risks remain for both countries, making rapprochement a measured process. A serious economic crunch could pose problems and protests for Chávez, who, until oil prices rise, will find it hard to continue the growth that Venezuela has seen in the last six years. But the biggest hurdle may already be behind the two leaders. Despite acts of vandalism and harassment by a small group of Chávez supporters—Chávez condemned the incidents and arrested the group's leader—Sunday's election was relatively peaceful and corruption-free.

With Chávez already open to talks, a sit-down could come as early as April 17, when leaders from across the hemisphere will gather at the Fifth Summit of the Americas in Trinidad. Obama and Chávez will both be there. If and when the two meet, they will have no shortage of issues to address: oil, the recession and Cuba. Re-establishing ties with Venezuela wouldn't be pretty, but it would be progress. Compared with the messes in the Middle East and on Wall Street, Latin America may be just the warmup the American president needs.