Venezuelan President Hugo Chavez has had a good time of it recently. In spite of his vehement protests against the Iraq invasion, this cloud has yielded Venezuela a significant silver lining. With America's attention and resources focused firmly on the Middle East and oil revenues at record levels, he has been free to develop his populist agenda, consolidate relations with his politically like-minded neighbours, and procure new military hardware from around the globe. It seems, however, that Washington is now turning its withering gaze back to its own back yard.

Firstly, during her inaugural hearings before the Senate Foreign Relations Committee Condoleezza Rice referred to Chavez as a "negative force" in the region. Then, while on a recent visit to Brazil, Donald Rumsfeld questioned the motives behind Venezuela's purchase of 100,000 AK-47 assault rifles from Russia, with an implication that the arms could be made for sale to guerrilla groups such as the FARC in Colombia. Chavez claims they are merely upgrading the weapons of Venezuela's armed forces, but additional orders for helicopters and fighter jets suggest that the move is more of an all-round step-up in military strength. The American right-wing press are further portraying Chavez's relationship with Fidel Castro as a Latin American Axis of Evil. Chavez is doing nothing to discourage such analogies by doing deals with and openly expressing support for other 'outposts of tyranny' such as Iran.

Another concerning development from an American standpoint is Chavez's recent policy of diversifying the export market for Venezuelan oil. Up to now, the US has taken a share of around 60 percent of Venezuela's oil exports, giving the Washington a tight grip on Chavez's purse strings. However, following recent deals with France, China and India, Venezuela's oil export market suddenly looks far more balanced. Chavez is now in a position to make credible threats of stopping supplies of oil to the US if they try to intervene in Venezuelan politics, and is already making noises to this effect.

The worst case scenario for Washington is that, with money and arms, Chavez could put himself in a position to support and encourage the devopment of a bloc of socialist countries in the region. Many already have left-wing governments, while Colombia, Ecuador, Mexico, Nicaragua and Peru will hold presidential elections in 2006. Chavez may be hoping to inspire a chain of leftist victories across Latin America, a domino effect similar to that which George Bush dreams of in the Middle East.

However, I feel that a more likely scenario is that Chavez is using the good times to bolster his own security. He has powerful enemies both within and outside the country. The Venezuelan media is unanimously against him, as are the majority of unions and business interests. And yet he has survived two elections, a failed coup attempt and a no-confidence referendum. In all cases it is the poor and downtrodden majority who have seen him through. Christian Parenti outlines why in this week's Nation:

Despite Chávez's often radical discourse, the government has not engaged in mass expropriations of private fortunes, even agricultural ones, nor plowed huge sums into new collectively owned forms of production. In fact, private property is protected in the new Constitution promulgated after Chávez came to power. What the government has done is spend billions on new social programs, $3.7 billion in the past year alone. As a result, 1.3 million people have learned to read, millions have received medical care and an estimated 35-40 percent of the population now shops at subsidized, government-owned supermarkets. Elementary school enrollment has increased by more than a million, as schools have started offering free food to students. The government has created several banks aimed at small businesses and cooperatives, redeployed part of the military to do public works and is building several new subway systems around the country. To boost agricultural production in a country that imports 80 percent of what it consumes, Chávez has created a land-reform program that rewards private farmers who increase productivity and punishes those who do not with the threat of confiscation.

The government has also structured many of its social programs in ways that force communities to organize. To gain title to barrio homes built on squatted land, people must band together as neighbors and form land committees. Likewise, many public works jobs require that people form cooperatives and then apply for a group contract. Cynics see these expanding networks of community organizations as nothing more than a clientelist electoral machine. Rank-and-file Chavistas call their movement "participatory democracy," and the revolution's intellectuals describe it as a long-term struggle against the cultural pathologies bred by all resource-rich economies--the famous "Dutch disease," in which the oil-rich state is expected to dole out services to a disorganized and unproductive population.

But these people can only defend Chavez up to a point. He has recently stated his fears that his life is in danger from US-sponsored assassins, and Venezuelan government officials have claimed that American troops are building up on the island of Curacao. The thought of a full-blown invasion is absurd, but a peace-keeping force in the wake of a coup d'etat may not be out of the question. It has already been admitted that the CIA were in the know about the coup attempt in 2002, but the information was not passed on to the Venezuelan authorities. Who is to say that next time a more active role will be taken by the US to secure the desired outcome?

Chavez's belief that it is only a matter of time before the US comes to get him in one way or another is therefore quite understandable, as is his desire to use the current windfalls to purchase acquire some military and economic security (although perhaps a few IED's and some copies of the Koran would be a more effective deterrent at this time). The US reaction, though, merits some consideration. Chavez is a democratically elected leader. In spite of the opposition to him from many powerful circles in Venezuela he has taken very few steps to clamp down on his detractors. Many of those behind the coup two years ago still walk free and hold key positions in the country. Chavez is doing no more than acting in what he perceives as the best interests of his country and those who have brought him into power. And yet Washington would (and probably will at some point) support a coup d'etat against the wishes of the majority of Venezuelans to depose this democratically elected ruler. Other oil-producing wannabe democracies should take note.