On anniversary, Chávez preparing for Falklands redux


Today marks the 25th anniversary of the end of the 1982 Falklands conflict between Britain and Argentina. Perhaps by no coincidence at all, Russian newspapers splashed headlines today revealing that Venezuelan President Hugo Chávez is preparing to finalize a deal to buy as many as nine Russian submarines this month. The deal reportedly includes five 636-type Kilo-class subs and four 677E Amur subs. Both are advanced diesel subs, and 677 represents the latest generation of post-Cold War Russian technology, which has not yet even been delivered to Russia's own fleet.

The deal is just the latest in Chávez's push for rapid militarization. Flush with oil money, Chávez has spent $3.4 billion on Russian arms since 2005, including the purchase of 24 fighter planes, 35 helicopters, air defense capabilities, and 100,000 small arms.

Why does Chávez need all of this hardware? He says he needs it to defend against America's evil empire. But in a column today, syndicated military affairs writer Austin Bay suggests Chávez may be up to something more sinister:

[A]n expansionary ideology and explosive ego propel Chavez. He styles himself as the new Simon Bolivar, who will reunite the South American continent while cowing the United States and other imperialists. He also bills himself as the 21st century's Fidel Castro.

As Condi Rice says, Chávez "can't intimidate the United States in any fashion." But he may use his newly acquired military power to enforce land claims against Colombia, Guyana, and the most menacing of all global hyperpowers—the Netherlands. The Dutch still rule islands such as Aruba and Curacao located off Venezuela's Northern coast. But would Chávez really try to reclaim these territories? Bay thinks it out this way:

Chavez isn't stupid — he knows Argentina lost its Falklands gamble. But he also knows that Britain's Falkland victory was more of a "near thing" than many think. Argentine combat aircraft could just reach the Falklands, while Venezuelan fighters could easily strike the Antilles.

Frighteningly, the Netherlands has started stockpiling its islands with naval forces, F-16 fighter jets, helicopters, and an infantry battalion. All that remains to be seen is whether Chávez, once armed, will back his words with action.


North Korea gets its $25 million


After many, many fits and starts, North Korea reportedly got its $25 million in frozen funds back today. Banco Delta Asia released the money to a undisclosed location, possibly a Russian bank. 

The apparent issue holding up the transfer was that the North Koreans didn't want the United States to simply wire them the money; they wanted a private bank to handle the funds in order to confer a sense of legitimacy on the country's accounts. But no bank would take the reputational risk involved in passing along cash that could be tied to drugs or money laundering.

One thing the North Koreans will soon find out, however: Resolution of the $25 million won't end the country's financial isolation. As U.S. Secretary of State Condoleezza Rice told the Wall Street Journal recently:

Once one of these -- once you are -- your accounts are called out this way in the international financial system, the international financial system is not readily available.

This is a problem for the international community as well as North Korea, however. Kim Jong Il's regime engages in nasty illegal activities not for the heck of it, but to make up for an estimated $1.7 billion shortfall (pdf) in hard currency. Now that the nuclear deal appears to be going forward, serious effort needs to be made to help the North Koreans understand that there are other ways to make a buck.