Chavez urges allies to pull billions out of US

Published on Sunday 27 January 2008 21:23

HUGO Chavez, the Venezuelan president, has urged his closest Latin American allies to begin withdrawing billions of dollars in international reserves from United States banks, warning of a looming US economic crisis.

He made the suggestion as he hosted a summit aimed at boosting Latin American integration and countering US influence.

"We should start to bring our reserves here," he said. "Why does that money have to be in the north? You can't put all your eggs in one basket."

To help pool resources within the region, Mr Chavez and other leaders launched a new development bank at the summit of the Bolivarian Alternative for the Nations of Our America (Alba). Its acronym is Spanish for "dawn".

The left-leaning alliance aims to offer an alternative, socialist path to integration, while snubbing US-backed free-trade deals.

The controversial Venezuelan leader called for allies to help end US domination internationally. "We have to do everything possible so that in the coming years the US empire falls," Mr Chavez said.

At the summit, Mr Chavez accepted some coca leaves from Bolivian leader Evo Morales, insisting "coca isn't cocaine".

"You know the strength that coca gives," Mr Chavez said. "I've really grown used to it every day in the morning."

The two men defend the leaf, which has been chewed by Andean Indians for centuries, but condemn its use in making cocaine.

US officials have long tried to stamp out coca cultivation. But Mr Chavez accused Washington of trying to use the issue of drug trafficking to discredit his government for political reasons, noting that John Walters, the White House drug tsar, had accused him of facilitating the flow of Colombian cocaine through Venezuela.

Mr Chavez called that "a serious thing," but smiled as he thanked Mr Morales for recently sending coca to him and asked for more.

Standing up from a table, Mr Morales walked to Mr Chavez and opened a drawstring bag. "Oh, friend, I knew you wouldn't fail me," Mr Chavez said, as he put some in his mouth.