VENEZUELA TO SUPPORT COCA FARMS IN BOLIVIA

Caracas, Venezuela -- Venezuelan President Hugo
Chavez has found a novel way to dispense foreign aid: by promising to
underwrite coca production in Bolivia.

Officials in Caracas confirmed Wednesday that Venezuela will buy
whatever legal products Bolivia can make from coca leaf, as part of
that southern Andean nation's attempt to wean farmers from the cocaine
industry.

Chavez's promise could finance the production of some 4,000 tons of
coca leaf in Bolivia, Venezuelan officials say.

Possible coca-based products include soap, bread, herbal teas,
toothpaste, unspecified medicines and cooking oils. No dollar amount
for Venezuela's support has been announced. Three factories are under
construction in Bolivia with Venezuelan financial and Cuban technical
support, and production could begin this summer.

First announced last month by Venezuela's ambassador in Bolivia, Julio
Montes, the deal is being finalized this week in Caracas during
meetings of the two countries' foreign ministers.

The pledge is the latest in a series of foreign aid promises in Latin
America as Chavez tries to expand his influence and promote his
"Bolivarean Revolution."

Among his foreign aid programs is a promised refinery for Nicaragua,
cut-rate fuels for Ecuador and continuing bond purchases from Argentina.

Chavez's promise is a big step in Bolivian President Evo Morales'
efforts to legitimize the production of coca leaves, a crop Morales
once grew.

The announcement came as the United States government is scaling back
its anti-drug enforcement funding to Andean nations, including Bolivia
and Ecuador.

Chavez has long supported Morales' efforts to find commercial markets
for coca-based products. Indigenous communities in Colombia and Peru,
which believe the leaf is sacred, have attempted to promote
commercial, noncocaine uses of coca in soft drinks, cookies and
arthritis ointments.

But such projects have been opposed by the U.S. government, which sees
the export of any coca product as a violation of the Vienna
Convention, an international accord by which signatories agree the
coca leaf is a dangerous substance that should be banned.

Morales announced in December he was expanding legal production of
coca in Bolivia to 50,000 acres from 30,000 acres by 2010. The United
States protested, saying Bolivia needed only a fraction of that
acreage to supply domestic needs.

The coca deal will do nothing to lessen the continued hostility of the
Bush administration toward the Chavez regime. But the Venezuelan and
Bolivian governments made it clear U.S. objections will not affect
their plans. Appearing Tuesday before reporters with Bolivian foreign
minister David Choquehuanca, Venezuelan chancellor Nicolas Maduro said
the two nations are working on projects to "value and dignify the coca
leaf."