Though Chavez maintains that the motives behind the move are not political, his announcement follows recent criticism of Venezuela by Costa Rican President Oscar Arias. Chavez has successfully relied on oil diplomacy to gain alliances, but closure of the plant indicates he also has punitive measures planned for his critics.


The announced closure of an aluminum plant in Costa Rica has ignited a diplomatic row between Costa Rica and Venezuela. The plant, located in Puntarenas province, is owned by Venezuelan state company Alunasa, which was a Costa Rican enterprise acquired by Venezuela in 1990. The plant produces 9,000 tons of aluminum each year and exports to many countries, including the United States, Mexico and Canada.

Venezuelan President Hugo Chavez confirmed late Feb. 21 that he is calling for the closure of the plant for "geopolitical, technical and economic" reasons, strongly denying that the move is in retaliation against Costa Rica over diplomatic tensions between the nations (no date was given for the closure). Chavez contends that the plant will be more economically profitable in a new location. Though this location has not been specified, the plant likely will be re-established in a state allied with Chavez, such as Ecuador or Bolivia.

Costa Rica has rejected Chavez's rationale; a government minister noted that moving the factory will cost at least $25 million and result in two years of downtime before operations can resume at the present level. In addition, given the plant's 25-year history in Costa Rica, the closure spells serious economic trouble for Puntarenas province. According to government estimates, at least 20 percent of the local population will be impacted by the closure.

But economic reasons are not Chavez's true motivation. Instead, he is angered by Costa Rican President Oscar Arias' recent criticism of Venezuela, in which Arias called Chavez's regime a "democratic dictatorship" and criticized Chavez's newly endowed special powers under the Enabling Law. Chavez responded publicly to Arias' statements, accusing the Central American leader of pandering for U.S. favor.

Chavez's idea of diplomacy revolves around oil, as is shown by his world tours and bilateral accords in 2006. Costa Rica was on his list of allies under the Petrocaribe Accord, in which Venezuela agreed to provide affordable crude to several Caribbean and Central American countries regardless of market fluctuations.

Chavez sees Costa Rica's public criticism of Venezuela as a de facto violation of his oil-induced friendship. Costa Rica is hardly the first nation to be critical of Venezuela. Brazil, Argentina and Mexico all have challenged Chavez's economic and political agendas. Faced with these regional giants, however, Chavez has been relatively powerless. He is taking punitive action against Costa Rica -- a geopolitical adversary too weak to challenge him -- simply because he can.

The closure of the Costa Rican plant is one of Chavez's first forays into punitive diplomacy, and it is not likely to be his last. The move could indicate a shift in his method of dealing with dissent -- but only if the dissenter is less powerful than he. The smaller nations of the Caribbean and Central America -- almost all of which fall under the Petrocaribe deal -- are in this vulnerable category.