Global Policy Forum

By Chris Kraul

The VenIran tractor factory in remote eastern Venezuela is one of the signs of Iran's growing presence in Venezuela, which is being monitored by a U.S. government on alert for any evidence that Iran might be exporting terrorism.

Such evidence would come in handy to the United States, which is working to keep Venezuela from securing the rotating Latin American seat on the U.N. Security Council. The vote is scheduled for October.

The United States has said Venezuela would be a "disruptive" and "nonconsensus-seeking" force on the Security Council. As evidence, officials point to Venezuela's refusal, along with North Korea's, to support the U.N. International Atomic Energy Agency board of governors' resolution in March criticizing Iran's nuclear-material development program.

That same month, the first bright-red tractors rolled out of the factory in the sprawling industrial town of Ciudad Bolivar on the Orinoco River. Now producing 40 tractors a week, the plant will be followed by a bus factory and a cement plant involving joint Iranian-Venezuelan ventures.

Venezuelan officials say it is merely an extension of the friendship between the two members of the Organization of the Petroleum Exporting Countries, and that the host country has a lot to learn from Iran's formation of its many socialist cooperatives. Venezuelan President Hugo Chavez has made cooperatives a central part of his new economic model.

The tractor factory is a so-called Nucleus of Endogenous Development, the term for the state-sponsored job-creation program that Chavez is pushing to draw workers away from overcrowded, traffic-choked cities such as Caracas and Maracaibo. Iran has formed dozens of hybrid worker-state companies such as VenIran, said a Venezuelan government official.

U.S. government officials say they are monitoring the Iranian presence. There might be much to monitor before long. On a visit to Venezuela this month, an Iranian industry vice minister said his country planned to invest $9 billion in 125 projects here. Among them is the cement factory under construction in Monagas state, along with 2,500 nearby housing units for workers.

The tractor factory is in an industrial park in underpopulated Bolivar state, of which Ciudad Bolivar is the capital. About 70 Venezuelan workers are on the payroll, with eight Iranian managers. The building sat abandoned for 30 years after another state-sponsored job-creation program, also to build tractors, collapsed months after the factory opened in the mid-1970s, local officials said.

Despite low-key projects such as this one, Western diplomats in the region are uneasy about Iran establishing a commercial beachhead in Venezuela, fearing the Islamic republic's designs in the region might not be strictly business. Some have said that Iran's increasing links with Venezuela already have helped make the South American country a center of intrigue.