Venezuela rivals U.S. in Central America and Caribbean

By Brian Ellsworth

CARACAS (Reuters) - Venezuela's socialist President Hugo Chavez has won over some of the United States' closest allies in the Caribbean and Central America with oil credits and aid that match similar efforts by Washington.

Hundreds of millions of dollars in food aid and billions in low-interest loans to buy Venezuelan oil put Chavez neck-and-neck with the United States as a major financier in a region that U.S. officials once called their backyard.

Chavez, who has clashed with the White House on everything from free trade to fighting drugs, is now a top benefactor even to Washington allies who welcome his aid offers to offset rising energy and food import bills.

With oil prices expected to stay high, analysts say Chavez's influence will grow in a region that was once a Cold War battlefield and remains impoverished.

"The economic relationship with Venezuela now appears to be central to the region's short-and medium-term stability," said Anthony Bryan, a senior associate at the Centre for Strategic and International Studies think-tank in Washington.

Many Caribbean and Central American countries rely on the United States for much of their trade, including food imports, and they generate electricity with pricey fuel oil.

Chavez this year launched a $450 million (252 million pounds) fund to combat soaring food prices in the region.

That sum rivals the roughly $500 million slated by the U.S. Agency for International Development, USAID, for those countries in 2008, according to USAID documents.