U.S. keeps Venezuela, Bolivia atop narcotics list

A guard dog attached to the Venezuelan National Guard stands watch as the media is shown more than a ton of seized cocaine ready for shipment in Puerto Cabello, July 27, 2009.

WASHINGTON (Reuters) - The United States has charged Bolivia and Venezuela with failing to do enough to fight the drug trade, but said it would continue aid to the two countries, both led by critics of U.S. foreign policy.

In an annual report, the United States said Bolivia -- the world's third-largest cocaine producer -- Venezuela and Myanmar had all "failed demonstrably" to meet their counter-narcotics obligations.

The same three countries last year were cited on the list, which allows the president to cut off U.S. aid other than counter-narcotics and humanitarian funds.

But the U.S. statement, released late on Tuesday by the State Department, said the White House had once again issued a national interest waiver to continue certain bilateral aid programs in the two South American countries.

"In Venezuela, funds will continue to support civil society programs and small community development programs. In Bolivia, the waiver will permit continued support for agricultural development, exchange programs, small enterprise development, and police training programs," the statement said.

Venezuela's President Hugo Chavez and Bolivia's President Evo Morales are persistent critics of U.S. foreign policy in the region, and particularly a plan by U.S. ally Colombia to give U.S. troops more access to its military bases for joint operations against drug traffickers and leftist rebels.

It did not give any similar detail for Myanmar.

U.S. Secretary of State Hillary Clinton said on Tuesday that Washington was concerned by what she said was Venezuela's growing number of arms purchases, saying they could spark a regional arms race.

Along with the three countries identified as the worst offenders, the U.S. list named 17 others as major production or transit centers for illegal drugs: Afghanistan, the Bahamas, Brazil, Colombia, the Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru.

But the statement noted that being on the list does not necessarily reflect a country's counter-narcotics efforts or cooperation with the United States, saying in some cases a country may suffer from geographic, commercial, or economic factors that allow drugs to be produced or trafficked "despite its own best efforts."