Feb. 5 (Bloomberg) -- Venezuela is serving as an increasingly frequent transit zone for drug traffickers to ship Colombian cocaine, undermining counter-narcotics efforts in neighboring countries, the top U.S. intelligence official said.

The situation will likely continue, as Venezuelan President Hugo Chavez remains ``unengaged'' in trying to halt the flow of drugs across his country's borders, Michael McConnell, Director of National Intelligence, told the Senate Intelligence Committee today.

``Chavez's lack of counter-drug cooperation undermines efforts by other countries, particularly Colombia, by giving traffickers access to alternative routes and transit points,'' McConnell said, according to a transcript of his statement.

Chavez will likely continue to push his ``anti-U.S., radical leftist'' agenda that appeals to the poor in Latin America, McConnell said. Leaders in Bolivia, Nicaragua and to some extent Ecuador are following the lead of Venezuela and Cuba in trying to increase presidential powers and promote ``economic nationalism'' over free markets, he said.

Venezuela's top drug enforcement official, Nestor Reverol, said Jan. 22 that U.S. criticism of the country's efforts to curb trafficking is politically motivated and aimed at discrediting Chavez.

Elsewhere in Latin America, McConnell said, the ``gradual consolidation of democracy remained the dominant trend.''

Cuba's acting president, Raul Castro, who took over governing duties from his ill brother, Fidel, in 2006, may try to make economic changes to increase agricultural production and attract foreign investment, without ceding the Communist party's control, McConnell said.

To contact the reporter on this story: Matthew Walter in Caracas at mwalter4@bloomberg.net

Last Updated: February 5, 2008 15:16 EST