Wednesday, January 30, 2019

What is at stake in Venezuela

Socialists must tread carefully and beware the pitfalls of shallow, superficial analysis. On May 20 of last year, Maduro received the votes of 6.2 million people, about 31 percent of the eligible voters, about the same percentage that U.S. presidents generally receive (Obama received 31 percent in 2008 and 28 percent in 2012, while Trump received 26 percent in 2016).  Twice since 2000, allowed the loser of the popular vote to take the White House. Does all that make United States a dictatorship? International observers concluded that Maduro’s electoral victory was fair. Turnout (at 46 percent) was very low by Venezuelan standards because the bulk of the opposition to Maduro not only called for a boycott and refused to run candidates. Another complaint about Maduro’s electoral victory last year was that two prominent opposition leaders were disqualified from running: Leopoldo Lopez and Henrique Capriles. Both were participants in, not just supporters of, the 2002 attempted coup. In the United States, anyone who participates in a violent uprising that threatens the life of a sitting president would not be complaining about being disqualified from running for office. That would be the least of their worries. It is certainly true that the Venezuelan Supreme Court is partisan. In 2000, the U.S. Supreme Court made a ruling that gave George W. Bush the presidency. Should the Democrats, backed by a foreign power, have disregarded the Supreme Court and named their own president? February 29, 2004, George W. Bush — who was thoroughly discredited around the world, owing to the invasion of Iraq — was happy to be fully supported by the governments of Canada and France when U.S. troops kidnapped Haiti’s democratically elected president and installed a dictatorship under which loyalists to the deposed government were murdered. The Maduro regime is surely undemocratic and corrupt, a one-man show that few Latin American governments recognize since his staged reelection at the end of 2018. But is a case of American pot calling Venezuela's kettle black.
While they ALL shed crocodile tears over elections, democracy, and corruption, the reality is that the vultures are circling around a Venezuelan crisis set to pick clean the bones and strip the country clean. For the US, in particular, it means an opportunity to end the anti-imperialism rhetoric nor see off the threat of more anti-Americanism. The US seeks to return Venezuela to the role of compliant client-state, which will not challenge the corporations, to make any new government in Venezuela, for all intents and purposes, a US puppet regime.
In late 2018, Maduro, desperate to get additional financing amid crippling sanctions, announced that Venezuela had offered Russian mining companies access to gold mining operations in the country. While the Kremlin’s media platforms like RT and Sputnik did their usual spin, presenting this as simply mutually beneficial, friendly, and downright altruistic policy from Putin, the reality is that Russia sees in Venezuela much the same as what US interests see: a cash cow on its knees, easily controlled and exploited.

And, of course, in addition to gold, there are plenty of other mining prizes to be had in Venezuela including nickel, diamonds, iron ore, aluminum, bauxite, natural gas, etc. Both Russia and China have a significant interest in all these minerals, and projects necessary to exploit them. Although undoubtedly irksome, the US is not necessarily most concerned with Russian and Chinese billionaires enriching themselves in Venezuela.
Is it all about oil again? 2020 Democrat hopeful Tulsi Gabbard believes so. She tweeted, "Bolton just exposed real motive for intervention in Venezuela: "We're in conversation with major American companies now...It would make a difference if we could have American companies produce the oil in Venezuela. We both have a lot at stake here." There are  reasons why we should be skeptical of the idea that the US simply wants to rake in profits by stealing Venezuela’s oil. This is not to say that oil companies would not be interested in looting it.  From a pure profit perspective, Venezuelan oil remains far less profitable than investing in Texas  oil where the fracking boom has continued unabated. With the US becoming an exporter of oil, and potentially the most productive oil field in the world in the Permian Basin, the idea of snatching Venezuela’s oil supply isn't a strong motive. More relevant perhaps is the control of Venezuelan oil is part of the broader international conflict with Russia (and perhaps China.)

In 2016, when Venezuela’s economy went into freefall due to the historic lows in oil price ($35 per barrel in January 2016), the Maduro government sold 49.9% stake of its ownership in PDVSA’s US subsidiary, Citgo, to the Russian state oil company Rosneft in exchange for a $1.5 billion loan. It was in essence, a bailout with major strings attached. With this move, the Russians effectively became important part owners of Venezuela’s primary asset. Why should Russia, one of the world’s leading oil producers itself, have any interest in Venezuelan oil. Russian exports mainly to Europe, with an expanding market in Asia. Venezuelan oil mostly goes to the USA and therefore it becomes a potent lever against the US at a time when the US and the EU was applying sanctions on Russia over the conflict in Ukraine and the Russian annexation of Crimea. Putin desperate for a counter strategy against the US and by providing a relatively small loan of $1.5 billion, Russia immediately became a dominant player in Venezuela’s oil.  It was clearly felt that Russia’s foray into Venezuela’s oil sector was a strategic calculation designed to counteract US political and economic moves against Russia.A group of U.S. investors endeavoured to buy out the Russians to prevent Russia from seizing a large part of the Venezuelan state oil company PDVSA,Texas-based, Citgo, in the event of a full-blown default and thwart Rosneft gaining a foothold in energy markets across the Americas. The investors would repay the outstanding loan balance and require that Rosneft terminate its lien and assign the loan to the new investors.
“Just as a matter of common sense, it would be better if those assets were held by American investors than by Rosneft,” said Richard Morningstar, chairman of the Global Energy Center at the Atlantic Council and a former energy official under ex-president Barack Obama.

Trump appears to be doing precisely what the ruling class demanded. What we’re witnessing is the Monroe Doctrine policy where a right-wing pro-American region is already in place under Duque in Colombia, Macri in Argentina, and Bolsonaro in Brazil. If Maduro falls South America will be America’s backyard once more.
Adapted from here

1 comment:

ajohnstone said...

Venezuela’s struggle to pay its debts even to allies Russia and China amid a sharp drop in oil output has been exacerbated by the new sanctions, which will make it very hard to sell oil to its main client, the United States.
In that context, the arrival in Caracas of a Boeing 777 plane from Moscow on Monday led to speculation Maduro’s government was shipping more gold reserves out of the country, following shipments of $900 million of gold to Turkey last year. That was part of a strategy to increase the central bank’s liquidity.

The flight, operated by Russia’s Nordwind Airlines, left Venezuela at 4.52 pm local time (2152 GMT), a Reuters witness said. Another Russian-operated flight, a Boeing 757 cargo plane, arrived at the airport an hour earlier via Cape Verde, according to publicly-available flight data. There are no routine flights between the two countries.
Venezuelan lawmaker Jose Guerra, a former central bank economist, told the opposition-run National Assembly his understanding was that the Nordwind plane would take some gold reserves to Russia.