Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Wednesday, January 16, 2019

January 15, 2019


International Trade

Venezuela goes to WTO to contest Colombia fuel import rules

Venezuela has launched a complaint at the World Trade Organization to challenge Colombia’s restrictions on the distribution of liquid fuels imported from Venezuela, a filing published by the WTO showed on Monday. Venezuela said Colombia was illegally discriminating against its fuel exports by imposing “a series of distribution and licensing measures, and product surcharges, market access measures and pricing policies” on Venezuelan fuel. Colombia has 60 days to settle the dispute or Venezuela could ask the WTO to adjudicate, although the ability of the Geneva-based body to keep refereeing such disputes is in doubt due to a U.S. block on judicial appointments. (Reuters, https://www.reuters.com/article/us-venezuela-colombia-wto/venezuela-goes-to-wto-to-contest-colombia-fuel-import-rules-idUSKCN1P8256)

 

Oil & Energy

U.S. considers harshest Venezuela sanctions yet, on oil

The U.S. is evaluating whether to impose tougher sanctions against Venezuela’s military and vital oil industry, a senior Trump administration official said Monday, as it seeks to ratchet up pressure on authoritarian leader Nicolás Maduro to hold free and fair elections. The Trump administration is considering a range of measures including curtailing the flow of Venezuelan oil to the U.S., the official said, in what could be the harshest blow to the country's money supply. No final decision has been made. (The Wall Street Journal: https://www.wsj.com/articles/u-s-considers-harshest-venezuela-sanctions-yet-on-oil-11547510165)

 

Dominican Republic moving to take back Venezuela shares in refinery

The Dominican Today news site reported that the Dominican government has initiated negotiations to buy the 49% stake held by PDV Caribe, a subsidiary of Venezuela’s State-owned PDVSA, in the Dominican Petroleum Refinery (REFIDOMSA PDV). PDV Caribe has reportedly yet to agree to sell its stake and, "if the Venezuelan company doesn’t agree to the sale, the Dominican State would be forced into litigation declaring the country’s only refinery eminent domain and a matter of national security", REFIDOMSA PDV CEO Felix Jimenez is reported to have said. Jimenez reportedly does not expect the process - initiated last December - to be affected by Santo Domingo’s decision not to recognize the legitimacy of Venezuela president Nicolas Maduro. (Loop Jamaica: http://www.loopjamaica.com/content/dom-rep-also-moving-take-back-venezuela-shares-refinery)

 

Venezuela’s crisis threatens U.S. control over oil prices

The Russian bear is on the prowl once again as President Putin seeks to expand Moscow’s influence and bolster the one-time superpower’s global influence while proving to constituents he can restore Russia’s superpower mantle. As demonstrated by his policy in Ukraine in 2014, Moscow seeks to take advantage of regional conflicts to extend its authority and geopolitical power base while bolstering its economy. One country benefitting from Putin’s largesse is crisis-ridden and cash strapped Venezuela which has the world’s largest crude oil reserves. Moscow has been using Venezuela’s deepening economic and political crisis to strengthen its relationship with the highly unpopular socialist regime of President Maduro. That has included providing a financial lifeline to cash strapped Caracas and especially state-controlled energy company Petróleos de Venezuela, S.A. known by its initials as PDVSA. With few friends elsewhere, Russia has become a key ally for the strife-torn nation causing Maduro to leap at the opportunity provided by Moscow. Russia has shown itself willing to be a creditor of last resort for Maduro. In exchange for moderate loans, cash advances, bail outs and arms over the last five years since Maduro came to power, Moscow has secured significant interests in five of Venezuela’s largest oil fields. The Maduro regime has also signed over almost half of its downstream, refinery and infrastructure business CITGO to Russian state-controlled oil giant Rosneft for US$ 1.5 billion in urgently needed funds. That includes giving Moscow indirect interests in CITGO’s U.S. refining assets. This is quite a prize for Moscow. It not only bolsters its oil reserves, infrastructure and assets in a country which hold the world’s largest oil reserves, but it gives Russia a strategic presence in a region long considered to be exclusively under U.S. hegemony. It appears that Russia is not interested in the survival of the Maduro regime but rather to evade existing sanctions, apply political pressure to the U.S. and boost its oil reserves, refining capacity and production. (Oil Price: https://finance.yahoo.com/news/venezuela-crisis-threatens-u-control-200000843.html)

 

Commodities

Venezuela to refine tons of gold in Turkey amid US sanctions

Venezuela and Turkey are working on a deal to ship tons of gold to refine and certify in the Turkish city of Corum this year. Facing sanctions and international pressure, Venezuela is increasingly turning to Turkey as a partner in the Middle East. Ankara will provide a host of services to Caracas, including building hospital and schools and providing humanitarian aid as a part of the gold refining deal. Venezuelan Minister of Industries and National Production Tareck El Aissami will finalize a deal on the gold trade during a visit to Turkey on Wednesday. He will also tour an industrial complex in Corum, where Ahlatci Metal company has a refinery with an annual capacity of 365 tons, according to a spokesperson from the Turkish precious metals company. Aissami is visiting Turkey amid US sanctions against Venezuelan gold imports, which are further debilitating the country's failing economy that is in need of fresh capital. Aissami himself is targeted by a set of sanctions by the European Union and the US due to allegations of corruption and drug trafficking. The new deal has been in the making since Turkish President Recep Tayyip Erdogan’s visit to Venezuela in December. Erdogan had personally introduced businessman Ahmet Ahlatci to president Nicolas Maduro as a likely candidate to refine the gold. Mehmet Ozkan, a former Turkish official who worked on bilateral relations with Venezuela until last year, said that the main objective was to refine the raw metal and create a capital inflow to Venezuela, likely in the form of services because of US sanctions that prohibit financial institutions from dealing with Venezuela in dollars. (Middle East Eye: https://www.middleeasteye.net/news/venezuela-intends-refine-tons-gold-turkey-amid-us-sanctions-378492428)

 

Maduro opponent says Hezbollah is exploiting Venezuela gold mines

An MP opposed to President Nicolas Maduro revealed that the Lebanese Hezbollah group was exploiting gold mines in his country in order to finance its “destabilizing terrorist activity in the Middle East.” MP Americo De Grazia said that the armed group owns two mines in the Orinoco Mining Arc project that is supported by Maduro. He said that cooperation between the Venezuelan government and Hezbollah is mutually beneficial for both parties. The government, he explained, was generating a lot of revenues from the partnership, while the group was making economic profits and avoiding international sanctions. (Asharq-Al-Awsat: https://aawsat.com/english)

 

Economy & Finance

Venezuela congress seeks freeze on Maduro government foreign accounts

Venezuela’s opposition-run congress is considering a measure that would ask dozens of foreign governments to seek a freeze on bank accounts controlled by the government of President Nicolas Maduro. Congress will formally request that governments instruct regulatory agencies to “prohibit any movement of liquid assets by the Venezuelan state in local bank accounts” due to the Maduro government’s lack of legitimacy, according to one of the documents. The governments include those in the United States, European Union, and Latin American neighbors such as Chile and Brazil. (Reuters: https://www.reuters.com/article/us-venezuela-politics/venezuela-congress-seeks-freeze-on-maduro-government-foreign-accounts-document-idUSKCN1P920G)

 

Maduro increases minimum wage by 300% as inflation approaches 2 million per cent

Nicolás Maduro has raised the country’s minimum wage by 300% as part of routine wage increases as his government battles hyperinflation. Maduro increased the minimum wage to 18,000 bolivars, around £5.20, per month amid an economy suffering from annual inflation nearing two million per cent. He announced his economic plans at the start of his second, disputed, term on Monday, as calls increased for him to surrender power. (The Independent: https://www.independent.co.uk/news/world/americas/venezuela-minimum-wage-nicolas-maduro-bolivars-inflation-a8728716.html; Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuelas-maduro-hikes-minimum-wage-as-economy-struggles-idUSKCN1P81RN; https://www.reuters.com/article/us-venezuela-politics-wage/venezuelas-maduro-hikes-minimum-wage-300-percent-idUSKCN1P82E2)

 

Russia offers Venezuela plan on revitalizing economy

Russia has proposed Venezuela an informal plan to revive the country's economy and is waiting for a response from Caracas, Russian Deputy Finance Minister Sergey Storchak told Sputnik on Tuesday. "We have made a proposal [to Venezuela]. An informal one. Traditionally, a project is devised after consultations and partners provide a response to this project", the official said on the sidelines of the Gaidar Forum. He also addressed the deal on restructuring Venezuela's debt to Russia. "Agreements have already been reached. They are making payments in line with a new schedule", Storchak added. (Sputnik News: https://sputniknews.com/latam/201901151071490301-russia-venezuela-economy/)

 

Politics and International Affairs

Venezuelan parliament declares Maduro illegitimate, and urges defections

Leaders of Venezuela’s opposition on Tuesday set in motion a plan to try to oust President Nicolas Maduro and create a caretaker government until new elections can be held. The National Assembly, the opposition-controlled legislative body, declared Maduro illegitimate, hoping to trigger a Constitutional mechanism that would allow the head of the National Assembly to take over the leadership. It was not immediately clear what effect the move would have or how Maduro’s government would react. The National Assembly has been largely powerless since Venezuela’s Supreme Court, which is packed by Maduro loyalists, attempted to dissolve it in March 2017. But pressure has been growing on Maduro both domestically and abroad since the president was sworn in for his second term last week. Not long after the ceremony, an opposition leader who is head of the National Assembly, Juan Guaidó, said he would be ready to take over as president and call fair elections if Venezuelans and the armed forces backed him. He quickly received support from Luis Almagro, the secretary general of the Organization of American States, who began calling Mr. Guaidó the country’s “interim president,” and from Vice President Mike Pence. Mr. Pence said in a message posted on Twitter Sunday that the United States “strongly supports the courageous decision by Juan Guaidó” to “declare the country’s presidency vacant.” Mr. Guaidó was briefly taken into custody by members of Venezuelan intelligence service on Sunday, then released. In an interview, he said he had been able to convince the officers that the opposition’s plan to remove Mr. Maduro was constitutional and would help the country.  The fact that Mr. Guaidó was released may indicate cracks in the security apparatus that has kept Mr. Maduro in power until now. Mr. Guaidó said on Monday that opposition leaders believed they stood a good chance of seizing power from Mr. Maduro and convening a new election. The key would be to persuade those who remain loyal to the government that they can switch allegiances and help rebuild a country devastated by an economic meltdown, acute food and medicine shortages and rampant violence. (The New York Times: https://www.nytimes.com/2019/01/15/world/americas/juan-guaido-nicolas-maduro-venezuela.html)

 

Trump considering recognizing opposition leader as legitimate President of Venezuela

President Donald Trump is considering recognizing Venezuela's opposition leader as the legitimate president of the country, three sources familiar with the matter told CNN, a significant move that would increase pressure on President Nicolas Maduro. The Venezuelan opposition, the United States and dozens of other countries have decried Maduro's presidency illegitimate and the country's constitution says a presidential vacancy can be filled by the president of the National Assembly. National Security Council spokesman Garrett Marquis declined to confirm that Trump is weighing this step, but said the US has "expressed its support for Juan Guaido, who as President of the democratically-elected National Assembly has courageously declared his constitutional authority to invoke Article 233 and call for free and fair elections." Secretary of State Mike Pompeo calls Nicolas Maduro government in Venezuela 'illegitimate' The Trump administration is also considering leveling its harshest set of sanctions yet against Venezuela's oil industry, weighing actions as severe as a full-fledged embargo of Venezuelan oil, two sources briefed on the matter said. A full oil embargo would cause gas prices to rise by 15 cents a gallon for about six months, a former senior administration official said of the analysis. The Organization of American States said last week that its member nations voted 19-6, with eight abstentions, to not recognize the legitimacy of Maduro's government. One of those nations, Paraguay, announced Thursday it was breaking diplomatic relations with Venezuela and closing its embassy there. And Republican Sen. Marco Rubio on Tuesday said he asked Trump to recognize Guaido as "the legitimate transitional President of Venezuela if the National Assembly invokes Article 233 of the constitution." In a statement on Friday, National Security Adviser John Bolton expressed US support for "the courageous decision of the National Assembly President, Juan Guaido, to invoke protections under Venezuela's constitution and declare that Maduro does not legitimately hold the country's presidency." And after Guaido was briefly detained Sunday by Venezuelan government operatives, Pence lambasted Maduro as a "dictator with no legitimate claim to power" and reiterated Bolton's support for Guaido. As the US weighs recognizing Guaido, it must also contend with whether the Venezuelan opposition -- which has been divided on whether Guaido should be sworn in as president while Maduro remains in office -- is ready to take the step. (CNN: https://www.cnn.com/2019/01/15/politics/trump-juan-guaido-venezuela/index.html; McClatchy: https://www.mcclatchydc.com/news/nation-world/world/latin-america/article224566420.html)

 

Venezuela's opposition stirs with lawmaker's emergence

Rallying around a little-known lawmaker, Venezuela’s opposition is stirring for the first time since President Nicolas Maduro crushed mass protests more than a year ago. For months, citizens ravaged by hunger have ignored calls to protest what the U.S. and many other countries have called a rigged election. Now, a trickle of supporters comes to hear Juan Guaido, 35, the new head of the defanged National Assembly, explain how an abstract constitutional provision could make him acting president. But whether Guaido can threaten the two-decade socialist autocracy that has driven the nation to ruin is far from clear. To do that, Guaido faces a Herculean task. In his two-week tenure as head of the assembly, he’s become recognized at home and abroad as Maduro’s top rival. But the largely untested protege of political prisoner Leopoldo Lopez must channel international pressure, unite a fractious opposition and motivate a beaten-down populace. In a Monday speech, Maduro scoffed at the idea of handing Guaido the reins of power. “I’m going to give you the sash, big boy, to see what you do with the country,” Maduro said, referring to the president’s tricolor ceremonial garment. Guaido, a former student leader, entered the assembly just four years ago and became its chief after peers were arrested or forced into exile. How long his platform lasts remains to be seen. Last week, the Constituent Assembly passed a measure that could be the first step toward the legislature’s disappearance. It also threatened treason investigations against lawmakers who back demands by Venezuela’s neighbors that Maduro hand over power. In the meantime, Guaido is convening town-hall meetings to discuss a constitutional provision that, in the absence of a legitimate president, would give the assembly’s head presidential powers to call new elections. So far, he has stopped short of declaring himself acting president, telling Venezuelans he needs the backing of the military and international community. An industrial engineer by training, Guaido more than a decade ago began organizing demonstrations against Chavez after the late leader silenced critics by refusing to renew the broadcast license of Venezuela’s most popular television channel. He formed a close relationship with Lopez, then a Caracas mayor, and later helped him form the Popular Will party. Even with Lopez under house arrest, they talk several times a day. In his short career, Guaido has been applauded for building unity among fellow legislators. His present challenge is to channel the desperate desire for change within the limits of an authoritarian state. (Bloomberg: https://www.bloomberg.com/news/articles/2019-01-15/venezuela-s-moribund-opposition-stirs-with-lawmaker-s-emergence)

 

Venezuela opposition plans incentives for officers who disavow Maduro

Venezuela’s opposition-led congress is considering offering legal incentives to military officers who disavow President Nicolas Maduro and help lead a transition to a new government, according to four legislators and a draft document seen by Reuters. The proposal, which comes in part at the request of high-ranking officers on active duty, seeks to ensure that defectors from the armed forces would not be persecuted by a future government if they abandon Maduro, according to the legislators, who asked not to be identified. It would apply to officers who “do not obey the orders of the man who has usurped the Presidency of the Republic ... and collaborate with the tradition and re-establishment of constitutional order,” the draft says. (Reuters, https://www.reuters.com/article/us-venezuela-military/venezuela-opposition-plans-incentives-for-officers-who-disavow-maduro-idUSKCN1P52HH)

 

Opposition-controlled Venezuela legislature calls for protest to oust Maduro

Venezuela's opposition-controlled legislature is calling for a mass protest against President Nicolas Maduro in a bid to oust the socialist leader in favor of "a transitional government." The president of the National Assembly, Juan Guaido, said Friday that the constitution gives the legislature the right to assume transitional power after declaring Maduro a "usurper," but said it would need military backing and for people to take to the streets to demand change. "Is it enough to lean on the constitution in a dictatorship? No. It needs to be the people, the military and the international community that lead us to take over," said the 35-year-old Guaido. In response, prisons minister Iris Varela threatened Guaido on Twitter, saying she had a cell ready for him. "I hope you quickly name your cabinet to know who is going to accompany you," Varela said. Guaido called for a mass protest on January 23 -- the day in 1958 on which the military dictatorship of Marcos Perez Jimenez fell. Mass protests demanding Maduro's exit also erupted in 2014 and 2017, leaving around 200 dead and hundreds arrested. (France 24: https://www.france24.com/en/20190112-opposition-controlled-venezuela-legislature-calls-protest-oust-maduro)

 

Leader of Venezuela Congress says he is prepared to assume presidency

The leader of Venezuela’s opposition-led congress said on Friday he was prepared to assume the country’s presidency on an interim basis and call elections, just one day after leftist President Nicolas Maduro was sworn in for a disputed second term. Juan Guaido, said he would only take office with support of the armed forces. “It should be the people of Venezuela, the armed forces, and the international community that give us a clear mandate to assume” the presidency, Guaido said in a speech to supporters outside the United Nations (U.N.) program office in Caracas. (Reuters, https://www.reuters.com/article/us-venezuela-politics/leader-of-venezuela-congress-says-he-is-prepared-to-assume-presidency-idUSKCN1P51U6)

 

Opposition leader Guaido 'not afraid' after detention

Venezuelan opposition leader Juan Guaido on Sunday said that President Nicolas Maduro’s adversaries were “not afraid” even though he was briefly detained by intelligence agents, days after announcing he would be willing to replace the increasingly isolated president. Intelligence agents on Sunday pulled him from his car on the way from the capital, Caracas, to the coastal town of Caraballeda, his wife and opposition legislators said. He was released shortly thereafter, they said. “I want to send a message to Miraflores - the game has changed,” said Guaido, 35, the head of the opposition-run congress, referring to the presidential palace, from a stage surrounded by cheering opposition sympathizers. He said that his recent detention shows the “desperation” of the regime of Nicolas Maduro. “They are desperate at Miraflores (the presidential residence). They don’t know who is giving orders,” the Popular Will (VP) lawmaker told hundreds of people at a public assembly in his home state of Vargas, near Caracas. Guaido arrived at the event two hours behind schedule. Venezuelan Communications Minister Jorge Rodriguez said that the incident was an irregular and unilateral procedure, whereby the agents involved were fired and an investigation opened to determine responsibilities. Guaido told reporters that the official version of events shows that Maduro “no longer controls the armed forces,” which reveals – he said – the “serious problem” within the military. (Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuela-opposition-leader-guaido-not-afraid-after-detention-idUSKCN1P70LZ; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2473136&CategoryId=10718; Bloomberg, https://www.bloomberg.com/news/articles/2019-01-13/venezuela-opposition-leader-arrested-by-intelligence-police)

 

Defense minister recognizes Nicolás Maduro as its commander in chief for the period 2019-2025

Venezuela’s Minister of Defense, General Vladimir Padrino López, says the Armed Forces recognize Nicolás Maduro, as their commander-in-chief, as established by the Constitution. He said: “the Bolivarian National Armed Forces reiterates its Bolivarian, anti-imperialist and anti-oligarchic character for the troops of the Armed Forces, the Army, the Aviation, the Guard and the Bolivarian National Militia (...) we recognize as our commander-in-chief - Nicolás Maduro ". Padrino stressed that in this new 2019-2025 presidential term, the FANB with absolute loyalty, will continue to fight for the ideals of independence and sovereignty. He swore, along with the military, “to honor and obey the mandate expressed on May 20th, by the people in free elections”. (Latin American Herald Tribune, http://www.avn.info.ve/contenido/fanb-recognizes-nicol%C3%A1s-maduro-its-commander-chief-period-2019-2025)

 

'Bolsonaro is Hitler!' Venezuela's Maduro exclaims amid Brazil spat

President Nicolas Maduro on Monday called Brazilian President Jair Bolsonaro a modern Adolf Hitler, days after Brazil on Saturday said it recognized Juan Guaido, head of Venezuela’s opposition-run Congress, as legitimate president. “Over there we’ve got Brazil in the hands of a fascist - Bolsonaro is a Hitler of the modern era!” Maduro said during a state of the nation speech. Brazil’s government on Saturday issued a statement saying it recognized Venezuela’s Congressional leader, who opposes President Nicolas Maduro, as the rightful president of Venezuela. (Reuters: https://www.reuters.com/article/us-venezuela-politics-brazil/bolsonaro-is-hitler-venezuelas-maduro-exclaims-amid-brazil-spat-idUSKCN1P82FJ; https://www.reuters.com/article/us-brazil-venezuela/brazil-says-it-recognizes-venezuelan-opposition-leader-as-president-idUSKCN1P60FJ)

 

South America creating regional bloc to counter Venezuela

South American countries are developing a new diplomatic group to replace the UNASUR regional bloc that is heavily influenced by increasingly isolated Venezuela, Colombian President Ivan Duque said on Monday. The new group, called PROSUR, would seek to counteract the influence of what countries in the region call a dictatorship in Venezuela. “We’ve been advancing toward the end of UNASUR and the creation of PROSUR ... a South American platform for the coordination of public policies, the defense of democracy, independent institutions, and market economies,” Duque said in a radio interview. “It is very important that (UNASUR), which has been a supporter of the dictatorship of Venezuela, be shut down,” Duque said. (Reuters: https://www.reuters.com/article/us-colombia-diplomacy/south-america-creating-regional-bloc-to-counter-venezuela-colombia-idUSKCN1P8287)

 

UN expresses concern over political situation in Venezuela

UN spokesperson Stéphane Dujarric says UN Secretary General António Guterres "is concerned with what he is seeing” in Venezuela, and “is following events closely”. He called on all sides to abstain from “any action or rhetoric” that increases tension. He described Sunday’s detention of the National Assembly president as proof of “polarization” here. More in Spanish: (El Universal, http://www.eluniversal.com/politica/30540/la-onu-expresa-su-preocupacion-por-situacion-politica-en-venezuela)

 

Pompeo says Venezuela's Maduro government is 'illegitimate'

U.S. Secretary of State Mike Pompeo described Venezuela’s government under President Nicolas Maduro as illegitimate on Saturday and said the United States would work with like-minded countries in Latin America to restore democracy there. “The Maduro regime is illegitimate, and the United States will work diligently to restore a real democracy to that country,” Pompeo told reporters in Abu Dhabi, where he is on a tour of Middle East countries. “We are very hopeful we can be a force for good to allow the region to come together to deliver that.” (Reuters, https://www.reuters.com/article/us-venezuela-politics-pompeo/pompeo-says-venezuelas-maduro-government-is-illegitimate-idUSKCN1P60FL)

 

Venezuela claims win in Latin American diplomatic dispute, ignores criticism of Maduro

Venezuela’s government claimed victory on Saturday in a diplomatic quarrel with Latin American countries over a border dispute with Guyana, while ignoring an avalanche of criticism over President Nicolas Maduro’s second term in office. Maduro had warned members of the so-called Lima Group of “diplomatic measures” after they said on Jan. 4 that they would not recognize his second term because Venezuela’s 2018 election was not free or fair. The statement, signed by nations including Brazil, Argentina and Colombia, also expressed concern that Venezuela had violated Guyana’s sovereignty by stopping a ship doing offshore oil exploration on behalf of Exxon Mobil Corp. Foreign Minister Jorge Arreaza said at a news conference on Saturday that 10 of the 12 governments that signed the statement had since clarified their position on the Guyana dispute. (Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuela-claims-win-in-latam-diplomatic-dispute-ignores-criticism-of-maduro-idUSKCN1P60NJ)

 

Venezuela proposes summit for reconciliation with countries of the region

Venezuelan Foreign Minister Jorge Arreaza proposed on Saturday a summit of Latin American countries for a session of reconciliation that would do away with political intolerance which, he said, is being applied in the region against the Nicolas Maduro government, whose legitimacy is not accepted by many in the international community.
We insist on President Nicolas Maduro’s proposal to hold a summit of presidents... and also of a group of countries in the region, which will help achieve an end to this ideological intolerance that has grown in recent years,” the official told reporters this Saturday.Arreaza said the meeting could take place during a summit of the Community of Latin American and Caribbean States (CELAC), whose presidency is currently held by the Salvadoran president and Maduro ally, Salvador Sanchez Ceren. (Latin American Herald Tribune,
http://www.laht.com/article.asp?ArticleId=2473108&CategoryId=10717)

 

Venezuela’s maritime claims also include territory of some CARICOM states

Venezuela is seeking to expand its maritime space not only in Guyana’s territory but also in the Exclusive Economic Zones (EEZs) of Caribbean Community (CARICOM) and other states, including Colombia, Barbados and Suriname, which must all be vigilant as a result. This warning was issued last Thursday by Guyanese Minister of Foreign Affairs Carl Greenidge and former Minister of Foreign Affairs Rashleigh Jackson, who both pointed out that regular aggression against Guyana by Caracas including the recent interception of an ExxonMobil-contracted vessel in Guyana’s maritime space, has implications not only for Guyana but for the rest of the Caribbean as well. Greenidge and Jackson cautioned against Venezuela’s expansionist approach to increasing its maritime space and enforcing its actions through domestic laws which are not recognized internationally. (Stabroek News: https://www.stabroeknews.com/2019/news/guyana/01/13/venezuelas-maritime-claims-also-include-territory-of-some-caricom-states/)

 

Vatican, Venezuela bishops play ‘good cop/bad cop’ with Maduro

A day after the bishops of Venezuela declared the new presidency of Nicolas Maduro “illegitimate,” Pope Francis sent a Vatican representative to his inauguration. Maduro thanked Monsignor George Koovakod for his “bravery” for coming. Many observers say the apparent contrast isn’t a matter of the Vatican and the bishops being at odds, but rather a classic “good cop, bad cop” diplomatic maneuver. Concerns over legitimacy have led the United States, along with most nations of Latin America and the European Union, to break diplomatic relations with Venezuela. Visible among the few representatives from other countries was Koovakod, a Polish monsignor who was appointed as Chargé d’affaires at the Vatican’s Secretary of State last year.

The Venezuelan crisis is not one the Holy See’s diplomatic team looks at from afar: the substitute, often referred to as the second most important person in the secretariat, comes from this Latin American country, Archbishop Edgar Peña Parra. The secretary of state, Italian Cardinal Pietro Parolin, was handpicked by Francis for the job while he was serving as papal representative in Venezuela. When the Venezuelan bishops were in Rome last September for their ad-limina visit, the matter of the Holy See acknowledging Maduro as the rightful, democratically elected president was brought up by many in the Vatican, including Francis. The situation is complex, and no clear decision was reached during the week-long visit. According to Elisabetta Pique, a long-time Vatican watcher who writes for one of Argentina’s major newspapers, La Nación, the Venezuelan bishops had the green light from the Holy See to declare Maduro’s regime to be illegitimate and the local episcopacy had been consulted about the pros and cons of sending a representative to Maduro’s swearing in. This information suggests that despite Maduro’s attempts to put the bishops and Francis on opposite sides, at the end of the day, it’s no more than another case of the Vatican’s realpolitik at play, confirming the Holy See’s intentions never to break diplomatic relations with a country. The Church’s long-standing tradition of leaving the doors of dialogue and diplomacy open whenever it’s possible does not mean actual support of the local ruling class. In 2016 Francis tried, unsuccessfully, to mediate dialogue efforts between Maduro and the opposition. Despite this, the Vatican’s attention to the Venezuelan situation has remained steady, as seen during the pope’s Christmas speech and his address to the diplomatic corps accredited to the Holy See. On both occasions he referred to the situation of Venezuela, and also that of Nicaragua, facing a similar situation and one that could devolve even more rapidly, as the Central American nation is not sitting on top of one of the world’s largest oil reserves. Expressing “hope for beloved Venezuela,” Francis told the diplomats that “peaceful institutional means can be found to provide solutions to the ongoing political, social and economic crisis; means that can make it possible to help all those suffering from the tensions of recent years, and to offer all the Venezuelan people a horizon of hope and peace.” In that speech he said that “the Holy See has no intention of interfering in the life of states; it seeks instead to be an attentive listener, sensitive to issues involving humanity, out of a sincere and humble desire to be at the service of every man and woman.” Many observers saw this as a response from the pope to a letter signed by 20 Latin American former presidents criticizing the pope’s remarks on Christmas Day, when he said he wished this time of “blessing,” referring to the holiday season, would bring “concord” to Venezuela. (The Crux: https://cruxnow.com/church-in-the-americas/2019/01/13/vatican-venezuela-bishops-play-good-cop-bad-cop-with-maduro/)

 

Venezuela blocks Wikipedia after Maduro ‘ousted’ from article, internet watchdog says

Venezuela has blocked access to Wikipedia, the free online encyclopedia, becoming only the second country after Turkey to do so, an internet watchdog claimed Sunday. According to NetBlocks, a digital rights group that tracks restrictions to the internet, as of 12 January, Venezuela largest telecommunications provider CANTV has prevented access to Wikipedia in all languages. The internet observatory told Haaretz the ban was discovered by attempting "to access Wikipedia and other services 60,000 times from 150 different points in the country using multiple providers." Wikipedia receives on average 60 million views from the country every month.  According to NetBlocks, the ban was likely imposed after a Wikipedia article listed newly-appointed National Assembly president Juan Guaidó as “president number 51 of the Bolivarian Republic of Venezuela,” ousting Maduro from his presidential status on Wikipedia.  Alp Toker, the head of NetBlocks, explained that the block followed a string of controversial edits on the Spanish-language article for Guaido as well as other related articles.  (Haaretz: https://www.haaretz.com/world-news/internet-watchdog-venezuela-blocks-wikipedia-after-maduro-ousted-from-article-1.6831777)

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

Thursday, January 10, 2019

January 10, 2019


International Trade

Venezuela launches WTO challenge to U.S. sanctions

Venezuela has launched a complaint at the World Trade Organization to challenge U.S. sanctions, saying that a ban on travel by blacklisted individuals and trade restrictions break WTO rules, a WTO filing showed on Tuesday. In the complaint, filed on Dec. 28, Venezuela also cited U.S. rules on sales of gold and discriminatory treatment of Venezuela’s debt and transactions in digital currency as breaches of the WTO rulebook. (CNBC: https://www.cnbc.com/2019/01/08/reuters-america-venezuela-launches-wto-challenge-to-u-s-sanctions.html)

 

Oil & Energy

Venezuela congress slams oil deals with U.S., French companies

Venezuela’s opposition-run congress on Tuesday issued a resolution calling deals between state-run oil company PDVSA and U.S. and French companies announced this week illegal, since they had not been sent to lawmakers for approval. The body said the oilfield deals with France’s Maurel & Prom and little-known U.S. company EREPLA violated article 150 of Venezuela’s constitution, which requires that contracts signed between the state and foreign companies be approved by the National Assembly, as Venezuela’s congress is known. “They are giving concessions that violate the law,” said lawmaker Jorge Millan, mentioning the two contracts. Congress, largely stripped of its power since the opposition took it over in 2016, is unlikely to be able block the deals from going forward. But the rejection could create legal complications under a future government. (Reuters, https://www.reuters.com/article/us-venezuela-oil/venezuela-congress-slams-oil-deals-with-u-s-french-companies-idUSKCN1P22HG)

 

Venezuela plans to remap its offshore oil territory, escalating tension with EXXON

Venezuela will remap its Caribbean oil and gas prospects in a move that could further stoke a century-long border dispute with Guyana and collide with EXXON MOBIL Corp.’s venture in the region, people with knowledge of the plan said. The seismic survey is planned for the coming months and will include an eastern area of Venezuela that borders Guyana. Venezuela has mapped its offshore territory for oil deposits in the past, but some areas remain uncharted. The new survey will also include areas bordering Caribbean islands such as Grenada and Saint Vincent. “More surveys are pending to identify commercially viable options for gas,” said Antero Alvarado, a managing partner at consulting firm Gas Energy Latin America. “Past PDVSA studies ignored identifying gas deposits because the focus was always on oil.’’ Maduro has issued a decree stating Venezuela’s continental shelf is open for oil exploration, although no investment plans have been announced for the area yet. PDVSA’s offshore division produces mainly gas from the western coast in a partnership with Italy’s ENI. It also has several inactive oil and gas projects in the east, near Trinidad and Tobago and Guyana. Three of them are in partnerships with Norway’s EQUINOR ASA, CHEVRON Corp. and France’s TOTAL. (Bloomberg: https://finance.yahoo.com/news/venezuela-plans-remap-offshore-oil-100000274.html)

 

Venezuela claims it can prove EXXON ships entered its waters

The Venezuelan government presented on Tuesday what it described as evidence that vessels belonging to global oil giant EXXONMOBIL entered the nation’s territorial waters last month. Vice President Delcy Rodriguez presented a press conference with audiovisual material in which officers of the Venezuelan navy are heard talking with crews of the oil company’s ships. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2472825&CategoryId=10717; AVN, http://www.avn.info.ve/contenido/venezuela-will-deliver-evidence-illegal-incursion-exxonmobil-ships; Bloomberg, https://www.bloomberg.com/news/articles/2019-01-08/venezuela-is-said-to-map-caribbean-as-tension-with-exxon-grows)

 

Curacao oil refinery resumes work after eight-month stoppage

Curacao’s 335,000-barrel-per-day (bpd) ISLA refinery has resumed work, management of the government-owned facility said on Tuesday, after eight months of paralysis caused by a dispute between its operator, Venezuela’s PDVSA, and U.S. producer CONOCO PHILLIPS. ISLA, which has been looking for a new operator to run the refinery beginning at the end of this year, restarted one of its crude distillation units and its thermal cracker, it said in a statement. The plant suffered a fire early last year and fell idle after CONOCO PHILLIPS brought legal actions against PDVSA over a US$ 2-billion arbitration award linked to the nationalization of CONOCO’s projects in Venezuela. The U.S. company got court orders temporarily seizing PDVSA’s cargoes and terminals across the Caribbean. (Reuters, https://www.reuters.com/article/us-refinery-operations-pdvsa-curacao/curacao-oil-refinery-resumes-work-after-eight-month-stoppage-idUSKCN1P22CI)

 

Mohammed Barkindo: Venezuela continues to be a key country for OPEC

On Tuesday, OPEC secretary, Mohammed Barkindo, held a meeting at the Miraflores Palace with the President of the Bolivarian Republic of Venezuela, Nicolás Maduro, as part of his visit to the country for the inauguration of the President. Thursday, January 10th. In his statements to the media, Barkindo stressed that Venezuela continues to be fundamental in all the efforts promoted by the Organization of Petroleum Exporting Countries (OPEC). (AVN, http://www.avn.info.ve/contenido/mohammed-barkindo-venezuela-continues-be-key-country-opec)

 

Economy & Finance

Maduro era is endurance test as Venezuela's lifelines fall away

President Nicolas Maduro’s second term is officially six years. However, it will endure only as long as Venezuela’s moribund economy allows. He has weathered protests, impeachment drives, an assassination attempt and U.S. sanctions. But as Venezuela’s economic lifelines drop away, his survival now depends on the country’s stamina. In his next term, Maduro must manage to feed a hungry nation, kick-start production at state oil company Petroleos de Venezuela SA and fend off creditors threatening to snatch up assets abroad. He has deepened ties with authoritarian allies such as Russia, China and Turkey, but they have provided only limited support. Maduro shows no sign of hesitation: “Rain, thunder or lightning,” he said this week. “Venezuela will stay on its course.” Calls are growing within the ruling socialist party to dissolve the opposition-led congress, the only elected institution Maduro doesn’t control, and one that has already been defanged. On Tuesday, the politically omnipotent National Constituent Assembly passed a measure that could be the first step to enable its disappearance. The super-body convened by the president also threatened treason investigations against dissident lawmakers. Constituent Assembly President Diosdado Cabello said Tuesday that lawmakers in the threatened national legislature who support the idea should be punished. “Those who are now in the National Assembly are traitors. Several lawmakers turned their backs on the most sacred: respect for sovereignty,” he said. Increasingly, however, it’s the Chavistas against the world. Now the U.S. is even considering designating Venezuela itself as a state sponsor of terrorism. Throughout it all, America has remained the primary buyer of Venezuelan crude. Gregory Weeks, a professor of political science at the University of North Carolina at Charlotte, said that if the U.S. truly wants to isolate Venezuela, it would have to stop buying its oil. “You can say you’re not going to recognize him, but if you’re still trading and buying Venezuela oil, how much does it really matter?” Weeks said. (Bloomberg: https://www.bloomberg.com/news/articles/2019-01-10/maduro-era-is-endurance-test-as-venezuela-s-lifelines-fall-away)

 

Venezuela to collect tax in cryptocurrency - but no Petro?

A decree issued yesterday by Nicolas Maduro’s government states that those conducting business in Venezuela involving either cryptocurrency or foreign fiat money must also pay taxes on that business using cryptocurrency or foreign fiat money, respectively. Exceptions to this stipulation, according to article two, include an exemption for securities traded on the national stock market, and on the “export of goods and services, carried out by bodies or public entities.” The plan to accept cryptos is not fleshed-out yet, however, and currently seems to be only an aspiration of this particular issue of the gazette. Notably, the decree does not mention which particular cryptoassets are usable for paying taxes. There is no mention anywhere in the decree of the country’s national crypto, the Petro, a ERC-20 token issued on the Ethereum network. (Cryptoglobe: https://www.cryptoglobe.com/latest/2019/01/venezuela-to-collect-tax-in-cryptocurrency-but-no-petro/)

 

Mexico tortilla giant GRUMA sues Venezuela for US$ 525 million over 2010 expropriation

The world's leading tortilla maker GRUMA's Spanish subsidiaries Valores Mundiales, S.L. and Consorcio Andino, S.L. have filed a US $525 million lawsuit in U.S. Federal District Court in Washington, D.C. against Venezuela over the expropriation of its Venezuela subsidiaries. The lawsuit is to enforce a US$ 525 million award made against Venezuela for the expropriation of GRUMA's food businesses in Venezuela. On July 25, 2017, an arbitral tribunal brought before the World Bank's International Center for the Settlement of Investment Disputes (ICSID) ruled that Venezuela must pay Valores Mundiales, S.L. and Consorcio Andino, S.L. US$ 430.4 million in damages, plus compound interest at LIBOR + 2% from January 22, 2013 and until the effective date of payment of the Award, and more than US$ 5.9 million in legal expenses and costs incurred by GRUMA in the course of the arbitration, meaning that Venezuela owes some US$ 525 million to GRUMA. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2472777&CategoryId=10717)

 

Politics and International Affairs

Venezuela's neighbors turn up heat as Nicolás Maduro begins second term

In a televised new year’s message to his atrophying nation, Nicolás Maduro struck an upbeat tone. “Victory awaits us! The future awaits us! And everything will be better!” Venezuela’s embattled president insisted, declaring 2019 “the year of fresh starts”. But the sandbags and rifle-toting troops that now encircle the Miraflores presidential palace in Caracas suggest far less confidence about the days ahead, as Venezuela sinks deeper into economic ruin and political isolation and questions grow over Maduro’s future. Hugo Chávez’s 56-year-old heir – narrowly elected after his mentor’s 2013 death and then again in disputed elections last May – will begin his second presidential term on Thursday, amid intensifying international condemnation of what critics call his illegitimate and authoritarian rule. Last week, a regional bloc known as the Lima Group turned up the heat, with 13 of its 14 members announcing they would not recognize Maduro’s new six-year term and urging him to step down. Those countries included Brazil, whose new president, Jair Bolsonaro, is well-known for his hostility to Maduro and whose pro-Trump foreign minister recently called for Venezuela’s “liberation”. The US has also stepped up pressure ahead of what it calls Maduro’s “sham inauguration” with the secretary of state, Mike Pompeo, telling one Brazilian newspaper “several things” could be done to rid Venezuela of Maduro’s “unacceptable” regime. Pompeo did not specify what those “things” might be. But after years of dawdling, regional patience does appear to be running out, as the situation in Venezuela deteriorates and Latin American politics swerves to the right under leaders such as Bolsonaro, Colombia’s Iván Duque, Chile’s Sebastián Piñera and Argentina’s Mauricio Macri. The Lima Group’s unexpectedly firm declaration – which includes plans for financial sanctions, preventing top Venezuela officials entering their countries, and suspending military cooperation – appeared partly designed to persuade the Venezuelan military to abandon their commander-in-chief. But any international effort to engineer a peaceful transition would founder unless Venezuela’s fractured opposition united. (The Guardian: https://www.theguardian.com/world/2019/jan/09/venezuela-nicolas-maduro-second-term-neighbours-latin-america)

 

Maduro accuses US of using Lima Group to instigate coup in Venezuela

President Nicolas Maduro has accused the United States of using the Lima Group of American countries to instigate a coup against his government, one day before being sworn in for a second term widely regarded as illegitimate. "I cannot lie to you, civilian and military companions... a coup d'etat is under way under the orders of Washington, from the Lima cartel against the constitutional government I preside over," the national news agency quoted Maduro as saying. "We shall not allow even a single slip. Whatever his name, whatever post he holds, whoever tries to promote a coup plan should know that he will face justice, the constitution and the civilian-military powers," Maduro added. (DPA: http://www.dpa-international.com/topic/maduro-accuses-us-using-lima-group-instigate-coup-venezuela-190110-99-499405)

 

Maduro warns of 'diplomatic measures' against Latin American critics

President Nicolas Maduro on Wednesday warned he could take “diplomatic measures” against Latin American nations that signed a statement last week describing his second term, which starts on Thursday, as illegitimate. Venezuela “has alerted very clearly to the governments of the Cartel of Lima that, if they do not rectify their position (...) we will take the most crude and energetic measures that can be taken in diplomacy,” Maduro, using a pejorative name for the group widely used by ruling Socialist Party leaders. He did not provide details what measures he could take. (Reuters: https://www.reuters.com/article/us-venezuela-politics/venezuelas-maduro-warns-of-diplomatic-measures-against-latam-critics-idUSKCN1P32C0)

 

Group of Lima nations to deny entry to Venezuelan officials

Thirteen nations from the Group of Lima have agreed to deny entry to high-ranking officials of Venezuelan President Nicolas Maduro's government. Colombian Foreign Minister Carlos Holmes said the decision was made after a Friday meeting of the group in Peru. At the end of the Friday meeting, the Peruvian Foreign Ministry issued a joint resolution of the Group of Lima -- in which Mexico was not included -- asking President Nicolas Maduro to abstain from assuming the presidency, to transfer power to the National Assembly and to call for new elections. The resolution said that Group of Lima countries would, depending on internal legislation, take action to prevent the entry of high-ranking Venezuelan officials to their territories and evaluate lists of Venezuelan people and organizations with which transactions will be banned. (UPI: https://www.upi.com/Group-of-Lima-nations-to-deny-entry-to-Venezuelan-officials/9721547047206/#ixzz5cB7CU8ip)

 

Caribbean to decide the fate of Nicaragua and Venezuela at the OAS

The Permanent Council of the Organization of American States (OAS) will meet this week to address the situation of the dictatorships in Venezuela and Nicaragua. In the first case, the government of Nicolas Maduro runs the risk of being repudiated by the OAS, and in the case of Daniel Ortega, is on the verge of the application of the Inter-American Democratic Charter. In this vote, the 15 countries that make up the Caribbean Community (CARICOM) would have an important weight, which will also be very important in the case of Venezuela. The session of Venezuela will be on January 10th and the session of Nicaragua on the 11th. The process for the application of the Inter-American Democratic Charter began on December 27 after the announcement of the secretary general of the regional body, Luis Almagro. In the case of the territorial conflict over the Essequibo region between Venezuela and Guyana, CARICOM has closed ranks in favor of Guyana. Manuel Salvador Abaunza, former ambassador of Nicaragua in Venezuela, says that from January 10 there will be changes in the panorama, because the regime of Nicolas Maduro will have lost legitimacy. “It is very certain that the Caribbean countries will see that they have no future of any kind with Maduro and that it is better for them to start negotiating with the United States, or at least show a change of attitude, because Maduro no longer offers them anything by becoming a De-legitimized state,” he explained. Venezuela still has a card under its sleeve to play -which is Guyana- and that is to offer the Caribbean that they will settle the conflict with Guyana below the table. If that scenario occurs, Venezuela could get CARICOM to vote against both the Nicaraguan resolution and the one against Venezuela. (Havana Times: https://havanatimes.org/?p=146723)

 

World leaders to skip Maduro inauguration amid possible further EU sanctions

 President Nicolas Maduro’s new term will bring further international pressure on Caracas as dozens of countries have called his May re-election fraudulent and pledged not to recognize his new government. The European Union is expected to release a strongly worded warning hinting that further EU sanctions could be levied on the country, should the president continue to flout human rights and the rule of law. The lack of international recognition will be apparent from the lack of foreign visitors at the inauguration ceremony for Maduro, due to be held at 10 am outside the Supreme Court building. Only Cuba and Bolivia have confirmed their presidents will attend, while a handful of other countries will send diplomats.  Plans to organize a mass boycott of the investiture ceremony by all 28 EU ambassadors to Venezuela appeared to have fallen foul of divisions in the bloc, however. The Telegraph understands that the Spanish and Greek ambassadors will attend, but Britain’s will not. Other drastic proposals within Latin America, such as the withdrawal of diplomatic missions from the country or the appointment of a parallel president in exile, have also been rejected for now. To squash any discontent, Maduro will rely on the armed forces and paramilitary groups known locally as colectivos, as he did during 2017 street protests. In the days preceding the inauguration, local media have reported caravans of government supporters, including masked men on truck beds, passing through downtown Caracas. In one of the city’s most emblematic slums, traditionally a bastion of pro-government support, government supporters fired guns into the air on rooftops. (The Telegraph: https://www.telegraph.co.uk/news/2019/01/09/world-leaders-skip-maduro-inauguration-amid-possible-eu-sanctions/)

 

European Parliament reaffirms support for Venezuela’s National Assembly

Antonio Tajani, President of the European Parliament, has expressed support for the the legitimate National Assembly in Venezuela, in a telephone call to the Assembly’s newly elected President, Juan Guaidó. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/europarlamento-envio-mensaje-de-apoyo-a-la-asamblea-nacional)

 

Spain and Portugal will not send representatives to Maduro’s second inaugural

Spain’s government has confirmed it will not send official representatives to Nicolás Maduro’s swearing in ceremonies. The 28 nations within the European Union announced in December that they would not send representatives if the ceremony were to be held anywhere other than the National Assembly, and that should it take place elsewhere representation would be “beneath ambassadorial rank”. More in Spanish: (El Universal, http://www.eluniversal.com/internacional/30146/gobierno-de-espana-no-asistira-a-toma-de-posesion-de-maduro)

 

Ecuador will not send a representative to Maduro’s swearing-in

Ecuador’s President Lenin Moreno has announced his government’s decision to not send representatives to Nicolás Maduro’s swearing-in ceremony citing the Venezuelan regimen’s violation of human rights: “International protection for human rights is an ethical and legal obligation, not intervention into the internal affairs of other countries”, he said. He called for solving Venezuela’s problems in a peaceful and democratic way, “through dialogue”. More in Spanish: (El Universal, http://www.eluniversal.com/politica/30150/lenin-moreno-anuncio-que-ecuador-no-enviara-representacion-para-asuncion-de-maduro)

 

As Maduro begins new term in Venezuela, opposition sees trouble looming

As Maduro begins his new term on Thursday — one that will have him leading the nation until 2025 — Julio Borges is aware of the perception that Maduro is firmly in control. But Borges doesn’t buy it. As one of Venezuela’s most visible opposition figures who’s not in detention, Borges has spent his time lobbying foreign governments to turn the screws on Maduro. And it’s been working. Borges, 49, has been one of President Nicolas Maduro’s harshest critics over the decades. A co-founder of the Primero Justicia political party and the president of the National Assembly from 2017-2018, he’s been living in exile since March, amid fears that he would join other colleagues who have been detained or died in jail. Not surprisingly, Borges’ advocacy has put him in Maduro’s cross-hairs. The president routinely accuses him of plotting coups and encouraging international invasions. While Borges says he has always favored a peaceful, democratic transition, he said the Maduro administration has opened the door to violence by closing off real opportunities for change. In August, Maduro accused Borges of being one of the masterminds behind an alleged assassination plot that included an explosive-packed drone. Talking in Bogotá, Colombia, his home in exile, Borges says there are plenty of reasons to believe that Maduro may not get to finish out his new term. “Maduro remains in power, fundamentally, due to two things: the support of the military — really just the upper ranks — and the dictatorial know-how of the Cubans,” Borges said. “Outside of that Maduro has nothing. There’s no economic support, no diplomatic support, no political support. ... I think he’s irredeemably defeated and it’s impossible for him to overcome the crisis he’s created.” Borges said the democratic opposition has used every avenue possible to create change: organizing protests, engaging in dialogue, winning the National Assembly, calling for a boycott during the 2018 presidential election, promoting international sanctions. But nothing has moved the needle. “We have done everything we can through civil society and organized politics,” he said. “But the government doesn’t care how much damage is produced as it clings to power.” He adds: “The constitution itself says that any citizen, with or without authority, has the right to restore the constitution, and that’s what society is pleading for the armed forces to do … They are asking for the armed forces to restore the constitution, which Maduro is ignoring.”  Borges said that Maduro clearly has the support of the military’s higher echelon, “the corrupt elite,” but is losing the rank and file. And that’s where the real threats are brewing … what I can tell you with certainty is that inside Venezuela’s armed forces they are not only tired of Maduro, but they’re in revolt. And the country is asking for them to complete their ‘divorce’ … for dignified, constitutional and democratic armed forces to see resurgence.” (The Miami Herald: https://www.miamiherald.com/latest-news/article224124250.html)

 

Defense minister asked Maduro to resign: Washington Post

Venezuela’s defense minister told socialist President Nicolas Maduro to step down last month, and said he would offer his own resignation if he did not, the Washington Post reported on Wednesday, citing an anonymous U.S. intelligence official. Both Maduro and Defense Minister Vladimir Padrino Lopez are still in office. Maduro is set to be sworn in for a second six-year term on Thursday, though several countries in the region have warned him not to take office, calling his May 2018 re-election vote a sham. Discontent within the military’s ranks has grown as Venezuela’s economic collapse has deepened, prompting millions to migrate. Security forces tortured dozens of military personnel accused of subversion last year, according to human rights groups, and detentions for desertion have increased. A U.S. government source told Reuters the government believes reports that Padrino threatened to resign if Maduro did not depart are credible. This week, however, General Padrino made a public statement on behalf of the Venezuelan military, expressing “indignation over the meddling of Latin American governments, under the auspices of the United States, through which they are attempting to ignore Venezuela’s unrelinquishable rights over the Essequibo region”. (Reuters: https://www.reuters.com/article/us-venezuela-politics-defense/venezuelas-defense-minister-asked-maduro-to-resign-washington-post-idUSKCN1P32LQ); and more in Spanish: (El Universal; http://www.eluniversal.com/politica/30048/fanb-rechazo-injerencia-de-paises-latinoamericanos)

 

Military personnel, relatives tortured in Venezuela: HRW

Venezuelan security forces in recent years have detained and tortured dozens of military personnel accused of plotting against the government, and in some cases their family members, two human rights groups said in a report published on Wednesday. The report by New York-based Human Rights Watch and Venezuela’s Penal Forum, which also says forces tortured civilians, comes as countries in the region are pushing the International Criminal Court to probe the government for alleged crimes against humanity. In most cases, members of the country's General Directorate of Military Counterintelligence (DGCIM) or the Bolivarian National Intelligence Services (SEBIN) carried out the arrests, according to the rights groups. In the report, detainees described being strangled, deprived of food and having the soles of their feet cut with razor blades. "The Venezuelan government has brutally cracked down on members of the military accused of plotting against it," said Jose Miguel Vivanco, Americas director at Human Rights Watch. The two groups analyzed information about cases involving a total of 32 people. Victims include military officers accused of plotting against the government and civilians accused of collaborating with Oscar Perez, a rogue police official who was killed in January 2018 after opposing the government. Several detainees did not have access to their families, lawyers or adequate medical treatment during their detentions, the report said. The individuals were arrested for crimes including "treason" and "instigating rebellion", however lawyers representing the accused said the charges were fabricated and not supported by any real evidence. (Al Jazeera: https://www.aljazeera.com/news/2019/01/military-personnel-relatives-tortured-venezuela-hrw-190109155041848.html; Reuters, https://www.reuters.com/article/us-venezuela-rights/venezuela-tortured-military-personnel-accused-of-subversion-rights-groups-idUSKCN1P30BD)

 

Venezuela names ex-spy chief as head of new presidential security unit

Venezuela’s former spy chief, who was ousted last year amid an uproar over the death of a jailed opposition politician, was sworn in on Tuesday as the head of a newly-created presidential security council, according to state television. General Gustavo Gonzalez Lopez was replaced as the head of the National Bolivarian Intelligence Service (SEBIN) in October after opposition councilman Fernando Alban died while detained at the agency’s headquarters in Caracas. The death was officially ruled a suicide, but critics said he was killed. Gonzalez Lopez was sworn in by Vice President Delcy Rodriguez in a brief ceremony just days before socialist President Nicolas Maduro is set to be inaugurated for a second term. (Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuela-names-ex-spy-chief-as-head-of-new-presidential-security-unit-idUSKCN1P301X)

 

Pope criticized for comments on Venezuela and Nicaragua by 20 ex-leaders

In response to Pope Francisco’s annual Urbi et Orbi Christmas speech, 20 ex-leaders from across Latin America wrote a letter to the religious leader criticizing his words regarding the situations in Venezuela and Nicaragua. In his speech, the Pope expressed a desire for Venezuela to find “harmony” and for Nicaragua to reach “reconciliation,” both criticized by the ex-presidents of the region for being too simplistic. The letter was inspired by the Democratic Initiative of Spain and the Americas (IDEA), headed by ex-president of Costa Rica and Nobel Peace Prize winner Oscar.  Your Holiness’ speech … is being interpreted in a very negative way by many in Venezuela and Nicaragua,” the letter stated. “In the current context,” it explained, “your speech could be interpreted as a request to the people who are victims to agree with their aggressors.” In relation to Venezuela, the Pope asked that “it finds peace again and that all the members of the society work together for the development of the country, helping the weakest area of the population.”  “[Venezuelans] are victims of oppression by a militarized narco-dictatorship,” the letter read, “which has no qualms in systematically infringing the right to life, freedom and personal integrity.” (Chile Herald: https://chileherald.com/pope-criticised-for-comments-on-venezuela-and-nicaragua-by-20-ex-leaders/1592/)

 

Venezuela is in crisis. so how did Maduro secure a second term?

President Nicolás Maduro of Venezuela is set to be inaugurated on Thursday for the second time, extending his term in office to 2025, after winning an election last year that had been rejected by nations across the region as illegitimate. But even as his country is grappling with a humanitarian crisis driven by this collapse, Maduro has clung to power. So how did he get here, and how has he managed to hold on? Here’s what to know as Mr. Maduro begins his second term in office. Maduro’s re-election in May 2018 was widely criticized, with reports of coercion, fraud and electoral rigging. Election officials said Maduro won 68% of the vote. The chaotic state of the country and the desperation of poor voters may have contributed to Maduro’s ability to maintain control. Representatives of Maduro’s party tracked those who voted by registering their “Fatherland Card” — or national benefits card — and promised aid and government subsidized food handouts if re-elected. Independent international observers were not on hand, and a crackdown on critics left several of them unable to participate. Opposition leaders called for a boycott of the election, and that, combined with the disillusionment of many longtime government supporters, meant the turnout was exceptionally low. Less than half of the country’s voters cast ballots. How strong is his grip on power? Despite international criticism and a crisis at home, Maduro has won the loyalty of the country’s powerful military by handing its leaders control of the food and oil industries as well as profitable mining regions. But there are clear signs of growing discontent. While the country’s opposition lost much of its power as a result of government persecution and the forced exile of some of its most prominent figures, the election last week of a new president in the opposition-controlled National Assembly, Juan Guaidó, has renewed calls to remove Maduro from power. Who still supports him? Maduro has found some allies in the region, including President Evo Morales of Bolivia, a fellow socialist who will attend the inauguration. And Mexico’s new leftist president, Andrés Manuel López Obrador, invited  Maduro to his own inauguration and has taken a friendlier stance in relations with Venezuela than his predecessor. Russia has remained a staunch ally, with President Vladimir V. Putin voicing his support for Maduro during a December meeting in Moscow. Venezuela has also received recent financial support from China. Within his country, loyal “chavista” governors, named for their support of Chávez and his revolutionary leftist policies, expressed their support for Maduro in a news conference on Wednesday. What’s the impact on Venezuelans? Daily life in Venezuela has become unrecognizable from what it was a few short years ago. Where once the government built homes, clinics and schools for the poor as part of its socialist policy, people are now finding themselves without the most basic necessities. The country’s health system has collapsed, leaving many without access to lifesaving medicine. Hunger is common, and the shelves of grocery stores lie bare. But there is no sense conditions are improving. (The New York Times: https://www.nytimes.com/2019/01/10/world/americas/venezuela-maduro-inauguration.html)

 

EDITORIAL: Latin America has never seen a crisis like Venezuela before

The epic political and humanitarian crisis in Venezuela is due to pass a new juncture Thursday when President Nicolás Maduro is sworn in for a second six-year term. His first saw an implosion unprecedented in modern Latin American history: Though his country was not at war, its economy shrank by 50%. What was once the region’s richest society was swept by epidemics of malnutrition, preventable diseases and violent crime. Three million people fled the country. Yet Maduro, having orchestrated a fraudulent reelection, presses on with what the regime describes as a socialist revolution, with tutoring from Cuba and predatory loans from Russia and China. If there is any light in this bleak picture, it is that Venezuela’s neighbors are edging toward more assertive action to stem a crisis that, with the massive flow of refugees, threatens to destabilize several other countries. Last week, 13 governments, including Brazil, Colombia, Argentina and Canada, issued a statement declaring Maduro’s presidency illegitimate and threatening sanctions. Peru imposed travel and banking restrictions on Maduro and his cabinet, and several countries said they would recognize the opposition-controlled National Assembly as Venezuela’s only legitimate institution. Unfortunately, that is unlikely to move the regime. Like three administrations before it, the Trump White House has struggled over how to respond to the Chavistas. As conditions continue to deteriorate Maduro may finally be toppled by dissidents inside the regime or a new popular uprising. If not, the pressure Venezuela is putting on its neighbors will escalate. One recent study by scholars at the Brookings Institution concluded that 5 million more refugees may pour across the borders. The region has never seen a crisis like this: a steadily escalating catastrophe with no solution — either from inside or outside — in sight. (The Washington Post: https://www.washingtonpost.com/opinions/global-opinions/latin-america-has-never-seen-a-crisis-like-venezuela-before/2019/01/09/26cc15b4-1381-11e9-b6ad-9cfd62dbb0a8_story.html)

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.