Oil & Energy
PDVSA makes unusual
offer of 4 cargoes of heavy crude for sale in Euros in March
Venezuela’s state-run oil company PDVSA has
launched tenders to sell on the open market up to four cargoes of heavy crude
for March delivery at its Jose and Puerto Miranda terminals, according to
document seen by Reuters on Monday. The offers, which are unusual as PDVSA
typically sells all its exports through long-term supply contracts, include two
600,000-barrel cargoes of Morichal 16 crude and two 200,000-barrel cargoes of
Tia Juana Pesado (TJP) crude. The
Morichal 16 crude is for delivery March 1-23, and the TJP crude will be loaded
on March 21-30. Payment must be made in euros three days before the loading
window, according to the tender’s terms. The TJP crude must be exported to the
U.S. West, East or Gulf Coasts, Northwest Europe or the Mediterranean. The
Morichal crude can also be exported to Asia. Bids will be accepted through Feb.
27, indexed to Brent crude front month prices. PDVSA earlier this month offered
to sell 2 million barrels of diluted crude oil (DCO), also for March delivery. (Reuters: https://af.reuters.com/article/commoditiesNews/idAFL2N1QG13Y)
U.S. ban on key oil material could further choke
Venezuelan production
The outlook for declining oil production in
Venezuela may get grimmer if the U.S. bans supply of a key commodity used to
help Venezuelan crude flow from oilfields to the coast. Production in the
Orinoco oil belt, which accounts for half of the country’s output, depends on
heavy naphtha imported from the U.S. to reach global markets. Naphtha is used
as a diluent to reduce the viscosity of Venezuela’s tar-like extra-heavy oil,
and help it flow through 62 miles of pipelines to the nation’s coast, where it
can be either upgraded or exported. The U.S. has already imposed sanctions on
more than a dozen top Venezuelan officials and now may target oil trades.
Venezuela imports about 2 million barrels of heavy naphtha per month, and all
of it comes from U.S. Gulf refiners, according to data compiled by Bloomberg. Oil
production in the Orinoco oil belt, responsible for half of Venezuela’s crude
oil production of currently around 1.6 million bpd, depends on the imports of
this heavy naphtha from the U.S., which is blended with the thick tar-like
extra-heavy oil to allow it to flow through pipelines from Orinoco to
Venezuela’s coasts for loading onto tankers. According to analysts, while a
U.S. ban on Venezuelan oil imports could hurt U.S. refiners, restrictions on
U.S. oil product exports to Venezuela could push Venezuela’s oil production off
the cliff. In case of restrictions on U.S. exports to Venezuela, this country
would have to either pay more for naphtha from other sources or see its oil
production fall more steeply than predicted. (Bloomberg, https://www.bloomberg.com/news/articles/2018-02-26/u-s-ban-on-key-oil-material-could-choke-venezuelan-production;
Oil Price: https://oilprice.com/Energy/Crude-Oil/Venezuelan-Oil-Production-Could-Further-Collapse-On-New-US-Sanctions.html)
The Venezuelan oil
industry is on a cliff’s edge. Trump could tip it over.
The Trump administration is threatening to
embargo Venezuelan oil, a potentially ruinous blow to the Saudi Arabia of South
America. But here in the home of the world's largest crude reserves, Venezuela
is killing its largest industry all on its own. Speculators once joked that all
it took to strike oil on the vast plains of eastern Venezuela was a guy with a
shovel. These days, the socialist government cannot seem to make the industry
work. This vast extraction site near the eastern town of Punta de Mata, which
once churned out 400,000 barrels of oil a day, is a tableau of hungry, idle
workers and broken rigs. The site about 280 miles east of Caracas, the capital,
has been partly paralyzed since last summer. Of its 30 drills, only six work,
in large part because of a lack of maintenance and spare parts. With time on
their hands, many oil workers are functioning as security guards. And with good
reason. The crude-heavy countryside is a lawless, bandit-ridden land. Three
hours south of this industrial town, a gang of thieves recently raided another
drilling site run by PDVSA, the state-owned oil giant. They tied up work crews
and stole their cellphones before swiping air conditioners and kitchen
appliances from company trailers. In Venezuela, corruption, a lack of
investment and a flight of expertise in the all-important oil sector have
finally come to a head. Last month,
according to a report from the Organization of the Petroleum Exporting
Countries, Venezuela's plummeting oil production hit a three-decade low of 1.6
million barrels a day, a 20% drop from January 2017 and less than half of what
it was in the 1990s. The state oil company is run by Manuel Quevedo, a military
general with no industry experience, after a purge last fall of executives seen
as not wholly loyal to President Nicolás Maduro. Oil revenue accounts for 90%
of the government's hard currency. About 40% of Venezuela's production goes to
China and Russia to repay loans or is gifted to chief ally Cuba. That has made Venezuela's nemesis — the
United States — its single-largest cash buyer.
PDVSA is so broke that creditors have been seizing shipments of
Venezuelan oil off the coast of Curacao and other Caribbean islands. Should the
U.S. government cut off Venezuela, that action could bring the country closer
to a large-scale debt default that could turn the nation into an economic
pariah. With less to lose, experts say, Maduro could potentially kick out the
Western oil companies that still do business here, seizing their assets. For
now, PDVSA is on its knees. Guillermo Morillo, a former PDVSA manager who is
working on a recovery plan for the company, said it would take as much as US$
100 billion in investment to bring production back to 2009 levels. (The
Washington Post: https://www.washingtonpost.com/world/the_americas/the-venezuelan-oil-industry-is-on-a-cliffs-edge-trump-could-tip-it-over/2018/02/24/1c8d6350-0b62-11e8-998c-96deb18cca19_story.html)
Congressman says US
investors aim to take control of CITGO from ROSNEFT
National Assembly opposition representative
José Guerra says a group of US investors are seeking to take control over
ROSNEFT’s 49% share in CITGO, to avoid Russia’s state-owned company from
entering the US market in the event of a full default by PDVSA. He claims this
is extremely serious to the interest of the Venezuelan oil industry.
(NTN24: http://www.ntn24.com/noticia/diputado-jose-guerra-advierte-que-inversionistas-de-ee-uu-buscan-tomar-control-de-las-acciones-de-166143)
Maduro claims Venezuela will recover 70% of oil
output decline
President Nicolas Maduro has promised Venezuela
will recover 70% of the country’s lost oil production in the first half of
2018. Venezuela’s oil production dropped by nearly 13% last year according to
figures released by OPEC in January, hitting a 28-year low that suggested a
deepening economic crisis and increased chances of a debt default.
Venezuela produced 2.072 million barrels per
day (bpd) in 2017 compared with 2.373 million bpd the previous year,
registering a near 300,000 bpd drop. (Reuters, https://www.reuters.com/article/us-venezuela-economy/venezuelas-maduro-says-to-recover-70-percent-of-oil-output-decline-idUSKCN1G9016)
Economy & Finance
Reports show only 5
buyers for the “Petro”, while Maduro
claims 171015 certified offers received
According to reports on the ETHERSCAN web page,
only five buyers have acquired Venezuelan “Petros”
as US$ 100 million in transactions took place since the new cryptocurrency was
launched by the Maduro regime. ETHERSCAN shows only two users bought 99,9995%
of the total amount. A third buyer bought 0,0005% in Petros, and the two
remaining buyers bought minimal amounts.
Yet in a speech Monday, President Nicolás Maduro claimed the Petro has
received 171015 certified purchase orders since it was launched on February 20th. He says the offers came from 87284 users,
including 3523 from companies around the world and the rest from individuals.
More in Spanish: (AVN, http://www.avn.info.ve/contenido/petro-recibi%C3%B3-171015-ofertas-compras-certificadas; Venepress; https://venepress.com/article/Solo_5_tenedores_han_comprado_Petro_desde_su_presentacion1519510973826)
Venezuela may limit
new crypto exchange launches
Venezuela's government may move to restrict the
number of cryptocurrency exchanges that will be able to operate domestically.
According to a ten-page manual published last week as part of a set of releases
related to the country's newly-launched cryptocurrency, the Petro, as few as
eight exchanges may be initially approved to operate in the market. The
document, released on Feb. 20, details the requirements by which local crypto
exchanges must operate. It suggests that the cap will exist at the outset,
under the auspices of Venezuela's cryptocurrency superintendent, before going
on to say that the government may modify the limit after the first 90 days of
the exchanges' operations. Sources with knowledge of the ongoing process in
Venezuela say that the cap may be more restrictive in practice. It remains to
be seen how many exchanges launch in Venezuela within its newly minted
regulatory framework. Likewise, it's not clear which exchanges are in active
talks with the Maduro government. (Coindesk:
https://www.coindesk.com/venezuela-may-move-limit-new-crypto-exchange-launches/)
Venezuela and Russia may
be collaborating on cryptocurrency
Venezuelan and Russian government officials met
last week in Moscow to discuss the launch of Venezuela's new petro
cryptocurrency. The terms of the meeting remain unclear, but it seems that
Russian officials have taken an interest in Venezuela's state-backed digital
currency. What are the implications for a potential collaboration? And what
might that collaboration even look like? It remains unclear exactly what role,
if any, Russia's government will play in the development or proliferation of
the petro. A Russian company called Aerotrading has already been linked with
the petro cryptocurrency projectWhether or not the international community
accepts the petro remains to be seen. (Investopedia: https://www.investopedia.com/news/venezuela-and-russia-are-working-together-cryptocurrency/#ixzz58H1zEdDl)
Poland refutes reports
of its interest in Venezuela’s oil-backed cryptocurrency
Poland’s Ministry of Finance has refuted
reports that it is interested in the petro, the Venezuelan ”oil-backed” currency. Earlier this
month, Venezuela reportedly claimed that a handful of countries have expressed
interest in receiving the petro for commerce with Venezuela such as Norway,
Denmark, Brazil, Vietnam, Poland, and others. Polish publication Gazeta “asked the [Polish] Ministry of Finance if
this was true and what value it would have to have [for] such a transaction and
when it could be carried out,” the publication wrote. The finance ministry
replied: “The Ministry of Finance did not
receive any letter in this matter…Cryptocurrencies are not issued or guaranteed
by the central bank or other state institutions. Therefore, they are not legal
tender or currency, they cannot be used to pay tax liabilities and are not
widely accepted at commercial and service outlets.” The Polish Ministry of
Foreign Affairs also answered the news outlet’s questions about the country’s
possible support of Venezuela’s cryptocurrency. “According to the knowledge of the Ministry of Foreign Affairs, Poland
did not report interest in transactions with the use of petro cryptocurrency,”
the foreign ministry clarified. The Venezuelan government claimed last week
that it has raised more than $1 billion from the petro’s pre-sale in just two
days, although some doubt that Venezuela has raised money at all with its new
currency. (Bitcoin: https://news.bitcoin.com/poland-interest-venezuelas-oil-backed-cryptocurrency/)
US Senator calls for
crackdown on Venezuela’s Petro
Insisting that Venezuela's new oil-backed
cryptocurrency is an extension of credit to the regime of President Nicolás
Maduro, US Senator Robert Menéndez has urged Washington to take further action
against the Petro. The Democrat brought up the subject during a Senate hearing
held by the Committee on Banking, Housing and Urban Affairs. During that
hearing, Commodity Futures Trading Commission chairman J. Christopher Giancarlo
said his agency "would watch
carefully" for signs that Venezuela may be using the Petro to
circumvent sanctions against Maduro’s government. Menendez’ attack on the Petro
came after its launch last Tuesday. In January, Democrat Menendez and his
Republican colleague Marco Rubio wrote a letter to US Treasury Secretary Steven
Mnuchin expressing their disapproval of the Petro. The two senators told
Mnuchin: "We are concerned that a
cryptocurrency could provide Maduro a mechanism by which to make payments to
foreign lenders and bondholders in the United States, actions that would
clearly thwart the intent of US imposed sanctions.” For its part, the
Treasury Department has warned all investors and citizens in the US against
investing in the Petro for otherwise they will face sanctions themselves.
(Cryptovest: https://cryptovest.com/news/us-senator-calls-for-crackdown-on-venezuelas-petro/)
OP-ED: The blockchain won't save Venezuela
The promise of cryptocurrency was supposed to
be trustless decentralization: You trust the thing because of objective
certainties embedded in its open-source code, not because some authority tells
you to. Meanwhile the petro is just the opposite. For one thing, you can't
trust the code; in fact Venezuela's government can't even get
its story straight on
what sort of code it is: Investors will have to overlook confusion about how
the currency will operate. The white paper says the Petro is built on the
Ethereum network, while the user guides the government published says it’s on
the Nem network. Also, this cryptocurrency is supposed to "promote well-being, bringing power closer to
the people" but you can't buy it with Venezuelan bolivars. The reasons
for this are obvious: The petro is not a currency, crypto or otherwise,
but a way to raise hard currency externally now that Venezuela is cut off by
sanctions from accessing the international debt markets. So, the petro is
just a way to hide new international debt behind a thin screen of
blockchain. (Bloomberg, https://www.bloomberg.com/view/articles/2018-02-25/venezuela-s-petro-cryptocurrency-won-t-help-debt)
Politics and International Affairs
White House debates
new punishments for Venezuela as April elections approach
The White House has put a possible oil embargo
against Venezuela back on the table as Trump administration insiders debate how
to respond to Venezuela's planned April elections, already dubbed by Washington
as “illegitimate.” The White House,
National Security Council, State Department, and Treasury Department among
other agencies are studying and talking with advisers about a range of options
to help drive President Nicolas Maduro from office. That includes a full
embargo, prohibiting any Venezuelan oil being sold in the United States, or
blocking sale of oil related products to Venezuela, according to U.S.
administration officials and advisers. The administration is also considering sanctions
against Diosdado Cabello, who is seen as Venezuela's second most powerful
leader and head of the ruling socialist party, noting that Canada has already
sanctioned the former military chief for human rights violations. “The message is we will continue to ratchet
up the pressure until the Maduro regime is removed and democracy is returned to
Venezuela,” a senior administration official told McClatchy. Trump has an “escalatory road map” that aides have
drawn up that outlines the available economic and individual sanctions meant to
strangle Venezuela’s economy. But Trump, so far, has stopped short of applying
the so-called “nuclear option” – oil
sanctions – that could starve the oil-dependent Caracas government of
desperately needed cash during a spiraling economic and humanitarian crisis.
Trump has taken a personal interest in this crisis and is “understandably impatient” for greater progress in Venezuela. (McClatchy:
http://www.mcclatchydc.com/news/nation-world/article202267834.html;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2451582&CategoryId=10717;
http://www.laht.com/article.asp?ArticleId=2451493&CategoryId=10717)
European Union threatens Maduro regime with
added sanctions
The European Union has threatened the Maduro
regime with additional sanctions if it does not guarantee transparent
presidential elections on April 22nd. After meeting with the group’s foreign
ministers, EU Foreign Affairs Commissioner Federica Mogherini said all
political parties should be able to participate and have equal access to media,
she also called for a reform of the pro-regime National Elections Council (CNE)
that allows it to be recognized by all political parties. More in Spanish: (El
Universal, http://www.eluniversal.com/politica/1015/union-europea-amenaza-al-gobierno-venezolano-con-nuevas-sanciones---#)
OAS calls on Venezuela
to cancel snap presidential election
The Organization of American States (OAS) urged
Venezuela to cancel the April 22 presidential election, citing a lack of
transparency in the polls. In a resolution, a majority of OAS members pressed
the Venezuelan government to carry out elections through a "fair, transparent, legitimate and credible"
process, in which all political parties and candidates could participate.
Samuel Moncada, Venezuela's ambassador to the OAS, rejected the resolution as
soon as it was approved by the delegates. Moncada accused the OAS of trying to
"strangle Venezuelan democracy,"
saying that the US had pressured members states to pass the resolution. The CNE
opened up the process for candidate subscriptions on Saturday. So far, only a
handful of potential candidates, mostly political outsiders, have announced
campaigns against Maduro: businessman Luis Alejandro Ratti, the evangelical
pastor Javier Bertucci and businessman Leocenis Garcia. Venezuela's main
opposition alliance, the Democratic Unity Roundtable (MUD), announced earlier
this week that it would boycott the election, although one of its high-profile
members, Henri Falcon, has indicated his intention to run. (DW: http://www.dw.com/en/venezuela-electoral-authority-rejects-president-maduros-mega-elections/a-42727192)
Venezuelan opposition allegedly makes renewed
push to delay presidential vote
Venezuela’s opposition has renewed private
talks with the government in a bid to push back the date of the country’s
presidential elections as President Nicolas Maduro’s administration seeks some
legitimacy for the vote, according to people familiar with the matter. Two-time
presidential candidate Henrique Capriles, former Governor Henri Falcon and
lawmakers from two of Venezuela’s largest opposition parties have participated
in the talks that began in Caracas, after the Democratic Unity Roundtable, or
MUD, announced it would shun snap elections to protest an electoral system
that is rigged to favor the ruling socialist party. Information Minister Jorge
Rodriguez and head of National Constituent Assembly Delcy Rodriguez are said to
have been among representatives from the government, two of the people said. The
latest discussions center on setting a date later than April 22 for
presidential elections, changing the leadership of the country’s electoral
authority and allowing the presence of international observers, according to
three sources with knowledge of the discussions, who aren’t authorized to speak
publicly about the private meetings. Earlier talks in the Dominican Republic
failed to culminate in an accord which prompted the pro-government electoral
council to set the general election date much earlier than the opposition had
wanted. Retired Captain Diosdado Cabello, Vice-president of the regime’s United
Socialist Party, has insisted that the elections will not be postponed, (Bloomberg:
https://www.bloomberg.com/news/articles/2018-02-26/venezuelan-opposition-is-said-to-make-renewed-push-to-delay-vote;
and more in Spanish: (El Universal, http://www.eluniversal.com/nota/1037/cabello-desestimo-rumores-que-apuntaban-a-cambio-de-fecha-de-las-presidenciales; http://www.el-nacional.com/noticias/oposicion/oposicion-exige-correr-presidenciales-para-julio_224675)
Electoral Council
won’t combine presidential, legislative elections
The president of Venezuela’s National Electoral
Council (CNE), Tibisay Lucena, has dismissed the idea of holding legislative
elections on the same day as the presidential election scheduled for April 22,
as the ruling party has proposed. “The CNE will decide on a later date for the
legislative and municipal elections. We’re not prepared at this time to hold
joint elections,” Lucena said. She made that statement during a joint press
conference together with the head of the ruling party’s National Constituent
Assembly (ANC), Delcy Rodriguez. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2451476&CategoryId=10717)
OP-ED: Venezuela's
meaningless election
Venezuela will hold a presidential election on
April 22. The winner has already been determined.
Last week, a coalition of opposition parties in
Venezuela announced that they wouldn’t field a candidate to run against
President Nicolas Maduro. It’s awfully hard to win an election when you don’t
run. Opposition leaders declined to participate in protest of what they call
unfair election conditions. Key figures are either imprisoned or banned from
running for public office. And Venezuela’s opposition alliance, the Democratic
Unity coalition, has been barred from fielding a coalition candidate, although
its 20 individual parties are still free to do so. A few candidates have
expressed interest. Perhaps most importantly, Maduro’s socialist allies control
the country’s election commission, giving him free rein to manipulate the
results. Impartial international observers will not likely be permitted to
monitor the vote. In other words,
opposition leaders are right that the election isn’t fair. Not even close. Over
the past year, Maduro has consolidated control over both the Constitutional
Court and the National Assembly, giving him power over all three branches of
government. He is Latin America’s newest dictator. And he will remain in power
unless viable candidates are allowed to challenge him in a fair election. Since
that doesn’t appear to be a possibility for the April 22 contest, the United
States and its allies in the Western Hemisphere must vocally oppose that
fraudulent election. The results must not be considered valid. Until free elections
are held, Mr. Maduro must not be considered the legitimate president of
Venezuela. (The Post and Courier: https://www.postandcourier.com/opinion/editorials/venezuela-s-meaningless-election/article_2838ab0e-1758-11e8-b973-d38e6de9f671.html)
Uruguay’s Foreign Minister says there are no
guarantees for Venezuelan elections
Uruguay’s Foreign Minister, Rodolfo Nin Novoa,
says conditions are not adequate for holding presidential elections in
Venezuela: “Would Uruguay enter elections
with jailed political leaders and a judiciary that takes orders from the
Executive branch? Would it go into elections with banned political parties? I
don’t think so. And what we don’t want for ourselves we don’t want for others.
This is a call, not a demand that rests in Venezuelan hands”, he said – and
rejected any call for military intervention in Venezuela. More in Spanish:
(Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/canciller-de-uruguay-no-cree-que-hayan-condiciones-para-comicios-venezolanos; El Universal, http://www.eluniversal.com/politica/1022/canciller-uruguayo-apoya-pedido-de-la-oea-de-aplazar-elecciones-en-venezuela)
US welcomes military role in improving
situation in Venezuela
In a recent interview, Todd Robinson, US Charge
d’affaires in Venezuela, responded to a question on whether Venezuela’s Armed Forces
should take a position on the current crisis, saying: “I would say we cannot afford the luxury of disqualifying any sector
from a negotiation for a better Venezuela. The military holds a lot of
influence over the nation’s future and if they can help we are not going to say
no.” Earlier, US Secretary of State
Rex Tillerson says the Venezuelan military could become “agents for change”. Robinson added “I believe the Secretary of State is saying that if they can play a
positive role in opening up politics, to create a more trustworthy environment
to improve conditions, they are welcome”. More in Spanish: (Noticiero
Venevisión, http://www.noticierovenevision.net/noticias/internacional/encargado-de-negocios-de-ee-uu-insiste-en-embargo-petrolero-y-golpe-militar-en-venezuela)
Arreaza tells UN there is no humanitarian crisis
in Venezuela
Maduro’s Foreign Minister Jorge Arreaza has
told the UN Human Rights Council in Geneva that there is no humanitarian crisis
in Venezuela, saying: “They are trying to
make the world believe there is a humanitarian crisis in Venezuela, an old
trick of the United States. It is indispensable to the United States to revoke
Venezuela’s democratic government to take over our mineral resources”, he
said. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/canciller-arreaza-asegura-ante-la-onu-que-en-venezuela-no-hay-una-crisis-humanitaria; AVN, http://www.avn.info.ve/contenido/venezuela-denuncia-ante-onu-inadmisibles-acciones-intervenci%C3%B3n-eeuu)
'Migrate or die': Venezuelans flood into
Colombia despite crackdown
The desert wind whipping their faces, hundreds
of Venezuelan migrants lugging heavy suitcases and overstuffed backpacks trudge
along the road to the Colombian border town of Maicao beneath the blazing sun. The
broken line snakes back 8 miles (13 km) to the border crossing at Paraguachon,
where more than a hundred Venezuelans wait in the heat outside the migration
office. Money changers sit at tables stacked with wads of Venezuelan currency,
made nearly worthless by hyperinflation under President Nicolas Maduro’s
socialist government. The remote outpost on the arid La Guajira peninsula on
Colombia’s Caribbean coast marks a frontline in Latin America’s worst
humanitarian crisis. The Venezuelans arrive hungry, thirsty and tired, often
unsure where they will spend the night, but relieved to have escaped the
calamitous situation in their homeland. (Reuters, https://www.reuters.com/article/us-colombia-venezuela-migrants/migrate-or-die-venezuelans-flood-into-colombia-despite-crackdown-idUSKCN1GA1K9)
Venezuela’s middle
class finds an open door in Peru
Structural reforms, fiscal discipline, rising
commodity prices and an export-oriented mining sector have made Peru one of
South America’s top performers over the last decade. The IMF projects 4% growth
this year; the poverty rate is now less than half of what it was in 2005. A
growing middle class has brought new consumers – and new opportunities for
Venezuelan entrepreneurs with dwindling economic prospects at home. Peru’s open
policy toward migration has also helped. In 2017, the government of Pedro Pablo
Kuczynski, himself a descendant of immigrants, created the Permiso Temporal de
Permanencia (PTP), a temporary residency permit that allows Venezuelans and
others to look for jobs, apply for a tax number and receive some health and
education services. Last year more than 26,000 Venezuelans applied for the
program, and about 25,500 were accepted. So far, however, fewer than 500 of
those have since sought work visas. On Jan. 30, the government rolled out a new
residency category for Venezuelans whose PTP is about to expire and who have no
police, criminal or judicial records. There are an additional 80,000
Venezuelans in Peru with tourist visas who could apply for the PTP, according
to officials. (Americas Quarterly: http://www.americasquarterly.org/content/venezuelas-middle-class-finds-open-door-peru)
OP-ED: Venezuela's
neighbors can't wait for Uncle Sam
Venezuela’s refugee crisis is metastasizing.
According to the United Nations, 5,000 Venezuelans have fled to Curacao, 20,000
to Aruba, 30,000 to Brazil, 40,000 to Trinidad and Tobago, and more than
600,000 to Colombia. In times past, the U.S. has led in responding to exoduses
sparked by political or humanitarian crises. Yet although the U.S. has put
pressure on Venezuela to restore its democracy, the burden of coping with the
implosion of what used to be Latin America’s richest nation has fallen most
heavily on its immediate neighbors. They can’t afford to wait for a distracted
and less benevolent U.S. to do the right thing. Instead, for their immediate
and collective future, they must forge a regional response to what has become
the hemisphere’s greatest humanitarian crisis. Top U.S. diplomats have called
out Venezuela’s humanitarian plight and human rights abuses. But on his
five-country trip to the region, Secretary of State Rex Tillerson focused more
on building support for new sanctions than on addressing this more immediate
catastrophe. The flood of people is already overwhelming border economies,
schools, health systems and basic shelter in Colombia, Brazil and even Ecuador.
Venezuela’s Caribbean neighbors, many with weak institutions and still
recovering from last year’s hurricanes, are ill-equipped to meet such new
challenges. Despite much cooperative rhetoric and nearly two dozen regional
economic and diplomatic bodies, the countries and their foreign policy efforts
remain quite solitary. To galvanize a
response, the region’s leaders should turn to the Inter-American Development
Bank and World Bank to fast-track cheap loans for refugee-focused
infrastructure. Latin America doesn’t need a new mechanism to pursue this more
cohesive and comprehensive response — the recently created 14-country Lima
group could suffice, and older diplomatic bodies desperate for a mission
abound. Its nations need only to summon the will and leadership to pick up the
regional humanitarian mantle. If they do so, it may then be the U.S.’s turn to
follow. (Bloomberg: https://www.bloomberg.com/view/articles/2018-02-26/venezuela-s-refugee-crisis-needs-a-regional-response)
