August 20, 2019

International Trade

Cargo arrivals reported at Puerto Cabello

The local port authority is reporting the arrival of 10,743 ton of assorted merchandise at Puerto Cabello, including auto parts, personal care products, chemicals, textiles, and appliances, aboard vessels AS FABIANA, NIKOLAS, PERITO MORENO, CAP BEATRICE, CONTSHIP ZOE, FS IPANEMA and CFS PALAMEDES. It also reports the arrival of 81,290 tons of bulk products, such as 30,000 tons of soy on the BOSPHORUS PRINCE, and 40,000 tons of White corn aboard the CORAL ISLAND. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=43614)

 

Logistics & Transport

Vessels from Venezuela can still transit Panama Canal

The Panama Canal will allow vessels coming from Venezuela to transit the waterway provided they present the necessary paperwork, the canal authority’s chief said on Wednesday, suggesting a new round of U.S. sanctions on this country may not make any difference to canal traffic. (Reuters, https://www.reuters.com/article/us-panamacanal-venezuela/vessels-from-venezuela-can-still-transit-panama-canal-authority-idUSKCN1V41WM)

 

Oil & Energy

China CNPC suspends Venezuelan oil loading, worried about U.S. sanctions

China National Petroleum Corp, a leading buyer of Venezuelan oil, has halted August loadings following the latest set of U.S. sanctions. Two Beijing-based senior sources with direct knowledge of the matter told Reuters on Monday. "Trump's executive order gave a directive for the follow-up sanction measures that shall be announced by the U.S. Treasury... CNPC is worried that the company is likely to be hit by the secondary sanctions," said one source. A second person, an executive with a key marketer of Venezuelan oil in China, said his company had been notified of the suspension. "We were told that CHINAOIL will not load any oil in August. We don't know what will happen after." CHINAOIL is the trading vehicle of CNPC that lifts Venezuelan oil under term contracts and is one of Caracas' top oil clients. CNPC will wait for more guidelines from the U.S. Treasury before further moves in dealing with Venezuelan oil, said the first source. The suspension followed recent communications between the U.S. and Chinese governments, including a meeting between U.S. embassy officials in Beijing and top management at CNPC, the source added. Beijing has become increasingly pragmatic in recent years in an amply supplied global oil market and as Venezuela's economy plunged deeper into recession. For the first six months of this year, China imported 8.67 million tons of crude oil from Venezuela, or roughly 350,000 barrels per day, about 3.5% of its total imports, according to Chinese customs data. (Reuters, https://www.reuters.com/article/us-china-venezuela-oil-cnpc/china-cnpc-suspends-venezuelan-oil-loading-worried-about-u-s-sanctions-sources-idUSKCN1V909C)

 

Maduro battles for control of US-based refinery

The regime of President Nicolas Maduro on Thursday nullified the newly named board of Venezuela’s prized CITGO refineries in the U.S. amid a political battle for control of the country, saying opposition leaders had no right to appoint them. The opposition-run National Assembly appointed the 15-member CITGO board early this year after Guaidó declared presidential powers, arguing that Maduro’s re-election was illegitimate. CITGO is valued at an estimated $8 billion and includes three refineries in Louisiana, Texas and Illinois, in addition to a network of pipelines. Citgo is also at the center of court battles, such a lawsuit filed by Crystallex, which seeks to liquidate CITGO for payment following a disputed takeover of the Canadian mining firm by Venezuela’s late President Hugo Chavez. Russ Dallen, head of the Miami-based Caracas Capital Markets brokerage firm, said U.S. courts have already weighed in on who controls CITGO, deferring to the U.S. government’s recognition of Guaidó as Venezuela’s president, therefore recognizing his board appointments. Maduro’s state comptroller Elvis Amoroso, who made the announcement on state TV, also said the ad-hoc board members are banned from leaving the country and their Venezuelan bank accounts have been frozen. But it is unclear whether any of them continue to live here. Amoroso also said another five leading figures opposed to Maduro have been banned from politics for 15 years. They include former Attorney General Luisa Ortega, former Caracas Mayor Antonio Ledezma and three opposition lawmakers, all of whom are living in self-imposed exile. So far this year, Maduro’s government has stripped 18 opposition lawmakers of their immunity, exposing them to criminal prosecution in a sigh of heightened political tensions. (WTOP: https://wtop.com/latin-america/2019/08/venezuelas-maduro-battles-for-control-of-us-based-refinery/)

 

Economy & Finance

Turkish BANK ZIRAAT closes door on Venezuela amid U.S. sanctions

ZIRAAT BANK, Turkey’s largest bank by assets, has stopped offering services to Venezuela’s Central Bank in wake of tougher U.S. sanctions that raise the stakes for companies that do business with the Caribbean nation. The Ankara-based state bank confirmed the closing of its account without providing further details. Venezuela’s Central Bank was relying on ZIRAAT to pay contractors, move money and import products in Turkish liras. (Bloomberg: https://www.bloomberg.com/news/articles/2019-08-15/turkish-bank-ziraat-closes-door-on-venezuela-amid-u-s-sanctions)

 

Politics and International Affairs

In Venezuela talks, Maduro allies said they would consider fresh elections

Allies of Nicolas Maduro had discussed holding a presidential election in the coming months during talks to find a breakthrough in the country’s political crisis, four sources told Reuters on Monday. Opposition politicians will travel to Washington to speak to U.S. officials this week, the sources said. Maduro representatives and a delegation representing opposition leader Juan Guaidó have been meeting in Barbados as part of talks to resolve a political stalemate in the struggling nation that is suffering from a hyperinflationary economic collapse. Guaidó’s delegation had proposed a presidential vote in six to nine months on several conditions including changes to the election’s council and supreme court, said the sources, who asked not to be identified because the talks are confidential. The government had in theory agreed to a presidential vote on the condition that the United States lift economic sanctions, Maduro be allowed to run as the Socialist Party candidate, and that the vote be held in a year, one of the sources said. U.S. officials have expressed support for an election but without Maduro as a candidate, which may be a point of discussion, two of the sources said. Preparing groundwork for an election requires a raft of changes to state institutions, including both the elections council and the supreme court - both of which have aggressively intervened in election processes to favor Maduro. Another possible roadblock would be the existence of the Constituent Assembly, an all-powerful legislative body controlled by Socialist Party supporters that opposition leaders say could also intervene in any potential vote. (Reuters: https://www.reuters.com/article/us-venezuela-politics/in-venezuela-talks-maduro-allies-said-they-would-consider-fresh-elections-sources-idUSKCN1V91SF)

 

US talks secretly to Venezuela socialist boss

The U.S. has opened secret communications with Venezuela’s socialist party boss as members of Nicolás Maduro’s inner circle seek guarantees they won’t face retribution if they cede to growing demands to remove him, a senior U.S. administration official has told The Associated Press. Diosdado Cabello, who is considered the most-powerful man in Venezuela after Maduro, met last month in Caracas with someone who is in close contact with the Trump administration, said the official. A second meeting is in the works but has not yet taken place. The talks are still preliminary. It’s not clear whether the talks have Maduro’s approval or not. Cabello, 56, is a major power broker inside Venezuela, who has seen his influence in the government and security forces expand as Maduro’s grip on power has weakened. But he’s also been accused by U.S. officials of being behind massive corruption, drug trafficking and even death threats against a sitting U.S. senator. The administration official said that under no circumstances is the U.S. looking to prop up Cabello or pave the way for him to substitute Maduro. Instead, the goal of the outreach is to ratchet up pressure on the regime by contributing to the knife fight the U.S. believes is taking place behind the scenes among competing circles of power within the ruling party. Similar contacts exist with other top Venezuelan insiders, the official said, and the U.S. is in a listening mode to hear what it would take for them to betray Maduro and support a transition plan. At a press conference Monday, Cabello shied away from discussing any details of the meeting, at one point likening it to “a lie, a manipulation.” But he also said he has long stood welcome to talk to anyone, so long as any discussions take place with Maduro’s approval. An aide said the U.S. has been increasingly knocking on Cabello’s door, desperately looking to establish contact. The aide rejected the notion Cabello was somehow betraying Maduro, saying that Cabello would only meet with Americans if it contributes to lifting sanctions, he blames for crippling the oil-dependent economy. The aide spoke on the condition of anonymity because he isn’t authorized to discuss political affairs publicly. The U.S. has repeatedly said it would offer top socialists’ relief from sanctions if they take “concrete and meaningful actions” to end Maduro’s rule. As head of the constitutional assembly, Cabello has the power to remove Maduro, a position that could come in handy in any negotiated transition. The news site AXIOS reported Monday morning that Mauricio Claver-Carone is the U.S. official that has been in contact with Diosdado Cabello, the number two man in Venezuela and President of the polemical Constituent Assembly legislative. An opposition politician briefed on the outreach said Defense Minister Vladimir Padrino and Interior Minister Néstor Reverol are among those in indirect contact with the Americans, underscoring the degree to which Maduro is surrounded by conspirators even after an opposition-led military uprising in April was easily quashed. (AP: https://www.apnews.com/a3e6b0da8c5648558e61bbaa466fbb42; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2482306&CategoryId=10717)

 

82% of Venezuelans polled believe Maduro should leave office in 2019

The latest poll by DATANALISIS shows 85.1% of the population has a negative view of the Maduro administration, and only 12.9% called it positive. 64.8% of Venezuelans pointed to the economy as the worst problem they are facing, and 18.3% mentioned social issues, as well as 16.3% pointed to political issues. More in Spanish: (El Nacional, https://www.elnacional.com/venezuela/datanalisis/)

 

US Southern Command head focused on ‘day after’ in Venezuela

The head of U.S. Southern Command says military officials are focusing on preparing for “the day after” once an “isolated” Nicolás Maduro leaves power. Navy Adm. Craig Faller warned Monday against Venezuela’s “formidable weapon system” and criticized Cuba, Russia and China for assisting Maduro, saying it was important to put “continuous pressure” on the “illegitimate regime” and organize humanitarian efforts. (Military Times: https://www.militarytimes.com/video/2019/08/06/saudi-special-forces-go-all-out-for-hajj-display/)

 

Trump has considered naval blockade of Venezuela

President Trump has reportedly suggested that the U.S. place ships along the coast of Venezuela to blockade goods from coming into the fraught nation. According to five current and former officials, the Pentagon hasn’t taken the suggestions by the president seriously because of its impracticability and because it would divert naval assets away from countering Iran and China, Axios reported. “He literally just said we should get the ships out there and do a naval embargo,” one official said. “Prevent anything going in.” “I’m assuming he's thinking of the Cuban missile crisis,” the official added. “But Cuba is an island and Venezuela is a massive coastline. And Cuba, we knew what we were trying to prevent from getting in. But here what are we talking about? It would need massive, massive amounts of resources; probably more than the U.S. Navy can provide.” (Washington Examiner: https://www.washingtonexaminer.com/news/trump-has-considered-naval-blockade-of-venezuela)

 

Russia warns US against imposing blockade on Venezuela

Russia on Tuesday warned the U.S. against "incautious steps" in tightening sanctions on Venezuela, and throwing a total blockade over the country. Speaking to reporters in Moscow, Deputy Foreign Minister Sergey Ryabkov called on Washington to assist Venezuelans in bridging existing chasms instead of hindering talks between the government and opposition. He said he would discuss the situation in Venezuela with Delcy Rodriguez, the country's vice president, who arrived in Russia on Monday for a working visit. "We will examine the situation, referring to the strengthening by Washington of illegal, illegitimate sanction measures, attempts to set up a blockade [on Venezuela]. We warn Washington against incautious steps in this area," Ryabkov said. (AA: https://www.aa.com.tr/en/world/russia-warns-us-against-imposing-blockade-on-venezuela/1560476)

 

Venezuelan exodus may soon double, triggering a bigger regional crisis

One of the things that surprised me the most during a lengthy interview with Juan Guaidó, the Venezuelan National Assembly president who is recognized by the United States and more than 50 countries as Venezuela’s legitimate leader, was his forecast that the number of Venezuelan exiles may “easily” reach 8 million by next year. It’s a mind-boggling figure because it would be twice the 4 million exiles that, according to a recent United Nations report, have already fled the country since dictator Nicolas Maduro took office five years ago. Eight million people would amount to about 25% of Venezuela’s population. Twice the current number of Venezuelan exiles would cause a much bigger economic, and perhaps political, earthquake for many Latin American countries. Asked about the Trump administration’s new economic sanctions on Venezuela, which ban U.S. transactions with state-owned Venezuelan businesses, Guaidó told me in the Aug. 12 interview that, “They seek to prevent the regime’s use of those resources to finance irregular (paramilitary) groups or to steal the Venezuelan people’s money.” Dismissing Maduro’s claims that Venezuela’s humanitarian crisis has been caused by U.S. sanctions, Guaidó said that, “The sanctions went into effect three days ago, whereas the 65% contraction of the economy has been taking place over the past six years. The Maduro regime bears total responsibility for the crisis.” Asked about the Cuban presence in Venezuela, Guaidó told me that there are “between 2,000 and 3,000 Cubans who are carrying out intelligence, counterintelligence, repression and even torture” for Maduro’s armed forces. I asked Guaidó whether he’s fearful that international pressure to restore democracy in Venezuela may weaken soon. Guaidó responded that governments come and go, noting that El Salvador’s new government, for instance, has switched sides to support him. He added that Maduro, too, is becoming weaker, as nearly 90% of Venezuelans want him to leave power, according to a recent MEGANALISIS poll. “Time is running against (all) Venezuelans, including Maduro, who is collapsing,” Guaidó told me. “What’s important is to take advantage of the window of opportunity we have to prevent an even bigger humanitarian catastrophe” and to “step up international diplomatic pressures to end the suffering of the Venezuelan people.” (The Oppenheimer Report: https://tribunecontentagency.com/article/venezuelan-exodus-may-soon-double-triggering-a-bigger-regional-crisis/

 

U.N. pleads for more help to relieve Venezuelan refugee crisis

United Nations High Commissioner for Refugees Filippo Grandi appealed on Sunday for more humanitarian aid for Venezuelan refugees pouring into neighboring countries where they are overwhelming social services and sparking local tensions. Grandi had planned to visit the Brazilian border town of Pacaraima this weekend, but authorities advised him to cancel due to protests by residents unhappy with the arrival of more than 500 Venezuelans a day. The UNHCR estimates 4.3 million Venezuelans have fled economic and political turmoil in their country, mainly to Colombia where there are 1.2 million and to Peru, Chile and Ecuador. Some 180,000 have stayed in Brazil. The U.N. and NGOs put out a humanitarian appeal for US$ 770 million at the start of the year and has received less than US$ 180 million, Grandi said in a telephone interview after visiting Chile and Brazil. “This is really one of the most under-funded humanitarian appeals in the world for one of the biggest crises,” he said. Financial institutions such as the World Bank and the Inter-American Development Bank are engaged but need to speed up their help, he said, to help sustain health and education systems. Grandi said there were signs of anti-immigrant sentiment spreading across the region, reflected in mounting restrictions on the movement of Venezuelans in Andean countries. But he praised Chile, which has received 400,000 Venezuelans, for granting safe passage and a guarantee of asylum. (Reuters: https://www.reuters.com/article/us-venezuela-brazil-refugees/u-n-pleads-for-more-help-to-relieve-venezuelan-refugee-crisis-idUSKCN1V80M8)

 

Colombia’s armed groups prey on Venezuela migrants

A new report by Human Rights Watch (HRW) on violence in the department of Norte de Santander, Colombia, shows how vulnerable Venezuelan migrants are to the criminal groups that dominate the region. The report, entitled “The War in Catatumbo” and published August 8, documents abuses by armed groups against Venezuelan and Colombian civilians in Norte de Santander’s Catatumbo region in northeast Colombia along the border with Venezuela. It explains that groups like the National Liberation Army (Ejército de Liberación Nacional – ELN), the Popular Liberation Army (Ejército Popular de Liberación – EPL), and the dissidents of the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC), are responsible for an uptick in killings and other crimes. The affected Venezuelan citizens live in Catatumbo’s urban areas, including the municipalities of Tibú, Ocaña, El Tarra, Ábrego, Convención and Sardinata. In these areas, the migrants — including many minors and women — live in precarious conditions which leave them at the mercy of criminals, according to HRW. “We have documented on the ground that armed groups in Catatumbo commit all types of abuses: murders, disappearances, kidnappings, recruitment of minors, sexual violations, threats and displacements,” HRW Director José Miguel Vivanco told Semana. There are currently close to 25,000 Venezuelans in Catatumbo who, despite being aware of the security risks in the region, have crossed the border in search of work, food and medicine, according to Vivanco. The Venezuelans have arrived as tens of thousands of Catatumbo’s residents have been displaced by the conflict among the various armed groups. Desperate, the migrants find themselves caught in areas where these groups are vying for territory and control of criminal economies. Officials with the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) on the border city of Cúcuta told InSight Crime that fear of being deported or arrested keeps Venezuelan nationals from seeking help from local authorities. (InSight Crime: https://www.insightcrime.org/news/brief/armed-groups-colombia-receive-venezuela-migrants/)

 

Fears grow of Venezuela malnutrition time bomb

The graffiti scrawled across a wall in Caracas is short but heartfelt. “Tengo hambre,” it reads. “I am hungry”. It is a cry increasingly heard across Venezuela. As Nicolás Maduro and western-backed opposition leader Juan Guaidó battle for the country’s future amid an economic collapse that has sparked severe shortages of food, fuel and medicine, millions of people are going hungry for extended periods and risking long-term damage to their health, humanitarian organizations have warned. “Six to eight million people are living in a state of undernourishment,” said Susana Raffalli, a veteran Venezuelan humanitarian adviser who has worked across the world with the Red Cross and UNICEF, the UN agency for children. Speaking before the latest US sanctions, she said: “That means the state cannot guarantee they have an adequate supply of food.” Ms. Raffalli’ s assessment is supported by the UN’s Food and Agriculture Organization. José Graziano da Silva, outgoing head of the FAO, said in a press interview last month that there had been a “dizzying increase” in hunger in Venezuela in recent years. In a recent report on global food security, the FAO estimates that between 2016 and 2018, about 21.2% of the Venezuelan population was undernourished. When Maduro came to power in 2013 the figure was 6.4%, it says. In a June report, UNICEFs estimated that 3.2m children in Venezuela were “in need of assistance”. Millions of poorer Venezuelans rely on monthly deliveries of government-subsidized food boxes for survival, a system critics denounce as a form of social control, alleging supplies are skewed towards supporters of the government. Delivery has become increasingly erratic, and the contents of the boxes are of variable quality, say aid workers. Washington has meanwhile accused the Maduro government of skimming off hundreds of millions of dollars from the food program, and last month-imposed sanctions on Maduro’s three stepsons over their alleged roles. One businessman with knowledge of the food situation in Venezuela, who spoke to the Financial Times on condition of anonymity for fear of government reprisals, said data show a large proportion of Venezuelans are living on between 1,500 and 1,900 calories a day. Malnutrition is particularly acute in the provinces, say aid workers. North-western Zulia state, on the border with Colombia, is one of the worst-hit areas. In a survey late last year, the Commission for Human Rights in Zulia State (CODHEZ), a local NGO, found that three-quarters of households in the state capital Maracaibo were suffering from hunger. Eight in 10 people said they could no longer afford protein such as chicken and beef and survived largely on arepas — traditional corn flour patties — margarine, pasta and rice. Since then, the situation has worsened as wages have failed to keep pace with galloping inflation. “The price of food went up 8,165% between last October and this June,” said Juan Berríos, a researcher at CODHEZ. Nine months ago, the monthly minimum wage bought 24kg of corn flour but now it buys less than 4kg. Venezuela will face long-term consequences from chronic undernourishment, especially of children, humanitarian organizations warn. NGO data seen by the FT show the weight and height of Venezuelan children have fallen significantly below the average for comparable populations. (Financial Times: https://www.ft.com/content/b6459434-b531-11e9-8cb2-799a3a8cf37b)

 

EDITORIAL: US sanctions are worsening Venezuela’s agony

“One of the worst man-made humanitarian disasters in the modern world.” US secretary of state Mike Pompeo’s assessment of Venezuela is sweeping, but fair. A nation which has the world’s biggest oil reserves but has descended into such economic chaos that up to a quarter of its population has fled should qualify by any standards. Those left behind face severe shortages of food, medicine and fuel. Malnutrition is stunting a generation of Venezuelan children. Top officials stand accused of corruption, drug trafficking and gold smuggling. Sadly, the cure adopted by the Trump administration is only making the patient sicker. Evidently the blame for the suffering of the Venezuelan people lies principally at the door of Chávez and his chosen successor, Nicolás Maduro, under whose rule the country has plumbed new depths. The Trump administration believes that by choking Venezuela’s economy harder Maduro can be ejected. The remedy is not working; other countries under drastic sanctions, such as Cuba, have similarly strangled economies, but long-lived leaders. The key to ending the agony lies in a much broader diplomatic effort. EU and Latin American nations have brokered talks between the government and opposition, but these have failed because Maduro’s key backers — Cuba, Russia and China — are missing. If Moscow, Beijing and Havana have nothing to gain from Maduro leaving power, they will continue to back him. Broad international talks to negotiate Maduro’s exit to a third country, installation of a respected interim president, equal treatment of all creditors and fresh elections are the way forward. This will not be popular with some in Washington. But the Venezuelan people’s suffering is rapidly worsening. Russian president Vladimir Putin suggested to this newspaper in July that Moscow’s interests in Venezuela were purely commercial and vowed that if Guaidó won an election, the Kremlin would work with him. That pledge should be put to the test. (Financial Times: https://www.ft.com/content/f7dd72a4-c044-11e9-b350-db00d509634e)

 

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.

June 13, 2019

International Trade

Miranda Governor announces Venezuela exported 10 tons of avocadoes and mangoes to Spain

Miranda State governor Hector Rodriguez has announced that Venezuela has exported 10 tons of avocadoes and mangoes to Spain, as a part of his state’s export drive. He made the announcement flanked by La Guaira Mayor José Alejandro Terán, and Hector Silva, President of the Miranda State Export Corporation. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/economia/venezuela-exporto-10-toneladas-de-aguacates-y-mango-a-espana/)

 

Oil & Energy

S&P withdraws ratings on Venezuela state oil company PDVSA

Standard and Poor’s withdrew its ratings On Venezuela's state oil company Petroleos de Venezuela S.A. after multiple events of default and the company repeatedly failed to submit its audited financials since 2017. “S&P Global Ratings withdrew its 'SD' issuer credit rating on Venezuela-based oil and gas company Petroleos de Venezuela S.A. (PDVSA). At the same time, we withdrew our 'D' issue-level rating on the company's debt.
The withdrawal of our ratings on PDVSA follows our repeated attempts to obtain timely information of satisfactory quality from the company in order to maintain our ratings in accordance with our criteria and policies. PDVSA has been unable to meet the coupon payments on its 2017, 2021, 2024, 2026, 2027, and 2037 notes since November 2017 (or we have been unable to obtain a confirmation that the bondholders had received the funds by that date). This constitutes an event of default under our methodology.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479770&CategoryId=10717)

 

Venezuela’s massive blackout sparks boom in generator sales

As Venezuela's crisis deepens, the sale of electric generators is one of the few growth industries in the once-wealthy oil nation, whose residents struggle to get through each day as public services crumble. Millions of poor live at the mercy of Venezuela's unstable power grid, but middle- and upper-class residents able to scrape together enough dollars are buying backup generators to regain a normal life. Even this solution isn't foolproof. Gasoline shortages are creeping across the country, imperiling access to fuel for newly bought generators. A catastrophic power failure has led to a scramble for generators by residents and small businesses fearing another big outage could hit without warning, plunging their lives once again into chaos. Some have opted for small units costing a few hundred dollars that can pump out enough power to run a few appliances at a time, such as using the lights and water heater for a shower. A household living with all the amenities requires a large generator that can cost upward of US$ 1,000 — a small fortune in a country where the typical worker earns US$ 6.50 a month. The situation is especially dire in Maracaibo, once known as Venezuela's Saudi Arabia for being at the hub of the country's now-decaying oil industry. Power plants put out a fraction of their potential, and the lights have flickered on and off since late-2017, when a major transmission line burned up. The nationwide blackout in March took the lights out for eight days in Maracaibo and sparked massive looting that shuttered many businesses. Lines to fill up a car with gasoline stretch a mile and often require a two-day wait. (The Miami Herald: https://www.miamiherald.com/news/business/article231504798.html)

 

Shell stays course on Trinidad, Venezuela gas

Shell was asked by Trinidad and Tobago to study development options for an offshore natural gas field that straddles the maritime border with Venezuela, while it continues work on Venezuelan offshore gas, the European major told Argus. The cross-border Loran-Manatee field, estimated to hold about 10 trillion cf of gas, has long been seen by Trinidad as a key source of feedstock for its extensive gas-based industries, led by the 14.8mn t/yr Atlantic liquefaction complex. Trinidad's domestic gas production has been recovering since late 2017, but demand still outstrips supply, forcing costly curtailments. Loran-Manatee covers block 6 on Trinidad's side of the border, and block 2 on Venezuela's side. Shell acquired a 50% operating stake in Manatee, on Trinidad's side, from fellow major Chevron in June 2017. Chevron still holds the remaining 50%. Trinidad needs the gas to supply its industries, while Venezuela needs export revenue and has no infrastructure to monetize the gas on its own. Shell, like Chevron, has been careful to reiterate that its "activities relating to Venezuela are in strict adherence to all applicable laws, regulations, trade controls and sanctions." PDVSA has long neglected its abundant gas reserves in favor of oil, despite enormous suppressed demand from domestic refineries, power stations and petrochemical plants. Little is expected to change in the near term. Venezuela's oil-based economy is nearly paralyzed against the backdrop of a power struggle between the Maduro regime and the US-backed opposition. Under a transition government that National Assembly leader Juan Guaidó is campaigning to establish, legislative reforms would open the door for foreign oil companies to quickly tap dormant Venezuelan hydrocarbon deposits. (ARGUS: https://www.argusmedia.com/en/news/1920237-shell-stays-course-on-trinidad-venezuela-gas)

 

Commodities

Gas shortages, sky-high food prices plague Venezuelans amid economic crisis

Dozens of cars lined up alongside a gas station just after dawn on a highway in the Venezuelan city of Maracay, in the central state of Aragua. The drivers had been waiting for hours to buy gas, partaking in an all too common ritual in the hopes that when it was their turn, there would be enough gas left to fuel up. The wasted trips used up what little was left in his gas tank, and last Tuesday three men had to push his truck from the highway down a long hill to a pump, where he was finally able to fuel up. Venezuelans described lost days of work, anxiety at being unable to feed their families, and endless hours waiting in lines because of a gas shortage that's hitting the country with the world’s largest producible oil reserves. For Venezuelans who make it to a gas pump with fuel, filling a tank is basically free. Drivers tip gas station workers a small amount, but there is no real fixed price to fill your tank with the government keeping gas prices low but with the shortages it's a major problem. Hours-long lines for gas have become more and more common, especially in states within the interior of Venezuela, but the shortages have increasingly crept closer to Venezuela’s capital, hitting cities like Maracay. While Caracas has been largely spared the long lines thus far, Venezuelans in other states are in such desperate need of gas they'll sleep overnight outside gas stations. The gas shortages also meant disruptions to the once-reliable public transportation system in Caracas, lengthening commutes and exposing Venezuelans to more dangerous situations. They are also delaying food traveling from different states in the Venezuelan interior, leading to rising costs. Even when there is food available, the problem for many families is being unable to afford it with hyperinflation and low wages. Many Venezuelan families rely on government subsidized food-aid program, known in Spanish by its initials, CLAP. (NBC News: https://www.nbcnews.com/news/latino/gas-shortages-sky-high-food-prices-plague-venezuelans-amid-economic-n1016496)

 

Economy & Finance

Venezuela: hyperinflation leads to new banknotes for second time in a year

Venezuela is releasing new banknotes for the second time in less than a year, the central bank said on Wednesday, after hyperinflation eroded the effects of an August 2018 monetary overhaul meant to improve availability of cash. The Maduro regime last year cut five zeroes off the currency and prices. The move was supposed to ease shortages of cash that pushed most of the economy toward debit and credit card operations and put heavy strain on digital commerce platforms. Banknotes of 10,000, 20,000 and 50,000 bolivar denominations will begin circulating on Thursday to “make the payment system more efficient and facilitate commercial transactions”, the central bank said in statement. The largest of those bank notes, equivalent to about US$8, is more than the minimum wage of 40,000 bolivars a month. Following the 2018 overhaul, the highest denomination notes were 500 bolivars, which now would not be enough to buy a piece of candy. Inflation in May reached 815,000% after peaking earlier this year above 1.7m%, according to the opposition-run congress. (The Guardian: https://www.theguardian.com/world/2019/jun/12/venezuela-releases-new-bank-notes-bolivars-hyperinflation; Reuters, https://www.reuters.com/article/venezuela-economy/venezuela-adds-bigger-bank-notes-due-to-hyperinflation-idUSL2N23J167; Bloomberg, https://www.bloomberg.com/news/articles/2019-06-12/hyperinflation-forces-venezuela-to-roll-out-three-new-bills)

 

3M to take about US$ 160 million charge as it deconsolidates Venezuelan operations

3M Co said on Tuesday it would incur a pretax charge of about US$ 160 million, or 27 cents per share, in the second quarter, as the company suspended local operations in Venezuela. The maker of Post-it notes, and Scotch tape said in a regulatory filing that it deconsolidated its Venezuelan subsidiary as of May 31. (Reuters, https://www.reuters.com/article/us-3m-venezuela/3m-to-take-about-160-million-charge-as-it-deconsolidates-venezuelan-operations-idUSKCN1TC2AW)

 

Venezuela hit with default in Saint-Gobain's US$42 million award row

A Delaware court clerk entered a default against Venezuela and state-owned oil company Petróleos De Venezuela SA considering their silence in the French plastics company’s litigation aimed at registering and enforcing a 2017 arbitral award. (Law360: https://www.law360.com/articles/1168575/venezuela-hit-with-default-in-saint-gobain-s-42m-award-row)

 

Convicted Venezuelan official’s Palm Beach mansion goes for US$ 11 million in auction

For just US$ 11 million, a little piece of corrupt Venezuelan history was sold to the highest bidder last month, courtesy of the United States government. On May 30, a Palm Beach mansion forfeited by convicted money launderer and former national treasurer of Venezuela Alejandro Andrade was quietly auctioned off by Customs and Border Protection (CBP) agents. The 4,600 square-foot estate is a 5-bedroom, 4.5-bath beach getaway, complete with a spa and pool. Andrade bought the property, located at 1290 N. Ocean Blvd., for $8 million in 2013 and apparently let the place fall into disrepair. In 2016, neighbors complained that renovations of the home were disruptive and had been drawn out for too long. The home — the latest of Andrade's illegitimate riches to be auctioned off — is markedly more luxurious than the ex-treasurer's current digs in federal prison. In November, Andrade received a maximum ten-year sentence in a West Palm Beach federal court after pleading guilty to accepting a stunning $1 billion in bribes as part of an illicit foreign currency scheme. Andrade began his prison sentence in February. He is reportedly being kept in a low- to medium-security prison in Loretto, Pennsylvania, about 80 miles outside of Pittsburgh. (Miami New Times: https://www.miaminewtimes.com/news/government-auctions-off-palm-beach-mansion-owned-by-former-venezuelan-treasurer-alejandro-andrade-11195909)

 

Politics and International Affairs

Trump on disputed claim of Russian withdrawal from Venezuela: 'Ultimately I'm always right'

President Trump on Wednesday stood by his claim that Russia had withdrawn its forces from Venezuela despite the Kremlin's denials, asserting that he would be proven right in the end. Trump was asked during an Oval Office meeting with Polish President Andrzej Duda what he knows about Russia's involvement in Venezuela given the conflicting statements. "Well, let's just see who's right. You know what you're going to do? You're going to see in the end who's right," Trump said. "You just watch it, OK?" he added. "And we'll see who's right. Ultimately, I'm always right." Trump tweeted earlier this month that Russia had informed the U.S. that it had removed "most of their people from Venezuela." He offered no further information, and officials did not elaborate on Trump's announcement. The next day, a Kremlin spokesman told reporters that most of Russia's military specialists were still working in Venezuela. Trump on Wednesday described the situation in Venezuela as "in flux," and blamed the country's leaders for its descent into a worsening economic and humanitarian crisis. "It's a very sad thing," he said. "We're watching Venezuela very closely." (The Hill: https://thehill.com/homenews/administration/448247-trump-on-disputed-claim-of-russian-withdrawal-from-venezuela)

 

Secretary Pompeo urges world leaders to find solutions to Venezuela’s hunger crisis

Secretary of State Mike Pompeo implored world leaders to continue to stand against Venezuela’s Maduro’s regime amid the country’s ongoing economic and humanitarian crisis. At a World Food Prize event Monday, Pompeo highlighted the need for progress in agriculture to help hungry nations. He pointed to starvation in Venezuela as evidence. “More than 60% of the country goes to bed hungry each and every night, and many have resorted to rummaging through garbage bins to feed themselves and their children,” he explained. “Malnourishment is so widespread that Venezuelans refer to it as the Maduro diet.” Hunger in Venezuela is such problems that soup kitchens have rapidly cut down on food donations due to Maduro cutting off humanitarian aid. The Trump administration has sent aid to neighboring Colombia to get food to Venezuelans after aid being sent to Venezuela was blocked because Maduro claimed it was sent to embarrass his regime. Pompeo believes the U.S. government alone can’t solve the issue. “We all have an obligation to work each of these problems, it isn’t just a human tragedy when we see hunger,” he stated. “When it takes hold of a country, it can perpetuate a destructive cycle of crime and violence and instability.” (OAN: https://www.oann.com/secretary-pompeo-urges-world-leaders-to-find-solutions-to-venezuelas-hunger-crisis/)

 

Moldova's parallel leader warns incumbent against new Venezuela

Moldova’s newly declared Prime Minister Maia Sandu said her decision to form a parallel government in the former Soviet Republic is perilous and urged the former ruling party still claiming power not to turn the country into a second Venezuela. Speaking in a phone interview from Chisinau, the 47-year-old former World Bank adviser insisted that her administration -- assuming it survives -- will be wholly pro-European even though it depends on the support of pro-Russia Socialist Party. (Bloomberg, https://www.bloomberg.com/news/articles/2019-06-11/moldova-s-parallel-leader-warns-incumbent-against-new-venezuela)

 

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.

March 26, 2019

Oil & Energy

As new blackout hits, Venezuelans brace for more hardship

Much of Venezuela remained without electricity Tuesday as a new power outage spread across the country in what many feared will be a repeat of the chaos during the nation's largest-ever blackout earlier this month. The Maduro regime canceled work and school again as the second major blackout this month left streets mostly empty in Caracas and residents of the capital wondering how long power would be out amid a deepening economic and political crisis. The outage began around midday Monday and appeared to have affected most of Venezuela's 23 states. While the lights flickered back on in many parts after officials declared service would be restored within hours, the grid collapsed again in the late evening, knocking out communications and leaving much of the country bracing for the worst. As with the previous outage, Nicolas Maduro's regime blamed U.S.-backed opponents, accusing them of sabotaging the Guri dam, which supplies the bulk of Venezuela's electricity. Officials said the "attack" had been controlled, but their assurances, similar to ones the last time around, did little to calm the anger of residents in Caracas who filled traffic-clogged streets as they walked home after subway service in the capital was suspended on Monday. Their patience grew increasingly thin when a second outage struck late into the night, with residents in some neighborhoods banging on pots and pans in pitch black to express their growing frustration. On Tuesday morning, banks, shops and other businesses in Caracas were closed. Lights were out in the Maiquetia airport near Caracas, a Reuters witness said, though flights were not canceled. A worker checked passengers’ passports with a hand lamp, while the belt carrying checked luggage was running with power from a backup generator. NETBLOCKS, a non-government group based in Europe that monitors internet censorship, said the late evening outage had knocked offline nearly 90% of Venezuela's telecommunications infrastructure. Even the powerful state TV apparatus was down. The Trump administration, which is campaigning to remove Maduro, has denied any role in the outages. Meanwhile, electricity experts and opposition leader Juan Guaidó fault years of state graft and incompetence.  Guaidó, who the U.S. and dozens of other countries recognize as Venezuela's rightful leader, said he was meeting with aides to determine actions "to express the indignation of the entire population." The government seeks to discredit Guaidó, presenting what it claims to be evidence purporting to show opposition plans to hire mercenaries from Central America to carry out targeted killings and acts of sabotage. During a news conference in the middle of the blackout Monday, Communications Minister Jorge Rodriguez showed screenshots of what are purportedly private text messages between Guaidó, his mentor Leopoldo Lopez and other opposition insiders discussing payment details to the hired guns through banks in Europe and Panama. Late Monday, Lilian Tintori, the wife of Lopez, said a group of government loyalists on motorcycles besieged her home in eastern Caracas, shouting epithets against her husband and warning he would soon be thrown back in jail. Lopez has been under house arrest following his conviction for stirring anti-government unrest in 2014 in a case marred by irregularities. (The Miami Herald: https://www.miamiherald.com/news/business/article228416374.html; Reuters: https://www.reuters.com/article/us-venezuela-politics/venezuela-blackout-leaves-streets-empty-school-and-work-canceled-idUSKCN1R71SU; https://www.reuters.com/article/us-venezuela-politics-blackout/venezuela-blames-attack-as-another-crippling-blackout-hits-idUSKCN1R62A7; Fox News: https://www.foxnews.com/world/new-power-outage-leaves-much-of-venezuela-in-the-dark; Bloomberg: https://www.bloomberg.com/news/articles/2019-03-25/venezuela-can-t-keep-the-lights-on)

 

Oil rebounds as growth angst eases and Venezuela tensions mount

Oil rebounded along with global markets as pessimism over the global growth outlook eased a little, while rising tension in Venezuela revived fears of supply losses. Futures rose as much as 1.4% in New York after falling about 2% over the previous two sessions. Crude futures have rallied about 30% in New York and London this year as the Organization of Petroleum Exporting Countries and its allies implement production cuts to stave off a global surplus. American sanctions on Iran and Venezuela have further squeezed supplies, but the demand outlook remains clouded by a slowing world economy and uncertainty over whether the U.S.-China trade war will be resolved. West Texas Intermediate for May delivery rose 717cents, or 1.3%, to US$ 59.59 a barrel on the New York Mercantile Exchange as of 11:12 a.m. in London. It closed 0.4% lower on Monday after swinging between a 1.5% loss and an 0.5% gain earlier in the day. Brent for May settlement advanced 0.9% to US$ 67.79 a barrel on the London-based ICE Futures Europe exchange, rising for a second day. The global benchmark crude was at a premium of U$ 8.18 to WTI. (The Houston Chronicle: https://www.chron.com/business/energy/article/Oil-Rebounds-as-Growth-Angst-Eases-and-Venezuela-13716649.php)

 

America imported no oil from Venezuela last week. Here's why that's a big deal

America's once-robust imports of crude oil from Venezuela have ground to a halt because of Trump administration sanctions and chaos gripping this nation. The United States imported exactly zero barrels of crude from Venezuela last week, according to government statistics. That's never happened since the US Energy Information Administration began tracking this weekly metric in 2010.It marks a sharp decline from the prior week, when the United States imported 112,000 barrels per day from Venezuela. The plunge in oil shipments from Venezuela helped lift US oil prices above US$60 a barrel this week for the first time since November. The United States has never gone a full month without importing oil from Venezuela since the EIA started measuring this monthly data in 1973.Getting cut off from the United States adds to the misery for Venezuela. Before the sanctions, the United States was Venezuela's No. 1 oil customer. And the Venezuelan government relied on oil exports for 90% of its revenue. The good news for the United States is that it's pumping tons of oil at home. Powered by the shale revolution, US output has soared to record highs. In fact, the United States is now the world's leading oil producer. The bad news is that US refineries can't rely on American shale oil alone. That's because not every barrel of crude is created equally. While US shale oil is a high-quality light grade, the decades-old Gulf Coast refinery system is configured to run on a healthy dose of lower quality heavy crude, the likes of which is abundant in Venezuela. The situation has caused a strange phenomenon, where heavy crude is trading on par or even at a premium to light crude.(CNN: https://edition.cnn.com/2019/03/21/business/venezuela-oil-imports-united-states/index.html)

 

 

Economy & Finance

IADB cancels China meeting after Beijing bars Venezuela representative

The Inter-American Development Bank on Friday called off next week’s meeting of its 48 member countries in China after Beijing refused to allow a representative of Venezuelan opposition leader Juan Guaidó to attend, two sources with knowledge of the decision said. The sources said the decision was made in Washington on Friday at a meeting of the executive board of the IADB, Latin America’s largest development lender, after China refused to change its position. The sources said the board would vote within 30 days to reschedule the annual meeting for another date and location. On Thursday, the United States threatened to derail the March 26-31 meeting unless Beijing granted a visa to Guaidó’s representative, Harvard economist Ricardo Hausmann.The meeting, slated to bring together finance and development ministers from the lender’s members, was meant to mark the bank’s 60th anniversary. One source, speaking on condition of anonymity, told Reuters on Thursday that China had proposed that no representative from either Maduro’s or Guaidó’s camps attend the meeting to “depoliticize” the gathering. In a statement posted later on its website, the IADB confirmed that the meeting would not take place on March 28-30 in the city of Chengdu as planned, but it did not give a reason. China’s foreign ministry said in its own statement it regretted the decision but bore no responsibility. Spokesman Geng Shuang said China “had difficulty allowing” Guaidó’s representative to attend because Guaidó himself lacked legal standing.“ Changing Venezuela’s representative at the IADB won’t help solve Venezuela’s problems and (the proposal) damaged the atmosphere of the IADB annual meeting and disturbed preparations for the meeting,” he said. The Washington-based IADB was the first multilateral lender to replace a Maduro-selected representative with one backed by Guaidó. The move would eventually open lines of credit to Venezuela should Maduro step down. The International Monetary Fund and World Bank have so far not made a decision on whether to recognize Guaidó officially as head of state. (Reuters: https://www.reuters.com/article/us-venezuela-politics-china-iadb-exclusi/exclusive-iadb-cancels-china-meeting-after-beijing-bars-venezuela-representative-idUSKCN1R32NU)

 

U.S. blacklists Venezuelan state banks after arrest of Guaidó aide

The United States imposed sanctions on Friday on Venezuela’s development bank, BANDES, a day after the Trump administration warned there would be consequences for the arrest by Venezuelan authorities of opposition leader Juan Guaidó’s top aide. The U.S. Treasury said it was slapping the sanctions on Banco de Desarrollo Economico y Social de Venezuela, including its subsidiaries in Uruguay and Bolivia. It also imposed sanctions on state-owned Venezuelan commercial banks, including Banco de Venezuela and Banco Bicentenario. “The United States will not tolerate the arrest of peaceful democratic actors, including members of the democratically-elected Venezuelan National Assembly and those Venezuelans working with interim President Juan Guaidó,” the White House said in a statement. The U.S. Treasury said Maduro tried to move US$1 billion out of Venezuela through Banco BANDES Uruguay in early 2019 as he came under increasing pressure from the United States and other countries in the region to step down. BANDES has received billions of dollars over the past decade from the China Development Bank, in exchange for oil, which the Venezuelan government used to fund infrastructure projects. Uruguay has stayed neutral on Venezuela’s political crisis and has called for dialogue, while China, Russia and regional ally Cuba have backed Maduro. But the sanctions on BANDES could test Beijing’s ties with Caracas, since it would impede Venezuela from restructuring its US$20 billion debt with China, opposition lawmaker Angel Alvarado said on Friday. The sanctions freeze assets belonging to the banks and subsidiaries, and prevent U.S. citizens from any dealings with them. They follow a raft of other sanctions imposed by the administration of U.S. President Donald Trump in recent months against Maduro, top government officials, and state oil firm PDVSA. Trump’s national security adviser John Bolton tweeted earlier on Friday: “BANDES bank is to Venezuela’s financial sector what PDVSA is to its oil sector. This action will severely affect any attempted currency movements by Maduro and his cronies moving forward. Do not test the resolve of this Administration.” (https://www.reuters.com/article/us-venezuela-politics-usa-sanctions/u-s-blacklists-venezuelan-state-banks-after-arrest-of-Guaidó-aide-idUSKCN1R32FQ)

 

 

Politics and International Affairs

2 Russian military planes land in Venezuela, exacerbating political tension

A visit to Venezuela by two military airplanes from Russia, which landed in broad daylight at the international airport in Caracas, has set off alarms that the Kremlin might be acting more brazenly to protect President Nicolás Maduro from the uprising against him. Russian and Venezuelan officials have not disputed the arrival of the airplanes, which were first seen at the airport on Saturday. Such flights ordinarily would be sent to a protected military air base beyond the sight of the public. The planes brought supplies and technical advisers to Caracas, Venezuela’s capital, according to a Russian state news agency and a Russian diplomat. The visit was related to military cooperation contracts signed years ago between Russia and Venezuela, said the news agency, Ria Novosti, suggesting it was routine. A Russian diplomat in Caracas, who spoke on condition of anonymity because the diplomat was not authorized to speak to the media, confirmed the Ria Novosti account and said there was nothing unusual. But opposition members said the visibility of the military planes was unusual and had been meant to send a message. The timing showed that both Russian and Venezuelan officials wanted to convert a routine technical stop into a show of strength, said Rocio San Miguel, a Venezuelan security analyst. Russia has maintenance contracts for weapons sold to Venezuela under late President Hugo Chávez, including air defense systems, fighter jets and tanks, that are worth billions of dollars. Flight tracking websites showed an Ilyushin IL-62 jet and an Antonov AN-124 cargo plane flew from Moscow’s military airport to Caracas’s international airport via Syria. The cargo plane flew back to Syria on Monday, according to flight tracking website bosphorusobserver.com. The arrival of the advisers came as Venezuela activated Russian-made S300 air defense systems last week, according to satellite imagery analysis firm IMAGESAT Intl. Russia has also recently deployed the S300 in Syria. US Secretary of State Mike Pompeo spoke with Russian Foreign Minister Sergey Lavrov on Monday and called on Russia "to cease its unconstructive behavior" in Venezuela, State Department spokesman Robert Palladino said in a statement. The United States "will not stand idly by as Russia exacerbates tensions in Venezuela," the statement said. "The continued insertion of Russian military personnel to support the illegitimate regime of Nicolas Maduro in Venezuela risks prolonging the suffering of the Venezuelan people who overwhelmingly support interim President Juan Guaidó," the statement said. The United States on Monday accused Russia of "reckless escalation" of the situation in Venezuela. (The New York Times: https://www.nytimes.com/2019/03/25/world/americas/russian-planes-caracas.html; Military Times: https://www.militarytimes.com/flashpoints/2019/03/25/pompeo-says-russian-troops-in-venezuela-increases-tensions/; Haaretz: https://www.haaretz.com/us-news/u-s-calls-russia-deployment-of-planes-to-venezuela-reckless-escalation-1.7059121; CNN: https://www.cnn.com/2019/03/25/americas/venezuela-news-roundup/index.html; The Wall Street Journal: https://www.wsj.com/articles/u-s-chides-russia-for-military-aid-to-venezuela-11553553299; McClatchy: https://www.mcclatchydc.com/news/politics-government/white-house/article228377779.html) 

 

Guaidó accused of plotting 'terrorist acts'

Jorge Rodriguez, the nation's minister of communication, spoke on national television Saturday to accuse opposition leaders, including National Assembly President Juan Guaidó, of plotting "terrorist acts" in the country. Rodriguez said some of the evidence was collected from the personal phone of Roberto Marrero, Guaidó's chief of staff, who was detained in Caracas on Thursday and later accused of being involved in an alleged "terrorist cell" planning attacks against high-level political figures. According to Rodriguez, Marrero coordinated the arrival of "hitmen" from El Salvador, Guatemala and Honduras to "kill members of the Venezuelan government." He said that about 60 "hitmen groups" were prepared and "trained in Colombia," but that given the closure of the Colombian-Venezuelan border, only "30 groups entered Venezuela." Marrero's lawyers have denied the claims and accused Maduro's regime of planting evidence. Rodriguez did not present any evidence to support his claim. This is not the first time the Venezuelan government has presented strong accusations against the Venezuelan opposition based on text messages, emails or pictures. And, with frequency, the elements are not presented by the Attorney General's Office, but by Rodriguez himself. Surrounded by hundreds of people waving flags and flashing cameras, Guaidó asked his followers to stay on the streets demanding freedom and to not be afraid. "We have the support of important countries ... we are not alone," he said. Guaidó closed the rally by singing the national anthem and once again spoke directly to Maduro: "You believe you are going to intimidate us. Well, here we are, moving forward, holding our heads high, taking it all for the freedom of Venezuela," he said. (CNN: https://www.cnn.com/2019/03/25/americas/venezuela-news-roundup/index.html)

 

House passes bills to expand humanitarian aid in Venezuela and hurt Maduro

The House of Representatives passed three bills on Monday to expand U.S. humanitarian assistance in Venezuela, examine Russia’s growing military presence in the country and prohibit U.S. exports of crime control materials that Nicolás Maduro can use against pro-democracy protesters. The bills, led by South Florida Democrats Donna Shalala, Debbie Mucarsel-Powell and Debbie Wasserman Schultz, are the first legislative responses to Venezuela’s ongoing humanitarian crisis since the U.S. recognized Juan Guaidó as the country’s legitimate leader in January. The bills were sent to the U.S. Senate without opposition.“ The world has witnessed the violent actions of Maduro’s security forces and their use of arms, rubber bullets, tear gas, and other dangerous weapons to violently disperse crowds during peaceful protests,” Shalala said. “With the passage of the Venezuela Arms Restriction Act, we will move one step closer to ensuring that no weapons originating in the United States are used to silence dissent through intimidation, repression, or execution.” Republicans allowed the bills to pass by a voice vote, meaning there was no significant opposition to any of the proposals. Though some Democrats have questioned the U.S. decision to recognize Guaidó, there was no formal opposition to the bills on the House floor. Mucarsel-Powell’s bill compels the Trump administration to outline a long-term humanitarian aid strategy in Venezuela and allocate at least US$ 150 million in federal funding for humanitarian aid in 2020 and 2021. Wasserman Schultz’s bill would compel the State Department to monitor and provide Congress with steps to limit Russian military influence in Venezuela. The three South Florida Democrats are in lockstep with Florida Republicans in support of Guaidó’s nascent government and Wasserman Schultz and Shalala recently visited the Colombia-Venezuela border. But their efforts have been overshadowed by Democrats who argue that recognizing Guaidó is a prelude to a U.S.-backed coup and Republicans like Sen. Marco Rubio who communicate directly with the president on the importance of maintaining a hard line against Maduro. Another piece of legislation that would expand Temporary Protected Status for Venezuelans has the support of Democrats and Republicans from South Florida, though some of Trump’s advisers are wary of expanding immigration protections after they sought to cut TPS for countries like Haiti, Nicaragua and El Salvador. Rubio is also planning to reintroduce a bill that expands humanitarian assistance in Venezuela and provide funds for pro-democracy groups. (The Miami Herald: https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article228383199.html; AP: https://www.apnews.com/3affa036dbea48b794ef33c19fd5e0a4)

 

US warns it will protect its 40,000 citizens in Venezuela

The US government took the unprecedented step of revealing the number of US citizens currently living in Venezuela. Spain’s ABC daily has published an interview with US State Department spokesman Robert Palladino where the Trump Administration warns Nicolás Maduro directly that it Will not tolerate abuses against US citizens on Venezuelan soil. “The US is seriously concerned for the wellbeing and safety of all Americans detained in Venezuela, and for deports that prison officials are blocking their families and lawyers from delivering food to them. We will make Maduro and his jailers responsible for their safety and wellbeing”. Previously, US National Security Advisor John Bolton had revealed that there are at least 40,000 US citizens living in Venezuela. More in Spanish: (Globovision, http://globovision.com/article/eeuu-advierte-que-protegera-a-sus-40-mil-nacionales-en-venezuela)

 

OP-ED: Russia is making the US look weak in Venezuela, by Erin Dunne

It’s no secret that President Trump wants illegitimate Venezuelan dictator Nicolas Maduro out. But as the Trump administration pressures Maduro’s regime and continues to back opposition leader Juan Guaidó, Russia has successfully positioned itself as a roadblock to Washington-backed regime change. And if existing shadowy ties between the Moscow and Caracas weren’t already a serious concern for Washington, the two Russian air force planes that touched down in Caracas over the weekend certainly are. Those planes carried 100 troops, a Russian defense official and almost 40 tons of cargo. They not only provide much-needed materiel assistance for Maduro, but they also send a clear message to Washington that the U.S. isn’t the only international player interested in Venezuela. That Russia would take stronger steps to back Maduro isn’t entirely unexpected. Indeed, at the end of January there were already Moscow-linked military contractors on the ground in Venezuela to support Maduro. Moreover, Russia has been a staunch backer of Maduro’s regime, investing billions of dollars in military contracts and other projects. That has left Moscow with a vested interest in keeping Maduro in power, both to cash in on their monetary investments and to reap the rewards of their influence. But the real motive for Russian President Vladimir Putin seems to be what Russian and before them Soviet leaders have always relished: challenging U.S. authority in what Washington views as its own backyard. Putin is complicating U.S. plans to end Maduro’s grip and restore stability to the region. Russia's investment in the government of a failed state is likely to yield few if any long-term direct returns on investment. That makes this challenge to the U.S. the most plausible reason behind Moscow’s continued support for Maduro. Likewise, the 100 Russian troops that Moscow has put on the ground, even backed by a generous shipment of equipment, is hardly enough to secure an embattled regime, although it could be enough to create a headache for Washington. Russia's actions not only make U.S. involvement more dangerous by introducing the potential to spark engagement with Russia, but they also undercut existing efforts against Maduro limiting the impact of sanction. They give Maduro new military power to rely on and lend him international backing even as the U.S. and other countries have increasingly isolated him. Secretary of State Mike Pompeo warned on Monday that the U.S. does not take these actions lightly. As he put it, U.S. and its allies “will not stand idly by as Russia exacerbates tensions in Venezuela.” Just what Pompeo has in mind is unclear. What is obvious, however, is that Russia has made Washington look weak. (The Washington Examiner: https://www.washingtonexaminer.com/opinion/russia-is-making-the-us-look-weak-in-venezuela)

 

OP-ED: Maduro faces mounting pressure to quit, yet he persists, by Philip Reeves

Two months have elapsed since the Trump administration threw its weight behind a multipronged campaign to oust Nicolás Maduro, after an economic collapse that has led more than 3 million Venezuelans to move abroad and created widespread hunger and shortages. Since then, Maduro — who is fond of comparing himself to a boxer in the ring — has been absorbing one body blow after another. Yet, somehow, Maduro remains in the ring — still on his feet, on TV in front of a crowd, cheerfully goading his enemies. Maduro's adversaries had hoped for success by now. They are beginning to ask what else they and their international supporters need to do to topple him. No one doubts that Maduro would fall if the men in charge of Venezuela's armed forces withdraw their support. Some heavy hitters on the world stage continue to back him — notably China, Iran, Turkey and Russia. Fractures have appeared in the lower ranks. Yet Venezuela's military high command has remained loyal, despite Guaidó's offer of amnesty to armed forces that abandon the government. Maduro's opponents explain the continued support by saying senior army commanders pocket millions from illicit black-market activities, including food and currency rackets and narcotics and gold smuggling. Venezuelans also frequently attribute their generals' dogged loyalty to the role played by Cuba, Maduro's closest foreign friend. Large numbers of Cuban agents operate within the Venezuelan military, monitoring the ranks for signs of betrayal. The National Assembly voted to block the government's long-running shipments of heavily discounted oil to Cuba, in the hope this will encourage the Cubans to withdraw their spies. But the state-run oil company is not expected to abide. As Guaidó's U.S.-backed campaign to assume power enters its third month, Maduro appears to be stepping up the use of force against his opponents. After Venezuela's huge power outage, Maduro called for the mobilization of colectivos, an armed pro-government motorcycle militia with a reputation for using extreme violence. Many Venezuelans feel the same about other security forces: Thirty-seven people were reported killed in Caracas during house raids in January by the national police's special force, according to United Nations High Commissioner for Human Rights Michelle Bachelet. Most of the victims were from poor neighborhoods and were suspected of participating in anti-government protests, she said. Many Venezuelans believe — and often hope — the U.S. will lead a military intervention that will finally drive out Maduro. That conviction is reinforced by the Trump administration and Guaidó: Both regularly emphasize that "all options are on the table." Yet the idea is widely opposed in the international arena, and there is little sign of enthusiasm for it in Washington. Maduro's hard-core support is small: just 14%, according to a February survey by the Caracas-based polling company DATANALISIS. Guaidó scored 61%. The same survey included another striking statistic: 47% still support Chávez, who died of cancer in 2013. Luis Vicente León, head of DATANALISIS, cites this as evidence that in the long term, the Chavistas could eventually make a comeback in Venezuela, "even with transparent and clear elections." Maduro now faces an even tougher test. Blows are raining down on him, as he dodges and weaves to somehow keep his broken economy running. The oil sanctions the U.S. imposed on Venezuela in late January are making an impact. With the world's largest proven oil reserves, Venezuela's production dropped by 142,000 barrels per day from January to February, according to OPEC. That is far below Venezuela's output from a few years ago. The industry's infrastructure is falling apart; many thousands of engineers have left; the state-run oil company finds it increasingly difficult to import diluents needed to raise Venezuelan crude to export grade. The Maduro government is scrambling to find fresh clients for crude oil that it is no longer exporting to the U.S. Despite this, it is far from certain Maduro will fall. That concerns rights groups, which fear U.S. sanctions are deepening the hardship of a long-suffering population and weakening their ability to organize against Maduro's government. Crashing an economy alone does not always bring a government down. Pollster León recalls: "Everyone thought the same with Cuba, Iran, Syria, Zimbabwe and North Korea." (NPR: https://www.npr.org/2019/03/25/706635580/venezuelas-maduro-faces-pressure-from-much-of-the-world-yet-he-persists)

 

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.