Venezuela

Refusing to yield

Print edition : March 29, 2019

“Hands off Venezuela” rally in Caracas in February. Photo: Vijay Prashad

In the Kaikachi neighbourhood at La Vega in Caracas. Photo: Vijay Prashad

Carlos Mendoza Potellá at the Central Bank of Venezuela in Caracas.

Political mobilisation defines the Venezuelan government’s current strategy as it resolutely battles economic sanctions by the United States and its allies and the world waits for Washington’s next move.

Clashes on the Colombia-Venezuela border over the theatrical “humanitarian aid” convoys produced by the United States government have now subsided. Even talk of the urgency to bring this aid into Venezuela has now largely died down. This silence over aid illustrates the shallowness of the argument for the aid in the first place. If there was such urgency when a coup seemed imminent, what is the reason for the silence after the coup failed?

U.S. Senator Marco Rubio, who led the public charge against the Venezuelan government, has moved from the question of aid to asking the U.S. Congress to offer temporary protective status for Venezuelans in the U.S. This will test the mettle of the commitment to humanitarianism within the U.S. The administration of President Donald Trump has been feverishly revoking temporary protective status for migrants from other parts of the Caribbean as part of its anti-immigrant policy. Whether its hardcore anti-immigrant base will fall in line to facilitate the ongoing attempts at regime change in Venezuela remains to be seen.

All these mutterings are not followed as closely on the streets of Venezuela as they are in the Venezuelan government. All eyes are on Washington. What will be the next move? Fears of a military strike have now receded. Rumours had begun to come in that U.S. bombers had increased their training runs on the U.S. territory of Puerto Rico.

On February 20, U.S. Navy Admiral Craig Faller, commander of the U.S. Southern Command (which would oversee an invasion of Venezuela), hosted Army Major General Luis Navarro Jimenez, commander of the Colombian armed forces, at the headquarters of Southern Command in Miami. In early February, Admiral Faller had said that the U.S. was prepared to send troops into Venezuela. Such rhetoric is no longer heard. Nor is it plausible.

Brazil’s Vice President and former General Hamilton Mourao has said that his country will not participate in any military adventure. That shut the door on any immediate armed conflict.

No question that Venezuela’s government remains in the crosshairs, as it has been the case since 1999, when the Bolivarian Revolution began. Mourao said that Venezuela “needs a change of government”. The Lima Group, created in 2017 by 12 American states (Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Panama, Paraguay and Peru, with Guyana and Saint Lucia joining later), cannot decide on the use of force but remains committed to regime change in Venezuela. Trump has certainly lost his focus as he felt the heat from the testimony of his former lawyer Michael Cohen and as he walked away from the meeting with North Korea’s Kim Jong-un. Others in his administration, such as National Security Adviser John Bolton and regime change point person Elliot Abrams, have not forgotten their duty—to find a way to get rid of the government of Nicolas Maduro.

Venezuela’s oil

It is commonplace to hear that Venezuela has the largest proven oil reserves in the world. Trump has said that he wants Venezuelan oil. It appears as if this is a blatant attempt to grab energy resources. The brazenness has been on offer already. The U.S. and the Europeans have seized Venezuelan state assets, including $1.2 billion by the Bank of England, without the equivalent of an international warrant. This is plunder as part of regime change. But is it correct that the economic war and the threats of invasion are about oil alone? Carlos Mendoza Potella has a clear grasp of Venezuela’s economy, in particular of its oil sector. He is a legendary figure who became a communist guerilla in his youth, for which he spent time in prison and as an exile in the Union of Soviet Socialist Republics (USSR). Potella helped found the Movement for Socialism and the Fifth Republic Movement—both Left initiatives (the latter with Hugo Chavez). But what is most important about Potella is that he worked closely with Venezuela’s most insightful Oil Minister, Juan Pablo Perez Alfonso (1903-1979). It was Perez Alfonso who said that oil was the “devil’s excrement” and who fought hard to get the oligarchy of his day to understand that oil rent must be used for the nation’s good. Potella has written volumes to advance the thinking of Perez Alfonso and to make his case that Venezuela needs to both better harness its oil wealth and diversify its economy.

Potella works at Venezuela’s Central Bank. His office is spare but filled with books on oil and economics. He told me that Venezuela’s oil is mostly of the heavy variety, which means that it was expensive to bring that oil out of the ground. At current oil prices, in fact, that “oil” is not oil since it would cost more to bring it to the surface than it would command per barrel. Wells over fields with light oil need investment. If oil prices remain around $50 per barrel, there is no expectation that this oil will be lucrative. With Saudi Arabia pumping suicidal volumes of oil out of the ground and with U.S. shale oil production on the rise, there is little hope that oil prices will rise soon. This would require serious thought for countries such as Venezuela and Nigeria—countries that rely upon oil exports and have very poor populations.

Exit from Venezuela’s predicament—reliance upon its oil rent and the economic war waged by the U.S. and its allies—is not going to be easy to find. Political mobilisation defines the government’s current attitude. Continuous political education and street demonstrations against any U.S. intervention and in defence of the country are necessary. Erika Farias Pena, Caracas’ mayor, is an impressive personality. She tells me that the people of the country are resolute. I attended a public rally organised in Caracas on the anniversary of the attempted coup. Erika, as she is known by everyone, is part of a generation of women who rose up the ranks to now run many of the most important offices of the government. These include the women who are heads of various “missions” that tackle hunger and give political education. Each one of them is highly mobilised to defend the process that shaped them, but it is not enough.

A Venezuelan economist, who is a fierce defender of the Bolivarian Revolution and the government, tells me that Venezuela’s currency, which had been in a hyper-inflationary free fall, has now become stable. It has, he says, effectively been dollarised. A stable currency is necessary, but so too is access to capital markets. Trump’s sanctions from August 2017 cut Venezuela off from borrowing from capital markets. Without the removal of these sanctions, there is only a limited prospect that the economic situation will improve. Pressure from the United Nations to lessen the burden of these sanctions has had no impact. Sanctions have become the only weapon in the U.S. arsenal. It is unwilling to loosen them without some kind of surrender from the government in Caracas. There is no evidence of any such surrender.

Russian initiative

There is hope that the initiative by Russia might bear fruit. Russian Foreign Minister Sergei Lavrov told U.S. Secretary of State Mike Pompeo that his government would be willing to hold bilateral talks with the U.S. about Venezuela. Russia has said that the U.S. should stop threatening the Venezuelan government. Such talks might dial down the tension further, but they are unlikely to be able to reduce the sanctions. Trump walked away from the talks with North Korea’s Kim Jong-un over the issue of sanctions. He believes that his stubbornness allows him to get the best deals. The price is being paid by the Venezuelan people—highly motivated, certainly, but also living with an economy that trembles under the weight of the devil’s excrement and the economic war.

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