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Many reasons Maduro won’t be overthrown. Sanctions won’t cause him to be toppled

Tom Wood, January 23, 2020, https://www.theguardian.com/commentisfree/2020/jan/23/juan-guaido-regime-change-venezuela-chavismo-maduro, A year on, Juan Guaidó’s attempt at regime change in Venezuela has stalled

Why did predictions of Maduro’s imminent departure prove so ill-founded? The mismatch was partly the product of wishful thinking on the part of international establishment opinion. There has been a through-the-looking-glass aspect to much coverage of Venezuela over the past year, as if the reality were simply whatever the opposition said it was, rather than a political struggle it was the media’s job to analyse and explain. But it is also clear that the US-sponsored drive towards regime change in Venezuela was premised on a series of miscalculations It was based, firstly, on an overestimation of the popular appeal of the Venezuelan opposition. A fringe politician before being elevated to the chairmanship of the national assembly, Guaidó was always something of an ersatz figurehead, better at cultivating a following on Twitter than among ordinary Venezuelans. The confrontational strategy advocated by Guaidó and his political mentor, Leopoldo López, was in part designed precisely to compensate for their lack of a broad support base, ratcheting up the pressure so the situation more closely matched the fever pitch of their anti-Chavista rhetoric. After failing to topple Maduro last January as planned, other debacles followed, notably an abortive army putsch on 30 April. This effort was very clearly concerted with US officials, including John Bolton, then national security adviser, who lamented that senior Venezuelan officials who were supposed to have changed sides had not done so. This pointed to another major miscalculation: the opposition had clearly exaggerated the degree of discontent with Maduro within the army, and officials in Washington either didn’t know better or didn’t care to question this misleading view. But perhaps the biggest miscalculation of all, both by the Venezuelan opposition and the Trump administration, was to underestimate the resilience of Chavismo. Amid a desperate economic situation, and with a population suffering from unemployment, hunger and police repression, Maduro’s popularity had plummeted, his support dwindling even in loyal constituencies. Yet discontent with Maduro was one thing; getting behind the Venezuelan opposition quite another. The fact of US backing for Guaidó’s coup attempt was itself a major factor in rallying support for Maduro: Venezuelans have good reasons to hesitate before opting for a government glued together in Miami and Washington. Once the initial drive for regime change fizzled out, the Venezuelan opposition camp also ran into other problems. Last June two of Guaidó’s aides were mired in a corruption scandal, and more sleaze came to the surface in December over ties between nine Venezuelan opposition members and a Colombian businessman who was facing US sanctions. Another dent to Guaidó’s image came in September when photographs surfaced of him alongside members of one of Colombia’s rightwing paramilitary groups.ut the most damaging blow came on 5 January 2020, when the national assembly voted to replace Guaidó as chair with a rival oppositionist, Luis Parra. This deprived Guaidó of his already slender constitutional claim to the de facto presidency. Accounts of what happened next are highly contested: Guaidó claims he was barred from entering the national assembly, and was filmed climbing the fence that surrounds the building; other opposition deputies, however, reportedly entered freely, and many of them voted for Parra. Later that day, Guaidó held a parallel vote in the offices of an opposition newspaper, El Nacional, that reinstated him as national assembly chair. A week later, on 13 January, the US made its feelings clear by imposing sanctions on several opposition deputies who had voted for Parra, as well as on Parra himself. Behind these manoeuvres lies a highly significant division within the opposition, between those still committed to regime change at all costs and those willing to negotiate with Maduro to find some kind of political solution to Venezuela’s crisis. Guaidó represents the former group, but with the regime-change strategy stalled, the initiative last year began to shift to the latter camp. In May 2019 and again in July, talks brokered by Norway were held between representatives of Maduro and the opposition. It was partly to break the momentum of these talks that the Trump administration announced a new and even more punitive round of sanctions last August. Aimed at tightening the screws on the Maduro government, they amount, like all sanctions, to collective punishment for the entire population, and have undoubtedly made an already dire situation much worse. The sanctions are also unlikely to tilt the situation in the opposition’s favour – as the US should have learned from 60 years of failed sanctions on Cuba. On the contrary, Maduro has been boosted by the mere fact of surviving in the face of such pressure. Parts of the opposition seem aware of this and have continued to negotiate with the government, with one eye on parliamentary elections due to be held by the end of 2020. Guaidó still has the backing of the US and more than 50 other governments, including Brazil and Colombia, both major regional players. On the anniversary of his previous attempt, he is now trying to reinvigorate his push for regime change, having crossed over to Colombia to meet the US secretary of state, Mike Pompeo, on 20 January. But there is little reason to think it will work any better this time. What does the situation in Venezuela tell us about the outlook for Latin America as a whole? Coming hot on the heels of Jair Bolsonaro’s election victory in Brazil in 2018, and of successes earlier that year for the right in Colombia and Chile, Guaidó’s attempted coup seemed set to confirm a decisive swing to the right in the region. Yet Maduro’s surprising endurance has bucked that trend, and while the November 2019 coup against Evo Morales in Bolivia reaffirmed the rightward shift, there have also been countervailing tendencies: Bolsonaro’s slumping approval ratings, President Mauricio Macri’s defeat in Argentina, Chile’s continuing constitutional emergency, and mass anti-government protests in Colombia. There is no doubting that the right has been on the rise in Latin America. But its ascendancy is far from consolidated – and in this uncertain interregnum, much remains to be decided.

Oil supplies increasing now, prices falling

Market Watch, January 23, 2020, https://www.marketwatch.com/story/crude-prices-slide-on-worries-about-oversupply-china-virus-fallout-2020-01-23

Oil futures tumbled for a third session in a row on Thursday, with U.S. benchmark prices logging their lowest finish since late November, on fears that economic growth and oil demand may be hit by the spread of the coronavirus outbreak in China. Oversupply concerns, despite a disruption to Libyan oil production, have been additional worries for the investors of the commodity…. Late Wednesday, the American Petroleum Institute reported a weekly supply rise of 1.6 million barrels. On average, the EIA was expected to report a weekly climb of 500,000 barrels in U.S. crude supplies, according to a poll of analysts conducted by S&P Global Platts. 

Four in 10 Venezuelan kids are impoverished

David A. Wemer is associate director, editorial at the Atlantic Council, January 23, 2020, https://www.atlanticcouncil.org/blogs/new-atlanticist/a-year-in-the-united-states-still-stands-behind-venezuelas-interim-government/, A year in, the United States still stands behind Venezuela’s interim government

 

As Miguel Pizarro, the special commissioner for humanitarian assistance for the interim government and a representative for Petare in the Venezuelan National Assembly, explained, approximately half of Venezuela’s population has now either fled the country or is reliant on international assistance for basic needs. According to Pizarro, “four out of every ten kids [in Venezuela] are not growing the way they should,” because of lack of food and medicine.

The US plans new sanctions after Venezuelan military aircraft challenged a US plane. The situation is escalating

Woody, Christopher. 1-22-2020, “The US is going after Venezuela over aircraft it says endangered US military planes,” Business Insider, https://www.businessinsider.com/us-sanctions-venezuelan-aircraft-it-says-involved-in-unsafe-encounters-2020-1

The US unveiled its latest sanctions against the government of Venezuelan President Nicolas Maduro on Tuesday, announcing that the Treasury Department’s Office of Foreign Assets Control designated 15 aircraft as blocked property of the state oil company, Petroleos de Venezuela, or PDVSA. Several of the aircraft were used to “transport senior members of the former Maduro regime in a continuation of the former Maduro regime’s misappropriation of PdVSA assets,” according to the release. The US no longer considers the Maduro government legitimate, instead recognizing Juan Guaidó, president of the country’s national assembly, as interim president The US patrol plane “was flying in international airspace as part of our intelligence and monitoring mission, so we can better understand the context, so we can understand what to plan for and what to anticipate and how to work inside the US whole-of-government efforts” to respond to the situation in Venezuela, US Navy Adm. Craig Faller, head of Southern Command, said in October when asked about the July incident.

Many reasons Maduro won’t be overthrown. Sanctions won’t cause him to be toppled

Tom Wood, January 23, 2020, https://www.theguardian.com/commentisfree/2020/jan/23/juan-guaido-regime-change-venezuela-chavismo-maduro, A year on, Juan Guaidó’s attempt at regime change in Venezuela has stalled

Why did predictions of Maduro’s imminent departure prove so ill-founded? The mismatch was partly the product of wishful thinking on the part of international establishment opinion. There has been a through-the-looking-glass aspect to much coverage of Venezuela over the past year, as if the reality were simply whatever the opposition said it was, rather than a political struggle it was the media’s job to analyse and explain. But it is also clear that the US-sponsored drive towards regime change in Venezuela was premised on a series of miscalculations It was based, firstly, on an overestimation of the popular appeal of the Venezuelan opposition. A fringe politician before being elevated to the chairmanship of the national assembly, Guaidó was always something of an ersatz figurehead, better at cultivating a following on Twitter than among ordinary Venezuelans. The confrontational strategy advocated by Guaidó and his political mentor, Leopoldo López, was in part designed precisely to compensate for their lack of a broad support base, ratcheting up the pressure so the situation more closely matched the fever pitch of their anti-Chavista rhetoric. After failing to topple Maduro last January as planned, other debacles followed, notably an abortive army putsch on 30 April. This effort was very clearly concerted with US officials, including John Bolton, then national security adviser, who lamented that senior Venezuelan officials who were supposed to have changed sides had not done so. This pointed to another major miscalculation: the opposition had clearly exaggerated the degree of discontent with Maduro within the army, and officials in Washington either didn’t know better or didn’t care to question this misleading view. But perhaps the biggest miscalculation of all, both by the Venezuelan opposition and the Trump administration, was to underestimate the resilience of Chavismo. Amid a desperate economic situation, and with a population suffering from unemployment, hunger and police repression, Maduro’s popularity had plummeted, his support dwindling even in loyal constituencies. Yet discontent with Maduro was one thing; getting behind the Venezuelan opposition quite another. The fact of US backing for Guaidó’s coup attempt was itself a major factor in rallying support for Maduro: Venezuelans have good reasons to hesitate before opting for a government glued together in Miami and Washington. Once the initial drive for regime change fizzled out, the Venezuelan opposition camp also ran into other problems. Last June two of Guaidó’s aides were mired in a corruption scandal, and more sleaze came to the surface in December over ties between nine Venezuelan opposition members and a Colombian businessman who was facing US sanctions. Another dent to Guaidó’s image came in September when photographs surfaced of him alongside members of one of Colombia’s rightwing paramilitary groups.ut the most damaging blow came on 5 January 2020, when the national assembly voted to replace Guaidó as chair with a rival oppositionist, Luis Parra. This deprived Guaidó of his already slender constitutional claim to the de facto presidency. Accounts of what happened next are highly contested: Guaidó claims he was barred from entering the national assembly, and was filmed climbing the fence that surrounds the building; other opposition deputies, however, reportedly entered freely, and many of them voted for Parra. Later that day, Guaidó held a parallel vote in the offices of an opposition newspaper, El Nacional, that reinstated him as national assembly chair. A week later, on 13 January, the US made its feelings clear by imposing sanctions on several opposition deputies who had voted for Parra, as well as on Parra himself. Behind these manoeuvres lies a highly significant division within the opposition, between those still committed to regime change at all costs and those willing to negotiate with Maduro to find some kind of political solution to Venezuela’s crisis. Guaidó represents the former group, but with the regime-change strategy stalled, the initiative last year began to shift to the latter camp. In May 2019 and again in July, talks brokered by Norway were held between representatives of Maduro and the opposition. It was partly to break the momentum of these talks that the Trump administration announced a new and even more punitive round of sanctions last August. Aimed at tightening the screws on the Maduro government, they amount, like all sanctions, to collective punishment for the entire population, and have undoubtedly made an already dire situation much worse. The sanctions are also unlikely to tilt the situation in the opposition’s favour – as the US should have learned from 60 years of failed sanctions on Cuba. On the contrary, Maduro has been boosted by the mere fact of surviving in the face of such pressure. Parts of the opposition seem aware of this and have continued to negotiate with the government, with one eye on parliamentary elections due to be held by the end of 2020. Guaidó still has the backing of the US and more than 50 other governments, including Brazil and Colombia, both major regional players. On the anniversary of his previous attempt, he is now trying to reinvigorate his push for regime change, having crossed over to Colombia to meet the US secretary of state, Mike Pompeo, on 20 January. But there is little reason to think it will work any better this time. What does the situation in Venezuela tell us about the outlook for Latin America as a whole? Coming hot on the heels of Jair Bolsonaro’s election victory in Brazil in 2018, and of successes earlier that year for the right in Colombia and Chile, Guaidó’s attempted coup seemed set to confirm a decisive swing to the right in the region. Yet Maduro’s surprising endurance has bucked that trend, and while the November 2019 coup against Evo Morales in Bolivia reaffirmed the rightward shift, there have also been countervailing tendencies: Bolsonaro’s slumping approval ratings, President Mauricio Macri’s defeat in Argentina, Chile’s continuing constitutional emergency, and mass anti-government protests in Colombia. There is no doubting that the right has been on the rise in Latin America. But its ascendancy is far from consolidated – and in this uncertain interregnum, much remains to be decided.

Sanctions are working. Venezuela has less cash than the rapper Jay-Z. They are going broke

Pietsch, Bryan. 1-21-2020, “Venezuela reportedly has less than $1 billion in cash, which is less than rapper Jay-Z’s net worth,” Business Insider, https://www.businessinsider.com/venezuela-reportedly-has-less-than-1-billion-in-cash-2020-1

Venezuela’s cash supply has fallen below $1 billion as the country faces sanctions from governments around the world, limiting its ability to access funds and sell off the tons of gold it has in storage. The South American country now has less than $800 million in cash and $200 million in other liquid assets, people familiar with the Venezuelan central bank’s finances told Bloomberg. The drop means Venezuela’s cash balance has dropped below the net worth of many billionaire entrepreneurs, including Jay-Z, who is worth more than $1 billion, according to Forbes Joining the list of people worth more than Venezuela’s supply of cash are Kylie Jenner, who Forbes ranked as the world’s youngest self-made billionaire, and ultra-wealthy founders like Jeff Bezos of Amazon and Bill Gates of Microsoft. While Venezuela has around 73 tons of gold held locally, worth around $3.6 billion, the country has struggled to turn that gold into cash because the US has limited buyers and banks from doing business with the country’s embattled presidential administration, the report said. Venezuelan President Nicolás Maduro has been accused of rigging presidential elections last year and is not recognized by many countries, including the US, as the president of his country. Sanctions from around the world have tried to limit Maduro’s power in an effort to force him from the presidency. Opposition leader Juan Guaidó has been recognized by many countries around the world as the winner of last year’s elections and the country’s rightful president, though Maduro has refused to cede power to him.  Aside from its domestic supply of gold, the country also has about $1.6 billion worth of gold in London, but the Bank of England has blocked Maduro from bringing that gold back home, according to the report. The shrinking supply of cash could spell more trouble for Venezuelans, not just Maduro, as the country faces a humanitarian crisis amid massive, widespread inflation and the crash of the country’s economy.

Maduro would have to be strong to overthrown by the US military to leave office, *small economic reforms are solidifying his power

Nick Walsh, January 22, 2019, https://www.cnn.com/2020/01/21/americas/guaido-venezuela-one-year-intl/index.html, Things have changed for Venezuela. But they’re not what Juan Guaido hoped for

So what has changed, if Guaido brought none?

First was Trump. While the fuel for Guaido’s rise was the smoldering and inexorable collapse of Venezuela, the spark was a White House convinced that an easy win was possible. Sacked US national security adviser John Bolton, who told Maduro he should look into beachfront property for retirement, may himself be crafting his explosive memoirs overlooking some gentle sands. Trump’s officials still bang the drum of sanctions, but Venezuela is rarely on his lips now. Unless Trump thinks a revived campaign to oust Maduro may help his reelection chances — perhaps in Florida — it’s unlikely he’ll escalate anytime soon. And given how entrenched the Maduro government is, the US would need to consider using force. Second, Guaido failed. His team was new to cutthroat politics, charmingly dazzled by their sudden overnight ascendance, and alternated between being startlingly adept and shockingly naive. The failed attempt to overthrow Maduro on April 30 was a decisive moment when Guaido and his emboldened supporters, including even soldiers in the streets of the capital in blue armbands, failed to turn the tide. Guaido failed at the one thing everyone knew he needed to break: the security forces and their hold on the guns, drugs, money and borders. Which leads to the third change — in Maduro himself. He has been pragmatic, but also ruthless. A recent interview with The Washington Post saw him offer direct talks with the Trump administration and even business opportunities to American oil giants. Offering Trump business deals while the White House is busy instead pillorying you with sanctions borders on ridicule and is not something you do unless you are pretty relaxed.

Maduro has also turned nast(ier). Whereas a year ago, the security forces seemed at times reticent to resort to violence — and perhaps even feared greater popular anger if they drew Venezuelan blood — now, the gloves are off. An extensive torture campaign has been documented by human rights workers, intended to rub out any sense of disloyalty from the military. Cuban operatives stalk detention centers where systematic violence and rape is alleged. Civilian opponents have been executed by special police units, human rights workers and the UN say. The Maduro government has rejected these allegations. Even Guaido’s fellow opposition legislators — together with journalists and bystanders — were physically attacked outside the National Assembly this month by Maduro loyalists. There’s always been thuggery, but the torture has become systematic and the targets on the street are broader now. Maduro has also been smart enough to allow tiny reforms. The seat of power — Caracas — is strangely calm. A friend there tells me dollars are informally permitted to pay for goods, removing one grievance behind the protests and reducing the impact of hyperinflation on the local bolivar. If you have dollars you can eat, even if the city is even less secure. Wholesale decline has continued in rural areas, where barter is now common and food scarce. But if the capital is muddling through, Maduro’s grip on its levers of power can stay tight.

It is hard not to see the hand of Moscow in some of these choices. Tiny economic reforms and targeted brutality are straight from the Kremlin’s playbook. Russian state oil firm Rosneft is also accused of trading Venezuelan oil with India and China to get around sanctions. (Russia and its companies have denied any wrongdoing or involvement in deals alleged to break international law.) Again, while the White House’s attention span for revolution demands overnight results, Moscow sits in with its allies for the long haul. Yet none of Guaido’s failure alters the underlying crisis at the heart of Venezuela: that its kleptocracy and mismanagement are still bleeding it dry, with hundreds of thousands still refugees around the region. But it marks yet another opposition leader’s rise and then deceleration. Guaido may not be done yet. Maduro’s new penchant for strong-arm tactics could see his rival arrested. That could spark internal fury, or meaningful external action. Military defectors in exile may muster enough foreign support to affect some sort of change. The Trump administration may have a backup plan. But the most startling observation — a year since Guaido stood before a crowd of thousands of supporters in Caracas and declared he was the legitimate president of the entire nation — is how smoothly Maduro has sailed out of the storm.

Talks not supported by the US and they have failed

Reuters, January 21, 2020, https://www.reuters.com/article/us-usa-venezuela-diplomacy/pompeo-calls-for-fair-elections-in-venezuela-and-nicaragua-idUSKBN1ZK2GU

Asked whether the United States would consider direct talks with Maduro, Pompeo said there had been many conversations with the Venezuelan leader in recent months. A State Department official said the reference to conversations with Maduro related to efforts by countries other than the United States, such as Norway and other European nations. Maduro’s envoys talked with the Venezuelan opposition in negotiations brokered by Norway last year, and during several previous attempts to find a way out of the country’s political crisis. So far, none of the talks have led to a breakthrough.

The Petro (Vanezuela’s Bitcoin) is useless

Dalmus Ngetich, January 1, 2020, https://coingape.com/venezuela-petro-dumped-at-a-50-discount-in-localbitcoins/, Venezuela Petro Dumped at a 50% Discount at LocalBitcoins

According to sources in Venezuela, the government airdropped 0.5 Petro to government workers and pensioners claiming that their effort reached 6 million people. As a crypto asset, the objective of the government was to probably avail a shield for its citizens. However, it soon emerged that people used the same airdropped Petro to buy ordinary stuff through Point-of-Sale and government-supported Petro Wallets. Both avenues were shut, paving the way for people to liquidate at peer-to-peer exchanges. At LocalBitcoins, the value of each Petro was consequently priced at $30, 50% of what the government had set:“You can go to “authorized by the government” exchanges, some of the offer the way of exchanging them, as it is free market and more people want to sell that people wanting to purchase, the price has dropped to 1 PRT around $30 (50%), of course a socialist government doesn’t like this, they say its price MUST be 60 USD. Some people are using LocalBitcoins to list Petros, but at the real market price of $30.”

Armed groups torturing Venezuelans

Human Rights Watch, January 22, 2020, https://www.hrw.org/news/2020/01/22/colombia/venezuela-armed-groups-control-lives-border, Colombia/Venezuela: Armed Groups Control Lives at Border

Armed groups use brutal violence to control peoples’ daily lives in the eastern Colombian province of Arauca and the neighboring Venezuelan state of Apure, Human Rights Watch said in a report released today.

The 64-page report, “‘The Guerrillas Are the Police’: Social Control and Abuses by Armed Groups in Colombia’s Arauca Province and Venezuela’s Apure State,” documents violations by the National Liberation Army (ELN), the Patriotic Forces of National Liberation (FPLN), and a group that emerged from the demobilized Revolutionary Armed Forces of Colombia (FARC). Abuses including murder, forced labor, child recruitment, and rape are often committed as part of the groups’ strategy to control the social, political, and economic life of Arauca and Apure. Impunity for such abuses is the rule. “Residents in Arauca and Apure live in fear, as armed groups recruit their children and impose their own rules, threaten residents, and punish those who disobey, even with murder or months of forced labor in the fields,” said José Miguel Vivanco, Americas director at Human Rights Watch. “The groups operate with near-to-absolute impunity on both sides of the border, and especially in Venezuela they sometimes are in collusion with security forces and local authorities.” Human Rights Watch visited Arauca in August 2019 and interviewed 105 people, including community leaders, victims of abuses and their relatives, aid workers, human rights officials, judicial officials, and journalists. Human Rights Watch also sent information requests to Colombian and Venezuelan authorities and consulted an array of sources and documents. Human Rights Watch found that armed groups in both countries have established a wide range of rules usually imposed by governments, and that the groups brutally enforce them. These include curfews; prohibitions on rape, theft, and murder; and regulations governing everyday activities such as fishing, debt payment, and closing times for bars. In some areas, the groups forbid wearing motorcycle helmets so that armed group members can see travelers’ faces. The groups routinely extort money from virtually anyone carrying out economic activity. The groups have committed unlawful killings in Arauca, including of human rights defenders and community leaders. In 2015, when the FARC declared a ceasefire to advance peace talks with the Colombian government, the authorities recorded 96 homicides in Arauca. Homicides have increased, reaching 161 between January and late November 2019. Armed groups are responsible for the majority of these killings. Human Rights Watch has also received credible allegations of killings by armed groups in Apure, but Venezuelan authorities have not released reliable, comprehensive statistics. At least 16 bodies of civilians found in Arauca in 2019 had scrawled scraps of paper accusing the victims of being “informants,” “rapists,” “drug dealers,” or “thieves.” Some were signed by the FARC dissident group operating in the area. Armed groups in Arauca and Apure also punish residents with forced labor, sometimes requiring them to work for months without pay, farming, cleaning roads, or cooking in the armed groups’ camps, which are often in Venezuela. “Here we have to do as they say, or you die,” said a resident who fled her town after being threatened by armed groups. “The rules are… you can’t talk to the army; you can’t leave the house late at night… If we don’t comply with the rules, the penalty is death.” About 44,000 Venezuelans live in Arauca. Most have arrived since 2015, fleeing the devastating humanitarian, political, and economic crisis in their home country. Venezuelans in Arauca often live in precarious economic conditions, sleeping on the street or forming makeshift settlements. Thousands have also set out on foot from the border region, often unaware of the dangers along the way, including the predatory armed groups. Venezuelans have also suffered abuses that are not directly associated with armed groups. There are credible reports that women are trafficked, sexually exploited, and coerced to sell sex. In some cases, once they arrive at a brothel in Arauca, their documents are withheld, and they are given clothes, food, and “housing” for which they must pay with sex. Venezuelans also face xenophobia in Arauca and are often blamed by residents for crime. Colombian authorities have tried to wrest power from armed groups, but impunity for serious abuses remains the norm and protection for residents is limited. As of September, the Colombian Attorney General’s Office had secured convictions for only eight killings committed in Arauca since 2017, out of more than 400 under investigation. None of the convictions were of armed group members. Nor has the government convicted armed group members of other crimes such as rape, threats, extortion, child recruitment, forced displacement, or the criminal offense of “forcible disappearance” since 2017.

US sanctions are being granted waivers. This sends a mixed set of messages and allows Venezuela to remain economically viable despite calls for more pressure

Slav, Irina. 01-20-2020, “U.S. Extends Chevron Venezuela Sanction Waiver,” OilPrice, https://oilprice.com/Latest-Energy-News/World-News/US-Extends-Chevron-Venezuela-Sanction-Waiver.html

The United States Treasury Department granted Chevron another three-month sanction waiver to continue operating in Venezuela, Reuters reported Sunday, with the expiry date of this latest extension set for April 22 The Treasury Department has been granting Chevron three-month extensions of its sanction waiver for a while now, with the one it announced last October reportedly being a topic of heated discussion in the Trump administration in light of Washington’s attempts to stifle all oil revenues going into the coffers of the Maduro government. Some, however, notably Secretary of State Mike Pompeo, argued that the presence of a U.S. company in Venezuela would help to quicken the recovery of its oil industry when—and if—the government changes Chevron operates a joint venture with Venezuela’s PDVSA in the country that is home to the world’s most abundant oil resources. Petroboscan, the joint venture, produced around 200,000 bpd as of October, with Chevron’s share of this at 34,000 bpd. The U.S. supermajor holds a 30-percent stake in the venture Reuters noted that Chevron reported losses of $104 million related to its business in Venezuela for the first nine months of the year. Yet if the Treasury Department stops granting it sanction waivers, Chevron would have to leave the country, which would cost it $2.7 billion in assets “Chevron is a constructive presence in Venezuela, where we have been part of the local communities for nearly a century,” a spokesman for the company told Reuters. “We remain focused on our base business operations and supporting the more than 8,800 people who work with us and their families. Our operations continue in compliance with all applicable laws and regulations. Besides Chevron, four oilfield services companies have been granted sanction waivers to continue doing business in Venezuela. However, Schlumberger, Baker Hughes, Halliburton and Weatherford have wound down their operations there to virtually nothing

 

Oil production stabilizing despite sanctions as the Venezuelan government looks to foreign investors and private industry to sidestep the economic sanctions.

Vaz, Ricardo. 1-15-2020, “Venezuela: Oil Output Stabilizes as Government Eyes Foreign Investment,” Venezuelanalysis, https://venezuelanalysis.com/news/14766

The latest monthly report of the Organization of the Petroleum Exporting Countries (OPEC) placed the South American country’s oil output at 714,000 barrels per day (bpd) in December, according to secondary sources. This represents a very small decrease compared to 717,000 bpd in November. Venezuela’s oil production averaged 792,000 bpd through 2019 The numbers reported directly by state oil company PDVSA register slightly higher, at 907,000 bpd, almost on par with 912,000 bpd in November. Venezuela’s oil industry has seen production fall sharply from 1.911 million and 1.354 million bpd in 2017 and 2018, respectively, following the imposition of crippling US financial sanctions in mid-2017. PDVSA has likewise been plagued by mismanagement, under-investment, corruption and brain drain Production plummeted further in the early months of 2019 after the imposition of a US oil embargo in late January. The measure was later expanded to a blanket ban on all dealings with the Venezuelan government or state companies in August, which also authorized secondary sanctions against third party actors The modest recovery in the final quarter of 2019 came as PDVSA resumed deliveries to Indian customers, including refining giant Reliance Industries. The deals involve exchanging crude for fuel and diluents in an effort to evade US sanctions. Chinese state oil company CNPC has also reportedly begun buying Venezuelan cargoes after suspending them in the wake of August’s general embargo. PDVSA has also increasingly resorted to selling oil cargoes to Russian energy giant Rosneft, which then reroutes them to other customers. The US Treasury Department has reportedly ruled out sanctioning Indian firms and Rosneft at this time Reuters has additionally reported that PDVSA has begun assigning cargoes to joint venture partners, who then resell them to other customers around the world. The arrangement does not reportedly violate sanctions as long as the proceeds are used to pay off PDVSA’s debts to its partners One company participating in this new framework is US oil giant Chevron, which holds a stake in Petropiar oil project in the Orinoco Oil Belt. Chevron has had its Treasury-issued sanctions waiver extended to continue operating in Venezuela extended several times, most recently in October Recent political developments could also pave the way for legislative changes aimed at attracting more foreign investment in the oil industry. The National Assembly (AN) elected a new leadership on January 5, which has pledged to “restore” constitutional order. Opposition deputy President Luis Parra was backed by pro-government deputies for the AN Presidency after he led an opposition faction in rebelling against self-proclaimed “Interim President” Juan Guaido. The Maduro government is allegedly angling to open the way for private companies to manage oil fields and hold larger stakes in joint ventures. However, these moves would need to be approved by the National Assembly The proposed changes would represent a reversal of policies enacted by former President Hugo Chávez. The current hydrocarbons laws require PDVSA to retain a stake of 60 percent or more in joint ventures, while stipulating that the state oil giant run all drilling operations. According to Reuters, the Maduro government is likewise hoping to use a liberalized joint venture framework to renegotiate foreign debt, for example offering creditors stakes in oil projects. It is not clear whether these agreements would run afoul of US sanctions.

Economic reforms won’t save the oil industry

Inter-American Dialogue, January 21, 2020, https://www.thedialogue.org/analysis/reviving-venezuelas-oil-sector-the-role-of-western-oil-majors/

After years of mismanagement and, more recently, crippling sanctions, Venezuela’s central economic engine–the oil sector–is in collapse. It’s increasingly clear that the disputed president, Nicolás Maduro, will not take the necessary steps to revive the sector and tackle Venezuela’s economic crisis. Although the timing and nature of a political transition in Venezuela are uncertain, there is little doubt that the oil and gas industry will be the immediate linchpin of an economic recovery under a new government

Not possible for Venezuela to diversify away from oil at this time

Michael Shifter, Presidentk Inter-American Dialogue, January 2020,  https://www.thedialogue.org/wp-content/uploads/2020/01/VENEZUELA-FINAL-PDF-1.pdf, REVIVING VENEZUELA’S OIL SECTOR

There is widespread agreement that Venezuela should reduce its economic dependence on oil and undergo diversification in the long term, but the country’s hyperinflation and extreme indebtedness would make it difficult to jumpstart other sectors of the economy in the short term without the massive inflow of capital that could be provided by exporting the country’s oil. In addition, repaying any loan package necessary for short-term growth, such as one from the International Monetary Fund, without a significant contribution from oil extraction, would be a monumental task given the economy’s low current level of diversification.

Sanctions stop US Venezuelan oil exports

Michael Shifter, Presidentk Inter-American Dialogue, January 2020,  https://www.thedialogue.org/wp-content/uploads/2020/01/VENEZUELA-FINAL-PDF-1.pdf, REVIVING VENEZUELA’S OIL SECTOR

However, at present, the oil industry is only further deteriorating. Production*  has declined from roughly 3.3 million barrels per day (b/d) in 19987  to about 700,000 b/d in December 2019, according to OPEC secondary sources.**,8 Far-reaching US sanctions on state oil company Petróleos de Venezuela S.A. (PDVSA) and the Venezuelan government, which have escalated since January 2019, have choked off cash flows to the Maduro regime and accelerated the decline of production from 1.1 million b/d in January 20199  to the present figure (see Figure 1). Potential markets for PDVSA crude oil shipments have dwindled as importers comply with the measures or avoid engaging with the state company for fear of violating sanctions.

No outside oil investment until the sanctions are lifted

Michael Shifter, Presidentk Inter-American Dialogue, January 2020,  https://www.thedialogue.org/wp-content/uploads/2020/01/VENEZUELA-FINAL-PDF-1.pdf, REVIVING VENEZUELA’S OIL SECTOR

The lifting of US sanctions was a pre-condition for all of the companies interviewed for this report. One company ninterviewed for this study stated that it would not take any action until it was fully comfortable that sanctions were lifted and its actions would be fully compliant, and another listed the lifting of US government sanctions as its first priority. Since Venezuelan law requires private companies to partner with PDVSA on oil projects, the sanctions against PDVSA have made operating in Venezuela very difficult, and some major oil projects have ceased production altogether. Two companies interviewed also expressed concern over the possibility of congressional sanctions, which would be more difficult to reverse than the executive sanctions used to date. The Venezuela Emergency Relief, Democracy Assistance, and Development (VERDAD) Act of 2019, introduced by Senator Bob Menendez (D-NJ) in April 2019, sought in part to codify many of the executive sanctions in place, including the executive order under which PDVSA was declared an SDN in January 2019 and earlier measures prohibiting PDVSA use of US financial markets and US persons dealing in Venezuelan debt.31 However, the version of the bill passed as part of a spending package in December 2019 ultimately did not include these measures.32 Separately, under the National Defense Authorization Act adopted for the 2020 Fiscal Year, approved in December, the Department of Defense is prohibited from contracting with entities that do business with the Maduro regime.33 The Venezuelan Contracting Restriction Act—which was introduced in April 2019 by Florida Senator Rick Scott and failed to pass in a unanimous consent process but will likely resurface—would extend this to all executive agencies.34

Lifting sanctions won’t create oil investment because there are other barriers to investment

Michael Shifter, Presidentk Inter-American Dialogue, January 2020,  https://www.thedialogue.org/wp-content/uploads/2020/01/VENEZUELA-FINAL-PDF-1.pdf, REVIVING VENEZUELA’S OIL SECTOR

Venezuela has one of the highest government takes for oil extraction in the world—above 90%.35 Elements of the fiscal regime include a 50% tax on net profits, royalties of 33% of the value of extracted crude, and a windfall tax that raises taxes on oil income when prices are high—to 80% for prices between $80-100 per barrel, and as high as 95% when prices exceed $110.36 When oil prices are $80 per barrel or lower, but higher than the prices estimate  in the government budget, there is also a 20% tax on the difference between the two prices.37 Venezuela’salternative minimum tax (AMT), colloquially referred to as the “shadow tax,” mandates a minimum tax of 50% of gross profits.38 The majority of Venezuela’s proven reserves lie in extra heavy oil fields where most projects are not economical under the current fiscal regime. The operating environment for foreign oil companies in Venezuela is also restrictive. Currently, most can only participate in mixed companies (often referred to as joint ventures (JVs)) in which PDVSA is the operator and holds at least 60% of the equity.39All of the companies surveyed listed favorable fiscal terms as a priority. Some said fiscal terms must be more flexible, as the government currently applies taxes and royalties equally to oil projects regardless of their profitability (despite some legal leeway to reduce royalties). One interviewed company stressed that other changes to the fiscal regime will be ineffectual if the AMT is not lowered or eliminated. Companies also said the elimination of foreign exchange controls and customs duties and tax exemptions to equipment, services, and personnel would be important investment conditions. Some pointed out that even if a new government recognizes the uncompetitive nature of the current fiscal terms by global standards, it may struggle to balance the needs of the government for economic recovery with establishing competitive fiscal terms for oil companies. Ultimately, though, for Western oil companies to return or expand their presence in Venezuela at all, it is clear that fiscal considerations will be a major factor. Many interviewees cited specific aspects of the regulatory framework they considered critical. One company said production-sharing or concession contracts rather than service contracts would be a precondition, whereas another said service agreements might be a lower-risk transition model for foreign companies because of the lack of equity. Three companies indicated the need for a strong, independent regulatory agency with the authority to administer areas and negotiate terms. Such an agency should be technically capable, economically savvy, effective, and depoliticized, they said. There are many examples of such agencies internationally and they are considered a global industry standard. Finally, nearly all of the companies interviewed expressed deep concern about the relationship of foreign companies vis-à-vis Venezuela’s troubled state oil company. Though no company voiced satisfaction with the status quo, their positions varied on the depth of the changes required in their relationship with PDVSA. Some companies expressed reluctance to partner with Venezuela’s state oil giant at all. Two companies voiced concern over the depleted state of PDVSA’s human resources and preferred not to work with them. One brought up the issue of corruption at the company, which evidence has shown to be widespread, and the potential hazard of running afoul of the US Foreign Corrupt Practices Act, a federal law relating to the bribing of foreign officials. Many analysts believe that the next leader of Venezuela could be another Chavista or member of the military or that there could be a power-sharing agreement between Chavistas and members of Guaidó’s government. Thus, political instability will be an ongoing concern for companies operating in Venezuela. What’s more, Venezuela has a long history of resource nationalism and expropriation in the oil sector,42 and this ideology could remain popular among swathes of the population even after a political transition. The assertion that Venezuela’s natural resources are the property of the people and that the state should exercise a high degree of control over them is one of the pillars of Chavismo and served as justification for the expropriation of some foreign oil companies’ projects under President Hugo Chávez. Even if the Chavistas vacate the Miraflores presidential palace after more than 20 years in power, their coalition still holds just under one third of the seats in the National Assembly43 and will not evaporate as a national political movement. This leaves the oil sector vulnerable to politicization  and may constrict a new government’s ability to ensure favorable fiscal and regulatory terms in the long term. It is impossible to guarantee that the government that immediately follows Maduro will keep the same policies in place as the next one, or the one after that. Even in the event of a government transition, Venezuela’s turbulent recent political history will infuse the future with uncertainty. The companies interviewed for this report noted that once a suitable legal and regulatory regime has been established, they need to be reassured that it will be consistent over time. Several companies pointed out that oil investments have a decades-long time horizon. Three companies pointed to the risk that resource nationalism will remain an important phenomenon in national politics,as described above

A new government creates a massive security dilemma that inhibits oil investment

Michael Shifter, Presidentk Inter-American Dialogue, January 2020,  https://www.thedialogue.org/wp-content/uploads/2020/01/VENEZUELA-FINAL-PDF-1.pdf, REVIVING VENEZUELA’S OIL SECTOR

Nearly all the companies surveyed emphasized that Venezuela’s security situation would be problematic, with three adding it would be a very large issue or a top priority. Companies said it will take time to thoroughly assess the security situation before they can factor it into investment decisions. Several companies cited the risk of protracted armed conflict in Venezuela following a transition, with one suggesting that it might actually escalate once military members no longer benefit from organized crime networks. Several companies also alluded to the possibility of continued resistance by the colectivos—civilian Chavista militias frequently invoked by Maduro for repressive purposes—which have been estimated to number 100,000 members.67 One company pointed out that Maduro’s reliance on oil revenues has kept these organizations from attacking oil installations—restraint which might not continue under a new government.

Madero’s ties to Iran means he will support terrorism against the US

Washington Examiner, January 22, 2020, https://www.washingtonexaminer.com/policy/defense-national-security/nightmare-in-venezuela-maduros-alliance-with-hezbollah-raises-specter-of-terror-threat-analysts-say, ‘Nightmare’ in Venezuela: Maduro’s alliance with Hezbollah raises specter of terror threat, analysts say

Venezuelan strongman Nicolas Maduro’s partnership with Hezbollah has increased the risk that Iran will sponsor terrorism in Latin America, according to an envoy for the socialist leader’s chief rival. “We don’t have to wait for tragedy to strike to act,” Carlos Vecchio, opposition leader Juan Guaido’s ambassador to the United States, told the Washington Examiner. “We need to come together with a tougher stance on terrorism.” Maduro’s relationship with Hezbollah and other violent groups has taken center stage in Latin America. Venezuela’s neighbors fear terrorism emanating from the country, especially given Maduro’s support for a left-wing group that bombed a Colombian police academy last year, while Secretary of State Mike Pompeo has tried to rally allies to reinforce U.S. maximum pressure campaigns targeting both Maduro and Iran. “We all know, too, that the Iranian regime’s top terrorist proxy, Hezbollah, has found a home in Venezuela under Maduro,” Pompeo said Monday at a counterterrorism ministerial in Colombia. “This is unacceptable.

Russian support continues to sustain Maduro

Isayen Herrera, January 16, 2020, https://www.aljazeera.com/ajimpact/venezuela-pork-leg-politics-highlight-russian-influence-200112185206773.html

ANGEL ALVARADO, MEMBER OF THE NATIONAL ASSEMBLY OF VENEZUELA

US sanctions against Venezuela are designed to “isolate Maduro’s regime from the global financial system”, according to a statement issued by Trump’s government. The US can do this because its banks and currency play central roles in global finance, facilitating cross-border transactions for governments, businesses, assorted entities and individuals By ordering its banks not to process Venezuelan transactions, the US drastically reduced the country’s options for trade, which increased the value of the Latin American nation’s relationship with Russia In April 2019, Yomana Koteich, Venezuela’s Minister of International Trade, told state-owned news channel Russia Today that the two countries were halting transactions in US dollars and moving to local currencies and the euro. By October 2019, Moscow and Caracas had signed 264 cooperation agreements across 20 different strategic areas. They also struck $4bn in economic, technological, and military deals. Angel Alvarado, an opposition leader and member of the National Assembly, the country’s legislative body, said Russia’s support has played a key role in helping Maduro’s regime stay in power despite the wide recognition that Juan Guaido has around the world as the country’s interim president. It is because transactions between Caracas and Moscow bypass the US that Maduro was able to get around the sanctions and pay for the pork. “During the past two years, Venezuela has paid $5bn to Russia, and that is the only debt that has been honoured [by the regime],” Alvarado told Al Jazeera. “Out of these billions of dollars, the payment of the pork legs is something almost marginal,” he said. “The reality is that Venezuela is still in a deep nutrition and healthcare crisis.” Holiday pork is unlikely to solve the country’s food, economic and health crises. Yet that’s what makes the pork battle all the more significant. It speaks to the need to influence voters who are not only angry and anxious, but also weakened by hunger.

China reducing its cooperation with Venezuela

Reuters, January 15, 2020, https://www.reuters.com/article/us-venezuela-politics-china-russia/u-s-envoy-sees-china-scaling-back-economic-support-for-venezuelas-maduro-idUSKBN1ZE2BO

Abrams said China’s involvement in Venezuela “is diminishing, not growing” because of Beijing’s increased concern about economic mismanagement and corruption under Maduro. Washington and dozens of other countries have recognized opposition leader Juan Guaido, not Maduro, as the country’s legitimate president “It is primarily their view that it’s a mess,” Abrams said of Beijing’s misgivings, adding that Chinese officials have expressed these privately. He declined to provide specifics on how China had scaled back in Venezuela, except to say “we’re not aware of any new Chinese loans or investments in 2019.” But when asked about Abrams’ comments, China’s foreign ministry said that after decades of growing economic ties, “presently, China and Venezuela are stopping or slowing down some of our cooperation, namely due to sanctions and other factors…. But as Chinese growth leveled off and crude became plentiful after the 2014 oil price collapse, China had less to gain from the relationship. Caracas, caught in an economic meltdown, is estimated to owe Beijing nearly $20 billion in outstanding loans. There has been a steady drop-off in Chinese financing, with Beijing reluctant to approve new loans, since the opposition took over the country’s legislature in 2016.

Malnutrition substantially increasing

Isayen Herrera, January 16, 2019, https://www.aljazeera.com/ajimpact/venezuela-pork-leg-politics-highlight-russian-influence-200112185206773.html

Undernourishment has significantly increased in Venezuela in recent years, according to the United Nations, with the portion of the Venezuelan population that is undernourished rising from 6.4 percent between 2012 and 2014 to 21.2 percent between 2016 and 2018. “You attend without knowing what they will give you, but you have no other choice because with the money [that the state] gives [me] monthly after 30 years of working, I can’t even buy two kilos of meat,” Graffe said as she cooked the rice, beans and fried bananas that she felt grateful to have because so many people have far less.

Countries have stopped accepting Venezuelan oil exports because Venezuela is demanding payment in cryptocurrency

Lucy Kasai, January 17, 2020, Venezuela’s demand for oil payments in cryptocurrency halts purchases, https://www.worldoil.com/news/2020/1/17/venezuela-s-demand-for-oil-payments-in-cryptocurrency-halts-purchases

HOUSTON (Bloomberg) – Some buyers of Venezuelan crude oil have halted purchases after the country started demanding payment of port fees in its failed cryptocurrency. Exports of at least 1 million barrels of oil were put on hold after the government announced this week that certain maritime fees, currently paid in euros, must be paid in Petros starting Monday, according to people with knowledge of the situation. Buyers worry the payment may be in violation of sanctions after the U.S. targeted the cryptocurrency, calling it a “scam.” The oil-rich nation launched the Petro two years ago as a way to navigate wide-reaching U.S. sanctions that have cut off Venezuela from international capital markets. Although banners with the Petro symbol adorn government buildings in downtown Caracas, it’s largely ignored by Venezuelans who don’t know how or where to buy it. It’s backed by the country’s oil reserves, the world’s largest. The move to require payments in Petros is an attempt to boost the crypto and help Venezuelan President Nicolas Maduro’s reduce his country’s dependence on foreign currencies. It comes as crude exports are starting to recover from U.S. sanctions on Venezuela and its oil company, Petroleos de Venezuela SA. Oil exports rebounded in December, surpassing the 1 million-barrel-a-day mark for the first time since February. Crude buyers typically use shipping agencies based in Venezuela to pay port fees. Although buyers are not directly involved, at least one company last year included a clause prohibiting shipping agents from using money transfers to buy digital currencies in Venezuela after the Petro was sanctioned in March 2018, according to a document seen by Bloomberg. Most companies taking Venezuelan crude no longer pay cash. Instead, they engage in swap transactions, where they take crude oil in exchange for gasoline or diesel. Others, like Eni SpA and Repsol SA, get oil in payment for old debts.

US increasing multilateral pressure on Madero

UPI, January 17, 2020, https://www.upi.com/Top_News/US/2020/01/17/Mike-Pompeo-US-will-keep-pressure-on-Venezuelas-Nicols-Maduro/8201579294486/, Mike Pompeo: U.S. will keep pressure on Venezuela’s Nicolás Maduro

WASHINGTON, Jan. 17 (UPI) — The United States and its Western allies will put additional pressure on the Venezuelan authoritarian regime of Nicolás Maduro, Secretary of State Mike Pompeo said Friday. “More actions are coming. Maduro certainly knows that we mean business,” Pompeo told the permanent council of the Organization of American States in Washington. “It’s why he sought to withdraw Venezuela from this institution. The political crisis in Venezuela began in January 2019 when the country’s opposition leader, Juan Guaidó, proclaimed himself interim president following socialist Maduro’s contested swearing-in to a second term. By the end of the month, the United States — followed by several other countries, including Canada, Brazil and Argentina — recognized Guaidó as the rightful head of state. The Venezuelan people “are so downtrodden and starving because of Maduro’s cruelty,” Pompeo said. He praised the OAS for leading efforts to help the Venezuelan people over the past year. He cited the activation of the Inter-American Treaty of Reciprocal Assistancea regional defense treaty known by its Spanish acronym TIAR — and how quickly the organization received Guastavo Tarre as the new Venezuelan ambassador, appointed by Guaidó. “This is multilateralism; nations coming together in a way that truly does work,” Pompeo said. “These have been landmark actions.” Pompeo attributed this to the leadership of OAS Secretary-General Luis Almagro, and he strongly endorsed Almagro’s re-election in March. Almagro, a former chancellor of Uruguay, tackled crises in Venezuela and Nicaragua, among other issues, during his five-year term. “Secretary Almagro is fearless and guarding against our authoritarian regimes,” Pompeo said. “He believes in multilateralism that holds people accountable, that puts new ideas on the table and forces countries to take a position. He is the leader we need for the organization to continue to proactively address the central challenges in the region.” Pompeo also urged other international organizations around the world to “wake up” because “wishful thinking won’t restrain authoritarian regimes” like those in Caracas.

Maduro can’t be overthrown because he’s putting resources into protecting the center of power while other suffer

Anatoly Kurmanaev, January 14, 2020, New York Times, Rural Venezuela Crumbles as President Shores Up the Capital and His Power, https://www.nytimes.com/2020/01/13/world/americas/Venezuela-collapse-Maduro.html?auth=login-email&login=email

PARMANA, Venezuela — From his palace in Caracas, President Nicolás Maduro projects an image of strength and his grip on power appears secure. Residents have a regular supply of electricity and gasoline. Shops are bursting with imported goods. But beyond the city, this facade of order quickly melts away. In order to preserve the quality of life of his most important backers, the country’s political and military elites, his administration has poured the country’s dwindling resources into Caracas and forsaken large swaths of Venezuela. “Venezuela is broken as a state, as a country,” said Dimitris Pantoulas, a political analyst in Caracas. “The few available resources are invested in the capital to protect the seat of power, creating a ministate amid the collapse.” Across much of the country, basic government functions like policing, road maintenance, health care and public utilities have been abandoned. ADVERTISEMENT Continue reading the main story The only remaining evidence of the state in Parmana, a fishing village on the banks of the Orinoco River, is the three teachers who remain at the school, which lacks food, books, and even a marker for the board. ImageThe school in Parmana has no food or books. The students often leave early, too hungry to focus. The school in Parmana has no food or books. The students often leave early, too hungry to focus.Credit…Adriana Loureiro Fernandez for The New York Times The priest was the first to leave Parmana. As the economic crisis deepened, the social workers, the police, the community doctor and several of the schoolteachers deserted. Overwhelmed by crime, the village’s residents say, they turned to Colombian guerrillas for protection. “We are forgotten,” said Herminia Martínez, 83, as she stooped with a machete in the tropical heat to tend an overgrown bean field. “There’s no government here.” ADVERTISEMENT Continue reading the main story A year ago, it seemed, for a moment, that Mr. Maduro’s critics might have a chance to oust him. An opposition leader, Juan Guaidó, had staged the biggest challenge to Mr. Maduro’s rule to date by claiming the presidency and quickly winning support from the United States and almost 60 other countries. Now Mr. Maduro’s adversaries have lost momentum. The Trump administration remains supportive of Mr. Guaidó: On Monday, the United States issued new sanctions against government allies who tried to block him from assuming the leadership of the country’s National Assembly. Despite this pressure, Mr. Maduro’s tenure seems secure, in part because of how well Mr. Maduro’s policies have bolstered Caracas.

A lack of economic growth means there is no money to pay people

Anatoly Kurmanaev, January 14, 2020, New York Times, Rural Venezuela Crumbles as President Shores Up the Capital and His Power, https://www.nytimes.com/2020/01/13/world/americas/Venezuela-collapse-Maduro.html?auth=login-email&login=email

After decades of lavish oil spending, Venezuela’s government is running out of money. The country’s gross domestic product has shrunk 73 percent since Mr. Maduro took office in 2013 — one of the biggest declines in modern global history, according to estimates by the opposition-controlled congress, based on official statistics and data from the International Monetary Fund. Unable to pay meaningful salaries to millions of state employees, the government has looked the other way as they resorted to graft, influence peddling and side businesses to make ends meet. The official salary of Venezuela’s top military general is $13 a month, according to Citizens’s Control, a Venezuelan research group.

Private markets starting to flourish

Anatoly Kurmanaev, January 14, 2020, New York Times, Rural Venezuela Crumbles as President Shores Up the Capital and His Power, https://www.nytimes.com/2020/01/13/world/americas/Venezuela-collapse-Maduro.html?auth=login-email&login=email

In Caracas, the private sector — maligned for years under the Socialist government of Mr. Maduro and his popular predecessor, Hugo Chávez — has been allowed to fill some of the gaps in consumer products left by declining state imports. As once sacrosanct economic controls disappeared overnight, the capital filled up with hundreds of new shops and showrooms, offering everything from imported sports cars to American-made seaweed chips.

Guida has to meet outside the assembly, the size of his rallies have collapsed

Audrey Wilson, January 13, 2020, https://foreignpolicy.com/2020/01/13/sanctions-venezuela-united-states-trump-guaido-maduro-legislative-assembly/, U.S. Announces New Sanctions on Venezuela

Slipping support? Last week’s leadership crisis was seen by many as a blow to the opposition. While Guaidó was reelected by his peers and managed to enter the National Assembly on the first day of the new session, he’s likely to hold future sessions elsewhere. Meanwhile, the size of his rallies have dwindled since early 2019. On Saturday, Guaidó called for more protests against the Maduro regime in front of a crowd of just a few hundred people in Caracas

The collapse of governance means people turn to gangs and paramilitary forces for aid

Audrey Wilson, January 13, 2020, https://foreignpolicy.com/2020/01/13/sanctions-venezuela-united-states-trump-guaido-maduro-legislative-assembly/, U.S. Announces New Sanctions on Venezuela

Beyond the capital. Still, the Maduro regime’s grip does not extend far outside Caracas, the New York Times reports. The economy suffers under bad management and U.S. sanctions. While the president uses his power to keep resources flowing in the capital, basic services in the countryside are nearly non-existent. Now, people are turning to gangs, paramilitaries, or Colombian guerrillas for protection and aid.

Rogue paramilitary groups run things outside of the capital

Anatoly Kurmanaev, January 14, 2020, New York Times, Rural Venezuela Crumbles as President Shores Up the Capital and His Power, https://www.nytimes.com/2020/01/13/world/americas/Venezuela-collapse-Maduro.html?auth=login-email&login=email

And the burden of the country’s collapse has fallen largely on Venezuela’s provinces, where many residents have been effectively cut off from the central government. Regions close to Venezuela’s borders have resorted to smuggling and cross-border trade for survival. Agricultural towns in Venezuela’s interior have sunk into subsistence, as the collapse of the road system and gasoline shortages decimated domestic trade. Tourism hot spots have survived on private investment and by catering to the elites. Local military commanders and a few ruling party strongmen with limited ties to Mr. Maduro have taken political control of far-flung regions. As national law enforcement shrank, irregular armed groups took their place, including Colombian Marxist guerrillas, former right-wing paramilitaries, criminal gangs, pro-Maduro militias and indigenous self-defense groups. Across the Venezuelan interior, these groups have often taken charge of enforcing business contracts, punishing common crimes and even settling divorces, according to dozens of testimonies of residents collected over months of reporting in three regions. The collapse of the Venezuelan state has run its course in Parmana, a large and once prosperous village of fishermen and farmers in Venezuela’s central plains.

Venezuela found a way around the sanctions

Reuters, January 13, 2020, https://www.nytimes.com/reuters/2020/01/13/business/13reuters-pdvsa-trade-partners-exclusive.html, Act as Traders of Venezuelan Oil Amid Sanctions-Documents

Venezuela, its oil exports decimated by U.S. sanctions, is testing a new method of getting its crude to market: allocating cargoes to joint-venture partners including Chevron Corp, which in turn market the oil to customers in Asia and Africa. This would not violate sanctions as long as sale proceeds are used for paying off a venture’s debts, according to three sources from joint ventures. They said this approach could help Venezuela overcome obstacles to producing and exporting oil.

Sanctions mean Venezuela’s oil industry can’t get the capital it needs to develop

Reuters, January 13, 2020, https://www.nytimes.com/reuters/2020/01/13/business/13reuters-pdvsa-trade-partners-exclusive.html, Act as Traders of Venezuelan Oil Amid Sanctions-Documents

Several of PDVSA’s more than 40 oil producing joint ventures owe hundreds of millions of dollars to minority partners as PDVSA demanded from 2013 to 2017 they extend funding to the projects. Minority stakeholders put the money through credit lines and loans backed by supply contracts so sale proceeds would go to trustees for paying the projects’ costs while amortizing the loans. But U.S. sanctions deprived PDVSA and some joint ventures of the supply contracts used to guarantee the loans, leaving the projects without sources of cash and freezing the credit lines.

Venezuela is “ground zero” for world-wide crypto currency adoption

Daily HODL, January 12, 2020, https://dailyhodl.com/2020/01/12/crypto-insider-says-venezuela-on-pace-to-lead-merchant-adoption-as-bitcoin-btc-trading-volume-sets-new-record/, Crypto Insider Says Venezuela on Pace to Lead Merchant Adoption As Bitcoin (BTC) Trading Volume Sets New Record

Venezuela could become ground zero in the push for widespread adoption of cryptocurrency. There are now over a thousand merchants accepting crypto payments in the South American country, according to the team behind the digital asset Dash. While the number accounts for fewer than 1% of all retail stores in Venezuela, crypto insider Ernesto Contreras expects crypto usage at retail locations in the country to soar to 10% by the end of 2020 and estimates that $25 million worth of crypto will be involved in retail transactions every year. e analyst’s projections are based on the following factors: Large retailers in the country are poised to include crypto as a payment option The government pays wages using the cryptocurrency Petro (PTR), which encourages people to learn more about crypto Venezuelans are seeing the cost-saving and convenience benefits of cryptocurrencies Venezuelans are also trading increasing amounts of Bitcoin. Source: CoinDance Bitcoin trading volume on the peer-to-peer platform LocalBitcoins in Venezuela just printed a fresh all-time high. According to data tracker Coin.dance, BTC volume climbed by over 38% from 263.3 billion Venezuelan bolivar to 363.4 billion for the week ending January 11th. Says Eduardo Gómez, head of support at Purse.io, “The Venezuelan-Colombian border is the melting pot where Bitcoin is being used for what it is, an unstoppable, permission-less store of value. Lots of exciting things are happening there.”

Oil prices decreasing now, and shale production means that even geopolitical tensions in the Middle East won’t increase prices

Oilprice.com, January 12, 2020, https://finance.yahoo.com/news/oil-prices-set-slide-even-160000438.html, Oil Prices Are Set To Slide Even Further

Oil prices have had a tumultuous week since the US launched a drone attack in Baghdad, killing Iranian General Qassem Soleimani. With tensions peaking after the US and Iran traded missile attacks, oil markets priced in a risk premium. However, as long as the flow of oil barrels to the market is not affected, Rystad Energy continues to see a downward risk to prices, with further pressure on OPEC to implement even deeper production cuts in order to keep Brent oil prices around $60 per barrel through 2020. “It is important to look beyond the rhetoric of the headlines and focus on market fundamentals – including the continued rise of non-OPEC oil supply led by US shale, and flat demand growth – which all points to a surplus, not a deficit, in oil balances in 2020,” says Bjørnar Tonhaugen, Head of Oil Market Research at Rystad Energy. “Prospects of Brent prices slipping below $60 per barrel – even in the midst of an intense geopolitical flare up in the Middle East – are entirely plausible.” Oil prices still react dramatically to news of tensions in the Persian Gulf, although less dramatically now than they would have before the US shale revolution. The importance of the region for oil markets is obvious, given that seven Gulf countries alone – Saudi Arabia, Iraq, UAE, Kuwait, Iran, Oman and Qatar – produced around 24 million bpd of crude oil in December 2019. “With the regime in Tehran under heavy sanctions, Iran is no longer an official major global oil producer. This means the real risk of a conflict between the US and Iran gets pushed to neighboring Iraq, where 5,000 American troops are stationed and where Iran is wrestling for political power. Any proxy war played out in Iraq would put the country’s nearly 4.7 million bpd of crude oil and condensate production as risk,” states Tonhaugen. Related: IEA: The Oil Glut Is Going Nowhere However, one key reason that geopolitically-driven oil price swings are now more subdued relates to the stabilizing effect of US shale oil production on global oil supplies. The stellar growth of shale has introduced a significant counterweight to the market, as it helps to absorb disruptive events such as the September drone attack on Saudi Arabian oil infrastructure and the geopolitical tensions that followed the assassination of General Soleimani. Rystad Energy forecasts that the ‘call’ on OPEC (in other words, the market demand for OPEC oil) will average about 28.3 million bpd during the final nine months of 2020. By comparison, OPECs actual production in December 2019 was 29.6 million bpd, and the cartel’s new implied production target for the first quarter of 2020 is 29.2 million bpd.

Gail Tylberg, January 11, 2020, https://oilprice.com/Energy/Energy-General/Recession-Fears-Cap-Oil-Prices-In-2020.html#

Overall, I expect that oil and other commodity prices will remain low in 2020. These low oil prices will adversely affect oil production and several other parts of the economy. As a result, a strong tendency toward recession can be expected. The extent of recessionary influences will vary from country to country. Financial factors, not discussed in these forecasts, are likely also to play a role. Oil prices can temporarily spike because of inadequate supply or fear of war. However, to keep oil prices up, there needs to be an increase in “demand” for finished goods and services made with commodities. Workers need to be able to afford to purchase more goods such as new homes, cars, and cell phones. Governments need to be able to afford to purchase new goods such as paved roads and school buildings. ack of affordability comes when too many would-be buyers have low wages or no income at all. Wage disparity tends to rise with globalization. It also tends to rise with increased specialization. A few highly trained workers earn high wages, but many others are left with low wages or no job at all. It is the fact that we do not have a way of making the affordability of finished goods rise which leads me to believe that oil prices will remain low. Raising minimum wages tends to encourage more mechanization of processes and thus tends to lower total employment. Interest rates cannot be brought much lower, nor can the terms of loans be extended much longer. If such changes were available, they would enhance affordability and thus help prevent low commodity prices and recession. At this point, the world economy is struggling with a lack of affordability in finished goods and services. This lack of affordability is what causes oil and other commodity prices to tend to fall, rather than to rise.

New minimum wage increase is useless

Max Hadlevang, January 11, 2020, https://qz.com/1783680/maduro-hikes-venezuelas-monthly-minimum-wage-by-67-percent-less-than-1-kg-of-beef/, Venezuela just hiked its minimum wage 67% but a month of work still cant buy 1 kg of beef

Venezuelan president Nicolas Maduro ordered the eleventh minimum wage hike in 24 months yesterday, boosting the basic salary by 67% to 250,000 bolivars ($3.61) plus a 200,000 “food bonus” as the country struggles to deal with hyperinflation. When Maduro last raised the wage to 150,000 bolivars in October, a month of work could buy about 4 kg (9 lbs) of beef, but the new hike can’t even buy 1 kg due to inflation’s effect on consumer prices, according to Bloomberg. A month of work on the US minimum wage of $7.25 per hour buys 137 kg of ground beef. At a minimum wage of £8.21 per hour, workers in the UK can earn enough to buy 288 kg of rump steak, in a month.

Sanctions are reducing oil exports by 1/3

Reuters, January 7, 2020, https://www.reuters.com/article/us-venezuela-oil-exports/hit-by-sanctions-venezuela-lost-a-third-of-its-oil-exports-last-year-data-idUSKBN1Z627P, Venezuelan oil exports fell by a third in 2019 as U.S. sanctions bit: data

Venezuela’s oil exports plummeted 32% last year to 1.001 million barrels per day, according to Refinitiv Eikon data and state-run PDVSA’s reports, as a lack of staff and capital drove output to its lowest level in almost 75 years and U.S. sanctions shrank exports markets

Sanctions are pushing Maduro to allow investment in the oil industry

Reuters, January 3, 2020, https://www.reuters.com/article/us-venezuela-oil-ramirez-exclusive/exclusive-weakened-by-sanctions-venezuelas-pdvsa-cedes-oilfield-operations-to-foreign-firms-idUSKBN1Z221R, Exclusive: Weakened by sanctions, Venezuela’s PDVSA cedes oilfield operations to foreign firms

Venezuelan state company PDVSA is letting some joint venture partners take over the day-to-day operation of oilfields as its own capacity dwindles due to sanctions and a lack of cash and staff, according to a former oil minister, an opposition lawmaker and industry sources. Crude production by PDVSA and its joint ventures has fallen to about a third of its peak 20 years ago. The steepest fall has occurred since military officials with no oil industry experience took over PDVSA’s management in late 2017 and Washington imposed sanctions on the state-run company in early 2019 in a bid to oust socialist President Nicolas Maduro. Maduro’s government and the opposition last year discussed allowing partners in PDVSA-led joint ventures to operate the oilfields, which would reverse a legal requirement that PDVSA control the operations That could give Maduro more breathing room by encouraging fresh investment in PDVSA’s operations, potentially boosting oil revenues. However, it would be controversial after late President Hugo Chavez, an iconic figure to many Venezuelans, made nationalization a flagship policyRafael Ramirez, a former oil minister and PDVSA president who left office after clashing with Maduro in 2014, said the company had already effectively handed control to joint venture partners even though an agreement had not yet been formally reached.

US supplies starting to offset Venezuela’s lost production

Reuters, January 7, 2020, https://www.reuters.com/article/us-venezuela-oil-exports/hit-by-sanctions-venezuela-lost-a-third-of-its-oil-exports-last-year-data-idUSKBN1Z627P, Venezuelan oil exports fell by a third in 2019 as U.S. sanctions bit: data

U.S. sanctions on Venezuelan and Iranian oil, which along with lower output affected global supply of heavy crude, contributed to driving oil prices up more than 20% last year. But prices are expected to remain rangebound this year as U.S. supplies have swelled.

Government officials and the wealthy are protected by illegal activity. The poor live in poverty

Benny Avni, January 11, 2020, https://nypost.com/2020/01/11/how-venezuela-could-help-iran-mount-an-attack-against-america/, How Venezuela could help Iran mount an attack against America

Today, led by Cuban-backed strongman Nicolas Maduro, the once-thriving oil-rich democracy of Venezuela is no longer a real country. It’s ruled by a corrupt crime syndicate that thrives on proceeds from illicit trading in drugs, arms and oil smuggling. Its citizens, meanwhile, are reduced to dumpster diving, petty crime and other desperate means of obtaining life’s most basic necessities.

The new minimum wage increase will boost inflation

Bloomberg News, January 11, 2020, https://www.heraldmailmedia.com/news/nation/venezuela-s-maduro-starts-year-with-a-minimum-wage-hike/article_2c40294d-31c9-52b9-b6a0-bec52f616bff.html, Venezuela’s Maduro starts year with a 67% minimum wage hike

President Nicolas Maduro ordered a 67% increase in Venezuela’s monthly minimum wage, the first this year and the 11th in the past 24 months.

The presidential decree, announced by pro-government lawmaker Francisco Torrealba on Twitter, boosts the minimum wage to 250,000 bolivars ($3.61 at the official exchange rate), up from 150,000 bolivars. In addition, workers will receive a food bonus of 200,000 bolivars, for a total minimum income of 450,000 bolivars, according to Torrealba’s publication of an image from an extraordinary edition of the Official Gazette dated Jan. 9. The new hike, which applies retroactively as of Jan. 1, threatens to refuel hyperinflation after restrictive monetary policies helped slow the pace of price increases in 2019.

Sanctions increase “blood gold” mining, triggering violence and environmental problems

Al Jazeera, January 9, 2020, https://www.aljazeera.com/ajimpact/venezuelan-miners-dealing-blood-gold-200109221911542.html, Are some Venezuelan miners dealing in ‘blood gold’?

Venezuelan opposition leader Juan Guaido on Thursday urged the European Union to officially label as “blood gold” the precious metal informally mined in the country’s southern jungles as he seeks to increase pressure on the government of President Nicolas Maduro.

Since 2016, Maduro’s government has supported artisanal mining in the Venezuelan Amazon to bring in revenue amid an economic crisis – an effort that expanded as Washington increased sanctions meant to force the ruling Socialist Party from power. The initiative has been criticised by environmental activists and rights groups for contaminating watersheds with mercury and fuelling massacres as gangs battle for territory.

Dollarizaiton makes salaries in Bolivars worthless

Bloomberg News, January 11, 2020, https://www.heraldmailmedia.com/news/nation/venezuela-s-maduro-starts-year-with-a-minimum-wage-hike/article_2c40294d-31c9-52b9-b6a0-bec52f616bff.html, Venezuela’s Maduro starts year with a 67% minimum wage hike

 The broad dollarization of the Venezuelan economy has also contributed to making salaries in bolivars worthless. A dollar costs around 81,000 bolivars at the black market rate. According to local research firm Ecoanalitica, $2.7 billion in physical dollars are circulating in the country, three times the value of bolivars in both cash and deposits. Ecoanalitica director Asdrubal Oliveros expects greenbacks to make up 70% of commercial transactions in 2020.

People don’t’ think joining a protest will be effective

Christine Armario and Fabiola Sanchez, January 9, 2020, Washington Post, https://www.washingtonpost.com/world/the_americas/fence-scaling-venezuela-opposition-leader-rekindles-his-mojo/2020/01/09/605de578-329d-11ea-971b-43bec3ff9860_story.html, Fence-scaling Venezuela opposition leader rekindles his mojo

A significant test will come later this week when Venezuelans decide whether or not to heed his call for a new round of protests. Many are skeptical that Guaidó can still mobilize large numbers. An estimated 4.5 million people have fled the country, many of them the young adults most likely to protest. Countless others are too preoccupied trying to meet basic needs like finding food and medicine to turn out for a demonstration that might not change anything.

Maduro still has all the power

Christine Armario and Fabiola Sanchez, January 9, 2020, Washington Post, https://www.washingtonpost.com/world/the_americas/fence-scaling-venezuela-opposition-leader-rekindles-his-mojo/2020/01/09/605de578-329d-11ea-971b-43bec3ff9860_story.html, Fence-scaling Venezuela opposition leader rekindles his mojo

In some ways, little or nothing has changed: Maduro still has control of the military and the backing of powerful institutions like the Supreme Court, while Guaidó leads a largely powerless institution with no ability to enforce its proposals. “Once the dust is settled, he’ll continue to face the same challenges,” said Diego Moya Ocampos, a political risk analyst.

US no longer backing Guiado

Christine Armario and Fabiola Sanchez, January 9, 2020, Washington Post, https://www.washingtonpost.com/world/the_americas/fence-scaling-venezuela-opposition-leader-rekindles-his-mojo/2020/01/09/605de578-329d-11ea-971b-43bec3ff9860_story.html, Fence-scaling Venezuela opposition leader rekindles his mojo

Guaidó’s most powerful ally – the United States – also seemed to signal Thursday that it was willing to take a slightly different approach. Secretary of State Mike Pompeo said that a “swift negotiated transition” would be ideal and outlined conditions for guaranteeing a fair legislative election. There was no mention of Maduro, who the U.S. has insisted needs to step down as part of any transition.

Chevron still in Venezuela’s oil sector

Argus Media, January 7, 2019, https://www.argusmedia.com/en/news/2046747-guaido-survival-likely-to-buy-more-time-for-chevron, Guaido survival likely to buy more time for Chevron

With Guaido tentatively still in action, the US Treasury seems likely to roll over a sanctions waiver for Chevron as well as a clutch of US oil services companies that expires on 22 January, nearly a year after Washington imposed oil sanctions on the Opec country. Guaido-led opposition officials have indicated support for Chevron to remain in Venezuela, as they see the US major as a key future partner for the country’s economic recovery under a post-Maduro government. US supporters of a waiver extension argue that Chevron’s forced withdrawal would only open the door for deeper Russian and Chinese participation in the oil industry.

US sanctions pushing dollarization

Francisco Toro, January 16, 2020, https://www.washingtonpost.com/opinions/2020/01/06/power-struggle-venezuela-has-created-dangerous-governance-vacuum/, The power struggle in Venezuela has created a dangerous governance vacuum

Hospitals and schools barely function; the electric grid is off more often than on in most of the country; telecommunications barely work. Those things aren’t new. Yet in the past few months, even more basic aspects of governance have collapsed. The government has as good as thrown in the towel in the fight against hyperinflation, and it’s no longer enforcing old laws against transacting in foreign currency, so more and more Venezuelans pay for things in U.S. dollars, Colombian pesos or Brazilian reais. In part, this is due to draconian U.S. sanctions that have left the regime desperately short of cash.

Governance has collapsed

Francisco Toro, January 16, 2020, https://www.washingtonpost.com/opinions/2020/01/06/power-struggle-venezuela-has-created-dangerous-governance-vacuum/, The power struggle in Venezuela has created a dangerous governance vacuum

In fact, Maduro has stopped enforcing most laws: labor rules, price controls, anti-money laundering and even just basic police work are all now beyond his capacity to deliver. Mass emigration has played a role: Most skilled public administrators are now waiting tables in Colombia or driving Ubers in Peru rather than manning their posts in Caracas. The result is a kind of pervasive lawlessness where anything goes, as long as you keep Maduro on your good side. Rather than the rigid socialism Venezuela is sometimes portrayed as embodying, the country is increasingly anarchic: a vast ungoverned space where men with guns prey on the weak with impunity…. Economic implosion, state failure and normalized lawlessness are the problems now overwhelming Venezuelans day-to-day. Their leaders seem too busy struggling for power to take much notice.

Maduro knows the US is distracted and will push against the opposition

Francisco Toro, January 16, 2020, https://www.washingtonpost.com/opinions/2020/01/06/power-struggle-venezuela-has-created-dangerous-governance-vacuum/, The power struggle in Venezuela has created a dangerous governance vacuum

Sunday’s move against Guaidó is, in one way, a second-order consequence of the growing tensions between the United States and Iran: With Washington’s foreign policy brain concentrated overwhelmingly on the Middle East, second-tier U.S. adversaries like Maduro find they have a little extra space to maneuver. An aggressive move to sideline Guaidó would likely have seemed too risky to Maduro before the Soleimani strike. But with the United States bracing for impact with Iran, there’s added room to try to regain the initiative against opponents.

Past uprisings failed

Joel Gerhke, January 7, 2019, Washington Post, https://www.washingtonexaminer.com/policy/defense-national-security/the-pressure-will-increase-standoff-between-maduro-and-guaido-will-deepen-says-trumps-venezuela-expert, The pressure will increase’: Standoff between Maduro and Guaido will deepen, says Trump’s Venezuela expert

It’s also a test of what western powers are willing and able to do to shift the balance of power in Venezuela. Trump hailed Guaido as interim president last year, but Maduro has retained control of the military and security services. The socialist strongman withstood a dramatic call for an uprising in April, although U.S. officials believe that only the support of Russian advisers and Cuban security services kept him in place.

Dollarization stabilizes the economy

Kenneth Rapoza, January 7, 2010, https://www.forbes.com/sites/kenrapoza/2020/01/07/meanwhile-in-the-failed-state-of-venezuela-another-coup/#e48d4bf7ab67, EDITOR’S PICK3,107 viewsJan 7, 2020, Meanwhile, In The Failed State Of Venezuela, Another ‘Coup’

By attacking the opposition’s hold on the National Assembly now, at what appears to be its weakest point in many months, the Maduro Administration is probably trying to preempt any attempts by opposition politicians to regroup ahead of a general election for National Assembly seats set for late 2020. Maduro isn’t going anywhere. The economy will remain a joke, but some stabilization thanks to dollarization should keep the rabble in line.

China is not increasing ties with Venezuela

Kenneth Rapoza, January 7, 2010, https://www.forbes.com/sites/kenrapoza/2020/01/07/meanwhile-in-the-failed-state-of-venezuela-another-coup/#e48d4bf7ab67, EDITOR’S PICK3,107 viewsJan 7, 2020, Meanwhile, In The Failed State Of Venezuela, Another ‘Coup’

Venezuela’s biggest oil buyer, China, has been absent since October due in part to U.S. sanctions and not wanting to run afoul of Washington during the phase one trade deal expected to be made official next week.

Venezuela adoption of crypto currency increasing

Tassbaum Naez, December 29, 2019, https://www.tronweekly.com/btc-p2p-trading-skyrockets-in-venezuela-and-argentina/, BTC P2P Trading Skyrockets in Venezuela and Argentina

Over the past few years, countries like Venezuela and Argentina have faced the worst economic crises in the region and Bitcoin being the decentralized cryptocurrency has been on a rise in these regions. However, the latest data reveals that P2P trading continues to increase and hit an all-time high in both countries. Trading on Rise Weaker Economic Countrie Per the crypto data websites CoinDance, a P2P trading platform LocalBitcoins shows bitcoin and P2p trading volume has been recording an incredible weekly surge in Venezuela and Argentina. More so, the weekly trading volume in these countries reached an all-time high (ATH) on LocalBitcoins last week. Notably, almost 248 billion bolivars (app.$24.8 million) traded on LocalBitcoins in Venezuela last week (December 15 – December 21) which was apparently 20.67% higher than early December. In contrast, Argentina witnessed trading of 32.6 million Argentine pesos ($544,905) on LocalBitcoins within the same week. Even though P2P trading volume in Argentina is relatively less than that of Venezuela last week, the trading volume in the former country saw a spectacular rise compared to what was traded during the weeks before TronEurope paid advertisement TronWeekl Moreover, the major market players such as Huobi exchange, and many others are looking to expand their business across these regions and tap on the crypto-blockchain community in Venezuela and Argentina. In fact, Huobi Global has launched a subsidiary in Argentina to help Argentines with crypto trading efficiently by using their local fiat currency Due to unstable and harsh economic situations in the regions like Argentina and Venezuela, investors often seek out the best possible alternative that holds potentially profitable opportunity – this being said, bitcoin ranks on top of the list of assets available. More so, experts believe that these situations may not change soon. Conclusively, the leading cryptocurrency Bitcoin is currently up with 1.97 percent within the past 24Hs which quietly surged its trading value to $7472 against USD. More so, the currency at the time of reporting this is valuing the market capitalization of $135,469,268,487.

Guida opposition strength decreasing, international pressure waning

Lopez, December 28, 2019, Ociel Alí López is a Venezuelan researcher who has published numerous written and multimedia works. He is dedicated to analyzing Venezuelan society for several European and Latin American media outlets. He is a co-founder of alternative Venezuelan state television station Avila TV in 2006. He is the recipient of the CLACSO/ASDI researcher prize and the Britto Garcia literature award, Veneuela, A Paradox of Stability?, https://venezuelanalysis.com/analysis/14753

While Latin America boils over, Venezuela has returned to calm. Despite the severe economic crisis that has lasted at least six years and the collapse of basic public services, political strife has waned. Opposition supporters did not return to the streets en masse and the political instability was displaced to the opposition’s own camp. At the close of 2019, Guaido’s leadership does not inspire unanimity. He has suffered several scandals, including the alleged embezzlement of aid funds by his handpicked envoys, his ties to paramilitary drug trafficking outfit Los Rastrojos, and most recently an illicit lobbying scheme involving deputies from his own National Assembly, among them members of his political party. The governments most radically opposed to Venezuela like Chile and Colombia have had to tend to their domestic matters. The activation of the Inter-American Reciprocal Action Treaty (TIAR) has not advanced in the direction of a direct military intervention, and in the US and international media, Venezuela’s “humanitarian crisis” has been moved to the backburner. It would seem that Venezuela is no longer at the center of the international agenda as it was at the start of 2019.

International pressure is weak because Trump is isolated

Lopez, December 28, 2019, Ociel Alí López is a Venezuelan researcher who has published numerous written and multimedia works. He is dedicated to analyzing Venezuelan society for several European and Latin American media outlets. He is a co-founder of alternative Venezuelan state television station Avila TV in 2006. He is the recipient of the CLACSO/ASDI researcher prize and the Britto Garcia literature award, Veneuela, A Paradox of Stability?, https://venezuelanalysis.com/analysis/14753

His veiled threats of a U.S. military intervention, which was never a good idea without significant international support, turned out to be what many of us suspected: political theater aimed at winning Cuban-American and Venezuelan-American votes in Florida. And Trump’s anti-immigrant, anti-environment, anti-free trade and anti-foreign aid agenda — in addition to his insults such as those to Mexicans as “rapists” and “criminals,” and Salvadorans and Haitians as natives of “shithole countries” — have isolated the Trump administration in the region. Without a coherent plan and unable to lead an international coalition to force Maduro out of power, Trump’s Venezuela policy is in disarray.

Maduro strength increasing

Lopez, December 28, 2019, Ociel Alí López is a Venezuelan researcher who has published numerous written and multimedia works. He is dedicated to analyzing Venezuelan society for several European and Latin American media outlets. He is a co-founder of alternative Venezuelan state television station Avila TV in 2006. He is the recipient of the CLACSO/ASDI researcher prize and the Britto Garcia literature award, Veneuela, A Paradox of Stability?, https://venezuelanalysis.com/analysis/14753

Regardless of whether Guaido can secure reelection as president of the National Assembly (AN) in 2020, the opposition does not have a credible strategy for ousting Maduro. And this impotence fuels an internal debate that not only divides the opposition publicly but also demobilizes its supporters. The opposition, as it stands now, appears politically bankrupt given the massive expectations it created in 2019 and the utter failure that ensued. Today’s opposition is divided between those holding out for a US invasion and those who favor a political solution. The bulk of the first group is based in the United States, while the majority of the second is still in Venezuela. This rift will likely continue to widen in 2020 when elections are slated for the National Assembly, the only branch of government the opposition currently controls. Of the four large opposition parties that control the AN, Democratic Action (AD) and A New Era (UNT) have their leadership in Venezuela and, as such, abstention would mean surrendering their seats. For the radical sectors, especially those based in the US and Colombia, their power base is mainly the international corporate media, and they will not accept an electoral solution. Therefore, 2020 could be the year of definitive fracture within the opposition. Popular Will (VP) and First Justice (PJ) still don’t know how to tell their supporters to vote in the elections without having fulfilled their oft-repeated “end of the usurpation” promise, because the alternative is to lose the National Assembly. And the opposition defeat is not limited to the political and military arenas. The mounting list of corruption scandals and political debacles runs in parallel to the popular uprising shaking the neighboring right-wing governments allied with the Venezuelan opposition. That is, the opposition is being routed on several fronts. If the opposition began 2019 with extremely high expectations around which it united and rallied its supporters, it ends the year severely divided, atomized, and demobilized. The careful public relations campaign that went into promoting Guaido was powerless to stop the political novice from squandering his political capital without achieving any notable gains. Maduro, on the other hand, has experienced a similar process but in reverse  Maduro, survivor of 2019 At the start of the year, Maduro had the profile of a weak president on the verge of being overthrown at any moment. The opposition flooded the streets in January. Over fifty countries refused to recognize Maduro and backed Guaido following his self-proclamation. Washington practically put a price on Maduro’s head, with Florida Republican Senator Marco Rubio threatening to sodomize and murder him like NATO-backed rebels did to Libya’s Muamar Gaddaffi. Venezuela’s future appeared to be one of bloody conflict if not outright dismemberment by Colombia, Brazil, and Guyana. Chile’s Sebastian Piñera and Colombia’s Ivan Duque gathered alongside Guaido in Cucuta on February 23 in what was hailed as the final thrust to oust Maduro by forcing so-called “humanitarian aid” across the Venezuelan border. By December, neither of these right-wing presidents attend meetings of the Lima Group, preferring to focus their energy on putting down the mass anti-neoliberal revolts occurring within their borders. At the end of 2019, Venezuela looks much more stable than its right-wing neighbors, who just months ago were fixated on regime change in lieu of their domestic problems. The Venezuelan government is no longer on the defensive, moving to take the political initiative by calling 2020 legislative elections in a bid to seize the opposition’s last political bastion. These elections could be held as early as the start of the year. The armed forces remain firmly behind Maduro, who has succeeded in opening up avenues for negotiation with minority opposition factions, with whom the ruling party can work during a new legislative period. Politics is a clash of opposing forces and, as Venezuela demonstrates, the balance can shift radically in the course of a year.

Opposition is arrested and tortured

Andres Oppenheimer, December 27, 2019, https://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article238779133.html, Trump’s Venezuela policy is in disarray. He must put it back on his radar — now | Opinion, BY ANDRES OPPENHEIMER

Maduro’s death squads are responsible for about 6,800 extra-judicial executions between January 2018 and May 2019, many of the victims peaceful pro-democracy activists, according to a recent report by United Nations High Commissioner for Human Rights Michelle Bachelet The U.N. report also documented the widespread use of torture against some of Venezuela’s more than 720 political prisoners, including electric shocks and suffocation with plastic bags. It’s a level of human-rights abuse that equals — and maybe exceeds — the worst times of South America’s military dictatorships of the 1970s More than 4.7 million Venezuelans have fled Venezuela over the past five years, according to the Organization of American States (OAS). The Venezuelan exodus could reach 10 million people in three years, according to OAS chief Luis Almagro. It already is straining the economies of several Latin American countries and could destabilize them politically, officials in the region say Yet, Maduro has been consolidating his dictatorship in recent months. Mexico and Argentina, once active members of the Lima Group of Latin American countries that withdrew their recognition of Maduro as Venezuela’s legitimate president following the fraudulent 2018 elections, have switched sides. The two countries’ new leftist presidents now recognize the Maduro regime Although it sounds like a joke, the Geneva-based United Nations Human Rights Council — which is a separate institution from U.N. High Commissioner for Human Rights Bachelet’s office — recently accepted Venezuela as one of its 47 member countries. That was hailed as a major diplomatic victory by the Maduro regime, and further demoralized Venezuela’s opposition.

Venezuela’s economy is stabilizing

Lopez, December 28, 2019, Ociel Alí López is a Venezuelan researcher who has published numerous written and multimedia works. He is dedicated to analyzing Venezuelan society for several European and Latin American media outlets. He is a co-founder of alternative Venezuelan state television station Avila TV in 2006. He is the recipient of the CLACSO/ASDI researcher prize and the Britto Garcia literature award, Veneuela, A Paradox of Stability?, https://venezuelanalysis.com/analysis/14753

Unlike various other countries in the region, Venezuela’s economy appears to be stabilizing for several reasons. First, the migratory wave has had the salutary side-effect of flooding the country with remittances that reach millions of families, even the poorest. There are even many cases in which financial support from abroad has changed the socioeconomic status of many families amid the severe crisis. There have also been several economic measures taken by Maduro, such as the derogation of the Illicit Exchange Law, the de facto elimination of price controls, and allowing the free circulation of dollars. All this has opened up new economic scenarios going into 2020, including the end of shortages of essential goods – the bane of the 2012-2016 period –, the creation of new business opportunities, as well as the repatriation of some capitals, however marginal, which are stimulating some commercial activity in a terribly impoverished economy. At the end of November, Reuters revealed that oil production in Venezuela had increased 20 percent relative to the month before, which could indicate a definitive reversal of the free fall experienced during the first half of the year. This news raises positive expectations for 2020 with the possibility of increasing Venezuelan crude exports in the coming year. Indeed, according to Venezuelan economist Francisco Rodriguez, Venezuela’s economy could even grow by 4 percent in 2020.

Venezuela crime decreasing

Xinhua, 12-29, 19, http://www.xinhuanet.com/english/2019-12/29/c_138663933.htm, Venezuela reduces crime by 36.3 percent in eight categories in 2019

The crime rate in Venezuela fell 36.3 percent this year in the eight main criminal categories, Interior Minister Nestor Reverol said Saturday. “The reduction in crimes that occurred this year, compared to 2018, reached 34.4 percent in the case of theft; 35.4 percent in the case of robbery; 51.9 percent and 50.8 percent in the cases of vehicular theft and robbery, respectively,” the minister said.Reverol said that homicides have decreased for the fourth consecutive year, with the rate falling to 20 homicides for every 100,000 inhabitants, a reduction of 36.3 percent. Kidnappings “fell by 34.2 percent, and efficiency in solving cases reached 97 percent, minimizing fatalities,” he said. As to the fight against drug trafficking, the Venezuelan minister said that security forces seized in 2019 a total of 44,274 kilograms of various drugs and detained 6,254 people allegedly involved in the drug trad. He added that the rate of traffic accidents in the country had also fallen, decreasing 49.7 percent compared to last year.

90% of Venezuelans are poor
Catesby Holmes, December 29, 2019, https://www.salon.com/2019/12/29/countries-to-watch-in-2020-from-chile-to-afghanistan_partner/, Countries to watch in 2020, from Chile to Afghanistan

This year will bring new depths of misery to Venezuela, which is suffering the worst economic collapse ever seen outside war. “Most Venezuelans today are desperately poor,” explains St. Mary’s College professor Marco Aponte-Moreno, citing a U.N. statistic that 90% of the people in the South American country live in poverty — double what it was in 2014. The increasingly severe U.S. economic sanctions passed last year, aimed at crippling the authoritarian regime of Nicolás Maduro, are only making life harder for poor Venezuelans, Aponte-Moreno writes. Venezuelans today rely on monthly government food delivery to survive. “If the government runs out of money, poor people will feel it the most — not the government officials,” writes Aponte-Moreno.

90% of hospitals don’t have access to needed medicines and water

Share America, December 30, 2019, https://share.america.gov/2019-in-review-saving-lives-in-venezuela/, 2019 in review: Saving lives in Venezuela

Since 2014, Venezuela has been devastated by an ongoing political and economic crisis that has:

Forced 4.8 million Venezuelans from their homes.

Left 7 million people in Venezuela in need of humanitarian assistance.

Caused 90 percent of hospitals in Venezuela to be without enough water or access to medicine.

Widespread poverty and inflation

David Blueston, December 27, 2019, https://www.orlandosentinel.com/opinion/guest-commentary/os-op-venezuela-protest-elections-20191227-h6rlr6aczjevldykhefxn7bkpa-story.htm

Over nine in 10 Venezuelans report being impacted by blackouts. Almost seven in 10 Venezuelans say someone in their family has emigrated in the past year. Over half of Venezuelans have personally experienced not having enough food for three daily meals sometime in the past two weeks. And, four in 10 Venezuelans have not been able to receive medical treatment due to shortages of medicine. Venezuelans are protesting for their basic survival and dignity. Inflation in Venezuela exceeded 1,000,000% in 2018, the IMF estimates inflation will reach 10,000,000% by the end of 2019, and current unemployment is estimated at 44%…. Venezuela’s inflation rate is worse than the hyperinflation which ruined the continent in the 1980s and 1990s and is more severe than that of Zimbabwe in the mid-2000s. Its unemployment rate is at the level of a war-torn country, almost as high as in Bosnia and Herzegovina after its 3 and a half year war ended.

Then needs of 1/3 of Venezuela’s children are not met

David Blueston, December 27, 2019, https://www.orlandosentinel.com/opinion/guest-commentary/os-op-venezuela-protest-elections-20191227-h6rlr6aczjevldykhefxn7bkpa-story.htm

Janeth Márquez, director of the Catholic aid organization Cáritas in Venezuela, said the three biggest problems facing Venezuela’s children are an inability to get medical care or supplies, malnutrition and the effect of families being separated as parents leave the country to find work to be able to send money back home. About a third of the country’s children need help accessing “basic nutrition, health and education services,” UNICEF said in June. The United Nations agency also said that mortality of children under 5 had increased by more than half from 2014 to 2017…. The government’s data from 2016 shows that maternal mortality shot up 65 percent in one year. Infant mortality rose by 30 percent — to more than 11,000 babies under the age of 1 dying in that single year…. Márquez said Cáritas’ latest study found that 35 percent of children were suffering from chronic malnutrition, living with nutritional deficiencies for at least five years. In 2017, that number was 27 percent, according to Cáritas. In a statement to United Nations human rights chief Michelle Bachelet, Cáritas highlighted several critical issues, including delays in growth because of chronic malnutrition. The charity said it had evaluated more than 30,000 children in the last three years and found that 6 out of 10 families interviewed are begging and searching for food in garbage dumps. Four in 10 have had to sell belongings to afford food, and another four in 10 have had to separate as a family to continue surviving, Cáritas said.

Lack of clean drinking water spreads disease

David Blueston, December 27, 2019, https://www.orlandosentinel.com/opinion/guest-commentary/os-op-venezuela-protest-elections-20191227-h6rlr6aczjevldykhefxn7bkpa-story.htm

Dr. Julio Castro, who works at the Central University of Venezuela, said a major contributing factor to health issues in Venezuela was the lack of consistent access to clean, safe drinking water, which has led to outbreaks of diseases, including Hepatitis A. Tap water is not considered safe to drink, and most people who can afford to do so boil the water or buy packaged bottles. Even in Caracas, the capital, some people do not have running water every day, he said, while others store water in tanks that can become breeding grounds for mosquito-borne diseases, or drink from polluted rivers or lakes. Plazuela said that while she has a water tank, sometimes the water comes out yellow or dirty so she “always” boils the water for herself and her four children.

Sanctions mean non money for health care transplants

NBC News, November 20, 2019,  https://www.nbcnews.com/news/latino/venezuela-s-ongoing-crisis-leaves-children-caught-life-or-death-n1058676, Venezuela’s ongoing crisis leaves children caught in life or death battle

Some 500 bone marrow transplants for adults and children have been done in the country at a hospital in Caracas and at another in the city of Valencia since 2000, said Dr. Francisco Ramírez, director of the bone marrow transplant program at the Hospital of Clinics Caracas. But in the last two years, the number of transplants has decreased from about 25 a year to nine last year and three so far this year, he said. “This is mainly due to the difficulty in getting medications, of getting what corresponds to the costs,” he said. Beyond the limited resources, children like Zabdiel, who do not have a matching donor in Venezuela, have had to look internationally for potential matches and transplant treatments, as Venezuela currently does not have the methodology or ability to take bone marrow matches from international sources and bring them to Venezuela to treat the children, he said. The country and aid organizations are looking into other ways to give transplants to children like Zabdiel, but limited resources are again a major issue, he said. Maduro’s government has said “coercive measures” by the U.S. government in the form of sanctions have prevented the state-run oil company PDVSA from transferring money for the transplant treatments. “Venezuela sent the funds through PDVSA, and they were retained in Novo Banco, Portugal, thanks to the sanctions and the criminal blockade,” Venezuelan Foreign Minister Jorge Arreaza said in a statement in April. “While the U.S. government maintains the PDVSA-Citgo blockade, in Venezuela the lists of citizens who hope to benefit from the social health program grow,” he added, referring to the U.S. subsidiary of PDVSA. Enrica Giavatto, director of the Association for Bone Marrow Transplant, said since 2006, the organization has brought 487 Venezuelans, most of them women and young people, to Italy. PDVSA had initially been covering the cost of transplants, she said. In June 2018, the group received funding related to the last two months of 2018, but since then they have not received any additional payments, Giavatto said. She said the association has not been paid costs related to the transplants and after-care treatment for all of 2018 and 2019. The group has continued to provide care for the 19 children and adults who are in Italy receiving treatment as part of the program, she said. Giavatto said that because Italy’s hospitals are public and because of the high debts owed because of the lack of payment, the association is not able to take more patients, including Zabdiel. She added that the Venezuelan government did try to make a bank transfer of more than 4 million euros to the association, but that was stopped by Portuguese bank Novo Banco. She said Venezuela asked the group to then open a bank account in Russia to bypass the sanctions. She said the group did, but has not heard an answer. Novo Banco did not immediately respond to a request for comment. Katherine Martínez, director of Prepara Familia, a nongovernmental humanitarian organization has been advocating for the families and said the Venezuelan government has the duty to find other sources of funding for the transplants. “We’re talking about the lives of children that are very much at risk,” she said. “These are families that are doing all they can.”

Venezuela has launched a new cryptocurrency in order to get around US sanctions that is a global model for state-supported crypto currency that will lead to a fairer and more stable global financial system

International Business Times News: http://www.ibtimes.com, November 19, 2019,  Delivered by Newstex) The retirees and pensioners of Venezuela will receive a Christmas bonus in the form of their controversial national currency, the Petro.News and research agency Venepress tweeted the announcement on Nov. 17, indicating that the “good tidings” were initiated by President Nicolas Maduro.

Translated in English, the tweet read, “#EnDesarrollo Maduro announced ‘Christmas bonus’ for retirees and pensioners of Petro (at today’s price would be Bs. 897,317.27) #17Nov.”The troubled South American country has been using the cryptocurrency since its launch in February 2018. And last year, as Cointelegraph reported[1], the country did the same thing with the bonuses — they converted them to Petro.Venezuela’s currencyThe Petro is the first state-backed cryptocurrency in the world, and its main purpose is to salvage the economically saddled country from its deepening crisis — the country’s last 2018 inflation rate was 130,060.2 % and is estimated to cap off 2019 with a whopping 10,000,000%.It was said that the Venezuelan crypto would be on the Ethereum blockchain, but there were many alterations to that as well as an accusation that Petro plagiarized the documentation from DASH. Maduro also said that oil and other reserves would back the crypto.In its white paper,[2] it states: “The petro will be an instrument for Venezuela’s economic stability and financial independence, coupled with an ambitious and global vision for the creation of a freer, more balanced and fairer international financial system.”However, the Petro is seen as a mere medium to get around the sanctions imposed by the U.S. and receive international financing. 27,000 ‘Affiliated Businesses’There are also questions regarding the adoption of Petro. In 2018, Reuters reported[3] that there was no presence of Petro in the oil-abundant town of Atapirire, with a certain resident, Igdalia Diaz, saying, “There is no sign of that Petro here.”But this year, as recently as Monday, Maduro claimed that there are already 27,000 “affiliated business” with Petro. Also, last month, according toCrypto Globe[4], Petro is accepted as payment for at least 93 stores.Whether Maduro’s push for a wider Petro adoption is working or just a brash attempt to stir interest in the crypto is unknown at this point.

Cryptocurrency use increasing in Venezuela due to economic problems

Reynaldo, December 29, 2019, https://www.crypto-news-flash.com/new-record-on-bitcoin-trade-in-argentina-and-venezuela/  Bitcoin trading reaches all-time high in Argentina and Venezuela

Venezuela and Argentina set new records for the weekly trading volume with Bitcoin (BTC) on the LocalBitcoins P2P exchange platform. The levels of trade with Bitcoin are increasing due to the complicated economic situation of these countries.  According to data from the platform CoinDance, the trade volume with Bitcoin has increased in Argentina and Venezuela. The Latin American countries set a new record in December of this year. How much Bitcoin is traded in Venezuela and Argentina According to CoinDance the growth of the weekly trading volume has been practically sustained. By the week of December 21, the Bitcoin trade reached more than 500,000 USD (in local currency, almost 30 million Argentine pesos). In comparison, the previous week registered a trading volume of 300 thousand USD or 21 million Argentine pesos. In Venezuela, 250 billion bolivars have been traded during these dates (equivalent to 24 million dollars). In contrast, the previous week’s volume was approximately 14.5% lower. Back in November both countries recored a volume of 19 million Argentine pesos and 142 billion bolivars. On this date, the increase in trade volume was significant, but the trade volume of BTC remained practically the same as in other periods. This indicates that inflation continues to affect national currencies. For this new record there was an increase in both factors. The difference between the volume of trading for Argentina and Venezuela is enormous. However, the causes behind the increase in BTC trade in the region are similar. Factors of the increase in Bitcoin’s trading volume The factors that justify the increase in the trading volume for Venezuela and Argentina are political and economic. Both countries are going through a serious economic and social crisis. As reported by CNF, after the October elections, Argentina’s government changed its exchange rate regime. The new restrictions prohibited citizens from buying goods for more than USD 200 per month. For cryptocurrencies, the ban was total. Argentines, in theory, could not acquire Bitcoin with their credit cards. In Venezuela, there are still high levels of inflation and an increase in the price of local products. The national currency continues to lose its value and its citizens increasingly resort to foreign currencies for their daily operations. Although the Venezuelan government has attempted to impose the use of a digital coin issued by the local central bank, the Petro has had little impact on local commerce. Its difficult trade and lack of transparency have only generated distrust in the population. In these countries, Bitcoin has emerged as a reliable, unrestricted and adequate alternative for moving through the crisis. This is how the analyst CryptoWelso records it on his Twitter account.

Support for the opposition decreasing, Maduro strength increasing

Emily Mendrala is a former National Security Council and State Department official in the Obama administration. She is the executive director of the Center for Democracy in the Americas, where she promotes U.S. policies of engagement toward the Americas, December 26, 2019, https://thehill.com/opinion/international/475791-bipartisan-consensus-on-venezuela-talks, Bipartisan consensus on Venezuela talks

The U.S. continues to squeeze Maduro, but his hold on power is not diminishing. Instead, the crisis is at risk of becoming normalized. We are almost one year into an acute political impasse — with two men claiming the presidency — and several years into severe humanitarian, economic and migratory crises. The Venezuelan opposition, led by Juan Guaidó, who surged to international prominence a year ago, is weakened. Despite claims of unity, cracks are beginning to show; the coalition suffers from scandal and division. And the Venezuelan economy, although still in shambles, is showing some signs of stabilizing.

Turn – Lifting sanctions can only help negotiations succeed if the lifting is conditional on the negotiations taking place

Emily Mendrala is a former National Security Council and State Department official in the Obama administration. She is the executive director of the Center for Democracy in the Americas, where she promotes U.S. policies of engagement toward the Americas, December 26, 2019, https://thehill.com/opinion/international/475791-bipartisan-consensus-on-venezuela-talks, Bipartisan consensus on Venezuela talks

As time passes, it becomes clear that the only way forward is for Venezuela’s parties to negotiate a path toward new elections. It’s true. Several rounds of negotiations between Venezuela’s two main factions have ended without agreement, but the Trump administration could effectuate the bipartisan congressional goal of successful negotiations between Maduro and Guaidó by making clear that it would consider partial sanctions relief if conditions for free and fair elections are agreed upon. Congress unequivocally has signaled its bipartisan support for negotiations and for an active, productive U.S. role. Now, action rests with the Trump administration.

Dollarization increasing – ordinary Venezuelans gaining access to the dollar from remittances

Andrews Oppenheimer, December 24, 2019, https://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article238691353.html, Venezuela, Argentina should follow Ecuador and base their economies on the U.S. dollar

Growing numbers of Venezuelans already are using U.S. dollars for everyday transactions. With the country’s oil exports a fraction of what they were, U.S. dollar remittances from the more than 4.7 million Venezuelans who have fled the country in recent years have become — much like in Cuba — one of Venezuela’s main sources of income.

No one is still using the Bolivar

Sergio Held, 12-24, 19, https://www.aljazeera.com/ajimpact/venezuela-currency-worth-craft-paper-money-191224144545023.html

Few in Venezuela use bolivares to buy goods or services. Most people have turned to US dollars, euros, cryptocurrencies or bartering to survive…. The president also recognised that in some sectors of the Venezuelan economy, such as the oil sector, that had been the case as well. However, due to hyperinflation, the trend of using US dollars in the streets instead of bolivares is becoming unstoppable  “This process that they call dollarisation can be used for the recovery and deployment of the country’s productive forces and the functioning of the economy,” Maduro said.

More people leaving means the poor can also access the dollar

Sergio Held, 12-24, 19, https://www.aljazeera.com/ajimpact/venezuela-currency-worth-craft-paper-money-191224144545023.html

Like many of his countrymen, Cordero sends money to relatives in his native land, and by doing so, he is contributing to the growing use of foreign currencies in Venezuela.

 “I expect dollarisation to continue naturally as people lose confidence in the currency, and they access remittances from their family members abroad,” Di Martino told Al Jazeera. “Eventually, as more Venezuelans escape the country, even the less fortunate Venezuelans should be able to access foreign currency.”

No increased oil production in the status quo

Platt’s, December 24, 2019, https://www.spglobal.com/platts/en/market-insights/latest-news/oil/122419-commodities-2020-analysts-doubt-venezuelas-ability-to-boost-crude-production-in-2020, Analysts doubt Venezuela’s ability to boost crude production in 2020

Caracas, Venezuela — Venezuela’s PDVSA is hoping to boost its crude production to over 1 million b/d, but analysts are skeptical the state-owned company, faced with deteriorating infrastructure and a lack of buyers due to US sanctions, will be able to push output higher in 2020. While PDVSA may be able to bolster output in the short term, an exodus of experienced workers and a lack of diluent for crude blending will present major challenges down the road. PDVSA’s crude production averaged 700,000 b/d in November, up from 650,000 b/d in October, according to an S&P Global Platts survey. PDVSA was planning on producing 1.1 million b/d in December, but that will be difficult to achieve, analysts said. One analyst, Einstein Millian, thinks Venezuelan crude production, which has fallen from 2.1 million b/d in February 2017, has bottomed out. “The sizable reduction in blackout periods, and the shift from upgrading to blending extra heavy crude, allowed PDVSA to stop a consistent production drop observed during the whole year,” said Millian. According to Millian “there is no increase in production. The increase we have seen in recent weeks is an illusion caused by draining inventories.” “The total accumulated inventory up to October exceeded 40 million barrels, which have been gradually finding their way out in spite of the US sanctions,” Millan added. “Effective production will remain around 700,000 to 750,000 b/d,” Millian said. Other analysts also believe that the recovery of oil production in Venezuela will be very difficult in the short term. S&P Global Platts Analytics expects production to end 2020 at around 600,000 b/d. Thomas O’Donnell, professor of energy and geopolitics at the Hertie School of Governance in Berlin, sees two main factors depressing production: PDVSA’s declining ability to produce crude, and its inability to sell crude. “First, declining ability to produce the oil. This is due to utter disrepair from chronic absence of investments, managerial incompetence and PDVSA not paying employees enough to make it possible to go to work,” O’Donnell said.  “Although Venezuelan Orinoco Belt crudes strata have very simple geology structure, unfortunately the damage done by 20 years of underinvestment and mismanagement, and by now often the complete shutdown of wells, will be difficult to recuperate. It will require investment, technology, infrastructure and skilled labor. PDVSA, or any domestic successor, will not be able to do this in the short term,” O’Donnell said.

No short-term oil link – massive brain drain

Platt’s, December 24, 2019, https://www.spglobal.com/platts/en/market-insights/latest-news/oil/122419-commodities-2020-analysts-doubt-venezuelas-ability-to-boost-crude-production-in-2020, Analysts doubt Venezuela’s ability to boost crude production in 2020 “Although Venezuelan Orinoco Belt crudes strata have very simple geology structure, unfortunately the damage done by 20 years of underinvestment and mismanagement, and by now often the complete shutdown of wells, will be difficult to recuperate. It will require investment, technology, infrastructure and skilled labor. PDVSA, or any domestic successor, will not be able to do this in the short term,” O’Donnell said

Platt’s, December 24, 2019, https://www.spglobal.com/platts/en/market-insights/latest-news/oil/122419-commodities-2020-analysts-doubt-venezuelas-ability-to-boost-crude-production-in-2020, Analysts doubt Venezuela’s ability to boost crude production in 2020 As Venezuela’s economy has collapsed, PDVSA has lost high-value oil sector employees. According to the most recent figures from the Central Bank of Venezuela, the Venezuelan economy contracted 26.8% in the first quarter of 2019 compared to the same in 2018. According to Venezuelan union leader Ivan Freites, in the last five years 30,000 trained oil workers have migrated to other countries, while another 30,000 have applied for early retirement. “Of 70,000 professionals and technicians, only 10,000 remain in PDVSA,” Freites said, citing statistics kept by oil unions

US sanctions block naptha, which Venezuela needs to produce oil

Platt’s, December 24, 2019, https://www.spglobal.com/platts/en/market-insights/latest-news/oil/122419-commodities-2020-analysts-doubt-venezuelas-ability-to-boost-crude-production-in-2020, Analysts doubt Venezuela’s ability to boost crude production in 2020

China not buying much oil from Venezuela

Platt’s, December 24, 2019, https://www.spglobal.com/platts/en/market-insights/latest-news/oil/122419-commodities-2020-analysts-doubt-venezuelas-ability-to-boost-crude-production-in-2020, Analysts doubt Venezuela’s ability to boost crude production in 2020 
Even if PDVSA could lift production, the company has a hard time selling barrels, said O’Donnell. “US sanctions have reduced exports to mainly efforts by Russia’s Rosneft, largely for Chinese delivery, although Chinese firms themselves firms have broadly withdrawn from Venezuela,” he said. “Spain’s Repsol reportedly is the second taker, then Cuba,” O’Donnell said.

Sanctions fail to weaken Maduro, his strength is only increasing

Scott Smith, December 23, 2019, https://time.com/5754539/support-venezuela-guaido/ , Support for Venezuela’s Opposition Leader Guaido Wavers as Maduro Holds Firm

And there seemed to be signs that the military might heed Guaidó’s repeated calls for soldiers to abandon Maduro. A few joined him in the streets in a quickly quelled uprising. The U.S. and other nations sent caravans of aid to Venezuela’s borders to be distributed by Guaidó’s backers, and they were put in charge of many Venezuelan embassies and assets abroad. Then February turned to March, and the months marched by. No international aid made it through Maduro’s blockade. The military stayed loyal. Even the nation’s catastrophic economy began to improve slightly. Maduro remains in power.  “Here we are today, like nothing ever happened,” said a disillusioned Palacios, 26, who has watched many relatives pack up and leave in desperation while he stayed behind to care for his parents living on a government pension constantly shrinking under the world’s highest inflation. Palacios no longer answers the opposition leader’s call to protest, nor do most of the others who once filled the streets. Cracks have even appeared in Guaidó’s base of support in the National Assembly, the only major institution controlled by the opposition. His re-election as congressional president is no longer assured and legislators’ official terms expire in a few months. Throughout, the 36-year-old Guaidó has admitted no mistakes, and neither he nor his backers in Washington have offered a fresh strategy to rescue their floundering battle to unseat Maduro. The Trump administration has continued to pile economic and travel sanctions onto members of Maduro’s inner circle, but so far with little effect. “We’re up against a dictatorship,” Guaidó said in an interview with The Associated Press. “I think that is central.” Guaidó said he remains focused on winning over the military, the linchpin of support for Maduro, and he dismissed the idea of further negotiations with the socialist administration — talks his side says Maduro has used to defuse protests without making concessions. He also said he favors boycotting legislative elections in 2020 as long as the electoral board running the vote remains packed with Maduro loyalists.

Millions suffer from a lack of food and essential medicines

Dialogo, December 23, 2019, https://dialogo-americas.com/venezuela-ends-2019-with-higher-inequality/

When the holidays arrive, the situation of inequality Venezuelans face is even more evident. According to Janeth Márquez, director of the nongovernmental organization Cáritas Venezuela, 2019 will end with more than 7 million people lacking basic needs. This not only means an inability to get medicine for chronic illnesses, but also food that meets the daily minimum caloric requirement. Of these, 1.2 million are minors. For all these people, there will be no Christmas.

US will continue to increase pressure on Maduro now

ABC News, December 20, 2019, https://abcnews.go.com/Politics/stalemate-venezuela-us-vowing-increase-pressure-maduro-2020/story?id=67852810, Stalemate in Venezuela has US vowing to increase pressure on Maduro in 2020

Nearly one year after the U.S. recognized Venezuela’s opposition leader as its legitimate president and vowed that strongman Nicolas Maduro would be pushed from power, Maduro holds on, with the humanitarian crisis deepening and refugees still pouring out into the region. That deadlock has some concerned that the Trump administration’s strategy has failed and President Trump has lost interest in the crisis. But U.S. and Colombian officials say they will double down on the pressure in 2020, warning Maduro must be toppled or things will reach a point of disaster for the region.

Maduro power increasing, opposition protests decreasing

ABC News, December 20, 2019, https://abcnews.go.com/Politics/stalemate-venezuela-us-vowing-increase-pressure-maduro-2020/story?id=67852810, Stalemate in Venezuela has US vowing to increase pressure on Maduro in 2020

But in the face of a year of opposition protests and a failed uprising in late April, Maduro maintains control of the military and its leadership — defying Abrams’s prediction in July that there would “absolutely” be a transition by year’s end. Those protests have been led by Juan Guaido, the president of the National Assembly — the country’s legislature that the U.S. and nearly 60 countries have recognized as its last legitimate institution, making Guaido the legitimate leader. While so much faith was put in Guaido as a way forward, his movement’s momentum seems to have stalled, with smaller crowds: “The people are tired of protesting and not obtaining what they ask for. But the country wants a transition,” he told the Washington Post this week.

Tapei Times, December 21, 2019, http://www.taipeitimes.com/News/world/archives/2019/12/21/2003727947

Colombia has strongly supported the US-backed effort to oust Venezuelan President Nicolas Maduro and install Venezuelan National Assembly President Juan Guaido. But nearly a year after most Western and Latin American nations recognized Guaido as interim president, opposition efforts to take power have fizzled and Maduro still enjoys the support of the Venezuelan military, Russia and China.

Refugees will grow by 2 million

Relief Web/Interaction, December 19, 2019, https://reliefweb.int/report/venezuela-bolivarian-republic/venezuela-displacement-crisis-shift-regional-international

The Organization of American States (OAS) projects that “Venezuelan migrants and refugees could reach between 5.3 and 5.7 million by the end of 2019 and between 7.5 and 8.2 million by the end of 2020”.

This substantial influx of migrants and refugees creates a regional humanitarian crisis and challenges for host countries, including a strain on healthcare and education systems. Refugee and migrants’ journeys are made even more difficult by a lack of access to food and clean water, vulnerability to gender-based violence, and an inability to obtain work permits in host countries.

Refugees exploited, abused, subject to gender-based violence

Relief Web/Interaction, December 19, 2019, https://reliefweb.int/report/venezuela-bolivarian-republic/venezuela-displacement-crisis-shift-regional-international

Migrants and refugees leaving Venezuela experience harrowing conditions during their journies. Venezuelans fleeing are often confronted with dangerous terrain, safety issues related to xenophobia, and exploitation, and abuse by armed groups and criminal networks. Women and children are profoundly vulnerable to sexual and gender-based violence and exploitation, including assault, rape, transactional sex as a last resort means of securing income, and human trafficking. In a recent gender analysis report about Venezuelan migrants and refugees in Colombia, InterAction Member CARE writes, “Almost all women and girls revealed that it was common for migrants to engage in transactional sex, while adolescent girls mentioned that mothers often encouraged their daughters to do so. Humanitarian organizations reported that a high proportion of women and girls, including transgender women, are engaging in some form of transactional sex as a survival mechanism.” The statement also highlighted a crucial issue in the humanitarian response in Colombia, as the leading host country for Venezuelan migrants. Colombia has ongoing conflicts in-country and 5 million Colombians in need. With the arrival of Venezuelan migrants, these two crises have created tension and strained resources. The INGO Forum states, “… many people arriving from Venezuela become victims of conflict, victims of forced recruitment into illegal armed groups, victims of violence, human trafficking, sexual exploitation and/or illegal economies.”

Sanctions destroyed peace talks

ABC News, December 20, 2019, https://abcnews.go.com/Politics/stalemate-venezuela-us-vowing-increase-pressure-maduro-2020/story?id=67852810, Stalemate in Venezuela has US vowing to increase pressure on Maduro in 2020

Talks between Guaido’s opposition and Maduro’s government broke down in August when the government walked after the U.S. imposed tough new sanctions.

Venezuela shifting to the markets now

Mary O’Grady, December 22, 2019, https://www.wsj.com/articles/venezuela-desperately-seeks-dollars-11577045202, Venezuela Desperately Seeks Dollars

When the bearded comandante of the Cuban Revolution showed up at offices of The Wall Street Journal in lower Manhattan in 1995, wearing a suit and tie, it was part of a shtick to clean up his image. Fidel Castro was a career mooch who had lost his Soviet sugar daddy. He had legalized the use of the dollar on the island two years earlier. In New York he was saying—and wearing—whatever might bring him more hard currency. Nicolás Maduro’s Venezuelan dictatorship is doing something similar today. After more than two decades spent trampling the rights of foreign investors and destroying the price mechanism inside the country, the Bolivarian Revolution is turning to markets to survive. A popular media narrative these days is that Mr. Maduro has outfoxed the Trump administration. U.S. sanctions put in place earlier this year prohibit most Americans from doing business with the regime or with most foreigners that do business with the regime. The policy was supposed to deny Mr. Maduro the resources he needs to stay in power. That hasn’t happened, leading some to conclude that the socialist dictatorship is impervious to the financial squeeze. But actions speak louder than press reports, and the evidence is that Mr. Maduro is hard up for dollars, not unlike Castro in 1995. How that will play out, ahead of a parliamentary election next year, remains unclear. Immediate capitulation was never in the cards given that the sanctions target the legal financial transactions of a criminal regime that has Cuban-Russian backing. Nevertheless the sanctions are biting Last week Bloomberg.com cited unnamed sources in a report that Mr. Maduro secretly met with “several American financiers” to talk about a plan to repay U.S. creditors, who hold some $60 billion in defaulted Venezuelan debt. According to the story, the idea is to engage a “foreign oil-drilling company” and bring up “billions of barrels of oil” to repay “a group that includes some of the biggest names in U.S. finance: Goldman Sachs, Pimco and T Rowe Price.” The dictatorship and the investment firms declined to comment, according to Bloomberg. Bloomberg didn’t invent the story but one wonders about its provenance. The Venezuela Creditor Committee, representing some of the bondholders, told Bloomberg that “neither the Committee nor its members have engaged in any discussions or negotiations with the Maduro regime or its delegates.” It added: “Moreover, to our knowledge, no proposals exist.” Any such deal would violate the sanctions. But what’s important for whoever leaked the story is that it creates the illusion that serious foreign investors are eager to do business with the thuggish Maduro regime. Domestically Mr. Maduro has adopted market measures that contradict his socialist ideology.

Venezuela economy becoming dollarized

Mary O’Grady, December 22, 2019, https://www.wsj.com/articles/venezuela-desperately-seeks-dollars-11577045202, Venezuela Desperately Seeks Dollars

In November he endorsed the use of the dollar. “I don’t see it as a bad thing . . . this process that they call ‘dollarization,’ ” he said in a national television broadcast. “It can help the recovery of the country, the spread of productive forces in the country, and the economy. . . . thank God it exists.” Venezuelan law still prohibits the circulation of the dollar. But the dictatorship has been forced to recognize that, together with the de facto easing of price controls, dollarization has restored some minimal order. The economy is still shrinking, but grocery shelves are no longer bare.

Venezuela can still export oil

Mary O’Grady, December 22, 2019, https://www.wsj.com/articles/venezuela-desperately-seeks-dollars-11577045202, Venezuela Desperately Seeks Dollars

The sanctions have made it more difficult, though not impossible, to export what crude is produced, and it sells at a large discount to the market. The Russian oil company Rosneft facilitates shipments and provides financing. Tanker-to-tanker transfers of the oil at sea disguise the origins of the cargo. Sometimes tankers turn off their transponders as a way of smuggling oil abroad.

Regime can survive with gold and drug sales

Mary O’Grady, December 22, 2019, https://www.wsj.com/articles/venezuela-desperately-seeks-dollars-11577045202, Venezuela Desperately Seeks Dollars

The regime’s criminality is more relevant than ever. Pro-Maduro gangsters run illicit gold mines in the rain forest. Drug trafficking to Europe and the U.S. generates billions of dollars for Mr. Maduro and his enforcers annually.

Opposition leaders arrested, scandal has undermined

DW.com, 12-16, 19, https://www.dw.com/en/venezuela-opposition-lawmakers-to-be-tried-for-treason/a-51701455 , Venezuela: Opposition lawmakers to be tried for treason

Venezuela’s pro-government Constituent Assembly on Monday revoked the parliamentary immunity of four opposition lawmakers. The move allows their prosecution at the Supreme Court for alleged crimes against the state, including treason and conspiracy. The lawmakers, who belong to different parties within the country’s opposition movement, have denied the charges and said the legal process against them represents another attempt by President Nicolas Maduro to dismantle the opposition-controlled national assembly. Maduro’s Constituent Assembly, a legislative body he created to override the national assembly, voted unanimously to lift the immunity, following a request by the pro-government Supreme Court. Chief state prosecutor Tarek William Saab accused the lawmakers Jorge Millan, Hernan Aleman, Carlos Lozano and Luis Stefanelli of conspiring to seize military installations in the northeastern state of Sucre, with the aim of “destabilizing this Christmas.” Read more: Cubans grapple with food shortage due to Venezuela crisis Juan Guaido, Venezuela’s self-proclaimed president and leader of the National Assembly, denounced the move as another attempt by Maduro to take over the opposition-led institution. He added that some 30 lawmakers remained detained, in exile, or in refuge at embassies in Caracas, due to government persecution. Struggling opposition Despite a high-profile push to oust Maduro, the ruling Socialist Party continues to maintain control of the state and military. Last month, Guaido struggled to launch a new mass mobilization, drawing a fraction of the crowds he drew earlier this year when he called for protests. This month, he had to fight allegations of corruption in his ranks. Read more: Venezuela and Colombia border tension fuels fear of armed conflict Venezuelan investigative website Armando.info published a report on December 1 claiming that nine pro-Guaido lawmakers attempted to negotiate leniency with Colombia and US authorities for a businessman tied to an allegedly corrupt network, which runs Maduro’s food subsidies for the poor. Weeks earlier, Humberto Calderon Berti, Guaido’s diplomatic representative in Colombia, accused fellow opposition envoys of improperly using funds meant to help 148 Venezuelan soldiers who had deserted to Colombia in February. While Guaido dismissed both Berti and the nine opposition lawmakers tied to the food scheme, the scandals have divided the opposition and weakened Guaido’s leadership.

Bipartisan political opposition to lifting sanctions. The sanctions are now codified in legislation, so removing them would require a legislative change.

David Smiley, 12-16, 19, https://www.miamiherald.com/news/politics-government/article238428848.html, Government funding compromise includes Rubio-backed Venezuelan aid bill

A newly negotiated government funding compromise on Capitol Hill includes nearly a half-billion dollars in humanitarian aid to support Venezuelan refugees and codifies sanctions against the regime of embattled Venezuelan ruler Nicolás Maduro. Released Monday ahead of a looming U.S. government shutdown, the $1.4 trillion bipartisan appropriations package includes legislation introduced by Democratic New Jersey Sen. Bob Menendez and a group of more than a dozen U.S. Senators, including Florida Republican Marco Rubio, to help restore democracy in Venezuela and address what the United Nations has called one of the largest mass migrations in the western hemisphere. That bill, called the Venezuela Emergency Relief, Democracy Assistance, and Development Act of 2019 — or VERDAD — increases humanitarian assistance to the poverty-torn South American nation and formally recognizes opposition leader Juan Guaidó as the country’s president. It also attempts to speed up reconstruction in the country by targeting private assets stolen by the government and requiring President Donald Trump to engage the International Monetary Fund to pull the country out of hyperinflation. TOP ARTICLES SKIP AD Rubio, in a statement issued to the Miami Herald, said the inclusion of the VERDAD Act in the appropriations compromise “reaffirms our nation’s unwavering support to interim President Juan Guaidó, and the democratically elected National Assembly.”

Sanctions don’t work

Frank Mora, March 19, 2019, https://www.foreignaffairs.com/articles/venezuela/2019-03-19/what-military-intervention-venezuela-would-look, What a Military Intervention in Venezuela Would Look Like, FRANK O. MORA is Director of the Kimberly Green Latin American and Caribbean Center and Professor in the Department of Politics and International Relations at Florida International University. From 2009 to 2013, he served as U.S. Deputy Assistant Secretary of Defense for the Western Hemisphere

The United States has a clear objective in Venezuela: regime change and the restoration of democracy and the rule of law. Yet sanctions, international diplomatic isolation, and internal pressure have failed to deliver a breakthrough.

65% cumulative decline in the economy

Valentina Sanchez, August 3, 2019, https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html, Venezuela hyperinflation hits 10 million percent. ‘Shock therapy’ may be only chance to undo the economic damage

But the economic situation remains dire: The IMF says the cumulative decline of the Venezuelan economy since 2013 will reach 65% this year — for 2019 the annual decline forecast has increased from 25% to 35%. The five-year contraction is one of the worst in the world over the past half century and one of the few that was not caused by armed conflicts or natural disasters, the IMF stated earlier this week.

Foreign investment needed to recapitalize the oil industry

Valentina Sanchez, August 3, 2019, https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html, Venezuela hyperinflation hits 10 million percent. ‘Shock therapy’ may be only chance to undo the economic damage

Venezuela is home to the world’s largest oil reserves, and its economy has been tied to the ups and downs of the international price of oil for decades — oil constitutes about 25% of the country’s GDP and 95% of its exports. But the country’s oil production reached its lowest point since 2003 this year, when production went from 1.2 million barrels per day in the beginning of 2019 to an average of 830,000 barrels per day. The energy sector is only producing a fraction of the 4 million barrels of oil a day it could be producing. “The sector has to be completely recapitalized,” said Eric Farnsworth, vice president of the Council of the Americas and the Americas Society.

Can’t recapitalize the oil industry because of brain drain

Valentina Sanchez, August 3, 2019, https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html, Venezuela hyperinflation hits 10 million percent. ‘Shock therapy’ may be only chance to undo the economic damage

The lack of a solid professional class will be the primary issue holding Venezuela back, Farnsworth of the Council of the Americas said. “Venezuela has been bleeding their professional class for years. The money will be there. Money is going to show up if they see opportunity. But particularly in the petroleum sector, Venezuela’s main productive sector, you have to have highly educated and experienced managers, engineers … That professional class left Venezuela years ago.” Gamarra is concerned about the lack of human capital pushing out the timeline for economic recovery.

Russia and China protect Maduro

Valentina Sanchez, August 3, 2019, https://www.cnbc.com/2019/08/02/venezuela-inflation-at-10-million-percent-its-time-for-shock-therapy.html, Venezuela hyperinflation hits 10 million percent. ‘Shock therapy’ may be only chance to undo the economic damage

China, Russia and Cuba have enabled Maduro’s continuation in power by lending money, providing weapons, intelligence support and political advice — relationships that date back to the regime of former Venezuelan president Hugo Chavez. Some experts believe these world powers need to be held responsible for it

Narco trafficking supports the Venezuelan government

Gonzala Abarca, 12-16, 19, https://dialogo-americas.com/narcotrafficking-is-venezuelas-war-weapon-in-the-region-experts-say/, Narcotrafficking Is Venezuela’s War Weapon in the Region, Experts Say

The tentacles of narcotrafficking in South America have reached into all sectors of society and in some cases, have defeated entire governments that now sponsor the activity and attempt to destabilize the region, analysts interviewed by Voice of America say. Martín Rodíl, a specialist in organized crime and narcotrafficking, says that Venezuela went from being a country with the presence of narcotrafficking groups to a “narcostate” under former President Hugo Chávez (1999-2013). “What’s new is the role of Venezuela as a state and not as a country with criminal organizations, but as a state sponsoring them,” said Rodíl in VOA’s program Inter-American Forum. Analysts agreed that the Venezuelan and Cuban governments sponsor cocaine trafficking to finance destabilizing operations in countries of the region and undermine the continent’s democratic institutions. Hugo Chávez, the ghost For Leandro Coutinho, writer and investigative journalist who specializes in transnational crime and hemispheric security, Venezuela is more than a narcostate. “In Venezuela, the destructions come from narcotraffickers. The Venezuelan state carries out narcotrafficking,” Coutinho added. Coutinho insists that Chávez was the main architect behind the new narcotrafficking routes, while the current regime of Nicolás Maduro continues to operate them. “Chávez has created a very important cocaine route toward the Northern Triangle, toward Central America and Mexico. He did so jointly with Cuba, as a way to destabilize the region and affect the United States,” the expert said. Coutinho warned that narcotrafficking causes instability and chaos, undermining the institutional foundations of democracies. “Narcotrafficking is a war weapon. That’s how Fidel [Castro] won Hugo Chávez over.” New mix: State, narcotrafficking, invasions Víctor Amram, retired commissioner of Venezuela’s Scientific, Criminal and Forensic Investigations Corps, said Chávez created what is known today as a “modern narcostate.” “What Chávez did was to take advantage of Venezuela’s corruption, the deterioration that already existed, and then polished and improved it. Chávez was the instigator of this mix of networks: drugs, narcotrafficking, corruption, and political and military invasions,” said Amram. Everybody’s fight The experts agreed that the fight against drugs led by the United States, is the responsibility of the entire continent. The moral imperative, they said, is a unified fight with all countries working side by side against a common enemy: narcotrafficking. “We need to stop saying that the United States is losing the war against narcotrafficking,” Rodíl said. “We are all losing it.” Rodíl added that the narcotrafficking issue cannot be left to the United States alone. “Venezuela lost the day it let someone like Hugo Chávez take office and turn the Venezuelan state into a sponsor for criminal activity, such as narcotrafficking,” he concluded.

Venezuelan oil production up 20%

Iolanda Fonseca -December 16, 2019, https://riotimesonline.com/brazil-news/mercosur/oil-production-in-venezuela-shows-slight-recovery/, Rio Times, Oil Production in Venezuela Shows Slight Recovery

Venezuela’s oil production in November showed an increase of more than 20 percent over the previous month., RIO DE JANEIRO, BRAZIL – This is reflected in the monthly figures of the Organization of Petroleum Exporting Countries (OPEC). This is the highest figure since the tightening of US sanctions against the Venezuelan state oil company PDVSA in August this year., This month, the US government threatened foreign companies with sanctions should they continue to cooperate with PDVSA., As early as January, Washington began taking action against the South American . . ., To read the full NEWS and much more, Subscribe to our Premium Membership Plan.

Venezuela opening up its oil industry now and new deals for food and medicine emerging

Ricardo Vaz, December 11, 2019, https://venezuelanalysis.com/news/14744, NEWSOIL AND GAS

Venezuela Oil Production Continues Slow Recovery

Reuters has recently reported that government and opposition figures are contemplating allowing private companies in joint ventures with PDVSA to operate oil fields themselves. The move would represent a reversal of a longstanding policy dating back to former President Hugo Chávez’s government which required that PDVSA retain operational control of oil operations. In an attempt to attract foreign investment, the Maduro government has also loosened the requirement that PDVSA hold at least a 60 percent stake in joint ventures, requiring only a majority stake in new dealings. As part of ongoing talks, government representatives and several minority opposition parties have recently agreed to seek oil-for-food and oil-for-medicine agreements with international partners, but no further details are known at this time. Edited by Lucas Koerner f

US pressure is forcing Maduro to open the economy

Luc Cohen, 12-6, 19, https://www.reuters.com/article/us-venezuela-oil/venezuela-government-opposition-weigh-giving-private-oil-firms-operating-rights-sources-idUSKBN1YA1ZO, Venezuela government, opposition weigh giving private oil firms operating rights: sources

Maduro’s socialist government already has reduced state intervention in other areas of the economy, such as price controls and foreign exchange restrictions, in response to broad sanctions by the United States which recognizes Guaido as the legitimate president, that have complicated the government’s ability to transact overseas. At least one joint venture is already weighing the possibility. Oswaldo Cisneros, a Venezuelan businessman whose Delta Petroleum has a 40% stake in the Petrodelta joint venture, said he was evaluating signing a deal with PDVSA that he said would “subcontract the operation of the field to us.” “They (PDVSA) authorize us to develop the fields ourselves directly with the financing we are bringing,” Cisneros said on the sidelines of a conference in Caracas this week.