VENEZUELAN’S OIL CURSE

With such potential wealth available, why is it not reaching the people?

Everybody perhaps remembers the months of unrest that characterised the life of Venezuelans’ during 2019. Shortages of fuel, water, food and medicines have been choking the Bolivarian Republic of Venezuela for many years.

Corruption, political mismanagement and police brutality have left deep scars throughout the entire population, particularly amongst the ones in dire need. An estimated of 5 million of people left the country as only solution in order to be able to provide for their families. They are those “lucky” though. For the ones that remained, problems got even worse.

Following the health crisis and heavy sanctions from their historical enemy, Venezuela is suffering again. Most likely, it never really stopped. About 100 protests have taken place just during the last weekend of September across 19 of its 23 states. The requests? Just the simple fulfilment of their basic needs.

Differently from the past, when Caracas was the centre of the unrest, now the demonstrations are concentrated outside the city’s borders. Indeed, the government prioritised fuel deliveries to the gas stations across the capital for maintaining its streets free from protesters. Also its economy has seen a growth during these last months. President Maduro has de facto decided to relax the economic restraints that have been characterised his socialist government since the beginning. So, thanks to an economic liberalisation and the creation of a new free market, Venezuela and the private sector appear to have finally made up. However, if in the capital stocked shops and dollars circulation have improved the life of some, the majority of Venezuelans are still on the brink.

In Venezuela’s poorest areas, the scenario is nothing alike. There, people have to queue sometimes for two or three days for filling the tank of their cars. Nobody has dollars and the hyperinflation has made their wages basically worthless. The majority cannot afford basic supplies or barely any food. Plus, collapsed infrastructures make almost impossible for citizens the access to water, power, electricity and healthcare. The discontent is high amongst Venezuelans. Protesting is the only thing under their control.

Although the demonstrations have been largely peaceful, police and the infamous colectivos (Venezuelan urban militia) have been reported to crack down on rioters with systematic violence and arrests. According to the local watchdog Foro Penal, at least 214 people got detained and other four killed solely during the unrests occurring in 2020, The Guardian informed. Yaracuay state, which have seen the higher number of protests during the last week of September, has also suffered from several human rights violations. As Caracas Chronicles disclosed, arrests of minors, illegal raids and the use of tear gas against houses and health centres have been among authorities’ reactions.

Unfortunately this data is a sad reality for the country. Already when the wave of protests started in 2014, the Human Rights Watch pointed out how Venezuelan security forces made use of excessive and unlawful violence against unarmed protesters and journalists. Firearms, tear gas and water cannons were the preferred weapons chosen by authorities for controlling the riots. Under this light, the United Nation has released a new report last month that shows how Venezuela “amounted to crimes against humanity” such as unlawful executions, enforced disappearances, arbitrary detentions and torture. However, some argue that the report could be more of a political move rather than a disinterested pursuit of the truth.

How has Venezuela reached this state of poverty, despair and violence? What are the causes that bring a nation with the largest proven oil reserve in the world drawing into its own richness? In reply, we should consider several factors.

Let’s go back in time, during the Hugo Chávez presidency. Being in power from 1999 to 2013, he was, indeed, the initiator of the Bolivarian revolution. Aggressive anti-imperialist policies and social programmes were the main features that characterised his government. Maintaining Venezuelans’ support that was slowly decreasing, in 2002 he expanded his social reform using the profits derived from high oil prices. However, government’s policies failed to address several problems that soon got out of hand.

Criminality, inflation and corruption are all products coming from the Chávez era. During this time, Venezuela already faced occasional shortages as a result of government inefficiencies. To these, it needs to be added the mismanagement of national natural resources as a collateral outcome generated by the politicisation of bureaucracy and enterprises nationalisation. This was the slippery political and economic scenario that welcomed Nicolás Maduro in 2013.

Despite his ambitious goal of reaching a “zero poverty” state by 2019, Maduro administration has witnessed the final collapse of Venezuela’s economy. Shortage rates continued to increase so that the Venezuelan National Assembly declared a national food crisis in February 2016. For coping with the production emergency due to years of mismanagement, in 2014 Maduro started to ration all the basic supplies, from food and gasoline to water and electricity, helped by a fingerprint scanning system. However, this created the basis of a new form of social control as well as political weapon.

As César Batiz, investigative journalist and director of Venezuelan independent online news publication El Pitazo, said talking about these food listings “The lists are a form of social control:

they determine who has a right to food. And: they determine who’s for or against Maduro’s government.” Pretty worrying, indeed.


MACKAYAN: VENEZUELA OIL CRISIS


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By Chiara Castro: Political Columnist


The bitter irony around Venezuela situation is a country with such a massive oil reserves has suffered from gasoline shortages. In fact, the State oil company Petroleos de Venezuela (PDVSA) has the capacity to yield roughly 1.3 million barrels of fuel per day. So, why is not Venezuela producing enough of it? The answer is pretty simple. Years of underinvestment and lack of maintenance has brought these oil plants to be mostly unusable. As Reuters reported, in March those refineries were able to deliver only 7,000 bpd. Plus, US-led sanctions imposed in 2019 notably challenged gasoline imports, worsening its oil ruin.

Maduro’s government is now planning new refining projects to cope with the critical situation as well as a new fuel distribution initiatives. However, analysts warn that the poor conditions of the oil infrastructure and equipment could lead to an ecological disaster in a country that has already experienced years of damage caused by abandoned oil fields.

Venezuelan’s global strategic significance has transformed the country’s battleground for many international interests. Several countries are trying to resolve the crisis for gaining something out of it, while others are striving to intensify the emergency at their own advantages. Surely, this is not the kind of pluripolar world that Chávez had in mind.

In January 2019 Mr Trump enforced an embargo against Maduro’s government, reportedly aiming to achieve a change of regime. This assesses also that other nations have to respect the trade restrictions for not running into sanctions themselves. In this way, the United States are bringing into a diplomatic isolation a country that is already collapsing. Despite the opposition leader Juan Guaidò looking at these events as a victory, US coercive policies have been condemned by Foreign Minister Jorge Arreaza. In a press release published on Twitter the 13th of January, he condemned the attack calling “the international community to protect the inviolable principles and purposes of the Union Nation Charter”.

How are the government allies to president Maduro reacting to this?

Cuba and Nicaragua both expressed their solidarity to the people of Venezuela, denouncing the “criminal attack” as an attempt to destabilise and subvert the constitutional order. The US offensive is directly well known also to their leaders. Plus, Venezuela provides heavily discounted oil to the Cubans, which keeps some and sells the rest. This trade deal has been in force since Chávez and Fidel Castro administrations. However, Mr Trump is already studying the eventuality of a limited naval blockade to prevent these shipments.

Although this economic war does not really benefit even US investors, someone seems to come out as a winner. Russia is a long-time ally of Venezuela. It is arguable that without Russian intervention, Maduro’s regime would most likely have collapsed. Putin does not appear to be scared of US sanctions either. The stakes are higher. Economically speaking, the Russian government is obtaining a deep discount on crude as repayment of his efforts. Plus, the Russian state-controlled oil giant Rosneft, which already handled about 70% of Venezuela’s oil exports, is increasing its operational control over existing national joint ventures.

But the “mutual cooperation”, as Russian described, is also giving to Putin the perfect opportunity to increase his sphere of influence just right off US territory. An important geopolitical move served to Moscow on a silver platter.

China maintained its trading activity with the Bolivarian Republic for a while, hoping to get access to the country’s vast natural resources. Although last year Xi Jinping decided to interrupt import of Venezuelan oils to escape US sanctions, the Chinese government seems to still get access to Maduro’s crude through Russian channels.

Also the strategic alliance between Iran and Venezuela does not appear to have been shaken by US political pressure. After 70 years of bilateral relationships, Iran is still keep helping its Latin American friend. It is, indeed, thanks to Iranian cargos of gasoline that Venezuela can cope with its fuel shortages. Three tankers have already reached El Palito refinery throughout last week, after having masterly overcome US punitive sanctions.

Business and trade are not the only cards in the geopolitical deck though. Humanitarian assistance is another delicate matter that could be used for jogging influence and pursuing secondary interests. At the expense of Venezuelans, once again. So, if on one side the United States have been worsening Venezuelan flattery economy through several sanctions for years, on the other they are offering their humanitarian aid to the misfortunate Latin country. It is not surprising that Maduro looks as these actions as a political weapon, accusing the US to use it as a way to cover for its military intervention.

Once upon a time, one of the richest countries in Latin America, Venezuela, now sinks into a chasm of poverty and despair. The oil industry shaped its economy deeper and deeper, day by day. As the OPEC Co-Founder Juan Pablo Pérez Alfonzo predicted “Ten years from now, twenty years from now, you will see, oil will bring us ruin…It is the devil’s excrement.” Well, yes. Once considered a benediction, the Venezuelan oil reserve reveals its real face: a curse that is tearing the whole country to pieces. Yet, another one.


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