On 5 March, US envoys travelled to Caracas for the first time in 20 years, desperate to secure energy imports amidst the deepening crisis over Ukraine. They met with Venezuelan President Nicolas Maduro. Since 2018, the US has refused to recognise the United Socialist Party of Venezuela (PSUV) government, using this as a pretext to ramp up sanctions, launch a new round of opposition destabilisation and isolate Venezuela diplomatically. Having defied these attacks and withstood the devastating economic and social consequences, today the Bolivarian Republic stands strong. SAM McGILL reports.
The meeting represented a decisive defeat for US-backed opposition stooge Juan Guaido who swore himself in as ‘interim president’ in 2019. Despite imperialist platitudes of continued ‘recognition’ for Guaido as the legitimate president of Venezuela, actions speak louder than words. When contemplating renewing oil imports from Venezuela, the US met with the only representatives able to make such decisions: Maduro and the PSUV administration. Guaido – ‘Washington’s man in Caracas’ – was not even notified about the meeting. Nor was the right-wing government of Ivan Duque in neighbouring Colombia, whose former president Juan Manuel Santos called the US-Venezuela negotiations a ‘slap in the face’.
This rapprochement does not signify the end of imperialist aggression against Venezuela’s 20-year struggle for socialism. Two days prior, US president Joe Biden extended the executive order declaring Venezuela an extraordinary and unusual threat to US national security, first enacted under former president Obama in 2015. Venezuela’s Minister for Foreign Affairs, Felix Plasencia, outlined strategic demands for recommencing oil trade with the US including sanctions relief, political recognition and the return of frozen assets: ‘If they accept that the only and legitimate government of Venezuela is the one led by President Nicolas Maduro, US and European oil companies are welcome’. Another nail in the coffin for Guaido’s sham ‘presidency’.
The negotiations are driven by Washington’s urgent need to secure oil imports to replace supplies from Russia, previously the third biggest oil exporter to the US after Canada and Mexico. US oil company Chevron is lobbying Biden for licences to trade Venezuelan oil in order to recuperate debt. It is preparing to take operating control in four joint ventures in Venezuela which used to produce 200,000 barrels of oil per day (bpd) before being blocked by US sanctions. US Secretary of State Antony Blinken reiterated their ‘interest globally in maintaining a steady supply of energy’.
Venezuela used to export 500,000 bpd to the US before the oil embargo imposed by former President Trump in 2017. The all-out blockade slashed total output from 3 million bpd in 2012 to historic lows of 500,000 bpd in 2020. Sanctions impede the necessary imports of diluent and spare parts, cutting off Venezuela’s PDVSA oil company from lines of international credit and finance. Secondary sanctions target foreign companies trading with Venezuela, blocking oil tankers scheduled to transport Venezuelan crude. Thanks to technical assistance from Iran, finance from China and trade with Russia, Venezuelan oil workers and volunteer work brigades have undertaken repair work, built their own spare parts to circumvent blocked imports and managed to restart production in key refineries, significantly increasing oil production to 800,000 bpd. As a result Venezuela’s economic situation is improving. Monthly inflation in December dropped to 7.6% from highs of nearly 200% three years ago. 2021 marked a full year without hyperinflation, allowing some wages to be raised. PDVSA plans to more than double production to 2 million bpd this year.
Fighting off the vultures
Much attention is focused on the future of the CITGO petrochemical company, a US-based subsidiary of PDVSA with petrol stations across 30 US states. CITGO, Venezuela’s most valuable foreign asset, has been the subject of a financial battle since 2016 when its shares were pledged in exchange for deferring debt repayments following the oil price crash. A string of lawsuits followed, demanding compensation for unrelated nationalisations, with US oil giant ConocoPhillips seeking $9bn and Canada’s Crystallex seeking $2bn. As a result of 2017’s oil blockade, CITGO’s assets were frozen by the US Treasury Department. Any payouts need approval by the Office of Foreign Assets Control (OFAC). US ‘recognition’ of Juan Guaido technically places him in control of CITGO. On 2 March, a US judge authorised the auctioning of CITGO shares to the highest bidder under a procedure brought by Crystallex. However the ruling clarified that shares could not be transferred without OFAC licences, mandating guidance from OFAC within six months.
In a goodwill gesture after the March negotiations, two US nationals were released from Venezuelan prisons. One of them was Gustavo Adolfo Cardenas, one of the notorious ‘CITGO six’ employees jailed for corruption after signing unauthorised contracts offering CITGO as collateral for loan negotiations with Dubai’s Frontier Management Group and US equity fund Apollo global management; these are ‘vulture funds’ aiming to strip CITGO’s assets. The actions of the six, and the level of US interest in their release, has drawn speculation that they are US intelligence assets.
US tacit recognition of Maduro and the increasing irrelevance of Guaido could spare CITGO from sell-off at the eleventh hour. CITGO has significant refining capacity, specialised for processing Venezuelan heavy crude. With oil at well over $100 a barrel, US energy costs rising 29% last year and the impact of war in Ukraine, Biden is under increasing pressure. If not torn apart by vulture capitalists, CITGO could fill the gap. However, with one eye on November’s mid-term elections, Biden has put Venezuela talks ‘on hold’ under pressure from ultra-reactionary politicians and lobbyists from swing state Florida, hotbed of the Venezuelan opposition.
Latin America, NATO and Russia
The backdrop to these talks is the escalation of NATO tensions with Russia in the Americas. Since the 1823 Monroe doctrine the US has considered Latin America its ‘back yard’. Biden has gone further, claiming ‘everything south of the Mexican border… is America’s front yard.’ US hegemony means any nation demanding control over its own resources, for an alternative political path, is intolerable. Venezuela, Bolivia, Nicaragua and socialist Cuba are the target of sanctions, destabilisation campaigns and unconventional warfare. Two years after the 1959 revolution, US-backed mercenary forces invaded Cuba in the failed 1961 ‘Bay of Pigs’. The US-orchestrated Contra war in Nicaragua between 1979-1990 left 30,000 dead. In 2002 the US-backed a coup in Venezuela against late President Hugo Chavez and in 2020 US private mercenaries attempted to invade in a plot signed off by Guaido. These overt actions have joined scores of unconventional warfare plots, from US planes spreading crop-destroying insects and dengue fever in Cuba, to the channelling of $100m to opposition forces in Venezuela and the bankrolling of phoney political candidates in Nicaragua.
The deadliest weapon so far is economic strangulation via sanctions. Far from being non-fatal, sanctions directly lead to deaths for lack of medicine and medical treatment. Whether the 60 year blockade of Cuba, the NICA and RENACER acts targeting Nicaragua, or over 400 measures against Venezuela, these sanctions are acts of war. By 2018 an estimated 40,000 Venezuelans had died as a result of sanctions and the US blockade of Cuba has cost the island over $144bn. In this context, Russia and China have emerged as alternative investors and trading partners, offering a much-needed lifeline (see FRFI 286). Nevertheless, as capitalist powers, Russia and China have their own economic and geopolitical interests in the region which challenge US domination over Latin America.
Russia has close links to Venezuela’s oil and gas industry. In 2017, as PDVSA struggled to service its debts, Russia postponed $3.5m of loan repayments, providing much needed debt relief. Rosneft also pre-paid $6bn for Venezuelan oil deliveries and in 2019 PDVSA moved its offices from Lisbon to Moscow as a safeguard from asset seizures. Trade turnover between Cuba and Russia in the first ten months of 2021 was $100m. Russian oil company Rosneft began oil shipments to Cuba last year to help compensate for the drop in Venezuelan imports. Meanwhile, Nicaraguan imports from Russia reached $43m in 2020 and the Mechnikov institute in Managua produces Russia’s Sputnik vaccine, vital to the region’s Covid-19 vaccination programme alongside Cuban-made vaccines.
Given the continuing US threat, Cuba, Venezuela and Nicaragua have extended military cooperation with Russia. Cuba’s defence sector has been modernised with the support of Russia, whilst Nicaragua hosts the GLONASS Russian satellite communications facility and a joint counter-narcotics centre. In addition, Venezuela’s military and air-force has depended on Russian cooperation. Unlike the US, which has 800 military bases around the world including 76 in Latin America and the Caribbean (with Colombia alone hosting seven US military bases along its border with Venezuela), Russia does not have any military bases in the region. In fact Venezuela, Cuba and Nicaragua prohibit foreign military bases in their territories and vehemently oppose the continued illegal occupation of Cuba’s Guantanamo Bay by the US naval base.
In this context, Russian Deputy Prime Minister Yuri Borisov visited Cuba, Nicaragua and Venezuela in February 2022 to deepen bilateral trade. Meanwhile Juan Gonzalez, special advisor and Senior Director of the White House National Security Council for the Western Hemisphere, declared that the sanctions levied against Russia are ‘by design’ so robust they will damage Cuba, Nicaragua and Venezuela amongst others. Venezuela is already struggling to access oil revenues held in sanctioned Russian banks like Promsvyazbank, where PDVSA and the Venezuelan defence ministry hold accounts.
When pushed at January’s unsuccessful meeting between NATO and Russia in Geneva, Russia’s Deputy Foreign Minister Sergey Ryabkov would neither ‘confirm nor exclude’ the possibility of increasing Russian military presence in Cuba, Nicaragua and Venezuela, prompting US National Security Advisor Jake Sullivan to promise a ‘decisive’ US response in such a scenario. Flexing their muscles shortly afterwards, a US nuclear aircraft carrier participated in joint NATO naval operations with Colombia near Venezuelan waters. Colombia is the most recent and only NATO partner in Latin America, joining in 2017. It is easy to see how the region could become a theatre for a looming third world war.
Acutely aware of the dangers, Cuba, Nicaragua and Venezuela are treading carefully. Maduro denounced the ‘mockery’ of NATO’s handling of the Minsk Agreements (over the autonomous Donetsk and Lugansk republics in Ukraine), arguing their ‘derailment’ constituted a ‘violation of international law’. At the 2 March UN emergency session on Ukraine, whilst recognising Russia’s security concerns over NATO expansion, Cuba, Nicaragua and Bolivia joined China in abstaining from the vote condemning Russia, calling for a peaceful, diplomatic resolution respecting the security of all involved. Shamefully, Venezuela was unable to vote because US sanctions have blocked it from paying UN membership since 2020. Significantly, in 2014 Nicaragua, Cuba, Venezuela and Bolivia voted against a similar motion condemning Russia after it blocked Ukraine from seizing Russia’s Crimean military base. This time Russia’s trading partners are maintaining a more neutral line, emphasising the crucial need for de-escalation. Cuban president Miguel Diaz-Canel stated that ‘conflict could have been avoided if the well-founded claims of the Russian Federation’s security guarantee had been met with seriousness and respect’, but emphasised ‘We defend peace in all circumstances and unambiguously oppose the use of force against any state.’
Venezuela’s permanent representative to the UN Samuel Moncada denounced sanctions: ‘We reject the implementation of unilateral and retaliative coercive measures… as they will intensify the crisis and prolong the conflict… When humanity continues to feel the effects of the Covid-19 pandemic, a new global economic crisis will be imposed, by design, with the express purpose of causing suffering to hundreds of millions of people around the world. A deliberately generated crisis, to destabilise a nuclear power. This is not the path to peace… Only through the path of diplomacy, dialogue and restraint, without pressure or sanctions, can we establish a necessary ceasefire… and avoid a chain reaction that takes us like sleepwalkers to the abyss’.
As tensions escalate we stand with the struggle for socialism in Latin America – no sanctions, no coups, no intervention!
Fight Racism! Fight Imperialism! No 287, April/May 2022
