The restructuring negotiations over Venezuela’s debt entail a complex geopolitical poker game, the Financial Times reports:
With the exception of bondholders, for the other five players sitting round the table — the government, the opposition, the US, Russia and China — the prize goes far beyond money. At stake are the political survival of a government, the fate of 30m Venezuelan citizens and the competing geopolitical interests of three superpowers…Advised by Cuban intelligence officials, in turn schooled by the Soviets, [President Nicolas] Maduro’s domination of the country is Orwellian. Apart from the National Assembly, all institutions are under his control — including the Supreme Court, the media, the electoral authority and the military.
Venezuela is mired in a four-year recession, with its currency reserves at their lowest point in decades, triple-digit inflation and a deepening humanitarian crisis that includes shortages of food and medicine, Americas Quarterly reports:
Also on November 13, the European Union approved an arms embargo against the country, and is preparing sanctions following irregularities in last month’s elections. The UN Security Council convened an important meeting with OAS Secretary General Luis Almagro and Venezuelan civil society to discuss the humanitarian crisis.
Russia is backing Maduro’s regime in support of Vladimir Putin’s strategy of global tension, observers suggest. Russia has lent Venezuela billions to keep the regime afloat, mostly through loans to PDVSA. Instead of repaying in cash, Venezuela is often paying in oil, Antonio Mora writes for The Hill:
In fact, a report from August estimated that Rosneft, the Russian state oil company, resells 225,000 barrels a day of Venezuelan oil, about 13 percent of the country’s total exports. Russia has also obtained bargain-basement collateral to secure those loans. In its desperation for cash infusions, the Venezuelan government has granted Rosneft liens on shares of CITGO, the large U.S. oil company it owns, and on Venezuelan oil fields.
The ties with Russia are also ideological. Venezuela may have been the only place outside Russia and Cuba that celebrated the 100-year anniversary of the October Revolution. In a speech, Maduro said, “This is your people, Lenin. This is your people, Trotsky.”