Author Topic: Venezuela Politica  (Read 380164 times)

Crafty_Dog

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Rumint
« Reply #450 on: January 28, 2019, 04:38:59 PM »
For those not familiar with the term "rumint" know that is a neologism that blends "RUMor" and "INTelligence".  In other words we have no idea as to whether this is true, a Russian dis-intel operation, or something else.

https://special-ops.org/49145/russian-private-military-contractors-reportedly-operating-in-venezuela/?fbclid=IwAR36oOTQact8X4gnuHnePqXnlzTjgfUPpwn2LrEB6YG0avSN2sYP9hj91-I



Crafty_Dog

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WSJ: O'Grady: Power & Money in Venezuela
« Reply #453 on: February 12, 2019, 09:13:35 AM »
Power and Money in Venezuela
Some opponents of Nicolás Maduro remain supporters of socialism.
46 Comments
By Mary Anastasia O’Grady
Feb. 10, 2019 3:02 p.m. ET
Venezuelan President Nicolás Maduro at Miraflores Palace in Caracas, Feb. 8.
Venezuelan President Nicolás Maduro at Miraflores Palace in Caracas, Feb. 8. Photo: andres martinez casares/Reuters

Nicolás Maduro’s decision to block humanitarian aid to the starving Venezuelan people is no surprise. It’s already well-established that the dictator and his Cubans backers are tyrants.

What really matters politically is the effect of new U.S. Treasury rules mandating that payments for Venezuelan oil go to an escrow account for the government of interim President Juan Guaidó. As the Journal’s Kejal Vyas and Bradley Olsonreported Feb. 4, the restrictions “are making it difficult for the Maduro regime to secure payment for the oil.”

A severe cash-flow disruption increases the odds that Mr. Maduro will have to move out of the presidential palace. Even so, democracy advocates had best not get ahead of themselves. Many risks would remain even if Mr. Maduro retires.

From the earliest days of Hugo Chávez’s rule, oil money has been the key to power in Venezuela. Chávez tightened his grip at first not by executing opponents but by buying them off. This is why friends of the region’s hard left are wringing their hands and crying that the Treasury rules will hurt the Venezuelan people.

The Venezuelan people are already destitute, and anything that accelerates Mr. Maduro’s demise is good for them. But what happens next?

Many analysts are overlooking the problem of the army of political operatives who were part of the breakdown of the country over the past two decades and now oppose Mr. Maduro.

These include die-hard chavistas like Rafael Ramírez. From 2004 to 2014, Mr. Ramírez was president of PdVSA, Venezuela’s state-owned oil company, which is in ruins. Also in the opposition are career bandits of the political class, who have shared for years in the spoils of corruption no matter who was at the helm. The list includes but is not limited to some members of Venezuela’s infamous Democratic Action Party.

These characters have broken with Mr. Maduro but not with the socialism that made them rich. They seek impunity for their crimes and a place at the feeding trough in the next government. Their strategy is to demand “power sharing” and to threaten to split the opposition if they aren’t dealt in. These self-interested opportunists have support from ideologues in places like the Vatican, which has been an advocate of appeasing Mr. Maduro.

The horrendous toll on humanity from two decades of Venezuelan socialism can’t be overstated. Food and toilet-paper shortages and malnutrition are getting the most attention. But an article in the journal Travel Medicine and Infectious Disease described Venezuela as “an epicenter of the resurgence of multiple vaccine-preventable, vector-borne, and zoonotic diseases with numerous ongoing, co-occurring epidemics.”

Malaria is a particular problem, the authors write, in part because of a large migration to illegal mining areas, a deterioration in the medical infrastructure and “above all, lack of political will.”

This is the legacy not only of Hugo Chávez but also those who embraced socialism, whether because of ideology or greed. He used his early popularity to rewrite the constitution, get the Venezuelan congress to give him the power to rule by decree, confiscate large farms, and attack entrepreneurs from the bully pulpit. He also cracked down on the free press. A few years later, when he trampled the rights of workers at PdVSA and packed the supreme court, the public was uninformed and there was little criticism from abroad. He could do it, the argument went, because he was still winning elections—though electoral institutions were already corrupted.

By 2007 price and capital controls were destroying the country’s productive capacity and harming businesses that sold imports. It was already difficult to find routine foodstuffs like milk, cooking oil, bread and pork. But Chávez had control of PdVSA and was flush with cash. No one could stop him.

Oil money greased every sector of society—from the government, military, business and media to nongovernmental organizations including religious groups. Most important, Chávez used it to bribe and corrupt members of other political parties.

These sycophants, along with the anti-Maduro chavistas, are now worried. They have no ethics and they don’t want Mr. Guaidó to succeed if it means the end of the gravy train—and the power that comes with it. That’s why they want to brand the interim president as a radical right-winger who is pulling off a coup with Washington’s help.

Enemies of democracy, including Cuba and Iran, will try to hold on to their power in Venezuela even if it means a bloodbath. In preparing for this possibility, Mr. Guaidó doesn’t have to worry only about Mr. Maduro’s supporters but also about the weasels who want to seize control of the opposition movement.

Crafty_Dog

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GPF: Russia wavering?
« Reply #454 on: February 18, 2019, 10:46:51 AM »
Is Russia wavering on Maduro? Russia has been one of the most important, stalwart supporters of Venezuelan President Nicolas Maduro. But over the weekend, an unnamed Gazprombank source told Reuters that the lender has frozen the accounts of Venezuelan state oil company PDVSA to avoid running afoul of U.S. sanctions. Moscow hasn't officially said anything about it, and PDVSA strongly denied the report, calling it right-wing American propaganda. At this point, it's difficult to verify the report itself, but if true, the potential implications of the report are significant for the Maduro government’s future. One of the main ways the U.S. has been working to buttress opposition leader and self-declared president Juan Guaido has been to cut off the Maduro government's sources of income. It also may suggest a basis for some kind of understanding or negotiations between the U.S. and Russia. That’s all mostly speculation at this point, but there's enough smoke here to begin asking questions.

Crafty_Dog

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Crafty_Dog

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Re: Venezuela Politica
« Reply #456 on: February 25, 2019, 10:19:46 PM »
How the Trump Administration Should Counter Putin's Policies in Ukraine and Venezuela
by Jiri Valenta  •  February 25, 2019 at 5:00 pm
             
   If Nicolás Maduro is removed from office in Venezuela, Putin might act as he did when a popular revolution overthrew Yanukovych in Ukraine, in 2014: with a surprise invasion of the Crimea. This time, Putin may launch a surprise naval and land attack on Mariupol, set up a land bridge from Crimea to Russia and continue intensifying his attempt to strangle Ukraine's economy in order to subjugate Ukraine to Russia. Trump needs to take immediate preemptive measures to prevent Putin from doing that by increasing naval aid to Kiev.
   So far, Putin seems to have been counting on a lack of American resolve regarding Venezuela, and has just succeeded in getting China to support him.
   If America abdicates its role in Venezuela, you can bet Russia will eventually build intelligence facilities there. Russia has also been providing Nicaragua with "sophisticated weaponry," including "T-72 tanks, war boats, warplanes, and powerful bombs."
   Above all, President Trump must continue as he is doing now, to work towards liberating the Venezuelan people. Any hesitation will be counterproductive.
 

Crafty_Dog

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Stratfor
« Reply #457 on: March 14, 2019, 12:43:18 PM »
What Happened

According to a Reuters report released March 12, partially recognized interim President Juan Guaido is preparing new legislation for Venezuela's oil and gas sector that would allow companies other than the country's state-owned energy company, Petroleos de Venezuela (PDVSA), to operate oil and gas fields. The proposed reforms, which Guaido's allies are presenting at an energy conference in Houston this week, are expected to be released for debate in Venezuela's National Assembly in the coming days.

Guaido's reforms would dismantle PDVSA's monopoly over Venezuela's oil and gas sector by no longer requiring its involvement in every project. In doing so, the laws would fundamentally reverse the country's highly nationalistic regulatory environment in place since former President Hugo Chavez nationalized the industry more than a decade ago.
Why It Matters

By proposing ambitious energy reforms, Guaido is ensuring Venezuelans that he has a rescue plan for the country's recovery should he gain more power. Venezuela's oil and gas sector is the main generator of revenue for the government, and its revitalization is thus paramount to address other factors plaguing Venezuela's recovery, such as its overseas debt obligations and decaying infrastructure.

There is a fair chance Guaido's reforms will pass the National Assembly, which is currently controlled by parties that support his campaign to unseat Maduro. Actually implementing the plan, however, will be a challenge so long as President Nicolas Maduro continues to control the military and, by proxy, the oil sector.

Venezuela's oil sector will still be an expensive and high-risk investment for foreign suitors, especially if they don't already have an established presence in the country.

Even if a transition from Maduro occurred and the new plan for Venezuela's oil sector went into effect, jump-starting investment into the sector — which has seen production collapse in recent years amid the country's ongoing economic and political crisis — would be no easy feat for Maduro's successor, whether that be Guaido or someone else. The country's oil and gas fields have long been neglected, and the heavy oil fields in the Orinoco Basin are also expensive to produce. After suffering years of underinvestment, some of the reservoirs are likely damaged and in need of costly repairs and upgrades to allow the conversion of heavy oil into a more easily transported form. This will make Venezuela an expensive and high-risk investment for foreign suitors, especially if they don't already have an established presence in the country.

And even if enacted, questions over how long the proposed reforms — which are modeled off of Colombia's and Mexico's energy reforms introduced over the last two decades — would remain in effect would give investors pause. While Colombia's reforms have been consistently backed by successive pro-business presidents, new Mexican President Andres Manuel Lopez Obrador's efforts to reverse Mexico's energy reforms show that if the political winds shift in a Latin American country prone to left-wing and populist movements — like Venezuela is — energy reforms may not last.



Crafty_Dog

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WSJ: Calls on President Trump to act
« Reply #460 on: March 25, 2019, 04:45:04 PM »
second post

The stakes for American interests keep rising in Venezuela, as Vladimir Putin is now moving his little green men to keep dictator Nicolás Maduro in power. U.S. Secretary of State Mike Pompeo called his Russian counterpart Monday after Russian air force planes carrying about 100 troops arrived in Caracas Saturday.


“The continued insertion of Russian military personnel” risks “prolonging the suffering of the Venezuelan people who overwhelmingly support” interim President Juan Guaidó, the State Department said in a statement. It added that Mr. Pompeo called on Russia to “cease its unconstructive behavior and join other nations” that want a better future for Venezuela.

This isn’t Ukraine next to Russia, or Syria in the Middle East. This Russian military provocation is in America’s backyard, and the Trump Administration will have to do more in response than issue statements or phone calls of disapproval. The Maduro regime’s fortress socialism is spreading millions of refugees and havoc throughout the region. President Trump needs to decide if he is going to let Mr. Putin get away with it.

Crafty_Dog

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Stratfor: Is Russia throwing in with Maduro?
« Reply #461 on: March 25, 2019, 10:40:25 PM »
Is Russia Throwing Its Lot in With Maduro?

What Happened

Russia is seemingly upping the stakes in Venezuela's standoff — for friend and foe alike to see. In a deliberately visible event, two Russian aircraft reportedly landed at Simon Bolivar International Airport in Caracas on March 22. One plane arrived with 100 Russian military personnel, including the chief of staff of the ground forces, Gen. Vasily Tonkonshkurov, while the other landed with 35 tons of unspecified military equipment. According to an unnamed Venezuelan military official, the Russian forces are there as part of an agreement to assist the South American country in military training and engage in cooperation.

The Big Picture
________________________________________
Its economy in tatters, Venezuela falls further into the abyss with each passing day. Because of the country's deep economic crisis and international pressure, President Nicolas Maduro could be forced to abandon his position, yet and he and his supporters — including key international backers like Russia — are trying to delay his departure for as long as possible. Now, Russia has reportedly upped the ante in the country by deploying more troops, possibly with the aim of prolonging Maduro's stay in power.
________________________________________
Venezuela's Unraveling
Why This Matters

The Russian soldiers could be the first wave of additional troops that will arrive and remain in Venezuela. A greater Russian deployment would raise the stakes of a U.S. military intervention in Venezuela, as the use of military force to remove Venezuelan President Nicolas Maduro could ignite a direct confrontation with Russian military forces — something that Moscow could bank on the United States wishing to avoid.

Naturally, a semi-permanent Russian deployment could complicate U.S. efforts to oust Maduro, but it would allow Moscow to make strategic inroads into Washington's near abroad and deprive foreign energy companies the prospect of greater investment opportunities in the short term. But given Venezuela's importance to the United States, especially due to its geographic proximity, Washington could seek to counter Russia's actions in Venezuela with a more forceful reaction.

Russia's Calculations

If Russia does deploy even more forces to Venezuela, it would have to consider the size of the force. Realistically, Moscow's options run the gamut from a token force to a larger-scale mission along the lines of its intervention in Syria.

A larger deployment would enable the country to bolster the Maduro government more effectively against internal threats, such as a military coup or a significant armed revolt. It would also allow Russia to spread its forces around the country, potentially deterring a U.S. intervention under the assumption that the United States would hesitate to launch military operations in Venezuela if it feared Russian casualties. In effect, Russia is calculating that the United States is unlikely to risk a wider war with Russia just to topple Maduro's government. Indeed, there is a precedent for such Russian behavior, as Moscow's increased presence in Syria restricted the United States' ability to strike and, ultimately, oust President Bashar al Assad.

The prospect of a larger Russian deployment could even spur the United States to move early to intervene before Russia can entrench itself militarily.

While a larger deployment would offer Russia greater ability to pursue its objectives in the country, it would also present some significant drawbacks, with cost being the most obvious concern. Yet another Syrian-sized deployment would place additional strain on Russia's ability to project force, especially since Venezuela is much farther away than the Levant. A larger, more visible deployment could also ensconce Russia in a potential quagmire, exposing its forces to more dangers and threats in the event that security worsens in the country. But there are potentially graver concerns for Moscow as well: An enhanced Russian military presence in Venezuela might not actually deter the United States from acting against Maduro. What's more, the prospect of a larger Russian deployment could even spur the United States to move early to intervene before Russia can entrench itself militarily.

A smaller deployment would offer Moscow less room to maneuver, but it would not expose Russia to as much risk. A more limited deployment would be less expensive and offer Russia greater flexibility, as it could withdraw its forces much more rapidly in the event that Venezuelan security deteriorates. And while a smaller deployment is likely to present less of an impediment to the United States, it would also put fewer Russian troops in harm's way, thereby decreasing the chances of a wider military conflict.

What to Watch For

So far, Russia has sent few forces to Venezuela, and even then, most of these troops have been on temporary missions. The deployments include Wagner Group mercenaries, rotations of heavy bombers and the latest arrivals on March 22. Accordingly, we will be looking for indications that Russia is preparing to upgrade its presence in Venezuela by deploying troops for longer periods and preparing more forces and materiel for missions to the country. If the Russian government seriously intends to bolster Maduro, it is likely to deploy military forces in and around Caracas, as well as near oil production and export infrastructure.

Of course, the U.S. reaction to this latest Russian move will also be on our radar. Thus far, there is no major indication that the United States is mulling a serious military intervention to preempt greater Russian activity in the country, but this could change if the Maduro government — emboldened by Russian reinforcements — conducts a bloody crackdown on its opponents.
A smaller deployment would offer Moscow less room to maneuver, but it would not expose Russia to as much risk as a larger deployment.

The U.S. strategy so far has been to focus on economic coercion to cripple the Venezuelan government and encourage military defections at the same time as it collaborates with Colombia and Brazil to contain the fallout. The United States will also evaluate the longer-term implication that Russia could establish a military foothold in the Caribbean basin, as that would undermine the core tenets of the Monroe Doctrine, complicating the U.S. imperative to prevent foreign powers from interfering in what it perceives to be its geopolitical domain.

For the moment, the threat of U.S. military intervention has hampered the Venezuelan government's attempts to crack down on growing internal dissent. Indeed, Maduro's government is reluctant to arrest or exile the partially recognized interim president, Juan Guaido, for fear of kick-starting a potential U.S. military intervention.

But if Maduro begins repressing the political opposition and other internal dissenters because he believes Russian forces have effectively eliminated the threat of a U.S. intervention, Venezuela's crisis will develop along two broad possible paths. On one hand, Maduro's opponents may perceive the Russian deployment as a sign they must act against the government sooner, rather than later. Depending on the extent of the plans to unseat Maduro, dissidents within the armed forces may attempt a coup before extensive Russian military deployments or a severe crackdown make that option impossible. On the other hand, the threat of a greater backlash from the government could convince officers sitting on the fence to swing back to the president's camp, making a coup much more difficult to carry out. Whatever the case, the prospects of a greater Russian presence on the shores of the Caribbean is likely to reshuffle the deck on Venezuela.

DougMacG

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Stratfor: Russia's other hemisphere?
« Reply #462 on: March 26, 2019, 05:33:37 PM »
"One plane arrived with 100 Russian military personnel, including the chief of staff of the ground forces, Gen. Vasily Tonkonshkurov, while the other landed with 35 tons of unspecified military equipment."

Is the American Left only against America militarizing the situation in Venezuela or are they against all of it?

Assuming this is all true, isn't this a key moment for President Donald Trump? 

I shouldn't joke about a potentially dangerous military situation but maybe we  could use the '35 tons of unspecified military equipment' to blow up the '100 Russian military personnel' and save them the cost of the return flight (Does Venezuela even have jet fuel?), and then ask Russia nicely not to send any more troops or equipment. 

Or we could ignore Venezuela and take back Crimea while they look away.

Just trying to develop some options.  Looks like the don't-militarize idea just got tossed out the window.



Crafty_Dog

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Re: Venezuela Politica
« Reply #465 on: April 17, 2019, 06:08:08 AM »
In Venezuela, the Tide Is Turning on the Opposition
A citizen shows his support for Venezuela's current president, Nicolas Maduro, (pictured in the poster on the left), as well as former President Hugo Chavez.
(FEDERICO PARRA/AFP/Getty Images)

Highlights

    The continued allegiance of high-ranking military officials remains the main obstacle to opposition efforts to unseat Venezuelan President Nicolas Maduro. 
    Encouraging officers to desert Maduro and support opposition leader Juan Guaido will be difficult, given the government's ability to threaten or bribe them into remaining loyal.
    To expedite Maduro's exit, the United States will increase sanctions against his government and directly dissuade foreign energy companies from doing business in Venezuela. 
    Maduro's government has also begun laying the foundation for Guaido's arrest, which would complicate and potentially stall the opposition and U.S. push for regime change.

For the first time since opposition leader Juan Guaido announced his bid to unseat President Nicolas Maduro in January, efforts at regime change in Venezuela face the real risk of failure. Though Guaido is free to move about the country and rally crowds against Maduro, there are still no signs he has the support of the key military commanders needed to initiate a prompt and relatively peaceful political transition, despite the United States and the opposition's best efforts. As long as his military remains loyal, Maduro's government will remain in Caracas — leaving Guaido, as well as other prominent opposition figures in Venezuela, vulnerable to a crackdown that could end his bid for power altogether.

The Big Picture

Venezuela's resurgent political opposition has been working to oust President Nicolas Maduro for nearly three months — but so far, to no avail. Despite rising sanctions pressure and the threat of military intervention from the United States, Maduro's government and his military's loyalty remain intact. And as a result, the chances that Venezuela's left-wing government can delay its departure for months, or potentially longer, are rising.

The Loyalty of the Military

The continued allegiance of high-ranking officials in the military remains the chief hurdle to opposition efforts to overthrow Maduro. The opposition's efforts at creating a military schism have so far failed. Commanders did not quickly desert Maduro in the wake of severe U.S. sanctions in January as the United States had hoped for. Instead, they have remained by his side, likely convinced by a combination of threats and financial incentives.

To seriously threaten Maduro, the opposition needs enough military commanders to come to its side, likely by convincing them that the new government will allow them to keep their privileges, power and — in some cases — ill-gotten gains. Any such amnesty agreement would, in theory, allow them to leave power without facing greater repercussions of arrest, imprisonment or extradition to the United States. However, it's unlikely that opposition negotiations will yield a quick political transition. Financial incentives for military officials to remain in power are too great, and the Maduro government will continue to intimidate, bribe or arrest officers perceived to be talking with the opposition.

In addition, the recent arrest of former military intelligence chief Hugo Carvajal has cast a cloud over opposition efforts to sway military officials. Nearly two months after declaring his allegiance to Guaido, Carvajal was arrested April 13 in Spain under a U.S. warrant on cocaine trafficking charges. His successful extradition to the United States would likely have a chilling effect on other military officers thinking about defecting to the opposition — especially since some commanders are involved in trafficking activities that could also land them in a U.S. prison.
Tightening the Noose of U.S. Sanctions

In an attempt to accelerate Maduro's exit, the United States will turn up the sanctions heat by implementing secondary sanctions that prohibit other countries' companies from doing business with Venezuela's state-run energy sector. Signs that Washington might also decide to pressure specific European energy companies to reduce their business ties with Caracas' natural gas sector have emerged following the recent meeting between the U.S. special representative for Venezuela and officials at the Spanish company Repsol. Repsol and Italian company Eni own stakes in an offshore natural gas joint venture that accounts for roughly 15 percent of Venezuela's total gas production. Since Venezuela reinjects natural gas into wells to keep pumping oil, if Repsol and Eni were to reduce their presence in Venezuela, the latter's oil production would plummet even more sharply.

But military commanders' loyalty to Maduro has so far withstood the increasing weight of U.S. sanctions, and will likely continue to hold strong despite these new threats from Washington — even as the country's economy and infrastructure crumble around it.

With Guaido in jail, military dissidents cowed into submission and commanders willing to repress political opponents, Maduro could remain in power for months if not years.

On April 2, the government took the first step to justify Guaido's arrest by stripping the opposition leader of his legal immunity. Maduro had been reluctant to go directly after Guaido — likely in fear of heavier sanctions or military intervention from the United States, and the resulting threat this would pose to the unity of his military commanders. Thus, such a bold move signifies that Maduro and his inner circle are gambling they can mitigate the effect of heavier sanctions on military unity by cracking down on key opposition figureheads, such as Guaido and those close to him, and dissident military forces. With Guaido in jail, military dissidents cowed into submission, and military commanders willing to repress political opponents, Maduro's government could remain in power for at least several more months, if not years.

The looming 2020 presidential election in the United States could also play a role in determining when and how soon Maduro makes his exit. Incumbent President Donald Trump has prioritized regime change in Venezuela. Should Trump fail to secure a second term in 2020, his successor might be less willing to bet on an opposition bid.

Of course, just because a delayed Maduro departure is becoming more likely doesn't make it inevitable. A covert push by lower-ranking military officers to remove Maduro could still prove successful, as could the opposition's efforts to sway higher-ranking commanders to join their side. And the country's increasingly dire economic situation and rapidly crumbling infrastructure — which recently manifested in a monthlong series of nationwide blackouts — could also fuel more riots and crackdowns in poorer neighborhoods and, in turn, spur certain military commanders to split from the government.

But as it stands, what seems most certain is that Maduro's government is gearing up for a crackdown that could possibly result in Guaido's arrest or extradition. Absent a viable opposition figure to seize the presidency, Maduro's armed forces will be even less likely to leave his side. And as a result, the United States will find its path to removing the Venezuelan president largely blocked off — that is, barring direct military intervention

Crafty_Dog

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Re: Venezuela Politica
« Reply #466 on: April 30, 2019, 04:08:37 PM »
https://www.foxnews.com/world/venezuelans-regret-gun-prohibition-we-could-have-defended-ourselves?fbclid=IwAR29OJD-xiVFMUQGm8K7QAElbqZ5FGhp9MezGiXTGEb8jyyZy-6B-FiQ7TM

https://www.theguardian.com/world/video/2019/apr/30/venezuela-national-guard-armoured-vehicle-drives-into-protesters-video?fbclid=IwAR38F3w4uZtcAmfbOL2CgdGxDNoll-9sVy1EU3FhlVIye4S8RcPYk6_i1h0

Also, today on Cavuto on FOX, Gen. Keane spoke of several hundred Russian military (including 400 of the Wagner group, of which we last heard when Mattis killed 200 of them in Syria) propping up Gordito Maduro, aided and abetted by Cuban military/security folk.  Should they succeed in propping up Gordito, Keane spoke of Russia (and China and Iran) establishing a beachhead there similar to the Russia-Syrian relationship.

 
« Last Edit: April 30, 2019, 04:15:50 PM by Crafty_Dog »


Crafty_Dog

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George Friedman on Venezuela
« Reply #470 on: May 11, 2019, 06:20:51 PM »


It’s time to take a break from my search for the meaning of the nation and turn my focus to specific countries. I will start with Venezuela, which has been experiencing a political and economic crisis for several years.

I spent a good deal of time in Venezuela in the 1990s. The reason for my being there was not clear, then or now, but it gave me some perspective on what’s happening in the country today. My first flight into Maiquetia airport was at night. On the approach, I could see a mountain, all lit up with what appeared to be lights lining the streets of the capital, Caracas. As we landed and deplaned, I realized that it was not Caracas at all that I was looking at.

It turned out that I was quite a distance from the capital, and the marvelous city I thought I had been watching was actually a shantytown, or a barrio. The mountain was actually a hill and the lights were lining the jagged paths between the settlements. They were powered by stolen electricity, as hundreds of illegally attached cables hung from electrical wires, running into the barrio randomly scattered. The possibility of catastrophic fire seemed a certainty, yet the residents managed to live their lives, diverting water in pipes and handling sewage the best they could. The barrios housed the unemployed and criminals, but it was also the place where working stiffs raised families. They mingled with the rest of the city during the day and then went back to the barrio and their families at night.

(click to enlarge)

On occasion, I was invited to have lunch at one of the most beautiful places I have been in my travels. It was an exclusive club, historic and meticulously maintained, that overlooked the city. The men and women were dressed to perfection in a way that spoke of old money. I was told that this was the club of the “owners of the valley.” I was also told that Caracas had once belonged to only a few families. On my visits, I could see business being conducted at one table, politics at another, and the next generation being introduced to each other at the third. I remember the hush that enveloped the club. There were no loud voices, nor any tension to be seen. It was a place of casual power.

I also had the opportunity to visit the state-run oil company, PDVSA, which was the engine powering the Venezuelan economy. The facility was well-maintained. The people who worked there were engineers, marketers, financial managers and public affairs personnel. But when I spoke with the people at the top, the illusion of technocracy vanished. These were not the owners of the valley or inhabitants of the barrio. They were tough, smart politicians who knew surprisingly little about the petroleum business but a great deal about how PDVSA fit into the rough-and-tumble world of Venezuelan politics. That was why they were there. A few floors down you could talk to a petroleum engineer who graduated from Texas A&M. On the top floor were what I would call the well-connected “hard men” who ran the company.

Some were clearly part of the established elite, but others had muscled their way to the top in alliance with the elite, an alliance that was clearly tilting to the hard and not particularly quiet men. But the entire edifice was built on two foundations. One was the experts who kept the oil flowing. The other were those living in the barrio, needed for the grunt work of the economy but excluded from any of the pleasures.

There is much more to Venezuela, from Lake Maracaibo to the deep jungle that covers much of the country. But in the 1990s, the barrios, the descendants of the owners of the valley, the hard men who controlled PDVSA, and the technocrats who kept it running seemed to me its center. But the center couldn’t and didn’t hold.

Hugo Chavez became president through the support of the people of the barrios. But the barrios had their own political leaders – the heads of the gangs that controlled the neighborhoods. Chavez couldn’t win the support of the barrios without the approval of the gang leaders, and so Chavez had no choice but to deal with them.

The people of old money were beyond Chavez’s reach. Much of their wealth was in the United States, where they also had citizenship. Many of them worked with Chavez; having gone through many chapters of Venezuelan history, they saw Chavez as just another chapter.

Chavez, however, had trouble bridging the gap between political promises and social reality. He came to power speaking for the barrios, but his debt to the powers in the barrios was substantial. They wanted money, and they wanted it now. Chavez didn’t fully trust the military command structure (he blamed them for not preventing the 2002 coup). He therefore needed the barrio toughs, who would support him only to the extent that he funneled aid to them. A new ecosystem emerged, dominated by the alliance of Chavez and the rulers of the barrios. The problem for Chavez was getting money to maintain this system.

Gutting the old money that remained had to be done gently. It maintained the all-important international financial relationships Venezuela had always relied on, so Chavez had to turn to the same source that the old political elite used, PDVSA. But Chavez’s need for money was more intense than in the old regime. He had to keep the barrios happy, and that was expensive.

Chavez started diverting more and more money from PDVSA, and in so doing, he cut into the standard of living of its employees. They were at first hopeful about Chavez, then resigned to more of the same, then frightened by the empowered barrios and the people sent to squeeze PDVSA. There was a vast diaspora of PDVSA employees, who can now be found in oil companies around the world. The problem this left for Chavez was that without PDVSA’s professionals, the company declined. The harder Chavez squeezed, the less he got. His supporters expected rewards he increasingly could not deliver.

The barrios were restless, and the middle class and the old money had fled. Enter the Cubans. In exchange for discounted oil, Cuba acted as a bodyguard for Chavez’s regime. The Cuban operatives were tough, trained and not eager to be obvious. And so, his regime, now led by Nicolas Maduro, survives to this day, supported by the Cubans and those in the barrios who still expect to be rewarded for their loyalty.

In the end, the barrios of today are similar to those I saw when I first arrived. The owners of the valley now sit in clubs in California or France, having timed their exits wisely. It was the deterioration of PDVSA that did the regime in. But Chavez had no choice. He was elected by promising more than he could deliver to men who didn’t like to be disappointed.

Perhaps the best ending in this story is the tale of the hard men at PDVSA and their political allies. In 2002, they arranged a coup d’etat against Chavez. Chavez was held on an island off the Venezuelan coast, until he suddenly showed up back at Miraflores Palace. The story goes that the coupsters had been arguing over what cabinet positions they would take. They didn’t make certain Chavez was safely under guard, so Chavez got back onto the plane and had himself flown back to the capital. The coup failed, and Chavez continued to rule until his death in 2013.

And that story tells us a great deal about the realities of Venezuela

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GPF: Brazil and Colombia respond to Venezuela
« Reply #471 on: May 11, 2019, 06:34:43 PM »
second post

Brazil and Colombia: Responses to the Venezuelan Crisis

As countries that share borders with Venezuela, Colombia and Brazil are most vulnerable to the fallout from the crisis.
By
Allison Fedirka -
May 9, 2019   
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Summary

Colombia and Brazil have adopted similar approaches to Venezuela and likely will continue to do so for the foreseeable future. Both countries have followed the United States’ lead in opposing the Maduro government but for different reasons. Their responses to the crisis stem from their individual interests and the geopolitical forces driving their behavior.

Venezuela has been mired in an economic and political crisis for years. Hyperinflation, corruption, oil sector mismanagement and plummeting energy exports have spelled disaster for the country’s economy. The U.S. has led the international response against President Nicolas Maduro, but two of Venezuela’s neighbors – Brazil and Colombia – have been critical partners in the campaign to remove Maduro from office. Their role in opposing his government stems from the fact that they are the most vulnerable to the mass migration and general instability resulting from the crisis. They have approached the issue in similar fashion so far, calling for Maduro’s removal but rejecting military intervention.

But what’s really driving their responses to the crisis? And why have they been among the region’s most vocal opponents of the Maduro government? Before we can answer these questions, we need a geopolitical basis for understanding South America’s place in the world and Brazil’s and Colombia’s most pressing geopolitical interests. South America is a region that gets little attention in geopolitical discussions, in part because the continent lies on the edge of the global system. It interacts with major geopolitical players but generally doesn’t drive major shifts, disruptions and developments. This doesn’t mean, however, that the basic rules of geopolitics aren’t at play in South America. In fact, they can help us identify the interests of neighboring countries and foreign powers in a country like Venezuela and, therefore, how they may respond to the unfolding crisis. Using models developed by some of the top geopolitical theorists, this Deep Dive will lay out a framework for understanding South America’s connection to the global system and the Brazilian and Colombian reactions to the upheaval in Venezuela.

South America’s Model Behavior

Geopolitically, South America is part of the periphery of the global system. Located in the Southern Hemisphere, which accounts for roughly one-third of the world’s landmass and one-tenth of its population, the continent is fairly removed from the rest of the world. It’s separated from the Eastern Hemisphere by the Pacific and Atlantic oceans and connected to Central America by a short 140-mile (225-kilometer) border between Colombia and Panama.

In analyzing the behavior of South American nations, there are two common pitfalls. First, many tend to dismiss events on the continent as unimportant based on the erroneous belief that the periphery doesn’t matter. Second, there is a tendency to overemphasize politics and political leaders and treat them as geopolitically relevant. To avoid these pitfalls, we need to look at how some of the founding fathers of geopolitical theory – Alfred Thayer Mahan, Halford Mackinder and Nicholas Spykman – framed South America in the global context.

As a former U.S. naval officer, Mahan believed that if a country could dominate the world’s oceans, it could dominate the world. This view served as the basis for the expansion of U.S. interests across the Western Hemisphere at the turn of the 20th century – which included the creation of a security perimeter that stretched into the Caribbean. The first step in this project was to reduce Spanish influence in the Caribbean so that the U.S. could emerge as the dominant power there, which was accomplished in part through the Spanish-American War. The second was to control the Isthmus of Panama, a strategic land bridge between the Caribbean Sea and Pacific Ocean. The U.S. supported construction of a canal at the isthmus, which opened in 1914, so that it could control transit between the Pacific and Atlantic oceans, a power that had enormous economic value.

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In contrast, English geographer Mackinder took a more European approach to geopolitics. He focused on land power rather than sea power as the determinant of a nation’s global status. Mackinder formulated the heartland theory, which defined the center of Eurasia as the world’s heartland and argued that the dominant global power would come from this region. Its coastal areas – much of Europe, the Middle East and East Asia – were seen as secondary powers and areas beyond Eurasia, including the entire Western Hemisphere, as largely irrelevant. Mackinder updated his model following the two world wars, elevating North America and the North Atlantic to a status almost equivalent to that of the heartland. South America, however, still played a minimal role in Mackinder’s updated model.

Spykman believed that Mackinder overemphasized the importance of the heartland and instead posited that the center of global power was in the rimland, the coastal areas around Eurasia. He viewed the Caribbean Sea and surrounding areas as the American Mediterranean because of their central location in the Western Hemisphere. He also believed that the dividing line between north and south in the Western Hemisphere was not the Isthmus of Panama but the northern edge of the Amazon. According to Spykman, then, the northern part of South America, including Colombia and Venezuela, was essentially part of North America and included in the American Mediterranean. He believed the U.S. needed to dominate the Caribbean to establish regional security and that the construction of the Panama Canal further increased the importance of the Caribbean and the Pacific Ocean in U.S. strategy. For Spykman, the U.S. faced few challenges in the Western Hemisphere, but any threat to its domination of the hemisphere come from the southern cone.

There are two important takeaways from these three models. First, the Caribbean, which includes the northern coast of South America, plays a key role in U.S. maritime security. This explains why the U.S. has intervened in Caribbean conflicts and why developments in South America can be critical to U.S. interests. Second, the northern nations of South America represent a borderland between North and South America. Conflicts and instability in this region threaten to draw in countries from both continents, and the Venezuelan crisis is one key example of this.

Brazil’s Territorial Integrity

Geographically, Brazil is defined by three key features: its large size, its natural boundaries and its north-south divide. Brazil is the fifth-largest country in the world by landmass and has long faced the challenge of filling and controlling that space. Portugal was forced to colonize northeast Brazil (rather than use it as a trading post) and move south for both security and economic reasons. Shortly after the Portuguese arrived in the Americas, other European powers followed. While it had an agreement with Spain on how to divide their respective territories, no such deal existed with the U.K., France and the Netherlands – all three of which challenged Portuguese claims in the New World. The colony also needed land, labor and resources. Portuguese pioneers therefore pushed west for land on which to grow sugar cane and to find indigenous populations for enslavement.

Natural geographic barriers, however, limited Portuguese expansion beyond Brazil’s current borders. But in terms of security, its geography actually worked in its favor. Natural barriers insulated the country from the rest of South America and protected it from external threats. In the north, the Amazon’s dense forest and vast size prevented major military incursions from Venezuela, Colombia and Peru. Farther south, the massive Pantanal swamp fortified borders with Bolivia and Paraguay. In the east, the Atlantic Ocean protected Brazil from outside powers. The one area of geographic vulnerability is its flat southern border, though Uruguay provides some strategic depth there as a buffer state.

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Brazil’s north-south divide is a result of its climate, unevenly distributed natural resources and river systems. The south, which has a more hospitable climate than the northeast, is the location of the country’s major population centers and the vast majority of its wealth. Its two major river systems – the Parana River and the Amazon River – split the country between north and south. The Amazon system passes through dense jungle and flows into the North Atlantic, while the Parana system generally flows south where it merges with the Rio de la Plata, though some of its tributaries flow directly into the South Atlantic. The two systems do not cross paths and have fostered their own economic and population centers with little connection between them.

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These geographic features play critical roles in the models developed by the pioneers of Brazilian geopolitical theory, Carlos de Meira Mattos, General Golbery do Couto e Silva and Therezinha de Castro, in the mid-20th century. All three theorists emphasized the importance of territorial integrity – which is most at risk in the sprawling Amazon basin – and Brazil’s control over the South Atlantic.

This is where the Venezuelan crisis could have implications for Brazil’s broader geopolitical imperatives. Venezuela is just north of the Amazon, one of the most poorly integrated regions of Brazil. In fact, Roraima state isn’t even connected to Brazil’s electrical grid and gets its power from Venezuela. If Venezuela’s political crisis leads to military conflict or foreign military intervention, it could result in foreign forces pushing against Brazil’s borders. Any spillover into Brazilian territory could destabilize the area and disrupt connections to ports, making it even harder to reach and control this region. In the past, Brazil has opposed foreign involvement in management of the Amazon and permitted development and mining projects there because the government wants to maintain control over the whole region that falls within Brazil’s borders. This strategy helps Brazil repress any potential internal rebellion and provides strategic depth should an attack or blockade be waged on coastal areas.

Venezuelan migrants fleeing the crisis are also a challenge for Brazil. The flow of migrants toward and across the Brazilian border risks creating a borderland between the two countries that could pull the outer reaches of Brazil further away from its core. Another concern is that migrants who settle along the Brazilian border will compete with Brazilians for resources and jobs. Thus, early relief efforts involved flying Venezuelan migrants to areas farther south and settling them in larger cities. Brazil is also wary of delivering foreign humanitarian aid to Venezuelans from Brazilian territory, concerned that it could invite other kinds of external involvement in regional affairs. Brazil has therefore refused to deliver humanitarian supplies from other countries (including the United States) to Venezuela, insisting on providing only its own support.

Trade is another issue. Brazil has direct access only to the Atlantic Ocean, but its top trade partner, China, is a country that can be reached by sea only through the Pacific. To access the Pacific, therefore, it depends on sea lanes that run past Venezuela and the Caribbean to the Panama Canal. Any potential disruptions in this route – as a result of a conflict in Venezuela or a blockade to further isolate Maduro – could have major implications for the Brazilian economy.

Colombia’s Geographic Constraints

Unlike Brazil, Colombia is a bicoastal nation, meaning it has access to both the Pacific and Atlantic oceans. But this status is not nearly as advantageous as one might expect. When the Panama Canal opened in 1914, it became the most important corridor between the Atlantic and Pacific oceans in the Western Hemisphere. Colombia never developed into a good alternative to the canal because its various mountain ranges dissect the country, making overland transportation between coasts difficult. In addition, the vast majority of Colombia’s exports and imports transit through the Atlantic Ocean, so Pacific ports and infrastructure have been relatively neglected.

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Colombia’s two defining geographic features are the Andes Mountains and the Magdalena River. The Andes comprise roughly half of Colombia’s territory. (The other half is composed of the Amazon and Orinoco basins.) Just beyond the country’s Atlantic and Pacific coastlines, three distinct ranges of the Andes run across the entire length of the country’s territory, stretching from Ecuador to Venezuela. The majority of its population resides in different mountain valleys, which are poorly connected by land. The Magdalena River, however, helps integrate these disjointed parts of the country. An estimated 70-80 percent of the population lives near this river or one of its tributaries. It also facilitates the transport of goods between the interior and the Caribbean port cities of Barranquilla and Cartagena, both of which are relatively close to the Venezuelan border.

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Colombia has several geographic constraints that are difficult to overcome despite the country’s strategic location. According to leading Colombian geopolitical thinker Julio Londono Paredes, it was South America’s general disjointedness and difficult terrain that gave North America a substantial power advantage over its southern neighbor. Londono Paredes believed the formation of five confederations including Gran Colombia – which united present-day Colombia, Venezuela and Ecuador into one entity from 1819 to 1831 – were necessary to ensure peace in South America.

But without such a union, Colombia remains weak in relation to other large Caribbean countries, particularly Mexico and Venezuela. Both countries have influence over the region in ways that Colombia does not. Mexico has historical ties to Central America (many Central American nations belonged to the same viceroy as Mexico during colonial times) and has used these links to help protect its interests on the western edge of the Caribbean. Venezuela’s islands in the southern Caribbean Sea give the country strategic depth and influence over sea lanes. Venezuela is also situated farther east along the Caribbean coast, giving it greater access to the sea and beyond.

Colombia has overcome some of these challenges by aligning with the United States on a number of issues, including how to handle Venezuela. The U.S. welcomes Colombia as a close ally in a region where it has had few in the past, and Colombia’s alignment with the U.S. gives it a boost in the regional power balance.

It’s an advantage Colombia needs given that it shares borders with five different countries and has three three-country borders. Colombia has had territorial disputes with each of its neighbors in the past, but tensions have run deepest with Venezuela, whose disputes over land and sea borders with Colombia have focused on resource-rich areas. The Venezuelan crisis threatens to reignite these tensions. Mass migration has forced Colombian authorities to dedicate more resources to border security, though thus far, it hasn’t prevented irregular crossings. For the most part, Colombia has welcomed the migrants, but it has also struggled to cope with the sheer number of Venezuelans, about 1.5 million in total, who have fled across the border. In fact, the influx has cost Colombia 0.5 percent of gross domestic product (or roughly $1.5 billion) per year, according to Colombian President Ivan Duque. Organized crime and drug trafficking are also concerns as groups involved in illicit activities operate more or less with impunity along the Colombia-Venezuela border, raising the possibility of military involvement from both sides. The country’s two major ports, Barranquilla and Cartagena, are close to the Venezuelan border, so any spillover violence or instability could disrupt some of Colombia’s most important trade hubs.

Considering all these variables, it makes sense that Colombia has taken the strongest stance against Maduro of any country in the region. It has joined the U.S. and several other nations, including Brazil, in recognizing opposition leader Juan Guaido as interim president. Bogota doesn’t want the crisis to escalate into a full-blown civil war, but unlike other countries in the region, it can’t completely rule out military intervention because of the history of border disputes between the two countries, as well as the risk that the violence might spill over into Colombian territory.

Colombia needs U.S. support to protect its interests. Brazil, on the other hand, doesn’t have that same dependency on the U.S. For now, however, both Brazil and Colombia will cooperate with U.S. efforts to orchestrate Maduro’s departure because it aligns with their own national interests.

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O'Grady: Squeeze the Cubans
« Reply #472 on: May 12, 2019, 03:15:21 PM »
How to Liberate Venezuela
The free world needs to squeeze the power behind Caracas’s police state: Cuba.
By Mary Anastasia O’Grady
May 12, 2019 3:20 p.m. ET
Venezuelan President Nicolas Maduro speaks in Havana, Dec. 14, 2016 Photo: yamil lage/Agence France-Presse/Getty Images

Venezuela’s fearsome intelligence service struck another blow against the democratic opposition last week by arresting Edgar Zambrano in Caracas. In detaining the vice president of Venezuela’s National Assembly, the thugs surrounding presidential pretender Nicolás Maduro not only put another hostage in their dungeon but also thumbed their noses at U.S. ultimatums to respect the rights of the opposition—or else.

They know that while the U.S. says the use of force is on the table, President Trump is loath to use it. With the rest of the region opposed to military intervention, Mr. Maduro’s minions feel safe from outsiders. They would feel far less secure if the international community put pressure where it belongs: on their homeland, Cuba.

Interim President Juan Guaidó remains free, but the regime now holds some 870 political prisoners, according to the Venezuelan nongovernmental organization Foro Penal. Since a failed uprising April 30, Mr. Maduro’s henchmen have doubled down on repression. The opposition is powerless to respond. Mr. Guaidó said Saturday he would seek U.S. military support.

Rescuing Venezuela starts with the recognition that the country is occupied. Russian military support is troubling—as is the Venezuelan-Iranian relationship, which I wrote about in November 2014. Tehran has likely planted sleeper cells throughout the country.

Yet it is Havana that has the most to lose if Mr. Maduro goes down. And it is Havana that is executing an aggressive daily ground game to protect him. This must first be acknowledged by the democracies that have recognized Mr. Guaidó as the rightful chief executive under the Venezuelan constitution. Then, to follow through, they need a strategy to squeeze the Cubans.

Cuban-born writer Carlos Alberto Montaner described the secret behind Mr. Maduro’s survival in a May 5 column for Miami’s El Nuevo Herald. “Loyalty and obedience emanate from respect or fear and Maduro is neither respected nor feared,” Mr. Montaner wrote. “Not only is this the attitude of the opposition. It is shared by military leaders, the regime’s apparatchiks and those people who serve them. That’s why Maduro only trusts ‘the Cubans.’ They made him the heir of the ‘eternal Commander’ ”—Hugo Chávez—“and they keep him in power.”

The main levers of power Cuba wields in Venezuela are its sophisticated intelligence apparatus and its crack military counterintelligence. The former head of the Venezuelan intelligence service, Manuel Christopher Figuera, trained and worked closely with Cuba. It was a mark of Cuban power that after he turned against Mr. Maduro during the April 30 showdown with Mr. Guaidó, he was forced to flee for his life and now is in hiding.

Cuba is thoroughly invested in Mr. Maduro’s survival because it needs Venezuelan subsidies. The money-grubbing Castros have wrecked the Cuban economy. What hasn’t been stolen has been destroyed through decades of brutal repression.

As Cuban-American economist Carmelo Mesa-Lago observed in March, Castro’s Cuba has been a dependency for 60 years. The Soviet Union poured $65 billion into the island from 1960-90. With the dissolution of the Soviet empire, aid to Cuba dried up and the 1990s were an extremely difficult period. But Venezuela picked up the subsidy slack when Chávez came to power in 1999. “At its peak in 2012, Venezuelan aid, subsidies and investment amounted to $14 billion, or close to 12% of gross domestic product,” Mr. Mesa-Lago wrote.

“Cuba is now facing its worst economic crisis since the 1990s,” Mr. Mesa-Lago explained. It refuses to reform its sclerotic economy—because economic power gives way to political power. Now its Venezuelan sugar daddy is cutting back on aid. Oil shipments to the island have been halved in recent years, and Caracas no longer has unlimited resources to pay the Castro regime for the tens of thousands of Cuban doctors, teachers, sports trainers and managers of ports and airports—not to mention security forces—in Venezuela.

Things will go from bad to worse for Havana if Mr. Guaidó is allowed to hold elections. This is why the Cubans are ruthlessly cracking down on the opposition while making the absurd proposal to the Lima Group that Havana ought to mediate a compromise solution. As if the fox ought to decide the fate of the hens. Defectors repeatedly testify that Cubans are behind the Venezuelan police state. It’s why the U.S. and its allies must shift their focus to Havana.

The Trump administration has been adding sanctions against the Cuban regime. Ships that carry oil from Venezuela to Cuba can no longer enter U.S. ports; Americans can now sue in U.S. courts over property confiscated by Cuba; and the ceiling on remittances from the U.S. has been reduced. Havana is feeling some heat. But it isn’t enough.

To persuade Cuba to exit Venezuela, the price of staying has to be higher than any benefits it still receives. That’s a hemispheric project, and it’s the best way to liberate Venezuela from tyranny.

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GPF: Rusia en Venezuela
« Reply #475 on: June 03, 2019, 10:08:27 AM »
Russia in Venezuela. Russia is withdrawing key defense advisers from Venezuela and Russian state defense contractor Rostec has cut its staff in Venezuela from 1,000 to just a few dozen, according to a Wall Street Journal report. The report also suggested that, after Rostec had completed construction of a helicopter training center in March, other projects such as the construction of a Kalashnikov production facility had been put on hold because the company doubted the Maduro government’s ability to pay up. Rostec told Interfax news agency on Monday that there was no truth to the report – that its presence in the country hadn’t changed. Russia’s ambassador to Venezuela also said the story was unfounded, telling RIA Novosti there had been no talk of backing out of commitments or cutting back Russian personnel. In the absence of reliable information either way, we would add that it would not make sense for Russia to withdraw in this manner now, especially considering the resilience the Maduro regime has exhibited in recent months.

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Stratfor: Corruption lies at the heart
« Reply #476 on: July 25, 2019, 07:49:11 AM »


Corruption Lies at the Heart of Venezuela's Chaos
By Eduardo Salcedo-Albaran
Board of Contributors

Numerous people wearing caps in the colors of the Venezuelan flag take part in a protest against the government of President Nicolas Maduro on Venezuela's day of independence.
(RAFAEL BRICEÑO SIERRALTA/NurPhoto via Getty Images)
Contributor Perspectives offer insight, analysis and commentary from Stratfor’s Board of Contributors and guest contributors who are distinguished leaders in their fields of expertise.

Highlights

    Venezuela is suffering from unique humanitarian, economic and institutional crises, but the common root of all three problems is the country's widespread corruption.
    Officials in President Nicolas Maduro's government have absconded with billions of dollars from the public budget by abusing the official exchange rate.
    As the links between the humanitarian disaster and graft become more evident, it will increasingly become harder to stabilize Venezuela in the long run.

It's a humanitarian, economic and institutional crisis that has grabbed the world's attention. According to the United Nations refugee agency, more than 4 million Venezuelans left their country between 2015 and June 2019, seeking refuge in Colombia, Peru and Brazil. In the economic field, the International Monetary Fund projects that Venezuela's hyperinflation will reach a whopping 10 million percent this year. And in terms of institutions, the country has had two presidents since January: Nicolas Maduro, who is supported by the Venezuelan security forces but lacks diplomatic recognition from most of the West, and Juan Guaido, who enjoys Western support but lacks local military support.

But lost amid Venezuela's dire humanitarian, economic and institutional crises is the underlying cause that is fueling the country's chaos: corruption. Deeply ingrained at all levels of Maduro's government, corruption is devouring Venezuela's wealth as it exacerbates Caracas' other problems and complicates the prospect that the country will overcome its woes for some time to come.

Bringing Up the Rear

Since 2015, Venezuela has plumbed the depths of Transparency International's Corruption Perception Index (CPI), ranking 168 out of 180 countries and scoring no more than 17 or 18 points out of 100. By way of comparison, Burundi — whose long-time president has drawn criticisms for hanging on to power and clamping down on the opposition — ranked higher than Venezuela, earning 22 points in 2017.

In last year's CPI, in fact, Venezuela had Afghanistan (16 points), South Sudan (16) and Chad (19) to share for company. All three are countries that are characterized by weak and small economies, and none of them boast massive oil reserves — unlike Venezuela.

High levels of opaqueness, egregious public mismanagement, legal uncertainty, an overconcentration of power in Maduro's hands and a profound lack of checks and balances lie at the root of Venezuela's low CPI. Today, the country provides the perfect institutional conditions to foster graft on a macro scale unseen anywhere else in the Western Hemisphere. Even so, Venezuela's CPI score doesn't reflect the magnitude of the country's situation and the scandalous sums of money that have gone missing from the budget during the past decade. Indeed, no other country in the Americas has witnessed such a convergence between massive injections of cash due to booming oil prices and cases of money laundering, corruption and drug trafficking involving high-level officials.

Today, Venezuela provides the perfect institutional conditions to foster graft on a macro scale unseen anywhere else in the Western Hemisphere.

In a recent report, the Venezuelan chapter of Transparency International reviewed cases of corruption and money laundering against Venezuelan officials and businesspeople in the United States, Colombia, Andorra and other countries in which Maduro's government has used the financial system to channel and launder profits gained through corruption.

And because of Maduro's extensive powers, the Venezuelan judiciary focuses on partial prosecutions that benefit the regime, meaning that real cases of graft involving the government never make it before a judge. As a result, it is only foreign jurisdictions that prosecute money laundering cases related to corruption in Venezuela.

Absconding With Billions

Brazil's "Lava Jato" (Car Wash) scandal, one of the biggest cases of transnational corruption ever recorded anywhere, drew international attention because of the huge bribes that changed hands — some of which reached $100 million. The Brazilian case, however, pales in comparison to what has happened in Venezuela.

To understand the magnitude of Venezuelan corruption, consider the amount of the public budget that went missing when authorities manipulated and abused official exchange rates to overpay loans to privileged companies involved in corruption. In one scheme that occurred in December 2014 and May 2015, Venezuela's national oil company, Petroleos de Venezuela (PDVSA), acquired a loan of $41 million — corresponding to 7.2 billion Bolivars — from a certain firm before paying it back for a huge markup of $600 million, according to an indictment at the Southern District of Florida. According to the prosecution, payments like these went to companies that then used other fictitious firms to channel the money to friends and conspirators of officials inside PDVSA and Maduro's government. Ultimately, the shady dealings allowed officials in the national oil company and the government to abscond with $1.2 billion from the Venezuelan public budget as part of two loans.

But this is just one case. In another that the Southern District of Florida is also hearing, officials allegedly engaged in improper conduct that cost the budget more than $2.4 billion. Together, these two cases account for $3.6 billion in lost funds for Venezuela's public budget.

As the Democratic Republic of the Congo has shown, the convergence of massive corruption and abundant natural resources will almost inevitably degenerate into a situation in which people are victimized on a widespread scale. With Venezuela's crisis set to deepen — to the extent that it might result in famine and send millions of refugees streaming into the country's neighbors — the spotlight will soon fall more on the causal links between the humanitarian catastrophe and unprecedented corruption. Such a perfect storm of endemic corruption and humanitarian disaster will throw formidable obstacles in the way of any stabilization effort in the country or the region — thereby hindering even further the chances of a regime change promoted by the United States.

Eduardo Salcedo-Albaran is the director of Scientific Vortex Foundation Inc., a transnational research group and nonprofit that develops concepts, methodologies and inputs for public policy under integrative science principles. He is currently developing transdisciplinary research on transnational criminal networks in Colombia, Peru, Guatemala and Mexico.

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Russia-Venezuela
« Reply #477 on: October 02, 2019, 08:13:21 AM »
Oct. 2, 2019


What Moscow Really Wants From Venezuela


Russia has both economic and domestic political reasons for supporting the Maduro government.


By Ekaterina Zolotova


Throughout Venezuela’s ongoing political crisis, Russia has been among its staunchest supporters. Last week, Venezuelan President Nicolas Maduro visited Russian President Vladimir Putin in Moscow, hoping for some reassurances of the Kremlin’s continued support for his administration amid the ongoing turmoil in his country and international pressure for him to step down. In September, the United States imposed new sanctions (against four shipping companies registered in Cyprus and Panama) aimed at stopping Venezuelan oil exports headed for Cuba. The U.S. also promised last week to provide the Venezuelan opposition with $52 million in aid. The European Union, meanwhile, introduced sanctions against seven members of the Venezuelan security and intelligence forces. Russia, however, hasn’t wavered in its support for Venezuela. Indeed, Moscow has not only foreign policy reasons to maintain strong relations with Caracas but domestic ones, too.
The two countries are long-time allies, but their ties peaked around 2012. Moscow considered Venezuela among its main strategic partners, provided generous loans and supplied a wide range of goods. Several Russian companies were involved in the development of Venezuelan oil fields, Russian-made KAMAZ trucks were in wide supply, and Russia participated in a pro-government housing construction program in Venezuela. But geopolitical tensions, as well as tough sanction policies against both Russia and Venezuela, significantly complicated Russia-Venezuela relations. High inflation and the risk of default in Venezuela also affected the willingness of Russian investors and exporters to do business with Venezuela and the ability of Venezuelan companies to sell their goods to foreign customers.
Nonetheless, the Kremlin has chosen to seek greater cooperation with Caracas for several reasons. First, from an economic perspective, Russia and Venezuela have much to gain from maintaining close ties. Both have large markets and production potential.


 

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Trade between the two has fluctuated over the years, however. When it comes to oil, Russian companies of course have an interest in Venezuela – the country, after all, has the largest oil reserves in the world, exceeding 300 billion barrels, according to OPEC. Some Russian oil companies have therefore invested in the Venezuelan energy sector. But in recent years, many Russian oil companies have left Venezuela, put off by the political uncertainty, security risks and general low quality of Venezuelan oil, not to mention the threat of sanctions. Yet a small group of companies, including Rosneft and Gazprom Neft, remains, despite U.S. threats to impose new penalties. In early September, for example, Washington said it was considering sanctions against Rosneft for its involvement in the Venezuelan oil sector; Rosneft, however, continues to purchase oil and develop fields in Venezuela.
Russia also sees Venezuela as a potential market for Russian wheat (wheat exports to Venezuela in 2018 increased by 33 percent year over year), mechanical engineering products and medical supplies. Such products could provide some relief from the scarcity issues plaguing Venezuela since the crisis began. For its part, Venezuela sees Russia as a potential buyer of its agricultural products. Russia already buys food products from other Latin American countries – these tend to be cheaper than Russian food products despite logistical costs and tariffs. In fact, Uruguay and Argentina account for 7 percent and 5 percent respectiely of Russian dairy imports. In addition, Argentina is the second-largest supplier of cheese to Russia after Belarus.
The Kremlin also has domestic political reasons for wanting to increase cooperation with Venezuela. It sees an opportunity to boost its approval rating by backing the Maduro government because Russian public opinion tends to be favorable toward Venezuela, and Latin America in general. A survey released in February by the Russian Public Opinion Research Center found that 57 percent of respondents were interested in current events in Venezuela. It also found that 20 percent of Russians see the deteriorating political and economic situation in Venezuela as a result of actions by other countries, particularly the United States. When it comes to the Venezuelan opposition and anti-government protesters, 15 percent said they felt indifferent, 12 percent felt distrust and 11 percent condemned them. Thus, if Moscow were to refuse to help Maduro, it might experience some backlash from the Russian public. Moreover, the amount of support Russia has provided – food supplies and a small number of troops for nonmilitary support – doesn’t carry a huge financial burden for Moscow anyway. Considering that it, too, has seen a recent wave of anti-government protests, it has been inclined to help Caracas in its time of need.


 

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In addition, Russia has an interest in increasing its presence in the Western Hemisphere, in the United States’ own backyard. It has done so primarily by getting close to Cuba – given its proximity to the U.S. – a country the Russian prime minister is scheduled to visit later this week for the first time since 2013. But maintaining strong relations with Venezuela could also help the Kremlin boost relations with Cuba. It has been difficult for Russia to gain a substantial foothold in Venezuela, partly because the U.S. would react strongly to any Russian military involvement in the country. For this reason, not to mention the expense and logistical requirements, it’s extremely unlikely that Russia would set up a military base in Venezuela, but it did send roughly 100 troops there in March, and a group of Russian military personnel arrived in Venezuela a week ago to carry out maintenance on Russian-made equipment.
Venezuela used to be one of the largest buyers of Russian weapons; it had purchased Russian tanks, Grad multiple rocket launchers, Pechora-2M missile systems, S-300 air defense systems and many others. But today, Venezuela is no longer considered a major market for Russian arms. In the past, these goods were purchased mainly using Russian loans, and Moscow can no longer rely on Caracas to pay back its debts given the state of its economy. Moscow too is short on funds and reluctant to offer loans it can’t be sure will be paid back. Thus, Russia’s defense-related activity in Venezuela today is limited mostly to fulfilling old contracts and maintaining assets that have already been delivered under previous agreements.
Russia has unquestionable long-term economic and geopolitical interests in Venezuela. But its ability to increase its presence there is limited, in part by its own economic obstacles, which include falling oil prices, reduced federal budget revenue and deteriorating living conditions for the Russian people. Still, Moscow will continue to make gestures of increased cooperation with an eye toward strengthening ties in the long term, not only because of the potential economic benefits but also because the Kremlin knows this is a popular policy position at home.