Tag Archives: loans

Feb
24
2012
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In Case You Missed It… Articles Roundup Week of 2/24/12

In this week’s roundup…  The Chávez administration hurled insults at opposition candidate Henrique Capriles following his landslide victory in the primaries; several Jewish groups publicly condemned Chávez’s anti-Semitic remarks against Capriles. Meanwhile, Venezuela’s Hugo Chávez heads to Cuba to undergo a third operation after doctors found another lesion where his last tumor was removed, stoking speculations about who will succeed Chávez if he is forced to step down.  A new report found that private construction in Venezuela is down 70 percent in the last two years, contributing to the critical housing shortage; Chinese loans drive PDVSA toward bankruptcy; Gold Reserve Inc. concludes oral hearings in ICSID arbitration against Venezuela; and Chávez continues to foster relationships with controversial governments, including Iran and Syria.

Venezuela’s Hugo Chavez faces an uprising at the ballot box, The Washington Post

Henrique Capriles Radonski, a 39-year-old Venezuelan state governor, won a primary election to become the opposition’s candidate against Hugo Chavez in October’s presidential election.

Chavez Media Say Rival Capriles Backs Plots Ranging From Nazis to Zionists, Bloomberg

Venezuela’s state media has accused opposition presidential nominee Henrique Capriles Radonski of offenses ranging from participating in a Zionist conspiracy to joining a Nazi-inspired effort to wipe out blacks and the poor.

El loco’s new foe, The New York Post

The reign of Venezuelan strongman Hugo Chávez faces its worst trouble in years. The normally fractured opposition has suddenly united behind one man, Henrique Capriles Radonski, in the Oct. 7 presidential election.      

Jewish groups decry ‘anti-Semitic’ Venezuelan state media article, CNN

A Venezuelan state media article about Chavez’s chief political challenger drew criticism from the New York-based Anti-Defamation League and the Los Angeles-based Simon Wiesenthal Center last week. 

AJC Decries Anti-Semitic Assaults in Venezuela Presidential Campaign, Market Watch

“If President Chavez wants to convince the world that Venezuela is a democracy, he needs to act now to show that there is no room for willful hate,” said AJC Executive Director David Harris.

Chávez Health Struggle Stokes Political Uncertainties, The Wall Street Journal

New uncertainties about Venezuelan President Hugo Chávez’s health are threatening to spur a power struggle to succeed him among the factions that make up his political movement, and boosting the hopes of a rejuvenated opposition planning for the presidential election this fall.

What Happens Next in Venezuela?, Foreign Policy

What happens if an incapacitated Chávez wins? Or, will a dying Chávez’s anointing of a successor succeed in overcoming a unified and energized opposition for the first time in a decade? Or, will voters, burdened by declining economic conditions and rising crime, opt for a new direction in the face of the uncertainty surrounding Chávez and the lack of a legitimate standard-bearer for his movement?

The republic vs. Chávez, The Miami Herald

You multiply it by 2.5 or 3 — depending on whom you ask. That’s how you usually translate the votes from the primaries into the final election results. Electoral experts insist that the three million votes obtained by Henrique Capriles in the Venezuelan primaries could bring him between 7.5 and nine million votes in the balloting against Hugo Chávez. Enough to remove him from power.

Private construction drops 70% in the past two years, El Universal

The president of the Venezuelan Construction Chamber, Juan Francisco Jiménez, stated that private construction has dropped 70% in the last two years. The situation was described as serious by the businessman leader, who said that the construction industry is necessary for the country’s development.

Thousands Of Homeless An Election Issue For Chavez, NPR

Oil-rich Venezuela is awash in hundreds of thousands of homeless. Many find places to live where they can — in half-finished shopping malls or under the grandstand at a race track. The huge number of homeless has become an election issue for President Hugo Chavez, who is seeking his fourth, six-year term.

Chinese loans put Venezuela over barrel, The Washington Times

Opposition groups in Venezuela are warning that billions of dollars in Chinese loans are driving the state oil company toward bankruptcy.

Gold Reserve Announces Conclusion of Oral Hearings in ICSID Arbitration Against Venezuela, Business Wire

Gold Reserve Inc. announces that the oral hearings held at the World Bank in Washington, D.C., and presided over by a three-member tribunal in the arbitration conducted under the auspices of the International Centre for the Settlement of Investment Disputes concluded, as scheduled, on February 17, 2012.

As Others Isolate Syria, Chávez Ships Fuel to It, The New York Times

A day before the United Nations General Assembly voted overwhelmingly to condemn President Bashar al-Assad of Syria this month for his bloody crackdown on the uprising in his country, President Hugo Chávez of Venezuela was conducting a very different kind of diplomacy on his own.

Iran and Venezuela, BFF, The NY Daily News

At a time when the world is rightly focused on the Iranian nuclear threat and its intentions against Israel, it is also important to not lose sight of that country’s clandestine dealings in Latin America. Its activities there serve multiple purposes. None of them is benign.

 

 
Nov
3
2011
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Chávez Outsourcing Venezuela’s Sovereignty to China, Russia, and Cuba

DSC 0754 150x150 Chávez Outsourcing Venezuela’s Sovereignty to China, Russia, and CubaJosé R. Cárdenas served in several foreign policy positions during the George W. Bush administration (2004-2009), including on the National Security Council staff. He is a consultant with Vision Americas in Washington, DC.

Hugo Chávez’s ongoing confiscations of foreign-owned property in Venezuela (another one here) are all part of a carefully constructed narrative that seeks to portray the Venezuelan caudillo as the final defender of Venezuela’s sovereignty. Under this myth – central to Chavismo – is the notion that, prior to Chávez’s rise to power, evil foreign interests had systematically plundered Venezuela of its natural riches, absconded with the profits, and left the Venezuelan masses in continued destitution.

Chávez, of course, has avenged that historical injustice by ensuring that, from now on, “the people” would be the primary beneficiaries of the national patrimony. Of course, the irony is that today Chávez has merely swapped out one set of alleged “exploiters” of Venezuela’s riches for another. Multinationals such as ExxonMobil may be gone, but into the breach has stepped the governments of China, Russia, Cuba, and other ideologically like-minded actors that are taking swings at the Venezuelan piñata.

The lopsided economic agreements that Chávez has signed with these governments are not only mortgaging the country’s future, but vastly increasing the leverage these foreign governments have in Venezuela’s internal affairs.

Take China, for example. As Chávez re-orients trade away from the United States, he is accepting staggering amounts in loans from China. To be exact, we are talking about $32 billion going into a “heavy investment fund,” $20.6 billion to facilitate the purchase of Chinese goods and services, and a commitment of $40 billion to invest in the Venezuelan oil sector. The loans, not surprisingly, are to be repaid with oil. But as China expert Evan Ellis points out, “the loan agreements…use a below-market reference price for the oil delivered, making the value of the goods that Venezuela must pay back far greater than the quantity loaned.” Indeed, in a Wikileaked cable, a PDVSA official complained to a U.S. diplomat that in some cases, China had paid as low as $5 a barrel to Venezuela and was suspected of reselling the product on the spot market for a hefty profit.

Russia, another Chávez ally, has roped him into signing multi-billion loan agreements to purchase Russian arms that no one else wants and that give Russia preferential access to lucrative Venezuela oil concessions.

Moreover, a recently leaked report from the Economic Social Development Bank of Venezuela (BANDES) details how Chávez has spent more than $1.5 billion in three years in giveaways to Cuba and other allies, stating that the funds cannot be properly accounted for because Cuban officials decide how the money is used and whether it is booked as loans or grants.

So, aside from exposing Chávez’s hypocrisy as a defender of Venezuelan sovereignty, why does it matter if his government is being taken to the cleaners by China, Russia, and Cuba? Why should we care that these countries have been given free rein in Venezuela?  Well, to start, China and Russia matter as strategic competitors of the United States; their efforts to establish such a strong foothold in an important oil-producing country in the Western Hemisphere should very much concern U.S. policymakers. Moreover, in the short term, their infusions of desperately needed hard currency to Chávez’s coffers strengthen the anti-American leader’s regime and allow him to continue funding his anti-American agenda and re-election campaign.

Over the longer term, the fact that Chávez may be terminally ill does not alter the equation. These countries have made enormous investments in Venezuela and they certainly can be counted on to act to protect those investments. They recognize that a post-Chávez government may not honor such unfavorable economic arrangements. Thus, they are especially well-positioned in Venezuela today to inordinately influence events if Chávez’s health takes a turn for the worse.

In Cuba’s case, the Castro brothers may be economic paupers, but they are rich in the dark arts of repression, eliminating opponents, and consolidating power. It’s no secret that thousands of Cubans are in Venezuela posted in various ministries advising Chávez on the best tactics to undercut the opposition. Losing Caracas as an economic pipeline represents an existential threat to the Cuban regime. Therefore, Havana will exert every effort to ensure that Chávez or a like-minded replacement stays in office.

Since his rise to power, Hugo Chávez has wrapped himself in the Venezuela flag, but the reality is he has outsourced the country’s future to Beijing, Moscow, and Havana. Simón Bolívar must be turning in his grave. The U.S. government, for its part, needs to recognize the stakes involved in this matter and get active diplomatically to ensure that Venezuela’s future is decided by the Venezuelans and Venezuelans only.