As one of the last regional holdouts against a return to neoliberalism, Venezuela has been especially vulnerable to isolation and targeting
London , United Kingdom of Great Britain & Northern Ireland - 2 Jun 2018 - Ghassan Matar
Venezuela’s ongoing crisis is not driven by political ideology – it is not a battle of socialism versus capitalism or dictatorship versus democracy – it is the result of two centres of political power possessing opposing interests and colliding geopolitically. The nation of Venezuela is currently under the control of Venezuelans who derive their support, wealth, and power from Venezuela itself – its people and its natural resource.
This political order also receives aid and support from Venezuela’s economic and military partners both in the region and around the globe. The opposition opposed to the current political order and seeking to supplant it represents foreign interests and more specifically, the United States and its European allies.
Just weeks after Congress lifted a 40-year ban on exporting oil in 2015, the first shipments of crude left U.S. ports for Europe. The steady trickle has now reached 900,000 bpd.
The first freely-traded shipments of U.S. crude were symbolic of the country's newfound role as a leading producer of oil. America's entry into the world market can also be viewed with relief by those worried about potential supply disruptions. After all, many big oil producers are located in volatile parts of the world susceptible to geopolitical shocks.
However, it also marked the point at which the United States, in conjunction with Saudi Arabia, began the process of ensuring that fellow OPEC members Iran and Venezuela are side-lined to make way for the new American oil. In effect, the United States, who, has long demonised OPEC and promoted the need for the country to become oil independent, is joining OPEC in all but name.
Having neutralized Iraqi and Libyan oil exports by decimating both countries; and by ensuring that Somalia, Yemen and Syria remain mired in conflict, their attention turned to Venezuela. The assault on Venezuela is not new. In as early as 2000, I personally witnessed meetings with Venezuelans expats in Florida who together with US-backing, were targeting then Venezuelan president Hugo Chavez.
They planned to overthrow Venezuela’s political order and replace it with one obedient to Washington. This culminated in the 2002 failed coup by the very same current opposition that was not only involved in the 2002 failed coup, but are documented to have received political and financial support from the United States government ever since.
This includes several founders of the opposition party, Primero Justicia (Justice First), including Leopoldo Lopez, Julio Borges, and Henrique Capriles Radonski. The latter of the three has been prominently featured in Western media coverage lately.
Although the US foray into crude exports makes no sense in terms of capitalism; it has become an essential lifeline for the U.S. current account deficit. The U.S. finds itself in a unique situation in which it imports $220 billion worth of crude while simultaneously exporting $180 billion of its own crude. This is where Venezuela comes in. Most US refineries are highly complex, world-class facilities.
They have been fine-tuned with special equipment over the years to utilize the dirtiest, nastiest oil you can buy. As it happens, Venezuela and Canada both export quite a bit of cheap, asphalt-laden oil. US refineries can get this stuff at a discount because few other countries have the necessary equipment to get much gasoline and diesel out of it.
That frees up a lot of high-quality US domestic oil production to be shipped overseas and sold at a premium to countries with lower-tech refineries. So the US imports cheap oil, and export expensive oil. It's profitable because the transport cost of a few dollars per barrel is quite a bit less than the price difference between high and low-quality oil.
In addition to this, US Shale production has now reached 6m bpd most of which can be shipped overseas; however, the U.S. needs to replace local demand from Venezuelan crude. By toppling the Maduro regime and installing a client regime, the U.S. can ensure replace Venezuela’s OPEC quota with its own oil, while guaranteeing the supply of Venezuelan oil to satisfy local demand.
After the death of Chavez in 2013, US-based special interests openly conspired to finally overturn the political order he built. The U.S. was getting close to lifting its export ban on crude oil and created a checklist of US foreign policy goals it sought to achieve in Venezuela. They included:
- The ouster of narco-kingpins who now hold senior posts in government
- The respect for a constitutional succession
- The adoption of meaningful electoral reforms to ensure a fair campaign environment and a transparent vote count in expected presidential elections; and
- The dismantling of Iranian and Hezbollah networks in Venezuela
In reality, these goals were about dismantling entirely the obstacles that have prevented the US and the corporate-financier interests that direct it, from installing a client regime and extracting entirely Venezuela’s wealth while obstructing, even dismantling the geopolitical independence and influence achieved by Chavez in Venezuela, throughout South America, and beyond.
More recently, another Wall Street-Washington policy think tank, the Brookings Institution, would publish in a paper titled, “Venezuela: A path out of crisis,” a 5-point plan toward escalating the crisis in Venezuela (emphasis added):
- The United States could expand its assistance to countries that until now have been dependent on Venezuelan oil, as a means to decrease regional support for and dependence on the Maduro government.
- The United States could increase monetary assistance to credible civil society organizations and nongovernmental organizations able to deliver food and medicines to Venezuelans. By doing so, the United States should make clear that international pressure aims to support democracy, not punish the Venezuelan people.
- The United States could support efforts by the opposition in Venezuela to build an “off-ramp” that would split moderate elements of the government away from hardliners, encouraging the former to acquiesce to a transition to democracy by lowering their costs of exiting government.
- The United States could coordinate with international institutions such as the International Monetary Fund (IMF) to offer financial incentives for holding free and fair elections in 2018, and for the opposition to unify and compete in those elections. Such coordination would also involve developing and publicizing a credible plan to restart Venezuela’s economy.
- As a last resort, the United States could consider raising economic costs to the government through an expanded sanctions regime that aims to limit Venezuelan earnings from oil exports and block further financing. This policy is risky, given that the Maduro government would be able to more credibly shift blame for the economic crisis onto the United States, and should be accompanied by well-publicized efforts to deliver humanitarian aid through credible civil society and nongovernmental organizations. While the Western media attempts to frame Venezuela’s crisis as a result of “socialism” and “dictatorship,” it is clear by reading the West’s own policy papers that it is owed instead to a systematic assault on Venezuela’s socio-political stability and economic viability, spanning decades.
Venezuela is not the first nation in South America that the United States has sought to overturn by undermining its economy.
Within the CIA’s own online archives under a section titled, “CIA Activities in Chile,” it is admitted that in the 1970s, similar tactics were used to undermine and overturn the government of Chile.
It states specifically: (emphasis added): In a world moving toward multi-polarism and greater decentralization on all levels, Venezuela’s collapse and a victory for Washington would undo an increasingly balanced distribution of geopolitical power – both in South and Central America, as well as across the world.
As a major oil producing nation, US control over its people and natural resources would further allow the US and its allies to manipulate energy prices toward achieving future goals – particularly in terms of encircling, isolating, and dismantling other centres of political power dependent on oil production for economic prosperity.
One needs not be a fan of “socialism” to understand that the ultimate outcome of Venezuela’s collapse will be a further concentration of power in Washington and Wall Street’s hands. Such power, regardless of whatever ideology it is superficially wielded behind, will always be abused. Regardless of the alleged form of government a nation may take, as long as it is a step away from unipolar globalization, it is a step in the right direction.
The crisis in Venezuela is not one of socialism versus capitalism or dictatorship versus democracy – it is one of hegemony versus national sovereignty, of centralized unipolar power versus an increasingly multipolar world. A sovereign and independent Venezuela allowed to pursue its own destiny is one in which its own people will naturally seek to decentralize and distribute power.
While the current government may not provide the ideal conditions to accomplish this, conditions under a US client regime – as US-wrecked Libya, Afghanistan, or Iraq prove – would be significantly less ideal. For geopolitical analysts, moving away from ideological talking points and examining the actual government and opposition, their interests, associations, and funding, as well as their base motives reveals a much simpler and consistent narrative, one that any analyst could discern, and a discernment that will stand the test of scrutiny and time.
Those entrenched in left/right ideology risk being betrayed by the government’s floundering desperation and the true nature of an opposition that most certainly is not “capitalist” or “pro-democracy.”
As one of the last regional holdouts against a return to neoliberalism, Venezuela has been especially vulnerable to isolation and targeting, and not just by the U.S. but also by Canada who wants to “marginalize” Venezuela because it does not follow the neoliberal “free trade” agenda that Trudeau is pushing.
The Trudeau administration insists on retaining the controversial investor-state dispute settlement (ISDS) mechanism in trade deals, which allows corporations to sue governments for “lost future profits” because of regulations. In 2011, former president Hugo Chavez revoked project authorization for gold mines, which prompted four Canadian mining companies to launch ISDS lawsuits against Venezuela for billions of dollars under the terms of a bilateral trade treaty signed with Canada.
Venezuela subsequently cancelled all its bilateral investment treaties – inspiring a world-wide resistance against the ISDS clause, but also further earning the wrath of the private sector. Opponents of Venezuela’s government blame it for turning one of the region’s most prosperous countries into an economic basket case with a shrinking economy, soaring inflation and widespread shortages.
The government rightly blames the crisis on an economic war waged by its opponents and outside backers.” Interior and Justice Minister Nestor Reverol has claimed that the U.S. is attempting a “financial coup” to “strangle our country,” through hyperinflation and political turmoil in order to end the 18-year-old Bolivarian Revolution. It’s threfore very odd that the mainstream press blames ‘socialism’ for the food problems in Venezuela, when the food distributors remain in the hands of private corporations,” who are “running general sabotage” of the system.
The reality is that the U.S. and Saudi Arabia conspired to lower the price of oil in 2015 in order to cause a “coup” in Venezuela enabling them to roll-back some of the world’s most important social reforms. The collapse in the price of oil devastated the Venezuelan economy. Washington has been more committed to ‘regime change’ in Venezuela than anywhere else in South America – not surprisingly, given that it is sitting on the largest oil reserves in the world.
The U.S. and the Venezuelan opposition want the state oil company, Petroleos de Venezuela (PDVSA) to be privatized, but instead the company has lately been forming partnerships with Russia, China, Iran and others – thereby adding to the urgency of the counter-revolution. The current economic situation Venezuelans are going through result from political actions undertaken by those who want to seize power of a country that has the largest oil reserve, the second largest gas reserve, and the largest freshwater reserve, gold and coltan in the world.
They intend to impede the success of a system other than capitalism. In addition to sanctions and economic sabotage, US imperialism and its allies domestically and internationally have been exacerbating Venezuela’s economic difficulties by attacking its international credit rating (making foreign loans increasingly expensive), by weakening the foreign exchange value of the national currency through purposeful speculation, and by withholding basic commodities needed by the people (but whose distribution is still controlled by private monopolies), such as milk, coffee, rice, oil and basic necessities like toilet paper, toothpaste and medicines.”
Shortly after being elected, Donald Trump named billionaire Wilbur Ross as his choice for Commerce Secretary. Known as the “King of Bankruptcy,” Ross spent 24 years with N. M. Rothschild & Sons, where he specialized in “asset stripping,” or leveraged buyouts of distressed firms that could later be sold for a large profit. At his U.S. Senate confirmation hearing in January, Ross talked about the Trump administration’s desire to re-negotiate NAFTA.
As reported by the World Socialist website (Jan. 21, 2017), “Ross did not shy away from spelling out the aggressive implications of Trump’s trade policy. He boasted about the recent collapse in the value of the Mexican peso and the further weakening of the Canada dollar. ‘The president-elect,’ said Ross, ‘has done a wonderful job of preconditioning other countries [with] whom we will be negotiating that change is coming.
The peso didn’t go down 35 percent by accident. Even the Canadian dollar has gotten somewhat weaker – also not an accident. He [Trump] has done some of the work that we need to do in order to get better trade deals’,” Ross said.
If that’s how the U.S. deals with its friends, it’s not too hard to imagine what’s being done to Venezuela.