January 24, 2019

VENEZUELA: As Venezuelans Starve, Maduro Continues To Give Oil Away To Communist Ally Cuba. Islamic Republic Of Iran, Communist Russia, And China's Central Role In The Venezuela Crisis.

Capx.co
written by Jorge C Carrasco
Tuesday September 18, 2018

While Venezuelans live with an unprecedented and recurring shortage of food and medicines, and an economic crisis punctuated by the highest inflation in the world and the lowest wages in the region, President Maduro continues to send millions of barrels of subsidised crude oil to Cuba.

Venezuelan oil production is plummeting. The government lacks the money to buy basic things like food, medicine or consumer goods, nor does it have the money to pay its debts. In the only official foreign exchange market, Dicom, only 20 million dollars have been traded in the first half of 2018, while in 2002, Venezuela traded 80 million dollars per day.

According to OPEC, in August oil production in Venezuela fell to an average of 1.23 million barrels per day (mbd), 2.8% less than in July, its lowest figure since the late 1980s. In addition, the country is about to close three of its largest refineries due to shortages of crude oil and personnel. This would have been an unimaginable situation two decades ago when the state-owned oil company and bedrock of the nation’s economy, PDVSA ,was the envy of the region and rated as the best in Latin America.

While this is happening, the Minister of Energy and Petroleum, Manuel Quevedo, promises the impossible. During an OPEC meeting, he said that before December PDVSA would meet the goal set by Maduro of producing one million more barrels of oil a day.

This will be a tall order, to say the least. In July, economist Ricardo Hausmann, director of the Center for International Development at Harvard University, said that “GDP has fallen 50% and that is because imports have fallen more than 80% and private imports have fallen more than 90%”.

In spite of this, the government will not sacrifice oil subsidies to Cuba due to its commitment to the socialist alliance. According to a Reuters report, PDVSA has resumed supplying oil to the island; an amount that this year has totalled 11.74 million barrels – about 49,000 a day. What’s more, between June and August this reached 4.19 million barrels.

But the question many still ask is: why? After the fall of the Soviet Union in the 90’s, Cuba’s socialist system experienced a huge crisis, which had an immediate and devastating effect on the island’s social, political and economic life. With the arrival of Hugo Chavez to power in Venezuela, Cuba has depended financially on its South American ally, which has covered up to 70% of its fuel needs for years.

In exchange, the Castro regime has not only provided medicine and education to Venezuela but has also offered the experience of Cuban intelligence that helped keep both Chavez and now Maduro in power.

Today, Cuba is the backbone of the Venezuelan regime. Havana is providing Maduro with the instruments of repression and the intelligence apparatus that allows him to remain in power despite the storm of opposition he faces. According to documents from the US State Department and Stratfor — a private intelligence agency — published by WikiLeaks,, Chavez initiated the cooperation program with Cuba.

The deal was that Caracas used oil to pay for the services of the tens of thousands of Cuban medical personnel assigned to work in Venezuela. But the program, which at one point cost Venezuela more than $5 billion per year, also paid for Cuban assistance with intelligence and national security issues.

Venezuelan intelligence received a strong boost following the alliance between Ch谩vez and Cuba. That is why the strongman was indebted to the Castros. His regime could more easily detect plots and snoop on the opposition thanks to the large number of Cubans involved in intelligence-gathering.

Both Maduro and his allies realized that SEBIN — the Venezuelan intelligence service — would never have been so effective if it had not been for the Cubans. If the island at any time decides to withdraw its cooperation, Maduro would have to quickly develop an intelligence capacity. Otherwise, he would be in trouble, and that’s a risk that the leader is not willing to take.

Raul Castro, meanwhile, knows that his plans for Venezuela are extremely unstable. For example, it is no longer feasible to sacrifice Maduro and put someone like Tareck El Aissami, Diosdado Cabello or any other Chavista henchman in his place. The time to do so expired when they began to massacre protesters in the streets.

For Cuba, the fall of Maduro would represent the largest blow to their aim of extending socialism in Latin America. For Maduro, Cuba is one of the few backers holding back the abrupt collapse of his regime and he will do whatever it takes to keep it that way, even if he has to starve his people to death for it.
Gatestone Institute
written by Joseph M. Humire
Wednesday February 14, 2018

U.S. Secretary of State Rex Tillerson just completed, by most accounts, a successful visit to Latin America. He began his five-nation tour by invoking the Monroe Doctrine and suggesting the Venezuelan military could manage a "peaceful transition" from the authoritarian leader Nicol谩s Maduro. This reminded several regional observers of President Trump's suggestion last year of a possible "military option" for Venezuela, hinting at possible U.S. or multilateral intervention to stop the country's collapse.

An armed action or military intervention in Venezuela by any nation in the Western Hemisphere, including Venezuela's own military, must take into account the role of Iran, Russia and China in the crisis. Russia and China were prominently mentioned by Tillerson during his visit to the region; Iran, however, was notably absent from his remarks.

Prior to any discussion on what to do about Venezuela, a consensus about what led to this crisis needs be reached. The role of Iran is critical in such a conversation.

Most regional analysts will likely agree that Venezuela has become a Cuban-occupied country. With more than 30,000 Cubans embedded in Venezuela, many of whom are part of the intelligence and security apparatus, it's clear that the Castro brothers had an integral role in the country's collapse. The Cuba narrative, however, misses two key points. First, it fails to identify precisely Cuba's role in Venezuela, and secondly, it ignores the presence and influence of other key extra-regional actors.

Of these, Russia and China are perhaps the two most visible. As in Syria, and historically in Central America, Russia is the primary supplier of lethal military aid, along with financial and technical support to the Venezuelan armed forces. Totaling more than $11 billion in military goods thanks to Russian arms sales, Venezuela represents 75% of Russia's total foreign military sales in the region. Additionally, the Russian state-owned energy firm, Rosneft, has provided Venezuela with an estimated $17 billion in financing since 2006. Moscow has leveraged its collateral deals to acquire expanded stakes in Venezuela's oilfields, namely the heavy-crude Orinoco belt, which gives Russia more control of Venezuela's strategic energy assets.

Russia is not alone in leveraging debt for greater control of strategic assets in Venezuela. According to the International Institute of Finance, China holds more than $23 billion in Venezuela's foreign debt, making it the country's largest creditor. Through these credits and loans, Beijing is the primary benefactor and principal banker to the South American nation, and China has enormous leverage over outcomes in Venezuela.

Chinese energy companies are also gaining an increasing share of Venezuela's most lucrative oil field, the Faja Del Orinoco (FDO). With a 25-year land grant to the FDO, China has secured access to strategic territory in Venezuela; and in exchange, China has used its checkbook to fund many of the Bolivarian Republic's social programs, such as subsidized housing and free medical clinics.

External support from China, Russia, and Cuba has contributed significantly to propping up the Venezuelan government during the last decade. Both Russia and China continue to leverage their financial, military, and energy support to the Maduro regime through Cuba's robust counterintelligence and human intelligence networks, which permeate Venezuela's highest political and military levels. Cuba is indispensable to China and Russia for its operational knowledge of Russian-supplied equipment, along with its longstanding ties to communist clandestine networks.

In this context, it is hard to imagine a scenario that removes Havana's presence from Venezuela without first passing through Moscow or Beijing. Iran, on the other hand, can operate independently in Venezuela because it taps into a separate, more robust clandestine network that has been developing in Latin America for more than half a century.

Approximately 60% of the population of the city of As-Suwayda in southwestern Syria (pop. 139,000, according to the 2004 census) are Venezuelan-born dual citizens. Many more have arrived since 2009. The district of As-Suwayda (same name as the city) has been dubbed "Little Venezuela." Estimates indicate that upwards of 300,000 Syrians from the As-Suwayda Governorate currently live halfway around the world in Venezuela. According to the late Venezuelan President Hugo Ch谩vez, more than a million Syrians reside there. This Syria-Venezuela connection could represent a clandestine network managed by Iran and critical to the advancement of Chavez's "Bolivarian revolution."

As in the Syria conflict, Iran's primarily role is preparing the Venezuelan battlefield through a range of operations in irregular warfare, using non-state actors and surrogates to gain influence over the population. Its influence is often not visible on the ground, but is felt through the repression anti-regime of protestors in 2017 and earlier. During anti-Maduro demonstrations, the motorcycle-riding members of the Venezuelan civilian militias known as Collectivos were remarkable for being modeled and trained by Iran's paramilitary Basij militia. The role of the Basij in crushing Iran's Green Revolution in 2009 provided lesson for dealing with anti-regime protestors half a decade later in Venezuela.

The extent of Iran's influence in Venezuela has long been a source of debate for the U.S. and regional security analysts. The Iranian regime's roots as a revolutionary movement with anti-imperialist rhetoric and expanding dominance throughout the Middle East has brought Russia and China, two historic cold war adversaries, closer together. In many ways, Iran has positioned itself in Venezuela to capitalize on China's economic clout and Russia's military footprint. For instance, Iran's Ministry of Defense and Armed Forces Logistics (MODAFL) used a variety of joint projects with Venezuela's military industry (CAVIM) as well as Russian and Chinese oil contracts with PDVSA to shield its evasion of international sanctions.

Iran's comparative advantage, however, is in the development of clandestine structures through surrogate forces and proxy networks. Its most prominent proxy force, Lebanese Hezbollah, is known to deploy to global hotspots on behalf of Iran. Meanwhile, the Qods Force (the extra-territorial arm of Iran's Islamic Revolutionary Guards Corps - IRGC) works with Hezbollah to increase social pressure in these hotspots to exacerbate conflicts. The Hezbollah and IRGC-QF cooperation is an important component of the Syrian civil war.

In Venezuela, long-standing clandestine networks from Syria, Lebanon and the Middle East are playing a similar role behind the scenes in shaping the narrative and ultimately directing the actions of the country's key players. These networks have provided the Venezuelan regime with the know-how systematically to control the population and dominate the narrative. Their rise to prominence can be seen not only in the abundance of Arabs in the Venezuelan government, but also in the way the Venezuelan crisis has unfolded, following the same pattern of economic and social grievances to violent uprisings with external support.

The humanitarian crisis in Venezuela began with severe shortages of food and medicine prompting a legitimate grievance among the population, which lead to an uprising last year. Many forget that prior to the its civil war, Syria faced a severe drought that was a factor in other violent uprisings that began in 2011. As in Syria, Venezuela has become a humanitarian crisis that exacerbates refugee outflows with serious counterterrorism concerns and a strong Russian and Iranian presence. Unlike Syria, however, this crisis rests much closer to U.S. shores.

Strong evidence suggests that Venezuela used its immigration agency (SAIME) to provide Venezuelan identities and documents to several hundred, if not thousands, of Middle Easterners. Without proper vetting and verification measures in place, and a high degree of counterintelligence support, our regional allies will not know if Venezuelan refugees spilling across borders are legitimate refugees or members of a transregional clandestine network between Latin America and the Middle East.

As Secretary Tillerson calls upon regional allies to increase support to resolve Venezuela's humanitarian crisis and apply more pressure to the Maduro regime, it would make sense for the Trump administration also to help U.S. allies by enhancing their counterintelligence and counterterrorism capabilities against Iran and Hezbollah in the Western Hemisphere. It appears that some of this cooperation is already beginning to take place, as evidenced by a new agreement between the U.S. and Argentina to tackle Hezbollah's illicit financing in the Southern Cone.

Dealing with the tragedy that has transpired in Venezuela over more than two decades will require a better public understanding of the central role of extra-regional actors, particularly Iran, in the country's crisis.

Any intervention in Venezuela -- military, humanitarian or otherwise -- will not work unless it is aimed at removing the external influences, especially Iran, Russia and China, that have turned Venezuela into the Syria of the Western Hemisphere.
OilPrice.com
written by Tsvetana Paraskova
Thursday December 6, 2018

Back from a visit to Moscow, Venezuelan President Nicolas Maduro tweeted a video on Thursday, in which he said that Venezuela and Russia have signed US$5-billion investment deals to increase oil production in the Latin American country.

Russia and Venezuela signed contracts to guarantee US$5 billion investments to increase oil production with Russian partners of joint ventures, Maduro said, after he returned from a visit to Moscow, where he met with Russia’s President Vladimir Putin.

Putin condemned “any actions of clearly terrorist nature and any attempts to change the situation by force,” the Kremlin said in a brief transcript of the meeting.

“I think we have found the point that helps us survive and launch a rather full, comprehensive economic programme that fully complies with the economic relations between Russia and Venezuela,” said Maduro.

Russia, alongside China, is now the only partner Venezuela has, but the Russians and Chinese are not giving away their aid to Venezuela for free—they expect payments in Venezuelan oil.

Last week, reports emerged that Igor Sechin, the chief executive of Russia’s biggest oil producer Rosneft, had recently flown to Caracas to have words with Maduro regarding delays in the shipments of Venezuelan crude oil that Caracas had agreed to send to Russia as a repayment for cash. According to Reuters sources, a Chinese delegation has also recently visited Venezuela.

Just like its economy, oil production in the world’s largest holder of crude reserves is also in free fall. In October, Venezuela’s crude oil production plunged by another 40,000 bpd compared to September, to stand at just 1.171 million bpd, as per OPEC’s secondary sources. To compare, Venezuela’s oil production averaged 2.154 million bpd for 2016 and 1.911 million bpd for 2017.

The economic collapse adds to years of mismanagement and underinvestment in the oil industry to further complicate attempts in Venezuela, one of OPEC’s five founding members, to stop the steep decline of its oil production. Venezuelan people are fleeing the country en masse amid an aggravating humanitarian crisis and an extreme poverty rate of 40 percent.

According to the IMF, Venezuela’s economy will collapse by 18 percent this year, while inflation is expected to be at 1,370,000 percent. 馃憟馃憟

Posted by Princess Mononoke at 3:09 PM

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