Venezuela and the Perils of Ceding Sovereignty

US imperialism is “not to be trusted even a little bit,” much less considered a “partner” in a “cooperation agenda.” - Che Guevara

By Ricardo Vaz

 

On January 3, the US bombed Venezuela’s capital region and kidnapped President Nicolás Maduro.  The unprecedented attack represented the culmination of a quarter-century of imperialist hybrid war, including devastating unilateral sanctions, mercenary incursions, “color revolution”-style insurrections, media disinformation, and NGO infiltration.

The four months since have brought a flurry of developments, from renewed diplomatic ties with the US to an overhaul of key legislative pillars of the Bolivarian Revolution.  Additionally, the Trump administration established semi-colonial control over Venezuelan oil revenues, with the amounts and timings of disbursements back to Caracas left entirely at US officials’ discretion.  The arrangement is similar to the one Washington has forced on Iraq since the 2003 invasion.

This compromised sovereignty is a catalyst for other issues.  On the one hand, it makes it tougher for the Venezuelan government to improve living standards without challenging business interests.  On the other, the burden of Venezuela’s external debt might see Washington attempt to impose an IMF loan that will bury the country in debt and dependency for decades.

The acting Rodríguez government’s tenure has been marked by accelerated political and economic transformations.  On the international front, Caracas has restored diplomatic ties with Washington and recently resumed dealings with the US-controlled International Monetary Fund (IMF) and World Bank.

Domestically, Rodríguez has changed key cabinet and military posts, while pushing through the National Assembly a number of reforms with the explicit goal of making the country more attractive for private sector investment, especially from Western multinationals.

Plans to reform pension, tax, housing, and the landmark 2012 labor law are in motion.  Mining and hydrocarbons have already undergone pro-business overhauls, with slashed fiscal responsibilities, decreased oversight, and disputes subjected to international arbitration.  In contrast to Chávez’s reassertion of oil sovereignty, which underpinned the massive sociopolitical achievements of the Bolivarian Revolution, the reformed energy law brings back the old concession model that puts operations and sales in the hands of private corporations.

In tandem, the Trump administration has issued licenses to pave the way for Western conglomerates to return to Venezuela, and several have already struck deals under the new highly favorable conditions.  The licenses maintain and even double down on US sanctions by barring dealings with China, Cuba, Iran, North Korea, and Russia and mandating that all Venezuelan state revenues from oil and mining be deposited in US Treasury-run accounts.

The subordination to US impositions saw Venezuelan authorities extradite former diplomatic envoy and minister Alex Saab to face charges in the US with little to no explanation.  The move was shocking but not out of context.  In recent weeks, there has been a succession of ceremonies at Miraflores presidential palace where Trump officials get the red-carpet welcome and escort corporate executives to sign contracts under the new pro-business incentives.  Far-right tech moguls, including Palantir founder Peter Thiel, are already taking advantage of Trump’s leverage to establish a lucrative foothold in the country.  For his part, the US chargé d’affaires holds regular publicized meetings with Venezuelan cabinet ministers. 

Caracas’ technocratic and pragmatic approach has dovetailed with a corresponding shift in discourse.  On foreign policy, the anti-imperialist rhetoric has all but vanished.  As Trump unleashes a savage war against Iran and threatens to “take over” Cuba, Venezuelan leaders have refrained from condemning the escalating imperialist aggression while emphasizing their desire to build good relations with Washington.  At the same time, references to Maduro have drastically decreased, as documented in a recent investigation.  Domestically, the central focus has become macroeconomic stability and attracting foreign investment.  Both Acting President Rodríguez and her brother, National Assembly President Jorge Rodríguez, acknowledged receiving “recommendations” and “suggestions” from oil majors amid the recent hydrocarbon overhaul. 

Rodríguez and the Bolivarian leadership, under ongoing US pressure, are betting that the pro-business opening will lead to accelerated economic growth that will trickle down into improved living conditions, thus allowing the government to rebuild social legitimacy and political prospects.  However, this plan faces serious roadblocks.

The first issue is that the acting authorities may not have a lot of time to improve the living conditions of the Venezuelan people. 

Over the previous seven years, with the economy asphyxiated by the US economic blockade, the Maduro government prioritized macroeconomic stability and reduced inflation first and foremost, through a strict monetarist policy package.  While the approach, coupled with a modest oil industry recovery, did lead to slowed down inflation and modest economic growth, it came at a price of freezing wages, consumer credit, and public spending.  The minimum wage, last raised in 2022, is now worth less than US $1 per month, with further increases replaced by non-wage bonuses that cheapen labor costs for employers.

Though these bonuses have increased periodically (the income floor is now $240/month for public sector workers), they are still far from covering living costs.  On May 1, Rodríguez ignored growing calls for a minimum wage hike, the conversion of bonuses to wages, and the restoration of collective bargaining rights, instead doubling down on the bonus policy.  With government officials announcing a labor reform soon, it is likely that the return of the minimum wage will come alongside a significant erosion of workers’ rights and employer responsibilities.

However, apart from its commitment to fiscal discipline, the Rodríguez acting government has little room to maneuver because of its lack of direct management over oil revenues.  At the mercy of the Trump administration to return export earnings in the amount and timing of its choosing, Venezuelan authorities are unlikely to commit to anything that might unsettle the budget.  Rodríguez herself warned that wage increases must be “responsible.”

There is a delicate balance to strike.  To implement the current pro-business agenda, not to mention the US rapprochement, the government needs social peace, and only improved material conditions for the working-class majority can ensure that in the short term.

It is not just the pressure for better living standards that looms large on Venezuela’s economic front.  There is a growing expectation that creditors will soon reengage with Venezuelan authorities to collect on a sizable external debt: a combination of defaulted bonds, unpaid loans, and arbitration awards that, with interest accrued over years, may amount to as much as $170 billion.  The Venezuelan government recently announced the launch of a debt restructuring process, while Washington issued a license allowing the hiring of financial and consulting services. 

Given the recent overtures to foreign capital, Venezuelan leaders will be hard-pressed to honor whatever commitments necessary to render the country a favorable investment climate.  Nevertheless, a major chunk of this debt is illegitimate.

On the one hand, debt ballooned in the mid-2010s as Venezuela’s credit rating was unjustifiably downgraded and borrowing costs went up, as Washington slapped its first rounds of sanctions on the Caribbean country.  The Maduro government made a strategic choice to prioritize debt service as the economy reeled following a collapse of global oil prices, hoping that this “discipline” would stave off a scenario where the country was shut out of financial markets.  It turned out differently.

Venezuela was gradually locked out of global finance after the Trump administration’s 2017 financial sanctions.  Bonds defaulted one after another and have been accruing interest ever since.  And the notoriously corrupt US-backed “interim government” also played its part in running up Venezuela’s liabilities and pilfering state assets abroad.

The diverse group of bondholders and corporations owed arbitration awards is sure to receive the backing of the White House, which holds the purse of Venezuela’s export proceeds.  This mechanism could be utilized to directly transfer Venezuelan state income to creditors in what would effectively amount to international wage garnishing.  Given how Venezuelan bonds have risen in recent months, investors are eagerly eyeing a significant windfall.

Venezuela’s unsustainable debt burden opens the door for further US imperial predations.  Even if there is an agreement to pay 50 cents on the dollar for Venezuela’s $170 billion debt for a period of 15 years, that comes to $5.6 billion a year, roughly a quarter of the present budget.  It is simply unpayable.

While Caracas may be able to settle with some creditors by privatizing Venezuelan state assets, it will not amount to much.  Venezuelan leaders will stress that, with the recent reforms and US opening, the economy will grow tremendously, and they will be able to honor all commitments.  But creditors are not willing to wait when they can cash in now, especially given Venezuela’s weak bargaining position.  The government cannot maintain a functioning country in the short term with a huge debt burden.  As a result, the US might take advantage of the crisis to impose a major loan from the IMF or some lending coalition.

An IMF or similar loan program is more than just an agreement to lend some amount under certain repayment conditions.  It is an opportunity to impose neocolonial arrangements on Global South countries.  In Venezuela’s case it is even more symbolic: it would mean exacting the proverbial pound of flesh for Chávez’s revolutionary audacity to challenge US hegemony in the Western hemisphere.

An eventual long-term credit program would surely come alongside a structural adjustment package of mass privatizations, gutted social expenditure, and all-around liberalization of the economy.  Given the current leverage over Venezuela, US officials may attempt to further entrench the rollback of the Caribbean nation’s sovereignty.

Between the growing domestic demands for improved living conditions and the specter of debt renegotiation, the acting Rodríguez government will find it increasingly difficult to walk the tightrope of maintaining social peace while continuing to make one concession after another to monopoly capital and the Trump White House. 

With the limits of US imperialism nakedly exposed in Iran, Trump needs a victory in Venezuela.  But that victory does not entail a buoyant economic recovery with social justice, let alone the survival of a sovereign and revolutionary project.  Victory for the US is a dependent country, mired in debt and underdevelopment, where Western corporations plunder natural resources and geopolitical rivals are kept at bay.

Ultimately, any long-term plan for sovereign development needs to start from the fact that US imperialism, to echo Che Guevara,  is “not to be trusted even a little bit,” much less considered a “partner” in a “cooperation agenda.”  It will undoubtedly be a major hill to climb.  But thankfully, even if it means starting over, the Bolivarian Revolution is not starting from scratch.

Source: Sovereign Media

The dangers of the hemisphere operating without the Inter-America Commission on Human Rights' (IACHR's) guidance

By Catie Duckworth
Research Associate at Council on Hemispheric Affairs

In recent months, members of the Organization of American States (OAS) have intensified their criticisms of the Inter-America Commission on Human Rights (IACHR).  The IACHR is an independent body established in 1959 by the OAS to create a Pan-American framework for dealing with human rights violations.

Heavily based upon the 1948 American Declaration of the Rights and Duties of Man, it was the Americas’ first universal human rights document, which was adopted at the same meeting that the region chartered the OAS. [1] However, strong opposition from OAS members throughout the years has heavily compromised the independent nature of the IACHR.  Critics of the organization, such as Bolivian President Evo Morales, have called for its elimination.

The 42nd OAS General Assembly that convened from June 3 to 5 in Cochabamba, Bolivia, where it found fault with the IACHR’s proceedings and rulings, claiming that the Commission has acted as a tool for modern US imperialism and thereby further fueling Morales’ discontent. [2] Calls to terminate the organization were problematic before the IACHR had even been effective in holding past administrations accountable for human rights violations and setting a higher standard for the treatment of people by the state in Latin America.  There is a possibility that OAS-proposed reforms will cause concern, because the OAS will most likely put limitations on the Commission’s independence.

However, this was not the first time a member state has expressed discontent with the organization.  In April, President Hugo Chavez announced that Venezuela would withdraw from the IACHR.  This announcement was initially dismissed at the time when OAS Secretary-General José Miguel Insulza pointed out that in order for Venezuela to remove itself from Commission jurisdiction, Chavez must withdraw from the OAS all together. [3] Claiming the Commission acts as a US contrivance, recalcitrant leaders from Ecuador and Nicaragua have joined Evo Morales and Hugo Chavez in their calls for reform in order to decisively bring an end to US imperialism in the region.  All four of these nations’ leaders have threatened to withdraw from the IACHR if reforms are not set. [4]

Ecuador’s President Rafael Correa asserted, “We cannot accept the double morals and inconsistencies.  We need to focus on the priorities of our America -- neocolonialism is over.” [5] Although all 34 countries represented at the Assembly have expressed their concern regarding recent proceedings carried out by the IACHR, most only call for reform, not dissolution like their more emphatic ideological neighbors.  As a result, the Assembly decided to draft a reform plan and meet again in six months to approve the changes.  If sanctioned, the reform will mark the first jurisdictional changes initiated outside the Commission since its founding over fifty years ago. [6]

At the June assembly of the OAS, IACHR Chair José de Jesús Orozco defended the organization and argued that the Commission is among the world’s most successful supranational organizations working to protect human rights.  Stressing the necessity of the IACHR, he asserted, “This is about regional guarantees and effective mechanisms to ensure that nobody in the Americas feels defenseless when it comes to his or her most basic rights, and that the States -- through their current and future governments -- see themselves as bound to respect those values that… they embraced and made an international commitment to safeguard.”

The Commission, like all supranational organizations, requires that member nations sacrifice some measure of their sovereignty.  By deeming, on some occasion, policies of member states unlawful through a Western-centric lens, critics allege that the Commission has taken on too progressive of a role in terms of a radical agenda.  However, the public ought to scrutinize the motivations of Latin American leaders for advocating the dissolution of the commission.

One initiative of this was a letter written some time ago by José Miguel Vivanco, director of Human Rights Watch’s Americas Division, who wrote a letter that found itself to the OAS General Assembly, which stated, “If this organization has been so successful, why then has a campaign against it been launched?  Very simple: Because it has touched the interests of important governments that possess clear autocratic tendencies or are sufficiently powerful as to believe that they are entitled to not render accounts to a supervisory regional body.” [7] In other words, many leaders advocate reform because the supranational organization has prevented them from fulfilling their political agenda.

For example, in April 2011 the IACHR provoked Brazilian authorities after ordering them to halt the construction of the Belo Monte hydroelectric dam project in order to ensure the livelihood of multiple indigenous tribes on the Xingu River, who faced the threat of displacement as a result of the project.  Unhappy with the decision, Brazil recalled its delegate to the organization, suspended payment of dues to the Commission, and withheld its ambassador to the OAS in protest.  Yet Brasilia quickly reembraced the Commission when it proposed to set up a Truth Commission to investigate the human rights transgressions during the Brazilian military dictatorship of 1964-1985, demonstrating how Brazil’s loyalty to the IACHR at times has been based on political expediency. [8]

The Commission has lost popularity among a number of its members by refusing to yield to governments with unsatisfactory human rights standards.  Leaders of this bloc cite historic acts of US imperialism in the region as a basis for disregarding IACHR rulings that do not work in their favor.  From the perspective of these critics of the Commission, the IACHR continues to kneel to US regional foreign policy interests while overlooking cases that are contrary to US national interests.  Tensions tend to arise when the Commission is bold enough to condemn an administration for violating the human rights of its own citizens.

As Manuela Picq, a recent visiting professor and research fellow at Amherst College, said, “These cases demonstrate that the Commission’s decisions are supported when they are aligned with governmental agendas and attacked and discredited when the Commission’s actions are perceived as inconvenient.  The challenge is not as much to reform the Commission’s proceedings as to appease the wrath of states when rulings interfere with their political agendas.” [9]

Many Latin American countries may want to see the end of the IACHR just to conceal their own self-serving and at times compromised human rights practices.  In order to draw attention away from their own corrupt institutions they passionately insist that the United States at times is using the organization as a mechanism for imperial calculations.  To put to rest any claims that Washington is using the organization to further its interests, Washington has decided to take a neutral role at the June OAS gathering, stating that member nations ought to work together in harmony with the Commission. [10]

As one of the most economically stable and democratically open states in the OAS, the US delegation should not take a neutral stance, but rather support the Commission.  However, the United States to this day still has not signed the 1969 American Convention on Human Rights Pact of San Jose, which means that the Inter-American Court in Costa Rica does not have any jurisdiction in the United States. [11]

To avoid further allegations of imperialistic intentions, the United States should thus lead by example and must give some thought to allowing the Inter-America Court some jurisdiction to operate within its borders and offer more assertive support for human rights activism while steering clear of anti-human rights advocacy.  Washington has a duty to not turn a blind eye to its southern neighbors’ human rights violations, it should, as a would-be promoter of democracy in the region, be consistent and careful not to set double standards based on its own narrow intentions.

The IACHR is a necessary body, and must be actively protected to ensure the UN Declaration of Human Rights is upheld in the region.  There are few doubts that some reforms need to be made to the IACHR, which will include limits on the Commission’s independence.  However, it is this independent nature of that body that makes the IACHR effective.  If the Commission’s independence is taken away, it will have to conform to the narrow partisan political agendas of some of its member states, and that would mean at times acting contrary to its entirely noble purpose.

Citations:

[1] Pearlman, Alexander.“OAS rights body facing criticisms, dissolution.” InterAmerican Security Watch. IASW Jun 8, 2012.
[2] Picq, Manuela. “Is the Inter-American Comission on Human Rights too progressive?” Aljazeera. June 9, 2012.
[3] “Human Rights in the Americas: Chipping at the foundations.” InterAmerican Security Watch. June 7, 2012.
[4] “Human Rights in the Americas: Chipping at the foundations.” InterAmerican Security Watch. June 7, 2012.
[5] Pearlman, Alexander.“OAS rights body facing criticisms, dissolution.” InterAmerican Security Watch. IASW Jun 8, 2012.
[6] “Human Rights in the Americas: Chipping at the foundations.” InterAmerican Security Watch. June 7, 2012.
[7] Pearlman, Alexander.“OAS rights body facing criticisms, dissolution.” InterAmerican Security Watch. IASW Jun 8, 2012.
[8] Picq, Manuela. “Is the Inter-American Comission on Human Rights too progressive?” Aljazeera. June 9, 2012.
[9] Picq, Manuela. “Is the Inter-American Comission on Human Rights too progressive?” Aljazeera. June 9, 2012.
[10] Pearlman, Alexander.“OAS rights body facing criticisms, dissolution.” InterAmerican Security Watch. IASW Jun 8, 2012.
[11] Pearlman, Alexander.“OAS rights body facing criticisms, dissolution.” InterAmerican Security Watch. IASW Jun 8, 2012.

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, visit www.coha.org or email coha@coha.org

July 28, 2012

Caribbeannewsnow

Chavez says US 'occupying Haiti' in name of aid

CARACAS, Venezuela (Reuters) -- Venezuela's President Hugo Chavez on Sunday accused the United States of using the earthquake in Haiti as a pretext to occupy the devastated Caribbean country and offered to send fuel from his OPEC nation.

"I read that 3,000 soldiers are arriving, Marines armed as if they were going to war. There is not a shortage of guns there, my God. Doctors, medicine, fuel, field hospitals, that's what the United States should send," Chavez said on his weekly television show. "They are occupying Haiti undercover."

"On top of that, you don't see them in the streets. Are they picking up bodies? ... Are they looking for the injured? You don't see them. I haven't seen them. Where are they?"

Chavez promised to send as much gasoline as Haiti needs for electricity generation and transport.

A perennial foe of US "imperialism," Chavez said he did not wish to diminish the humanitarian effort made by the United States and was only questioning the need for so many troops.

The United States is sending more than 5,000 Marines and soldiers to Haiti, and a hospital ship is due to arrive later this week.

The country's president said US troops would help keep order on Haiti's increasingly lawless streets.

Venezuela has sent several planes to Haiti with doctors, aid and some soldiers. A Russia-Venezuela mission was set to leave Venezuela on Monday carrying aid on Russian planes.

Chavez said Venezuela's planes were the first to land in Haiti after Tuesday's 7.0 magnitude earthquake, which wrecked the capital Port-Au-Prince and killed as many as 200,000 people.

January 18, 2010

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