Venezuela
represents everything that the U.S. opposes in the region: socialism,
anti-imperialism, economic independence via energy exports and a
viable ally for China, Russia, Iran and other countries that oppose
the hegemonic designs of Washington.
by
Eric Draitser
Part
4 - The Sino-Venezuelan partnership
For decades,
corporations in the U.S. saw Venezuela as little more than an
American possession, an oil colony whose dependence on U.S. exports
made it little different from a true colony in the traditional sense
of the word. However, with the ascendance of Hugo Chavez and the
Bolivarian Revolution, Venezuela ceased to be a dependent client of
the U.S., and instead became a political adversary.
One key
aspect of Venezuelan economic relations with other countries that has
undoubtedly rubbed strategic planners the wrong way has been its
ongoing partnership with China. Under Hugo Chavez and Nicolas Maduro,
Venezuela has signed countless deals with Beijing, many of which are
based on an oil-for-credit framework wherein Venezuelan oil
underwrites Venezuelan borrowing from Chinese banks. The Chinese cash
has been used to stave off default and pay the financial obligations
of the Venezuelan government.
Beyond that,
Venezuela and China have inked agreements in the areas of energy,
mining, finance, infrastructure and agriculture. There is also the
Joint Chinese-Venezuela Fund, which finances infrastructure projects
and economic development in the Bolivarian Republic.
In February
2017, China and Venezuela signed a raft of agreements, including the
construction of a refinery in China that will process 400,000 barrels
of crude per day, 70 percent of which will come from Venezuela. The
deals totaled $2.7 billion.
China has
also become one of the leading manufacturers of transportation in
Venezuela, with taxis and buses being purchased or manufactured by
the Chinese for the Venezuelan market. This tangible example of the
Venezuela-China relationship illustrates the importance of Beijing to
the daily life of Venezuela.
Unlike
China, Russia has little need for Venezuelan oil. However, the one
other area of Russian economic might is critical for the Bolivarian
Republic: weapons.
According to
Rostec, a Russian state corporation involved in the sale of military
hardware to Venezuela, the estimated value of Russia-Venezuela arms
contracts is roughly $12 billion. From 2005 to 2013, Venezuela was
the largest buyer of Russian weapons in Latin America, with roughly
$11 billion in purchase contracts.
But Russia’s
ties to Venezuela are not simply about mutual enrichment, there is
also a somewhat predatory aspect to the relationship, one that is
likely making observers in both Washington and Caracas wary. Russia’s
$1.5 billion loan to Venezuela in November 2016 came with the
condition that the Venezuelan state oil company PDVSA pledge a
49.9-percent stake in Citgo, the U.S. subsidiary of PDVSA, as
collateral for the loan.
This means
that Russia’s state oil company Rosneft, run by Russian President
Vladimir Putin’s close friend Igor Sechin, could control much of
Venezuela’s economic clout. Translation: Russia wants Venezuelan
oil to use as leverage against the U.S.
Venezuela
has become a geopolitical flashpoint in recent years. As the country
has moved forward on the path of socialism and anti-imperialism, it
has increasingly been targeted by a wide range of destabilization
tactics, as well as the collapse of global oil prices in 2014 and
2015 that crippled the Venezuelan economy.
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