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Venezuela, China and Russia

Written By: - Date published: 1:41 pm, March 4th, 2019 - 54 comments
Categories: China, Deep stuff, democracy under attack, International, us politics - Tags:

Now that we are in a proper new age of robber barons in which most states are collectively so weak that they no longer offer effective resistance against large corporations, it’s somewhat easier to refresh how we view states: they are diplomatic fronts for corporations. True it’s also part of every state’s job to do that.

The willingness of some countries particularly the United States to use crisis within a country to accelerate the interests of their own corporations has been well documented in Naomi Klein’s Shock Doctrine from over a decade ago:

But Klein and others like her such as Hardt and Negri, and Chomsky, focussed almost exclusively on the United States.  

Why is Maduro able to hold on to power? Who is really in play?

For the answer in Venezuela, we need to look deeper, particularly to Russia and China.

In exchange for modest loans and bailouts over the past decade, Russia now owns significant parts of at least five oil fields in Venezuela, along with 30 years of future output from two Caribbean natural gas fields.

Venezuela also signed over 49.9% of Citgo, its wholly owned company in the United State. This includes three Gulf Coast refineries and a massive web of pipelines – as collateral to Russia’s state-owned Rosneft for a reported US$1.5 billion in desperately needed cash.

Russia is seriously exposed to Venezuela.

Rosneft also funnelled supwards of US$17 billion in loans to the Chavist-Maduro regime over the past decade. It has also gained three million tonnes of oil from 2017 from Venezuela.

Helpfully for all this financial funneling, Russia and Venezuela have a joint venture bank, Evrofinance Mosnarbank, Russia’s 91st largest by assets. The Venezuelan National Development Fund owns 49.99% of the bank. Russia’s state-owned Gazpromban, and the state bank VTB each own 25% of Evrofinance.

So whether Russian public support for Putin’s international interventions falls or not, the Russian state has to prop Maduro up because they simply have too much skin in the game. U.S. sanctions against Russia have crippled its ability to secure financing other than from its own state. This is the state acting with the coldest of commercial calculations.

According to Reuters, Russian private military contractors are now surrounding President Maduro.

Russian President Putin knows that if National assembly President Juan Guaido takes power, those who stood with Maduro will likely be ousted, and Russia’s privileged access to Venezuela’s oil fields will be revoked.

(The closest comparison I can think of is the impact of the Iranian oil nationalisation programme in the early 1950s. British investor confidence was shaken and the Shah of Iran barely survived. In 1979 the government simply nationalised all the banks.)

Then there’s China.

Venezuela has the world’s highest oil reserves, China is the world’s largest oil importer, and China has lent more money to Venezuela than to any other country in the world. An ocean of superlatives.

China gets about 19% of its oil from Russia and Venezuela together.

China has investments in Venezuela estimated to be worth around US $60 billion. As of April 2018 China owns US$23 billion of Venezuela’s foreign debt. That’s about three times the exposure of Russia to Venezuela. Interestingly, China has not followed Russia in accusing the United States of an attempted coup. That tells me that China has cultivated contacts with the opposition and with Venezuelan civil society broadly.

No doubt Russia is going all out against the United States via Venezuela because the degree of U.S. government commercial hostility to Russia through sanctions and military positioning is now so high that Russia simply have less to lose. China, not Russia, is in the middle of a complex trade negotiation with the United States.

Last week, President Trump indicated that Huawei and ZTE – vital Chinese domiciled tech multinationals – could be included in that trade deal.

That is another almighty big reason not to go head to head with the U.S. via Venezuela. China knows that it gains rewards if its companies accede to paying massive fines to United States regulators. ZTE paid the fine, fired its entire board, sucked up the losses, and kept going. I suspect the same thing will happen with Huawei.

There’s still plenty of capacity from the United States to damage Chinese tech firms, and China is playing a careful diplomatic game around it, in part because of its exposure to U.S. intervention in Venezuela.

Venezuela represents the contest of the United States, Russia, and China like no other place on earth.

54 comments on “Venezuela, China and Russia ”

  1. Gosman 1

    Russia and China are on a hiding to nothing. There is no indication that Maduro will be willing to make the sorts of reforms necessary to stem the decline in the Venezuelan economy and certainly no ability to turn it around so that it expands significantly rather than contracts. Therefore Russia and China will have to continue to stump up cash in exchange for sections of a declining Venezuelan economy. There is a saying for this – “Throwing good money after bad”.

  2. adam 2

    But isn’t trump a putin puppet…

  3. Gosman 3

    Once again I will post John Oliver’s take on the mess that is Venezuela

    • Jinx 3.1

      John Oliver is an establishment shill.

      Watch this.

      By the way, YouTube is trying to censor the video for absolutely no reason by making it age required.
      There is no reason for their claim for violating community standards.

      • weston 3.1.1

        Thanks Jinks nice to get some REAL facts !!

      • Gosman 3.1.2

        That was hilarious. I especially enjoyed his explanation for hyper inflatiom. Apparently it is because people smuggle the currency out of the country. Of course he fails to grasp that if currency is been taken out of the country you reduce the supply of it and thetefore under the law of supply and demand you increase its value. Venezuela’s problem is not too little currency but TOO MUCH. As for extracting food and other items to other nations, that happens when you impose price controls.

  4. I’ve already brought this up today…and I’m not sure if there’s any point me commenting on such a right wing, possibly racist* article…but…

    “Hands off Venezuela!”

    The “Permanent War State” Aims to Plunder Venezuela – Wilkerson and Jay
    Trump promises “democracy and freedom” to Venezuela, delivered by Elliott Abrams who brought you illegal wars, coups, and support for dictatorships; and Mike Pompeo and VP Pence, both with deep ties to the Koch brothers who need Venezuelan heavy crude to feed their Texas refinery – Col. Larry Wilkerson joins TRNN’s Paul Jay

    *http://theconversation.com/venezuelas-long-history-of-racism-is-coming-back-to-haunt-it-82199

    *http://www.afrocubaweb.com/news/venezuela-racial-conflict.html

    • Gosman 4.1

      Where is the evidence that the US has “plundered” say Iraq or Afghanistan?

      • Sam 4.1.1

        Only way to deny U.S motivation for stealing Middle East oil is to pretend to be thick in the head.

        • Gosman 4.1.1.1

          No evidence just an emotional laden argument that pre-supposes the point.

          • Sam 4.1.1.1.1

            You are not deceiving me, just yourself.

            • Gosman 4.1.1.1.1.1

              I’m just asking you to back your views up. It is you who is refusing to do so.

              • Sam

                They’re not my views. They’re the words of The President of The United States of America threatening Venezuala repeatedly and consistently and his spokespeople from the pentagon and Whitehouse carrying the burden of carry. And you gooie, in complete denial.

                • Gosman

                  Trump has only made a really concerted effort in the past few months and he hasn’t threatened to steal oil for tge US.

                  • Sam

                    Protecting U.S. Oil interests has been a long standing U.S. Forign policy. Where have you been the last 100 odd years…, Checking your fathers navel?

      • Ad 4.1.2

        Have trawl through the Naomi Klein video.

        Or even the book.

      • Siobhan 4.1.3

        Not enough time has passed for me to have good links at my fingertips on those two countries, plus its home time…but its a well known fact that America’s involvement beyond its borders is always about its own ‘business interests’, which is just a modern term for ‘plundering’.
        Its always been this way, and to think it is now otherwise would be denial on a tragic scale…,not to mention the idea that America spent 6 trillion on a war in Iraq/Afghanistan for kicks is also pretty hilarious…

        in the words of Smedley Butler, at the time of his death the most decorated Marine in U.S. history …

        “I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer; a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”

        • Gosman 4.1.4.1

          That was from 2005 and was meant to be some sort of secret plan. How did this plan work out? Where is the evidence for that?

          • Stuart Munro 4.1.4.1.1

            I’ve said it before and I’ll say it again – go and Google it you lazy ignorant trolling prick.

            • Stuart Munro. 4.1.4.1.1.1

              But, on the principle that you are too useless to look for it yourself:

              On the ground, the occupation forces are quickly working towards selling the Iraqi governmental services to private companies. They are quite open about their plan.
              In mid-April, U.S. officials stated that they want the World Bank to eventually act as the “neutral international body” that will be the accountant for oil revenues, replacing the United Nations, which had overseen the oil-for-food program (April 18, 2003, New York Times). The World Bank is definitely not a “neutral” body; quite the contrary, it has caused immense impoverishment in its agenda of privatization.[2] For example, as reported by the International Consortium of Investigative Journalists (ICIJ), “despite World Bank contentions that it does not force privatization on the poor, research by ICIJ and the bank itself showed that privatization is playing an ever-increasing role in bank lending policies.”[3]
              In mid-May, Bremer announced that, within weeks, the Central Bank of Iraq and a group of private banks would begin providing “substantial” trade credits to finance the sale of goods to Iraqi ministries, government-owned factories and private companies. Bremer did not say which “private banks” would provide these credits, or at what terms the credits would be made. He did reveal that U.S. and British companies were expected to be among the first to benefit.

              https://www.globalpolicy.org/component/content/article/168/34828.html

              • Gosman

                So your evidence that a “secret” plan to control the oil industry in Iraq is a link to reports from 2003 is it? How about you find out who controls the Iraqi oil and finance industry NOW not who the occupation authorities were discussing in 2003 or some sort of “secret” plan suggested in 2005?

                • Stuart Munro.

                  This is all such old news Gosman, did you sleep through the first decade of this century?

                  If you want to know what went down you really ought to get your mouse finger working. But it was a jackal’s wedding. You’ll probably reject the source (so dear is your crippling burden of ignorance to you), but a quick and dirty summary is here for those who ignore current affairs and have to play catch up:

                  https://archive.org/details/bushinbabylonrec00alit

                  • Gosman

                    I want to see you provide evidence of how US oil interests have taken over thr Iraqi oil sector please. Not so called “secret plans” from 15 years ago which suggest they were going to.

                    • Stuart Munro.

                      Yes, I thought as much – more ignorance and bad faith behavior, and an implicit assumption of superiority unsupported by anything greater than cynicism.

                      This is the thanks I get for throwing a little light into the all but infinite void of your ignorance and bile.

                      I’ve provided you with three sources, which you were not sincere enough to read. I’d quite like to see you justify your own position – the endless denials, the enthusiastic embrace of any hint of amorality, the astonishing ignorance of the principles of democracy and appalling want of judgment.

                      Fuck off and do your homework Gosman, or better yet, just fuck off.

                    • Gosman

                      No I enjoy too much you squirming and ducking and diving whenever I ask you to provide evidence that the US is doing the things you accuse it of doing.

                    • Stuart Munro.

                      Yes we know Gosman – you are the consummate troll, lazy, cynical, ill-informed, fucking useless, a blight on humanity and on this site.

                      I’ve produced a truckload of evidence, but that’s not good enough for a lying weasel lie you, you haven’t even looked at it. That’s the squirming, and it’s all yours.

                      You’ve produced nothing to validate your position. Nothing could. Shame on you Gosman, you pitiful lazy wretched lying thing.

                • Gossie you little testicle tickling toad go back to Kiwi Bog with the rest of the Swamp Dwellers.

      • WeTheBleeple 4.1.5

        Oh for shame just STFU for once in your life you loser.

        • Gosman 4.1.5.1

          Ahh…. no.

          • Sam 4.1.5.1.1

            May I ask what kinds of injuries causes you to believe that failed policies might one day work in the future?

            • Gosman 4.1.5.1.1.1

              My policies don’t fail. Contrast Chile with Venezuela to see that.

              • Sam

                Lelz. Am I the first person to point out that no one has ever voted for you or your policies? You’re funny.

                • Gosman

                  My policies are mainstream. They have been adopted by most developed nations on the planet.

                  • Sam

                    Most? I could literally use occums razor to prove the negative simply because of pair-pressure that you wanted to look cool in front of “most countries” and adopt there policies or I could even prove that you adopt policies suited for forign nations. Just can’t believe you’d leave yourself open like that, there must be something else going on.

                    I could even wank off your IQ and say that it is 92 so below average, I don’t think you are retarded because you’ve got some arguments, not very good ones but it does imply you’ve got the speech component of IQ and follow basic instructions given to you so you are at least above 80. So I’ll wank you off (high ball your IQ) and say you’ve got a below average IQ of 92 which is very generous.

                    It’s just your entire style of debating is just so cliche that I’v lost count of how many times you’ve conceded. I’ll body your entire body of evidence/comments/research and just bully all your arguments and then you’ll get all paralysed and come back a few hours later like nothing even happened. Iv literally lost count of how many times I’v just bullied you like that and like an injured snake you just keep coming back for more.

                    Every one has lost respect for you that I don’t even think you’ve noticed that no one can spell your name properly for fear of falling prey to what ever injuries that you are carrying around with you. Like you are pretty good at distracting people but as far as debating you are like the level of a 10 year old kid who’s not allowed to swear. You should literally delete your account so you don’t embarrass yourself any further.

    • Sam 4.2

      I mean the one thing Venezualan Propogandist fail to acknowledge is that the White House and it’s spokespeople openly admit to causing financial crises and fund undemocratic candidates and blame Maduro for there own meddling. There’s so many hours of spokespeople admitting there fraud it’s not funny.

  5. “No doubt Russia is going all out against the United States via Venezuela because the degree of U.S. government commercial hostility to Russia through sanctions and military positioning is now so high that Russia simply have less to lose.”
    Bollocks. Naive under-interpretation of the complexity of the situation. There are many other factors. The sentence makes no sense and brings down what is otherwise a fairly erudite article.

  6. McFlock 6

    Interesting article. So Russia being so exposed to Venezuela makes the geopolitical wonks in the US happy for US intervention in Ven, the Colombian factor means the anti-drugs crowd are for US intervention if only to keep Colombian govt support, Bolton would be creaming for regime change anywhere in the world, the oil crowd will be wanting control over ven production, and so on.

    And the orange-utan would have to be contrary to all of them (and an effective leader) to help Putin on this one.

  7. Milly 7

    I love the way the U.S. complains how other countries interfere in their elections, yet they openly get involved in coups against democratically elected governments.
    The irony is too much.

  8. The USA are the world’s bully boys just like Pies Brownlee from Canterbury

  9. sam 9

    it sounds nothing happen to each other.

    [Eh? Can someone please reboot the Sambot. Ta, TRP]

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