Here’s Where America’s Imported Oil Comes from: Venezuela Is Currently the 4th-Largest

Here’s Where America’s Imported Oil Comes from: Venezuela Is Currently the 4th-Largest

ERIC ZUESSE | 13.02.2019 | WORLD / AMERICASBUSINESS

Here’s Where America’s Imported Oil Comes from: Venezuela Is Currently the 4th-Largest

At the present time, the latest month for which the US Department of Energy publishes the number of barrels per day (bpd) of oil that’s exported to the US is November 2018. Here are the rankings:

1. Canada        142,206 bpd

2. Saudi Arabia  30,028

3. Mexico        18,020

4. Venezuela     16,889

5. Iraq          11,767

6. Colombia      7,769

7. Russia        7,611

8. Ecuador       5,866

9. Nigeria       5,392

10. Algeria      4,848

11. UK           4,653

12. Norway       4,073

13. Kuwait       3,027

14. Brazil       2,777

15. Belgium      2,075

16. S. Korea     1,927

17. Netherlands  1,462

18. Egypt        1,405

19. UAE          1,771

20. China        1.268

21. France       1,239

22. Singapore    1,232

23. Indonesia    1,204

24. Argentina    1,101

25. Peru         1,061

26. Denmark      1,000

27. Brunei       961

28. Spain        846

29. Angola       833

Here were the top 10 for the entire year of 2015 as reported by Bloomberg Finance at Forbes. For comparison to today, the country’s sales and rank in November 2018 is also indicated [between brackets]”

1. Canada        3.2 million bpd  [1. Canada 142,206]

2. Saudi Arabia  1,1 [2. Saudi Arabia 30,028]

3. Venezuela     780,000 bpd [4. Venezuela 16,889]

4. Mexico        690,000 [3. Mexico 18,020]

5. Colombia      370,000 [6. Colombia 7,769]

6. Iraq          230,000 [5. Iraq 11,767]

7. Ecuador       225,000 [8. Ecuador 5,866]

8. Kuwait        210,000 [13. Kuwait 3,027]

9. Brazil        190,000 [14. Brazil 2,777]

10. Angola       190,000 [29. Angola, 833]

Clearly, the figures change over time. Whereas Angola was #10 in 2015, it’s #29 now; and whereas Russia, Nigeria, and Algeria, weren’t in the top 10 in 2015, they now are.

US President Donald Trump is bringing down the latest Venezuelan monthly number from 16,889 to close to zero. On 25 August 2017, Reuters headlined two stories, “Trump slaps sanctions on Venezuela; Maduro sees effort to force default” and “Venezuela says US sanctions designed to push Venezuela to default”. The first of those reported that, “US President Donald Trump signed an executive order that prohibits dealings in new debt from the Venezuelan government or its state oil company on Friday in an effort to halt financing that the White House said fuels President Nicolas Maduro’s ‘dictatorship’.” The second reported that Venezuela’s Government daid that Trump’s action “essentially forces the closure of its US refining unit Citgo,” which means bringing an end to Venezuela’s oil exports to the US

Venezuela’s socialized oil company, PDVSA, of which Citgo is the US distributor, had never prepared for the measures that Trump is now imposing, and Reuters’s report said, “As a result, it will be it tricky for PDVSA to refinance its heavy debt burden.” The Reuters report continued:

“Maduro may no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people,” US Treasury Secretary Steven Mnuchin said on Friday.

PDVSA, the financial engine of Maduro’s government, is already struggling due to low global oil prices, mismanagement, allegations of corruption and a brain drain.

However, the likely failure of Venzuela’s oil company is due not only to the lowered price of oil, but to the fact that Venezuela’s oil is among the two costliest in the world to produce, because it’s from the dirtiest source, tar sands, much like Canada’s oil is. The difference between Canada and Venezuela is twofold: first, that whereas Canada is a vassal-state of the US empire and so its aristocracy is allied with America’s aristocracy (which controls America’s Government), Venezuela isn’t. And, second, that whereas Venezuela has a monoeconomy that’s based on oil (which accounts for around 95% of Venezuela’s exports), Canada does not.

Saudi Arabia used to be the top foreign source of oil imported into the US, but now it’s only a very weak second-place to Canada in this, exporting only 21% as much oil to the US as does Canada. This is a huge decline for the Sauds.

Whereas Saudi oil is the world’s most “light” or cleanest and least-costly to produce and therefore has the lowest “carbon footprint” of any oil, Canada and Venezuela have the most “heavy” or dirtiest and most-costly to produce and therefore have the highest “carbon footprint” of all the world’s oils.

(NOTE: There are many different ranking-systems for the ‘average’ cost per barrel of oil produced, such as this and this and these, but all tend to vastly underestimate in order to continue the case for fossil fuels. The BBC once noted that its calculation-system “only covers the cost of production, not the cost of exploration and development.” And it also ignored the cost of transit. It also ignored environmental costs. It also ignored the costs to taxpayers for the many subsidies they pay in order for the fossil-fuels investors to continue investing in those companies. The environmental site “The Energy Mix” headlined in April 2018, “Ditched Bitumen Desperately Seeks True Commitment” and reported that fewer and fewer investors were continuing to trust the industry’s reported numbers regarding the costs of tar-sands oils. Also, on 11 February 2019, they headlined “Trans Mountain’s Fee Plan for Fossil Customers Represents $2-Billion Taxpayer Subsidy”. But, mostly, the heavy taxpayer subsidizations to the fossil-fuels industries are ignored, both by consumers and by investors. Realistically, the tar-sands oils in both Canada and Venezuela are costing far more than any per-barrel oil price that’s below $100. They are money-losers, but bring lots of money to the ‘right’ people.)

So: the US is replacing the world’s cleanest oil with the world’s filthiest oil, and that’s not only from Canada but also from Venezuela. However, because the US aristocracy want to take over Venezuela, the US Government now is set to zero-out oil imports from Venezuela, so as to increase the pressure on Venezuela’s Government to place in charge there a leader who will do America’s bidding. Canada has been working right alongside the US to achieve that objective, and will probably be supplying to the US much (if not all) of the 16,889 bpd oil that currently has been supplied by the other producer of very dirty oil: Venezuela. The US produces fracked oil, which is dirty but not as dirty as that from Canada and Venezuela. The US, Canada, and Venezuela, have been committed to ignoring the global warming problem. To the extent that the problem becomes globally recognized, the oil-production in all three of those countries will decline in its marketable price even more than will the oil-production in other countries (especially than Saudi Arabia’s oil-production, since that’s the cleanest); and, so, the profits from those dirty oils will quickly (especially for Canada and Venezuela, where it has already happened) turn into losses. All three governments — Venezuela, Canada, and US — are trying to postpone that, till as late a time as possible.

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Venezuela: From Oil Proxy to the Bolivarian Movement and Sabotage. Abysmal Poverty under US Proxy Rule (1918-1998)

The Historical Levels of Poverty in Venezuela, Prior to the Bolivarian Revolution. Interview with Michel Chossudovsky

Warfare Tools

Michel Chossudovsky talks to Bonnie Faulkner on Guns and Butter.

We discuss the economic and political crisis in Venezuela, its history as an oil proxy nation since the discovery of oil in 1918, through successive dictatorships, coups d’etats, a fake nationalization of the oil industry, the Chavista movement and destabilization through financial warfare, with a special emphasis on Michel Chossudovsky’s personal experience there conducting a study on poverty in 1975 as Advisor to the Venezuelan Minister of Planning.

The study commissioned by the Ministry of Planning (CORDIPLAN) (involving an interdiscilinary research team) headed by Michel Chossudovsky was entitled: “Venezuela: La Mapa de la Pobreza”.  (Venezuela: The Poverty Map)

The report provided detailed estimates of poverty, focussing on nutrition, education, health, housing, employment and  income distribution.

It also addressed the role of government policy. Venezuela’s oil wealth was not used to build schools and hospitals. The oil surplus was largely recycled into the hands of the oil giants and the local elites.

Upon its release, the draft report was confiscated by the Minister of Planning. It was subsequently  shelved on orders of the Cabinet (Consejo de Ministros) of President Carlos Perez.

Michel Chossudovsky brought it out as a book in 1978, which created a bombshell. It dispelled the myth of “La Venezuela Millionaria”.

In the period prior to the Bolivarian Revolution, extending into the 1990s, the levels of poverty were abysmally high.

“More than 70 percent of the Venezuelan population did not meet minimum calorie and protein requirements, while  approximately 45 percent were suffering from extreme undernourishment.

More than half of Venezuelan children suffered from some degree of malnutrition.

Infant mortality was exceedingly high.

23 percent of the Venezuelan population was illiterate. The rate of functional illiteracy was of the order of 42%.

One child in four was totally marginalized from the educational system (not even registered in the first grade of primary school).

More than half the children of school age never entered high school. 

A majority of the population had little or no access to health care services.  

Half the urban population had no access to an adequate system of running water within their home.

Unemployment was rampant. 

More than 30 percent of the total workforce was unemployed or underemployed, while 67 percent of those employed in non-agricultural activities received a salary which did not enable them to meet basic human needs (food, health, housing, clothing, etc.). 

Three-quarters of the labor force were receiving revenues below the  minimum subsistence wage.”

(Michel Chossudovsky, excerpts from La Miseria en Venezuela, Vadell, Caracas, 1978, translated from Spanish)

The objectives of the US led Coup:

Install a US proxy regime,

Confiscate the country’s extensive oil wealth (Venezuela has the largest oil reserves Worldwide),

Impoverish the Venezuelan people.

 

TRANSCRIPT

 This is Guns and Butter

Michel Chossudovsky: I think concretely also we understood that poverty was not the result of a scarcity of resources, because this was an oil-producing economy, but all the oil revenues were going into private hands. Of course, the big-oil U.S. was behind it. But what we understood was that it was the governments which were responsible for poverty.

I’m Bonnie Faulkner. Today on Guns and Butter, Michel Chossudovsky. Today’s show: Venezuela: From Oil Proxy to the Bolivarian Movement and Sabotage. Michel Chossudovsky is an economist and the Founder, Director and Editor of the Center for Research on Globalization, based in Montreal, Quebec. He is the author of 11 books including The Globalization of Poverty and the New World Order, War and Globalization: The Truth Behind September Eleventh and America’s War on Terrorism. Today we discuss the economic and political crisis in Venezuela, its history as an oil proxy nation since the discovery of oil in 1918, through successive dictatorships, the Chavista movement and destabilization, with a special emphasis on Michel Chossudovsky’s personal experience there conducting a study on poverty as Advisor to the Minister of Planning.

Bonnie Faulkner: Michel Chossudovsky, welcome.

Michel Chossudovsky: I’m delighted again to be on Guns and Butter.

Bonnie Faulkner: The president of Venezuela’s National Assembly since February 5th, Juan Guaidó, declared that he has temporarily assumed presidential powers, promising to hold free elections and end Nicolas Maduro’s “dictatorship.” President Trump announced that the U.S. would recognize Juan Guaidó as the legitimate president of Venezuela. According to The Wall Street Journal, Vice President Mike Pence called Guaidó the night before his announcement and pledged that the Trump administration would support him. Trump refused to rule out military action. In your recent article, Regime Change and Speakers of the Legislature: Nancy Pelosi vs. Juan Guaidó, Self-proclaimed President of Venezuela, you intimate that Trump’s declaration might constitute a dangerous precedent for him. Why?

Michel Chossudovsky: Well, ironically, the position of Speaker of the National Assembly of Venezuela, which is held by Juan Guaidó, is in some regards comparable to that of the Speaker of the U.S. House of Representatives and, of course, the leader of the majority party, the Democrats, which is currently held by Nancy Pelosi. There are certain differences from the constitutional standpoint, but what President Trump has intimated in declaring that the Speaker of the National Assembly of Venezuela is the interim president of Venezuela is tantamount to saying, “Hey, Donald Trump, what about Nancy Pelosi?” Somebody might intimate, either a U.S. politician including perhaps even President Maduro of Venezuela, “We would like Nancy Pelosi to be the President of the United States, and then, of course, we’ll go to the UN Security Council to have it endorsed.”

That illustrates the ridicule of political discourse but also the shear fantasy of U.S. foreign policy, that they should provide legitimacy to a Speaker of the House because they don’t like the President. Well, I don’t like the president of the United States of America and a lot of people don’t like him, but do we want to have Nancy Pelosi as our interim president? That, in fact, is something which could evolve in the current context of confrontation between President Trump and the Democratic Party, which now controls the U.S. House of Representatives.

Bonnie Faulkner: It looks like the Democrats in Congress are also threatening President Maduro. The House Foreign Affairs Committee has tweeted out, “We refuse to recognize the legitimacy of Maduro’s presidency. That’s why members are joining to introduce legislation to support the people of Venezuela and hold the illegitimate president accountable for the crisis he created.” So this is a bipartisan effort to unseat Maduro.

Michel Chossudovsky: Precisely. It is a novelty in relation to regime change. We have military coups in Venezuela going back to the early 20th century – a whole bunch of military coups. We have color revolutions, which instigate protest movements. That is already ongoing in Venezuela. Then we have this new formula of intimating that we don’t like the President; have him replaced by the Speaker of the House. And that’s, of course, a very dangerous discourse because, as I mentioned, it could backlash onto President Trump himself.

Bonnie Faulkner: Venezuela’s crisis came before the UN Security Council on Saturday, but they took no action because there was no agreement. Russia and China backed Maduro but France, Britain, Spain and Germany said they would recognize Juan Guaidó as president unless Venezuela calls a new presidential election within eight days. So here we have European nations demanding that Venezuela hold another election. Did Nicolas Maduro win the presidency of Venezuela democratically or not?

Michel Chossudovsky: He won the presidency of Venezuela democratically with a large majority. Conversely, France’s President Macron also won the presidential election with a rather feeble majority and nobody is questioning Macron’s presidency. Well, in fact, some people are because we have the Yellow Vest movement throughout France. That doesn’t seem to be making the headlines anymore and people are endorsing President Macron.

Well, there are several issues. These European leaders don’t have the support of their respective populations. In Venezuela support for President Maduro is divided, but that’s I think something that happens in a large number of countries. It’s not any different. The opposition is controlling the National Assembly but nonetheless, President Maduro gets a majority of support of the Venezuelan population.

The fact of the matter is that all these leaders in Europe are, first of all, caving in to U.S. foreign policy; they are essentially behaving as U.S. proxies. At the same time, their behavior and management of the republics that they represent, not including the United Kingdom, which is also in a big mess – well, one might say, how can they get away with this? Under a constitutional democracy, how is it that they could actually support the United States in calling for the Speaker of the National Assembly of Venezuela to become president of the country? It’s an absurd proposition, and that this would then get to the United Nations Security Council is even more absurd.

What should get to the United Nations Security Council is the mode of interference in the internal affairs of a sovereign country through the financing of opposition groups, the financing of terrorists and so on who are involved in triggering the protest movement and so on. It’s an evolving situation. It has certain features resembling in fact the Euromaidan in Ukraine. And, of course, the end objective is to unseat the president.

Now, he has very strong grassroots support because the Bolivarian Revolution has indeed led to major changes in the country, major achievements, under very contradictory circumstances as well as divisions within the Bolivarian movement.

I have been going back and forth to Venezuela for a very long period since I started very early in my career when I became Advisor to the Minister of Planning in the Carlos Andrés Pérez government of the mid-‘70s. I know the country inside-out.

It’s a very complex process, and I think people have to understand first of all that Venezuela has the largest oil reserves worldwide – more than Saudi Arabia – both traditional crude as well as tar sands, which are extensive but also very easy to manage and produce compared to those of Canada, for instance. What is at stake there is the battle for oil.

Historically, Venezuela has been an oil economy from its inception in 1918 when oil was discovered in the Maracaibo Bay. Then you had a whole series of military dictators.

The most prominent was, of course, Juan Vicente Gómez, who was really a proxy of the United States and big oil.

So big oil has controlled this country from the early 20th century and it was only in the ‘90s with the Bolivarian Revolution that they actually started to repeal this control of big oil with the government of Chávez, which essentially started to implement some major changes and shifts in the nature of state management, but under very contradictory circumstances, which I guess we’ll be discussing.

Bonnie Faulkner: How did you first get involved in Venezuela? Did you first go there in 1975, and under what auspices?

Michel Chossudovsky: Actually, one of my close friends when I was studying at the University of Manchester in economics was a person named Gumersindo Rodriguez. Now, Gumersindo Rodriguez was a bit older than I. He was active in the MIR, Movimiento Izquierda Revolucionaria, which was a leftist faction of the Democratic Action Party, Acción Democratica. He had close links to one of the prominent presidents, which was Romulo Betancourt, (left) but at the same time he was – to some extent the MIR were considered as renegades.

He went off to study in the UK and then when he returned and a new Acción Democratica government was formed he became Minister of Planning. And then he called me up and we met in New York. He said, “Would you like to come down, etc., to Caracas to work for the Planning Ministry as my Advisor?” I accepted and I went down in mid-1975 during the school break at the University of Ottawa.

Initially he wanted me to write his speeches, so I started writing his speeches. After a while I said, “Listen, Gumersindo, I would like to do something more substantive and set up a research group on poverty in this country, which is a serious issue.” So he said, “Okay, Michel. Go ahead. Set up the group. You have all the resources you need.”

I set up a group of about half-a-dozen people with consultants at the university and so on. I was a young researcher. It was a very challenging project. Very carefully we looked at concepts of what defines the standard of living, in other words, nutrition, education, health, employment, income distribution, the environment, the access to running water, the levels of malnutrition. We defined what was called a minimum family income, and this was supported with very careful analysis at the statistical level. I had a professor in nutrition at the university who advised me on various aspects.

This report was done in three months. It was a big push. I had to go back to Ottawa to the university in September where I was teaching economics, so we managed to finish the first draft of the report in a matter of months. We came up with incredible results, that the abysmal levels of poverty, largely basing our analysis on national statistics, the various surveys which were available, household budget surveys, the census data and also the input of a large number of intellectuals and so on. But not so much field work because simply we didn’t really have the time to do that. But we came up with results.

I think concretely also we understood that poverty was not the result of a scarcity of resources,because this was an oil-producing economy, but all the oil revenues were going into private hands. Of course, the big-oil U.S. was behind it. But what we understood was that it was the governments which were responsible for poverty because they weren’t recycling the oil revenues to a societal project. They weren’t using the oil revenues to finance education, health and so on, and the levels of unemployment were exceedingly high and so on.

Now, this is the background of poverty which prevailed when the Bolivarian Revolution occurred. I should mention that much of our data was based on the 1970s, but the 1980s were far worse, because then you had what was called El Caracazo in 1989, which was a process of economic and social collapse. It was instigated by the IMF. It led to hyperinflation, so it was a sort of classical neo-liberal intervention with strong economic medicine [shock therapy] where the prices of consumer goods went sky high. That happened in 1989.

Now, what I think is very important to underscore is that Venezuela in the 1970s and ‘80s was a very poor country with a lot of resources, namely oil, and that oil went into private hands. That was despite the fact that the oil industry was nationalized in 1975. Now, I should mention that when I arrived at the Ministry of Planning in 1975, that coincided more or less with the nationalization of the oil industry. But it was a fake nationalization.

Bonnie Faulkner: How do you mean a fake nationalization?

Michel Chossudovsky: Well, legally it was nationalization, but it was ultimately understood that the big oil companies were complicit in this nationalization and that they would get all the benefits and so on. And then also when it was nationalized, of course, there were payments to the oil companies. It was implemented by the government of Carlos Andrés Pérez and there was no question of actually saying, “Well, we’ve got the oil; what are we going to do with it?” The pattern of appropriation continued, the corruption within the state apparatus and so on.

Ironically, I was asked to draft a text which was to be used for the nationalization speech, which was a very important document, because it defined, what are you doing to do with the oil. Idrafted an analysis of this, essentially saying the following: that the oil revenues would be recycled to a societal project alleviating poverty. It was explained conceptually that the oil money now belongs to the country and not to the oil companies, and consequently this is the avenue that we choose.

There was a drafting committee and they contacted me. I knew all these people; they were on the same floor in the Ministry of Planning building. But then the nationalization speech was read and published, and it was simply political rhetoric. It didn’t have any substantive perspective as to how these oil revenues would be used to improve the livelihood of the Venezuelan people, and that is something which Chavez actually formulated many years later. The Bolivarian Revolution said, yes, the oil is going to improve the conditions of the Venezuelan population and particularly the people who are below the poverty line.

Now, I should mention and that’s so important, we undertook an estimate of undernourishment, people who do not meet minimum calorie requirements, and we arrived at figures in excess of 70% of the Venezuelan population. That was part of the report which I submitted to the government at the time. I contacted my friend [medical doctor] at the university who specialized in nutrition and said, “This seems to be horrendously high.” His response, “No. You’re absolutely on. Your estimates are on the whole conservative.” He had focused also on the impacts on child malnutrition and so on. We had estimates of that as well from secondary sources.

That was the picture which existed in the mid-70s in Venezuela, an exceedingly poor country with tremendous wealth. That tremendous wealth, of course, was being appropriated and the elites in Venezuela were, of course, complicit in the role of the oil companies and the United States. The Rockefellers were involved. I knew about this because I was also very close to the Minister of Planning.

Now, what happened to our report? That’s very important. We submitted the report. I went back to Canada and my colleagues submitted the report to the minister. In fact, what happened is the moment I had instructed my colleague to have copies made of the report and to circulate this report within the ministries. Immediately upon having the photocopied 20 or 30 copies of the report the driver of the Minister of Planning – he [the Minister] was a very powerful figure – came in and confiscated everything. They confiscated everything. Then the team was dismissed and then when I returned to Caracas in early ’76 I still had an office but I was all by myself and, in fact, I had absolutely no functions or activities assigned to me. My team had been dispersed. They were still there, we still spoke, but we were not working as a team anymore.

What has happened is, first, that report was confiscated by the Minister of Planning and then it was shelved by the Council of Ministers of the Carlos Andrés Pérez government. The Council of Ministers reviewed it and said, “No, we don’t want it.”

The reasons they didn’t want it wasn’t the figures on poverty; it was how we analyzed the role of the state.

The  state creates poverty.

Mind you, we have the same thing in the United States of America. The state creates poverty. Why? Because it spends more than $700 billion on so-called defense.

So we have that logic, but it was very clear that that kind of analysis could not go public. It couldn’t go public. It was only a couple of years later that I took the report and I brought it out as a book. It was published in 1978 and it became an immediate best seller. The first edition was sold out in nine days. It was adopted at the colleges and universities and high schools across Venezuela because it broke a myth. It broke the myth of what they call La Venezuela Miliónaria, that this was a rich country, sort of the Latin Saudi Arabia so to speak. But the social realities were otherwise.

Now when we look at what is happening in Venezuela today and where the U.S. policymakers say, “We want to come to the rescue of the people who have been impoverished,” this is a nonsensical statement. The history of Venezuela was a history of poverty right until Chavez became president. They retained that level of poverty and exclusion. Not to say that there aren’t very serious contradictions within the Bolivarian movement; that’s another issue.

I think that we have to assess what Venezuela was historicallystarting with the dictatorships throughout – the last dictatorship was repealed in 1958. That was the dictatorship of Pérez Jiménez (left). But then you have a sort of bipartisan framework between what was called Acción Democratica, Democratic Action, and Copei, which were the Christian Democrats. It was a bipartisan structure very similar to that of the United States, going from one to the other and largely serving the interests of the elites rather than the broader population.

Bonnie Faulkner: You have said that Venezuela in 1918, basically, when oil was discovered, it became an oil colony. What was Venezuela like before oil was discovered? Do you have any idea?

Michel Chossudovsky: It was essentially an agrarian society, which was dominated by landlords. There were regional powers. What in Latin America are called los caudillos. In other words, these were essentially landlords and leaders in various regions of Venezuela, and it was largely an agrarian society producing coffee and cacao.

In fact, they would say, if somebody becomes a big landlord or a Caudillo, they would call him a Gran Cacao, which indicated that cacao (cocoa) was a – you could say that Venezuela was a cash crop economy, exporting coffee and cocoa to the Western markets, very similar to what we have in Central America, for instance.

Of course, it still had the legacy of Simon Bolivar in Caracas, an urban society which goes back to the Spanish colony, but it didn’t really have any particular momentum in terms of wealth formation until the emergence of oil in 1918. That is when U.S. big oil became involved in Venezuela, and it was essentially an oil colony of the United States, and a very important oil colony of the United States due to geography as well, because it’s not in the Middle East; it’s right there, very close to the United States.

So that was really ultimately the transition and that’s where, first of all, we saw more of the centralization of political power within the country and the development of an elite which were serving the interests of the oil companies.

Bonnie Faulkner: But then even before oil was discovered in 1918, Venezuela was still controlled by the elites. Was there crushing poverty then, as well?

Michel Chossudovsky: Well, there was certainly crushing poverty during that period, but what I’m suggesting there is that that crushing poverty was not alleviated with the discovery of oil. What happened is that the discovery of oil first of all created conditions of displacement of the agrarian economyAgricultural production started to decline dramatically, and oil became essentially the sole industry in the country. There has been, or there was during the Bolivarian period under Chavez, concern that the rural economy had been more or less abandoned, and that was also the consequences of big oil.

Bonnie Faulkner: So then in 1992, Hugo Chavéz stages a coup d’état. Could you talk about Venezuela under Hugo Chavéz? Now, you’ve met him personally, haven’t you?

Michel Chossudovsky: Yes, I met him personally, rather briefly, when I attended the sessions of the Latin American Parliament. I think what was striking was that, first of all, he acknowledged the report which was published as a book entitled in Spanish, La Miseria en Venezuela, and he also intimated he would like me to get involved in an update of that – well, it wouldn’t be an update – a contemporary review of poverty, so that we could actually compare poverty in the 1970s to poverty in the early 2000s.

That proposal was discussed but it never really got off the ground. Had I been involved in doing a new poverty analysis, it would, of course, have been done in a very, very different way to what we did in the 1970s. But I still think that the analysis has to be made. The historical levels of poverty are there, and I had the opportunity of undertaking the study and releasing that information to the broader public in Venezuela.

As I mentioned, that destroyed a myth, the narrative that Venezuela in relation to other countries in Latin America was a rich country. It wasn’t a rich country. It was a country with tremendous wealth and a poor population with serious social divisions and high levels of inequalityThat is what U.S. Foreign policy wants to restore. They want to restore Venezuela as a subordinate country with a poor population and elites that are aligned with the United States. That is the nature of the crisis which is ongoing today in Venezuela.

Bonnie Faulkner: Well, now, how would you assess the effect that Hugo Chavéz and his government had on Venezuela?

Michel Chossudovsky: This is a very complex process, because when Chavéz arrived to power initially, his first presidency was in 1999, and he became President in 1999 and then he continued again in 2007 until his death in 2013. The nature of the Venezuelan state apparatus was such that it was very difficult to start implementing reforms within the state apparatus. I knew that from the very beginning when I put together the team of people. I had a representative from the Ministry of Health and it turned out that she was sustaining essentially an elitist vision of health, and eventually I asked her to withdraw from the research group.

What Hugo Chavéz inherited was a structure of government which was very much still centered on the previous periods and required tremendous reform. You couldn’t simply go in and start instructing the officials to do this and that. There had to be a major reform of the state apparatus.

Now, what he did instead was to create projects which were parallel to the state system. Those were called the Misiones. They had also sort of grassroots. So there was a gradual process of reform of the state apparatus and at the same time there were activities which were grassroots which took place outside the realm let’s say of ministerial politics. They were geared towards literacy, education, health. They had tremendous support also from the Cuban doctors. In some regards, these were very successful undertakings.

I should mention from my own understanding is that there were serious divisions within the Bolivarian movement and I think also mistakes from the point of view as far as Chavez is concerned. From my standpoint, one of the biggest mistakes was to have, at an earlier period created, a United Socialist Party rather than a coalition. In other words, the intent of Chavéz was to create a political party which would be the United Socialist Party of Venezuela, of which he was also the leader, rather than create a coalition of parties which would gather different segments of Venezuelan society. So the thing became very polarized.

I should say there were divisions within the Chavista movement. There was also corruption within the Chavista movement. It was very difficult for the state to disassociate itself with the Venezuelan lobby groups, which were the rich families of Venezuela. But nonetheless, the results of this process were historically significant because first of all, the oil industry was already nationalized – well, it was nationalized by Carlos Andrés Pérez – but it was never really applied as a national process. And what Chavéz did was essentially to render this nationalization of petroleum as an active and key component in the recycling of revenue into the financing of social projects rather than into private hands. And that, of course, was ongoing. And the country had the resources to undertake these projects.

So that is the background. I should mention that – and that’s a separate issue – that there were already attempts to destabilize Chavéz from the presidency right from the outset, and it came as a result of the National Endowment for Democracy and its various actions in Venezuela in support of so-called opposition groups. I recall, again, and I should mention it, that in the 2012 elections, which Chavéz won, there was an attempt by various foundations, the NED but also Germany’s Hanns Seidel Foundation to support the opposition candidate. So there was direct interference in the electoral process.

Bonnie Faulkner: Were you saying that one of the ways that Hugo Chavéz tried to implement reform was not through reforming the government itself, but by creating a sort of a parallel structure. Is that what you were saying?

Michel Chossudovsky: Yes, that was certainly what occurred. Reforms were taking place within the state apparatus and the parallel structures were also there, and they were eventually linked up. But at the outset it was very difficult for the new government to come in and introduce major reforms in the state apparatus.

They then had a process of constitutional reform, which Chavéz implemented, and they created a constitutional assembly, which was the object of controversy. We’re dealing with a very complex process, because throughout his presidency up to his death there were conspiracies to destabilize the government, and there were people within the government who were playing a dirty game. I think that was clear. In fact, even to some extent Chavéz let that happen. There were contracts allocated with the Ministry of Public Works and so on. There were various cases of corruption within the Bolivarian government and there were serious problems regarding the structure of the state apparatus.

But it’s not to say that this was not known. But at the same time there was a grassroots movement. There was a process of democratization at the grassroots. I think that what was achieved was remarkable within a relatively short period of time. The historical levels of poverty were alleviated.

Bonnie Faulkner: It sounds like corruption played a very big part in Venezuela before Hugo Chavéz’s coup d’état and after his coup d’état when he got in charge. Many people are claiming that Venezuela’s economic collapse presently is linked to its socialist policies. What are Venezuela’s socialist policies and what do you make of this claim?

Michel Chossudovsky: I think that’s a little bit of a misnomer because, first of all, Venezuela was not a socialist economy. It was essentially a capitalist economy. What happened is that the government nationalized certain key industries. It created what were called the Communal Councils, it had the Misiones, which were largely focusing on issues of housing, healthcare and so on, but the economy was essentially a capitalist economy, a market economy. If you go to Caracas you see it. I think there was a socialist process which had been implemented but by no means was this a full-fledged socialist economy.

I think if we compare it to other Latin American countries, Venezuela in a sense would divorce itself from the so-called Washington consensus, namely the economic and social policies imposed by the Bretton Woods Institutions, e.g., World Bank, International Monetary Fund. It had its own structure for participatory democracy which were in some regards quite successful, particularly the Misiones.

In fact, the failures that we’re now seeing, rising consumer prices, hyperinflation, those are engineered. They’re engineered by manipulations of the foreign exchange market.We know this kind of mechanism because it’s what characterized the last months of the Chilean government of Salvador Allende in 1973 (left), where persistently the national currency was under attack leading to hyperinflation and so on and so forth. We might say that it’s part of the IMF, World Bank, Federal Reserve “remedy,” or action. It’s very easy for Wall Street to destabilize currencies. It’s been applied in many, many countries.

I recall when I was in Peru in the early ‘90s when President Alberto Fujimori came to power that in a single day the price of fuel went up 30 times, and that was following the IMF measures. Well, in the case of Venezuela, the manipulation is ongoing. The exchange rate is manipulated, and it is triggering poverty. There’s no question about it, that these acts of sabotage and financial warfare are creating abysmal poverty.

But that was not the result of a government policy; it was the result of intervention in the currency markets by speculators, and this is something which is well known and understood. If you want to destroy a country, you destroy its currency.

I should mention that I’ve had meetings with people at the Central Bank – not recently, but when I went to Venezuela some seven or eight years ago, I had those meetings at the Central Bank. The Central Bank of Venezuela did not really implement significant changes in the management of monetary policy which would avert this kind of action. But what I can say quite rightly is that if there’s poverty today in Venezuela it is not due to the Bolivarian Revolution; it is due to the fact that there are measures of sabotage and financial warfare which have been introduced with the view to undermining the Bolivarian missions in health, housing and so on simply by manipulating the currency markets, and that generates hyperinflation.

Bonnie Faulkner: How exactly does Wall Street attack a nation’s currency? What about the currency in Venezuela? Is it what you have referred to as a dollarized economy or not?

Michel Chossudovsky: I think it is a dollarized economy. That even prevailed before Chavez arrived to power. In other words, there’s a dual currency system. There’s the bolivar on the one hand, the national currency, and the dollar, and there’s a black market. And when there’s a black market which is unregulated – they never really manage to regulate the black market – when it’s unregulated well that’s what happens. People save in dollars because the national currency is very unstable and so on.

I think there were failures on the part of the Central Bank of Venezuela to ultimately come to terms with this issue. One of the reasons for that is that many of the people who were there, whom I knew, were of the old guard. They’re trained in monetary policy and macroeconomics and there was a need for some very careful reforms within the monetary system and mechanisms to protect the currency. That was fundamental.

Now, there’s also another element which played a role and that was the collapse of the oil market. That’s clear. The fact that the oil prices are exceedingly low backlashes on oil-producing countries, but that also affected other countries.

Bonnie Faulkner: And that oil collapse was manipulated, correct?

Michel Chossudovsky: The oil market collapse was manipulated, yes. I think the oil collapse was manipulated. There are mechanisms – I don’t want to get into that because it’s rather technical – but there are mechanisms of pushing prices of commodities up or down through speculative actions on the commodity exchanges. It’s well known and understood. There are ways of pushing currencies up and down through speculative actions. We know that from the 1997 Asian crisis, how the South Korean won collapsed. Those mechanisms are there. In economic jargon we call that naked short selling. When you introduce a naked short selling operation against a currency, it collapses, but there are ways for governments to actually avoid this short selling of their currencies. They have to regulate the currency market and unfortunately, in Venezuela that did not take place. Some proposals were put forth but they were never effective in protecting the currency.

Bonnie Faulkner: I’ve read that Venezuela is in debt to the tune of 60 billion. Does that debt have to be repaid in dollars?

Michel Chossudovsky: I presume that is a dollar debt, yes. It’s an external debt.

Bonnie Faulkner: How would they earn the dollars – by selling the oil?

Michel Chossudovsky: They’d sell the oil. I remind you that 60 billion dollars of external debt is not unduly high when you have oil revenues, but I expect that that debt was also accumulated with the collapse of the oil market. But, of course, yes, there are debt servicing obligations to repay that debt – of course, if there are problems of debt repayment then the creditors can implement measures which are detrimental to the Venezuelan economy and they’re doing it. There are a whole series of acts of sabotage. Just recently we see that the Bank of England has said, no, you can’t repatriate the gold that you’ve deposited in the Bank of England. They had gold deposited in the Bank of England which belongs to Venezuela and the response of the Bank of England said no, you can’t have it back. That’s another act of sabotage.

Bonnie Faulkner: It looks like Citgo, Venezuela’s main foreign energy asset, could be a target of the overthrow of Maduro, with the money from oil exports being sent to Guaidó instead of the Maduro government. I read that John Bolton was setting that out as a priority.

Michel Chossudovsky: Yeah, well, this is something which could have devastating consequences. But I don’t see it. First of all, there are institutional mechanisms as to how Guaidó would actually take control of these revenues. He’s not a government; he’s an individual. But what I think that what they’re doing now is to engineer mechanisms which will further destabilize the Venezuelan economy and also trigger some form of regime change.

Now, there’s another thing I’d like to mention, which I think is very important. What has been the response to this crisis? I saw recently a statement by a number of progressive authors and it essentially says that there should be mediation or negotiation between both sides. I think that that is something which is rather much misunderstood. There cannot be mediation between the government of Venezuela and a proxy for U.S. intelligence, which is Guaidó. In other words, what is being proposed is essentially to have a negotiated settlement between both sides, between the interim president, Juan Guaidó and the President of Venezuela, Maduro. In fact, Maduro has fallen for that proposal and has had I think some discussions with Guaidó or said he’s open to having conversations with him.

I think it should be obvious that this proposal is redundant and contradictory, because the leader of the National Assembly Juan Guaidó is a U.S. proxy. He’s an instrument of a foreign government who will then be negotiating on behalf of Washington.

Now, there’s always been negotiations within the Bolivarian process with opposition groups. They’ve always negotiated and discussed. But here, we’re dealing with something which is quite specific. You can’t negotiate with Juan Guaidó. He’s a U.S. proxy. And you can’t negotiate with the U.S. government. Well, there are internal divisions within Venezuela, but the President of Venezuela cannot negotiate with individuals who are committed to overthrowing the constitutionally elected President and replacing him with the Speaker of the House.

I think in Western countries we have to certainly take a stance and simply reject this opening by our governments, which are supporting the Speaker of the House and portraying him as an interim president of Venezuela. That’s the stance that we have to take.

There are certainly avenues of debate and negotiation within Venezuela, but it is very difficult for that to occur with a country which is under attack, which is the result of sabotage, financial warfare in the currency markets, threats to confiscate the revenues occurring from their oil exports, freezing the gold reserves in the Bank of England or freezing the accounts of assets overseas and so on. That is what has to stop and then there may be a period of transition where the country can restore its activities of normal government.

Bonnie Faulkner: Michel Chossudovsky, thank you.

Michel Chossudovsky: Thank you. Delighted to be on the program. Our thoughts today are with the people of Venezuela.

I’ve been speaking with Michel Chossudovsky. Today’s show has been: Venezuela: From Oil Proxy to the Bolivarian Movement and Sabotage.

Professor Michel Chossudovsky is the Founder, Director and Editor of the Center for Research on Globalization, based in Montreal, Quebec.

The Global Research website, globalresearch.ca, publishes news articles, commentary, background research and analysis.

Michel Chossudovsky is the author of eleven books including The Globalization of Poverty and the New World Order and War and Globalization: The Truth Behind September Eleventh. Visit globalresearch.ca.

Guns and Butter is produced by Bonnie Faulkner, Yarrow Mahko and Tony Rango. Visit us at gunsandbutter.org to listen to past programs, comment on shows, or join our email list to receive our newsletter that includes recent shows and updates. Email us at faulkner@gunsandbutter.org.

Follow us on Twitter @gandbradio 

British analyst: Venezuelan patriotism, Russian support will be crucial to defending Venezuela from US aggression

ST

03 February 2019

British political analyst says that Venezuelan patriotism and Russian support will be crucial to defending Venezuela from the aggression of the United States that is now intent on reasserting its authority in the international arena at the expense of the Venezuelan people after its defeat in Syria.

Dr. Marcus Papadopoulos’s remarks came during an interview with the Syria Times e-newspaper about the reasons behind Washington’s currently attempts to engineer a coup in Venezuela and how Caracas can prevent U.S. from reaching its goals.

“There is more than one reason behind Washington’s attempts to engineer a coup in Venezuela.  I hold the view that there are two key reasons accounting for America’s brazen act of aggression against Venezuela’s sovereignty, and that these are equal in significance to each other,” the analyst said.

He made it clear that one of the reasons for why the Americans are currently trying to overthrow the democratically elected president of Venezuela, Nicolas Maduro is the fact that Venezuela’s oil industry is nationalised and Caracas pursues an independent foreign policy.

“This deprives American energy companies, such as ExxonMobil, from taking control of Venezuela’s energy sector and exploiting it for their own gains,” Dr. Papadopoulos added, asserting that the US has an unquenchable thirst for oil and has, historically, gone to monstrously criminal lengths to secure control of, and access to, the largest oil producing markets in the world, most notably in the Middle East.

“With Venezuela geographically situated in what is, traditionally speaking, America’s sphere of influence, policy-makers in Washington are determined to take control of the country’s oil and gas industry, even if this means using military force to do so, as the Americans did in Iraq,” the analyst stated.

He emphasized that Venezuela is a major energy player in global affairs since it is , according to some sources, home to the world’s largest crude-oil reserves, while the country also sits on one of the largest reserves of natural gas in the world.

The close relationship between Venezuela and Russia

The other reason accounting for the US’ interference in the Latin American country, concerns the close relationship between Venezuela and Russia, according to the analyst, who  indicated that for some 20 years now, Caracas and Moscow have cultivated intimate relations with each other in the political, economic and military spheres.

“Today, Russia is the leading supplier of military hardware to Venezuela, and late last year reports surfaced about Russian plans to construct an air base for itself on the Venezuela island of La Orchila which would host Russian strategic bombers capable of delivering nuclear payloads,” Dr. Papadopoulos said

He went on to say:

“The prospect of a Russian military base in Venezuela, and one that can accommodate Russian nuclear bombers, is something that the Americans will bitterly resist.  Whilst Russia is only responding to the increasingly dangerous presence of NATO on its western border, coupled with both the threatening American missile shield in Eastern Europe and Washington’s diabolical withdrawal from the Intermediate-Range Nuclear Forces Treaty, the US is determined that its tormenting behaviour on the international stage remains unimpeded hence why the Americans are trying to overthrow President Maduro and replace him with the pro-American puppet, Juan Guaido.”

The analyst stressed that a Venezuela led by the legally and electorally illegitimate Guaido would end political, economic and military co-operation with Russia and make the Latin American country, once again, subservient to the US.

In a response to a question about how Caracas can avoid a military confrontation with U.S, Dr. Papadopoulos said: “Russia is the only country that can either deter Washington from embarking on a military confrontation with Venezuela or indirectly defeat an American military campaign against Caracas, with the aim of overthrowing the legal government of President Maduro.”

“I draw a comparison with how Russia came to the aid of Cuba, following the Cuban Revolution, when the country was faced with imminent American military aggression with the objective of overthrowing Fidel Castro.  In that situation, Moscow ultimately ensured the survival of the Cuban Revolution and, with it, the independence and sovereignty of Cuba.  Russia will be all-important in defending Venezuela and the Venezuelan people from the clutches of Messrs. Trump and Bolton.”

Besides the essential support of Russia, both economically and militarily, the prowess of the National Bolivarian Armed Forces of Venezuela and the patriotism and fiercely independent nature of the Venezuelan people  are main obstacles for US quick military intervention against Caracas, as stated by Dr. Papadopoulos, who indicated that the US could ignite a war in Venezuela in which large parts of the Venezuela population and the economic infrastructure of the country are consumed by a fireball.

U.S. has no moral compunction in starting a war

“The US has no moral compunction in starting a war – either through an invasion or a bombing campaign, or through supporting illegally armed groups – so as to seize control of a country’s economic and military infrastructure and impose a compliant government in the country’s capital. Washington rained down death and destruction on Syria but the Syrian people, aided by Russia, thwarted American ambitions in the country.  Because of their defeat in Syria, the Americans are angry – very, very angry, and are now intent on reasserting their authority in the international arena at the expense of the Venezuelan people.  So the world could, at some point, be witness to Washington raining down death and destruction on Venezuela and its people,” the analyst affirmed.

He, in addition, made it clear that economic sanctions are one of the most potent weapons in the US’ armoury hence the Venezuelan Government could be vulnerable to Washington’s endeavours to instigate a coup through economic strangulation of Venezuela’s economy.

“However, providing that Venezuela still keeps producing and selling oil and gas, and providing that Moscow is able to economically assist Caracas, then Venezuela stands a reasonably good chance of prevailing against American aggression,” concluded, Dr. Papadopoulos, the founder and editor of Politics First magazine.

On January, 24, 2019, an open letter- signed by 70 scholars and Latin America, political science, and history as well as filmmakers, civil society leaders, and other experts- was issued in opposition to ongoing intervention by the United States in Venezuela.

The letter underlined that actions by the Trump administration and its allies in the hemisphere are almost certain to make the situation in Venezuela worse, leading to unnecessary human suffering, violence, and instability.

 

Interviewed by: Basma Qaddour  

Related Articles

What the Press Hides From You About Venezuela — A Case of News-Suppression

February 07, 2019

by Eric Zuesse for The Saker Blog

What the Press Hides From You About Venezuela — A Case of News-Suppression

INTRODUCTION

This news-report is being submitted to all U.S. and allied news-media, and is being published by all honest ones, in order to inform you of crucial facts that the others — the dishonest ones, who hude such crucial facts — are hiding about Venezuela. These are facts that have received coverage only in one single British newspaper: the Independent, which published a summary account of them on January 26th. That newspaper’s account will be excerpted here at the end, but first will be highlights from its topic, the official report to the U.N. General Assembly in August of last year, which has been covered-up ever since. This is why that report’s author has now gone to the Independent, desperate to get the story out, finally, to the public:

THE COVERED-UP DOCUMENT

On 3 August 2018, the U.N.’s General Assembly received the report from the U.N.s Independent Expert on the Promotion of a Democratic and Equitable International Order, concerning his mission to Venezuela and Ecuador. His recent travel though both countries focused on “how best to enhance the enjoyment of all human rights by the populations of both countries.” He “noted the eradication of illiteracy, free education from primary school to university, and programmes to reduce extreme poverty, provide housing to the homeless and vulnerable, phase out privilege and discrimination, and extend medical care to everyone.” He noted “that the Bolivarian Republic of Venezuela, and Ecuador, both devote around 70 per cent of their national budgets to social services.” However (and here, key paragraphs from the report are now quoted):

22. Observers have identified errors committed by the Chávez and Maduro Governments, noting that there are too many ideologues and too few technocrats in public administration, resulting in government policies that lack coherence and professional management and discourage domestic investment, already crippled by inefficiency and corruption, which extend to government officials, transnational corporations and entrepreneurs. Critics warn about the undue influence of the military on government and on the running of enterprises like Petróleos de Venezuela. The lack of regular, publicly available data on nutrition, epidemiology and inflation are said to complicate efforts to provide humanitarian support.

23. Meanwhile, the Attorney General, Tarek Saab, has launched a vigorous anticorruption campaign, investigating the links between Venezuelan enterprises and tax havens, contracting scams, and deals by public officials with Odebrecht. It is estimated that corruption in the oil industry has cost the Government US$ 4.8 billion. The Attorney General’s Office informed the Independent Expert of pending investigations for embezzlement and extortion against 79 officials of Petróleos de Venezuela, including 22 senior managers. The Office also pointed to the arrest of two high-level oil executives, accused of money-laundering in Andorra. The Ministry of Justice estimates corruption losses at some US$ 15 billion. Other stakeholders, in contrast, assert that anti-corruption programmes are selective and have not sufficiently targeted State institutions, including the military. …

29. … Over the past sixty years, non-conventional economic wars have been waged against Cuba, Chile, Nicaragua, the Syrian Arab Republic and the Bolivarian Republic of Venezuela in order to make their economies fail, facilitate regime change and impose a neo-liberal socioeconomic model. In order to discredit selected governments, failures in the field of human rights are maximized so as to make violent overthrow more palatable. Human rights are being “weaponized” against rivals. Yet, human rights are the heritage of every human being and should never be instrumentalized as weapons of demonization. …

30. The principles of non-intervention and non-interference in the internal affairs of sovereign States belong to customary international law and have been reaffirmed in General Assembly resolutions, notably [a list is supplied]. …

31. In its judgment of 27 June 1986 concerning Nicaragua v. United States, the International Court of Justice quoted from [U.N.] resolution 2625 (XXV): “no State shall organize, assist, foment, finance, incite or tolerate subversive, terrorist or armed activities directed towards the violent overthrow of the regime of another State, or interfere in civil strife in another State”. …

36. The effects of sanctions imposed by Presidents Obama and Trump and unilateral measures by Canada and the European Union have directly and indirectly aggravated the shortages in medicines such as insulin and anti-retroviral drugs. To the extent that economic sanctions have caused delays in distribution and thus contributed to many deaths, sanctions contravene the human rights obligations of the countries imposing them.Moreover, sanctions can amount to crimes against humanity under Article 7 of the Rome Statute of the International Criminal Court. An investigation by that Court would be appropriate, but the geopolitical submissiveness of the Court may prevent this.

37. Modern-day economic sanctions and blockades are comparable with medieval sieges of towns with the intention of forcing them to surrender. Twenty-first century sanctions attempt to bring not just a town, but sovereign countries to their knees. A difference, perhaps, is that twenty-first century sanctions are accompanied by the manipulation of public opinion through “fake news”, aggressive public relations and a pseudo-human rights rhetoric so as to give the impression that a human rights “end” justifies the criminal means. …

39. Economic asphyxiation policies are comparable to those already practised in Chile, the Democratic People’s Republic of Korea, Nicaragua and the Syrian Arab Republic. In January 2018, Middle East correspondent of The Financial Times and The Independent, Patrick Cockburn, wrote on the sanctions affecting Syria:

There is usually a pretence that foodstuffs and medical equipment are being allowed through freely and no mention is made of the financial and other regulatory obstacles making it impossible to deliver them. An example of this is the draconian sanctions imposed on Syria by the US and EU which were meant to target President Bashar al-Assad and help remove him from power. They have wholly failed to do this, but a UN internal report leaked in 2016 shows all too convincingly the effect of the embargo in stopping the delivery of aid by international aid agencies. They cannot import the aid despite waivers because banks and commercial companies dare not risk being penalised for having anything to do with Syria. The report quotes a European doctor working in Syria as saying that “the indirect effect of sanctions … makes the import of the medical instruments and other medical supplies immensely difficult, near impossible”. In short: economic sanctions kill. …

41. Bearing in mind that Venezuelan society is polarized, what is most needed is dialogue between the Government and the opposition, and it would be a noble task on the part of the Secretary-General of the United Nations to offer his good offices for such a dialogue. Yet, opposition leaders Antonio Ledezma and Julio Borges, during a trip through Europe to denounce the Government of the Bolivarian Republic of Venezuela, called for further sanctions as well as a military “humanitarian intervention”. …

44. Although the situation in the Bolivarian Republic of Venezuela has not yet reached the humanitarian crisis threshold, there is hunger, malnutrition, anxiety, anguish and emigration. What is crucial is to study the causes of the crisis, including neglected factors of sanctions, sabotage, hoarding, black market activities, induced inflation and contraband in food and medicines.

45. The “crisis” in the Bolivarian Republic of Venezuela is an economic crisis, which cannot be compared with the humanitarian crises in Gaza, Yemen, Libya, the Syrian Arab Republic, Iraq, Haiti, Mali, the Central African Republic, South Sudan, Somalia, or Myanmar, among others. It is significant that when, in 2017, the Bolivarian Republic of Venezuela requested medical aid from the Global Fund to Fight AIDS, Tuberculosis and Malaria, the plea was rejected, because it ”is still a high-income country … and as such is not eligible”. …

46. It is pertinent to recall the situation in the years prior to the election of Hugo Chávez. 118 Corruption was ubiquitous and in 1993, President Carlos Pérez was removed because of embezzlement. The Chávez election in 1998 reflected despair with the corruption and neo-liberal policies of the 1980s and 1990s, and rejection of the gulf between the super-rich and the abject poor.

47. Participatory democracy in the Bolivarian Republic of Venezuela, called “protagónica”, is anchored in the Constitution of 1999 and relies on frequent elections and referendums. During the mission, the Independent Expert exchanged views with the Electoral Commission and learned that in the 19 years since Chávez, 25 elections and referendums had been conducted, 4 of them observed by the Carter Center. The Independent Expert met with the representative of the Carter Center in the Bolivarian Republic of Venezuela, who recalled Carter’s positive assessment of the electoral system. They also discussed the constitutional objections raised by the opposition to the referendum held on 30 July 2017, resulting in the creation of a Constitutional Assembly. Over 8 million Venezuelans voted in the referendum, which was accompanied by international observers, including from the Council of Electoral Specialists of Latin America.

48. An atmosphere of intimidation accompanied the mission, attempting to pressure the Independent Expert into a predetermined matrix. He received letters from NGOs asking him not to proceed because he was not the “relevant” rapporteur, and almost dictating what should be in the report. Weeks before his arrival, some called the mission a “fake investigation”. Social media insults bordered on “hate speech” and “incitement”. Mobbing before, during and after the mission bore a resemblance to the experience of two American journalists who visited the country in July 2017. Utilizing platforms such as Facebook and Twitter, critics questioned the Independent Expert’s integrity and accused him of bias, demonstrating a culture of intransigence and refusal to accept the duty of an independent expert to be neutral, objective, dispassionate and to apply his expertise free of external pressures. …

67. The Independent Expert recommends that the General Assembly: (g) Invoke article 96 of the Charter of the United Nations and refer the following questions to the International Court of Justice: Can unilateral coercive measures be compatible with international law? Can unilateral coercive measures amount to crimes against humanity when a large number of persons perish because of scarcity of food and medicines? What reparations are due to the victims of sanctions? Do sanctions and currency manipulations constitute geopolitical crimes? (h) Adopt a resolution along the lines of the resolutions on the United States embargo against Cuba, declaring the sanctions against the Bolivarian Republic of Venezuela contrary to international law and human rights law. …

70. The Independent Expert recommends that the International Criminal Court investigate the problem of unilateral coercive measures that cause death from malnutrition, lack of medicines and medical equipment. …

72. The Independent Expert recommends that, until the International Court of Justice and the International Criminal Court address the lethal outcomes of economic wars and sanctions regimes, the Permanent Peoples Tribunal, the Russell Tribunal and the Kuala Lumpur War Crimes Commission undertake the task so as to facilitate future judicial pronouncements.

On January 26th, Britain’s Independent headlined “Venezuela crisis: Former UN rapporteur says US sanctions are killing citizens”, and Michael Selby-Green reported that:

The first UN rapporteur to visit Venezuela for 21 years has told The Independent the US sanctions on the country are illegal and could amount to “crimes against humanity” under international law.

Former special rapporteur Alfred de Zayas, who finished his term at the UN in March, has criticized the US for engaging in “economic warfare” against Venezuela which he said is hurting the economy and killing Venezuelans.

The comments come amid worsening tensions in the country after the US and UK have backed Juan Guaido, who appointed himself “interim president” of Venezuela as hundreds of thousands marched to support him. …

The US Treasury has not responded to a request for comment on Mr de Zayas’s allegations of the effects of the sanctions programme.

US sanctions prohibit dealing in currencies issued by the Venezuelan government. They also target individuals, and stop US-based companies or people from buying and selling new debt issued by PDVSA or the government.

The US has previously defended its sanctions on Venezuela, with a senior US official saying in 2018: “The fact is that the greatest sanction on Venezuelan oil and oil production is called Nicolas Maduro, and PDVSA’s inefficiencies,” referring to the state-run oil body, Petroleos de Venezuela, SA.

Mr De Zayas’s findings are based on his late-2017 mission to the country and interviews with 12 Venezuelan government minsters, opposition politicians, 35 NGOs working in the country, academics, church officials, activists, chambers of commerce and regional UN agencies.

The US imposed new sanctions against Venezuela on 9 March 2015, when President Barack Obama issued executive order 13692, declaring the country a threat to national security.

The sanctions have since intensified under Donald Trump, who has also threatened military invasion and discussed a coup. …

Despite being the first UN official to visit and report from Venezuela in 21 years, Mr de Zayas said his research into the causes of the country’s economic crisis has so far largely been ignored by the UN and the media, and caused little debate within the Human Rights Council.

He believes his report has been ignored because it goes against the popular narrative that Venezuela needs regime change. …

The then UN high commissioner, Zeid Raad Al Hussein, reportedly refused to meet Mr de Zayas after the visit, and the Venezuela desk of the UN Human Rights Council also declined to help with his work after his return despite being obliged to do so, Mr de Zayas claimed. …

Ivan Briscoe, Latin America and Caribbean programme director for Crisis Group, an international NGO, told The Independent that Venezuela is a polarising subject. … Briscoe is critical of Mr de Zayas’s report because it highlights US economic warfare but in his view neglects to mention the impact of a difficult business environment in the country. … Briscoe acknowledged rising tensions and the likely presence of US personnel operating covertly in the country. …

Eugenia Russian, president of FUNDALATIN, one of the oldest human rights NGOs in Venezuela, founded in 1978 before the Chavez and Maduro governments and with special consultative status at the UN, spoke to The Independent on the significance of the sanctions.

In contact with the popular communities, we consider that one of the fundamental causes of the economic crisis in the country is the effect that the unilateral coercive sanctions that are applied in the economy, especially by the government of the United States,” Ms Russian said.

She said there may also be causes from internal errors, but said probably few countries in the world have suffered an “economic siege” like the one Venezuelans are living under. …

In his report, Mr de Zayas expressed concern that those calling the situation a “humanitarian crisis” are trying to justify regime change and that human rights are being “weaponised” to discredit the government and make violent overthrow more “palatable”….

Venezuela has the largest oil reserves in the world and an abundance of other natural resources including gold, bauxite and coltan. But under the Maduro government they’re not easily accessible to US and transnational corporations.

US oil companies had large investments in Venezuela in the early 20th century but were locked out after Venezuelans voted to nationalise the industry in 1973.

Other than readers of that single newspaper, where has the public been able to find these facts? If the public can have these facts hidden from them, then how much trust should the public reasonably have in the government, and in the news-media?

(NOTE: Zeid Raad Al Hussein, who “reportedly refused to meet Mr de Zayas after the visit,” is Prince Zeid Raad Al Hussein, a Jordanian Prince. Jordan is a vassal-state in the U.S. empire. But Prince Hussein is a Jordanian diplomat who served as United Nations High Commissioner for Human Rights from 2014 to 2018 — hardly an unbiased or independent person in such a supposedly nonpartisan role.)

(NOTE: Here is the garbage that a reader comes to, who is trying to find online Mr. de Zayas’s report on this matter: https://documents-dds-ny.un.. As intended, the document remains effectively hidden to the present day. Perhaps the U.N. needs to be replaced and located in Venezuela, Iran, or some other country that’s targeted for take-over by the people who effectively own the United States Government and control the U.N.’s bureaucracy. The hiding of this document was done not only by the press but by the U.N. itself.)

(NOTE: On January 23rd, Germany’s Die Zeit headlined

“Christoph Flügge: ‘I am deeply disturbed’: The U.N. International Criminal Court Judge Christoph Flügge Accuses Western Nations of Threatening the Independence of the Judges”. Flügge especially cited U.S. President Trump’s agent, John Bolton. That same day, the Democratic Party and Labour Party organ, Britain’s Guardian, bannered “International criminal court: UN court judge quits The Hague citing political interference”. This news-report said that, “A senior judge has resigned from one of the UN’s international courts in The Hague citing ‘shocking’ political interference from the White House and Turkey.” The judge especially criticised Bolton: “The American security adviser held his speech at a time when The Hague was planning preliminary investigations into American soldiers who had been accused of torturing people in Afghanistan. The American threats against international judges clearly show the new political climate. It is shocking. I had never heard such a threat.” Flügge said that the judges on the court had been “stunned” that “the US would roll out such heavy artillery”. Flügge told the Guardian: “It is consistent with the new American line: ‘We are No 1 and we stand above the law’.”)

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

 

Venezuela – The Straw that Breaks the Empire’s Back?

February 07, 2019

by Peter Koenig for The Saker Blog

Venezuela – The Straw that Breaks the Empire’s Back?

Venezuela in the limelight, on practically all the written, audio and visual mainstream media, as well as alternative media. A purposeful constant drip of outright lies and half-truths, “fake news”, as well as misleading information of all shades and hues about Venezuela is drumming our brains, slowly bending our minds towards believing that – yes, the US has a vital interest in meddling in Venezuela and bringing about “regime change”, because of primarily, the huge reserves of oil, but also of gold, coltan and other rare minerals; and, finally, simply because Washington needs full control of its “backyard”. – BUT, and yes, there is a huge BUT, as even some of the respected progressive alternative media pretend to know: Amidst all that recognition of the AngloZionist empire’s evil hands in Venezuela, their ‘but’ claims that Venezuela, specifically Presidents Chavez and now Maduro, are not blameless in their ‘economic chaos’. This distorts already the entire picture and serves the empire and all those who are hesitant because they have no clue, whom to support in this antagonistic US attempt for regime change.

For example, one alternative news article starts, “It is true that some of Venezuela’s economic problems are due to the ineptitudes of the Bolivarian government’s “socialist command” economy, but this overlooks the role played by the United States, the United Nations, and the European Union….”. Bingo, with such a low-blow beginning, the uninformed reader is already primed to ‘discount’ much of the interference by Washington and its minions. Some of the-so-called progressive writers have already been brain-smeared, by calling Nicolás Maduro a “dictator”, when in fact, there is hardly any country farther away from a dictatorship than Venezuela.

In the last 20 years and since Comandante Hugo Chavez Frias was first elected in 1998 and came to power in 1999, Venezuela had another 25 fully democratic elections, of which 6 took place in the last year and a half. They were all largely observed by the US based Carter Institute, the Latin American CELAC, some were even watched by the European Union (EU), the very vassal states that are now siding with Washington in calling President Maduro an illegitimate dictator – and instead, they side with and support the real illegitimate, never elected, US trained and appointed, Juan Guaidó. Former President Carter once said, of all the elections he and his Institute observed, the ones in Venezuela were by far the most transparent and democratic ones. By September 2017, the Carter Center had observed 104 elections in 39 countries.

Despite this evidence, Washington-paid and corrupted AngloZionist MSM are screaming and spreading lies, ‘election fraud’; and Nicolás Maduro is illegal, a dictator, oppressing his people, depriving them of food and medication, sowing famine – he has to go. Such lies are repeated at nauseatum. In a world flooded by pyramid-dollars (fake money), the presstitute media have no money problem. Dollars, the funding source for the massive lie-propaganda, are just printed as debt, never to be repaid again. So, why worry? The same Zionists who control the media also control the western money machines, i.e. the FED, Wall Street, the BIS (Bank for International Settlement, the so-called Central bank of central banks), the European Central Bank, the Bank of England and the banks of London. The western public, armchair warriors, all the way to caviar socialists, believe these lies. That’s how our unqualified brains apparently work.

A recent independent poll found that 86% of all Venezuelans, including from the opposition, want no interference by the US and her puppet allies, but want to remain a sovereign state, deciding themselves on how to resolve their internal problem – economics and otherwise.

Let me tell you something, if Mr. Maduro would be a dictator – and all the diabolical adjectives that he is smeared with were to apply, he would have long ago stopped the western propaganda machine, which is the western controlled media in Venezuela; they control 90% of the news in Venezuela. But he didn’t and doesn’t, because he believes in freedom of speech and freedom of the ‘media’ – even if the “media” are really nothing more than abject western lie-machines presstitute. Mr. Maduro is generous enough not to close them down – which any dictator – of which there are now many in Latin America (take a pick: Argentina, Chile, Ecuador, Brazil, Colombia, Paraguay, Uruguay, Guatemala, Honduras….) would have done long ago.

***

From the very beginning, when Hugo Chavez was first elected in 1998, Washington attempted to topple him to bring about “régime change”. The first real coup attempt took place on 11 April 2002. Under full command by Washington, Chavez was ousted for less than 2 days, when an on-swell of people and the vast majority of the military requested his reinstatement. Chavez was brought back from his island seclusion and, thus, the directly Washington-led coup d’état was defeated (“The Revolution Will Not Be Televised”). But the pressure mounted with economic sanctions becoming ever bolder and, in the case of Venezuela, they had severe economic and humanitarian impacts because Venezuela imports close to 90% of her food and medication – still today – and most of it from the US.

Both Chavez and Maduro had very little leeway of doing differently what they have already done. Sanctions, boycotts, outside money manipulations, driving inflation to astronomical levels and constant smear propaganda, these predicaments are biting hard. The US has a firm grip on Venezuela’s dollar dependency.

Last week, Washington confiscated about US$ 23 billion Venezuela’s reserve money in US banks, blocked them from use by the legitimate Maduro government, and, instead, handed them to their US-appointed, puppet, never elected, “president”, Juan Guaidó. – He is now able to use Venezuela’s money in his US-EU-and Lima-Group supported “shadow” government. Will he dare? – I don’t think so. However, he has already invited US petro, companies to come to Venezuela and invest in and take over the petrol industry. Of course, it will not happen, as President Maduro stays in power, firmly backed by the military.

All of this sounds like a bad joke. Did you ever heard of Juan Guaidó, before the US and her European vassals almost unanimously and obediently aped Washington in supporting him?

Likewise, the Bank of England withheld 1.2 billion dollars’ worth of Venezuelan reserve gold, refusing to respond to the Maduro Government’s request to return the gold to Caracas. Both cases represent an extreme breach of confidence. Up to now, it was ethically, commercially and financially unthinkable that reserve money and gold deposited in foreign banks would not be safe from hooligan theft – because that’s what it is, what the US is doing, stealing other countries money that was deposited in good fate in their banks.

In a recent interview with RT, President Maduro, said there was absolutely no need for “humanitarian aid”, as the UN suggested, prompted by the US. This so-called humanitarian aid has everywhere in the world only served to infiltrate ‘foreign and destabilizing’ elements into countries, just look at Syria, Libya, Iraq, Afghanistan, to name just a few. While the US$ 23 billion blocked in New York banks could have supplied Venezuela with 20 years-worth of medication for the Venezuelan people, Maduro asserted, Venezuela has enough liquidity to feed and medicate her people.

However, what this latest Trump plunder (the money and gold confiscation) does, is hammering one more nail in the western monetary system’s suicide coffin. It sends an ever-clearer signal to the rest of the world, to those that haven’t noticed yet, the AngloZionist empire cannot – I repeat – CANNOT – be trusted. Ever. And the European Union is intrinsically and “vassalically” linked to the Washington rogue state – not to be trusted either. There is virtually no circumstance under which a countries’ assets in western foreign lands – as bank deposits, or foreign investments – are safe. It will prompt a move away from the dollar system, away from the western (also entirely privately-owned) SWFT international transfer system by which sanctions can be enacted.

Indeed, the Russia and China and much of the SCO (Shanghai Organization Cooperation) members are no longer dealing in US dollars but in their own currencies. We are talking about half the world’s population broke free from the dollar hegemony. Europe has started a half-assed attempt to circumvent the dollar and SWIFT system for dealing with Iran. Europe’s special purpose vehicle, or SPV, is called INSTEX — short for Instrument in Support of Trade Exchanges. It is a project of Germany, France and the UK, suspiciously chaired by the latter, to be endorsed by all 28 EU members.

It aims in a first instance at shipping “humanitarian aid” to Iran. Similarly, to Venezuela, Iran’s foreign Minister, Javad Zarif, after learning about the details, considered the conditions of INSTEX as insulting and rejected any dealings with Europe under this system. Iran, he said, does not need “humanitarian aid”, not from Europe, not from anybody. In the meantime, what was to be expected, has already happened. The Trump Administration issued a stern warning of “sanctions” to the EU, if they would attempt to deal with Iran outside of the dollar system. Europe is likely caving in, as they always do.

***

Back in Venezuela, the NED (National Endowment for Democracy), the extended arm of the CIA, has for the last two decades trained funded and infiltrated ‘traitor’ agents into Venezuela, with the goal to assist the opposition to foment unrest, to carry out assassinations and other ‘false flags’, and to simply create chaos and unrest. However, some of these agents are also lodged in Venezuela’s financial institutions, as the Fifth Column, where they sabotage – often with threats – any economic policies that could rescue Venezuela from its economic predicament.

In June 2017, I was privileged to be a member of an economic advisory team to Mr. Maduro. During three days of intense discussions with government, a number of potential short- medium and long-term solutions emerged. They were well received by Mr. Maduro and his economic team. What became of these recommendations? – Well, maybe there are strong foreign-directed forces at play to prevent their implementation.

Clearly, any accusation that the Maduro Government may bear the blame for some of the economic chaos, have to be vigorously rejected. Mr. Maduro has very little space to maneuver the economy other than what he is already doing. His actions are severely limited by the ever-stronger squeeze by western claws.

With or without Venezuela’s new crypto currency, the oil-based Petro, the Venezuelan economy, including a major proportion of her imports, is strongly linked to the US dollar. With military threats and sanctions left and right, there is little that the Government can do in the immediate future to become autonomous. Yes, Russia and especially China will most likely help with balance of payment support loans, with investments in the oil industry to ease Venezuela’s US-dollar debt burden and vamp up oil production; and in the medium and longer run they may also help boosting Venezuela’s agricultural sector towards 100% food self-sufficiency.

What is the real reason, you may ask, behind Trump’s intense ‘coup d’état’ attempt – aka, Bolton, Pompeo and Elliott Abrams (the ‘regime change’ envoy), or the diabolical troika’s killer mission?

  • Is it oil and other natural riches, like gold, coltan, diamonds and many more rare minerals? Venezuela with some 301,000 MMbbl (billions of barrels) of known reserves has about 12% more hydrocarbon reserves than Saudi Arabia. Shipping from the Gulf to Texas refineries takes 40-45 days and the risk of passing through the Iran-controlled strait of Hormuz. Delivering oil from Venezuela to Texas takes some 2-4 days.
  • Is it that Venezuela committed a mortal sin when circumventing the petro-dollar, when trading her hydrocarbons, notably with China and Russia in other currencies, like the gold-convertible yuan? – Remember, Saddam Hussein and Muamar Gadhafi attempted similar dollar-escaping actions – and look what it brought them. The US-dollar hegemony depends very much on oil and gas trade in US dollars, as per an agreement of the seventies between the US and Saudi Arabia, head of OPEC.
  • Is it that Washington cannot tolerate any socialist or socialist leaning country in its “backyard”? – Cuba and Nicaragua beware!
  • Is Venezuela a crucial stepping stone to fully dominate Latin America and her resources? – And, hence, a step closer to ‘full power dominance’ of the world?
  • Or all of the above?

I believe it’s all of the above, with a strong accent on Venezuela’s abandoning the US-dollar as hydrocarbon trading currency – putting the dollar-hegemony even more at risk. Once the dollar ceases to be the main reserve currency, the US economy will slowly collapse – what it is already doing. Twenty years ago, the US-dollar dominated world reserve coffers with about 90%. Today that proportion has sunk to less than 60%. The dollar is rapidly being replaced by other currencies, notably the Chinese yuan.

Now let’s cut to the chase. – It is clear that the Trump Administration with these stupid actions of dishing out sanctions left and right, punishing allies and foes alike, if they deal with Russia, Iran, or Venezuela – and this special blunt regime change aggression in Venezuela, nominating a 35 year old US puppet, trained in the US by CIA as Venezuela’s new ‘interim president’, confiscating Venezuela’s reserve assets in New York and London, stopping importing petrol from Venezuela and punishing anybody who imports Venezuelan oil – except, of course, Russia and China. The ‘might’ of the US stops short of interfering in these non-dollar deals. With these and more ridiculous actions and military threats – Washington is actually not only isolating itself, but is accelerating the fall of the US economy. Ever more countries are seeking alternative ways of doing business with currencies and monetary systems other than the dollar-based fraudulent SWIFT, and eventually they will succeed. All they need to do is joining the China-Russia-SCO system of transfer in their local currencies and the currencies of the eastern SCO block – and dedollarization is moving a step further ahead.

Dedollarization is the key to the end of the US (dollar) hegemony, of the US economic supremacy. The arrogant Trump, plus the impunity of the unfettered diabolical and outright dumb Bolton-Pompeo-Abrams approach of military threats and intimidations, may just make Venezuela the straw that breaks the Empire’s back.

Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog, the New Eastern Outlook (NEO); and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.

Peter Koenig is a Research Associate of the Centre for Research on Globalization.

Saker interview with Michael Hudson on Venezuela, February 7, 2019

February 06, 2019

[This interview was made for the Unz review]Saker interview with Michael Hudson on Venezuela, February 7, 2019

Introduction: There is a great deal of controversy about the true shape of the Venezuelan economy and whether Hugo Chavez’ and Nicholas Maduro’s reform and policies were crucial for the people of Venezuela or whether they were completely misguided and precipitated the current crises.  Anybody and everybody seems to have very strong held views about this.  But I don’t simply because I lack the expertise to have any such opinions.  So I decided to ask one of the most respected independent economists out there, Michael Hudson, for whom I have immense respect and whose analyses (including those he co-authored with Paul Craig Roberts) seem to be the most credible and honest ones you can find.  In fact, Paul Craig Roberts considers Hudson the “best economist in the world“!
I am deeply grateful to Michael for his replies which, I hope, will contribute to a honest and objective understanding of what really is taking place in Venezuela.
The Saker

The Saker: Could you summarize the state of Venezuela’s economy when Chavez came to power?

Michael Hudson: Venezuela was an oil monoculture. Its export revenue was spent largely on importing food and other necessities that it could have produced at home. Its trade was largely with the United States. So despite its oil wealth, it ran up foreign debt.

From the outset, U.S. oil companies have feared that Venezuela might someday use its oil revenues to benefit its overall population instead of letting the U.S. oil industry and its local comprador aristocracy siphon off its wealth. So the oil industry – backed by U.S. diplomacy – held Venezuela hostage in two ways.

First of all, oil refineries were not built in Venezuela, but in Trinidad and in the southern U.S. Gulf Coast states. This enabled U.S. oil companies – or the U.S. Government – to leave Venezuela without a means of “going it alone” and pursuing an independent policy with its oil, as it needed to have this oil refined. It doesn’t help to have oil reserves if you are unable to get this oil refined so as to be usable.

Second, Venezuela’s central bankers were persuaded to pledge their oil reserves and all assets of the state oil sector (including Citgo) as collateral for its foreign debt. This meant that if Venezuela defaulted (or was forced into default by U.S. banks refusing to make timely payment on its foreign debt), bondholders and U.S. oil majors would be in a legal position to take possession of Venezuelan oil assets.

These pro-U.S. policies made Venezuela a typically polarized Latin American oligarchy. Despite being nominally rich in oil revenue, its wealth was concentrated in the hands of a pro-U.S. oligarchy that let its domestic development be steered by the World Bank and IMF. The indigenous population, especially its rural racial minority as well as the urban underclass, was excluded from sharing in the country’s oil wealth. The oligarchy’s arrogant refusal to share the wealth, or even to make Venezuela self-sufficient in essentials, made the election of Hugo Chavez a natural outcome.

The Saker: Could you outline the various reforms and changes introduced by Hugo Chavez? What did he do right, and what did he do wrong?

Michael Hudson: Chavez sought to restore a mixed economy to Venezuela, using its government revenue – mainly from oil, of course – to develop infrastructure and domestic spending on health care, education, employment to raise living standards and productivity for his electoral constituency.

What he was unable to do was to clean up the embezzlement and built-in rake-off of income from the oil sector. And he was unable to stem the capital flight of the oligarchy, taking its wealth and moving it abroad – while running away themselves.

This was not “wrong”. It merely takes a long time to change an economy’s disruption – while the U.S. is using sanctions and “dirty tricks” to stop that process.

The Saker: What are, in your opinion, the causes of the current economic crisis in Venezuela – is it primarily due to mistakes by Chavez and Maduro or is the main cause US sabotage, subversion and sanctions?

Michael Hudson: There is no way that’s Chavez and Maduro could have pursued a pro-Venezuelan policy aimed at achieving economic independence without inciting fury, subversion and sanctions from the United States. American foreign policy remains as focused on oil as it was when it invaded Iraq under Dick Cheney’s regime. U.S. policy is to treat Venezuela as an extension of the U.S. economy, running a trade surplus in oil to spend in the United States or transfer its savings to U.S. banks.

By imposing sanctions that prevent Venezuela from gaining access to its U.S. bank deposits and the assets of its state-owned Citco, the United States is making it impossible for Venezuela to pay its foreign debt. This is forcing it into default, which U.S. diplomats hope to use as an excuse to foreclose on Venezuela’s oil resources and seize its foreign assets much as Paul Singer hedge fund sought to do with Argentina’s foreign assets.

Just as U.S. policy under Kissinger was to make Chile’s “economy scream,” so the U.S. is following the same path against Venezuela. It is using that country as a “demonstration effect” to warn other countries not to act in their self-interest in any way that prevents their economic surplus from being siphoned off by U.S. investors.

The Saker: What in your opinion should Maduro do next (assuming he stays in power and the USA does not overthrow him) to rescue the Venezuelan economy?

Michael Hudson: I cannot think of anything that President Maduro can do that he is not doing. At best, he can seek foreign support – and demonstrate to the world the need for an alternative international financial and economic system.

He already has begun to do this by trying to withdraw Venezuela’s gold from the Bank of England and Federal Reserve. This is turning into “asymmetrical warfare,” threatening what to de-sanctify the dollar standard in international finance. The refusal of England and the United States to grant an elected government control of its foreign assets demonstrates to the entire world that U.S. diplomats and courts alone can and will control foreign countries as an extension of U.S. nationalism.

The price of the U.S. economic attack on Venezuela is thus to fracture the global monetary system. Maduro’s defensive move is showing other countries the need to protect themselves from becoming “another Venezuela” by finding a new safe haven and paying agent for their gold, foreign exchange reserves and foreign debt financing, away from the dollar, sterling and euro areas.

The only way that Maduro can fight successfully is on the institutional level, upping the ante to move “outside the box.” His plan – and of course it is a longer-term plan – is to help catalyze a new international economic order independent of the U.S. dollar standard. It will work in the short run only if the United States believes that it can emerge from this fight as an honest financial broker, honest banking system and supporter of democratically elected regimes. The Trump administration is destroying illusion more thoroughly than any anti-imperialist critic or economic rival could do!

Over the longer run, Maduro also must develop Venezuelan agriculture, along much the same lines that the United States protected and developed its agriculture under the New Deal legislation of the 1930s – rural extension services, rural credit, seed advice, state marketing organizations for crop purchase and supply of mechanization, and the same kind of price supports that the United States has long used to subsidize domestic farm investment to increase productivity.

The Saker: What about the plan to introduce a oil-based crypto currency? Will that be an effective alternative to the dying Venezuelan Bolivar?

Michael Hudson: Only a national government can issue a currency. A “crypto” currency tied to the price of oil would become a hedging vehicle, prone to manipulation and price swings by forward sellers and buyers. A national currency must be based on the ability to tax, and Venezuela’s main tax source is oil revenue, which is being blocked from the United States. So Venezuela’s position is like that of the German mark coming out of its hyperinflation of the early 1920s. The only solution involves balance-of-payments support. It looks like the only such support will come from outside the dollar sphere.

The solution to any hyperinflation must be negotiated diplomatically and be supported by other governments. My history of international trade and financial theory, Trade, Develpoment and Foreign Debt, describes the German reparations problem and how its hyperinflation was solved by the Rentenmark.

Venezuela’s economic-rent tax would fall on oil, and luxury real estate sites, as well as monopoly prices, and on high incomes (mainly financial and monopoly income). This requires a logic to frame such tax and monetary policy. I have tried to explain how to achieve monetary and hence political independence for the past half-century. China is applying such policy most effectively. It is able to do so because it is a large and self-sufficient economy in essentials, running a large enough export surplus to pay for its food imports. Venezuela is in no such position. That is why it is looking to China for support at this time.

The Saker: How much assistance do China, Russia and Iran provide and how much can they do to help?  Do you think that these three countries together can help counter-act US sabotage, subversion and sanctions?

Michael Hudson: None of these countries have a current capacity to refine Venezuelan oil. This makes it difficult for them to take payment in Venezuelan oil. Only a long-term supply contract (paid for in advance) would be workable. And even in that case, what would China and Russia do if the United States simply grabbed their property in Venezuela, or refused to let Russia’s oil company take possession of Citco? In that case, the only response would be to seize U.S. investments in their own country as compensation.

At least China and Russia can provide an alternative bank clearing mechanism to SWIFT, so that Venezuela can by pass the U.S. financial system and keep its assets from being grabbed at will by U.S. authorities or bondholders. And of course, they can provide safe-keeping for however much of Venezuela’s gold it can get back from New York and London.

Looking ahead, therefore, China, Russia, Iran and other countries need to set up a new international court to adjudicate the coming diplomatic crisis and its financial and military consequences. Such a court – and its associated international bank as an alternative to the U.S.-controlled IMF and World Bank – needs a clear ideology to frame a set of principles of nationhood and international rights with power to implement and enforce its judgments.

This would confront U.S. financial strategists with a choice: if they continue to treat the IMF, World Bank, ITO and NATO as extensions of increasingly aggressive U.S. foreign policy, they will risk isolating the United States. Europe will have to choose whether to remain a U.S. economic and military satellite, or to throw in its lot with Eurasia.

However, Daniel Yergin reports in the Wall Street Journal (Feb. 7) that China is trying to hedge its bets by opening a back-door negotiation with Guaido’s group, apparently to get the same deal that it has negotiated with Maduro’s government. But any such deal seems unlikely to be honored in practice, given U.S. animosity toward China and Guaido’s total reliance on U.S. covert support.

The Saker: Venezuela kept a lot of its gold in the UK and money in the USA.  How could Chavez and Maduro trust these countries or did they not have another choice?  Are there viable alternatives to New York and London or are they still the “only game in town” for the world’s central banks?

Michael Hudson: There was never real trust in the Bank of England or Federal Reserve, but it seemed unthinkable that they would refuse to permit an official depositor from withdrawing its own gold. The usual motto is “Trust but verify.” But the unwillingness (or inability) of the Bank of England to verify means that the formerly unthinkable has now arrived: Have these central banks sold this gold forward in the post-London Gold Pool and its successor commodity markets in their attempt to keep down the price so as to maintain the appearance of a solvent U.S. dollar standard.

Paul Craig Roberts has described how this system works. There are forward markets for currencies, stocks and bonds. The Federal Reserve can offer to buy a stock in three months at, say, 10% over the current price. Speculators will by the stock, bidding up the price, so as to take advantage of “the market’s” promise to buy the stock. So by the time three months have passed, the price will have risen. That is largely how the U.S. “Plunge Protection Team” has supported the U.S. stock market.

The system works in reverse to hold down gold prices. The central banks holding gold can get together and offer to sell gold at a low price in three months. “The market” will realize that with low-priced gold being sold, there’s no point in buying more gold and bidding its price up. So the forward-settlement market shapes today’s market.

The question is, have gold buyers (such as the Russian and Chinese government) bought so much gold that the U.S. Fed and the Bank of England have actually had to “make good” on their forward sales, and steadily depleted their gold? In this case, they would have been “living for the moment,” keeping down gold prices for as long as they could, knowing that once the world returns to the pre-1971 gold-exchange standard for intergovernmental balance-of-payments deficits, the U.S. will run out of gold and be unable to maintain its overseas military spending (not to mention its trade deficit and foreign disinvestment in the U.S. stock and bond markets). My book on Super-Imperialism explains why running out of gold forced the Vietnam War to an end. The same logic would apply today to America’s vast network of military bases throughout the world.

Refusal of England and the U.S. to pay Venezuela means that other countries means that foreign official gold reserves can be held hostage to U.S. foreign policy, and even to judgments by U.S. courts to award this gold to foreign creditors or to whoever might bring a lawsuit under U.S. law against these countries.

This hostage-taking now makes it urgent for other countries to develop a viable alternative, especially as the world de-dedollarizes and a gold-exchange standard remains the only way of constraining the military-induced balance of payments deficit of the United States or any other country mounting a military attack. A military empire is very expensive – and gold is a “peaceful” constraint on military-induced payments deficits. (I spell out the details in my Super Imperialism: The Economic Strategy of American Empire (1972), updated in German as Finanzimperium(2017).

The U.S. has overplayed its hand in destroying the foundation of the dollar-centered global financial order. That order has enabled the United States to be “the exceptional nation” able to run balance-of-payments deficits and foreign debt that it has no intention (or ability) to pay, claiming that the dollars thrown off by its foreign military spending “supply” other countries with their central bank reserves (held in the form of loans to the U.S. Treasury – Treasury bonds and bills – to finance the U.S. budget deficit and its military spending, as well as the largely military U.S. balance-of-payments deficit.

Given the fact that the EU is acting as a branch of NATO and the U.S. banking system, that alternative would have to be associated with the Shanghai Cooperation Organization, and the gold would have to be kept in Russia and/or China.

The Saker:  What can other Latin American countries such as Bolivia, Nicaragua, Cuba and, maybe, Uruguay and Mexico do to help Venezuela?

Michael Hudson: The best thing neighboring Latin American countries can do is to join in creating a vehicle to promote de-dollarization and, with it, an international institution to oversee the writedown of debts that are beyond the ability of countries to pay without imposing austerity and thereby destroying their economies.

An alternative also is needed to the World Bank that would make loans in domestic currency, above all to subsidize investment in domestic food production so as to protect the economy against foreign food-sanctions – the equivalent of a military siege to force surrender by imposing famine conditions. This World Bank for Economic Acceleration would put the development of self-reliance for its members first, instead of promoting export competition while loading borrowers down with foreign debt that would make them prone to the kind of financial blackmail that Venezuela is experiencing.

Being a Roman Catholic country, Venezuela might ask for papal support for a debt write-down and an international institution to oversee the ability to pay by debtor countries without imposing austerity, emigration, depopulation and forced privatization of the public domain.

Two international principles are needed. First, no country should be obliged to pay foreign debt in a currency (such as the dollar or its satellites) whose banking system acts to prevents payment.

Second, no country should be obliged to pay foreign debt at the price of losing its domestic autonomy as a state: the right to determine its own foreign policy, to tax and to create its own money, and to be free of having to privatize its public assets to pay foreign creditors. Any such debt is a “bad loan” reflecting the creditor’s own irresponsibility or, even worse, pernicious asset grab in a foreclosure that was the whole point of the loan.

The Saker:  Thank you very much for taking the time to reply to my questions!

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