[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] O [/yt_dropcap]ne gets the impression that US President Donald Trump could lead his nation and world at large to a new world without conflicts. However, if he misleads the world by his mischief as a usual US leader, then, like his predecessors have done before him, would betray the humanity beyond Mideast and the humanity would be the silent victim to war mongers and looters.
US President Donald Trump has met Pope Francis on May 24 morning at the Vatican for a short private audience on the third leg of his overseas trip before going to Europe to conclude his madden tour as the custodian of White House. Trump is now due to meet Italy’s president and prime minister. He will then fly to Brussels for a NATO summit.
The US President arrived for the meeting along with his wife Melania, daughter Ivanka and Jewish son-in-law Jared Kushner after their visit to Israel. The meeting was keenly awaited as the two men have already clashed at a distance on issues including migration and climate change.
Trump and his entourage arrived at the Vatican n the morning just before 08:30 local time; the meeting was arranged last minute which resulted in the early start time. The US president was greeted by Archbishop Georg Ganswein, the head of the papal household, and escorted by the Swiss Guard from the Vatican courtyard to the offices of Pope Francis. Journalists who covered the initial greeting said the pair were cordial with each other. Trump told the Pope “it is a great honour”. The two men spoke privately for about 20 minutes before returning to a public arena to exchange gifts.
Though this is their first meeting, they’ve already sparred. During the election the Pope on a visit to the Mexico-US border said that people who only think of building walls instead of bridges were not Christians. Donald Trump described those comments as disgraceful, and accused the pontiff of being a pawn of the Mexican government. But on Wednesday both men were seeking to find common ground.
It is hard to think of two more contrasting characters than Pope Francis and President Trump. On one hand, the Jesuit who has made his mission the championing of the poor and dispossessed; on the other the property developer who has championed getting rich, and surrounded himself with billionaires in his cabinet. Interestingly, Trump gave the Pope a boxed set of writings by the black civil rights leader Martin Luther King. The Pope gave Trump a signed copy of a message he delivered for World Peace Day, along with some of his writings about the need to protect the environment. “Well, I’ll be reading them,” Trump told him.
Trump seemed subdued during their initial meeting, while Pope Francis was not as jovial as he sometimes is with world leaders. The two men appeared much more relaxed at the end of their 30-minute private meeting. He was granted a short private audience with the head of the Catholic Church on the latest leg of his overseas trip. The two men have in the past clashed on issues such as migration, climate change and a Mexico-US wall. On international affairs, their “exchange of views” covered the “promotion of peace in the world through political negotiation and interreligious dialogue”, and highlighted the need to protect Christian communities in the Middle East.
The Vatican said later that they shared a commitment to “life, and freedom of worship and conscience” and expressed hope that they can collaborate “in service to the people in the fields of healthcare, education and assistance to migrants”.
Saudi Arabia and Iran
Trump vowed to help Israelis and Palestinians achieve durable peace, as he ended the Middle East leg of his tour. The US leader began his foreign trip with a two-day stop in Saudi Arabia over the weekend, urging Muslim countries to take the lead in combating radicalization.
Western powers make maximum benefits of the illogical Saudi-Iran rift.
After the first leg of his trip in Saudi Arabia, President Trump seems to hope that Sunni Arab countries might be part of any solution between Israel and the Palestinians. Without doubt the Saudis and the Israelis are talking, because Iran is their shared enemy. But the Saudis have had their own Arab peace plan on the table for the last 15 years, offering full peace and recognition of Israel in return for the establishment of a Palestinian state on the entire territory of the West Bank and Gaza with its capital in East Jerusalem. That is something the current Israeli government is not prepared to concede.
Antipathy towards Iran is the one thing that Washington’s disparate allies in the region agree upon. So, bashing of Tehran has been a prominent theme for Trump both in Saudi Arabia and now in Israel. Hostility to Iran is the glue that binds what some would like to believe is an emerging coalition between Israel, Saudi Arabia and the smaller Gulf States together. But how far it really promises to shake up the sterile politics of the region is unclear.
A common purpose to contain Iran is one thing but can it really extend to bringing a new diplomatic dawn to the region? For Trump, criticising Tehran performs multiple functions. It allows him to sound tough on the world stage. Tougher than his predecessor, Barack Obama, who, he believes, signed one of the worst deals in history in reaching the nuclear accord with Iran.
It enables him to reassure both the Gulf Arabs and Israel at one and the same time. And it underscores the narrative of a common front emerging in the region that – at least according to the Trump administration – holds the enticing promise of a new dynamic in the log-jammed struggle between Israel and the Palestinians. And, of course, it also sends a warning signal to Tehran about aspects of its policy in the region that Washington sees as contrary to US interests.
It is also not a policy of nuance or one that contends with complex reality. How does it look providing ringing endorsements to the Saudis and selling them a fortune of weaponry, when they are engaged in a brutal war in Yemen?
The Trump government’s almost brash belief in the possibilities of a wider Middle East peace seems to be at variance with most experts who know the region well. They argue neither the Israelis nor the Palestinians are ready to make the hard compromises necessary to achieve a lasting peace.
Some have argued that rather than focusing on a comprehensive deal that would have to resolve the hard questions like Jerusalem and refugees, the goal should be less ambitious; an interim deal that might mark the re-starting of a longer term diplomatic process. But it is not clear yet if the new US administration has the patience for this kind of worthy diplomacy. And this brings us back to Iran. Just what is the Trump administration’s policy towards Tehran?
Indeed the re-election of Iran’s President Hassan Rouhani may complicate matters further. He was perceived as the more moderate candidate after all, even if the Supreme Leader and the Revolutionary Guard still retain a key grip on foreign policy.
President Rouhani is already encouraging some European politicians to talk of the search for an opening to Tehran. That may not go down well in Washington. But then there is the very complexity of the region that Trump’s rhetoric often overlooks.
Interestingly, the Iraqi government is now one of Washington’s main allies against so-called Islamic State. But Iran too is a strong supporter of Baghdad and has deployed militia forces and advisers on the ground to aid the war effort.
President George W Bush sponsored a peace conference in Annapolis in 2007, which for a while was hailed, in vain, as a major step towards the establishment of an independent Palestinian state alongside Israel. President Bill Clinton presided over the moment in 1993 at the White House when Yasser Arafat and Yitzhak Rabin exchanged a historic handshake and signed the Oslo peace agreement. At the end of his presidency in 2000, a make or break summit failed and was followed by years of violence and unrest. In recent times every American president also brings with him new hopes and fears for Israelis and Palestinians. In 2009 President Barack Obama trying to re-set relations with Arabs and Muslims. In the process he alienated Israelis and its leaders never forgave him. His first act as president was to appoint a Middle East envoy whose peace mission, in the end, failed.
Nobel foundations have played mischief by offering Obama the coveted Nobel Peace prize even before he could do nay thing meaningful in his presidency in the proper way. Nobel committee denied any chance for Middle East peace by almost imposing on him Peace Award that made him ineffective in solving the Mideast puzzle by establishing Palestine. Perhaps had he not got the Nobel Peace Award, Palestine would have become a sure reality as he supported the Palestine cause towards the end of tenure at White House. .
Now President Trump, who sees himself as the world’s best dealmaker, says he would like to pull off the world’s toughest deal. How quickly Trump would be able to get Israeli leadership on board to settle the world’s deadliest conflict in the name of Israel war on Palestine would determine the success of his efforts to end the blood bath in Palestine where Palestinians have been facing cruelty form Israel’s military.
The US leader began his foreign trip with a two-day stop in Saudi Arabia over the weekend, urging Muslim countries to take the lead in combating radicalization. In his final speech, at the Israel Museum in Jerusalem, President Trump also identified himself, his government and the USA four-square with Israel. He repeated, to lots of applause, that he would never let Iran have nuclear weapons. Israel has a substantial -illegally obtained from USA – and officially undeclared nuclear arsenal.
Trump became the first serving American president to visit the Western Wall in Jerusalem, the holiest place where Jews can pray. That is being taken by Jews as his support for Israel. Trump became the first serving American president to visit the Western Wall in Jerusalem, the holiest place where Jews can pray. That is being taken as support for Israel. The wall is in East Jerusalem, which Israel annexed after it was captured 50 years ago and which most of the world outside Israel regards as occupied land. Some will interpret the fact that the president declined the Israeli prime minister’s request to accompany him as a sign of support for the status quo view that it is occupied territory.
President Trump, in his speech, did not pick up the cue. After making many warm remarks about Israel, which earned him standing ovations, he said he believed that the Palestinian President, Mahmoud Abbas, was serious about making peace.
One pointer to a potential difference with Israel’s hawkish PM Netanyahu came at the museum. In his opening remarks, Netanyahu said that if the bomber in Manchester was Palestinian, and his victims were Israelis, the Palestinian Authority would be paying a stipend to his family. He was referring to a Palestinian Martyrs’ fund. It pays pensions to people it regards as victims of the occupation, including the families of individuals who have been killed attacking Israelis. There is also a fund to support Palestinians who have been imprisoned by Israel. The Palestinians have compared the payments to the salaries Israel pays to soldiers.
Senior Israeli politicians and officials in the room disagree. Netanyahu said earlier this year that President Abbas lied to Donald Trump when they met in the White House. That is an important disagreement. If President Trump’s hopes ever become negotiations about substance he will find that there are many others. The two sides are far apart on the main issues, like the future of east Jerusalem, the borders of a Palestinian state and the fate of Palestinian refugees.
President Trump brought with him to Jerusalem most of his top advisers, dozens of vehicles and his own helicopters. The White House booked the entire King David Hotel for the president and his entourage. The Israeli and Palestinian authorities cleared the main roads of Jerusalem and Bethlehem for the movements of his armed and mighty motorcade.
President Donald Trump has arrived in Brussels ahead of a NATO summit where he will push the security alliance’s 28 members to meet their spending obligations and do more to combat terrorism. The fight against terrorism will be top of the agenda at the May 25 meeting in the Belgian capital, a stop on Trump’s first trip abroad since he took office in January.
It is believed that the bombing in Britain that killed 22 people has been engineered to further strengthen the NATO and its brand state terrorism encompassing Islamic world. The whole idea for all this is to brand Islam a terrorist religion and to force Islamic regimes to kill Muslims as terrorists in order to reduce Islamic populations and loot their resources, valuable assets. . . . .
This is Trump’s first visit to Europe since taking office in January. Security has been stepped up across Rome, with the areas around the Vatican City, the Italian presidential palace and the American ambassador’s residence, where Trump is staying, temporarily closed to traffic.
Trump called NATO “obsolete” during the US presidential campaign last year, saying it was not doing enough to fight terrorism. He has also chided some members for not following NATO guidelines on spending. This visit will be about damage limitation with the fervent hope of establishing some kind of transatlantic chemistry. The tone in Brussels has gone from off-the-record sneering when the erratic and unpredictable Trump first won the November elections, to outright concern now that the implications of his presidency have begun to sink in.
Despite the heavy police presence, about 100 anti-Trump protesters held a rally in one of Rome’s squares on Tuesday evening. Significant protests are also expected in Brussels where he will meet EU and NATO officials.
Trump is now in Brussels for talks with NATO and EU officials. He will also hold meetings with Belgium’s King Philippe and Prime Minister Charles Michel. Later on Wednesday, Trump flew to Brussels, where significant protests are expected. For the EU and for NATO, this visit is about damage limitation with the fervent hope of establishing some kind of transatlantic chemistry, the BBC’s Europe editor Katya Adler says. She adds that the tone in Brussels has gone from off-the-record sneering when the erratic and unpredictable Trump first won the November elections, to outright concern now that the implications of his presidency have begun to sink in.
After his visit to Saudi Arabia, home to Islam’s holiest sites, and to Israel, this is the final leg of the tour of three of the world’s major religions. President Trump’s commitment to fighting extremism and intolerance will win approval from the Pope, as will his determination to bring peace to the Middle East. And the president thinks there’s another reason why they will get on. Back in 2013 he tweeted: “The new Pope is a humble man, very much like me.”
Trump was joined not only by his wife, daughter and son-in-law but also Secretary of State Rex Tillerson and National Security Adviser HR McMaster. Both Melania and Ivanka Trump were dressed in black with their heads partially covered, in keeping with a traditional Vatican protocol that is no longer expected to be rigorously observed. Melania, a Catholic, asked the Pope to bless her rosary beads.
Following his visit to the Vatican, Trump was moving on for talks with Italian President Sergio Mattarella and Prime Minister Paolo Gentiloni in what is his first visit to Europe since taking office in January. Security has been stepped up across Rome, with the areas around the Vatican City, the Italian presidential palace and the American ambassador’s residence, where Trump is staying, temporarily closed to traffic. Despite the heavy police presence, about 100 anti-Trump protesters held a rally in one of Rome’s squares.
After the meeting between President Trump and the Pope, the Vatican said there had been an “exchange of views” on international issues, while Trump said they had had a “fantastic meeting”. Trump also tweeted: “Honor of a lifetime to meet His Holiness Pope Francis. I leave the Vatican more determined than ever to pursue PEACE in our world.” He arrived in Europe from Israel and the Palestinian territories, where he vowed to try to achieve peace in the region.
Today the world is at a cross roads. Palestinians and Kashmiris like other oppressed nations, brutally occupied colonist and imperialist regimes, continue to be strangled to death by democracy militaries aided by high precision terror equipment. President Trump has given a new hope for the survival of occupied masses with some dignity. . Whether or not he could be trusted remains a trillion dollar question.
Enemies of Islam have succeeded creating a solid wedge between Saudi Arabia and Iran and through that a vertical split in Islamic world. That trend may not end any soon because Saudi led Sunni Arab states view Iran as their worst foe- even worse than Israel and all anti-Islamic rogue states operating in coalition to destroy Islam. Interestingly, a few Muslim regimes also led support to the destructive format of anti-Islamic forces globally.
Absolute foolishness and fatal ignorance are not a part of Islamic faith. Nor reluctance to mold the mindset of Arab leaders could be an excuse to let the enemies of Islam invade energy rich Arab world.
Donald Trump deserves global appreciation as he has said he is “more determined than ever” to pursue peace in the world after meeting Pope Francis at the Vatican.
The main problem is Israel does not want to resolve the conflict. Trump is right on one point. This is a conflict that badly needs settling. If that is not possible, there needs to be political progress. History shows that bloodshed tends to fill the void left by the absence of hope.
Well, for all the rhetoric the practical reality of Trump’s foreign policy is more guarded. So beyond a raft of trade deals in Saudi Arabia what have we really learnt so far. All the indications are, for example, that the move of the US embassy to Jerusalem has been put on hold.
US Presidents have never talked about Israeli nukes and their danger posed to the humanity. Trump also never questioned the validity of Isabel possessing nukes illegally. For all of the president’s repeated condemnation of the Iran nuclear deal, is he really capable of walking away from it?
A Trump foreign policy is still very much a work in progress. Much of Trump’s world view is now coming into a jarring contact with reality. This current trip is in large part ceremonial, it is very early in his presidency to be putting a toe into Middle Eastern waters.
In all the speeches President Trump made during the trip there was no detail about how he might succeed when so many others have failed. So signs and symbols and implicit messages are being pored over for meaning.
This is President Donald Trump’s first foray to the Middle East and of course it will not be his last. He has already got one thing clear. Adversity really does make strange bedfellows.
Trump will end his tour on the Italian island of Sicily at the G7 summit on Friday.
Leftists make a comeback in Latin America
In Argentina and Uruguay, leftist candidates won the elections and Evo Morales could maintain his position as the president of Bolivia, but in Chile, people have protested against the U.S.-backed president.
The failure of the U.S.-backed candidate in the Argentinean election in recent days was a sign of the U.S. failure in Latin America. Leftist Alberto Fernandez, an opponent of U.S. interventionist policies, won about 48 percent of the vote in general election and was announced as the new president in the first round.
This is while countries such as Venezuela and Cuba have maintained their anti-U.S. sentiment. Although the U.S. has made an unceasing effort in the last two years to overthrow the current regime in Venezuela, it has not succeeded.
The New Left movement in Latin America, which was formed by the late Venezuelan president Hugo Chaves, has put Venezuela in many troubles but reduced U.S. influence in the region to the point that even experts suggested that Washington has lost its backyard.
The New Leftist governments emerged in Latin America in the late 20th century. Leftist leaders have distanced from some of traditional principles, but maintained the fight against American hegemony, just like their predecessors. Latin America, with rich sources of oil, gas, and uranium, as well as great opportunity for investment, has been of particular importance from a geopolitical, geostrategic and geo-economic perspective. The U.S. has put control over Latin America on its agenda since 1823 when then president James Monroe offered his plan known as the “Monroe Doctrine”.
The Monroe Doctrine emphasized that as long as the U.S. had not achieved real power and growth, it cannot be considered as an active element and main actor in world politics, thus it should obtain necessary economic growth in Western Hemisphere. The doctrine also stated that South America and Caribbean are areas with high security priority whose fate is tied to the U.S. fate, and the U.S. must have a strong influence in the region to provide its own growth and development.
In the late 20th and early present century, Latin America has witnessed new developments, including the New Left movement. The New Left in Latin America was founded and developed as leaders such as Chavez in Venezuela, Luiz Inacio Lula da Silva in Brazil, Evo Morales in Bolivia, Rafael Correa in Ecuador, and Daniel Ortega in Nicaragua came to power.
Opportunities and threats
The U.S. is concerned about the presence of its rivals, especially Russia and China, in Latin America and the cooperation of these two countries with leftist states in the region. To counter China and Russia’s influence, the U.S. has launched various plans to undermine leftist governments through economic crises and put its allied right-wing figures into power.
Washington’s comprehensive effort to topple the Maduro administration in Venezuela is an example. On the other hand, China and Russia’s approach to Latin America and the tendency of New Left countries to ally with Beijing and Moscow can be a major deterrent to the implementation of the U.S. plan in the region.
This is while the Trump administration is trying to redefine U.S. role and position in Latin America. From Trump’s point of view, the wrong policies of previous governments and developments have caused the U.S. to lose its control over Latin America and the Caribbean, and instead increased the influence of U.S. rivals, including China, in the region.
In an interview with Foreign Policy, following his recent visit to Colombia, Air Force Chief of Staff General David Goldfein said that the Trump administration is making a push to strengthen alliances across Latin America as part of an effort to counter rising Chinese and Russian influence in the United States’ backyard.
Goldfein said Colombia and other Latin American countries risked being locked out of U.S. and allied operations if they stopped buying military hardware from the United States and turned to other markets instead.
China has invested heavily in the region to reach Latin America’s oil reserves. Beijing has now become the largest trading partner of some Latin American countries, including Brazil, Chile, Cuba and Uruguay.
Russia also continues to sell billions of dollars in arms to Latin American countries. Unlike China, which seeks to use Latin American natural resources for its economic growth, Russia’s interests in this region are more strategic.
From our partner Tehran Times
Democrats take a gamble on Trump’s impeachment
Despite all ups and downs, Democrats finally brought impeachment inquiry into President Donald Trump to the House of Representatives, a move which made Trump’s prediction come true.
The House of Representatives passed a resolution on Thursday to launch an impeachment inquiry into Trump, thereby making formal investigations against him possible. The resolution was approved by a vote of 232 to 196.
Accordingly, the House of Intelligence Committee carries out the investigations into the impeachment and reports its findings to the Judiciary Committee that comments on the process of impeachment.
Trump has said that the House will get enough votes to impeach him, but he is certain that the Senate will acquit him of charges.
Investigations into Trump’s impeachment began on September 24 following the official order of Speaker of U.S. House of Representatives Nancy Pelosi.
The order came after reports about Trump’s telephone call with Ukrainian president for investigation into his possible rival Joe Biden.
During the conversation Trump asked his Ukrainian counterpart Volodymyr Zelensky for a “favor”. He pressured Zelensky to investigate Joe Biden, his possible Democratic rival for the 2020 presidential election, and his son Hunter Biden who was on the board of a Ukrainian oil and gas factory. At the time, Trump had suspended $400 million military aid to Ukraine as a quid pro quo.
Why Nancy Pelosi risks?
It should be noted that some Democrats have called for Trump’s impeachment since his first months of his presidency. The impeachment inquiry was popular among Democratic voters, with a recent poll showing that %73 of them favoring the impeachment.
But Republicans are strongly opposed to impeachment, and the country generally relies on Republicans. That is why Nancy Pelosi and other leading Democrats were first reluctant to officially begin an impeachment. Their calculations have so far revealed that impeachment against Trump will not have much effect on the opinion of Republicans and his supporters, a situation which will make it more difficult to remove him from the 2020 election.
Trump has described the impeachment as “fake”. Pelosi said that Trump has affirmed that he had asked the Ukrainian president to take actions in favor of his political position, claiming the measures of Trump’s administration were undermining U.S. national security.
“The release of the notes of the call by the White House confirms that the president engaged in behavior that undermines the integrity of our elections, the dignity of the office he holds and our national security,” Pelosi said in a statement.
House Intelligence Committee Chairman Adam Schiff also said that the president should prioritize national interests rather than his personal interests. Schiff added that they will study whether Trump has exploited military aid to Ukraine to meet his demands.
Consequences of Trump’s impeachment
Experts argue that Trump’s impeachment and lack of a decisive leader will make the U.S. more vulnerable to other countries’ plots. As Robert W. Merry recently said in The National Interest magazine, “When the president is weakened at home, then America is weakened abroad.”
However, Washington’s friends and enemies consider U.S. foreign policy insignificant due to political infighting at home. Instead, the great power players are seeking to limit the influence of the country rather than cooperating with it.
The recent accusations against Trump can be easily stated as a national security issue, which needs to be reformed immediately. Theoretically, military aid will be provided only if U.S. officials become convinced that they can achieve main security objectives of Washington. Therefore refusing to provide aid because of political reasons is a serious wrongdoing, showing that the personal interests of the president is superior to U.S. national interests.
Will the impeachment inquiry get the necessary vote?
Now that the House has launched an impeachment inquiry into the president, the Senate will play an important role in the process. In this case, the Senate will act as a court that decides on Trump’s dismissal or survival.
To oust Trump, the votes of 67 members of the Senate is needed, which would be two-thirds of their population. Currently, there are 53 Republicans and 47 Democrats in the Senate. Therefore, Democrats need the support of 20 Republican senators.
Since the Republicans have not supported Trump’s impeachment, it is highly unlikely that Trump’s impeachment leads to his dismissal.
Impact of the impeachment on the 2020 presidential election
The impact of Trump’s impeachment on the presidential election depends on his defense and the credibility of accusations against him. Democrats are well aware that accusing Trump of corruption and incompetence will not affect American voters. Democrats probably knew that those allegations were not strong enough to undermine Trump, but on the contrary they would undermine their positions.
By stating an issue related to U.S. national security, Democrats took the risk of impeachment. To make the impeachment strategy successful, Democrats should prove that the president has endangered U.S. national security and he may do the same in future. This claim can go beyond party politics and put unbearable pressure on Trump, Republicans and uncertain voters.
From our partner Tehran Times
Russian Involvement in Venezuela is Troublesome for Western Hemisphere
The U.S. Energy Information Administration (EIA) “projects that natural gas consumption in Asia will continue to outpace supply.” With the future growth of natural gas consumption concentrated in Asia the EIA “expects ‘non-OECD Asia’ to consumer 120 billion cubic feet per day (Bcf/d) by 2050, outpacing regional production by 50 Bcf/d.” China’s natural gas consumption will “triple between 2018-2050.” Most long-term natural gas infrastructure, global liquid natural gas (LNG) terminal(s) import and export, and demand projections are based on Asian growth.
Late October reporting in Russian media confirmed Russian energy conglomerate, Rosneft had plans to consolidate Venezuela’s National Oil Company PDVSA (Petroleos de Venezuela) under Rosneft’s corporate structure in exchange for debt relief. This counters U.S., Canadian and Mexican oil and natural gas firms from satisfying natural gas demand from non-OECD Asia. Additionally, it allows Moscow to use Rosneft acquiring Venezuelan natural gas as a geopolitical, soft power coercion tool by acquiring some of the largest recoverable oil and natural gas reserves in the world.
Venezuelan government sources, Rosneft and the Kremlin all denythe potential for a takeover of PDVSA energy assets to satisfy Russian bank loan requirements to the Madero regime. Russian energy experts have visited PDVSA to analyze the possibility of merging with Rosneft. The Russian energy giant buying out Venezuela’s best source of hard currency and domestic economic driver illustrate the “hard-hitting impact of U.S. sanctions.” The Venezuela regime-based economy predicated on oil and natural gas production is on the verge of collapsing.
Rosneft’s offer is the best way outside of western help for Venezuela to mitigate damaging sanctions, and “debt relief for a country that owes over $156 billion to external parties – and Venezuela’s debt is 740% higher than the value of its exports.” This is four times more than what is typical in emerging markets and economies according to The World Bank.
U.S. Special Envoy for Venezuela Elliot Abrams has pointed to Rosneft having joint projects with PDVSA where it took leading minority stakes, and how these ventures do not “breach” U.S. sanctions. This is positive news for average Venezuelan citizens suffering under economic malaise. Caracas’ debt to Moscow seemingly is being forgiven under the auspices of U.S. blessing. However, the Trump administration has been clear in its maximum pressure “sanctions policy towards Venezuela” that mirrors the sanctions-strategy towards Tehran. Retaliation from the U.S. could be the future of Washington-Moscow-Caracas tri-lateral relations if Rosneft tries to liquidate PDVSA assets, and release thousands of employees to skirt U.S.-led western sanctions.
The Maduro regime will also need to navigate the “$20-$60 billion in debt owed” to China. Will the Chinese have a stake in PDVSA? If so, how does that play into the current U.S.-China trade negotiations? What these geopolitical decisions points towards is a Rosneft-PDVSA merge bringing up more questions than answers.
It makes sense for Russia to be the power broker in Venezuela. This is similar to how Russia is the safe diplomatic choice in the Middle, post-Syrian civil war. According to Foreign Affairs, Russia is now “the Indispensible Nation in the Middle East.” Military troops and hardware were used to save the Assad regime, and now in Venezuela it will be oil, natural gas and petrochemicals that gives Russia a solid foothold in the western hemisphere. PDVSA is one of the “world’s most prolific oil companies” with the largest extractable oil and gas reserves in the world – estimated at 300 billion barrels and PDVSA’s estimated worth is “approximately $186 billion.”
Putting this energy portfolio under Kremlin influence gives Rosneft and other energy firms aligned with Moscow solid footing to control price and supply for global oil and petrochemical markets. The Maduro government wants to stay with previous joint venture contracts between PDVSA and Rosneft, and if the merger takes place, wants to “hand control over to Rosneft without having to go through privatization.” Financial questions arise from this arrangement; who is responsible for terms of debt, how is China able to value the deal, and would equity be defined as a public, private or some form of public-private entity? These are some of the larger issues that would need to be resolved.
Maduro can possibly work around these issues when he took over Venezuela’s Supreme Tribunal of Justice. This allows Maduro to ignore the democratically elected Legislature, the opposition-controlled National Assembly, and its leader, Juan Guaido. Mr. Guaido claims he is the legitimate leader of Venezuela, but likely Rosneft with Moscow’s backing will only negotiate with the Maduro government. The Supreme Tribunal of Justice can overrule the Assembly to assist the merger towards completion. Debt repayment is important to the Maduro regime, and return to financial health.
Citgo, a U.S. based company that is a valued asset for PDVSA is another area of concern for the proposed merger in tandem with U.S. sanctions.
American officials have implemented a freeze on all Venezuelan assets based in the U.S. Washington implemented an executive order coinciding with sanctions protecting “bondholders and other parties” mulling asset sales and seizures for unpaid debts. The international desire among government and financial officials is this move by the Americans facilitate diplomatic solutions over asset seizure. The downside is it strengthens Maduro over the elected Venezuelan legislature and Assembly leader Guaido.
Debt holders who own Citgo then have to negotiate with Venezuela and Rosneft. This will be tough for bondholders to receive repayment, or will it, as this could mean tougher going for international credit markets to lend money for future Rosneft/PDVSA projects. A Moscow-Caracas alliance is something Washington could believe will increase geopolitical tension between all three countries. Debt relief for Caracas, and control over the world’s largest oil reserves are likely to be the final push for Rosneft to acquire PDVSA over escalating tensions between Moscow and Washington with Caracas stuck in the middle.
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