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Not a Short-Term, For-Profit Venture: Why Diplomacy is Not Like Running a Business

Dr. Elise Carlson-Rainer

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With the departure of U.S. Secretary of State Tillerson, and the continual upheaval of the U.S. Department of State, American diplomatic relations and U.S. national interests are jeopardized. The world watches with trepidation as the U.S. Department of State once again processes new leadership.The implications for numerous bilateral and multilateral agreements remain unknown. The Trump Administration, thus far, has failed to recognize that diplomacy is not like running a business. There is no profit model or clear revenue determination of success. While in the private sector, at times, it may be effective management to cut leadership at the top, and start with fresh new ideas, diplomacy does not work in the same way. Diplomats are not selling a product,they are promoting an idea. They give voice to what the U.S. stands for, its values, and ideals. While Secretary of State Tillerson and President Trump are often praised by their supporters as being successful businessmen, they need different skill setsto carry out successful diplomatic work. Namely, diplomacy requires the long game. Relationships in diplomatic engagements are cultivated for years, or even decades, with long term gains. It is often slow, nebulous work that is hard to measure. However slow, this work is vital to U.S. long-term economic and security interests.

It is important for the United States to continue engagement globally towards a stable, peaceful, democratic world. Democratic leaders make better allies; stable countries make better trade partners[1]. However, as most U.S. leaders have understood prior to this administration, democracy development takes time, even generations. In 1992, Presidential candidates Bill Clinton and Ross Perot recognized the large pay-off and importance of long term American diplomatic engagement, specifically in assisting with stable democratic in post-Soviet states. During their presidential debate, they echoed nearly identical sentiments to this end. Bill Clinton stated, “I think we will have a continuing responsibility, as the only remaining superpower, to stay involved. The Soviet Union is no more. Now we’re working to help them become totally democratic through the FREEDOM Support Act that I led on[2].” To this Perot, famously replied, “Well, it’s cost-effective to help Russia succeed in its revolution. It’s pennies on the dollar compared to going back to the cold war[3].” Both leaders understood the long-term value and important investment of democratic development.

It remains unclear if leaders within the Trump Administration, clear novices as to the inner workings of the U.S. government, and complexities of U.S. foreign policy, grasp the far-reaching impact of the State Department. One pundit from the Washington Post speculated that Tillerson did not comprehend the full extent as to how the Office of the Secretary of State exerts power and influence globally. Thus far, the current leadership seems to lack an understanding of the diverse diplomatic programmatic work of the Department. One such important program funded by the Education and Cultural Affairs (ECA) Bureau of the Department of State is the Fulbright Fellowship. Established in 1945,during post-war reconstruction, the goal of the Fulbright Fellowship is for “the promotion of international good will through the exchange of students in the fields of education, culture, and science.” Former ECA Assistant Secretary of State Evan Ryan said,“We view exchanges as long-term investments. Exchange is something foundational that we build upon. We might not be able to see the exact benefits of it for many years, but we know it is there.” One benefit is shaping positive relations with Americans and future global leaders. Numerous world leaders have been Fulbright Fellows;37 as heads of state. The Prime Ministers of Korea and Ghana, to name just a few,were Fulbright scholars early in their careers. Decades later, at times,they have implemented policies in their own countries that engendered a positive relationship with the United States. While the pay-off is slow, the return on investment for the U.S. national interest is enormous.

Worldwide, the U.S. is one of the largest donors to international humanitarian aid. Part of this assistance is human rights promotion, work that also is slow, but important for America’s long-term interest. In Jordan, for example, American diplomats forge relationships with Jordanians to “assist political parties in the country, improving the ability of parties to develop platforms, diversify membership, and more effectively advocate for the passage of legislation in line with party values and citizen interests[4].” Jordan remaining a stable nation in the Middle East is critical to U.S. interest in the region. In other countries, diplomats work towards religious tolerance, the rights of persons with disabilities, ending trafficking in persons, and beyond.

Diplomats also work to protect American citizens;indeed, this is a core responsibility of embassy staff. In 2010, when Morocco began expelling American Christians allegedly for proselytizing, for it was the work of countless hours of diplomatic engagement that made the expulsions stop. Some of these Americans had lived in Morocco for decades running orphanages, and after diplomatic intervention, they were reunited with their families,and manyallowed to remain in the country. This example of quiet diplomacy does not often make headlines. In fact, successful diplomatic engagement is often to stop a public incident or row over a specific issue with the host country. No news, is often good news for an embassy. It is this unsung work that the current administration seems either ignorant of, or disregards entirely. Whether to protect American citizens, promote religious freedom, women’s rights, or free and fair elections, diplomats conduct long-term work critical to U.S. national interests and strengthening stability the world over.

The United States, comparatively, is still a young country. Nations such as China or leaders in the Middle East often calculate much longer-term goals in their diplomacy. They may entertain delegations and diplomatic engagements to build relationships,not necessarily because they have any plans to implement near-term policy suggestions in the immediate future. China is famous for “playing the long game” in diplomacy. One example is Chinese construction of approximately sixty athletic stadiums across sub-Saharan Africa. While a huge expense in the near term to build a stadium, and no clear short-term interest for the Chinese people, Chinese leaders calculate the long-term gain of gaining good will and diplomatic ties with these nations as part of their national interest and worth the investment. The Arab world also values long-term diplomacy by way of personal relationships built over many years or decades in diplomatic relations. Thus, the jarring nature of changing U.S. leadership, or not valuing the true worth of diplomacy by the current administration, hurts U.S. ties across the world.

Diplomacy is not a short-term, for-profit venture. Rather, it is a slow, long-term endeavor to ensure American national interests.The long-term security investment of funding programs such as the FulbrightFellowship, democracy, and human rights programs is also clear: military and security cooperation can be linked back to decades of education and programmatic good will between two nations. Unstable leadership in the U.S. erodes critical trust between world leaders; with the leadership turnover agreements might not be honored and policies abruptly discontinued. Therefore, moving forward, it behooves the current U.S. leadership to stabilize its diplomatic core and run the State Department more…diplomatically.

[1] Müllerson, Rein 1997, 2004. Human Rights Diplomacy. Routledge, London, UK.
[2] Source: The Second Clinton-Bush-Perot Presidential Debate Oct 15, 1992
[3] Source: The Second Clinton-Bush-Perot Presidential Debate Oct 15, 1992
[4] U.S. Department of State. Jordan “Advancing Freedom and Democracy Reports.Released by the Bureau of Democracy, Human Rights, and Labor May 23, 2008

Dr. Elise Carlson-Rainer is Doctoral Faculty in the School of Security and Global Studies at the American Public University. She has a long and distinguished career within the diplomatic corps of the United States, with postings across Europe and the Middle East. She was a Fulbright Fellow to Sweden in 2004-2005.She earned her Ph.D. from the University of Washington in the field of human rights and foreign policy. Dr. Carlson-Rainer teaches university courses in democracy and human rights, U.S. foreign policy, nationalism, global security and international relations.

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US not to tolerate independent countries

Payman Yazdani

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Commenting on the US policy towards Venezuela, Professor Arshin Adib-Moghaddam says This has been the aim of successive US governments to roll back the Boliviarian revolution that is the paradigm of independence for Latin America.

The US President Donald Trump couple of weeks ago announced that he is recognizing Venezuelan opposition leader Juan Guaido as the legitimate president of Venezuela.

Trump also urged other governments to recognize Guaido, adding that he “will continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy.”

Recent developments in Venezuela was discussed with Professor Arshin Adib-Moghaddam, Chair of the Centre for Iranian Studies at the London Middle East Institute.

How do you see the US role in creating economic crisis in Venezuela?

There are several factors to be considered, but the most important one is the price of oil. The Trump administration lobbied Saudi Arabia very hard to keep the price of oil down, not least to put pressure on countries such as Iran and Venezuela. The Venezuelan economy is largely dependent on oil. After years of social empowerment programs instituted by Hugo Chavez, the government simply ran out of money. The Trump administration intensified its economic war against Venezuelans when it sanctions its economy at the height of the crisis. It is ironic, given that this President has used the most disgraceful and brute profanities to describe Mexicans and other Latin Americans, whom he intends to keep out of the United States by building a wall, which is a good metaphor for the closed mindedness of this administration, certainly the most uneducated one in the history of the country.

What are the reasons behind the US hostile policy towards Maduro’s government? And what is the importance of the country for the US foreign policy?

At the heart of the stand-off is a politico-ideological factor, as the deep structure of world politics is constituted by a war of ideas. This is the trigger that makes everything else possible, i.e. when you can subvert the ideational system of a country and re-code its institutions and political culture in accordance with what can be safely called a paradigm of dominance and one-sided hegemony, then the results are long term and strategic. This has been the aim of successive US governments, i.e. to roll back the Boliviarian revolution that is the paradigm of independence for Latin America which grew out of the Cuban revolution and which is hinged upon a rich and deep political culture, from Simon Bolivar to the legendary Cuban poet Jose Marti. This is very similar to the independence drive that emerged out of the Iranian revolution and it explains the hostility of the US state to Iran. The similar calculus works for Venezuela and the rest of free and independent Latin America. The message is clear: The US state will not tolerate independence, even when Venezuela continues to supply the United States with oil.

How do you see the possibility of the US military intervention in the country?

This is the fascinating and pivotal part that US decision-makers don’t seem to grasp: The world order has radically changed and the US is only one among many players. There is Russia, which has made it clear that any military intervention in Venezuela would provoke a response from Moscow. There is China which would easily veto any UNSC resolutions endangering the sovereignty and territorial integrity of Venezuela. And there is Turkey, the close NATO ally of the United States which has reconfirmed the legitimacy of Nicola Maduro in strict opposition to the Trump administration. So there is not much the United States can do in terms of inciting a coup d’etat or a military intervention, exactly because of that multipolar world order which is distinctly non-American these days. The country and its subservient allies have been on the wrong side of history too many times, in Iraq, in Syria, In Lebanon in East Asia, in Latin America etc.

The US has recognized the parliament’s head as the country’s president. Is this leagal based on international law and norms?

The Trump administration has repeatedly contravened international law and this is another example. This President adheres to the law of anarchy, kill or be killed, a distinctly aggressive mentality that is devoid of diplomatic acumen and cultural empathy. President Nicolas Maduro has been elected as the President of Venezuela. Democracy requires patience. Venezuelans will have the opportunity to change their government after the next elections. It is another tragic irony that the self-proclaimed “leader of the free world” once again betrays all the ideals that it trumpets to the rest of the world with such cacophonic and annoying hysteria that it lacks any semblance with reason and rationality.

First published in our partner MNA

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Why Venezuela’s People Are Suffering

Eric Zuesse

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The case that will be documented here is that Venezuela’s people are suffering from a tragic national situation which actually cannot be reversed by anything that’s within the power of Venezuela’s Government to do or to block. In order to understand this very unfortunate reality (if one wants to understand it), one must first understand the relevant parts of the broader situation in the world that affects Venezuela. What’s dooming the country isn’t merely a local situation, but instead is global and environmental. It also is economic, pertaining to the role that Venezuela is playing in the global economy. But the economic factor is definitely not  of the kind that it’s commonly assumed and alleged to be. It is instead very different.

Here, this very different reality will be both described and documented (instead of just founded upon assumptions — many of which are false — such as the standard, basically local, economic ‘explanation’ of Venezuela’s troubles is, which focuses on Venezuela’s socialism, or the economy’s being not sufficiently capitalist).

What it all comes down to, stated in its briefest terms, is that no nation can do anything but lose money by selling the world’s dirtiest oil, tar-sands oil, which costs $100+ to clean and produce, into a global oil market that’s paying less than $100 (currently around $65) per barrel. Venezuela was able to sell it profitably when oil-prices were high, but is getting crushed now, because its oil is no longer profitable to produce and sell. But 95% of Venezuela’s export-earnings come from oil. Unless and until oil-prices are again above $100 (which probably won’t happen again, except perhaps for very brief periods), Venezuela is doomed. Venezuela’s only chance to diversify its economy away from “the natural resources curse” (from which it especially suffers) was long ago, decades before the current Government came into power. That chance was missed. This ship is now sinking, and no one can save it. (And the U.S. Government and its allies have no actual interest in saving it, but only in exploiting it, parasitically.)

So, here the real history and context for what is happening in and to Venezuela will be presented, and the reader will be able easily to verify any detail of it (by means of the links) — on one’s own, (not accepting anything on mere ‘authority’, which, in such a politically charged matter as this, is almost invariably propaganda). The reader can verify any allegation here simply by clicking onto the given link, at any point in the presentation that might seem to be questionable.

These links are directly to the items of evidence, in the specific case of: why Venezuela’s people are suffering.

Here is that case — the realistic case, without any propaganda, but with only  credible news reports and source-documents as constituting its basis — regarding this question.

THE CASE

The two lands that produce the world’s highest-cost-to-produce oil are Canada and Venezuela. Both extract their oil overwhelmingly from tar-sands, which is the dirtiest of all oil and thus (by far) the costliest to refine. (Thus, it’s called “extra-heavy crude”, and that is the least desirable type. It’s also the type that, in a global-warming world, should remain in the ground, never be burned at all, as will also be explained here.)

An accurate summary statement in Wikipedia is that, “With present technology, the extraction and refining of heavy oils and oil sands generates as much as three times the total CO2 emissions compared to conventional oil,[20] primarily driven by the extra energy consumption of the extraction process.” That reference at “[20]” also states: “As the price of oil rises and as conventional hydrocarbon resources become scarcer, increased exploration and production activity is occurring in heavy oil, tar sands, and bitumen deposits. While these contribute significantly to the global energy …, they also contribute a greater share to … the detriment of the global environment.” (That’s referring to “a greater share” of “detriment” than normal crude does.) As another source phrased this matter in more explicit terms: “85 gallons of water, two tons of soil, 700-1200 cubic feet of natural gas, and 170 pounds of greenhouse gases make one barrel of crude oil” from tar-sands. That oil is simply not usable as-is to go into refining, like, for example, the standard Brent crude is. Furthermore, to produce that barrel of tar-sands-derived oil requires also the production of tons of sheer waste, none of which is left behind from producing normal oil. The cost of dealing with that waste is not factored into the cost of the barrels of oil. For examples, the future “impact upon water supplies,” and that “this water is polluted by toxic substances,” are not counted in. Therefore, the full cost of such oil has never been calculated. And yet, even so, everyone recognizes that tar-sands-derived oils are the costliest to produce.

On 25 January 2013, HSBC Global Research issued a landmark report, “Oil & Carbon Revisited: Value at risk from ‘unburnable’ reserves”. It defined the key concept of  “Unburnable reserves: The IEA’s World Energy Outlook (2012 edition) estimated that in order to have a 50% chance of limiting the rise in global temperatures to 2ºC, only a third of current fossil fuel reserves can be burned before 2050. The balance could be regarded as ‘unburnable’.”

The oil in Canada and in Venezuela is the world’s least  burnable, the most “heavy,” and therefore it’s not only the costliest to produce, but it’s also the worst environmentally. There is consequently increasing pressure upon large investment funds such as Harvard’s 39-billion-dollar endowment fund, to disinvest in fossil fuels. Because of interlocked boards of directors or trustees, and the needs that such ‘charities’ have to appeal to wealthy donors, these public pressures are often (as in Harvard’s case) ignored, but the movement toward divestment is gradually gaining strength in the less corrupt investment funds.

On 13 December 2018, the environmental organization 350.org headlined “Landmark fossil fuel divestment reached! 1000+ institutions are withdrawing investments from coal, oil and gas companies”, and announced:

The 1000th institution to divest was the Caisse des dépôts et consignations (CDC), which manages France’s public sector pensions, savings, and investments worth €173 billion (USD$196 billion). It recently announced that from 2019 it will no longer invest in companies that make more than 10% of their business from coal – this implies that the top 200 companies in the coal-industry are now effectively blacklisted. …

On the momentum for divestment since 2013 – Nicolas Haeringer, an organiser who supports divestment groups globally, at 350.org said:

“This is a moral movement as well as a financial one. Just five years ago we had 181 divestment commitments and USD$50 billion shifted away from polluting industries and today we’re over 1000 and approaching USD$8 trillion dollars.”

This has already helped to drive many coal companies out of business. Though coal-mine owners and employees might lose from that, the entire world gains vastly more from it. Such a transition is called “progress.” Transition in the opposite direction — toward more bad than good — is called “regress,” or, simply, “harm.” Some people call it “conservatism,” but whatever it is, certainly isn’t  progress. Not in any way. But that’s what the U.S. Government and the Canadian Government want: extreme conservatism — not conservation. And they view Venezuela’s tar-sands oil as being a prize that they could profit from if Venezuela’s Government could be ‘persuaded’ to reduce their environmental regulations on extracting it. However, in 2012, Venezuela strengthened, instead of weakened, its environmental laws. That strengthened the motivation for the U.S. and Canada to take over Venezuela. Hugo Chavez died in 2013, and Nicolás Maduro replaced him. Then, in 2016, Maduro instituted a new policy, to weaken environmental enforcement in Venezuela. Perhaps he was hoping that this would reduce the U.S.-and-allied efforts to overthrow him. Venezuela’s economy was already on the ropes. The U.S. continued its efforts to overthrow Maduro. Now desperate, he started selling off 12% of the land to international mining companies. Environmental enforcement at PDVSA also plunged, and on 24 November 2018, Bloomberg News bannered “Venezuela Is Leaking Oil Everywhere”. Apparently, the weaker Maduro gets, the worse he becomes. He had entered a doomed office as the president, and seems willing to do anything not to drown in it. Apparently, the weaker he gets, the more that U.S.-allied billionaires want to take over the country, entirely on their own terms. It’ll be like what had already happened in Greece, when the Syriza Party there capitulated to the international financial firms in 2015, and the Government stripped pensions, education, social services, etc., and privatized the infrastructure. But the path toward that end is quite different in Venezuela.

With the world’s increasing move toward renewables, the disinvestment in oil companies will increasingly be targeted toward selling the stock in the ones that have invested the most in oil fields in Canada and Venezuela. However, the situation is radically different for Venezuela than it is for Canada. Here is why:

The biggest market for Canadian oil is just next door, the United States. Most of the oil that’s imported into the U.S. comes from Canada. And, because most of the oil companies that are producing oil in Canada are U.S. owned or allied (such as in UK), the U.S. Government isn’t sanctioning Canada and trying to bring its Government down by reducing Canada’s oil-sales via sanctions, such as is the case with regard to Venezuela’s oil-sales. The U.S. Government doesn’t need to do that in order for America’s corporations to become enabled to sell the oil that comes from Canada: they’re already selling that oil, and Canada’s Government (as well as America’s Government) is already helping America’s companies to do this. America’s and Canada’s aristocracies are allied — not only with Venezuela’s aristocracy (which wants to replace Venezuela’s existing Government), but also with each others’ aristocracy.

Furthermore, unlike Venezuela, Canada isn’t nearly 100% dependent upon its oil-sales in order to support its economy, such as Venezuela tragically is. Venezuela receives around 95% of its export-income from its oil. That’s ridiculous and, for geostrategic and geoeconomic reasons, should never have been tolerated by Venezuela’s Government, but it nonetheless has been tolerated by them — and, for many decades, not only by Venezuela’s present Government. Indeed, Oil&Gas Journal headlined on 8 February 2010, “All about Orinoco” and reported that there had been “early efforts to produce heavy crude from the [Orinoco] belt” and these efforts “led PDVSA predecessors to output by the early 1980s of 93,000 b/d.” Furthermore, “Petroleos de Venezuela SA estimated 1.18 trillion bbl of oil in place in the Orinoco in 1987 and revised that in 2006 to a median of 1.3 trillion bbl, a maximum of 1.4 trillion bbl, and a minimum of 900 billion bbl.”

At that time, Richard Turcotte, of Peak Oil Matters, warned about this report, by headlining “A Look at Venezuela”, and pointing out that:

Unlike the light sweet crude oil produced by the U.S. and the light oil which has made Saudi Arabia such a force, the Orinoco oil is “heavy oil” found in oil sands — similar in characteristics to the tar sands bitumen found in Alberta, Canada. (See my prior post here.) The Venezuela oil is thus much harder to extract and refine, making it more costly. Significant investments of time and money are required to provide adequate refinery capabilities. Needless to say, extracting this heavy oil is a much more energy-and time-intensive effort than is the process for extracting the more familiar light crude. It is not anyone’s answer in the next few years.

Lead researcher and USGS geologist Chris Schenk admitted that their report is not asserting that the “technically recoverable” oil is in fact “economically recoverable.” That’s a significant distinction, and one that needs to be emphasized. All the presumed underground reserves in the world won’t mean much if it makes no sense to invest the time, effort, and money to try and extract them.

The USGS nonetheless estimates that a stunning 40 – 45% of that resource will be ultimately recoverable. One prominent geologist (and a former board member of Petroleos de Venezuela SA — Venezuela’s state oil company) is already on record as doubting anywhere near that amount can be recovered, and stated that much of what might actually be recoverable would in fact be too expensive to produce. 

Perhaps Venezuela’s President Hugo Chavez and his predecessors were thinking that if the U.S. Government says that this oil is an asset, then it is reasonable to consider it to be an asset; but if the U.S. Government was instead merely aiming to get Venezuelans to think that it’s an asset so as to keep that country accepting its existing oil-monoeconomy (its over-dependence upon oil), then ultimately as the disappointment hits when the Venezuelan people experience the poverty after having hoped and tried to develop that ‘asset’, the U.S. Government will become welcomed in, to take over Venezuela’s failing Government. Anyway, that would be a conceivable reason why the U.S. Government would be promoting the ‘economic potential’ of the Orinoco belt. The aristocracy’s agents (in this case the petroleum industry) tend to be very clear-eyed about what’s of benefit to their paymasters. For whatever reason, the actual fact — that this oil was no asset — has remained hidden from the Venezuelan public. It still isn’t publicly acknowledged by Venezuela’s Government. Nor is it publicly recognized by America’s.

So, this tragic error (of presuming that tar-sands oil should be developed) goes back even to well before the time of Hugo Chavez. Moreover, it’s worth pointing out that the actual source of the ‘error’ is the petroleum industry itself, which, like the tobacco companies before it, constantly propagandized for increased production and sales, regardless of what the science says. A good example of that propaganda is the Editorial in Oil&Gas Journal on 24 January 2019, headlining “Costs, energy needs discredit ‘keep it in the ground’ agenda”. It says: “Preemptive opposition to oil and gas projects by ‘keep it in the ground’ activists promises needless hardship in two broad areas.” This is a denial of the entire concept of “unburnable reserves.” They want, instead, to burn it all — and even to keep prospecting to find yet more  oil and gas (at this time of already greatly excessive inventories of cleaner reserves that should be burned before any of Canada’s or Venezuela’s filth is). They could lay off their entire teams of oil-explorers, who are wasting their time to find yet more dirty energy sources that won’t ever need to be used by anybody. Either these people are stupid and insane, or else they are psychopaths who care only about keeping their existing jobs and don’t care at all about the world that future generations will be experiencing. If their children knew, then what would they think of what their parents had done to the world that they will be living in?

Consequently (perhaps after — for whatever reason — listening too much to self-interested advisors), Venezuela’s Government has allowed itself to become trapped by its addiction to selling its extraordinarily filthy oil. There was no Governmental demand, no sufficient priority placed upon Venezuelan firms, for them to diversify the economy away from petroleum. Neither the present Government, nor any previous Government of Venezuela, did.

Hugo Chavez and Nicolás Maduro didn’t create this problem; but, now, and especially on Maduro’s watch, the oil-market transformations that result from the global-warming phenomenon are accelerating; and, unlike Canada, which is part of the U.S. empire, Venezuela isn’t receiving U.S. Government protection of its investors, and so there is no helping hand from the U.S. Government (i.e., from America’s aristocracy) to assist Venezuela’s oil sales (such as the U.S. does provide regarding Canada). There is, instead, to the contrary — as Venezuela’s Government has become weaker and weaker, and has less and less public support while global oil prices have plummeted — the grabbing hand, of both the U.S. and Canadian Governments, to take over Venezuela’s Government, whose biggest sin, actually, was to have left itself open to such a take-over, by its having failed to diversify its economy away from the country’s doomed, and dooming, extraordinarily costly-to-refine, and undesirable to refine, oil. It’s now just a coffin in the ground, but it’s nonetheless still the source of virtually all of Venezuela’s export sales. No government could sustain supporting such a zombie. It’s a deadweight that’s dragging Venezuela down and economically suffocating all Venezuelans. And the documentation that this situation exists is incontrovertible:

The current WTO report on Venezuela indicates that 96.9% of the country’s exports are of “Fuels and mining products,” and that over 98% of this 96.9% consists of oils. Also shown is that the biggest five importers from Venezuela account for only 1.9% of Venezuela’s exports, and therefore all other countries account for 98.1%. So, when Venezuela loses its U.S. market, that would mean loss of only 0.6% of its total export market.

However, America’s sanctions will additionally cause some U.S. vassal nations such as in Europe to stop importing from Venezuela. So, Maduro is very vulnerable, indeed. Diversifying the markets (to that 98.1%) isn’t what was needed by Venezuelans; diversifying the economy was; and neither he nor his predecessors did any of that.

On February 2018, Petroleum Science headlined “Analysis of Venezuela’s oil-oriented economy: from the perspective of entropy” and reported that, “the current breakeven price has achieved to over $100/bbl in Venezuela.” Right now, oil is selling at around $65 per barrel. So, how can Venezuela make money selling its $100+ oil into the global $65 oil market? It’s just not possible, at least not sustainably. The Petroleum Science article therefore said that “it is unwise for Venezuela to count on selling raw oil to support the country’s economy,” because any per-barrel price that’s lower than Venezuela’s $100+ per barrel production cost will produce a loss on the sale of that barrel of oil, and because there will be very few if any future days when the per-barrel oil-price will again be above $100. The more that the world cuts back on petroleum and increases non-carbon energy-sources, the lower that the price of oil will become. And the more that investment funds steer clear of high-carbon firms, the lower the corporate stock of those companies will sink in value. Both investors and consumers are therefore going to be turning away from them.

When global oil prices were high, Venezuela could sell even its costly-to-refine oil profitably, but those times are now long gone and probably will never return, as the world increasingly switches away from fossil fuels. Especially tar-sands oils, such as from Canada and from Venezuela, should stay in the ground, and not only because today’s oil prices are too low to sustain selling them, but also because those extra-heavy oils are the worst to burn, from the standpoint of causing global warming.

As an example of this economic reality, a major U.S. corporate investor in Venezuelan oil is Chevron Corporation, and Zacks Investment Research headlined on 5 October 2011, “Chevron Sees Carabobo Oil in 2012”. It stated:

According to a company executive, U.S. energy behemoth Chevron Corp. (NYSE: CVX – News) may see the start-up of an oil field in Venezuela’s Orinoco Belt next year. The super-major is confident that it can commence production from Orinoco’s Carabobo Project 3 – which has estimated reserves of 66 billion barrels – in the third quarter of 2012. …

Chevron holds a 34% interest in Carabobo Project 3, while Venezuela’s national oil company Petroleos de Venezuela S.A. (or PDVSA) controls 60%. The remaining stake is owned by Venezuelan and Japanese firms.

Following the first production of 50,000 barrels per day, … [Chevron] is looking to boost volumes by an additional 50,000-100,000 barrels per day every two years. Carabobo 3, one of several Orinoco projects, is estimated to reach a maximum output of approximately 400,000-480,000 barrels of crude oil per day by 2016.

There is no public indication, at least not online, that even the “first production of 50,000 barrels per day” has been yet achieved, though it had been expected to occur within a year. Chevron’s 2017 Annual Report (covering the year 2016) is the latest online, and it doesn’t so much as even mention “Carabobo.” And this was after  the 5 October 2011 prediction that “Carabobo 3, one of several Orinoco projects, is estimated to reach a maximum output of approximately 400,000-480,000 barrels of crude oil per day by 2016.” Clearly, that’s a poorly performing investment. Chevron’s current web-page on “Venezuela” says “Chevron has a 34 percent interest in Petroindependencia, S.A., which includes the Carabobo 3 Project,” but it provides no number of barrels of oil being produced there (if any) — not even now, in 2019. Bad investments die in silence and in obscurity, but good investments get trumpeted everywhere — and this one is being trumpeted nowhere.

Any oil sales from those fields will not only be delayed until when oil prices are again high enough to sell those dirty oils at a profit (which is increasingly unlikely ever to happen again). The investment values of those companies will likewise be especially hard hit as the problem of unburnable reserves becomes increasingly widely recognized and understood by the public. The public won’t remain ignorant and deceived about these matters forever. This is like a Ponzi scheme.

Russia’s Government seems determined never to accept this U.S. coup imposing America’s “regime-change” upon the sovereign nation of Venezuela, and has made the decision to send military assets, and to invest both in Venezuela’s Government and in the oil company. On January 29th, Russia’s Interfax News Agency headlined in Russian, “The Ministry of Finance of the Russian Federation hopes to get external debt payments from Venezuela”. The neoconservative Jamestown Foundation remarked about that on January 31st by saying that “These debts may eventually be written off by a new opposition Venezuelan government led by the self-proclaimed interim president, Juan Guaido, if it manages to push Maduro out (see EDM, January 28, 2019). Yet, even if Maduro somehow succeeds in clinging to power with Russian help, he will hardly have the resources to service the loans.” That, unfortunately, happens to be true. The only sensible reason why Russia would be committing itself to protecting Venezuela’s sovereignty would be in order to say to Washington that America’s long string of foreign regime-changes (Iraq, Libya, Syria, Honduras, Ukraine, etc.) has now ended — to establish the principle (as Russia has recently done in Syria) that no longer will Washington’s invasions and coups be tolerated, no more conquests (additions to its empire) will be allowed. Somebody has to draw the line, finally, and the other nuclear superpower could be the one to do it. Other than that, however, Russia, like other investors, can only experience losses from investments in Venezuela. Venezuela is now an asset only in “The Great Game”. Russia’s protecting in Venezuela the principle of national sovereignty — no coups, no conquests, at all — is as moral as America’s repeatedly rejecting that principle is immoral; but, as an investment, Venezuela simply is a loss. If “The Ministry of Finance of the Russian Federation hopes to get external debt payments from Venezuela,” then Russia’s Ministry of Finance should be expecting to be disappointed in that “hope.” But that hope wouldn’t, in any case, be a sound reason for what Russia is doing there. The only “asset” to be won in Venezuela is protection of the most basic principle of international law: the independence and sovereignty of each nation. Hitler and his fascist allies, and Stalin and his communist allies, violated that principle; but now fascist America and its allies routinely violate it. Venezuela’s allies (unlike Neville Chamberlain) are supporting the foundation-stone of international law: national sovereignty and independence. For the U.S. and its allies to reject the results of Venezuela’s (or of Syria’s or of Iran’s) elections is no basis for invalidating those results, and the U.S. Government’s stooge Juan Guaido is simply a Venezuelan traitor, and should be treated as such, by an appropriate trial for treason. Certainly, there is no Constitutional basis for Guaido’s power-grab, despite the lies to the contrary by the putchists such as in America and its allied regimes.

All oil-exploration should therefore now stop, and existing tar-sands oil fields should simply be abandoned altogether. Only the easiest-to-refine (the “lighter”) oils should be sold and burnt right now. There is going to be a rush for the exits in the stocks of those “extra-heavy oil” companies, and the only question is when it will happen. Regarding that rush, the situation is very different in Venezuela than it is in Canada, because the U.S. Government will delay as long as possible the collapse of Canada’s oil-sales, but the U.S. (and Canada) want to expedite the collapse of Venezuela’s — at least until and unless the current Venezuelan coup succeeds. (And Canada’s Foreign Minister, Chrystia Freeland, did the key preparatory work for U.S. President Trump to pull the plug on Venezuela’s Government; so, both of those governments have actually led in overthrowing and replacing Venezuela’s non-U.S.-allied Government.)

Venezuela became addicted to selling its filthy oil, but now can only lose money with every barrel it sells of its oil. Each day of the company’s operations is simply eating the company’s seed-corn — and there is nothing like Canada has, to soften the blow. That’s not only unsustainable, it has already become a crisis, and Washington is exploiting it.

PDVSA’s latest online financial report is for 2016 and it shows that “Profit before income tax” was $16,317,000 in 2014, then $1,469,000 in 2015, and then $955,000 — less than a million dollars — in 2016. During the three-year period, “Current assets” declined from $55.2 billion to $54.6 billion, and “Current liabilities” declined from $55.7 billion to $50.0 billion. “Financial debt” declined from $40.0 billion to $33.9 billion. “Total assets” declined from $217.4 billion to $189.7 billion; and “Total liabilities” declined from $127.7 billion to $102.6 billion. Probably the company is already operating in the red now, but with every year of deteriorating infrastructure, just wearing out, with more and more and longer deferred maintenance, and with a bad long-term prospect for profitability, could the Government even sell the company? If Trump succeeds and PDVSA and every other state-owned asset in Venezuela becomes privatized, Venezuela’s citizens will be left with nothing, and the only beneficiaries will be the international bankers, even as international investors will need to take haircuts on their existing Venezuelan loans. The oil that PDVSA sells shouldn’t even be bought; it should simply remain in the ground.

According to the latest public information, PDVSA showed less than a million dollars of profit in 2016 — and the trend was downward. Anyone in Venezuela who thinks that the country can be sustained in the future, as it was in the past, from the sale of Venezuela’s exceptionally costly-to-produce oil, isn’t taking into account the broader picture, and the impact that the global-warming phenomenon will inevitably have upon the fossil-fuels industries.

There may be ways to jiggle the books to make PDVSA fool some investors into buying the company, but only the international bankers would be profiting from a sale of that firm.

Foreign Policy magazine, which represents America’s aristocracy, headlined on 5 June 2018, “It’s Time for a Coup in Venezuela”, but even if that turns out to be the final solution to the Venezuelan problem for America’s aristocrats, it won’t solve anything for the Venezuelan public — basically like Hitler’s “final solution” did nothing to benefit Germany’s Jews. Germany’s aristocracy did nothing for Jews then, and America’s aristocracy will do nothing for Venezuelans now. They’re all on their own. The leaders of the U.S.-allied nations don’t want to save them, and instead follow in the fascist and Nazi tradition. The leaders in Venezuela’s current Government, who want to save them, simply can’t save them. It’s far too late for them to start now, to do what needed to start back in “the early 1980s of 93,000 b/d” from Venezuela’s Orinoco belt — which would have been for them to stop what ought never even to have been started there: extraction of that oil.

CONCLUSION

The poverty and violence that now rack Venezuela result from a broader situation in which selling what shouldn’t even be bought has run its miserable course until the final act, which is a Government that has reached the stage where it can produce income only for international bankers and for the aristocrats who control them. Any oil company now that would want to buy those assets would merely be adding to its assets — chiefly the dirty oil in the ground — ‘assets’ (oil reserves) that can never even be used (unless the propaganda becomes even more effective in the future than it has always been until now, which might be impossible to achieve). Oil companies already have lots more of that dangerous filth than anyone except people in finance will ever be able to benefit from buying or selling.

For Venezuelans, this is a great tragedy. The U.S. and its allies are (and have been) doing everything they can to exploit the tragedy.

It’s like a hungry lion chasing a fleeing exhausted deer, who now is finally trapped.

That’s the ugly reality.

Author’s note: first posted at strategic-culture.org

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Crisis in Venezuela: An Analysis of the United States’ Interference

Aaron Denison

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As the crisis in Venezuela escalates uncontrollably for the people, the politicians are in the centre of legitimising themselves as the president of the country. Current president Nicolas Maduro has recently rejected an ultimatum by the European Union to hold a snap elections in the country stating that he would not “cave in to pressure” from those calling for his departure.  The European Union issued the ultimatum as the Juan Guaido, the head of Venezuela’s opposition-led National Assembly, declared himself as the country’s interim president . Many European countries such as the UK, Spain, France, Germany, Sweden and Denmark have all recognised Juan Guaidó as the interim president of Venezuela. Portugal, the Netherlands and Belgium have said they will recognize opposition leader Juan Guaido as president if Maduro failed to announce elections.

In addition to that, the biggest support for Juan Guaido is definitely from the United States as President Donald Trump has recognized and endorsed Juan Guaido as the president of Venezuela. Even Ireland has followed a number of other EU countries in recognising Juan Guaido as interim President of Venezuela.  Irish Minister for Foreign Affairs Simon Coveney said he supports Mr Guaido, the leader of the legislature, “in order for him to call for free, fair and democratic presidential elections”.  The United Nations however has rejected Juan Guaido, as the interim president. The UN Secretary General, Antonio Guterres responded to a letter written by Guaido seeking humanitarian aid to Venezuela. Guterres reiterated his concern about the impact of the current Venezuelan crisis on the people but however, in regards to Guaido’s request for humanitarian aid, the secretary-general requested to communicate with the Government of Venezuela, which is headed by President Nicolas Maduro . This directly meant that the United Nations are in support of the current government and president Nicolas Maduro.

Nicolas Maduro was sworn as the president on 10th January 2019 after he was re-elected in May 2018 by getting 67.7 % of the vote. This means that by law he is the legitimate leader of Venezuela. In addition to that, the country’s main opposition coalition, the Democratic Unity Roundtable (MUD), boycotted the election and that basically paved way for Maduro to be re-elected as the president. While many are now recalling for elections, why didn’t the MUD participate in the elections in the first place? They claimed that the elections was rigged in favour of Maduro but the fact that they did not contest shows that they are incapable to be in power and incompetent to run the country. Now there is Juan Guaido from the Voluntad Popular (VP), (Popular Will Party) who declared himself as the president. He was sworn in as leader of the National Assembly and de facto leader of the opposition early in January, at a time when not many in Venezuela had heard of him. It is said that at least 80% of the population in Venezuela have not heard of Juan Guaido. Thus the National Assembly basically elected a president without an electoral mandate which makes unlawful because there is a democratic process for a reason.

Another issue that should be taken into serious consideration in this Venezuelan political crisis is the involvement of the United States. It seems that as though the situation in Venezuela is a question of human rights, democracy and freedom that is built upon only by the National Assembly via the opposition although in reality that the whole move of making Juan Guaido as the interim president of Venezuela was engineered, organized and financed by the United States along with a small group of countries from Latin America and Europe. This definitely shouldn’t come as a surprise as the United States has had a long history of intervening and overthrowing leftist governments in Latin America for many years. Among a few examples are the 1954 US Intervention in Guatemala, 1964 US intervention in Brazil, 1973 US intervention in Chile, 1976 US intervention in Argentina and many others. All these interventions by the United States were coup d’états that were sponsored and engineered by the United States military by supporting right wing leaders or political parties.

The situation in Venezuela is a little different as the United States are not using military intervention yet but are engineering what many media outlets would not call which is a soft coup d’état through Juan Guaido. While many refrain from the word coup, in reality that is the situation in Venezuela at the moment because Juan Guaido is trying to seize power illegally and unlawfully. In addition, the United States seem to be using a similar tactic that was used when they intervened in both Chile and Iraq respectively in 1973 and 2003 by trying to destabilise the economy of Venezuela through economic sanctions before deciding to intervene or invade via military. This is because a destabilised economy would indeed give the United States a strong reason to invade or intervene Venezuela if needed. This was definitely the case in Iraq. Sometimes sanctions that are often used on countries are an act of war because it hurts the most poor and vulnerable sectors of a country’s population. Moreover sanctions are also genocidal and one example is in Iraq when almost 500,000 babies lost their lives due to the sanctions carried out by the United States. A similar trend is being seen in Venezuela as the US-led sanctions has cost the Venezuelan economy at least 6 million USD and this has indeed weakened the country and also the population.

Recently on 29January 2019, the United States has also announced that a new round of sanctions will block almost 7 billions USD in Venezuelan assets. These sanctions that are being carried out by the United States are actually against Venezuela’s state owned oil company Petróleos de Venezuela, S.A. (PdVSA).  As a result, all property and interests in property of PdVSA subject to U.S. jurisdiction are blocked, and U.S. persons generally are prohibited from engaging in transactions with the company. The opposition in Venezuela approves the confiscation of the 7 billion USD as it is seen by them as securing assets although in reality it is actually an international theft. As the PdVSA, is an important source of income to Venezuela and while the United States are actually aware of it, the sanctions are a clear indication that the United States are trying to cut off every last source of income available to Venezuela to weakened their economy even more.

Besides that, just like in Iraq the United States would also want to get their hands on Venezuela’s oil via Juan Guaido because it is impossible that the United States are oblivious that Venezuela has one of the largest oil reserves in the world. An additional evidence that the opposition parties in Venezuela are aligning themselves to the United States is the fact that the National Assembly in Venezuela is beginning a process of appointing new board of directors for PdVSA to transfer the controls of Venezuela’s foreign accounts. It is clear that the National Assembly in Venezuela headed by Juan Guaido are not positioning themselves of running the country on behalf of the 30 million Venezuelan people but are instead only invested in securing power and position as well as allowing the United States to intervene in their country’s internal affairs.

The United States are definitely turning Venezuela into their colony and their actions are a demonstration that represents the greatest threat to peace and regional stability of Latin America as a whole. As it is now their custom, they threaten other countries through extortion and coercion so that these countries will recognize a puppet president, which would allow them to take full control of that particular country and exert their continuous influence for years to come. We have seen a similar trend carried by the United States in countries such as Iraq, Iran, and Libya that has led to the devastating effects that remains till this day. This is bound to happen in Venezuela if the opposition leaders led by Juan Guaido are not cautious in aligning themselves wholly to the United States. Although President Nicolas Maduro has not proven himself in leading Venezuela forward, but it has to be understood that US-led sanctions since the Obama Administration has had a huge influence the Venezuelan crisis.

The opposition parties in Venezuela should have shown their will to fight for the interest of the people by not boycotting the election in May last year because the boycott basically meant that they betrayed the people of Venezuela. Personally I am not a Maduro sympathizer but I believe in that a leader should be elected through a democratic electoral process and I also denounce foreign intervention into the internal affairs of a particular country because often times history have shown that a third party intervention by the United States has always brought more negative impacts instead of positive ones. For this reason, I would be on Maduro’s side and would urge other countries to recognise him as the legitimate leader of Venezuela because recognising Juan Guaido would mean recognising the United States colonialism against Venezeula.

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