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Why Venezuela’s People Are Suffering

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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

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010

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Is the Washington-initiated Climate Summit a Biden Politrick?

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Earlier on, climate skeptics had wondered if President Biden’s January 27 Executive Order on “climate crisis” was “climate politrick?” Now, scholars in China have likened the US climate envoy’s hurried China visit last week to “a weasel calling on a friendly New Year visit to a chicken” – or a visit with evil intentions. Some overenthusiastic critics of the US in Beijing are even warning President Xi to not login for the online Earth Summit in Washington this week.

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People in China believe a snake and a wolf must never be rescued. The belief comes from a popular idiom: the Zhongshan wolf or “The Wise Old Man and the Wolf.” In a few words, the essence of the popular Chinese adage is well-captured in the following sentence: a popular fairy tale about the ingratitude of a creature after being saved. Last year, the idiom entered China’s foreign policy discourse as several IR commentators employed it to describe “ingratitude” of the Trump-led America towards the Peoples’ Republic. Following the ascent of President Biden in the White House, the Chinese commentariat quickly course-corrected itself, i.e. neither Trump nor Biden, it is the US bipartisan anti-China consensus which is the real “wicked wolf.”

Just like the curt and bland statement issued by China’s foreign ministry acknowledging China will host the US climate envoy Kerry for three days in Shanghai, 14-17 April, China released on last Sunday the text of the joint China-US statement following Kerry’s departure on Saturday. The statement said: “The United States and China are committed to cooperating with each other and also with other foreign governments to tackle the climate crisis which must be addressed with seriousness and urgency it demands.” Interestingly, or rather conspicuously, the statement neither indicated nor was followed by another press release regarding whether China will be represented at the upcoming crucial 40-nation Earth Summit being hosted by President Biden.

While it is true a few Chinese scholars and think tanks have welcomed the worlds’ two largest carbon emitting nations to come forward to cooperate with each other upholding the spirit of the Paris climate agreement. What is perhaps unprecedented and more significant is the warning to President Xi by a section of China’s leftist intelligentsia to beware of Biden’s “climate politrick.”

Talking of those who welcomed Xi-Biden climate cooperation initiative – the first sign of bilateral cooperation since the Trump interregnum, Zhang Jianyu, chief representative and vice president of the non-profit Environmental Defense Fund’s China Program, reacted positively and said: “The fact that the joint statement has been signed, means that both Beijing and Washington believe in climate change. We are hoping both China and the US take bold actions.” Li Shuo, senior climate adviser for the environmental group Greenpeace, said China could soon respond to a new U.S. pledge with one of its own, building on the “momentum” of the Shanghai talks.“The statement in my view is as positive as the politics would allow: It sends a very unequivocal message that on this particular issue (China and the United States) will cooperate. Before the meetings in Shanghai this was not a message that we could assume,” Li added. 

In contrast, an article in Utopia, one of the influential “anti-US” platforms for ideological debate in China, cautioned China’s top leadership while questioning Biden’s credentials to host the Earth Summit. The pro-Mao, leftist online intellectual discourse forum advocates Maoist and communist ideology. In a signed article on the forum’s website last Saturday – the day John Kerry concluded his 3-day stay in Shanghai and left for Seoul, a commentator using strong words not only “condemned” Joe Biden for his “arrogant” and “hypocritical” foreign policy thinking, but also urged the Chinese leadership to thwart Washington’s attempt to regain the US leadership by holding the Earth Summit beginning Thursday. The article was entitled: “China must resist and fight back hypocrite Biden.”   

In fact, as early as in November last year, within days of the presidential voting, a section of scholars in China were writing “the election of Biden may or may not turn out to be a turning point for easing Sino-US frictions…with Biden in power, the nature of Sino-US relations will not see a fundamental change, but the mode of confrontation will be relatively soft and the direction of negotiations will be more predictable.” However, with each passing day since taking office, President Biden’s China policy has consistently been predictable in only one direction – in enduring the Trump legacy. The most recent manifestation of which was on display at the testy diplomatic summit last month in Anchorage where senior officials from the two countries “traded sharply critical assessment” of each others’ policies.

Another Chinese commentary has highlighted six ideological “attacks” the US has carried out against China in the international arena under Trump and Biden administrations respectively. First is the classic example of the US-Japan nexus in politicizing and turning on its head the Chinese opposition to Japan’s decision to release radioactive contaminated water from Fukushima into the sea; second is the Western governments and media carrying out slanderous campaign of China’s “economic colonialism” in Africa; third, as soon as China succeeded in containing fight against COVID-19 last year in May and started offering humanitarian assistance abroad, the US-led started defaming and discrediting China by launching “mask diplomacy” campaign against Beijing; fourth, just like vicious propaganda maligning China’s economic assistance to Africa and China’s humanitarian aid by free supply of PPE and masks, the US launched “vaccine diplomacy” campaign to vilify China; the fifth is attacking China using the virus trajectory and accusing China of developing COVID-19 virus and exporting it from chemical laboratory in Wuhan; the sixth and the latest anti-China “false” propaganda is the “genocide” in Xijiang. Unlike the genuine human rights violation by Japan to release the contaminated water into the sea, the false propaganda against China is aimed at creating anti-China world public opinion, creating social unrest and turbulence in China and ultimately achieving their goal of destroying China, the article stated.   

Finally, it is not incorrect to view President Xi’s highly charged remarks made at two most recent international events respectively in the context of strongly-worded articles published in Utopia and other left-leaning online websites in the past few days. Two days prior to the arrival of Kerry in China, President Xi, according to the Xinhua news agency, warned the US in his speech at the China-Germany-France trilateral video conference on climate change: “Climate change could be used as a tool to disparage some countries for not doing enough.” Then two days prior to the Earth Summit, Xi apparently reiterated his stern warning to President Biden: “We must not let the rules set by one or a few countries be imposed on others, or allow unilateralism pursued by certain countries to set the pace for the whole world.” The remarks by Xi were made at China’s annual Boao Asia Forum on Tuesday.    

China’s semi-official “independent” English language CX Daily interpreted Xi’s above remarks as “veiled swipe at the new US administration under Biden” who has been busy forming alliances challenging China over issues such as Taiwan, Hong Kong and Xinjiang. Of late, mainstream media in China has been accusing Biden of not only carrying on and enduring the Trump legacy in relentlessly “attacking” China, but also that Biden has gone far beyond Trump in insulting and condescending Beijing. In fact, the Utopia commentary uses another Chinese idiom “externally strong, empty inside” to caricature Biden’s personality. It cites two recent incidents to establish how weak and hollow is President Biden, i.e. the US-China talks in Alaska and Putin’s resolve to dare the US in the Black Sea – in both instances, Biden simply caved in after he was challenged, the commentary observed. “On Iran nuclear deal issue too we saw Biden acting in the same surreptitious and crude manner. He [Biden] is typical treacherous man,” the Utopia commentary continued its verbiage.

Some Chinese scholars, therefore, have welcomed Xi’s remarks as clear rebuff to what the mainstream Western media, in particular the Wall Street Journal has been spreading, i.e. “Xi would participate in the US-initiated climate summit later this week.” These scholars are invoking yet another ancient Chinese proverb “Mouth honey belly sword” or Koumifujian in Chinese. The idiom is used as a metaphor for describing someone extremely sweet on the outside but actually shrewd, cunning and sinister. Most Chinese IR commentators are telling us, the idiom is a perfect description of Biden. 

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Americas

Russia Or China: Is Biden Right To Target Russia?

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No one can disagree with President Joe Biden when he wants to overhaul infrastructure — although a single-minded concentration on one aspect is likely to be longer lasting and a legacy.  Consider, for example, a high-speed rail link between New York and Los Angeles,  True high-speed, that is, and truly modern like the new lines in China with a design speed up to 350 km/h (220 mph), or preferably higher by the time the rails are constructed in the US.  It would make overnight coast to coast (3,000 miles) railroad trips a reality.  

What is more difficult to fathom is Biden’s foreign policy.  He appears to have identified Russia as an adversary or worse, starting with calling Vladimir Putin a killer and exposing several Russian companies that possibly support its intelligence services.  Do American companies ever provide cover for the CIA?  That is the obvious question coming to mind with an obvious answer.  Have western intelligence services including the CIA ever carried out assassinations?  If so, would the US president be called a killer?

At the same time, Russia is not the country with a stated goal of becoming the world’s leader in its economy, technology and military.  No, that’s China.  Russia only wants closer ties with the west but is being driven into the arms of China.

Given China’s stated goals and its progress towards them, it is transparent that its aims require the displacement of the US from its leadership position.  Any prospect of thwarting China’s ambitions would impel the US to cordon the  country to some extent or at the very least attempt to challenge its influence.  Instead, China is signing treaties with neighbors.  It is in Iran and it announced that it might send its own troops to Afghanistan to maintain its “peace” after the US departs.  Afghanistan, by the way, is rich in minerals and rare earth elements.  

So far Mr. Biden’s foreign policy initiatives appear tactical with a kind of tit-for-tat approach that is absent a coordinated (with allies) strategic plan to prepare the US for a confrontation politically and economically — not militarily, although as the US ramps up pressure, a skirmish here and there on the high seas could be a possibility.

A string of Chinese bases now ring the Persian Gulf extending west to East Africa and east along the Iran and Pakistan coast to Sri Lanka, across to Burma and then south to the western end of Indonesia.  The recent treaty with Russia allows convenient Eurasian access while the new closeness with Iran permits an overland route to its oil riches.  East of Iran is Pakistan which is a Chinese client state of long standing and where it has built the Gwadar port.

Given the circumstances, the US is obliged to reassess Iran from a geostrategic perspective but also Pakistan, a country that has been on the frontlines of the Afghan war since the beginning.  Pakistan is also a key to long term peace in Afghanistan as its own Pashtun population is connected to Pashtuns there through family ties and a traditionally porous border.  They also command a plurality as the largest ethnic group in Afghanistan. 

Further east China is increasing its influence in Sri Lanka, and is by far Burma’s largest trading partner.  The recent coup in Burma is its own story and an oft-reported tale in that country without noting China’s silence.  

Despite the local politics, the US can ill afford to surrender such a vast region to China without counter moves to ensure some freedom of movement within China’s tight embrace.

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Americas

Playing Politics in Times of Covid: AMLO’s Whimsical Inoculation Programme

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Image source: as-coa.org

Andrés Manuel López Obrador (AMLO) has capriciously modified Mexico’s inoculation programme as he sees fit. He has followed an improvised strategy along the way that follow no logical approach.

The initial vaccination schedule was set up in 5 stages that placed frontline and essential workers as priority sectors; the rest of the population would be divided up by age ranges and inoculated accordingly. However, last January, AMLO announced the creation of 10,000 brigades who would oversee the vaccination programme. Each brigade is made up 12 people majority of whose are active members of the president’s political party MORENA. They also were prioritised for vaccination, even ahead, some key workers. This process alone took up 120,000 vaccines that otherwise would have gone directly to frontline workers or the elderly.

As of mid April, Mexico, with a population of 117 million people, has only vaccinated over 10 million people, roughly 8.5% of the population. Only 2.6 million have received the second shot, only 2.2%. The government also announced that it was prioritising the poorest citizens and indigenous communities. In a more recent announcement, he declared teachers would be also bumped up for priority vaccination ahead of the elderly. This again demonstrates the arbitrary standards of his vaccination schedule.

The government’s decision to inoculate teachers ahead of even health workers does not come as a surprise: they’re a key voting bloc. Mexico is holding mid-term elections this coming July, and vaccinating teachers so close to voting time is the latest evidence that the president is playing politics with the vaccinations. Just like in old times under the hegemonic party, unionised teachers are crucial for AMLO’s political party to win the most votes in the next elections.

Using certain sectors of the population to mobilise voters in favour of political party is not something new in Mexican politics. In Mexico, just like in many other unconsolidated democracies, political parties and candidates themselves can turn to political agents to ensure victory in elections through the use of patronage systems or vote-buying strategies.

To fully understand the role of the Teachers’ Union (SNTE and CNTE) as a political machine, it is essential to understand its history and role in elections over the last decades. The SNTE has more than 1.6 million members nationally, while the CNTE has over 100,000 members, it was founded in 1980 and has considerably less influence than the SNTE.

The SNTE was founded in 1949, and since then they served as a satellite organisation of the hegemonic party, PRI. Up until 1992, it was mandatory for all Union members to register as active party members. Therefore, throughout these years, the PRI, regularly received electoral support from the Union. The alliance between the hegemonic party and the SNTE strengthened in 1989 when Elba Esther Gordillo was appointed as the new leader of the Union.

What was behind the motivation of the SNTE in becoming an electoral agent? For many years, the Union received monetary incentives and access to political posts. Under this arrangement, political parties and even candidates may monitor the performance of such agents to make sure they are still aligned to those of the government, political party or candidate. As long as the interests of both sides are aligned, the electoral agent is expected to work efficiently to deliver the expected results either on election day or throughout the length of the administration.

In 2005, Elba Esther Gordillo was expelled from the PRI, ending the alliance between the SNTE and the hegemonic party. The leader of the Union founded her own political party, PANAL, and participated in the 2016 federal elections. However, due to the number of voters the newly created party attracted, it was only limited to proportional representation positions. Although PANAL, presented its own candidate for the presidency, Elba Esther offered the votes of the Union in the presidential elections to other political parties with greater possibilities of winning.

The SNTE supported Felipe Calderón, the PAN candidate in 2006 and in 2012 they backed the PRI candidate, Enrique Peña Nieto. The SNTE’s geographical outreach and the role of teachers as community and educational leaders facilitate their role as electoral agents. They’re able to influence informally the vote of others as well as the opinions and voting decisions of students and their parents.

In many democracies, it is not unusual for teachers to have strong ties to political parties and their candidates, and this is critical when it comes to explaining their effectiveness as electoral agents. It is not uncommon also for teachers to be appointed as voting stations representatives. The combination of these institutional characteristics opens the door for teachers to continue to influence voters through either legal or illegal.

AMLO’s courting of the Teachers’ Union dates to his electoral campaign in 2018. José Alfredo González, son in law of Elba Esther Gordillo, was seen in a presidential campaign event to support AMLO’s candidacy. He is also an active member of Redes Sociales Progresistas, a newly created party with links to Elba Esther Gordillo. Soon after AMLO’s inauguration in 2018, AMLO set to dismantle the education reform that has been approved by Enrique Peña Nieto in 2012. This was well received by the 2 Teachers’ Trade Unions. In 2020, the SNTE expressed its support for the president, and they also ratified its adherence to the political programme of the president. AMLO also publicly asked Elba Esther Gordillo to talk openly about the (alleged) fraud of 2006. AMLO’s intentions in doing this are very clear: He wants the former leader of the Union to enter the political game by talking about the issue and taking a stance that would not be antagonistic towards the incumbent party.

There is no doubt that the president has an underlying agenda in prioritising the vaccination of teachers when mid-term elections will be held in less than 2 months in Mexico. The president has chosen CanSino as the vaccination to be used to inoculate teachers across Mexico to allow schools to reopen by the end of May in some states. Now, with only less proven vaccine options, CanSino has an efficacy rate of less than 65%, questions undoubtedly arise as to how effective the inoculation of Mexicans will be with the use of these vaccines over the already proven ones.

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