Venezuela’s tragedy: sanctions are not the cause of Venezuela’s difficulties

Venezuela’s tragedy: sanctions are not the cause of Venezuela’s difficulties

by Jamie Nugent
article from Wednesday 10, October, 2018

SANCTIONS ARE OFTEN TOUTED as a significant factor either in Venezuela’s decline or its current crisis.  Neither is true. US and EU sanctions mainly target corrupt individuals, such as top minister Tarek El Aissami, who has been sanctioned as a drug trafficker. $500m of his US assets have been frozen including luxury homes and cars as well as "hidden assets in different elements of the banking system." Much of that was found in "offshore accounts wrapped in some sort of legal package, wrapped in another offshore account in another country that ultimately ends up in a U.S. bank account,” said the US State Department. 

Chavez, Maduro and their friends the ‘boligarchs’, have enriched themselves while the poorest have remained poor or even more so. Nearly 10 million Venezuelans, or a third of the population, are on the minimum wage of around $1 a month. Meanwhile, Chavez’s daughter Maria is estimated to be worth $4.2 billion, most of which is held overseas to avoid Venezuela’s volatile economy.

People like Maria Chavez and El Aissami are part of the reason why the US and EU have imposed sanctions. It is surely right that life is made more difficult for these corrupt individuals and that stolen funds are frozen to hopefully be returned to the Venezuelan people?

The second reason why the US and EU have imposed sanctions is the clear and flagrant disregard for human rights shown by Venezuela’s government. Thousands killed in ‘anti-criminal operations.’ Brutality against student demonstrators (see photo). Arrests without warrants. Illegal dismissal of judges. The list is extensive and disturbing. The EU has imposed an arms embargoin response.

This year, the US Government issued new sanctionsagainst Venezuela that prohibit US citizens and bodies from purchasing Venezuelan Government debt, and that of its oil company PDVSA.  Although they may prevent fire sales of Venezuelan assets at ridiculously low prices, these sanctions will have little practical impact on the Venezuelan economy. The Venezuelan Government has already defaulted on its debt, which means that no-one will want to buy any more.

Overall, it is very unlikely that anything will change as a result of these sanctions, positively or negatively – except for the corrupt individuals targeted.  In the last few years, international banks and companies who have traditionally done business with Venezuela have stopped doing so. This has nothing to do with sanctions but rather their difficulties in getting paid and the risks in them being expropriated by the Venezuelan state. As theFinancial Times has revealed, more than three-quarters of foreign companies have left Venezuela in the last 20 years. Even Cuba has taken over Venezuelan oil facilitiesdue to unpaid debts. 

Venezuela’s decline has been not been caused by an American-backed ‘economic war’ but by the abject failure of Chavez’s ‘Bolivarian Revolution’. Elected in 1999 on the promise to make Venezuela an egalitarian and independent nation, Chavez failed on every count, and his successor, Nicolas Maduro, has only made the situation worse. Billions have been wasted on corrupt and ineffective ‘social programs’ at the expense of essential infrastructureinvestment. Dependence on imported food has skyrocketed. Tight currency controlshave left many Venezuelans unable to purchase essential items such as medicines. Petrol, food and many basic goods are subsidized or subjected to price controlsthat have made almost everything scarce. 

Venezuela’s national oil company and national bank have been pillaged to provide all these things. In addition, foreign borrowing has spiralledever higher. There are even signs that China is slowly taking over the Venezuelan economy

The causes of the present crisis lie not with Washington or Brussels but with the regime in Caracas, and its years of waste, mismanagement and wanton greed. The people of Venezuela deserve better.

For further information on the Venezuela Campaign  or its website

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