How US sanctions hurt Venezuela's people

Much media fanfare has been made about US President Donald Trump pledge to deliver US$20 millions worth of humanitarian aid, in the form of food and medicine, into Venezuela via its borders with Colombia and Brazil.

While Trump is using a request from self-proclaimed “interim president” Juan Guaido as a pretext for the move, it is clear that the purpose is to provoke some kind of reaction from the Venezuelan military, who continue to recognise elected president Nicolas Maduro: either they let in the aid, thereby implying allegiance to the coup president; or block its enter, and risk a further escalation in tension and potential military conflict.

The International Committee of the Red Cross (ICRC) has told the Trump administration that this manoeuvre poses important risks for all involved if it is undertaken without prior agreement from the Venezuelan military. ICRC director of global operations Dominik Stillhart explained to AP that it would only participate in the deliver of the aid “with the agreement of the authorities”.

In all media coverage, almost nothing has been said of the impact that the devastating and illegal US sanctions have had on the Venezuelan people, or that the latest round, including the impact that the seizure of Venezuela’s oil assets in the US will have.

Below, Pedro Santander looks at how these sanctions have worked to strangle the ability of the Venezuelan government to respond to the needs of its people.

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Every day the world media dedicates extensive coverage (preferably headlines and opinion columns) to highlight all the difficulties that the Venezuelan people are going through. In doing so, they always blame the administration of president Nicolás Maduro.

Journalists, opinion gurus, singers, actors, academics and politicians have expressed their opinions on Venezuela in the main media outlets across the world. But this media obsession with the country always conceals a factor that is key to any rigorous analysis: the blockade.

As has occurred for decades with Cuba, the political process and the Venezuelan situation are judged as if this huge factor did not exist.

There is nothing new about a country, whose government tries to carry out an independent domestic and foreign policy and criticises capitalist system, will be brutally blockaded.

It has been happening to Cuba for more than 50 years.

It happened to the government of Salvador Allende in Chile, which from the beginning had to deal with an international economic blockade that led to the freezing of copper exports.

In his 1972 speech to the United Nations, Allende denounced “the financial and economic blockade applied by the United States.” Last year, Venezuelan President Nicolás Maduro made similar remarks to the 73rd UN General Assembly.

The strategy is the same: politically and economically blockade dissident (that is, sovereign) countries and have the media conceal the blockade and its consequences from international public opinion.

It happened to Cuba, it happened to Chile and it is happening to Venezuela.

However, in every case, the blockade takes on its own particular expressions and modes.

In the case of Venezuela, four can be identified: 1) Blockade via extra-territorial orders; 2) blockade via intermediaries; 3) blockade via credit rating agencies; and 4) the blockade of information, promoted by the corporate media.

The first mode was formalised on March 9, 2015, when then-US President Barack Obama signed an executive order that declared Venezuela “an unusual and extraordinary threat to the national security and foreign policy of the United States,” and further declared “a national emergency to deal with that threat.”

This executive order has been extended over time and expanded in its effects.

Last May, in response to the insolence of the Chavistas to call elections (once again), Trump ordered the Department of the Treasury to prohibit US citizens from buying any form of debt from the Venezuelan government, including accounts receivable.

These sanctions include the Central Bank and the state oil company PDVSA. To date, Venezuela cannot use US dollars as international currency, nor can it negotiate any international transaction using that currency. This makes it impossible for Venezuela to renegotiate its external debt, as most of the debt contracts belong to US jurisdiction.

Along the same line, a large part of the international finance system has been promoting a scheme to blockade Venezuelan finance operations in recent years. Correspondent banking contracts with Citibank, Comerzbank, Deutsche Bank, etc. have been unilaterally cancelled.

In July 2017, the paying agent for PDVSA bonds, Delaware, said that its correspondent bank (PNC Bank) in the US would no longer receive funds from the state-owned oil company.

The second mode, the blockade via intermediaries, is a typical expression of the current times. The objective is to hinder any intermediary from trading with Venezuela, obstructing all interactions and relations between that country and companies in the US.

In August 2017, Novo Banco (Portugal) stated it had become impossible to carry out dealing with Venezuelan public institutions in US dollars due to blockades imposed by intermediaries. In this way, payment intermediaries are impeded from operating, thus blocking any ability to carry out payments.

This method has had humanitarian consequences, as the purchase of medicine and food has been affected.

In 2017, 300,000 doses of insulin paid for by the Venezuelan state, were not delivered to the country because Citibank blocked the purchase of this product. The US bank refused to receive the funds that Venezuela was transferring to pay for the import of this huge shipment, which diabetes patients required. This meant the insulin remained stranded at an international port, despite the funds being available to pay for the medicine.

Colombian pharmaceutical BSN Medical has also blocked the importation of a shipment of Primaquine, a medicine used to treat malaria.

A total of 23 payments carried out via the international finance system have been returned (including US$39 million for food, basic supplies and medicine.)

Since November 2017, US$1.65 billion in state funds allocated to buying food and medicine have been held up by finance company Euroclear, in compliance with the sanctions dictated by the US Department of the Treasury.

This blockade via intermediaries not only targets financial operations. It also affected the ability of Venezuelans to travel.

Since 2014, Air Canada, Tiara Air, Alitalia, Gol, Lufthansa, Latam Airlines, Aero México, United Airlines, Avianca, Delta Airlines, Aerolíneas Argentinas and other airlines have left Venezuela. This has made it increasingly difficult to fly there.

Travel agencies have also joined the blockade. For example, 15 Venezuelan boxers could not attend the classification event for the 2018 Central American and Caribbean Games because they were not able to reach an agreement with the agencies, which imposed several limitations, including increasing ticket prices from US$ 300 to $2100 a person when they noticed they were dealing with the Venezuelan Boxing Federation.

When a private party later offered the team a charter flight, Colombia and Panama did not authorise it to use their air space. Mexico also closed its airspace to the flight. A similar situation occurred with the female volleyball team.

Guatemala refused visas to the Venezuelan rugby team to participate in the South American Four Nations B championship last year and to the wrestling team participating in the Pan-American Championship.

Cultural events are also blockaded: In early 2018, Italian bank Intensa Sanpaolo blocked funds for the Venezuelan pavilion to participate in the XVI Venice Biennale of Architecture. Minister Ernesto Villegas described this as a “cultural crime”, and after hard negotiations and complaints, managed to break the blockade.

Obstacles are not only placed in front of Venezuelan cultural and sports delegations wanting to travel abroad and represent their country. The boycott also operates the other way: foreign artists and athletes refuse to travel to Venezuela, and unashamedly comment on Chavismo and the Venezuelan Government.

Perhaps Miguel Bosé and Jaime Bayly are the vilest examples of this. This cultural and sports boycott is very effective when it comes to influencing world public opinion. It is also a powerful tool for promoting a negative attitude towards Venezuela, due to the popularity of figures like Miguel Bosé, Alejandro Sanz, Kevin Spacey, Gloria Stefan or Pittsburgh Pirates’ Francisco Cervelli, who spread negative propaganda in the context of a multi-dimensional blockade.

The third mode of the blockade is expressed in the arbitrary and unjust risk ratings given by agencies.

The country risk (CR) assigned by rating agencies is completely unwarranted when compared with Venezuela’s compliance with its external debt payments.

In the past four years Venezuela has honoured its loan commitments of $73.359 billion. However, its CR has kept soaring. As economist Alfredo Serrano notes, “there have been 32 months in the past 14 years in which Venezuela’s CR has risen, despite the rising price of oil.

“Currently, the CR, as rated by JP Morgan (EMBI +), is at 4820 points, that is 38 times Chile’s rating, even though this country has a debt/GDP ratio similar to that of Venezuela.

“All this makes any chance of obtaining loans more expensive and practically impossible.”

These three modes of blockading are dripping in cynicism and paradox: while, on one hand, the international media denounces “famine and a humanitarian crisis” in Venezuela, on the other hand, pro-US countries and institutions, in a coordinated action, are restricting the shipment of medicine and food to the country.

While the Lima Group [of 11 primarily right-wing Latin American countries and Canada], the US, and the European Union express their concern about the Venezuelan diaspora, these same countries’ airlines have abandoned the country.

While payment commitments are honoured, the country’s risk rating continues to rise.

This is an absurd inversion of reality. Yet, no matter how absurd, it is ideologically supported by the fourth mode of blockade: the media.

This blockade is also paradoxical, as Venezuela is the most discussed country in the international corporate media. What we have is a “noise blockade”, different from that of, for example, the silent blockade on news regarding Guantánamo, the massacres in Yemen or Palestine, or the constant murder of journalists in Mexico.

On the contrary, when it comes to Venezuela, there is an abundance of information, a continuously escalating agenda and a verbose feast.

In effect, during 2017, from a sample of 90 US media outlets, there were 3880 negative news stories about Venezuela, that is, an average of 11 a day, led by Bloomberg and the Miami Herald.

When it comes to news agencies, Reuters and AFP together ac count for 91% of negative news stories.

In turn, the Spanish newspaper El País mentioned Venezuela in 249 of their 365 issues in 2017; that is, almost daily and always in a negative fashion.

If this seems like an exaggeration, then there are no words to describe the reporting by German media outlet Deutsche Welle: it published 630 news stories about President Maduro — almost two a day.

In terms of the Latin American media, those based in Mexico, Colombia and Chile (that is, the main members of the Pacific Alliance), tend to be the ones that report with the least journalistic rigour: 4200 negative news stories were published in 2017 in Mexico; 3188 in Colombia; and 3133 in Chile.

None of them mentioned the blockade,

The media blockade operates by generating a lot of noise and, at the same time, making the economic blockade and the Chavista people invisible. Neither of them exists for the corporate media. So world public opinion, which gets its information on Venezuela primarily through the hegemonic corporate media, tends to form a biased view of the reality in Venezuela.

This is the formula of the current blockade, installed as a foreign policy by the US against peripheral countries that, like Venezuela, seek to build their own future on the basis of national sovereignty.

There is a clear continuity with cases such as those of Cuba and Chile in the 20th century, but there are also features characteristic of the 21st Century and of this particular stage of imperialism.

[Translated from Latin American Strategic Centre for Geopolitics (CELAG) by Pedro Alvarez for Green Left Weekly]

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