Globe, Latin America, Uncategorized, United Kingdom

Venezuelan strategy against the US blockade

With the first government meeting with its creditors and the signing of an agreement with Russia, Venezuela entered into a new financial scheme in order to neutralise the blockade promoted by the United States, requested by the opposition in the South American country.

 

Photo Commons-Wikimedia

 Livia Rodríguez Delis

 

Since August, when the president of the United States, Donald Trump, signed a decree in order to bring about the siege, the barrier to the currency and their main resources has become tougher for Venezuelans that move abroad.

Trump’s measures put locks on trade with the Venezuelan government and are facilitating actions aimed at ensuring that they don’t comply with their financial commitments, like paying the bond holders of the state-owned Venezuelan Petroleum South America (PDVSA).

The United States, through the Office of Foreign Assets Control (OFAC), is using actions against PDVSA in order to damage the Venezuelan economy with the objective of hindering the payment of the debt and in this way blocking their access to finance.

To this end, they are employing analysis manipulated by country risk-rating agencies, accomplices in their financial war, to show a distorted image of the breakdown of the South American nation, making it impossible for them to meet their international commitments.

Recently, the Venezuelan Ministry for Economy and Finance reported the false description from the United States agency, Standard & Poors, which claimed to reveal a supposed delay from the country in the payment of some bonds.

Photo: Pixabay

According to experts, Washington’s intention is clearly to incentivize a change of government by affecting the main flow of finance for economic and social programmes that are being developed in Venezuela, and in this way damage the public policies that the Bolivarian government is promoting in favour of the people.

The political scientist Miguel Jaimes indicated that in the last four years the country stopped receiving more than 100 billion dollars due to the economic and financial restrictions imposCed by the government of the United States, whilst they paid an external debt of more than 71.7 billion dollars.

The principal North American financial agencies influenced by Washington since the administration of Barack Obama, refuse to grant loans, but the situation “has been much more difficult and unbearable” with the presidency of Donald Trump”, he argued.

The attempt by the treasury department of freezing the payment of interest of the bonds in 2021, 2024, 2025 and 2026 aims for the global agencies  to increase the country risk as a political tool so that Venezuela declares default (ceasing payments), and thus to have an excuse to carry out  an international intervention, he warned.

Nicolas Maduro

In response, President Nicolás Maduro has ordered the renegotiation and the restructuring of the external debt, having the first meeting in Caracas with the participation of 91% of the creditors, which was judged a huge success for the government.

The initiative of the Venezuelan leader was also endorsed by expert and director of the Datanálisis carry  investigation company, Luis Vicente León, who considered it a positive action to renegotiate with bond holders the conditions of the external debt of the republic and Pdvsa.

He warned also that it is not recommended that the country enters into default, as desired by the right-wing Venezuelans that sponsor Washington, as this situation will affect the people and the national economic development.

He indicated that the only ones who would benefit from a breach in the payments by Venezuela, would be those who possess derivatives of the bonds, default insurance companies, bankruptcy lawyers and the so-called vulture funds.

León specified that 75% of the creditors of Venezuelan external debt are North American, because of which “they would like  sanctions to be negotiated and made flexible in order to avoid losses being increased by default”.

On the other hand, the Bolivarian government considers the meeting of the 13th November as highly positive and very auspicious for the renegotiation of the debt.

The meeting offered the opportunity to ratify that Venezuela is maintaining its obligation to meet its financial commitment, as it has up to this moment, despite attempts to destabilise the South American nation from Washington and and its regional acolytes.

Photo: Pixabay

Furthermore, it served to guarantee the intention of the Venezuelan authorities to overcome those obstacles, “through serious, clear and open mechanisms, undertaken in an agreed manner” with the debt-holders, according to an official communication.

As a result of the meeting of the government committee with the creditors, the Russian and Venezuelan authorities signed a Financial Amendment protocol, which makes it possible to extend the term of payment of a debt valued at 3 biillion, 150 million dollars.

The agreement signed on the 15th November refers to the reduction of the financial burden, which will result in the freeing up of resources in order to meet the needs of the Venezuelan people and the economic development of the South American country.

The South American nation also initiated the transfer of more than 199 million dollars for the payment of  interest related to the bonds from 2019 and 2024. The new disbursement is added to over 73 million dollars that the nation has paid in the last 36 months for capital and interest. On top of this expense, PDVSA announced the payment of interest to the holders of bonds expir in 2027.

(Translated by Francine Morgan – f_s_morgan@yahoo.co.uk)

Share it / Compartir:

Leave a Comment

Your email address will not be published. Required fields are marked *

*