While enabling the perpetuation of the tyranny of Nicolas Maduro’s Venezuelan United Socialist Party (PSUV) over the country, Russia and China seem to have become the last lifeline remaining for this red-wing authoritarian regime within a national context of humanitarian devastation and economic downturn. But just how much will Russia and China influence the fate of Venezuela?
Although the political aims of Russia and China are still unclear concerning Latin America, the particular relation amid the eastern bloc and the fractured Bolivarian Republic of Venezuela is quite another matter. Since the very beginning of the socialist revolution, this superbly placed and formerly rich Caribbean territory was one of the main targets of Moscow and Beijing in the region.
In compliance with the “anti-imperial” policies hold in place by Hugo Chavez Frias, late and most important leader of the party, the country started early this century to make important approaches to the Eurasian giants, in order to progressively break down its dependence from the US, by the diversification of its international trade.
Hence, the Venezuelan government has historically stood stark as a detractor of US trade and geopolitical policies within Latin American since Chavism rose to power. Even if the socialist party hasn’t been able to completely break the dominance of Washington over its economy, its fascination with China and Russia has led their transformation into the main bankers for the Chavista regime.
Russia and China Relations to Venezuela
As the majority of investors has lost faith in Venezuela’s potential of a soon recovery, Russia and China seem to have experienced the opposite. For example, since 2006, Russia has loaned Venezuela $11 billion in military hardware, ranking behind China, that has not only become the primary arms provider of the country but its major banker. This not only represents an increment of the participation of both powers in the Latin American arms market but might also be related to their military projections around the continent.
In a similar way, both eastern powers have penetrated the Venezuelan oil industry by taking part in building and maintaining electricity, transportation, and infrastructure required to get Venezuela’s oil drilled and put onto the market. All this has been enabled through credit relations with the country, from which they have guaranteed stake percentages in the oil industry as collateral payments.
Perhaps the most interesting lending from China last year was the $2.3 billions approved to finance further infrastructure projects related to the oil industry, including Chineses refineries inside the country. On the Russian side, in 2016, Moscow contributed the important amount of $1.5 billion dollars in loans for a 49 percent stake in Venezuelan oil properties in the US, adding to the $17 billion that Rosneft, a Russian state-owned oil company, has given Venezuela since 2008.
Russia and China’s economic clout over Venezuela are undeniable. Although it is still uncertain how both countries have influenced the unraveling political plight of the country, analysts have pointed out signs of both countries in several important decisions that the administration of Nicolas Maduro, so-called dictator of Venezuela, has taken. It is likely that they both have not only found an economic partner in Venezuela, but an ally on their path to increase their power in Latin America.
Russian and Chinese Goals
Rosneft has provided $17 billion dollars to PDVSA, Venezuela state-owned oil company, since 2008. China, as well, has lent Venezuela $63 billion dollars from 2007 to 2014— 53% of all its lending to Latin America during that time. This impressive amount of money looks like a big gamble considering the ballooning situation of the debtor, which was ostensibly considered an annoying defaulter by both eastern powers.
All forecasts predicted a defaulted Venezuela by November 2017, until its debts payments, once again, were forgiven by Russia and China and changed to a payment plan based on PDVSA bonds. Another retrieval for a country that’s been at the edge of the abyss for almost five years.
For many political analysts, that kind pardon is not a proof of favoritism but a sign that Venezuela might be important for both countries on a global scale. Perhaps in terms of their geopolitical aims within the whole region, especially if it is considered that oil production from Rosneft is more than enough to fulfill the need of the Russian Federation.
Whether Russian and Chinese amnesty is an ultimate resolution to save their historical investments or not, Nicolas Maduro’s unlikely capability of restoring the economy constrains the country to the decision that might be taken in Moscow and Beijing. Meanwhile, Venezuela is on a non-official default.
What’s in Store for Venezuela’s Future?
There is nothing that can be predicted about the future of this nation beyond its economic stance. In a year of dictatorially advanced Presidential elections, that is foreseen as another episode of Nicolas Maduro’s despotism, during a massive diaspora of Venezuelans and with the disabled political opposition, it’s hard to think that the solution still lies inside the country.
What many have started to think is the opposite: international forces might be the only ones capable of overthrowing Maduro and his bigots. And in spite of the apparent interest of Russia and China about keeping his corrupted regime alive – or protecting their properties – this year is envisioned as a year of interesting changes for this Latin American nation. Changes of mind from the world powers could decide Venezuela’s fate.
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