Nicolás Maduro is in financial trouble. Western sanctions blocked half of the reservations of gold and foreign currency from the Central Bank of Russia that are placed in European banks, so Vladimir Putin decided not to give guarantees on the resources that, as a result of illegitimate enrichment, the cupola that controls power in Venezuela has deposited in that nation.
Five weeks ago, Hugo Chávez’s heir asked Putin to unfreeze the funds that Petróleos de Venezuela and the Ministry of Defense have in several Russian banks included in the US blacklist, especially the Promsvyazbank (PSB).
To avoid US sanctions on PDVSA, Maduro has used the Russian banking system. In 2019 he moved from Lisbon to Moscow the European subsidiary of the Venezuelan state oil company, as well as the bank accounts of the gold mining company known as Minerven, which until then were managed directly through the BCV. This had allowed him to receive foreign exchange from oil exports penalized by the United States and from “blood gold” for the importation of food from the CLAP boxes – a mechanism for social control of the population – and other goods.
Steven MnuchinTrump’s Treasury Secretary between 2017 and 2021, said in a press release when intermediaries in the sale of Venezuelan oil and tankers were sanctioned, that “those who facilitate the attempts of the illegitimate Maduro regime to circumvent United States sanctions they contribute to the corruption that consumes Venezuela.”
Therefore, the exclusion of Russia from the international financial system has forced the Venezuelan de facto ruler to look for other alternatives to obtain income in dollars.
In this context, a group of 25 Venezuelans, self-proclaimed “civic and academic leaders and renowned economists who defend democracy,” addressed the President of the United States and other representatives of his government involved in that country’s policy towards Venezuela, to ask them “that allow the return of Western oil companies and other private companies to regenerate the national oil sector”
In addition, in a sort of adviser to Maduro, they propose that these companies also be allowed to manage their projects and their contractors, in addition to export revenues, including the corresponding royalties and taxes. “Companies will provide the technology and capital that the sector needs so much,” they indicated.
It happens that the United States sanctions on PDVSA date back to 2011, with the administration of the Democrat Barack Obamafor violating US sanctions against Iran. And in 2019, the government of the Republican donald trump he imposed them for being “for a long time a vehicle for corruption. Various schemes have been designed to embezzle billions of dollars from PDVSA for the personal benefit of corrupt Venezuelan officials and businessmen.” That is to say, the Venezuelan state oil company has been a means of money laundering that has allowed maintaining the apparatus that has sustained Maduro in power.
Today it is known that the oil business is one of the main sources for enriching the madurista political and military elite. They charge 30% in advance and the rest (PDVSA and trader) once the shipment is delivered to the refinery.
In a kind of magic, “civic and academic leaders and well-known pro-democracy economists” decree that “with the return of Western companies, Venezuelan oil production may increase significantly in a few months and even more next year.” They believe that the current rule of law guarantees their operations.
The madurismo has unfolded a narrative similar to that of the indigenous people at the time of the El Dorado colony: Venezuela will export 830,000 barrels per day average year in 2022. With this assumption, the Credit Suisse investment bank, on April 6, projected that “the country’s gross domestic product could grow 20% this year as the increase in oil production drives a spectacular rebound of an economy that sank just two years ago.
Ecoanalítica estimates that, with this volume of exports and an increase in the price of a barrel of oil, the Maduro regime would receive 16.2 billion dollars in 2022. This would give it oxygen this year, given the unavailability of funds frozen in Russian banks.
However, the mere statistical analysis of Venezuela’s oil production and exports since the Trump sanctions until March 2022 contradicts the legend of the Venezuelan El Dorado.
The first conclusion is that the two variables ―oil production and exports― present a strong positive correlation. That is, if one increases one, the other also increases and vice versa. Therefore, Venezuela would have to pump 1,038,827 barrels per day in the remainder of the year to reach the ideal goal of 830,000 barrels per day of oil exports. In the first quarter, it produced an average of 682,000 barrels per day and exported 497,000 barrels per day.
In addition, in order to reach the required production, a capital investment of 2,500 million dollars will be needed in the remainder of the year.
Maduro’s need for foreign currency is such that there is talk in Caracas that he is rehearsing the mirage of a “perestroika,” according to the journalist. Alonso Moleiro.
At a time when Western democracies are struggling with the authoritarian-kleptocratic regime of Putin and his associates in Ukraine, the 25 Venezuelans step out to support Maduro, creating noise in the relationship between the White House and the interim government of Venezuela.
We Venezuelan democrats should rather be united around the weakening of the Maduro regime due to the lack of foreign currency.
If the war is won by Zelensky, Chavez’s successor will have to negotiate his exit from power with elections, resignation or another, since he will not have enough funds to continue usurping power. Of course, if Putin is victorious there will be no perestroika in Venezuela. He will cling to power in the best style of Daniel Ortega in Nicaragua.
For this reason, while the end of Ukraine is defined, Maduro urgently needs the relaxation of US sanctions on PDVSA.
