Tag Archives: Socialism

After bloodshed, Venezuelan government and foes battle for votes

After bloodshed, Venezuelan government and foes battle for votes

By Andrew Cawthorne and Francisco Aguilar

BARINAS, Venezuela (Reuters) – Tirelessly traversing the lethargic plains of Venezuela, a brother of former leader Hugo Chavez and an ally of a famous opposition detainee vie for votes.

The governorship race in Barinas state – the Chavez family’s stronghold – is the most emblematic of state elections taking place nationwide on Sunday just weeks after opposition-led protests that shook Venezuela and claimed at least 125 lives.

“At every rally, Hugo Chavez is out front, showing us the way,” enthuses Argenis Chavez, 59, an electrical engineer and incumbent governor, jumping on a bike and evoking his late elder brother at every campaign stop.

“In Barinas, defeating the government means defeating the Chavez family who have wielded power at whim for 18 years,” counters opposition rival Freddy Superlano, 41, wearing a shirt with the image of his arrested party leader Leopoldo Lopez.

This year’s prolonged protests failed to bring down the government of President Nicolas Maduro, but they hardened global opinion against the ruling socialists and led to U.S. sanctions.

Now, opposition leaders want their demoralized supporters to turn out en masse at the gubernatorial polls to overturn Maduro’s majority in 20 of Venezuela’s 23 states.

The government, in turn, wants to minimize seemingly inevitable losses, and trumpet the election as proof against accusations of autocracy in Venezuela.

“Look at our ‘dictatorship’ then: an election where most candidates are from the opposition!” Chavez ironically told Reuters, as red-shirted supporters danced around him at a rally.

With voters angry over a crushing economic crisis, polls show the opposition coalition would win handily in normal circumstances. One recent survey gave the coalition, which aspires to win 18 governorships, 44.7 percent of voter intentions versus 21.1 percent for the government.

SKEWED PLAYING FIELD?

Circumstances are far from normal in Venezuela, however, and the government has threatened to ban any candidates linked to violence in protests.

Furthermore, as in past elections during the ruling “Chavismo” movement’s 18-year grip on Venezuela, state resources are being mobilized heavily for official candidates.

Distribution of subsidized food at government rallies is commonplace, state-run companies lend transport for the events, and state media give Maduro’s candidates unfettered air-time. One opposition candidate’s brother has been arrested for alleged car theft in what the coalition says is an attempt to intimidate its ranks.

Perhaps the biggest disadvantage for the opposition is the electronic ballot sheet itself.

Despite primaries to choose a single opposition candidate per state from the plethora of parties within the Democratic Unity coalition, the pro-Maduro election board is declining to modify the ballot list to narrow it down to one name.

All initial candidates from before the primaries are listed on the ballot instead, something that could confuse opposition supporters and dilute their vote, benefiting the ruling Socialist Party’s candidates.

Further stoking opposition supporters’ skepticism, the election board is using a new vote machine provider after long-term partner Smartmatic accused it of inflating numbers in July’s controversial election of a Constituent Assembly super-body.

“OPPOSITION WANTS WAR”

On a walkabout in an unpaved shantytown on the outskirts of Barinas city, Superlano told Reuters government candidates were using helicopters to campaign while he and other opposition aspirants spent hours on the road to reach remote communities.

The government was also exploiting Venezuelans’ hunger, during a period of unprecedented scarcity, by handing out food bags in return for promises of votes, he said.

“It’s a macabre plan,” said Superlano, a lawmaker from Lopez’s Popular Will party who won the opposition primary in Barinas. “Even with all that, they are losing!”

Having dealt a hugely symbolic blow to “Chavismo” by winning five of six congress seats for Barinas in 2015 elections, the opposition now wants to end 18 years of nearly unbroken control of the governorship by Chavez family members.

While there is widespread discontent over food shortages, idle land and rising malnutrition in a fertile region that should be Venezuela’s bread basket, the government is running a rigorous campaign and painting Superlano as “the candidate of the violence” in reference to this year’s protests.

Maduro supporters say the opposition, backed by Venezuela’s elite and the U.S. government, is intent on taking power by force to seize control of the nation’s oil riches.

“They want war for Venezuela. We want peace,” said 65-year-old retiree Ramon Alvarran, proudly wearing a red T-shirt depicting the eyes of Hugo Chavez at a rally for his brother.

Elsewhere though, resentment against Maduro is palpable.

“My kids don’t have a crumb in their stomachs yet today,” said Daris Gonzalez, 36, whose three children had not eaten by lunchtime. Like many in her poor and once staunchly “Chavista” neighborhood, Gonzalez is now leaning toward the opposition.

“There has to be change. We cannot go on like this.”

Offsetting such sentiment, many young grassroots opposition supporters feel their leaders have sold out – and betrayed the memory of slain protesters – by entering an election on an unfair playing field. Abstentions could hurt their numbers.

Should the opposition triumph on Sunday, the government can limit the impact by restricting funding and taking authority away from the governors’ offices, as it has done in the past when offices have fallen to opponents.

Any overt dirty tricks, however, risk bringing more international sanctions or torpedoing an already fragile, foreign-led mediation with the opposition that Maduro needs to improve his international image.

Following the gubernatorial election, the opposition wants to shift attention to demanding a date, and guarantee of free conditions, for the 2018 presidential election to advance their ultimate goal of ending socialist rule.

“People are very angry and their anger has a face: Maduro,” said Carlos Ocariz, an opposition candidate trying to hold Miranda state for the opposition against a rising star on the government side, Hector Rodriguez.

(Reporting by Andrew Cawthorne and Francisco Aguilar; Editing by Alexandra Ulmer and Tom Brown)

Venezuela’s unrest, food scarcity take psychological toll on children

Venezuela's unrest, food scarcity take psychological toll on children

By Alexandra Ulmer

LOS TEQUES, Venezuela (Reuters) – Venezuelan siblings Jeremias, 8, and Victoria, 3, were in their pajamas and preparing to go to bed when a tear gas canister smashed through their family’s kitchen window in early July.

National Guard soldiers were pelting the building in this highland town near Caracas with tear gas canisters as they searched for opposition activists who had been protesting against unpopular President Nicolas Maduro for over three months.

Amid screams and insults from neighbors, soldiers stormed the building and arrested dozens of youths, according to the children’s mother, Gabriela.

Gabriela and her husband Yorth hid the kids in their bedroom closet as the apartment filled with thick gas after seven canisters crashed in. The guards did not enter their apartment, but the family was unable to sleep that night and the apartment reeked for days.

After that, the kids changed.

Jeremias cried and begged to leave Venezuela. His younger sister, previously not even scared of the dark, was terrified every time she heard a loud sound – an object falling, a truck, or thunder.

“She would say: ‘The soldiers are attacking us’ and cry,” said Gabriela, 30, a nurse by training. “That was the trigger for us that we had to get the kids out of here, otherwise it would be even worse for them psychologically.”

A month after the incident, the family sold what it could, packed three suitcases, and left Venezuela by bus with around $250 in their pocket, joining droves fleeing the country.

Out of fear of reprisals, Gabriela asked that their surname and country of residence not be published.

Her children’s case highlights the lasting psychological toll the OPEC nation’s economic and political crisis is having on its youngsters.

Venezuela, home to the world’s largest crude oil reserves, has spiraled deeper into chaos in recent years as Maduro – the narrowly-elected successor of leftist firebrand Hugo Chavez – has cracked down harder on the opposition amid a painful recession blamed by economists on his socialist government’s interventionist policies.

Recently, months of protests demanding early elections interrupted schools, leaving kids holed up at home or exposed to violence. A crippling recession has spawned shortages of products like milk and diapers, while rapid inflation means toys or school uniforms are unaffordable for poor families.

There is no recent data examining the psychological effects of the deprivations on children, but teachers, psychologists, rights activists and two dozen parents interviewed by Reuters suggest it could have a heavy toll.

“From a young age, children are being forced to think about survival,” said psychologist Abel Saraiba at Caracas-based child protection organization Cecodap. He said around half of his 50 patients have symptoms linked to the crisis.

Children are more prone to anxiety, aggression and depression, and could also struggle to relate with peers because they see the outside world as hostile. That could be another hurdle in Venezuela’s eventual reconstruction.

Maduro blames the opposition for traumatizing children and others via protests that often turned violent, with hooded demonstrators throwing stones and Molotov cocktails.

He says his government, which did not respond to a request for comment, has done more for children than previous administrations, pointing to youth orchestras, sports programs and vacation camps.

Yennifer Padron kisses her baby in her house at Petare slum in Caracas. REUTERS/Andres Martinez Casares

Yennifer Padron kisses her baby in her house at Petare slum in Caracas. REUTERS/Andres Martinez Casares

“MOMMY, WHEN IS THE FOOD BOX COMING?”

It is lack of affordable food – a kilo of rice costs around 20 percent of a monthly minimum wage – that is putting the most strain on children from poor families.

Some low-income families have little choice but bring their children to rough food lines at supermarkets or send them to work or beg. Parents say childrens’ games include pretending to find food at the supermarket.

In the most dramatic cases, kids suffer malnutrition and disease.

High up in Caracas’ sprawling Petare slum, waiter Victor Cordova juggles three jobs while his wife Yennifer cares for their three daughters and a baby boy in their tiny home.

The girls sometimes wake their parents in the middle of the night asking for food, and spend much of the day inquiring when government-subsidized food boxes will arrive.

“They’re always asking me: ‘Mommy, when is the food box coming? Will the food box have milk?’ I can’t get it out of their heads,” said Yennifer, 26, rocking little Aaron.

“I tell them they’re too little to worry about that, that they should only worry about studying. But they’re little sponges, they absorb everything.”

A minority of parents, appalled by once-booming Venezuela’s collapse into misery, try to hide the crisis from their kids.

Accountant Suset Gutierrez tells her two sons in the decaying industrial town of Ciudad Guayana that nighttime gunshots are fireworks from parties or exploding car tires.

“I’ve had to vary the stories because they’ve wanted to know about the parties,” said Gutierrez, 47, whose kids also asked why they don’t have more milk or pasta at home.

“I’ve had to invent that it’s because the cows have fallen ill or because heavy rains in other countries mean there’s no wheat.”

Outside Venezuela, Gabriela and her husband, who used to work as a company administrator, have found work selling flowers and at a cafe. They see their children steadily improving.

Once the family gets more economic stability, Gabriela said she will seek psychological help for them.

“They’re happy. The eldest tells me, ‘Look, there’s candy here!'” said Gabriela, laughing. “But if someone even suggests the possibility of going back to Venezuela, he starts to cry.”

(Additional reporting by Maria Ramirez in Puerto Ordaz, Anggy Polanco in San Cristobal, Mircely Guanipa in Punto Fijo, Francisco Aguilar in Barinas; Writing by Alexandra Ulmer; Editing by Girish Gupta, Daniel Flynn and Jonathan Oatis)

Venezuela opposition won’t attend scheduled talks with government

Luis Florido (C), lawmaker of the Venezuelan coalition of opposition parties (MUD) attends a news conference at the National Assembly building in Caracas, Venezuela, September 26, 2017. REUTERS/Ricardo Moraes

By Diego Oré and Andreina Aponte

CARACAS (Reuters) – Venezuela’s opposition said on Tuesday it will not join scheduled talks with President Nicolas Maduro’s government, undercutting a dialogue effort that has been viewed with suspicion by many adversaries of the ruling Socialist Party.

The government has eagerly promoted the talks amid global criticism that Maduro is turning the country into a dictatorship, while the opposition has always insisted the talks should not distract from the country’s economic crisis.

The two sides held separate exploratory conversations with the president of the Dominican Republic earlier this month. But the opposition said the government has not made enough progress on issues such as human rights to warrant full bilateral talks.

“Negotiation is not to go and waste time, to look at someone’s face, but rather so that Venezuelans can have immediate solutions,” opposition leader Henrique Capriles told reporters.

“We cannot have a repeat of last year’s failure,” he said, referring to Vatican-brokered talks in 2016 that fell apart after the opposition said the government was simply using them as a stalling tactic.

The Information Ministry did not immediately respond to a request for comment.

The opposition wants a date for the next presidential election, due by the end of 2018, with guarantees it will be free and fair. It is also calling for freedom for hundreds of jailed activists, a foreign humanitarian aid corridor and respect for the opposition-led congress.

With Spain pushing for the European Union to adopt restrictive measures against members of the Venezuelan government, Maduro may be hoping to dodge further sanctions.

The United States has issued several rounds of sanctions against Venezuela, primarily in response to the creation of an all-powerful super body called the Constituent Assembly that was elected in a July vote the opposition labeled fraudulent.

Many countries have refused to recognize the assembly, which Maduro insists has brought peace to the country of 30 million. He says opposition leaders are coup-plotters seeking to sabotage socialism in oil-rich Venezuela under the guise of peaceful protests.

Amid a fourth straight year of recession, millions of Venezuelans are suffering food shortages and rampant inflation, which the government blames on an “economic war” led by the opposition and fueled by recent sanctions.

(Reporting by Diego Ore and Andreina Aponte, Writing by Alexandra Ulmer; editing by Diane Craft and Dan Grebler)

Venezuela doctors in protest urge stronger WHO stance on health crisis

People hold letters which read "Hunger" during a protest outside the World Health Organization (WHO) office in Caracas, Venezuela September 25, 2017. REUTERS/Ricardo Moraes

By Alexandra Ulmer

CARACAS (Reuters) – Venezuela’s doctors, fed up with what they called the World Health Organization’s passive attitude toward the country’s deep medical crisis, protested at the agency’s Caracas office on Monday to demand more pressure on the government and additional assistance.

Venezuela is suffering from a roughly 85 percent shortage of medicines, decrepit hospital infrastructure, and an exodus of doctors during a brutal recession.

Once-controlled diseases like diphtheria and measles have returned due in part to insufficient vaccines and antibiotics, while Venezuelans suffering chronic illnesses like cancer or diabetes often have to forgo treatment.

Malnutrition is also rising, doctors say.

Rare government data published in May showed maternal mortality shot up 65 percent while malaria cases jumped 76 percent. The former health minister was fired shortly after the bulletin’s publication, and it has not been issued since.

In the latest protest by an umbrella group of health associations, dozens of doctors and activists gathered at the Pan American Health Organization (PAHO), the WHO’s regional office, urging the agency step up pressure on Nicolas Maduro’s leftist government and provide more aid during its 29th Pan American Sanitary Conference this week.

“There’s been a complicit attitude because they haven’t denounced things,” Dr. Rafael Muci said during the rally.

“This is an unlivable country, and no one is paying attention,” he said, adding he earns about $8 a month at a state hospital.

In a statement on Monday, PAHO stressed its main role was to provide “technical cooperation” and highlighted recent help in providing vaccines.

The Venezuelan government, which accuses activists of whipping up panic and the business elite of hiding medicines, did not respond to a request for comment.

Venezuelans seeking certain drugs often have to scour pharmacies, seek foreign donations or turn to social media.

Sociologist Maria Angelica Casanova, 51, has struggled to find psychiatric medicines for a year. “Sometimes they come, sometimes they don’t. It’s serious,” she said, as passers-by shouted “Down with Maduro!”

Measles, which were controlled after a mass immunization in the 1990s, has returned to Venezuela’s jungle state of Bolivar, PAHO data show.

As the crisis stokes emigration, Venezuela’s health problems could be exported, doctors warned.

“We don’t know how many people who are emigrating could have some of these pathogens in incubation period,” said Andres Barreto, an epidemiologist who had participated in the measles vaccination drive.

(Reporting by Alexandra Ulmer; Additional reporting by Johnny Carvajal; Editing by Richard Chang)

Venezuela Supreme Court has staged effective coup: jurists’ group

FILE PHOTO: People walk in front of the building of Venezuela's Supreme Court of Justice (TSJ) in Caracas, Venezuela June 28, 2017. REUTERS/Marco Bello/File Photo

GENEVA (Reuters) – Venezuela’s Supreme Court has progressively dismantled the rule of law, becoming an instrument of President Nicolas Maduro’s government in what amounts to a coup against the constitutional order, an international human rights group charged on Tuesday.

The International Commission of Jurists (ICJ) said the top court had undermined human rights and infringed the Constitution through a series of rulings since December 2015.

In two rulings in March 2017, the Supreme Court of Justice “effectively claimed legislative powers for itself, depriving the National Assembly of its Constitutional powers and granting sweeping arbitrary powers to the executive,” it said.

“These decisions amount to a coup d’état against the Constitutional order and have ushered in a new reign of arbitrary rule,” Sam Zarifi, ICJ Secretary General, said in a statement.

Judges on the Supreme Court are mainly from the ruling Socialist Party and/or former officials of the government of Maduro, the Geneva-based jurists’ group said.

Maduro denies accusations of a power grab, saying his actions – including the creation of an alternative constituent assembly that has granted itself lawmaking powers – are aimed at restoring peace after months of protests and violence.

Zarifi said the Supreme Court of Justice “has issued its decisions based on political considerations and ideological and party loyalties to the executive power”.

The ICJ report, “The Supreme Court of Justice: an instrument of executive power”, was issued on the sidelines of the U.N. Human Rights Council which began a three-week session on Monday.

U.N. human rights chief Zeid Ra’ad al-Hussein said on Monday that Venezuelan security forces may have committed crimes against humanity against protesters and called for an international investigation.

(Reporting by Stephanie Nebehay; Editing by Mark Trevelyan)

Venezuela’s Maduro seeks debt negotiations after U.S. sanctions

FILE PHOTO: Venezuela's President Nicolas Maduro speaks during a meeting at Miraflores Palace in Caracas, Venezuela August 25, 2017. Miraflores Palace/Handout via REUTERS

By Deisy Buitrago and Corina Pons

CARACAS (Reuters) – Venezuelan President Nicolas Maduro has invited bondholders to unspecified “negotiations” over the country’s foreign debt in coming days, in response to recent U.S. financial sanctions.

With Venezuela deep in recession and its currency reserves at their lowest in more than two decades, the Maduro government and state oil company PDVSA have to pay about $4 billion in debt and interest during the rest of 2017.

“All bondholders are invited to various rounds of negotiations over the next few weeks,” the president said in a speech late on Thursday to the new Constituent Assembly.

He reiterated Venezuela would keep honoring debt, but said he wanted to talk with bondholders affected by sanctions recently imposed by U.S. President Donald Trump.

Maduro said Vice President Tareck El Aissami, already under U.S. financial sanctions over drug trafficking allegations, and Finance Minister Ramon Lobo would coordinate talks and some “bilateral conversations” with bondholders had already begun.

In the same speech, Maduro said Venezuela would seek to “free” itself of the U.S. dollar and “implement a new system of international payments” using currencies such as the yuan, yen, rupee, euro and ruble.

The president did not, however, specify whether paying in a different currency was an option his government wanted to discuss with bondholders.

The Washington-based Institute of International Finance, which represents large banks and financial institutions, said it was advising a group of holders of Venezuelan bonds.

“This informal group will take note of the Venezuelan announcements and discuss how to proceed,” IIF Executive Managing Director Hung Tran told Reuters. The group was made up of bondholders from the United States and elsewhere, he said.

Tran said Venezuela could not change the currency of bonds without agreement by all or a large majority of holders.

Last month, Trump, who brands Maduro a “dictator,” signed an executive order that prohibits Americans from dealing in new debt issued by the Venezuelan government or PDVSA.

That could complicate any debt refinancing attempts.

Washington has also sanctioned PDVSA’s finance boss Simon Zerpa, meaning U.S. businesses are barred from dealing with him, and even Maduro himself in measures intended to punish the Venezuelan government for alleged corruption and rights abuses.

“I will be announcing Venezuela’s definitive response to the financial aggression we – and the international investors – have suffered from Donald Trump and (opposition leader) Julio Borges,” Maduro added in the speech on Thursday.

Borges, the head of the opposition-led congress whose role has been overridden by the Constituent Assembly, has been spearheading an opposition campaign for foreign financial institutions to put the squeeze on Venezuela’s government.

“Venezuela will take a position to defend the judicial and financial security of the republic and its investors or holders of financial instruments,” Maduro added.

BOND PRICES STABLE

Though Maduro gave no further details of what his government wanted to discuss with bondholders or where talks would be held, he did say 74 percent were American or Canadian.

Three bondholders consulted by Reuters said they had not received any formal approach to dialogue, though two said intermediaries for the government had been communicating with some investors informally.

“We didn’t receive an invitation or anything like that. Even if we had we don’t think we would take it too seriously,” said one portfolio manager at a large New York firm that owns Venezuelan debt, asking not to be named.

In trading on Friday, Venezuelan government and PDVSA bonds were little changed in price.

The OPEC nation of 30 million people is in the fourth year of a recession, with its population grappling with triple-digit inflation and shortages of food and medicine.

Critics say a long-failing socialist economic system is to blame for Venezuela’s financial troubles, while the government blames an alleged “economic war” by domestic foes and Washington.

International reserves stood at $9.873 billion on Wednesday, compared with nearly $30 billion five years ago, central bank data shows. They are at their lowest level since 1995.

Most of the country’s reserves are tied up in gold that cannot be used in financial transactions without going through a certification process in another country.

In another speech on Friday, Maduro said that Venezuela would begin selling its oil, gas, gold and “all products” in currencies other than the U.S. dollar, but gave no further details of the intended changes in export transactions.

(Additional reporting by Diego Ore and Andrew Cawthorne in Caracas, Davide Scigliuzzo in New York and Lesley Wroughton in Washington; Writing by Andrew Cawthorne; Editing by W Simon and Andrew Hay)

Sore at Macron’s ‘dictatorship’ criticism, Venezuela blasts France

Venezuela's President Nicolas Maduro speaks during a meeting at Miraflores Palace in Caracas, Venezuela August 25, 2017. Miraflores Palace/Handout via REUTERS

CARACAS (Reuters) – Venezuela accused France on Wednesday of joining an “imperialist” campaign after President Emmanuel Macron portrayed the widely criticized socialist government as dictatorial.

Adding to criticism from Washington, the United Nations and major Latin American nations, Macron on Tuesday called President Nicolas Maduro’s administration “a dictatorship trying to survive at the cost of unprecedented humanitarian distress.”

Many countries are outraged at the Venezuelan government’s overriding of the opposition-led congress, crackdown on protests, jailing of hundreds of foes and failure to allow the entry of foreign humanitarian aid to ease a severe economic crisis.

Authorities say local opposition leaders want to topple Maduro in a coup with U.S. support, but its new Constituent Assembly will guarantee peace.

“Comments like this are an attack on Venezuelan institutions and seem to form part of the permanent imperialist obsession with attacking our people,” the government said in a communique responding to Macron.

“The French head-of-state’s affirmations show a deep lack of knowledge of the reality of Venezuela, whose people live in complete peace,” the statement said.

It added that the assembly and upcoming state elections demonstrated the health of local democracy.

Leaders of the fractious opposition coalition boycotted the July 30 election of the assembly, branding it an affront to democracy.

They called for an early presidential election, which Maduro would likely lose as his popularity has sunk along with an economy blighted by triple-digit inflation and food shortages.

France’s foreign ministry on Wednesday reiterated Macron’s comments and said it was studying the best way to accompany all initiatives that would enable credible dialogue that included regional countries.

“It is up to the Venezuelan authorities to give quick pledges in terms of respecting rule of law and fundamental freedoms,” spokeswoman Agnes Romatet-Espagne told reporters in a daily briefing. “The European Union and France will evaluate their relationship with Venezuela on this basis.”

(Reporting by Andrew Cawthorne in Caracas, Sudip Kar-Gupta in Paris; Editing by Girish Gupta/W Simon/Ken Ferris)

Trump slaps sanctions on Venezuela; Maduro sees effort to force default

Venezuela's President Nicolas Maduro speaks during a meeting at Miraflores Palace in Caracas, Venezuela August 25, 2017. Miraflores Palace/Handout via REUTERS ATTENTION EDITORS - THIS PICTURE WAS PROVIDED BY A THIRD PARTY.

By Alexandra Ulmer and David Lawder

CARACAS/WASHINGTON/ (Reuters) – U.S. President Donald Trump signed an executive order that prohibits dealings in new debt from the Venezuelan government or its state oil company on Friday in an effort to halt financing that the White House said fuels President Nicolas Maduro’s “dictatorship.”

Maduro, who has frequently blamed the United States for waging an “economic war” on Venezuela, said the United States was seeking to force Venezuela to default — but he said it would not succeed.

The order is Washington’s biggest sanctions blow to date against Maduro and is intended to punish his leftist government for what Trump has called an erosion of democracy in the oil-rich country, which is already reeling from an economic crisis.

It suggests a weakening in already strained relations between the two countries. Just three days ago, Maduro said the relations between Caracas and Washington were at their lowest point ever.

“All they’re trying to do to attack Venezuela is crazy,” said Maduro on a TV broadcast on Friday. “With the efforts of our people, it will fail and Venezuela will be stronger, more free, and more independent.”

Venezuela faces a severe recession with millions suffering food and medicine shortages and soaring inflation. The South American nation relies on oil for some 95 percent of export revenue.

Citgo Petroleum [PDVSAC.UL], the U.S. refiner of Venezuela’s ailing state-run oil company PDVSA, is “practically” being forced to close by the order, warned Maduro, adding that a preliminary analysis showed the sanctions would impede Venezuelan crude exports to the United States.

He said he was calling “urgent” meetings with U.S. clients of Venezuelan oil.

The new sanctions ban trade in any new issues of U.S.-dollar-denominated debt of the Venezuelan government and PDVSA [PDVSA.UL] because the ban applies to use of the U.S. financial system.

As a result, it will be it tricky for PDVSA to refinance its heavy debt burden. Investors had expected that PDVSA would seek to ease upcoming payments through such an operation, as it did last year, which usually requires that new bonds be issued.

Additional financial pressure on PDVSA could push the cash-strapped company closer to a possible default, or bolster its reliance on key allies China and Russia, which have already lent Caracas billions of dollars.

“They want us to fall into default,” said Maduro, adding that just under two-thirds of Venezuelan bond holders are in the United States.

Maduro insisted that Venezuela would continue paying its debts.

The decision also blocks Citgo Petroleum from sending dividends back to the South American nation, a senior official said, in a further blow to PDVSA’s coffers.

However, the order stops short of a major ban on crude trading that could have disrupted Venezuela’s oil industry and worsened the country’s faltering economy.

It also protects holders of most existing Venezuelan government and PDVSA bonds, who were relieved the sanctions did not go further. Venezuelan and PDVSA bonds were trading broadly higher on Friday afternoon.

“Maduro may no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people,” U.S. Treasury Secretary Steven Mnuchin said on Friday.

Venezuela’s Oil Ministry and PDVSA did not immediately respond to a request for comment.

 

PDVSA UNDER PRESSURE

PDVSA, the financial engine of Maduro’s government, is already struggling due to low global oil prices, mismanagement, allegations of corruption and a brain drain.

Washington last month sanctioned PDVSA’s finance vice president, Simon Zerpa, complicating some of the company’s operations as Americans are now banned from doing business with him.

Trump has so far spared Venezuela from broader sanctions against its vital oil industry, but officials have said such actions are under consideration. The Republican president has also warned of a “military option” for Venezuela, although White House national security adviser H.R. McMaster said on Friday that no such actions are anticipated in the “near future.”

Venezuela has for months struggled to find financing because of PDVSA’s cash flow problems and corruption scandals have led institutions to tread cautiously, regardless of sanctions.

Russia and its state oil company Rosneft have emerged as an increasingly important source of financing for PDVSA, according to a Reuters report.

On at least two occasions, the Venezuelan government has used Russian cash to avoid imminent defaults on payments to bondholders, a high-level PDVSA official told Reuters.

“At this point our view is that the country can scrape by without defaulting this year, largely with the help of Chinese and Russian backing and by further squeezing imports. Next year is a tossup,” said Raul Gallegos, an analyst with the consultancy Control Risks.

However, China has grown reticent to extend further loans because of payment delays and corruption. Russia has been negotiating financing in exchange for oil assets in Venezuela, sources have told Reuters, but going forward it would be difficult for the OPEC member to provide enough assets to keep up loans destined for bond payments.

Venezuela’s government has around $2 billion in available cash to make $1.3 billion in bond payments by the end of the year and to cover the import of food and medicine, according to documents reviewed by Reuters.

 

(Reporting by David Lawder in Washington and Alexandra Ulmer in Caracas; Additional reporting by Deisy Buitrago, Girish Gupta, Eyanir Chinea, Corina Pons, Deisy Buitrago and Hugh Bronstein in Caracas, Marianna Parraga in Houston, Tim Ahmann and Ayesha Rascoe in Washington, Rodrigo Campos and Riham Alkousaa in New York; Writing by Alexandra Ulmer and Girish Gupta; Editing by Leslie Adler)

 

Venezuela-U.S. relations at lowest point ever: Maduro

Venezuela's President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela August 22, 2017. REUTERS/Marco Bello

By Brian Ellsworth and Julia Symmes Cobb

CARACAS/BOGOTA (Reuters) – Relations between Caracas and Washington are at their lowest point ever, Venezuela’s President Nicolas Maduro said on Tuesday in a speech at the presidential palace for international media that was televised to the nation.

“Unfortunately we are in the worst moment of the relationship with the government of the United States,” said Maduro.

He said that he and U.S. President Donald Trump should be respectful of each other and that relations between Venezuela and the United States should be normalized and a dialog established. “You and I should talk,” said Maduro. “Only by speaking can we understand each other.”

Earlier this month during an impromptu session with reporters in Washington, Trump said, “The people are suffering and they are dying. We have many options for Venezuela including a possible military option if necessary.”

Maduro is struggling to weather a political crisis that has shaken his government, led to months of violent protests and his being accused of trying to establish a dictatorship through a new structure for the government that has been opposed nationally and internationally.

Venezuela is also racked by a severe economic crisis that has led to chronic shortages of food and medicine.

During his address on Tuesday, Maduro spoke at length about actions the United States has taken in the region and elsewhere, specifically mentioning the war in Iraq.

Maduro, like his predecessor Hugo Chavez, has frequently railed against Washington, blaming it for Venezuela’s problems, including crushing inflation and the collapse of the local currency.

In recent weeks, the government has cracked down on the opposition including one of Maduro’s most outspoken critics in his government, Venezuela’s top prosecutor Luisa Ortega.

Ortega fled to Colombia last week with her legislator husband after saying she feared for her life. She is now going to Brazil, according to Colombian authorities.

During his speech, Maduro said Venezuela would seek an international arrest warrant for Ortega, and he accused her of having worked with the United States for a long time.

(Reporting by Brian Ellsworth and Julia Symmes Cobb; Additional reporting by Diego Ore; Writing by Girish Gupta; Editing by Toni Reinhold)

Venezuela prepares world summit to defend new legislative body

Venezuela's President Nicolas Maduro gestures during a rally against U.S President Donald Trump in Caracas, Venezuela, August 14, 2017. REUTERS/Ueslei Marcelino

By Diego Oré

CARACAS (Reuters) – Venezuela is preparing an international summit to rally support for an all-powerful lawmaking body, whose recent creation drew widespread foreign condemnation as a power grab by leftist President Nicolas Maduro.

Late last month, and in the face of anti-government street protests, Venezuela elected a 545-member constituent assembly at the behest of Maduro.

On Friday the assembly granted itself lawmaking powers. It was the latest blow to an opposition-controlled congress whose decisions have been nullified by Maduro’s loyalist Supreme Court.

The United States slapped Maduro and a number of Venezuela leaders with sanctions, and U.S. President Donald Trump said military action was among the options he was considering for Venezuela.

“We have drawn up a plan to call a worldwide solidarity with the people of Venezuela, against Donald Trump’s threat and in defense of the constituent assembly,” Maduro said in a television interview on Sunday.

“This world summit will have a combination of preparatory events in various countries around the world, and it will start this week,” Maduro said.

Maduro said help with organizing the summit would come from a regional bloc called The Community of Latin American and Caribbean States (CELAC).

The constituent assembly was elected on July 30 to rewrite the constitution, which Maduro billed as the only solution to bring about peace after more than four months of deadly opposition protests.

The opposition boycotted the election, calling it an affront to democracy. It wants an early presidential election, which it is sure Maduro will lose as his popularity falls along with an economy blighted by triple-digit inflation and acute shortages of food and medicine.

A bloc of countries called the Lima Group, including Peru, Argentina, Brazil, Canada, Colombia and seven other nations in the hemisphere, late on Friday joined the United States in criticizing the assembly for “usurping” congress’s powers.

Anti-government marches have stalled since the assembly was inaugurated on Aug. 5. In its first working session, the assembly fired Venezuela’s chief prosecutor Luisa Ortega, who had accused Maduro of human right abuses.

Ortega fled to neighboring Colombia last week. Colombian President Juan Manuel Santos said on Monday that she was under the protection of his government and would be granted asylum if she requested it.

(Additional reporting by Julia Symmes Cobb in Bogota; Writing by Hugh Bronstein; Editing by W Simon)