In a letter sent to Sec. of State Mike Pompeo, Chairman of the House Foreign Affairs Committee Eliot Engel (D-NY) described his incredulity at President Trump’s decision to withhold over $100 million dollars in foreign aid to both the World Health Organization (WHO), and its partner the Pan American Health Organization, (PAHO).
President Trump has disagreed with many international organizations like the WHO, and the move came after he criticized their handling of the COVID-19 pandemic. Eliot’s stated reason for his disbelief is how it will affect the capacity of the health services and people of Venezuela to resist COVID-19’s impact.
Venezuela has been heading for an economic and human rights disaster, both before, and after a series of crippling economic sanctions that tanked the oil economy, even though paradoxically she sits upon the largest oil reserves on earth.
The ability for the socialized oil company in the country to generate revenue has been so shattered, that reports from Diario de Cuba stated that Venezuela was trading thousands of barrels of oil to Cuba, its socialist neighbor and last remaining trading partner in the Western Hemisphere, in exchange for things like artisan products and sports coaches, which the United States Office of Foreign Asset Control (OFAC) described as "fueling the corruption of the Maduro regime".
The valves of socialized petroleum
Truly a petro state, inflation of the money supply and a decline of foreign imports in the country was present before the sanctions hit in 2017 and were worsened again in 2019 after Venezuelan President Nicolas Maduro was re-elected, as shown by a study from the Brookings institute.
The Brookings paper is a critique of another work by Mark Weisbrot and Jeffery Sachs, two researchers who published a paper examining whether sanctions fit the criteria of collective punishment, as outlined by international law. While the Brookings paper presents strong findings that the sanctions cannot be considered the cause of some 40,000 estimated child deaths based on the strength of the downward economic trends before the sanctions were imposed, as well as other unexamined co-factors, Weisbrot and Sachs do detail how the sanctions obliterated national oil revenues.
"Annual oil production fell by 30.1 percent in 2018, as compared with 11.5 percent in 2017," writes Sachs. "The difference in this rate of decline implies a loss of approximately $8.4 billion in foreign exchange".
This massive decline must be seen as separate from the inherent problem with centrally planned economies, since the U.S. herself, as Weisbrot and Sachs detail, were Venezuela’s largest customers until the sanctions arrived.
In a socialist nation, industries become nationalized, hypothetically owned by guilds of the people who are responsible for their operation. As history demonstrates, leadership positions in these guilds are often filled by corrupt officials loyal to the socialist central planners, in this case Maduro; and PDVSA the national oil company in Venezuela is no different in the minds of OFAC
According to OFAC, it’s the sale of oil and foreign assets abroad that allowed the corrupt Maduro regime to survive, and whether the socialist economic policy of the Chavismo leader is the primary force behind the appalling destitution and humanitarian troubles, entirely removing the only channel through which the great oil wealth of the country can be transformed into a currency more valued in the Venezuelan markets can only hurt the citizenry.
Furthermore, in a point not covered by the critique from the Brookings Institute, sanctions from both European countries and the US has frozen over a billion dollars in foreign currency and gold bullion owned by the Venezuelan government and held overseas which it could liquidize in order to provide lifesaving medicine and equipment for Venezuelans in the time of COVID-19.
However instead of allowing the opportunity for the Maduro government to pay for its own citizens’ healthcare, Chairman Engel in Congress wants Trump to give over $100 million in taxpayer dollars to international aid groups to try and prevent a COVID catastrophe in Venezuela.
It would seem more sensible then, for both the citizens of the United States, a country that Venezuela has never threatened, and in fact has been the primary purchaser of Venezuelan oil throughout the 21st century, and for the citizens of Venezuela, a harrowing 87% of whom are now living in poverty according to a recent survey from three different Venezuelan universities, to remove the sanctions, perhaps even temporarily, and allow them to mount a response.
The VERDAD Act
UN Human Rights Council Chief Michelle Bachelet called on countries to ease sanctions campaigns in countries fighting COVID-19 – the first mentioned being Iran, but also Venezuela, Cuba, and North Korea. To this end Trump has proved as agreeable as a rock in one’s shoe, and has in fact placed additional sanctions on Iran after it had become clear she was already the epicenter of the region.
Chairman Engel has long been an opponent of Maduro. A supporter of the sanctions, he also lauded the regime change attempt in April of 2019, and both the passage and reauthorization of the VERDAD (Truth) Act, a sweeping government action that confronts Russia, seizes Venezuelan property, undermines Venezuelan natural sovereignty, and deploys $400 million taxpayer dollars to rebuild the nation’s economy and energy infrastructure.
The 87% poverty statistic reported by Universidad Catolica Andres Bello, the scandals of international aid embellishment by America’s allies in the country, and the frequently reported numbers of Venezuelans leaving the country in excess of 4.5 million, do enough to suggest how successful the "Truth" Act has been in achieving those goals.
By passing the VERDAD Act of 2019, and Engels request for more money, Congress has demonstrated that they want to prevent a socialized government from providing social services to its people by replacing the Venezuelan government’s wealth with America’s wealth.
Everyone involved would save a lot of money if Trump simply lifted the sanctions and allowed Venezuela’s government to help the Venezuelan people to tackle the Venezuelan COVID-19 outbreak.
Andy Corbley is founder and editor of World at Large, an independent news outlet. He is a loyal listener of Antiwar radio and of the Scott Horton Show.