Venezuelan Presidential Election Another Battlefield in Growing China-Russia vs. U.S. War

The most blatant, indisputable "official enemy" propaganda has of late been produced by The New York Times with the reporting of William Neuman and Nicholas Casey on the presidential election in Venezuela.

For a sample, read the first paragraph of "Venezuela Election Won by Maduro Amid Widespread Disillusionment":

CARACAS, Venezuela — President Nicolás Maduro won a second term as president of Venezuela, a country in the midst of a historic economic collapse marked by soaring prices, widespread hunger, rampant crime, a failing health system and a large-scale exodus of its citizens.

From there the story goes to read like an opposition brief  in favor of a re-vote, which is what distant runner-up Henri Falcon is demanding:

Reuters lists the vote total:

The election board said Maduro took 5.8 million votes, versus 1.8 million for his chief challenger Henri Falcon, a former governor who broke with the boycott to stand. 

Turnout at the election was 46 percent, it said, way down from the 80 percent at the last presidential vote in 2013.

No doubt turnout was down significantly because Venezuelans know that a Maduro victory will precipitate more Yankee economic warfare against the country. According to Neuman and Casey,

The United States — which condemned the election as unfair and anti-democratic even before it happened — has threatened stricter sanctions. Also likely to increase pressure on Mr. Maduro’s government even before his next term begins: He has largely been cut off from international financing, and the government-run oil industry, which provides virtually all of the country’s hard currency, is in free fall, with plummeting production.

What Casey and Neuman don't mention, but the Reuters report does, is that the economic warfare is already so extreme that a U.S. oil company, ConocoPhillips, has seized significant property of the Venezuelan national oil company, PDVSA:

Furthermore, Venezuela’s multiple creditors are considering accelerating claims on unpaid foreign debt, while oil major ConocoPhillips has been taking aggressive action to seize state oil company PDVSA’s assets over a 2007 nationalization.

I was surprised to read of this last week in a business page feature written by Times energy specialist Clifford Krause, "Sanctions on Iran and Venezuela May Empower U.S. Rivals":

ConocoPhillips has seized cargoes at a refinery it leases in Curaçao and various storage facilities in Aruba, Bonaire and St. Eustatius to enforce a $2 billion arbitration ruling against the state oil company, Petróleos de Venezuela, known as Pdvsa.

The facilities were used to blend Venezuelan heavy crude with lighter oils, and the port in Curaçao was able to dock the largest tankers that typically send crude and other fuels across the Pacific.

“This will clearly limit Venezuela’s ability to export profitably to Asia,” said Francisco J. Monaldi, a Venezuelan oil expert at Rice University. “And if the supplies from Venezuela cannot arrive in Asia, China and India are less likely to go along with sanctions against Iran.”

Venezuela may hope for a reversal of the liens, either by international courts or by island governments concerned about protecting local jobs and fuel supplies. But with the country increasingly behind in its debt payments since last year, mining and oil companies are likely to make further attempts to seize Pdvsa assets in the coming months. That would limit Asian imports of Venezuelan oil even more.

More trouble may be coming for Venezuela in the next few days.

Trump administration officials have warned that they may impose additional sanctions on Venezuelan oil after the election on Sunday. Washington could restrict insurance on Venezuelan oil shipments or ban American sales of light oil used to blend with Venezuela’s heavy oil to prepare it for export. A ban on imports of Venezuelan oil altogether is less likely, although possible.

The point of the Krauss piece is that the Trump administration is biting off more than it can chew by sanctioning (with the ultimate intention of regime change) Iran and Venezuela simultaneously. China relies on both countries for its crude oil; hence, China will find a way around the sanctions:

In Venezuela, Beijing in recent years has tried to gain a stable energy source with more than $50 billion in loans in exchange for oil shipments, but lately has shied away from deepening its relationship. More recently, Russia has poured money into the tottering government and helped it create a cryptocurrency as it picks up oil fields on the cheap.

A collapse of the Venezuelan government might jeopardize payment of money owed to China and the future of oil-field acquisitions by Rosneft, the Russian oil company.

As Reuters says,

Though increasingly shunned in the West, Maduro can at least count on the support of major powers China and Russia, who have provided billions of dollars’ funding in recent years. 

In Beijing, foreign ministry spokesman Lu Kang said China believed the Venezuelan government and people could handle their own affairs and that everyone should respect the choice of the Venezuelan people.

China and Russia, at least for the time being, will stand fast with Venezuela.

White House Afraid the Venezuelan Constituent Assembly Might Actually Work

The Trump administration is ratcheting up sanctions on Venezuela, designating president Nicolas Maduro. According to Bloomberg:

The Trump administration is imposing sanctions directly on Venezuela’s President Nicolas Maduro after the vote Sunday that was a step toward rewriting his country’s constitution.

In an unusual move against a foreign leader, the Treasury Department’s designation freezes any of Maduro’s assets subject to U.S. jurisdiction and prevents U.S. persons from dealing with him. The measures were announced in a statement on the Treasury’s website on Monday.

“Yesterday’s illegitimate elections confirm that Maduro is a dictator who disregards the will of the Venezuelan people,” Treasury Secretary Steven Mnuchin said in a statement. “By sanctioning Maduro, the United States makes clear our opposition to the policies of his regime and our support for the people of Venezuela who seek to return their country to a full and prosperous democracy.”

[snip] 

Venezuela, a founding member of OPEC, has the world’s largest proven reserves and is South America’s largest oil exporter. It’s the third-largest supplier to the U.S. -- sending 10 percent of its imports last year -- and the top supplier to refineries on the U.S. Gulf Coast, home of the largest cluster of refiners in the world.

Less than a week before Sunday’s vote, the U.S. sanctioned 13 senior Venezuela officials, including the interior minister and the national oil company’s vice president for finance, which sparked defiance and condemnation from Maduro. In February, it put Venezuelan Vice President Tareck El Aissami on a list of foreign nationals subject to economic sanctions because of suspected ties to the narcotics trade.

There was tension inside the White House in recent weeks about which additional measures to adopt, including a potential ban on oil imports, according to people familiar with the discussions. The debate reflected concerns over the potential impact on U.S. gasoline prices and over the humanitarian situation in Venezuela, said the people, who asked not to be identified discussing internal deliberations.

While the National Security Council views limiting Venezuelan crude as a powerful weapon, the State Department has argued that cutting off a major piece of the country’s foreign trade could harm already suffering Venezuelans. There is significant sensitivity to the impact on Venezuelan people, one of the people said.

The American Fuel and Petrochemical Manufacturers, the largest association of U.S. refiners, had urged Secretary of State Rex Tillerson, Commerce Secretary Wilbur Ross and other cabinet officials to exempt Venezuelan crude imports from a possible sanctions package.

Bets on a Venezuelan default are climbing. The implied probability of the country missing a payment over the next year has risen to 62 percent, according to data compiled by Bloomberg on credit-default swaps. That’s the highest level since March 2016.

Investors’ bets reflect international concerns about the nation’s shaky political underpinning. The European Union “has grave doubts” about whether the election results can be recognized, spokeswoman Mina Andreeva said Monday.

Brazil, Colombia, Peru, Argentina, Chile and Panama issued statements saying they wouldn’t recognize Sunday’s vote, while U.S. Ambassador to the United Nations Nikki Haley said she would not accept an illegitimate government.

It seems unlikely that Venezuelan crude will be targeted given the pull of petroleum in Trump's White House. But if it is, it is essentially a declaration of war.

The domestic opposition didn't disrupt the Sunday's vote as promised. Even the incredibly and consistently anti-Chavez/Maduro NYT acknowledged:

The opposition made little headway in opposing the weekend of the vote. Leaders canceled a rally scheduled in the afternoon because of the clashes rocking the country. A demonstration on Friday, billed as a last stand against the vote, was poorly attended.

Instead, opposition members took to their social media accounts to drum up support.

“Today’s journey has been one of abstention and repression, with dead and wounded,” wrote Henrique Capriles [which the NYT basically repeated],  the opposition governor of the state of Miranda who narrowly lost to Mr. Maduro in 2013’s presidential election and was banned this year from running again. “A monumental failure!”

The focus of many voters in Caracas seemed to be on food, not politics. Venezuela remains in an economic tailspin, causing severe shortages of food and medicine.

“When the opposition got the National Assembly they said there would be food, and now it’s even worse,” said Juan Carlos Hernández, 43, a government employee who said he supported Mr. Maduro.

“The first thing I’m asking of the constitutional assembly is that they start putting out food,” he said, “because if they don’t, the people are going to get angry.”

I suppose the fear that is prompting Washington's hostile response is found in the quote above from the government employee. What if the constituent assembly actually does the trick and pulls Venezuela back from the brink? It would be a compelling statement for direct democracy. Even if one concedes the mainstream media's dismissal of the constituent assembly as nothing more than Socialist Party goons, you can't argue with results like more food and better policing. According to a story in The Independent:

The winners among the 5,500 ruling-party candidates running for 545 seats in the constituent assembly will have the task of rewriting the country's constitution and will have powers above and beyond other state institutions, including the opposition-controlled congress.

Mr Maduro made clear in a televised address on Saturday that he intends to use the assembly not just to rewrite the country's charter, but to govern without limitation.

The propaganda belching out of organs of the prestige press asserts, without any proof other than statements from the opposition, that participation in the informal July 16 anti-assembly referendum was robust; then it follows up, also without any proof, with a statement that turnout was poor for Sunday's vote. The Times article is a good example:

However, some polls leading up to Sunday’s voting showed that large majorities of Venezuelans did not think their country needed a new Constitution.

This month, Venezuelans issued a stinging rebuke to Mr. Maduro by turning out in droves during a symbolic vote held by the opposition. More than seven million votes were cast, opposition leaders said, with 98 percent against rewriting the Constitution.

Election officials said on Sunday night that eight million people cast ballots, which would represent more than 40 percent of eligible voters. But lines observed by reporters throughout the country on Sunday cast doubt on the figure. An independent estimate by the investment bank Torino Capital, based on a poll of voting centers, estimated that between 3.1 million and four million voters cast ballots. [This is a joke, right?]

One thing we can be sure of -- the more successful the constituent assembly, the greater the chance Washington will enhance its strategy of tension. Add another theater to the U.S. war cineplex.