Category Archives: Socio-economic Collapse

Good day... And a Wonderful Wednesday to you... I watched my beloved Cardinals last night win their game against their foes across the state. I kept switching back and forth to the Blues game that they also won in Boston... So a good night for St. Louis sports teams and fans... I had to chase the squirrels out of my gas barbeque pit again yesterday, they had built another nest in the pit, and there were 3 baby squirrels in there that I had to chase out, don't worry squirrel lovers, the mama came back and got her babies and were off to build another nest... Little Feat greets me this morning with their rock classic song: Dixie Chicken...

Well, the dollar got sold for a brief time yesterday, after the consumer inflation data printed, and showed even in the watered-down, stupid CPI, prices increased to 8.5%, the highest level for CPI since 1981, and back then the number was on its way down, not on its way up, like now. But, that selling of the dollar didn't last too long and by the end of the day the dollar was getting bought again, and the BBDXY dollar index a 1 1/4 points gain...

Gold continues its march to higher ground albeit in small amounts, but gains nonetheless. I find this dollar strength to be stranger than fiction, but I also view Gold's rise while the dollar is so strong to be curious, indeed... Gold gained $12.10 yesterday to close the day at $1,967.20, and Silver turned around its early loss of 10-cents, to show again on the day of 25-cents, which put Silver's closing price @ $25.43.... Bonds rallied yesterday ( was the Fed/Cabal/Cartel buying again?).... And Oil also rallied to move back above $100.....

In the overnight markets last night... The broken record keeps playing the same song, as the dollar continues to get bought, along with Gold & Silver... Gold is up $13, and Silver is up 41-cents this morning... My spider-sense is tingling and I'm going to go out on a limb here and say that Gold & Silver have turned the corner, and are on their respective ways to much higher ground. I also have the thought that Oil is moving higher too...

Yesterday, the gov't's watered down, stupid CPI showed that inflation for March rose at the fastest clip since 1981, with the difference between then and now being that inflation is now on its way up! The CPI was 8.5% for March year on year... And that report got the fires roaring under Gold, and Oil...

Well, the gov't's inflation numbers did not disappoint, were still looking for additional price increases because if you recall, PPI ( wholesale inflation), to work its way through to consumer inflation.... It's really gotten out of hand, all this inflation... But have no fear, folks, Mighty Mouse is going to save us with two, back-to-back rate hike beginning this month.... Yeah, that should do the trick....NOT!

I think the thing about hiking rates 50 Basis Points at a time, that's being shrugged off is the effect that the rate hike will have on the already, stumbling, bumbling, fumbling economy.... Recall the Jerome Powell promised us the he could fight inflation and deliver a soft landing for the economy... I'm from Missouri, so he's going to have to show me, how that's done, because I'm not buying what he's selling... The boys and girls at the Eccles Building are so far behind the inflation 8-ball.

The Reserve Bank of New Zealand (RBNZ), being a proactive bank, hiked their Official Cash Rate (OCR), yesterday, another 25 Basis Points to bring their OCR to 1.50%...

And in the U.K. their consumer inflation report for March was just about as bad as it was here. U.K. inflation rose to 7%, March year on year, and is the fastest rate of inflation since 1992... And after I tell you this little ditty, I bet you'll say to yourself or maybe out loud,, "That's what we should have done in 2008 and now!"

Swiss judges sentenced a banker to three and three-quarters years in prison as it found him guilty of fraud and other counts, in a trial that has gripped the nation. He was a former Swiss 'banker of the year'

Man can you imagine, what the world would be like if the U.S. gov't, lawmakers, etc. had started down the list of corrupt bankers back in 2008, and started throwing them in jail? And then continuing their jobs through to today, I'm thinking of all the fraud that Wells Fargo has been charged with, and JPMorgan's list of bad things, among others... The world would be a better place, the financial system would be better/ stronger, and future bankers would think twice before going down that road... I'm just saying...

OK... so remember last spring when I went down the road of talking about defaults and digital currencies, etc? To jog your memory, I talked about how with all the debt in the world, that eventually we would see a country default, and then another and another, and didn't leave out the U.S. defaulting... Well, here are a year later, and not one country but two are on the edge of defaulting... Russia has 30 days to come up with the hard assets to pay their bond holders, and Sri Lanka is taking steps to avoid default, but I doubt they'll get it worked out...

This is not to be taken as something that can be shrugged off folks... I can't put enough emphasis on this, because this is just the beginning... Too much debt in the world is going to come home to roost, this summer, making this summer to be known in the future as the summer of debt default...

On a sidebar, this June we will celebrate the 55th anniversary of the Summer of Love... Where were you in 1967? Maybe you participated in the Summer of Love? I know I've lost quite a few of you, for you were too young, or not even born yet... But this was real, folks...

OK... Well, I've already gone over the stupid CPI report that printed yesterday... Today's Data Cupboard is basically empty, and in need of restocking! And restocking it will get, as tomorrow's Data Cupboard will have Retail Sales for March along with other prints. The BHI (Butler Household Index) indicates that March Retail Sales will be better than February's that were nearly flat...

I'm talking about tomorrow's Data Cupboard, because.... I won't be writing tomorrow. You probably don't want to know why, but I'll tell you any way. Remember those spots on my bald head that I told you had gone, after I applied the magic lotion the doctor gave me? Well, they're back and worse than before, so the doctor said, get your self in here and let me look at them. And so that's where I'll be tomorrow bright and early in the morning... So now, you know!

To recap... The broken record keeps playing the same song, that goes like this: the dollar, Gold & Silver continue to get bought... It's a catchy tune but I don't think you could dance to it! New Zealand hike their OCR, and in the U.K. their inflation is soaring too... Faster than any time since 1992... So the Bank of England is far behind the inflation 8-ball, just like their brothers in the U.S.

Here's your snippet: "The tiny island nation of Sri Lanka in the Indian Ocean released a statement Tuesday that said it would default on its foreign debt, including bonds and government-to-government borrowings, amid its worst economic crisis in over seven decades.

Sri Lanka's finance ministry said it "has had an unblemished record of external debt service since independence in 1948."

A confluence of factors has drained the South Asian island nation's foreign exchange reserves by more than 70% since the virus pandemic began, including the collapse in tourism and poorly timed tax cuts.

"Recent events, however, including the effects of the Covid-19 pandemic and the fallout from the hostilities in Ukraine, have eroded Sri Lanka's fiscal position that continued normal servicing of external public debt obligations has become impossible," the statement said.

Last month, the Washington-based International Monetary Fund (IMF) warned Sri Lanka's debt is unsustainable:

"Although the government has taken extraordinary steps in an effort to remain current on all of its external indebtedness, it is now clear that this is no longer a tenable policy," IMF said.

The socio-economic crisis unfolding on the island nation of 22 million people has already sparked mass unrest. It suffers from widespread food shortages, out-of-control inflation, and rolling blackouts."

Chuck again... Yes, this is just the beginning folks, buckle yourself in snuggly, and keep your arms and legs inside the car at all times...

Market Prices 4/13/2022: American Style: A$ .7412, kiwi .6772, C$ .7901, euro 1.0828, sterling 1.3006, Swiss 1.0695, European Style: rand 14.5050, krone 8.8383, SEK 9.5418, forint 348.73, zloty 4.2861, koruna 22.5605, RUB 82.59, yen 125.89, sing 1.3752, HKD 7.8392, INR 75.97, China 6.3680, peso 19.76, BRL 4.6761, BBDXY 1,210.64, Dollar Index 100.39, Oil $102.27, 10-year 2.72%, Silver $25.76, Platinum $980.00, Palladium $2,459.00, Copper $4.66, and Gold... $1,977.30

That's it for today... I'm late, I'm late for a very important date... I'm having so many issues with my laptop, that it takes me about 2 hours longer each day to get this letter out than normal... I know, buck up and buy and new one, right? Ahh, grasshopper it's not that easy... All the Cardinals' runs last night came by the home run... Now I have nothing against home runs, but I prefer old time baseball, with hit and runs, bunts, sacrifices, etc. That brand of baseball produces more action, and less sitting around waiting for a 3-run homer... I'm just saying... ELO (Electric Light Orchestra) takes us to the finish line today with a live version of their song: Can't Get You Out of My Head.... I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

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The broken record keeps playing the same song - FXStreet

Russia's President Vladimir Putin signed decrees to recognize independence of the Donetsk and Luhansk. Moscow ordered troops into these areas on Monday, escalating the prospect of outright war between Russia and Ukraine.

Alexei Nikolsky/TASS via Getty Images

No matter how desperately one might long for a silver lining in the current situation, the fact remains that Russias recognition of the two breakaway republics is yet another major violation of international law, writesStefan Wolff and Tatyana Malyarenko.

Vladimir Putins recognition of the independence of the two breakaway republics of Donetsk and Luhansk followed a surreal live broadcast of a security council meeting in the Kremlin. Sitting facing the 13-member council, Putin cajoled and argued as, one by one, his most senior officials including Dmitry Medvedev, a former president and prime minister, and the countrys foreign minister, Sergei Lavrov took to the lectern to provide their boss with "reasons" for the formal recognition of the two republics in the countrys east as independent states.

He followed this decision by authorising Russian troops to cross into the republics in a "peacekeeping" capacity. It was also reported that the recognition treaties give Russia the right to establish military camps there.

Blaming the decision entirely on Ukraine and those governments in the west above all the United States which "control" Ukraine, Putin questioned more than once the very legitimacy of the existence Ukraine as a nation-state. He put forward an argument that was very similar in language to an essay he published on the Kremlins website in July 2021, On the Historical Unity of Russians and Ukrainians.

Putin portrayed recognition as a decisive step by a true "great power" asserting its interests and protecting vulnerable "kin" communities. But the gambit raises more questions than it answers. The most obvious among them is whether this is the end of the current crisis, or at least the beginning of the end of it.

An optimistic reading would be that the recognition offers a way out for everyone. Putin saves face by humiliating Ukraine and the west but avoids full-scale war and the human and economic costs that would impose on Russia.

If you take this at face value that Putin is only interested in protecting the rights of the two pro-Russian republics then accepting recognition would spare Ukraine a major military confrontation with Russia. It would also mean that Kyiv would avoid the domestic political difficulties and socio-economic costs that an implementation of the deeply unpopular 2015 Minsk agreement would mean for the Ukrainian president Volodymyr Zelenskyi and his government.

As in Georgia after the invasion of 2008 and with Crimea after its annexation by Russia in 2014 recognition could lead to a gradual stabilisation in the regions. Neither side has to argue about the implementation of the Minsk agreement anymore. The deadlock that had been reached in this process would no longer constitute a source of tension and mutual recrimination.

But this is a very optimistic assumption. It would be a mistaken reading of perhaps the most dangerous moment of European and global security since the end of the cold war.

No matter how desperately one might long for a silver lining in the current situation, the fact remains that Russias recognition of the two breakaway republics is yet another major violation of international law. Western sanctions are now being introduced and may include full and most punitive measures. Previous disagreements between the EU, US and UK on the scale of sanctions seem to have been overcome.

Russian actions have, if anything, strengthened western resolve, as is clear from the immediate responses from countries like the UK and Germany, which has announced it wont certify Russias Nord Stream 2 gas pipeline.

The current crisis is about more than the status of certain areas of Donetsk and Luhansk regions, as the territories are referred to in the Minsk agreement. It does not resolve the broader tensions between Russia and the west over the future European security order.

It is obvious that Putin has become convinced that the continuing status of Donetsk and Luhansk as de facto states within Ukraine and thus as an instrument of leverage over Ukraine and, by extension, over its western partners had ceased to serve Russias purposes. But his hour-long televised speech has given little cause for optimism that their recognition has put an end to the Ukrainian issue.

Significantly, Putins speech focused much more on the wider problems of Russian-Ukrainian relations than the problem of the two Donbas republics. The Russian president reiterated a much broader agenda that links the situation in Ukraine clearly to his overall challenge to the international order. Various snippets are worth looking at more closely in this regard.

According to Putin, Ukraine as a result of Soviet boundary drawing in the 1920s, 1940s and 1950s became an artificial territorial construct. After the collapse of the USSR, it ended up with "historically Russian territories" inhabited by ethnic Russians whose rights are violated in contemporary Ukraine.

Putin also asserted that these violations have in large part been due to Ukraine being a failed state in which decisions are being made by corrupt authorities that are under the control of "western capitals". But, perhaps most importantly, he repeated that Ukraine, by moving closer to Nato, has already created threats to Russia to which Russia must respond.

Taken together with the signing and immediate ratification of "friendship treaties"between Russia and the now recognised breakaway republics and the decision to move Russian troops into the newly recognised republics, Putins recognition speech and its tone make it much more likely, therefore, that this is at best a brief interlude in a continuing and deepening crisis.

More realistically, the recognition and the actions taken in its immediate aftermath signal a dramatic escalation on the part of Russia. Putins track record since 2008 should not leave anyone in doubt about the fact that this crisis is far from over.

-Stefan Wolff, Professor of International Security, University of Birmingham and Tatyana Malyarenko, Professor of International Relations, National University Odesa Law Academy

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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ANALYSIS | Ukraine crisis: Whats really behind Putins deployment of peacekeeping troops? - News24

Whats new?Once a largely domestic affair, the struggle for political supremacy in Venezuela has become a source of geopolitical discord. Partly due to the worsening humanitarian emergency, it remains a vital concern for neighbours. The Venezuelan parties recent readiness to negotiate could allow for a more constructive role from foreign powers.

Why does it matter?Outsiders cannot impose an end to the feud between President Nicols Maduros government and the opposition. But neither can the parties resolve the crisis without the tacit consent, and preferably the active involvement, of world powers including the U.S., the European Union, Russia and China.

What should be done?Now on pause, talks between government and opposition will require external mediation, sustained support from foreign allies on both sides, and pledges from abroad of financial and technical support should a settlement eventually be reached.

Over two decades of political tumult in Venezuela have ended up entangling much of the world. The dispute between the governments of self-proclaimed socialist Hugo Chvez (1999-2013) and his successor Nicols Maduro, on one side, and an opposition alliance on the other, spread first to Latin America and after that erupted into global feuding. Early in 2019, U.S. President Donald Trump, with the support of the mainstream opposition, openly sought to oust Maduro through maximum pressure: harsh economic sanctions, diplomatic isolation and vague threats of military intervention. The bid failed. But it drew a clear dividing line between states supportive of Maduro, including Russia and China, and nearly 60 others that backed the U.S. gambit and opposition leader Juan Guaids interim presidency. Three years on, the country remains politically deadlocked and mired in humanitarian emergency. But the two sides returned to the table in 2021. Foreign allies of both sides should urgently back these tentative efforts, which are now stalled, to reach a negotiated settlement for Venezuela.

The consummate charismatic populist, Chvez used cheap oil, generous finance and acts of solidarity to cultivate a circle of close allies in Latin America and the world, with Cuba foremost among them. At the same time, he demonised those who opposed his rule the U.S. and its acolytes, in particular. But the onset soon after his 2013 death of a devastating economic slump intensified Venezuelas internal political conflict and extended it far beyond the nations borders. Neighbouring countries absorbed most of the massive exodus of migrants, now estimated at six million, fleeing poverty and collapsing public services. Meanwhile, organised crime and armed groups from Colombia looked to turn an illicit profit and collude with cash-starved security forces across the border, sparking Bogots ire. The two states severed relations in 2019.

As the Venezuelan government honed its state security apparatus and adopted a more repressive stance, the U.S. from 2015 onward tightened its sanctions on state officials and eventually expanded them to target whole economic sectors. Numerous countries in Europe and Latin America rallied to this cause after Maduro was re-elected in 2018 amid a mainstream opposition boycott and accusations of fraud. These circumstances led the opposition-held National Assembly to name Guaid head of state in January 2019. Dozens of states recognised his new interim government.

Maduros supporters immediately rose up in his defence, leading to vitriolic confrontation on the international stage. Moscow, already a financial, military and diplomatic backer of Caracas, helped it evade sanctions and blocked U.S. efforts to muster support for punitive measures at the UN Security Council. Beijing had also invested heavily in Venezuela, often to its regret, but it likewise joined efforts to safeguard the Maduro government. Turkey and Iran, for their part, emerged as crucial economic partners of the beleaguered South American state.

Three years after Guaid staked his claim and Venezuelas international partners split into rival blocs, foreign governments might now be in a position to foster rather than hinder a peaceful resolution of the crisis. Government and opposition resumed Norwegian-facilitated negotiations in August 2021 in Mexico City, though the government suspended its participation two months later. A role for foreign powers is explicitly contemplated in the memorandum of understanding signed at the outset of the talks. Russia and the Netherlands have been invited to accompany the process. There is also provision for a Group of Friends, comprising an equal number of allies of each side, even if the part these countries will play and the groups composition has yet to be defined.

The talks began amid an international climate in some ways more favourable to a settlement than at any time in the recent past. Under President Joe Biden, Washington has adopted a more multilateral stance and modified Trumps maximum pressure policy, enabling much closer alignment among the U.S., Canada and the European Union on Venezuela. Latin America is more evenly divided than before and, with some exceptions, less bent on kicking Maduro out of office. With support for Guaids claim to the interim presidency eroding, and the Maduro governments collapse seemingly averted, Russia and China may be less worried about regime change and its effects on their global standing, and more concerned to rescue their depreciating investments.

Even so, achieving consensus across the Venezuelan divide is far from easy given tense relations between major powers, made all the more challenging by the standoff over Ukraine. The U.S. perceives the growing footprint of Russia and China in Latin America as a threat. Neither Moscow nor Beijing is keen to see a settlement that would represent a clear strategic gain for Washington, especially if it would hurt their economic interests, too.

Bringing the various foreign powers on board with compromise will require adapting to their key interests and red lines. The U.S. has a small but influential Venezuela lobby that will actively oppose any agreement it perceives as too lenient with Maduro. Cuba and other Caribbean nations will need assurances that their energy needs will be met. Russia and China will seek guarantees for their investments, particularly in the energy sector, and of the repayment of bilateral debts. Bogot will be unhappy with any deal that does not address the issue of safe haven in Venezuela for armed groups dedicated to illicit profit-making in Colombia.

Yet these difficulties should not obscure the evidence that champions of both sides have an interest in seeing the impasse resolved. To this end, they should encourage their Venezuelan counterparts to return to the negotiating table and work in good faith to achieve an agreement. They should offer incentives, especially to the government side, for moves toward compromise. They should also be ready to provide assistance of various kinds to skirt obstacles and ensure progress in the talks, from financial aid packages to support for internal security or justice reforms, or by pledging to verify compliance with a final agreement.

The geopolitical rift has made it easier for both sides in Venezuela to turn to foreign allies for support rather than make concessions to domestic foes. But so long as the country is suffering extreme socio-economic distress, all concerned have more to gain from a peaceful, negotiated solution to the long-running crisis.

Caracas/Bogot/Brussels, 17 February 2022

For a full size version of this map, click here.

In January 2019, the U.S. administration of President Donald Trump took the extraordinary step of recognising opposition leader Juan Guaid as Venezuelas legitimate interim head of state. Subsequently matched by dozens of Washingtons allies, including most EU member states, the move was intended to trigger the downfall of President Nicols Maduro, whose 2018 re-election the opposition and its foreign supporters regard as a sham. The attempt failed, and most of the countries involved (albeit not, so far, the U.S.) have quietly dropped their recognition of Guaids interim government.[fn]Venezuelas strongman wants to improve relations with the United States, The Economist, 3 June 2021.Hide Footnote But the U.S. decision to recognise an opposition politician as head of state generated a sharp backlash, exposing the extent to which Venezuelas long-running homegrown political conflict had spilled into the terrain of geopolitical rivalries.

The spat over Venezuela reflected and aggravated existing geopolitical divides. Some of the most vocal denunciations of the recognition of Guaid came from expected quarters; Maduros allies Russia and China condemned the move as unwarranted interference in Venezuelas internal affairs. U.S. attempts to seek support for its strategy at the UN Security Council failed to prosper as a result.[fn]Gerardo Lissardy, Crisis de Venezuela: qu significa el veto de Rusia y China a la resolucin de EE.UU. en el Consejo de Seguridad de la ONU, BBC, 1 March 2019. The Security Council first held an open meeting to consider the Venezuela matter on 26 January 2019, at Washingtons request, although it had been the subject of previous informal meetings. The Council debated the matter again on 28 February that year, when the U.S. tabled a motion demanding a fresh presidential election. Russia advanced another motion condemning outside interference, adding that Venezuela was no threat to international peace and security and thus lay outside the councils purview. Russia and China vetoed the U.S. motion, while Moscows failed to obtain enough votes. On 10 April, again at U.S. urging, the Council heard testimony on the humanitarian crisis, and slightly over a year later, on 20 May 2020, the body convened at Russias behest after the failure of Operation Gideon, an attempted mercenary landing to oust Maduro. See Country and Regional Issues (Venezuela), Security Council Report, n.d. See also Crisis Group Latin America Report N85, Venezuela: What Lies Ahead after Election Clinches Maduros Clean Sweep?, 21 December 2020.Hide Footnote But international tensions stemming from Venezuelas interlocking political, economic and humanitarian crises are not confined to spats between major powers. They had been building for many years, above all in Latin America and the Caribbean, where the policies pursued by Maduro and his predecessor Hugo Chvez as well as their support for left-wing causes stirred heated controversy over how Venezuelas government should be branded and treated.

These international dimensions of the Venezuelan conflict have made a seemingly intractable domestic dispute even more complex, but they could also offer a route toward its resolution. In August 2021, the Maduro government and opposition signed a memorandum of understanding in Mexico City, marking the resumption of talks facilitated once again by the Norwegian government that had broken down two years earlier. Although the government side suspended its participation in mid-October, amid a row over the extradition to the U.S. of a close Maduro ally, neither side has decisively pulled out. While Maduro said in late November that conditions were still not right, the government has indicated it will eventually return to the table.[fn]In early November 2021, during a visit to Moscow, Venezuelan Foreign Minister Flix Plasencia expressed confidence that the negotiations would resume sooner rather than later, while his Russian counterpart Sergey Lavrov expressed his governments interest in the talks success. Plasencia: la extradicin de Saab no implica el fin del dilogo con la oposicin, EFE, 8 November 2021. Foreign Minister Sergey Lavrovs remarks and answers to media questions at a joint news conference with Foreign Minister of the Bolivarian Republic of Venezuela Felix Plasencia following talks, press release, Foreign Ministry of the Russian Federation, 8 November 2021.Hide Footnote

Although the Mexico talks have stumbled, initial signs were that international involvement in attempts to resolve the crisis had evolved in important ways from the tentative diplomatic discussions that took place in Sweden in 2019.[fn]Phil Gunson, Venezuela: Making the Most of the Mexican Breakthrough, Crisis Group Commentary, 30 August 2021. From 2019 to 2020, the Swedish foreign ministry hosted three meetings on Venezuela at which virtually all the most relevant international players, with the exception of Cuba, were represented. See Russia, other key powers discuss Venezuelan crisis in Sweden, Associated Press, 13 June 2019.Hide Footnote The role of external stakeholders was incorporated from the outset: the Russian and Dutch governments were chosen to accompany the talks, and a Group of Friends potentially comprising countries acceptable to both sides, including allies of each was also contemplated. The composition of this latter group proved to be a source of friction, delaying its formation. Even so, the decision to bring in foreign governments as more than mere observers represented an important step toward overcoming Venezuelas deadlock.[fn]Crisis Group interviews, diplomats close to negotiations, Caracas, September 2021.Hide Footnote

This report examines the geopolitical stakes of the Venezuelan crisis, and how they might serve to support rather than frustrate an eventual negotiated settlement. It argues that, while outsiders should not impose a solution, as that must necessarily emerge from negotiations among Venezuelans themselves, the engagement of foreign powers, including the key external allies of the two sides, is an essential prerequisite.[fn]See Crisis Group Latin America Report N79, Imagining a Resolution of Venezuelas Crisis, 11 March 2020.Hide Footnote The report is based on dozens of interviews and informal contacts with politicians, diplomats, academic experts and civil society activists in Venezuela, as well as with people attached to foreign governments and multilateral bodies. It draws not only on Crisis Groups longstanding presence in Caracas, but also on its network of analysts in foreign capitals, including Washington, Brussels and Moscow.

Venezuelas political turmoil is far from over, and the country remains in the throes of a prolonged humanitarian emergency. But recent developments, including tentative fresh talks and regional elections, suggest that there may be room for compromise between government and opposition, particularly if the foreign allies of both sides evince greater pragmatism.

Once a matter of concern largely to Venezuelans themselves, the countrys internal tensions began to spill over into Latin America and the Caribbean as a whole not long after Maduros 2013 election, when a sharp downturn in oil prices exposed the vulnerability of its badly run economy and triggered what would become a mass exodus. Economic mismanagement, corruption and falling oil prices, exacerbated by U.S. sanctions, have slashed GDP by over 80 per cent, leaving Venezuela among the poorest countries in the hemisphere.[fn]Amelia Cheatham and Roco Cara Labrador, Venezuela: The Rise and Fall of a Petrostate, Council on Foreign Relations, 22 January 2021.Hide Footnote Around six million people have fled unemployment, poverty and repression, creating an unprecedented regional refugee crisis that has intensified political divisions in and outside the country.

The concentration of ever more power in the hands of President Maduro, who succeeded the late Chvez in 2013, and the progressive dismantling of institutions enshrined in the 1999 constitution have played a central role in the escalation of conflict between the Venezuelan government and opposition. After the opposition Democratic Unity alliance won a parliamentary majority in the December 2015 legislative elections, Maduro used his control of the judicial system to render the National Assembly impotent, stymie a presidential recall referendum in 2016 and, the following year, set up a parallel parliament, in the form of the National Constituent Assembly.[fn]The National Constituent Assembly sat for close to three and half years, but never produced a new constitution. Its activities included convening local and regional elections, installing a truth commission, lifting the parliamentary immunity of opposition legislators and barring certain opposition parties from electoral participation, replacing the Public Prosecutor (Fiscal General), passing a law against hate, which targeted non-government media and opposition figures, and (in its final days) approving an anti-blockade law giving the government discretionary powers over investment and trade. Venezuela: la Asamblea Constituyente de Nicols Maduro se disuelve, El Pas, 19 December 2020. Santiago Martnez Neira, No Room for Debate: The National Constituent Assembly and the Crumbling of the Rule of Law in Venezuela, International Commission of Jurists, July 2019.Hide Footnote The government, for its part, argues that it has been targeted by an insurrectionary campaign led by right-wing national and international forces bent on undermining the countrys independence.[fn]Crisis Group virtual interview, Venezuelan government minister, 3 March 2021. Alejandra Bastidasa, Despojo criminal! Venezuela sufre una poltica sistemtica de agresin imperialista con la complicidad de Juan Guaid, Prensa Vicepresidencia, 24 March 2021; Venezuela denuncia consecuencias de las agresiones de EE.UU., Telesur, 29 July 2020.Hide Footnote

The claim by Guaid to the interim presidency in January 2019 heralded a new, more intractable phase in the conflict, characterised by overt attempts to topple Maduro, intensified persecution of the opposition by state security forces and an even deeper economic slump in Venezuela. Two separate but almost simultaneous events in January 2021 eventually disrupted the deadlock between the sides. On 5 January, opposition domination of the National Assembly came to an end with the inauguration of a new, 277-seat parliament, produced by a one-sided election boycotted by the mainstream opposition, and overwhelmingly dominated by the Maduro government. Two weeks later, Joe Biden took over from Donald Trump as U.S. president, committed to a less confrontational, more multilateral approach to Venezuela.[fn]Vivian Sequera and Deisy Buitrago, Maduro allies win majority in disputed Venezuela congress election, Reuters, 7 December 2020. Holly K. Sonneland, U.S. 2020: Joe Biden and Donald Trump on Venezuela, AS/COA, 2 September 2020.Hide Footnote

The immediate effects of these changes were mild. Although it lost control of the National Assembly, the Guaid-led opposition has continued to insist on its status as the only democratically elected representative of the Venezuelan people while disputing the Maduro governments authority and legitimacy. Meanwhile, substantive changes in U.S. policy have to a degree been impeded by the Biden administrations domestic political concerns and its need to deal with other foreign policy challenges. Even so, these developments have strengthened the hand of those, in government and opposition, who seek to replace the mutual antagonism of 2019-2021 with a more low-key, gradualist approach to political, economic and social reform.[fn]Crisis Group Statement, Venezuela: An Opportunity That Should Be Seized, 7 May 2021.Hide Footnote

Alongside the Trump administrations campaign to unseat him, Maduro has faced until recently a much more hostile regional environment than his predecessor Chvez. While the communist government of Cuba remains an important ally, the pink tide of leftist-populist governments that came to power in the 21st centurys first decade had receded conspicuously by 2019. Venezuelas two biggest immediate neighbours Brazil and Colombia are now led by implacable right-wing opponents (although both face significant electoral challenges from the left in 2022). The Organization of American States (OAS) voted in April 2019 to recognise an appointee of the opposition-led National Assembly as Venezuelas rightful representative, pending free and fair elections. Its secretary general, Luis Almagro, is overtly aligned with the most intransigent wing of the opposition.[fn]In May 2021, Almagro rejected out of hand the new, more politically representative electoral authority, deriding those prepared to work with it as collaborationists. Comunicado de la Secretara-General de la OEA sobre Venezuela, Organization of American States, 4 May 2021. Hide Footnote

Swelling opposition to the Maduro government across Latin America led a dozen OAS members to form the Lima Group in 2017, largely out of frustration that Caracas oil diplomacy among Caribbean states had prevented the organisation from taking tougher action. The groups stated aim was to produce a peaceful restoration of democracy in Venezuela.[fn]Lima Declaration, 8 August 2017; Venezuela Crisis: Juan Guaid backed by Lima Group, BBC, 5 February 2019. See section V.C below for an account of the Lima Group and its present significance.Hide Footnote Behind the call for political change lay concern about the massive socio-economic impact of the refugee crisis. But the increasing severity of political tensions and public unrest throughout the region, greatly exacerbated by the COVID-19 pandemic, has lately blunted the groups ability to focus on external issues, and hence its capacity to influence conditions in Venezuela. Changes of government have also led some countries to exit the group.

At the same time, rising pressure since 2017 from U.S. financial sanctions, and since 2019 from non-recognition of President Maduro, has been countered by the efforts of several governments supportive of Caracas. They include Russia, China, Cuba, Turkey and Iran, whose assistance has come in various forms, such as financial, diplomatic and intelligence support, as well as increasingly sophisticated techniques for evading sanctions. These states have helped the government in its efforts to resist popular discontent, attempted coups and international isolation.[fn]Javier LaFuente, Elas Camhaji, Zorayda Gallegos, Georgina Zerega, Roberto Deniz and Ewald Scharfenberg, How a vast network enabled Venezuela to avoid US oil sanctions, El Pas, 16 June 2021.Hide Footnote Even so, their interests are diverse, and not all would necessarily be averse to some form of political adjustment. China can afford to be more flexible than Cuba, whose communist government is hugely dependent on Caracas for its survival. Russia is playing a role in the Mexico talks, as an accompanying government, while Turkey has offered to mediate.

Prospects for a resumption of full-scale talks appeared dim at the start of 2021. The mainstream opposition leadership had declared a previous round of Norwegian-facilitated talks exhausted in September 2019 and seemed ill disposed to return to the table. Yet civil society organisations gathered under the umbrella of the recently created Foro Cvico (Civic Forum), as well as a minority opposition faction under former presidential candidate Henrique Capriles, pursued a more modest agenda, and found the Maduro government willing to make concessions in areas such as electoral conditions, access for humanitarian assistance and political prisoners.[fn]The Foro Cvico Nacional emerged in early 2021 from Dilogo Social, a loose coalition founded in 2017 that includes NGOs and professional, student and labour bodies, as well as representatives from the private sector and faith groups. Its stated aim is to foster peaceful restoration of democracy in Venezuela.Hide Footnote The governments most significant compromise was its decision to allow the opposition two seats on the five-person board of the National Electoral Council appointed in May 2021 by the government-controlled parliament.[fn]Crisis Group Statement, Venezuela: An Opportunity That Should Be Seized, op. cit.Hide Footnote

These moves sparked renewed interest in negotiations on the part of Guaids interim government, perhaps apprehensive that political rivals might outflank it.[fn]Crisis Group interview, foreign specialist in negotiations, Caracas, 8 June 2021.Hide Footnote A fresh round of contacts, once again facilitated by Norway, gathered speed, although the Maduro government was reluctant to give fresh impetus to Guaid by bargaining with his representatives, while the latters negotiators continued to rule out partial agreements, believing these would only help consolidate the government they sought to remove. Another obstacle was the local and regional elections approaching in November, which the government anticipated would divide and demoralise its opponents, giving it a powerful motive to resume talks after rather than before the vote.[fn]Crisis Group interviews, sources close to negotiations, Caracas, May-June 2021.Hide Footnote But both sides faced international pressure to return to the table and eventually reached an agreement to restart negotiations.

At the outset of the talks, on 13 August 2021, the two sides signed a four-page memorandum of understanding outlining the purpose and framework of negotiations.[fn]The memorandum, subsequently approved by Venezuelas government-controlled National Assembly, can be f0und in Acuerdo en Respaldo al Memorando de Entendimiento entre el Gobierno de la Repblica Bolivariana de Venezuela y Sectores de la Oposicin Venezolana, Gaceta Oficial, no. 6,637, extraordinaria (17 August 2021).Hide Footnote In a startling turnaround for a movement that regards Maduro as having usurped the presidency and considers Guaid the legitimate president, the opposition agreed to define the two delegations as representing the Government of the Bolivarian Republic of Venezuela and the Unitary Platform, the present name of the mainstream opposition coalition. The seven-point agenda included the key issues for each side a timetable for free elections, for the opposition, and the lifting of sanctions and return of foreign assets, for the Maduro government. It also referred to the need to address social welfare issues and concluded with a reference to implementation and verification measures.

Despite the opposition leaderships previous insistence that anything short of a comprehensive agreement would strengthen the governments grip on power, the memorandum explicitly contemplates partial accords as part of the process. It also includes a reference to the need for consultation mechanisms to enable other political and social actors to have a say. In two subsequent sessions during September, negotiators signed three partial agreements, although none of them resolved a substantive issue. The two sides agreed on the need to assert Venezuelan sovereignty over the disputed Essequibo territory in neighbouring Guyana (one of the few uncontroversial causes in Venezuela); set up a joint Social Welfare Working Group (Mesa de Atencin Social), comprising three representatives from each side; and follow through as soon as possible with the inclusive consultative mechanisms referred to in the original memorandum.

Progress has faltered, however, and the talks are now on ice. A month after the agreement to establish the Social Welfare Working Group, there was still no agreement on who its members should be. The government made the issue yet more difficult to resolve by insisting that one of them should be Alex Saab, a Colombian businessman facing money-laundering charges in the U.S. When Saab, whom the government had also named a member of its Mexico delegation, was extradited to the U.S. from Cape Verde in October, it announced it was suspending participation in the talks, accusing Washington of sabotaging them, even though the extradition request came more than a year before the Mexico meetings began.[fn]Julie Turkewitz, US extradites key financial ally of Venezuelas president, inciting retaliations, The New York Times, 16 October 2021.Hide Footnote The pause may be temporary: Foreign Minister Flix Plasencia insisted several weeks later that negotiations would resume.[fn]Plasencia: la extradicin de Saab no implica el fin del dilogo con la oposicin, op. cit.Hide Footnote

The initial promise of external backing for the talks was also proving hard to render operational. Russian diplomats privately expressed confusion as to what the precise role of an accompanying government was supposed to be.[fn]Sources close to the talks said the Norwegian facilitators had sought to clarify the issue with Russia, adding that the precise role of accompanying delegations would evolve as the talks progressed. Crisis Group interviews, diplomats, Caracas, November 2021.Hide Footnote Such was the squabbling over who should join the Group of Friends that its formation was postponed, with some sources suggesting it might never come into being.[fn]Crisis Group interviews, diplomats, Caracas and by telephone, September 2021. Those reportedly under consideration (or putting themselves forward) for membership of the Group of Friends included the U.S., Canada, Colombia, Spain, Bolivia, Turkey and China, as well as the EU. Neither the government nor the opposition was keen to admit Spain, however, while Colombias overt scepticism regarding the talks seemed to rule it out.Hide Footnote Following regional and local elections on 21 November, the government repeated its call for broadening talks to include opposition groups that do not belong to the Unitary Platform; these alternative forces in total obtained some 1.4 million votes.[fn]Maduro said in November: The conditions still dont exist. The kidnapping of our diplomat Alex Saab by the United States was very serious. They must answer for that kidnapping. When the conditions exist [to return to talks] we will announce it to the country. Manuel Tomillo C., Maduro: No hay condiciones todava para retomar el dilogo en Mxico, Efecto Cocuyo, 21 November 2021.Hide Footnote While Maduro insisted on election day that the U.S. must respond for its kidnapping of his confidant Saab before talks resumed, opposition sources said they expected a return to the table early in 2022.[fn]Crisis Group virtual interviews, opposition sources, November 2021.Hide Footnote To date, however, there has been no change in the governments stance.

It was Maduros predecessor, Hugo Chvez, who set the stage for the international divisions over the Venezuela crisis today. Long before Chvez declared his Bolivarian revolution to be a socialist project, he made it clear that he intended to remove Venezuela from the U.S. orbit and seek a multipolar world, marking a clear departure from the policies of almost all the countrys modern presidents.[fn]Rosalba Linares, La Estrategia Multipolar de la Poltica Exterior Venezolana, Aldea Mundo, vol. 15 (July-December 2010).Hide Footnote While insisting, at the outset, that he was ideologically equidistant from capitalism and communism, he placed nationalism and anti-imperialism at the heart of his project, in part due to his close ties with and admiration for Fidel Castro, not to mention his longstanding association with Venezuelas own leftist guerrillas.[fn]Brian Palmer, Why did Hugo Chvez hate the United States so much?, Slate, 6 March 2013.Hide Footnote

Chvez quickly started distancing Caracas from Washington. In 1999, his first year in office, he countermanded an order from his defence minister accepting emergency aid from the U.S. military after the flood disaster that December. He also cancelled an agreement that allowed the U.S. Drug Enforcement Administration to operate counter-narcotics surveillance flights over Venezuelan territory, justifying both decisions on the grounds of national sovereignty. In a move that would place him on a collision course not only with the U.S. but with a succession of governments in neighbouring Colombia, he declared his countrys neutrality in the conflict waged for decades by leftist guerrillas, who had long been an irritant on the Venezuelan side of the border, too. This tolerance was matched by an ambiguous stance toward other types of non-state armed groups, including criminal gangs, whose activities often spilled over from Colombia into adjacent countries.[fn]Crisis Group Latin America and Caribbean Report N78, A Glut of Arms: Curbing the Threat to Venezuela from Violent Groups, 20 February 2020. Luis R. Martnez, Transnational Insurgents: Evidence from Colombias FARC at the Border with Chvezs Venezuela, Journal of Development Economics, vol. 126 (May 2017).Hide Footnote

Another initiative calculated to rouse Washingtons ire was Chvezs bid to revive the Organization of Petroleum Exporting Countries (OPEC). In 2000, the late president hosted only its second heads-of-government meeting since Venezuela co-founded it 40 years earlier.[fn]Brian Knowlton, Chvez, defiant, tells OPEC to show its power: Venezuelan visits Iraq, angering Washington, New York Times, 11 August 2000.Hide Footnote On a tour of OPEC capitals, he made a point of visiting the pariah government of Saddam Hussein, despite UN sanctions banning flights to Baghdad. Oil diplomacy based on close ties with fellow producers, the creation of new export destinations (notably China), and distribution of subsidised fuel to allied or favoured nations in Latin America and the Caribbean proceeded to become hallmarks of chavismo. Chvez strongly opposed U.S. hemispheric free trade proposals and in 2004, in conjunction with Cuba, he proposed the Bolivarian Alternative for the Americas, seeking to build a counterweight to U.S. influence in Latin America.[fn]Anthony Boadle, Chavez oil diplomacy gains ground in Caribbean, Reuters, 20 December 2007. Mauricio Vicent, Nace la Amrica bolivariana, El Pas, 16 December 2004.Hide Footnote

The U.S. ambassador in Caracas when President Chvez came to power was John Maisto, who famously downplayed the threat to his countrys interests, saying it was important to watch what Chvez does, not what he says.[fn]Franklin Foer, The talented Mr Chvez, The Atlantic, May 2006. By the end of his term as ambassador, however, Maisto was unsure where the country was headed. Dan Bohning, Venezuela at crossroads, U.S. ambassador says, Miami Herald, 14 August 2000.Hide Footnote Later developments, however, showed that these early forays into international affairs demarcated the boundaries between external friends and foes of chavismo. Just as he did on the domestic front, Chvez placed a premium in his diplomacy on close ideological and political affinities: he would lavish gifts on his allies, while decrying or exacting swift revenge upon any government that stood in his way.[fn]In 2003, for example, Chvez abruptly halted around 110,000 barrels/day of oil shipments to the Dominican Republic after accusing its government (without evidence) of conspiring with former Venezuelan President Carlos Andrs Prez to overthrow him. Gary Marx, With oil cut off, Dominicans try to pacify Venezuela, Chicago Tribune, 20 October 2003.Hide Footnote An oil boom that lasted for most of his time in office, along with the regions increasing domination by sympathetic left-leaning governments, facilitated this approach.

Not all was smooth sailing, however. The Chvez years featured frequent diplomatic spats with Latin American neighbours. In 2005, Mexico came close to breaking relations over Chvezs accusation that President Vicente Fox was a lapdog of Washington. The following year saw similar tensions with Peru, after Chvez openly interfered in the Peruvian presidential race in favour of candidate Ollanta Humala, casting a shadow over Venezuelas subsequent relations with the election winner, Alan Garcia. In 2009, Chvez ally Manuel Zelaya was ousted from the Honduran presidency after seeking to end a ban on re-election. In 2010, relations were briefly severed between Bogot and Caracas over President lvaro Uribes complaint to the OAS over Colombian guerrilla camps on Venezuelan soil.

Maduro, who succeeded Chvez after the latters death in 2013, sought to continue in the same vein, but a collapsing energy industry, sharply lower oil prices and growing diplomatic isolation made the task harder. Maduro had served as Chvezs foreign minister from 2006 to 2013, playing a central part in cultivating a network of allies.

Friendly governments had varied motives. One was to diminish U.S. influence, both in Latin America and around the world; another was to secure trade, cheap supplies of oil and related products, or other forms of material assistance from Caracas. Several countries had both ambitions.[fn]Gitanjal Wolfermann and Lisseth Boon, Compadres Ideolgicos del Chavismo, Connectas, September 2021.Hide Footnote Prominent among the partners were China, Russia, Cuba and Iran, all of whom had adversarial relations with the U.S. as well as financial and economic interests in Venezuela. Allies driven largely by material expediency included most of the beneficiaries of Petrocaribe, a scheme launched in 2005 to provide oil at preferential rates to small countries in and around the Caribbean basin.[fn]Under the Petrocaribe scheme, in which seventeen Caribbean basin countries took part, Venezuela supplied oil in exchange for 50 per cent of its market price, with the remainder to be paid for over 25 years at 1 per cent interest, with a two-year grace period. Jason Beaubien, The fallout from a seemingly sweet oil deal for Venezuelas neighbors, NPR, 20 July 2019.Hide Footnote Despite the substantial reduction of shipments under the Petrocaribe scheme, caused by a slump in production and financial constraints, Caracas has been able to count on a solid bloc of Caribbean votes in international forums, which, among other things, for many years impeded the approval of sanctions promoted by its foes in the OAS.

Maduros international champions tend to regard Guaid and other opposition leaders as surrogates for Washington, believing that regime change in Venezuela would alter the geopolitical balance to their disadvantage. At the same time, neither China nor Russia is particularly enamoured of the government. The status quo does not serve their economic and financial interests (including energy investments and debt repayment), and neither has responded favourably in recent years to Maduros pleas for money. But they have done enough to keep his government afloat, including by assisting it in evading U.S. sanctions. On the other hand, another key ally, Cuba, is both heavily dependent on the chavista government and a key source of intelligence, both domestic and international.

One of Chvezs core goals as he sought to extricate Venezuela from the U.S. sphere of influence was to diversify trading partners. In 1998, the year before he took office, Venezuela exported over 600 million barrels of crude oil and oil products to the U.S., which was not only nearby and a major consumer but also closely integrated with its supplier.[fn]By the time Maduro came to power in 2013, this figure had roughly halved. U.S. dominance of Venezuelan oil exports lasted until early 2019, when Washington banned U.S. entities from dealing with PDVSA. See Devika Krishna Kumar and Collin Eaton, Venezuelan oil exports to U.S. still a primary source of cash, Reuters, 25 January 2019.Hide Footnote Through Citgo, a wholly owned U.S. subsidiary of the state oil corporation PDVSA, the government controlled a chain of refineries in Texas and Louisiana, geared toward processing Venezuelas heavy, sour crude, as well as a network of petrol stations. Chvez feared that this mutual dependence on what he called the empire was weighted in favour of Washington, which could in theory strangle his incipient revolution by boycotting Venezuelan oil or even by expropriating Citgo. He determined to seek markets elsewhere, and the rapidly growing, energy-hungry Chinese economy had obvious appeal. The main impediment was cost: earnings from oil shipped around the world, to a country whose refineries were not set up to process it, would be much reduced.

Beijing proved a willing partner. Chvezs early years in power coincided not only with a sharp increase in Chinas need for commodity imports, including oil, but also with its revived diplomatic outreach to developing countries and the go global policy promoted by President Jiang Zemin (1993-2003). The Chinese were looking primarily for beneficial trade and investment relations, including markets for their industrial products. Chvez who had first visited Beijing in October 1999 was looking for something more: an alliance with the communist superpower was as much an ideological match as it was a commercial one. He insisted that his Bolivarian revolution was founded on Mao Zedongs principles, apparently unaware that his invocations of Mao and the Great Leap Forward were more likely to embarrass his new partners than to endear him to them.[fn]Crisis Group interview, guest at dinner for visiting Chinese Vice President Zeng Qinghong, January 2005. Jorge Domnguez, Chinas Relations with Latin America: Shared Gains, Asymmetric Hopes, Inter-American Dialogue, June 2006.Hide Footnote

While at the time, trade between the two countries was negligible around $200 million at the highest it soon ballooned. As China embarked on a massive expansion of its trade and investment relations in Latin America, Venezuela would become by far its biggest debtor in the region. Under Chvez, the country would receive over $60 billion in loans.[fn]China-Latin America Finance Databases, Inter-American Dialogue.Hide Footnote At their peak, Chinese investments in Venezuela represented around 75 per cent of Beijings entire portfolio in the region, while Venezuelas oil exports to China rose from 90,000 barrels/day in 2005 to 344,000 in 2014 (albeit still well below the originally projected one million). China has also been Venezuelas most important arms supplier in recent years.[fn]Fuerza Armada Nacional Bolivariana Adquisicin, Recepcin e Incorporacin de Armamento y Material Militar, Perodo 2017-2021, Asociacin Civil Control Ciudadano, 12 November 2021.Hide Footnote Unlike Western banks and multilaterals, Chinas development banks were undeterred by the Chvez governments heterodox economic policies. China prided itself on its policy of non-interference in others internal affairs and refrained from imposing macro-economic policy conditions. It calculated Venezuelas capacity to repay its loans based on the presumption that its oil reserves would guarantee its solvency.

Venezuelas economic slump, beginning in 2013, and the collapse of its energy industry, exacerbated eventually by U.S. sanctions, rendered Chinas bet a losing proposition. By 2014, Beijing had opted to cut its losses by granting a moratorium on capital repayments. Despite repeated requests from Maduro for fresh loans, the Chinese authorities have limited themselves to rolling over existing lines of credit in order to save Caracas from full-scale bankruptcy. In fact, Chinas relations with the region as a whole have undergone a shift from loans to investment. For the first time in sixteen years, the countrys two main development banks offered no fresh finance to Latin American governments in 2020. Instead, China is focusing on infrastructure and extractive investments.[fn]Alicia Gonzlez, China cambia prstamos por inversiones en Latinoamrica durante la pandemia, El Pas, 10 May 2021.Hide Footnote At a meeting in Caracas with Chinese business leaders in late 2020, Maduro asked for Chinese assistance, both public and private, in reviving the Venezuelan economy through investment and transfer of technology and scientific expertise.[fn]Maduro pide ayuda a China y le ofrece liderar nuevas inversiones en Venezuela, EFE, 7 November 2020.Hide Footnote

Close observers of the relationship believe Chinas primary interests are economic and financial. Chinese policymakers, a former high-ranking foreign diplomat said, are basically pragmatic and super-frustrated with the Maduro governments inability to put its house in order.[fn]Crisis Group interview, former Western Hemisphere ambassador to Venezuela, 25 June 2021.Hide Footnote In a departure from its hands-off stance vis--vis involvement in domestic policy, China in 2018 sent economic advisers to Caracas but, like their Russian counterparts, they found their words ignored. Struggling to recoup its loans to the Venezuelan government, Beijing has declined to provide fresh funds. China is seen as a possible member of the Group of Friends backing the Mexico talks, a move that would both contribute to the sustainability of negotiations and allow Beijing to monitor more closely the prospects of an eventual settlement. In the past, China has also signalled that it is willing to offer financial support if the parties reach such an agreement.[fn]Crisis Group interview, Venezuelan financial analyst, Caracas, June 2019.Hide Footnote

While Chinas stance on Venezuela retains an undeniable geopolitical element, Beijing has shown itself willing to deepen commercial relations with Latin American nations regardless of political leanings. In its dealings with right-wing Latin American governments, like those of Mauricio Macri in Argentina (2015-2019) and Jair Bolsonaro in Brazil (2019-present), China has shown that trade and investment tend to trump geopolitical alignment. Hence, there seems to be no reason why it would not maintain good relations with a post-chavista government in Caracas. With this possibility in mind, Guaid held exploratory talks with both China and Russia in 2019, according to one of his envoys.[fn]Guaid has explicitly offered good relations with China should the alliance he leads come to power. Venezuelas Guaid holds exploratory talks with China, Russia: Envoy, AFP, 22 October 2019; Juan Guaid, Por qu China debera cambiar su posicin in Venezuela, Bloomberg, 14 April 2019.Hide Footnote That said, indications are that Beijing continues to find the oppositions assurances unconvincing.[fn]Crisis Group interview, Venezuelan financial expert with China ties, November 2021.Hide Footnote

The Cuban government has been Venezuelas closest ally since the Chvez governments early days. Chvez used to refer to the two countries as one: In essence we are a single government, he said.[fn]ngel Bermdez, Maduro vs Guaid: qu se juega Cuba en la crisis poltica de Venezuela, BBC Mundo, 13 February 2019.Hide Footnote Cuban advisers were closely involved in devising the missions, the social welfare programs that have been at the heart of chavismos appeal to voters since the first two of them (Barrio Adentro, a primary health-care program, and Misin Robinson, a literacy campaign) helped Chvez defeat a recall referendum in 2004. Thousands of Cuban literacy teachers, sports instructors and medical personnel were deployed to Venezuela, while the Castro government was rewarded with virtually free supplies of oil and petroleum products via an energy agreement that was even more generous than the Petrocaribe accord.[fn]Under the Convenio Integral de Cooperacin, signed by Cuba and Venezuela on 30 October 2000, the Chvez government initially agreed to supply 53,000 b/d of oil and oil products to Cuba on generous terms, including barter. Cuba was to provide doctors, teachers and other professionals partly in exchange. By 2006, daily deliveries had risen to 90-98,000 b/d and the annual subsidy to Cuba to over $1 billion. Andrs Serbin, El Caribe, Chvez y los lmites de la diplomacia petrolera, Nueva Sociedad, no. 205 (September-October 2006). Luis R. Luis, Venezuelas Cuban Burden, Association for the Study of the Cuban Economy, 10 May 2019.Hide Footnote Deliveries of Venezuelan oil were crucial to Cubas emergence from the austerity of the special period that followed the Soviet Unions collapse and persists to this day. Arguably more than ideological affinity, the cut-rate oil is a major reason for Havanas reluctance to abandon its key South American ally.

Cubas contribution to the Maduro governments survival goes well beyond its role in social welfare. Cuban advisers are embedded throughout the Venezuelan government bureaucracy. They advised the agriculture ministry on sugar and coffee cultivation, for example, despite Cubas flawed domestic record in both industries.[fn]Prior to the 1959 revolution, Cuba was the worlds top sugar exporter, as well as a major coffee exporter. Coffee production slumped after the plantations were nationalised, and since that time it has never met national demand. Sugar production collapsed after the fall of the Soviet Union, from a high of about eight million tonnes to around one million. Rory Carroll, Hard times mean Cuban coffee tastes of peas again, The Guardian, 6 May 2011; Marc Frank, Sugar harvest no sweetener for Cubas ailing economy, Reuters, 11 March 2021.Hide Footnote They played a key part in running highly sensitive departments, including ports and airports, commercial registries and the citizen identification system.[fn]Paulo A. Paranagua, Their men in Caracas: The Cuban expats shoring up Maduros government, The Guardian, 27 May 2014; Venecuba, a single nation, The Economist, 13 February 2010.Hide Footnote Although precise details are hard to obtain, the Cubans in Caracas reportedly include a number of intelligence officers who not only guard against civilian and (importantly) military subversion but also give Havana an inside track on everything from the economy and internal security to the inner workings of the circles around Maduro.[fn]Angus Berwick, How Cuba taught Venezuela to quash military dissent, Reuters, 22 August 2019; Abraham Zamorano, La grabacin que desat un terremoto poltico en Venezuela, BBC, 20 May 2013.Hide Footnote They have also helped ensure the military remains loyal to the government by bolstering counter-intelligence within the armed forces, which has weeded out dissent by methods allegedly including torture and mass arrests.[fn]Reports by the UN High Commissioner for Human Rights (UNHCHR) and other human rights bodies have documented torture and other abuses by security services, including the Directorate General of Military Counter-Intelligence (DGCIM). In 2020, the UNHCHR observed that individuals deprived of their liberty were interrogated by intelligence services following their arrest, either at the DGCIM premises or at non-official and unknown locations. It was mainly during this period of time that victims were reportedly subjected to ill-treatment and, in some cases, torture [with the aim of] to intimidat[ing] and punish[ing] detainees, extract[ing] confessions or incriminate[ing] others through videos or written statements. Reports of physical and psychological torture of military or ex-military personnel were common. Outcomes of the investigation into allegations of possible human right violations of the human rights to life, liberty and physical and moral integrity in the Bolivarian Republic of Venezuela, UNHCHR, 2020.Hide Footnote

The Trump administration gave Havana strong reasons to help Maduro survive U.S. sanctions and opposition efforts to topple him. Proclaiming the goal of eradicating socialism in the hemisphere, Trumps team openly tried to oust the governments in Venezuela and Nicaragua, with Cuba next on its list. But if Havana hoped for leniency upon the advent of Biden, it was to be disappointed. There appears to be no prospect of imminent return to President Barack Obamas policy of rapprochement with Cuba, partly because relations with Havana are well down the new administrations docket of priorities, but also because (as with Venezuela itself) any relaxation of sanctions and restoration of relations could bring political costs that the White House would rather defer at least until after the 2022 mid-term congressional elections.[fn]Karen DeYoung, New Cuba policy on hold while Biden deals with bigger problems, Washington Post, 27 June 2021.Hide Footnote

Although the Venezuelan opposition has sought to reassure Cuba that its interests would be safe under a post-chavista government, these promises carry little credibility in Havana. The Cuban government has in the past indicated to intermediaries that, even assuming they are sincere, the opposition leadership is in no position to give solid guarantees.[fn]Crisis Group interview, leading opposition politician, Caracas, August 2015.Hide Footnote For the moment, Cuba would only back a negotiated transition by agreement with the Maduro government. It could well oppose and even seek to interfere with any transition that affects its vital interests. Its government representatives have also made clear that Cubas priority is normalisation of relations with the U.S., a goal that it considers independent of its stance toward Venezuela.[fn]Crisis Group interview, Cuban diplomat, July 2021.Hide Footnote Intensive efforts by Canadian Foreign Minister Chrystia Freeland in 2019 to enlist Cuban support for a negotiated solution made no headway, despite a series of apparently friendly meetings.[fn]Canad insiste en incluir a Cuba en un arreglo sobre Venezuela, Deutsche Welle, 29 August 2019.Hide Footnote

Before Chvez, Venezuela had only a distant relationship with Russia.[fn]In June 1952, authorities arrested two suspected Russian secret agents at Venezuelas main airport, later deporting them. The incident led to a bitter exchange of protests between the two governments, after which Caracas broke diplomatic relations with the Soviet Union. Ties were restored in 1970. Venezuela: Broken contact, Time, 23 June 1952.Hide Footnote But after Chvez adopted a confrontational stance toward Washington, President Vladimir Putin seized the opportunity to develop economic ties while expanding Russias geopolitical footprint in Latin America after a sharp contraction following the dissolution of the Soviet Union.[fn]Stanislav Secrieru, The Comeback Kid: Russia in Latin America, EU Institute for Security Studies, 26 November 2021. Chvez visited Moscow in May 2001, signing a bilateral agreement with Putin that signalled the intention of both parties to develop a mutually advantageous political dialogue. According to the joint statement published after the meeting, the Presidents agreed to jointly work for establishing a new multi-polar and non-violent world order based on the principles of non-interference in internal affairs of other states. Putin highlighted that the visit would serve as a powerful boost for the development of political and economic ties between the two countries. President Vladimir Putin had talks with Venezuelan President Hugo Chavez intheKremlin, The Kremlin, 14 May 2001.Hide Footnote

The benefits to Moscow of this relationship were soon clear. Following Washingtons announcement in 2007 that it would no longer allow the sale of arms of U.S. origin to the country, Venezuela became one of Russias leading arms buyers, with over $4 billion in weapons deals since then, including combat aircraft.[fn]FACTBOX: Military power in Colombia, Venezuela and Ecuador, Reuters, 5 March 2008. Hugo Chvez says Russia lends Venezuela $4 billion for arms, Reuters, 27 November 2010. Russia and China are almost the only arms suppliers to Venezuela. See Fuerza Armada Nacional Bolivariana Adquisicin, Recepcin e Incorporacin de Armamento y Material Militar 2017-2021, op. cit.Hide Footnote Under Chvez, Venezuela recognised the independence of Abkhazia and South Ossetia, which Moscow recognised after its short war with Georgia in August 2008. According to Putin, the recognition clearly underlined the independent nature of Venezuelan foreign policy. At the same time, Chvez was adamant that Venezuela had become a Russian ally; of the Kremlin, he said: Our foreign policies coincide in a multipolar world.[fn]Venezuelas Chvez recognises Georgian rebel regions, Reuters, 10 September 2009. Pavel Felgenhauer, Venezuelas multibillion-dollar Abkhazia and South Ossetia recognition fee, Eurasia Daily Monitor, 17 September 2009.Hide Footnote

Military deals were followed by energy cooperation between Venezuela and leading oil and gas producers from Russia, such as Gazprom, Lukoil and TNK-BP, which signed agreements to develop projects in the Orinoco Belt, an area rich in heavy oil reserves. In 2010, Russia even committed to help build a nuclear power plant in Venezuela, a move that Chvez argued would help Venezuela reduce its dependence on fossil fuels.[fn]Russia, Venezuela strengthen energy ties in Orinoco oil belt, Rigzone, 11 September 2009. Russia to build nuclear power plant in Venezuela, Reuters, 15 October 2010.Hide Footnote The project never got started.

Even before Maduro was elected, the likelihood of sustained economic decline in Venezuela had led some Russian companies to abandon their projects in the country. The only state-owned entity that maintained an important presence on the ground was Rosneft, an oil giant headed by Igor Sechin, a close Putin ally who also developed personal ties to Chvez and Maduro. In 2019, when the U.S. imposed sanctions on oil exports from Venezuela, Rosneft played a crucial role in facilitating oil shipments to other parts of the world while simultaneously importing diesel to address Venezuelas domestic shortfall.[fn]Russias Surgut says leaves Venezuela oil consortium, Reuters, 7 November 2012. Venezuela, Russias Rosneft agree on $14 billion oil, gas investment, Reuters, 28 May 2015. Rosneft becomes top Venezuelan oil trader, helping offset U.S. pressure, Reuters, 22 August 2019.Hide Footnote

Russias role in Venezuela was conspicuous as the Trump administration sought to force Maduros exit from power.[fn]Anatoly Kurmanaev, Why is Russia helping Venezuela?, The New York Times, 8 March 2019.Hide Footnote Putin saw the occasion as an opportunity to increase his leverage when negotiating deals with Maduro, as well as a chance to counter-balance U.S. and EU moves in conflict zones such as Kosovo, Crimea and eastern Ukraine.[fn]Alexander Gabuev, Russias support for Venezuela has deep roots, Financial Times, 3 February 2019.Hide Footnote In 2019, Russia went so far as to dispatch military personnel to Venezuela on several occasions, arguing that it was complying with contractual obligations to service military equipment but offering highly visible and symbolic backing at a time when U.S. military intervention had been mooted.[fn]Crisis Group interview, Russian diplomat, March 2019. Venezuela crisis: Russian military planes land near Caracas, BBC, 25 March 2019. In March 2021, photographs of what appeared to be a Russian soldier in the midst of a Venezuelan military operation against Colombian guerrillas near the Venezuela-Colombia border caused controversy, although specialists suggested that any Russians on the scene were probably doing nothing more than providing technical assistance. Francisco Zambrano, Presencia de militares rusos confirma carencia operacional de la FANB, Runrun.es, 30 March 2021.Hide Footnote At the UN, Russia played a key role in blocking U.S. efforts in 2019 to promote a Security Council resolution on the Venezuelan crisis.[fn]Michael Schwirtz, Russia blocks Venezuela measure at U.N., calling it a U.S. ploy for regime change, The New York Times, 28 February 2019.Hide Footnote In January 2022, amid an escalating Ukraine crisis, Russian Deputy Foreign Minister Sergei Ryabkov refused to rule out an increased military presence in Venezuela and Cuba if its Europe-focused demands were not met.[fn]Jennifer Rankin, Luke Harding and Julian Borger, Russia threatens military deployment to Cuba and Venezuela as diplomacy stalls, The Guardian, 13 January 2022.Hide Footnote

As time dragged on, however, the limitations of Russias support also became apparent. Rosneft decided to sell its direct stake in Venezuelan projects after the U.S. imposed sanctions on its trading subsidiaries, while Russian businesses and the government have in general become increasingly cautious over involvement in economic projects.[fn]Olga Tanas and Dina Khrennikova, Rosneft exits all Venezuela projects, sells assets, Bloomberg, 28 March 2020. In 2018, Russia signed a deal envisaging Venezuelas repayment of $3.12 billion in principal as well as $217 million in interest. Caracas has to pay Moscow $133 million a year until 2022, but the amount increases to $684 million from 2023 to 2026. There is no public information about new loans since then. Russia says Venezuela will increase debt repayment five-fold from 2023, Reuters, 30 June 2020.Hide Footnote Russian officials have repeatedly insisted on the need for a negotiated settlement in Venezuela, and reportedly sought to impress the importance of a political agreement on their Venezuelan counterparts.[fn]Crisis Group interviews, senior Russian diplomats, November 2020 and April 2021. After the September 2021 suspension of the Mexico City talks, Russia repeatedly urged a return to the table. We are keen for these talks to succeed, said Russian Foreign Minister Lavrov after meeting his Venezuelan counterpart Plasencia in November. Russia to keep supporting Venezuela in settling internal political differences Lavrov, TASS, 8 November 2021.Hide Footnote Moscow, however, is unlikely to stop defending the Maduro government, and would as a bare minimum require guarantees that any successor government protect its energy investments in particular. Russian representatives have also continued to stress the present governments legitimacy and the egregiousness of U.S. policy.

Encouraging Russian backing for negotiations leading to a restoration of constitutional rule would require assurances that Moscows economic interests in Venezuela would be unaffected by a change of government, as well as that debt repayment would continue uninterrupted and diplomatic relations undisturbed. But pragmatism would likely prevail where investments are at stake, as suggested by Moscows actions regarding Bolivia in 2019, after its ally Evo Morales was removed from power. Albeit somewhat reluctantly, the Kremlin soon recognised the controversial interim presidency of Jeanine ez in a bid to preserve its investments.[fn]Russia recognises Bolivias interim leader as violence continues, The Moscow Times, 14 November 2019.Hide Footnote

Turkeys involvement in Venezuela is relatively recent. The Maduro government, anticipating heightened criticism from regional neighbours, sought to diversify its relations and in particular to foster close ties with other non-Western governments.[fn]Imdat Oner, New breathing room for the Maduro regime: Authoritarian coalition, The Global Americans, 22 May 2018.Hide Footnote From the Turkish standpoint, Maduros offer represented an opportunity to profit from the Venezuelan gold trade and other commercial undertakings, while underlining the growing distance between Ankara, on one side, and Washington and Brussels, on the other, especially over the issue of sanctions.[fn]Turkey-Venezuela bilateral trade on rise, Anadolu Agency, 20 July 2018. Turkey hopes to turn new page with U.S. and EU in 2021, Erdogan says, Reuters, 23 December 2020.Hide Footnote

The Maduro governments speed in expressing solidarity with Recep Tayyip Erdoan after he faced down a coup attempt in July 2016 was a catalyst for the new relationship. Soon after that initial contact, Maduro travelled to Turkey, and the two countries signed agreements on trade, energy and air transport. In December 2018, Erdoan visited Caracas and the two countries inked various additional trade and cooperation accords. Maduro said Venezuela was open to Turkish investment in all areas: oil production, refining, petro-chemicals, tourism development, trade enhancement, among others.[fn]Venezuela y Turqua firman acuerdos para fortalecer lazos de cooperacin, Ministerio del Poder Popular del Petrleo de Venezuela, 3 de diciembre 2018. Maduro y la alianza de Estambul, Deutsche Welle, 10 October 2016. Turqua y Venezuela, amigos de conveniencia frente a Occidente, El Pas, 31 January 2019. Turkish Airlines is one of the few international carriers with connections to Caracas.Hide Footnote

Further agreements since late 2018 have consolidated economic ties between the two countries. Bilateral trade tripled that year, as Venezuela began shipping tonnes of gold to Turkey for refining. The gold imports disappeared relatively quickly, however, from official figures at least, after Washington imposed sanctions on the Venezuelan gold industry.[fn]Imdat Oner, Turkey and Venezuela: An Alliance of Convenience, Wilson Center, March 2020. Humeyra Pamuk and Corina Pons, Venezuela exported $779 mln in gold to Turkey in 2018 data, Reuters, 19 July 2019. A peak was reached in 2019, when an unknown Turkish company imported over $900 million worth of Venezuelan gold. Mysterious Turkish firm helped Maduro move $900 million in gold, Bloomberg, 8 February 2019.Hide Footnote In many instances, Turkish entities paid for the gold with food exports, and Turkish products began to feature in Maduros subsidised food program.[fn]In April 2016, Maduro launched a network of Local Supply and Production Committees, better known by its Spanish acronym CLAP. Each committee is assigned an area or neighbourhood in which to distribute cheap staples such as powdered milk, flour, pasta and rice. The program has been plagued with corruption and lack of transparency. Reports indicate that, since late 2016, the main contractor for the CLAP scheme has been Alex Saab, a Colombian national whom the U.S. has extradited on charges of money laundering. See Michael Smith and Monte Reel, Venezuelas trade scheme with Turkey is enriching a mysterious Maduro crony, Bloomberg, 25 April 2019; Llegan a Falcn ocho mil toneladas de pasta alimenticia para los CLAP, Prensa SENIAT, 15 July 2021Hide Footnote By 2020, Venezuelas imports from Turkey although still modest at almost $236 million were worth twelve times what they had been in 2016, with nearly 80 per cent of the total accounted for by pasta and wheat flour.

Even so, the relationship has its limits. Turkey, which has been suffering a severe economic crisis, is in no position to become a lifeline for the Maduro government.[fn]Carlota Gall, Battered Turkish economy puts a powerful Erdogan to the test, The New York Times, 31 May 2021.Hide Footnote On the political front, Erdoan has put Ankara forward as a potential mediator between Maduro and the opposition, building on the fact that it is alone among the governments allies in straddling to some extent the geopolitical divide between Washington and Moscow. The initiative forms part of what one close observer calls a hyperactive Turkish foreign policy that seeks a presence at the table in global affairs and plays well with Erdoans nationalist base. But circumstances have made it hard for Ankara to be as active as it would wish on the Venezuelan front.[fn]Crisis Group telephone interview, former Turkish diplomat, 19 November 2021. Turkish Mediation and the Venezuelan Crisis: Reasons for Engagement and Prospects, United World International, 9 July 2020. Turkey has also been mentioned as a possible member of the Group of Friends, should it be set up.Hide Footnote

Unlike Turkey, Iran began its relationship with Venezuela long before chavismo. The two countries were among the five co-founders of OPEC in 1960, when Venezuela was still a major oil producer often at odds with more conservative members led by Saudi Arabia. The relationship became more intense with the rise to power of Irans President Mahmoud Ahmadinejad (2005-2013), who developed such a strong personal bond with Chvez that the Islamic Republic declared a day of mourning when the Venezuelan leader died in 2013. Ties between the two vocal adversaries of Washington sparked fears that Hizbollah, the Lebanese movement backed by Iran, and even Irans Islamic Revolutionary Guard Corps might use Venezuela as a springboard for attacks in the Americas, although there is a dearth of hard evidence to this effect.[fn]In late 2021, Colombian Defence Minister Diego Molano alleged that the presence of Iran and Hizbollah in Venezuela constituted a threat to his countrys security, but later said his comments had been hasty. Colombia advierte sobre actividades de Hezbol en su territorio, Deutsche Welle, 15 November 2021.Hide Footnote

Iranian-Venezuelan ties have been somewhat uneven. In 2007, the two countries established a $7 billion fund for joint projects, including one to support anti-imperialist governments in Latin America. But binational companies, including the Veniran car-manufacturing plant, either never got off the ground or went bankrupt.[fn]Venirauto produjo 1,844 autos y trabaja a 7% de su capacidad, 800noticias, 25 March 2015.Hide Footnote The political relationship, on the other hand, took on a new urgency when the Trump administration targeted both Caracas and Tehran with draconian sanctions regimes. Iran became particularly important for the Maduro government in 2020, after the Russian company Rosneft pulled out of Venezuela as a result of the sanctions. It has supplied not only food, oil and petroleum products but also equipment and assistance to keep Venezuelas battered refinery infrastructure semi-operational.[fn]With help from Iran, Venezuela doubles oil production despite U.S. sanctions, Miami Herald, 21 January 2022.Hide Footnote Irans long experience dodging sanctions has allowed it to help Venezuela do the same.[fn]Marianna Parraga, Rinat Sagdiev and Parisa Hafezi, Phantom oil buyers in Russia, advice from Iran help Venezuela skirt sanctions, Reuters, 10 November 2020.Hide Footnote

With relations between Tehran and Washington at least as tense as in the case of Caracas, prospects for persuading Iran to help foster a transition in Venezuela are extremely poor. The new Iranian government under hardline President Ebrahim Raisi has strengthened ties with Caracas. Raisi has said Latin America and especially Venezuela will be a foreign policy priority, promising a twenty-year bilateral cooperation pact.[fn]Maziar Motamedi, Iran, Venezuela to sign 20-year cooperation accord, Al Jazeera, 18 October 2021. Iran, Venezuela presidents hold phone conversation, Tehran Times, 6 December 2021.Hide Footnote

For most of the 20th century, relations between the U.S. and Venezuela were heavily influenced by oil. They were, respectively, the worlds largest importer of petroleum and the Western Hemispheres biggest supplier. Venezuela was valued in the U.S. not only as a conveniently located, major source of energy but also as a politically stable ally and one of the few big oil producers located far from the volatile Middle East. Most of Venezuelas oil exports went to the U.S. market, and the U.S. was Venezuelas top trading partner prior to the imposition of sanctions.[fn]U.S. Relations with Venezuela (Bilateral Economic Relations), U.S. Department of State, 6 July 2021.Hide Footnote

The relationship has since undergone major upheaval. Caracas has adopted an adversarial stance toward Washington, while its oil production has suffered a precipitous decline and been reoriented toward the Asian market. At the same time, the U.S. as a whole has become a net petroleum exporter, even if most of its regions continue to be import-dependent.[fn]Despite the U.S. Becoming a Net Petroleum Exporter, Most Regions are Still Net Importers, U.S. Energy Information Administration, 6 February 2020.Hide Footnote Although a number of U.S. oil companies continue to maintain skeleton operations in Venezuela, despite sanctions, oil no longer dominates the bilateral relationship as it once did.[fn]Chevron is the last major U.S. oil company still operating in Venezuela. It does so under a six-month, renewable licence from the U.S. Treasury Department, which allows it to conduct only limited maintenance activities. Four oil service companies are similarly licenced. Biden administration renews Chevron license in Venezuela, Reuters, 1 June 2021.Hide Footnote Prior to the imposition of sanctions, Venezuelas oil exports to the U.S. averaged around 500,000 barrels/day, but sanctions reduced that to zero.

Washington first adopted sanctions as far back as 2006, in response to what it saw as the Venezuelan governments lack of cooperation on issues such as drugs and terrorism. Prior to the Trump administration, however, sanctions were mostly individual, rather than targeted at sectors of the economy.

Beginning in 2017, when President Trump took office, the U.S. tightened the squeeze on Venezuela in an increasingly overt effort to force Maduro from power. Sanctions became sectoral: executive orders signed in 2017 and 2018 barred the Venezuelan government and the state oil corporation PDVSA from access to U.S. financial markets and prohibited dealing in Venezuelan debt. In January 2019, the U.S. endorsed Guaids claim to be interim president. With the subsequent application of maximum pressure, the sanctions regime got even tougher. U.S. officials insisted privately that Maduro could not hold out more than a few months at best.[fn]Crisis Group interview, senior U.S. official, Caracas, February 2019.Hide Footnote That year saw the freezing of all Venezuelan government assets in the U.S., sanctions on the central bank, a ban on U.S. citizens and companies engaging in transactions with Venezuela, and even secondary sanctions on non-U.S. citizens and companies deemed to be aiding and abetting the Maduro government.[fn]Venezuela: Overview of U.S. Sanctions, Congressional Research Service, 22 January 2021.Hide Footnote

Sanctions were accompanied by even less subtle efforts to oust the president. On 23 February 2019, the U.S. and some of its regional allies took part in an abortive attempt to turn the military against Maduro by forcing aid convoys across the border from Colombia and Brazil.[fn]As Venezuelan aid standoff turns deadly, Maduro severs ties with Colombia, The New York Times, 23 February 2019.Hide Footnote On 30 April, a U.S.-supported coup also failed, after top generals and a Supreme Court justice who had supposedly conspired with the opposition failed to act.[fn]Nicole Gaouette and Jennifer Hansler, Pompeo claims Russia stopped Maduro leaving Venezuela for Cuba, CNN, 1 May 2019.Hide Footnote National Security Advisor John Bolton had made it abundantly clear that the Trump administration saw Venezuela as a domino whose fall would accelerate the demise of the other members of what he dubbed the troika of tyranny the Daniel Ortega and Ral Castro governments in Nicaragua and Cuba, respectively.[fn]Rafael Bernal, Bolton dubs Cuba, Venezuela and Nicaragua the troika of tyranny, The Hill, 11 January 2018.Hide Footnote

Many aspects of the Trump teams policy endure. The U.S. embassy in Caracas has been closed since March 2019, and its staff are now based in Bogot. The U.S. has kept formal diplomatic relations with Guaids interim government, which maintains an embassy in Washington, as Venezuelas legitimate authority. Stated U.S. concerns include Venezuelas lack of cooperation on drug interdiction and counter-terrorism efforts, domestic repression, economic collapse and the regional migration crisis.[fn]Venezuela: Background and U.S. Relations, Congressional Research Service, 28 April 2021; U.S. Relations with Venezuela, U.S. Department of State, 6 July 2020.Hide Footnote U.S. officials and elected politicians continue to cite the presence of potentially hostile extra-regional powers as an additional worry.[fn]Bolton went so far as to say the 19th-century Monroe Doctrine by which the U.S. designated Central and South America as its sphere of influence and admonished other powers not to interfere there is as relevant today as when it was first enunciated. Lucia Newman, Trump revives Monroe Doctrine as warning to China and Russia, Al Jazeera, 19 June 2019. Meanwhile, Trumps secretary of state, Mike Pompeo, accused Russia and China of spreading disorder and propping up an undemocratic government. Tal Axelrod, Pompeo: Russia, China spread disorder in Latin America, The Hill, 4 December 2019.Hide Footnote Another issue, which appears less in public statements but is often mentioned behind the scenes, is the exposure to Venezuelan debt on the part of U.S. bondholders and hedge funds.[fn]Crisis Group interview, Venezuelan economist, 19 November 2021. Financial-sector sanctions make it impossible for creditors, whether they hold bonds, commercial debt or other forms of publicly backed instruments, to trade in them or have any dealings with the Venezuelan government. A sudden lifting of sanctions would lead to a free-for-all, and the total debt vastly exceeds the countrys reserves and overseas assets, but no restructuring can take place so long as the sanctions exist. Some creditors have sought to press their claims against Citgo through the courts, which might threaten Venezuela with losing the PDVSA subsidiary altogether. Isabella Cota, Los bonos de PDVSA y el riesgo de perder la joya de la corona de Venezuela, El Pas, 17 August 2021.Hide Footnote

Although the Biden administration has abandoned maximum pressure, it has so far failed to replace that policy with a clear alternative or demonstrate sustained engagement in efforts to end the conflict. Venezuela figured little in Bidens presidential campaign, and to the extent that it was a 2020 electoral issue (mainly in southern Florida, where Cuban and Venezuelan exiles are concentrated), it counted against the Democrats, who were widely perceived by these constituencies as soft on Maduro. Officials have made it clear that the country is not among their top foreign policy priorities for now.[fn]Crisis Group telephone interview, leading Democratic Party member, 28 July 2021.Hide Footnote

Even so, Venezuela meets many of the criteria for outlining matters of concern in the new presidents interim security strategy.[fn]U.S. Interim National Security Strategic Guidance, The White House, March 2021.Hide Footnote The administration is explicitly committed to combating authoritarianism and, in particular, to standing up to what it perceives to be a threat from Russia and especially China to a stable and open international system.[fn]The Biden administration has declared, When the Chinese governments behavior directly threatens our interests and values, we will answer Beijings challenge. Ibid.Hide Footnote Moscow, in the White Houses words, is determined to play a disruptive role, and the growing rivalry [between the U.S. and] Russia, China and other authoritarian states is a major issue in the global security environment. The strategy document also stresses, however, that strategic competition does not, and should not, preclude working with China, when it is in our national interest to do so.[fn]Ibid.Hide Footnote

Despite the new administrations declared preference for a more realistic multilateral approach to Venezuela, and the clear need for coordination between Washington and Brussels, progress toward a common strategy was slow at first. On 25 June 2021, the U.S., EU and Canada issued a long-awaited joint communiqu, which acknowledged the need to relax sanctions in return for meaningful progress in a comprehensive negotiation, suggesting that, as Crisis Group has recommended, there could be reciprocal sanctions relief before a full-scale settlement is reached.[fn]Venezuela: Joint Statement by the EU High Representative for Foreign Affairs and Security Policy, the Secretary of State of the United States of America and the Minister of Foreign Affairs of Canada, 25 June 2021.Hide Footnote The wording, however, remained ambiguous, and opposition representatives continued to insist that government concessions be irreversible.[fn]Crisis Group interview, adviser to Guaid, 24 June 2021.Hide Footnote

Meanwhile, the State Department has expressed support for the negotiations in Mexico City and, although highly critical of election conditions under Maduro, was supportive of those who took part in the 21 November 2021 regional and local polls.[fn]Secretary of State Antony J. Blinken, Venezuelas Flawed November 21 Elections, U.S. State Department, 22 November 2021.Hide Footnote While the Venezuela Affairs Unit in Bogot, under Ambassador James Story, has consistently favoured the position of Guaids interim government, in Washington the approach is more nuanced.[fn]Crisis Group interviews, U.S. officials, Washington and Bogot, December 2021 and January 2022.Hide Footnote Alongside abiding concern as to whether the Maduro government can be trusted to honour its side of any bargain, the principal impediment to adoption of a more flexible policy appears to be domestic political considerations.[fn]Crisis Group interview, U.S. diplomat, Bogot, 31 January 2022.Hide Footnote These include the resistance of prominent Cuban-Americans in both main U.S. parties to any concessions to Maduro and the prospect of mid-term elections in November 2022, in which once again the southern Florida factor will come into play.

Europe has had a historically close relationship with Venezuela. After World War II, many Europeans resettled in the country, becoming a driving force in sectors such as agriculture, construction and services.[fn]Sebastian Huhn and Christoph A. Rass, The Post-World War II Resettlement of European Refugees in Venezuela: A Twofold Translation of Migration, in Gabriele Pisarz-Ramirez and Hannes Warnecke-Berger (eds), Processes of Spatialization in the Americas (Berlin, 2019).Hide Footnote It was in Venezuela that, in 1977, the European Economic Community, forerunner of the EU, established its first delegation in South America. Around one million residents of Venezuela are nationals of a European country, reinforcing the link with the continent.[fn]Venezuela and the EU, Delegation of the European Union to Venezuela. Barry Hatton, European nations raise pressure on Venezuelas Maduro, PBS, 4 February 2019.Hide Footnote

Throughout much of the 20th century and even during the early Chvez years, the relationship was mainly geared to trade. Many major European companies, including oil giants Frances Total, Italys Eni and Spains Repsol had a significant presence.[fn]Minister Quevedo reviews joint projects with PDVSA Strategic Partners, PDVSA, 13 December 2017.Hide Footnote But as Venezuelan democracy began to falter, relations with the EU, and with some of its member states, were affected by the political fallout from the crisis, even as Brussels sought to provide humanitarian aid.[fn]EU announces 35mn euro aid package for Venezuela crisis, France 24, 31 August 2018.Hide Footnote

Chavismos relations with the EU have seldom been as contentious as with the U.S., and governments of individual member states have at times enjoyed close ties with Caracas. Collectively, the 27 EU members are perhaps best thought of as occupying a potential middle ground between Washington and Maduros allies. Nonetheless, tensions have occasionally flared. An early episode came in 2007 during an Ibero-American Summit, when President Chvez repeatedly interrupted Spanish Prime Minister Jos Luis Rodrguez Zapatero, prompting King Juan Carlos of Spain to interject: Why dont you shut up?[fn]Spains king tells Chvez, Why dont you shut up?, The New York Times, 11 November 2007.Hide Footnote A similar incident occurred in 2008 when Chvez declared that Angela Merkel, then German chancellor, and her party belong to the same right that supported Adolf Hitler and fascism. Previously, Merkel had said she did not believe state-guided economies can tackle urgent problems better or more sustainably. She also said the late Venezuelan president did not represent the interests of Latin America.[fn]Chavez criticizes Germanys Merkel, NBC News, 13 May 2008. Chavez hits out at Merkel ahead of EU-Latin America summit, Deutsche Welle, 12 May 2008.Hide Footnote

Incidents such as these strained ties with European countries, whose recommendations regarding democracy and human rights the chavista government has usually dismissed as originating from colonial powers.[fn]Maduro seala que la UE ve a Venezuela como una colonia y que eso se produce porque no creen en la democracia, Notimrica, 20 June 2019.Hide Footnote In 2006, when the EU deployed an observation mission for the presidential election, which Chvez won easily, its report highlighted the high turnout, and peaceful atmosphere in which [the vote was] held, together with the acceptance of results by all those involved.[fn]Final Report, Presidential Elections, Venezuela 2006, European Union Election Observation Mission.Hide Footnote But it was also critical of the state publicity in Chvezs favour, the unbalanced media coverage and the participation of public employees in the incumbents campaign. As a result, Caracas refused to allow meaningful international election observation by the EU or, indeed, any other body from 2006 to 2021, permitting only accompaniment instead.[fn]Venezuelan electoral law limits external observers to accompaniment, meaning inter alia that they can publish their conclusions only with National Electoral Council approval. For the November 2021 elections, however, the council lifted the usual restrictions, citing the process of dialogue and national understanding taking place in Mexico. CNE admite excepcionalmente esquema para la observacin internacional, National Electoral Council, 4 October 2021.Hide Footnote

Relations between many European countries and Venezuela reached breaking point early in 2019, after Brussels decided that the presidential election the year before did not comply with the minimum international standards for a credible process political pluralism, democracy, transparency and the rule of law.[fn]Declaration by the High Representative on behalf of the EU on the presidential and regional elections in Venezuela, Council of the EU, 22 May 2018.Hide Footnote When the Trump administration declared that Maduro had only weeks left in power, the EU urged the Venezuelan leader to bring forward the presidential election.[fn]Declaration by the High Representative on behalf of the EU on the situation in Venezuela, Council of the EU, 26 January 2019.Hide Footnote A majority of EU member states proceeded to recognise Guaid as interim president, but the EU itself was reluctant to set a precedent for other opposition figures worldwide.[fn]Robin Emmott, EU states move to recognize Venezuelas Guaid: Diplomats, Reuters, 1 February 2019.Hide Footnote Instead, it opted for a credible process of engagement with Maduro, establishing an International Contact Group with the aim of promoting a negotiated solution and stepping up humanitarian aid to the country.[fn]International Contact Group on Venezuela Terms of Reference, Council of the European Union, 31 January 2019. The Groups composition has varied over the years. At present, the members are Chile, Costa Rica, the Dominican Republic, Ecuador, the EU, France, Italy, Germany, Netherlands, Panama, Portugal, Spain, Sweden and Uruguay.Hide Footnote

The Contact Group met with scepticism not only from the U.S. but also from the Maduro government allies, including Russia, Turkey, China, Cuba and Iran. Russian Foreign Minister Lavrov dismissed the Group, saying all mediation initiatives should be unbiased and that the Groups notional purpose was at odds with its demand that Maduro hold a fresh presidential election.[fn]Elena Teslova, Russia ready to mediate in Venezuela peace efforts, Anadolu Agency, 30 January 2019.Hide Footnote According to diplomats, Russia lobbied to join the Contact Group at first, but the EU refused, ostensibly because in the absence of the U.S. its presence would unbalance the initiative. While the Group has failed to achieve a breakthrough, it has acted as a moderating influence, bringing together European and Latin American countries committed to a negotiated solution leading to credible elections, as well as full access for organisations bringing in humanitarian assistance.[fn]EU humanitarian engagement in Venezuela has scaled up in recent years. Brussels hosted the first two international humanitarian conferences on Venezuela in 2019 and 2020, gathering pledges to alleviate the conditions of Venezuelan migrants and refugees across South America and cushion the effects on host communities. International Donors Conference in solidarity with Venezuelan migrants and refugees, in the midst of COVID-19: Co-Chair Statement, 26 May 2020.Hide Footnote

The EU also maintains targeted measures against high-level officials involved in human rights violations and other actions undermining democracy, including imposing an arms embargo prohibiting European countries from selling equipment the Venezuelan security forces could use for repression.[fn]EU slaps sanctions on 19 more Venezuelan officials, Associated Press, 22 February 2021.EU readies sanctions on Venezuela, approves arms embargo, Reuters, 13 November 2017.Hide Footnote Sanctions have placed great strain on relations between Brussels and the Maduro government. Reacting to European sanctions on eleven officials in 2020, Caracas asked the EU ambassador to quit the country and declared her persona non grata after the EU Council extended the list of sanctioned individuals in February 2021.[fn]Venezuela: head of mission to the EU declared persona non grata, Council of the EU, 25 February 2021.Hide Footnote

Even so, the EU has trodden a fine line between chastising the Venezuelan government and seeking a negotiated, peaceful resolution to the conflict. It has eschewed the use of economic and financial sanctions and, in recent years, put its weight behind calls for improved election conditions, including the acceptance of international observers. This stance, together with its withdrawal of de facto recognition of the interim government, puts it at odds with Washington, which opposed the deployment of observers on the grounds that this step risked legitimising a rigged election.[fn]Luke McGee, Europe on collision course with US over Venezuela elections, CNN, 13 October 2021.Hide Footnote Part of the EUs stance is down to the personal engagement of former Spanish foreign minister and current high representative for the EU common foreign and security policy, Josep Borrell, who has had to defend his policy toward Caracas from sceptics in the European Parliament.[fn]Venezuela: Remarks by the High Representative/Vice President Josep Borrell at the EP plenary debate on the EU diplomatic mission in Venezuela in view of possible elections, European External Action Service, 7 October 2020.Hide Footnote

Having failed to reach agreement with Maduro ahead of the December 2020 legislative elections, the EU finally signed a deal with the government on 28 September 2021 to deploy an observer mission ahead of the 21 November local and regional polls.[fn]Acuerdo Administrativo entre el Consejo Nacional Electoral de la Repblica Bolivariana de Venezuela y la Delegacin de la Unin Europea en la Repblica Bolivariana de Venezuela sobre la Misin de Observacin Electoral para las elecciones Regionales y Municipales del 21 de noviembre 2021, National Electoral Council, 28 September 2021.Hide Footnote The missions preliminary report identified structural shortcomings in the electoral system, while recognising improved conditions.[fn]Preliminary Statement on the 21 November regional and municipal elections, European Union Election Observation Mission Bolivarian Republic of Venezuela, 25 November 2021.Hide Footnote Its measured tone, however, did not assuage Maduro, who reacted by calling the team enemies, a delegation of spies whose aim had been to stain the election with false accusations.[fn]Daniel Lozano, Maduro acusa a los observadores europeos de ser espas enviados a manchar sus elecciones, El Mundo, 28 November 2021.Hide Footnote The team was obliged to leave earlier than planned, and the government blocked presentation of its final report in Caracas.

From 2016, when Maduro moved to neutralise the opposition-dominated National Assembly, several Western Hemisphere countries, led by the recently elected OAS Secretary General Luis Almagro, sought to build consensus in the region for concerted intervention in the Venezuelan crisis. The first idea was to invoke the Inter-American Democratic Charter, which allows the region collectively to take whatever measures are deemed necessary to discourage democratic backsliding. But despite repeated attempts at the OAS to muster a majority of votes in favour of applying the Charter, by 2017 it was clear that success was improbable.[fn]Joan Faus, La OEA no logra decidir si interviene en la crisis venezolana, El Pas, 23 June 2016.Hide Footnote Thanks to years of oil diplomacy in the Caribbean by Caracas as well as support from left-wing governments in the region, a majority was not forthcoming.[fn]La OEA debate si activa la Carta Democrtica Interamericana a Venezuela, AFP, 3 April 2017. A simple majority (eighteen votes) is required to activate the Charter, while a two-thirds majority is needed to suspend the membership of a country deemed to be in violation of it.Hide Footnote In response to the deadlock, a group of twelve countries decided to set up an ad hoc body, which they later called the Lima Group, to exert greater pressure on the Venezuelan government.[fn]Cancilleres de 12 pases de Amrica y el Caribe suscriben en la Declaracin de Lima que Venezuela no es una democracia, BBC Mundo, 8 August 2017. The signatories were: Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Panama, Paraguay and Peru.Hide Footnote

The Lima Group recognised in its first statement in August 2017 that outside powers lacked the tools to resolve the crisis, declaring that it simply wanted to contribute to finding a peaceful, negotiated solution that would allow restoration of democracy in Venezuela.[fn]Declaracin de Lima, Peruvian Foreign Ministry, 8 August 2017.Hide Footnote The Group deplored the Maduro governments creation of the National Constituent Assembly that July and decried worsening human rights violations. It called on countries that had done military deals with Caracas to stop arms transfers to Venezuela, per the Arms Trade Treaty, which prohibits the transfer of equipment that could be used to commit crimes against humanity.[fn]Ibid.Hide Footnote In an unprecedented move, Lima Group members Argentina, Canada, Chile, Colombia, Paraguay and Peru in September 2018 referred alleged crimes against humanity in Venezuela to the International Criminal Court.[fn]Statement of the Prosecutor of the International Criminal Court, Fatou Bensouda, on the referral by a group of six States Parties regarding the situation in Venezuela, International Criminal Court, 27 September 2018. The effect of the referral the first ever by state parties relating to events occurring on the territory of another state party was that an eventual decision by the Prosecutor to open a formal investigation would not be subject to review by the Courts Pre-Trial Chamber.Hide Footnote

Over the next two years, the Group tried to ratchet up the pressure but to little avail. In January 2019, it recognised Guaids interim presidency, pledging to support a democratic transition in Venezuela.[fn]Declaracin del Grupo de Lima, Peruvian Foreign Ministry, 23 January 2019. Mexico, Guyana and Saint Lucia declined to join the others in recognising the interim government.Hide Footnote The U.S., which never formally joined the Group, began to take part in its discussions, impeding its already limited capacity to engage with the Maduro governments foreign allies.[fn]Alex Horton, Trump soured relations in Latin America. China and Russia have welcomed the chaos, The Washington Post, 20 April 2019; Tillerson urges Latin America to beware of Russia, China, Radio Free Europe, 2 February 2018; Ciara Nugent, The U.S. and China are battling for influence in Latin America, and the pandemic has raised the stakes, Time, 4 February 2021.Hide Footnote The Group continued to issue sporadic communiqus in response to events in Venezuela, but after it recognised Guaid it was never able to agree on the next step. It could not, for instance, get behind President Trumps threats of military intervention.[fn]Melissa Barra, El Grupo de Lima ha perdido vigor y est llamado a desaparecer, analiza experto, RFI, 25 March 2021. Declaracin de Lima, Peruvian Foreign Ministry, 25 February 2019.Hide Footnote In September 2019, it threatened to adopt new sanctions or other economic and political measures against the Maduro regime, but it never did so.[fn]Declaracin de Lima, Peruvian Foreign Ministry, 23 September 2019.Hide Footnote

Political changes in the region by the start of 2021 had led some countries, such as Argentina, Mexico, Bolivia and Saint Lucia, to leave, marking the start of the Groups demise. Twelve countries issued a declaration questioning the legitimacy of the chavista-dominated National Assembly elected in December 2020 and acknowledging the existence of the legitimate delegate commission of the National Assembly elected in December 2015, chaired by Guaid.[fn]El Gobierno del Per nombra un nuevo Embajador en Venezuela, Peruvian Foreign Ministry, 15 October 2021.Hide Footnote But the election in 2021 of a new Peruvian government headed by leftist Pedro Castillo further weakened the Group. Castillo adopted a non-interventionist approach to international relations and renewed diplomatic ties with the Maduro government.[fn]El Gobierno del Per nombra un nuevo Embajador en Venezuela, Peruvian Foreign Ministry, 15 October 2021.Hide Footnote

A member of the Lima Group since its inception, Colombia has particular importance in the Venezuelan crisis. It shares a 2,200km border with Venezuela and has received by far the largest number of migrants escaping the economic meltdown. At the same time, the two governments maintain a tense, adversarial stance toward one another: they have had neither diplomatic nor consular relations since February 2019.[fn]Venezuela closed the border after the 23 February 2019 clashes, reopening it to commercial traffic on 5 October 2021. Venezuela to reopen border with Colombia on Tuesday, official says, Reuters, 4 October 2021. Colombia had shut the border itself in March 2020, on account of the COVID-19 pandemic, but reversed the measure a year later.Hide Footnote Each has repeatedly accused the other of harbouring rebels seeking to overthrow the respective governments, and in May 2020 Venezuela foiled a poorly executed plot, known as Operation Gideon, involving small groups of armed men trained in Colombia.[fn]Joshua Goodman, 3 Venezuelans plead guilty for aiding anti-Maduro plot, Associated Press, 5 March 2021.Hide Footnote In September 2021, Maduro said Colombia had sent up to 100 armed terrorist drug traffickers into Venezuela with the aim of attacking police, soldiers and political targets. He presented no evidence, and Colombia denied the accusation.[fn]Maduro acusa a Colombia de infiltrar grupos terroristas en Venezuela, Deutsche Welle, 1 October 2021.Hide Footnote

The two sides have also traded accusations of military incursions in border regions, most recently involving alleged drone flights. Another major source of friction is the growing presence in Venezuela of Colombian guerrillas from the National Liberation Army and dissident or rearmed groups from the Revolutionary Armed Forces of Colombia.[fn]Luis Jaime Acosta, Some 1,900 Colombian guerrillas operating from Venezuela, says Colombia military chief, Reuters, 30 September 2021. See also Crisis Group Report, A Glut of Arms: Curbing the Threat to Venezuela from Armed Groups, op. cit.; and Bram Ebus, A Rebel Playing Field: Colombian Guerrillas on the Venezuelan Border, Crisis Group Commentary, 28 April 2021.Hide Footnote

It was from the Colombian border city of Ccuta that, with backing from the U.S. and several Latin American governments, the Venezuelan opposition sought without success on 23 February 2019 to introduce humanitarian aid across the border, with a view to driving a wedge between the Maduro government and the Venezuelan armed forces. President Ivn Duques government in Bogot has maintained a consistently hardline stance regarding the Venezuelan crisis and the president himself has publicly expressed scepticism regarding the Mexico City talks.[fn]Ivn Duque: Soy escptico respecto a las negociaciones sobre Venezuela, EFE, 17 September 2021.Hide Footnote His ambassador to Washington from September 2018 to June 2021, Francisco Pacho Santos, spoke openly of a possible use of force to oust Maduro and has tried since resigning as ambassador to undermine the talks.[fn]Francisco Santos plantea posible intervencin en Venezuela, Semana, 18 September 2018. Since resigning as ambassador, Santos has used his Twitter feed @PachoSantosC to criticise the Mexico talks and associate leftist Colombian presidential aspirant Gustavo Petro with Maduro.Hide Footnote Colombias insistence on being part of the proposed Group of Friends is one of the factors hindering its creation.[fn]Crisis Group interviews, diplomats, September 2021.Hide Footnote

A robust, sustainable resolution of Venezuelas crisis is unlikely unless major powers on both sides of the conflict can come to an understanding. At the very least, it is essential that none act as a spoiler, either by imposing impossible conditions or by providing resources that allow or encourage either side government or opposition to maintain the status quo indefinitely and resist concessions that would allow a settlement to be reached.

The portents as regards foreign backing for a negotiated solution are better than they have been for many years, provided that the standoff over Ukraine does not escalate. The Biden administrations commitment to multilateral diplomacy, and early efforts by Washington, Ottawa and Brussels to forge a common Venezuela policy, are encouraging developments. China has shown that it is prepared to exert pressure on the Maduro government, albeit in pursuit of its own interests. Russia is publicly committed to a peaceful, negotiated resolution of the crisis, and seeks to help secure such an outcome as one of the two accompanying countries at the Mexico talks. Nonetheless, the gap between the U.S., the EU and their allies, on one hand, and Maduros major foreign allies, on the other, remains wide.

To complicate matters further, many issues that separate the two sides have little or nothing to do with Venezuela. Russia, for instance, has hinted in the past that it would be more open to a deal if its concerns about Ukraine were addressed.[fn]Testimony by Dr Fiona Hill (deputy assistant to the president and senior director for European andRussianaffairs, National Security Council, 2017-19), Joint Hearings, U.S. House of Representatives Intelligence, Foreign Affairs and Oversight Committees, 14 October 2019. Hill said the Russian government had, signal[ed] very strongly that they wanted to somehow make some very strange swap arrangement between Venezuela and Ukraine.Hide Footnote Cubas priority is to normalise its relationship with Washington, although its Venezuela policy might prove more pragmatic if it could resolve its economic crisis without access to subsidised oil. China and the U.S. have a wide range of bilateral disputes, from trade to Taiwan and the South China Sea.

While none of the three Russia, Cuba and China would want a change of government in Caracas that would bring a full-blooded U.S. ally to power and potentially threaten their interests, there is still room for compromise. None of them is well served by indefinitely prolonging an already protracted crisis that has not only wrecked Venezuelas economy but also severely damaged the interests of its foreign investors and trading partners. After years of debilitating crisis, it should be evident to all that the only way back to stability and public well-being is through compromise. Such an agreement would likely entail allowing the gradual lifting of financial and economic sanctions in return for a process of restoring functioning state and judicial institutions and paving the way to free and fair elections. For talks to this end to succeed, Crisis Group has argued, both sides will need guarantees that neither will face political exclusion or judicial persecution in the event of defeat.[fn]See Crisis Group Report, Imagining a Resolution of Venezuelas Crisis, op. cit.Hide Footnote External partners will also want assurances that their economic and financial interests will be preserved.

One important contribution would be for the parties to the Mexico negotiations (or any future round), along with their major external allies, to reach agreement on the precise role that foreign governments should play at the talks. To date, diplomats say, that role has been left rather vague, and for now it is on the back burner, but it will have to be better defined as discussions move toward a conclusion.[fn]Crisis Group interview, diplomats, Caracas, 5 November 2021.Hide Footnote

Certain elements of international support for negotiations appear self-evident. Foreign governments whether accompanying the talks or as members of a future Group of Friends must exercise discretion, preferring silence to public comments that might undermine the talks. They should be friends of the process, rather than of one side or the other, and if they bring any influence to bear on the Venezuelan parties it should be to encourage them to remain at the table and adopt a flexible attitude. They may be able to offer technical, logistical or financial assistance for the talks. If the parties reach an agreement, foreign governments may play a role in seeing it fulfilled. While the word guarantor is often used, it is perhaps more useful to think in terms of monitoring implementation of an accord and distribution of post-conflict assistance.[fn]For a detailed analysis of the role played by such groups in peace talks, and the potential pitfalls, see Teresa Whitfield, Working with Groups of Friends, U.S. Institute of Peace, 2010.Hide Footnote

At the same time, managing the manifest tensions among interested external parties will be crucial to promoting a peaceful settlement in Venezuela. One way to do so would be to revive the suspended Stockholm process, hosted by Sweden, which gathered almost all the main foreign stakeholders and potential facilitators for closed-door meetings that while they reached no conclusion helped participants understand one anothers motivations and red lines.[fn]Russia, other key powers discuss Venezuela crisis in Sweden, op. cit.Hide Footnote

As in any negotiations, the chances of success will be hugely enhanced if the parties abandon extreme positions. If consensus is to be reached, not only do the two main parties have to trim back their expectations, but so do their external partners. Intransigent positions on both sides of Venezuelas divide whether among government supporters who chafe at the idea of losing power or among opposition factions demanding Maduros immediate departure from office and prosecution have their corresponding cheerleaders abroad. Both sides will need to progressively temper their positions if the stalemate is to be resolved.

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Overcoming the Global Rift on Venezuela | Crisis Group - Crisis Group

While Russia has continued massing troops and military equipment along Ukraines borders, raising fears that an invasion is imminent, a different kind of Russian drama has played out at the Winter Olympics in Beijing.

After helping the Russians take home gold in the figure-skating team event last week, 15-year-old Kamila Valieva ignited a firestorm of criticism when reports emerged that shed tested positive for a banned substance in December. The Court of Arbitration for Sport ruled that Valieva could compete, and although she finished first in Tuesdays short program, she came in a stunning fourth during Thursdays free skate after falling several times. (Earlier, the International Olympic Committee announced there would be no medal ceremony if she had finished among the top three.)

Although Olympic figure skating has always been a mix of politics and sport, the display of national identity and political rivalry on the ice is something the American public tends to miss. But even Ia self-professed superfan, former skater, and foreign-policy researcherwas surprised to realize how closely Russias relationship with figure skating reflects the Kremlins foreign-policy trajectory.

One could draw three lessons in particular:

In both figure skating and foreign policy, Russia is keen to regain what it considers to be its former prestige. Since its introduction by Peter the Great three hundred years ago, the sport has been a powerful cultural exportand Russia takes great pride in its dominance of it (particularly in pairs skating and ice dancing). From 1964 to 1991, the Soviet Union won seven straight Olympic gold medals and twenty-four of twenty-six World Figure Skating Championship gold medals in pairs skating.

But with the collapse of the communist empire, the sport fell on hard times. Government funding dried up, ice rinks closed, many top coaches moved abroad, and Russian skaters brought home fewer Olympic medals. This rise and fall mirrors the countrys broader geopolitical realities.

Now, the Kremlin wants to see both rise again. Before the 2014 Winter Olympics in Sochi, state funding once again poured into Russian figure-skating schools. With Russian President Vladimir Putin among the spectators at the event, Russian competitors captured the team gold medalthe first of those games for the host country. The home crowd roared for its national heroes, waved flags, and showered them with flowers and stuffed animals on the ice.

But Russias search for pride and prestige extends beyond athletic competition. Indeed, its been a driving force behind the Kremlins revanchist foreign policy since the end of the Cold Warwith Putins widely reported remark that the Soviet collapse was the greatest geopolitical catastrophe of the [twentieth] century serving as clear evidence.

Experts argue that Russia suffered a profound identity crisis exacerbated by what it believed was the unwillingness of the United States and Europe to treat it as a great power. US military interventions (undertaken without the United Nations approval), NATO expansion in Eastern Europe, and Western engagement with post-Soviet countries such as Georgia and Ukraine strengthened Moscows perception that the West did not accept Russia as an equal.

That perceived lack of respect fueled an antagonistic foreign policy that ranges from diplomatic snuffs and saber-rattling to invading its neighbors. Todays crisis over Ukraine can be understood, at least in part, as another Russian attempt to impose its authority in its so-called near abroad and boost its claim to great-power status.

For many Russians, the 1990s was a decade of socio-economic distress and defeat linked to their countrys lost status. This allowed the Putin regime to invent a narrative of Russian victimhood that cast the West as the perpetrator of that humiliation and loss.

He drew on two central pillars of Soviet collective identity, says Russia researcher Gulnaz Sharafutdinova: Soviet exceptionalism and extreme fear of foreign enemies, the latter of which has resulted in a siege mentality. In Putins own words, the infamous policy of containment, led in the eighteenth, nineteenth and twentieth centuries, continues today, and that his countrys enemies are constantly trying to sweep [Russia] into a corner. This supposed Western perfidy animates Russian foreign policy, regardless of whether the threat is exaggerated or wholly imagined.

This mentality is so entrenched that it expresses itself in figure skating, as well. As the Valieva scandal took center ice in Beijing, Russian officials dismissed it as a Western conspiracy against the Russian teenagers who have dominated the sport for the last decade. That kind of paranoia has a long history: When US skater Sarah Hughes won the womens competition at 2002 Salt Lake City Games, for instance, Russia submitted a protest (which was later rejected) to the International Skating Union disputing the judging and demanding that Russian skater Irina Slutskaya, who finished second, be awarded the gold medal.

Although Slutskaya delivered a subpar performance, marred by several awkward jump landings, she still insists: I knew beforehand that I wouldnt be allowed to win thereit was all about politics. Thats why its reasonable to conclude that Olympic figure skating helps fuel the broader narrative of Russia as a besieged fortress.

Collective humiliation, frustration, and resentment are powerful emotions and, researchers say, tend to generate a willingness to accept larger costs.

This, too, might just be reflected in the Russian devotion to the sport. While elite figure skaters commonly train six days a week for hours at a time, some Russian skating schools push it to another level: Eteri Tutberidzethe coach of Olympic medal winners such as Yulia Lipnitskaya, Evegenia Medvedeva, and Alina Zagitovahas been criticized in the West for extreme training methods that include countless jump repetitions (which result in recurring injuries) and strict diets. After Valievas loss this week, cameras reportedly caught Tutberidze scolding the teen: Why did you let it go? Why did you stop fighting?

In Russia, however, those methods are not only tolerated, but apparently celebrated by the state with the Order of Honor.

From this, it seems as though the medals and prestige are worth more to the countryor, perhaps more accurately, a government obsessed with glorythan the health of its young skaters. If Russia can demand such sacrifice from figure skaters, what could it require of the entire nation if another mass conflict were to erupt?

Sport, George Orwell wrote, is war minus the shooting. Russia has not been able to repair its injured pride and prestige on the ice, and it is unlikely to do so in the international arena by invading Ukraine.

If war does come, it will be because of Russias foreign-policy choicesones rooted in its rulers perceived denial of status and deep distrust toward the West. Understanding the root causes of Russian behavior is key if theres to be any hope of peace in Europe.

Kelly A. Grieco is a resident senior fellow with the New American Engagement Initiative in the Atlantic Councils Scowcroft Center for Strategy and Security.

Thu, Jan 27, 2022

UkraineAlertByTaras Kuzio

When Russian President Vladimir Putin laments the fall of the USSR and speaks about the injustice of the post-Soviet settlement, he is really thinking of Russian imperialism and has Ukraine primarily in mind.

Wed, Feb 16, 2022

New AtlanticistByHarlan Ullman

By conflating three vital Russian national-security interests into four demands, the Russian leader created internal contradictions and conflicts that would make a military intervention in Ukraine disastrous.

Image: Russian figure skater Kamila Valieva falls during her performance in Beijing on February 17, 2022. Photo by Eloisa Lopez/REUTERS

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Beyond the sequins: What figure skating tells us about Russia's foreign policy - Atlantic Council

The political instability and insecurity in some Sahelian states in West Africa has led to the capture of political power by their military in recent times. Chad, Burkina Faso and Mali have all experienced coups.

One thing these cases have in common is that the states are grappling with the threat of Islamist insurgency.

The insurgents are bent on imposing extremist political ideologies that are anti-democratic, including establishing an Islamic caliphate across the region. The consequences could lead to state collapse across the region, as has been the recent case in Afghanistan.

Is there a relationship between jihadism and military coups in the Sahel? There is no easy answer.

Analysts say that while there is no mutually beneficial relationship between jihadist groups and coup plotters, there is a linkage between the increase of jihadism and the protracted insecurity across the region.

What is certain is that the new wave of military coups could dim the prospects of delivering the dividends of democracy in a region already devastated by jihadism.

The complex, evolving relationship between jihadism and military coups in West Africas Sahel region is best understood in how the activities of the former preempts the emergence of the latter. This is not to say however that jihadism is a direct precursor to military coups.

The latest coup in West Africa took place in Burkina Faso. It was the third in the country within the past eight months. There was also a recent attempted coup in Guinea-Bissau.

The Economic Community for West African States and the African Union have reacted to the unfolding trends in the region mostly with mere sanctions and suspensions. These measures tend to further isolate affected states rather than improving transparency and accountability.

A historical deep dive into the Sahel region, where most of these military coups are occurring, shows that most of the states there are confronted by the challenge posed by jihadist groups.

Most of these groups are affiliated with global jihadist groups such Al-Qaeda and the Islamic State in Syria and Iraq.

Jihadist groups in the region include Jamaatu Ansaril Muslimina fi Biladis Sudan (popularly referred to as Ansaru), Jamaat Ahl as Sunnah lid-Dawah wal-Jihad (Boko Haram), the Islamic State in the West African Province , the Islamic State in the Greater Sahara and Jamaat Nusratul Islam wal-Muslimin.

Read more: Mapping the contours of Jihadist groups in the Sahel

The underlying circumstances that have led to the proliferation of these jihadist groups across the region include high levels of poverty and inequality. There is also high unemployment, illiteracy and poor governance.

The existence of these socio-economic factors as well as political instability and the challenges posed by climate change in the region have compounded the threat posed by jihadism.

Combined, these conditions have given fuel to jihadism in the troubled region, leaving the affected states in perpetual fragility and weakness.

The obvious result has been the continued incapacity of the affected states to deal with their many challenges.

This has led to repeated tensions in relations between the state and society, which the jihadist groups have exploited in intensifying their recruitment drive.

On the other hand, the activities of these jihadist groups have also mounted additional pressure on the fragile democratic systems across the region.

This encourages state capture by the military, who see themselves as guardians of the state and the last hope of the common citizen.

Having to bear the brunt, over the years, of fighting these jihadist groups, while sustaining multiple casualties, has also contributed to disenchantment within the ranks of the military. This was the case in Burkina Faso.

Endemic corruption has further increased distrust between the military and the political elites. Corruption is often associated with the affected Sahelian states in West Africa.

The military often blame corruption among the political elite for the lack of required resources to fight insurgencies.

The militarys ascension to power does not necessarily guarantee a defeat of jihadists. Rather, it creates the tendency for an overly militaristic approach to fighting insurgency.

The approach further entrenches the unintended consequence of pushing the vulnerable into joining jihadist groups, rather than pulling them away from extremist ideologies.

The jihadist groups in the region are likely also to intensify their influence operations across the region aimed at winning the hearts and minds of the locals within their areas of operation.

The continued emergence of coups is likely to be capitalised upon by jihadists as reflecting efforts which are finally yielding desired results the forced displacement of democratic systems of government. The jihadists could use this as a tactic to get more fighters to join them.

While the situation across the region continues to look bleak, it is important to note that democracy still stands a chance of surviving.

But wishful thinking alone is not sufficient. If the underlying factors that triggered the spate of violent extremism across the Sahel region continue, the militarys penchant for seizing political power might grow.

The military juntas now in power must urgently seek to establish mutuality with the societies they now rule. Its a tall order, given that they dont prioritise the relationship between state and society. Doing so would require giving voice to the concerns and grievances of citizens they rule over.

Failure to do this could result in the same disenchantment the people had towards the ousted civilian rulers, in the first place.

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Jihadism and coups in West Africas Sahel region: a complex relationship - The Conversation CA

Assuming the ANC drastically curtailed corruption and rebuilt state capacity, would investment in the private sector and economic growth save the country?

In order to produce effective solutions to the entangled plagues of unemployment, poverty, inequality and corruption the four horsemen of postapartheid understanding both the fundamental causes and nature of our problems is crucial. The ruling ANC, through its enabling a regime of corruption, eroding of state capacity and general failure to provide quality basic services, is an obvious culprit.

But a major defect of the ANC that often evades investigation and critique is its abundant lack of political imagination. This weakness was on full display during President Cyril Ramaphosas recent State of the Nation address. Ramaphosa called for a new consensus which recognises that the state must create an environment in which the private sector can invest and unleash the dynamism of the economy.

The ruling party has weakened its ability and willingness to deal with national crises because its executive leadership is anchored to an ideology and economic system that has proven to be a force of destruction around the world: neoliberal capitalism.

There are disputes as to whether the ANCs macroeconomic governance can be accurately described as neoliberal. Denoting the ruling partys present and historic economic policy as neoliberal does not mean South Africa has become Miltons Friedmans wet dream or that ANCs policies would receive uncritical praise from the Chicago Boys.

Politics is always practised within the influence of certain constraints. The need to secure victories in elections, the demand for rectifying the injustices of apartheid, the make up of its core constituency (the working class, poor and unemployed) and the egalitarian tradition from which the ANC was birthed, have acted as restraints on the ANCs design and implementation of policy.

The extent to which the ANC has implemented neoliberal policies and the degree to which neoliberal values have guided its governance has varied since 1994. But soaring above Nelson Mandelas Rainbowism, Thabo Mbekis African Renaissance, Ramaphosas New Dawn and even within Jacob Zumas vision of Radical Economic Transformation, is a steadfast belief that individual and societal prosperity is only possible through endless economic growth unleashed by loosely restrained private enterprise.

But what is neoliberalism? Author David Harvey provides two levels from which we can obtain a holistic understanding. Firstly, neoliberalism is an economic theory which proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterised by strong private property rights, free markets, and free trade. The role of the state is to create and preserve institutional frameworks appropriate to such practices.

The latter sentence of Harveys definition is vital because it clarifies how neoliberalism is not just an attempt to minimise state capacity or construct small government. Being that the state has a legitimate monopoly on the use of violence and the government possesses the democratically granted authority to design legislation and enact policy, neoliberalism has reformed the state to work, mostly although not totally, in the interests of those who dominate private enterprise.

Secondly, neoliberalism is a political project that seeks to restore the power of economic elites. This second level clarifies why the inequalities of apartheid have peristed into the present. By the early 1990s the ANC had all but secured its path to executive power and the egalitarian future it had long promised, reflecting the values of the Freedom Charter, posed a threat to domestic and international capital.

It was feared that a government which prioritised human development over economic growth and utilised various redistributive policies would undermine capitals ability to accumulate and retain wealth. Falling prey to the seduction of economic advisers, Washington diplomats and the subtle threats of domestic capital, the ANC rejected the vision of a developmental state.

Wealth, and the unequal patterns of ownership and production from which it came, remained in the same hands and the inequities of apartheid were compounded. In an attempt to deracialise the private sector, various measures of affirmative action were introduced by the ANC since its ascension to power. Twenty-eight years later a new but small black elite has flourished, some seeking to gather wealth through the state and others more committed to accumulation in the private sector. In recent years the inequality between people of colour added to to generalised inequality between white and black people. Unfortunately the prosperity of these new black capitalists has not trickled down to be enjoyed by the rest of the black population

Neoliberalism has not disrupted unjust hierarchies in South Africa. Economic domination, and the suffocating exploitation it entails, continued after apartheid but now conducted by old and new faces.

Grand inequality is the destructive child of neoliberalism that looms over the nation. The immense wealth of South Africas economy is gathered in the hands of a few at the cost of social stability, democracy and human dignity. The opulence of a few that relies on the poverty of many cultivates frustration as citizens rightly question why they are denied the opportunity to pursue their own well-being. The rise and persistence of dangerous populism, whether it be organized xenophobia to reserve jobs for South Africans or the calls for radical economic transformation, spring from the discontent produced by inequality.

Highly concentrated economic power manifests as unevenly distributed political power. If democracy is ruled by the people, it requires the construction and reinforcement of institutions which give all citizens the opportunity to partake in decision making regarding numerous spheres of public life including the economy.

By elevating the interests of the private sector, the ANC has displayed an authoritarian tendency in which policy creation and governance rarely considers the needs of citizens before the concerns of private enterprise. Consider how Ramaphosas presidency has continued a cooperation between the ANC and international mining companies in which the rights of indigenous communities are undermined for the extraction of minerals.

Democracy is further eroded when those with significant wealth can exert unaccountable influence over politics through campaign donations, lobbying groups, media organisations or, as is often the case in provinces like KwaZulu-Natal, through violence.

Inequality must also be considered a moral crime. The absurd distribution of income and wealth echoes throughout a persons life, resulting in unbearable presents and bleak futures. It determines access to healthcare, safe housing and education, closing opportunities that will make existence more than a brutal game of competition and survival. Unless one believes that the poor, unemployed and working class deserve to be in their position, inequality has no moral or practical justification.

Perhaps the greatest expression of the ANCs neoliberalism is its frantic aversion to redistribution and state led development. Mandela and Mbeki sidelined discussions of nationalisation throughout the late 1990s while ANC leadership ostracised those within the tripartite alliance who were critical of the economic liberalisation their presidencies had introduced.

It was only after months of protests across the countrys universities that Jacob Zuma announced plans to subsidise higher education. The Covid-19 pandemic and stringent lockdown measures intensified unemployment and food scarcity. Rather than offering comprehensive relief, Ramaphosas cabinet implemented austerity measures which cut government spending for education, social services and healthcare.

The surveillance and violent suppression of dissent has become one of the primary strategies deployed by the ANC to manage the conflict caused by the inequality and poverty it refuses to seriously confront. This amplifies distrust and bitterness towards the government. Citizens are first insulted by a state which fails to realise socio-economic rights or fails to provide fragile communities with basic services. The sting of this insult burns deeper when the states presence in communities is as a hostile, invasive force willing to harass, torture and in some instances kill those who object to its ineffective power.

Change is an inevitable process within civilization. Mutating economic conditions, transformations in nature, shifting and conflicting power relations, revolutionary technological developments, the proliferation of new ideas and the exercise of human agency to imagine and create different social orders the convergence of all these factors and more has produced different economic systems and political orders over millennia.

One can see the ANCs reluctance to shift its economic policy as capitalist realism, defined by Mark Fisher as the widespread sense that not only is capitalism the only viable political and economic system, but also that it is now impossible even to imagine a coherent alternative to it.

With impressive dexterity, successive ANC leadership has exploited the frustration of citizens and emancipatory or progressive rhetoric to present neoliberal capitalism as our only avenue to human and societal well-being. In unsurprising harmony with the ANC, many of those who lead national discourse agree. Any major divergence, in policy or legislation, from the neoliberal consensus is ridiculed or lazily critiqued as irrational, unjust or practically infeasible.

The reality is that in its current form, South Africa is an unsustainable social order. If just, drastic and effective action is further delayed, this abundance of human suffering, ubiquitous desperation and the inexhaustible rage of millions will converge to plummet society into total dysfunction.

This isnt to say societal collapse is in the near future but it remains a menacing possibility on the far horizon. To avoid disaster, it is imperative we seriously entertain alternative economic policy and realise that history is far from over, we have the agency to craft a society that works for all of us.

Andile Zulu writes regularly for the Mail & Guardian from Durban

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ANC and neoliberalism: Why the aversion to a fairer economy? - Mail and Guardian

Independent Indias first elections were held from October 25, 1951 to February 21, 1952. To commemorate that monumental exercise,The Wireis publishing a series of articles exploring various aspects of the first ever general election in independent India. Read ithere.

In post-independence India, the first general elections held in 1951-52 constituted a rare historical event, if not a glorious moment. They were conducted at a time when male literacy rate was 27.16%, while the corresponding figure for female was 8.86%. The economy was in shambles, worsened by the gaping wounds of the Partition.

Despite these odds, Sukumar Sen, ICS, the first chief election commissioner, took up the challenge of conducting the first general elections on the basis of which the first Lok Sabha was constituted. In the absence of a proper infrastructure, the polls were conducted in 68 phases, commencing on October 25, 1951 and ending on February 21, 1952. Out of 17,32,13,635 eligible voters, 8,86,12,171 voters turned out, that is, about 51.15% voters cast their votes, which was not a small feat.

CPIs decision to participate

Against this background, the Communist Party of India (CPI) participated in the elections, threatened by a cloud of uncertainties. The war had just ended and the CPIs decision not to join the Quit India movement, the call given by M.K. Gandhi, had quite badly tarnished its image. Besides, the party had just shifted its position on transformation of state power in post-independence India through armed struggle to the defence of parliamentary communism.

Moreover, the party was declared illegal in parts of the country as a sequel to the Telangana uprising and, organisationally, it was in a pretty bad state. In fact, a good number of CPI activists were languishing in jail, which badly affected the functioning of the CPIs election machinery.

For the CPI it was, indeed, a momentous decision to contest, as in 1948, the Second congress of the CPI, held in Calcutta under the stewardship of B.T. Ranadive, the new general secretary who replaced P.C. Joshi, characterised the attainment of independence as sham. Consequently, a call for ousting the Nehru government was given, which would make way for a revolutionary restructuring of power. The Telangana uprising was to a large extent the fallout of this line.

In 1951 the CPI, under the leadership of the new general secretary Ajoy Ghosh, who replaced Ranadive, adopted a new programme which signalled the change of line, allowing the partys entry in parliamentary politics in post-independence India.

Fifty-three parties contested the first general elections, the Congress being the biggest, for obvious reasons. Elections were held for 401 constituencies. The results were declared on February 10, 1952. The Congress won 361 seats, securing 45% of votes. The CPI contested 49 seats and won 16 seats, coming out as the second biggest party next to Congress, although it secured only 3.29% votes.

Compared to the Congress, the CPIs performance was rather poor; but considering the odds against which the party was pitted, it was not a very bad performance either. In this context it should be noted that Ravi Narayana Reddy, contesting from the Nalgonda constituency (Hyderabad) in the name of Peoples Democratic Front or PDF, which was a cover for the CPI in Andhra Pradesh because of its banned status there, got the highest number of votes in the first general election, beating even Jawaharlal Nehru.

Regarding election symbols, two options were given by the CPI to the Election Commission hammer and sickle, and ears of corn with a sickle on one side and hammer on another side. Finally, however, the symbol that was allotted looked like this: ears of corn and a sickle. The election campaign was conducted physically, since the use of the radio for electoral propaganda by political parties was not sanctioned by the Election Commission.

A biting critique of Nehru

This being the poll scenario involving the first general election, it would be most appropriate to take a close look at two documents of this period, if one has to understand the CPIs reading of the 1951-52 election. One refers to the partys election manifesto, which was finalised on August 6, 1951, and the other was The Results of the General Elections and the Tasks before the Party.

In this election, the main political rival of the CPI as well as all other opposition parties was the Congress led by Nehru. The CPIs election manifesto was unambiguously clear on its assessment of the performance of the Nehru government. Besides being a trenchant critique, the manifesto simultaneously put forward an alternative understanding of the new India which it envisaged.

It needs to be kept in mind that the 1951-52 elections took place at a time when the Congress had not yet launched its welfarist strategy of building a socialistic pattern of society, following the Avadi Congress resolution adopted in 1955, with its focus on the public sector, nationalisation etc. The Non-Aligned Movement (NAM) was yet to take off, as the Bandung Conference (1955), which initiated NAM, was yet to emerge. In the early 50s, the Indian economy was very much controlled by British business and commercial interests, India remained a member of the British Commonwealth and the US pressure on India to join the Western bloc was quite palpable. This was a time when Indias relations with the Soviet Union were rather cool, as Stalin had a strong dislike for Nehru and the Congress. It was only after Stalins death in 1953 that the Indo-Soviet relations started warming up, as evident in Indias adoption of planned economic growth, with a focus on industrialisation. To a large extent, the Soviet Union emerged as a major factor in shaping the direction of the Indian economy in the mid-1950s, which led to the softening of CPIs attitude towards the Nehru regime.

Also read: The First Indian Election: Inclusion, Independence and the Making of We, The People

The CPIs election manifesto, and its critique of the early years of the Nehru era, have to be viewed in this perspective. It was pointed out in the manifesto that the attempts of the Congress to showcase its achievements by resorting to certain facts and figures could not hide the real fact that essentially it was a government of national betrayal, a government of landlords and monopolists and a government of lathis and bullets.

It was a government of national betrayal, because, according to the CPI, the Nehru government remained closely tied up with British and American capital, it remained a member of the British Commonwealth and Indias defence establishment continued to be controlled by the British military advisors. The manifesto stated the CPIs understanding in the following words:

What has come is not freedom. What has come is the replacement of a British viceroy and his councilors by an Indian president and his ministers, of white bureaucrats by brown bureaucrats, and a bigger share in the loot of Indian people for the Indian monopolists collaborating with the imperialists.

The Manifesto characterised the Nehru government as one of landlords and monopolists, because at one level it planned to pay hefty compensation to the zamindars, following the abolition of the zamindari system, and allowed the princely states to continue their corrupt and oppressive rule, these being the two main pillars of feudalism which sustained the British rule. At another level the agricultural front was believed to be on the verge of collapse, the poor peasants being the worst sufferers, as victims of money lenders, and no land reform programme, focusing on the slogan land to the tillers, was on Nehrus agenda of Nehru. This catastrophic situation made India beg for food from the West, predominantly the US.

As regards the industrial front, the CPI alleged, it was controlled by the Indian monopolists, which led to the plunder of the economy by vested interests. While they had their tie-up with bureaucrats and ministers, corruption, primarily bribery, reigned at all levels involving the Congress party. This is how the election manifesto evaluated the situation:

It is not true therefore to assert that all are suffering in Nehrus India, that freedom has brought suffering to all. Freedom has meant freedom for them ( i.e.,princes, monopolists, landlords, big financiers, speculators and black marketeers SDG) to rob and loot the people and freedom for the congress ministers to join in the loot.

The CPIs characterisation of the Nehru government as one of lathis and bullets was based on the understanding that it was a government which resorted to all sorts of repressive measures against the outbreak of any kind of protest by the masses, the classic example of which was the brutal suppression of the Telangana uprising. The manifesto made the caustic remark that 80% of the central budget was spent on the maintenance of the army and bureaucracy. The state governments, it was stated, spent far more on police than on education in a country where 90% of the people were illiterate.

Suggesting an alternative

While lambasting the Nehru government, the manifesto projected an alternative too, which was based on the CPIs new programme adopted in 1951. In putting forward this alternative, the CPI made it clear that it was fighting on two fronts: the Congress, and the reactionary, communal forces represented by the Hindu Mahasabha. To attain this goal, CPI called for unity of all Left and democratic forces, while presenting before the electorate an alternative blueprint for the future which was described as a peoples democracy, a phrase very popular in the newly established socialist regimes in eastern Europe after 1945.

This ideal envisioned a government comprising all democratic parties and groups representing the interests of workers, peasants, middle classes and patriotic sections of the national bourgeoisie which would carry out the following tasks: all organs of the government, from the bottom to the top, would be elected by the people. All officials would be held accountable to the people and would be removable by the people. The police force would be replaced by a peoples militia, to be raised, guided and controlled by the people. It would create a national army closely linked with the masses. It will cancel peasants debts, implement the slogan land to the tiller, will take into consideration the interests of the poorer sections of the landlords and the rich peasants. Industrialisation would take place with the aid of nationalised capital and cooperation of the private industrialists would be enlisted by assuring them legitimate profits. It would grant a living wage to the workers, protect the rights and interests of all minorities, would end caste oppression and would put to an end all socio-economic disabilities from which women suffer. It promised to introduce free compulsory primary education and peoples health services across the country. Above all, it would drive out the Britishers who still controlled the Indian economy and would stage an exit from the British Commonwealth.

Also read: The Parties That Contested Indias First General Election

After the election results came out in February, 1952, the Central Committee of the CPI prepared a review report, mentioned earlier, at the end of March 1952, which was released to the press on April 5. In this report, CPI made a detailed analysis of its performance as well as its weaknesses. This was based on the following facts and figures: CPI won 16 seats out of the 49 seats it contested. The break up was: Madras eight seats, Orissa one seat, Tripura two and West Bengal five. It came second in 19 seats which it contested in Bombay, Madhya Pradesh, Orissa, Punjab, UP, West Bengal, Mysore, Ajmer and Manipur. In a way, this performance was quite significant for the reason that it confirmed the partys presence in so many states in the immediate aftermath of independence, which was quite a stunning achievement, considering the adverse circumstances it encountered while contesting the elections. It is these facts which went into the making of the partys election review.

Two elements in the report merit attention. First, it viewed the election as a moral defeat for the Congress and a shift not to the Right but to the Left, the argument being that the Congress had secured only 45% of votes, while the CPI came out as the main opposition party, standing next to the Congress. Second, it made a critical evaluation of the weaknesses and the problems faced by the party. CPI all along pleaded for a united democratic front of all democratic and Left forces, leaving out the Congress and the Hindu Mahasabha. But this did not materialise because of the intransigent attitude of the Socialist Party towards this idea and its rabid anti-communist stance.

However, the CPI too, it was admitted, had sectarian trends inside the party and it was acknowledged that there were cases where despite this attitude of the Socialists, there were Socialist candidates who were popular in their own capacity in their localities and for the sake of defeating the Congress, they should have been supported. It was stated in the report that the CPIs rather stellar performance, which could not be anticipated, must not be overestimated. It would be absolutely wrong to put forward the sectarian slogan that the CPI was emerging as an alternative to the Congress. Instead, it was emphatically stated, the accent should be on the broad coalition of all Left and democratic forces which were opposed to the Congress as well as the Hindu Right.

Seventy years after the first general elections, when one looks back at the past and reviews the Communist Partys performance, it has got to be admitted that the initial difficulties faced by the party when it joined the electoral battle could be largely overcome. Its negative image was largely neutralised by its electoral achievements. CPIs entry in parliamentary politics in 1951-52 opened up a new frontier for the party, as within years it established itself as a potent and formidable opposition force in Parliament, commanding respect and admiration from all walks of life.

Sobhanlal Datta Gupta is the former Surendra Nath Banerjee Professor of Political Science, Calcutta University.

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How Communist Party of India Emerged as Largest Opposition to Congress in 1951-52 - The Wire

In a statement given by the U.K.-based Jubilee Debt Campaign, developing countries are paying more to service their debt at the highest rate in the past two decades. Sovereign debts have been exacerbated by the coronavirus pandemic, thus limiting the ability of developing nations to manage the economic and social effects of the current crisis.

Efforts to mitigate the effects of the pandemic and the resulting global economic crisis include the Debt Service Suspension Initiative (DSSI). According to the World Bank, the DSSI has helped countries concentrate their resources on fighting the pandemic and safeguarding the livelihoods of millions of the most vulnerable people. Implemented in May 2020, more than $10.3 billion in relief and aid has been distributed to more than 40 eligible countries. The DSSI temporarily suspended the debt payments of low-income countries (LICs) through December 2021 without a framework that addressed the ongoing health and debt crisis. Instead, the DSSI offered debt restructuring strategies. This is problematic because unsustainable sovereign debt compromises national economic growth and well-being by incentivizing debt repayment over the improvement of essential public services, education, and healthcare.

Responding to the high debt service standards, Heidi Chow, Jubilees Executive Director, pointed out that The debt crisis continues to engulf lower-income countries with no end in sight unless there is urgent action on debt relief. In a call to action directed at China and other G20 countries, World Bank President David Malpass reasserted the need for immediate debt relief for developing countries, warning that delays increase risks to their economies from higher interest rates, currency devaluation, and food insecurity. Malpass went on to announce that the poorest countries face $35 billion in debt service payments to official and private-sector creditors. Amidst the challenges of the pandemic and the financial burdens predating the current global crisis, national governments and supranational institutions should give precedence to the lives and livelihoods of people by developing debt restructuring strategies that cater to the individual needs of each nations economy and population.

In a study by the IMF, if a country is no longer able to service its debt, the government can undertake economic reforms and fiscal adjustments while asking the IMF for a loan to cover the deficit this works when the debt is limited or temporary. If this strategy is not feasible, then the country with unsustainable debt must coordinate with creditors to renegotiate the terms of repayment this is called sovereign debt restructuring. Current strategies for the debt restructuring process include moving the debt from the private sector to public sector institutions. According to the chair of the U.N. Committee for Development Policy, an alternative solution to the debt crisis would include a greater provision of liquidity and soft multilateral financing, as well as a conjunctural (temporary) mechanism that would facilitate debt re-negotiations. Furthermore, any restructuring program must provide a grace period to allow the country to recover from the crisis before diverting any needed resources to repay loans and interest. This will allow time for the economy to regain its strength and make it possible to make payments on its debts without damaging its prospects or harming its population.

The DSSI did not cancel the debt, but instead delayed the payments and continued to accumulate interest. In the process of negotiating debt restructuring, two things must be taken into consideration: interest rates must be lowered and DSSI benefits must be extended to middle-income countries at risk of increasing poverty levels. Furthermore, while the Initiative was adopted by members of the Paris Club, China, and other creditors, it lost credence when other private creditors did not adopt it and debtor countries did not use it to avoid negative sovereign credit ratings. Of the 73 countries that could have benefited from the program, only Chad, Zambia, and Ethiopia applied for debt restructuring under the G20 framework. The Common Framework of the DSSI was intended to deal with insolvency and liquidity problems, along with the implementation of an International Monetary Fund (IMF) supported reform program. Restructuring methods have fallen short of the desired impact with LICs like Ethiopia being downgraded. Beca0use the credit ratings decrease, the cost of borrowing from international investors increases. This ultimately prevents governments from qualifying for future loans/grants and investing in national healthcare infrastructure.

The DSSI framework ended at the end of 2021, and the G20 has failed to implement debt restructuring reforms that would aid vulnerable nations in combating the looming global debt crisis. We need a strategy for sustainable economic recovery to ensure the quality of life and security in at-risk states. High debt levels can hinder a governments ability to provide social services necessary for the well-being of citizens and can divert resources and energy from implementing long-term development strategies. According to the IMF, a fundraising campaign is currently requesting grants from a wide range of donors to extend grant-based debt relief to the most vulnerable countries until 2022. Looking back on the past year, the statement on Debt Relief for a Green and Inclusive Recovery Initiative calls for bilateral, multilateral, and private sector debt relief similar to the Highly Indebted Poor Countries Initiative. Essentially, it would provide debt relief, a new allocation of the IMFs Special Drawing Rights, and an increase in multilateral and regional development bank financing and capital. These measures are vital in efforts to finance health, social protections, and climate transitions for developing countries in need. The prioritization of debt repayment over funding for essential public services reflects the value of capital markets over people.

Developing countries are vulnerable to external intervention in domestic governance because of the incentives to accept economic conditionality and cater to the interests of more powerful states and their creditors. Debt defaults and economic collapse are imminent unless G20 creditors collaborate and implement an improved debt restructuring strategy and suspend debt service during the negotiation period. Decision-making on a multilateral level requires clear communication, collaboration, and compromise between all involved parties. The well-being of the public cannot be compromised. While navigating the socio-economic challenges of debt recovery during a global pandemic, the protection of national public interests and proper standards of living should be prioritized. There must be a coordinated effort between supranational institutions, like the IMF and World Bank, and private creditors in protecting national public interests. One of the main dilemmas of creating a framework for restructuring debt is taking into consideration that each country and region has different economic environments and needs. The volatility of the current global socio-political stage has created an opportunity to reimagine and restart economies with a different framework that values inclusivity, climate action, and development goals at the core of the recovery effort.

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Developing Countries: Debt Restructuring Amidst a Global Pandemic - The Organization for World Peace

The function was attended by the highest offices of the State, including President Aoun and Prime Minister Mikati. In his homily, the cardinal listed five priorities, including the elections in May and the truth about the incident at Beirut port. The country must not be transformed into an arena of regional conflict, and a model of coexistence must be found.

Beirut (AsiaNews) - Parliamentary and presidential elections to be held according to the dates provided for by the Constitution; bringing to light the truth about the double explosion at the port of Beirut in August 2020; accelerating the process of reforms and agreeing with the International Monetary Fund (IMF) on a rescue plan for Lebanon; completing the implementation of the Taif Agreement, closing its gaps and ensuring full sovereignty on Lebanese territory; adopting the system of so-called "positive neutrality" as the basis for foreign relations.

These are the five points outlined by the Maronite Patriarch, Card. Beshara Ra, during the homily of the Mass celebrated yesterday for the feast of St Maron, a religious and civil feast, to save the country of the cedars from a political, economic and institutional crisis that has dragged it to the brink of the abyss.

The cardinal addressed a supplication to the holy founder of the Maronite order, asking him to protect "our country, our Church and our people" so that they may remain "faithful to the mission" in this East troubled by wars and violence. At the same time, he appealed to the highest institutional offices to ensure that the elections are held in accordance with the law.

The function was attended by the head of state Michel Aoun, the president of parliament Nabih Berri and the prime minister Nagib Mikati. The words of Card. Ra's words are linked to fears of a postponement of the vote scheduled for 15 May and feared by some of the government parties and within Parliament, while the country continues its drift towards socio-economic collapse.

The legislative elections are perceived by many Lebanese as an opportunity to change the political and ruling class, accused of being responsible for the unprecedented crisis that has hit the nation. However, rumours are also pointing to a postponement of the vote as the traditional parties see their popularity dwindling and fear the response and the wrath of an increasingly dissatisfied electorate, with three quarters of the population living in increasing poverty.

Addressing institutional officials and the faithful from the altar of St Maron's Church in Gemmayzeh, a district of Beirut, the cardinal recalled that "Lebanese Maronites have made freedom their spirituality" as well as a "social and political project". They have followed the saint's example because of his faith and his values of benevolence, love, gift, dignity and strength. For this reason, he continued, "rancour, envy, hatred, revenge and the spirit of surrender" must be strongly opposed, because history teaches: "The political and military fall of all empires - he warned - is preceded by the collapse of the scale of values".

Card. Cardinal Ra extolled the cultural and religious pluralism that animates the nation, the democratic parliamentary system, public freedoms, the commitment to neutrality and peace, the separation of religion from the State "in a single formula based on coexistence". Lebanon, he continued, should have become "a pioneering project" for East and West and "a meeting place for civilisations", but the "weakness" of the nation "has distorted its message".

Finally, he called for the Land of the Cedars not to be transformed "into an arena for conflicts in the region, a missile platform [referring to Hezbollah] and a battle front". Recognising Lebanon as a homeland, he concluded, means recognising three constants: "the purpose of the coexistence pact, the purpose of the role of Christians and the purpose of loyalty to Lebanon itself. By respecting this historical triangle, we will save the unity of Lebanon and demonstrate its neutrality'.

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LEBANON On the feast of Saint Maron, Card. Rai points the way out of the Lebanese crisis - AsiaNews

New York, NY, February 9, 2022 Chairman Murphy, Ranking Member Young, and Members of the Subcommittee: Thank you for convening this hearing on the humanitarian crisis in Afghanistan and the US response.

The severity of the situation in Afghanistan, reinforced to me by a meeting this week with IRC staff in the country, requires me to speak in blunt terms today. The humanitarian situation is rapidly deteriorating by nearly every measure as we near six months since the change in power and subsequent halt in all non-emergency aid for Afghans. Business as usual will mean that a starvation crisis kills more Afghans than the past 20 years of war. I am here today to appeal to members of this subcommittee to lead the charge for an urgent change in US and international policy, especially economic policy, to avert a catastrophe-of-choice imposed on the Afghan people and a catastrophe-of-reputation left for the US and its allies.

Humanitarian responses have historically received welcome bipartisan support from members of this Subcommittee, the wider Senate Foreign Relations Committee and the US Congress writ large, spanning across Republican and Democratic Administrations. We appreciate the US efforts to support the humanitarian response in Afghanistan - from quick and continuing action to ensure humanitarian exemptions in sanctions to humanitarian aid funding itself.

But this crisis will not be solved by more humanitarian aid. Aid cannot make up for an economy deprived of oxygen. Economic collapse makes the humanitarian challenge like running up an escalator that is going down faster and faster. It becomes impossible. That is why the need today is not just for more aid; it is for different policy.

There is a narrative around Afghanistan that the US must choose between helping the people of Afghanistan or helping the Taliban. The suffering of the Afghan people is seen as an unfortunate byproduct of an impossible situation. My message is that this is wrong. The humanitarian community did not choose the government, but that is no excuse to punish the people, and there is a middle course - to help the Afghan people without embracing the new government.

IRC: A Unique Resource in Afghanistan and in the US

I am speaking today on behalf of the International Rescue Committee (IRC), a humanitarian organization that has provided lifesaving aid and services to Afghans since 1980. The IRC has a unique vantage point from which to offer perspective on the crisis. We are on the ground providing aid in Afghanistan, responding to refugees across the border in Pakistan, supporting those seeking asylum in Europe, and working closely with the US authorities in this country, across two dozen cities, to resettle Afghans and other refugees who have been given the opportunity to start their lives anew. We have resettled Afghans through the Special Immigrant Visa (SIV) program since it was established more than a decade ago. After the evacuation from Kabul last fall, the IRC worked with the US government to support Afghans at all the government reception facilities in Virginia, Texas, Wisconsin and New Jersey and we are continuing to support them as they are resettled around the country with immediate needs such as housing, food and medical care, as well as long-term support.

On the ground in Afghanistan, the IRC has maintained aid operations during the past three decades as power and territory changed hands. Our work began as relief programs for people displaced by the invasion of the Soviet Union, continued during the civil war, and then transitioned to providing aid under Taliban rule in the 1990s, then under the new government and in pockets of Taliban control after 2002, and continue today. During each period, we have adhered to the humanitarian principles of neutrality, independence, impartiality, and humanity.

Since August, our nearly 3,000 staff have resumed operations, providing lifesaving assistance and expanding our programs to reach ten provinces. Afghans make up more than 99% of IRC staff in the country and women make up half of our staff. Last year, we reached one million Afghans with vital services spanning health, emergency cash, education, water and sanitation, and economic recovery programs.

The IRC is responding to the ongoing deterioration by providing emergency winterization assistance and scaling up support for 64 health facilities. We are also launching mobile health teams to travel to treat malnourished children in rural communities with no other access to healthcare. We support those displaced with cash, tents, clean water, sanitation, and other basic necessities. The IRC has expanded our womens protection and empowerment activities in recent years and has become a leading actor in the protection field. Our teams also help Afghans gain self-sufficiency, including by helping local communities plan and manage their own development projects and by providing livelihoods support like climate-smart agriculture programming.

Generous US government funding has helped support our work, including ongoing programs focused on protection and economic (cash) support for women, protection services for at-risk children, and gender-based violence case management and psychosocial support.

The IRCs mandate is to help Afghans survive, recover and rebuild their lives. This means we have a stake in not only seeing humanitarian assistance reach everyone who needs it, but ensuring the causes of humanitarian distress are addressed. The IRC does not take a position on the issue of diplomatic recognition or the wider interests of the US government in Afghanistan. All of our asks of the US government are rooted in what the IRCs experience on the ground shows is required to address the humanitarian crisis and avert a larger catastrophe.

Catastrophe-of-Choice

Afghanistan is moving towards economic catastrophe at breakneck speed. In just the last six months, the country has emerged as the worlds fastest-growing humanitarian crisis. The IRC completed a global analysis exercise in December to identify the top countries at risk of humanitarian deterioration this year. Afghanistan topped our list, surpassing even active conflict zones like Yemen and Ethiopia.

Afghanistan has been uniquely dependent on western support for twenty years. This goes well beyond the military effort. Less than six months ago, over 40% of the economy, and 75% of the governments public spending, came from international donors.[1] Now, the international house of cards that was Afghanistan's economy has come falling down. The international community, overnight, halted its support while freezing Afghan assets overseas. Sanctions, which are meant to be on the Taliban, have in fact chilled almost all economic activity. While those in power in Afghanistan have much to answer for, it is these policy choices of the international community that are the proximate cause of the crisis we face today.

It is one thing to say that Afghanistan needs economic adjustment at the end of a major war. It certainly does. But while a planned and phased shift in foreign aid could be defended, there has instead been a guillotine cutting off desperately needed support. If state collapse was the object of policy, it could hardly be better designed. That is the effective consequence of current US-led policies.

The impact of the current policy mix has been as fast and brutal as it was predictable and preventable.

The economy is disintegrating and the banking system has been crippled. Organizations like IRC, and Afghan families, cannot take more than token sums out of the bank. Some branches have run out of cash entirely and shut down. Businesses cannot do business. And since the humanitarian response does not happen in a vacuum, we are not spared. And at the end of the day, the cost is footed by the poverty-stricken population.

The banking system needs capital to function. But the international assets that underpinned the economy have been frozen, estimated at over $9 billion.[2] A portion of these frozen assets - estimated at at least $500 million belonged to Afghan individuals and businesses. In Afghanistan, a trade deficit has left the country with almost no other sources of funds to fall back on to deal with economic shock or maintain the value of local currency. Without access to foreign reserves, essential currency auctions used to support the value of the Afghani have ceased, while traders have lost access to US dollars needed to pay for imports. The value of the countrys currency is estimated to have plummeted by at least a quarter. To cap it all, as confidence is lost in the banking system, most suppliers now demand payment in cash, perpetuating a vicious cycle where shortages of cash are making access to cash more important than ever. Yet the import of $8.5 million worth of Afghani banknotes from the Polish printing press that has the contract has been blocked by fears of falling foul of the sanctions regime.[3]

Humanitarian actors like the IRC also depend on banks and access to cash to pay our staff, procure items locally, and run operations. Yet a humanitarian response which the UN says needs $4.4 billion this year is now forced to move to informal channels.[4] Just last week, UN staff reported that the UN has $135 million sitting in a bank that they cannot use because the bank cannot convert it to local currency.[5] Humanitarians are dependent on local money brokers (Hawalas), which are providing a vital stop gap, but they cannot act as a substitute for the banking system. Meanwhile, many local Afghan NGOs without international bank accounts do not have these options and are even more constrained.

Livelihoods are evaporating across the board, in both the public and private sector. The largest employer in the country was the government. Now, the government does not have the funds to pay salaries for doctors, teachers, sanitation workers, or other civil servants. In the private sector, businesses cannot withdraw enough funds to pay employee and day laborers salaries, many of whom lack bank accounts or savings and depend on daily cash wages to feed their families. Farmers are increasingly unable to afford food for livestock or agricultural inputs, threatening their income and ability to provide for local communities. At least 500,000 Afghans have lost their jobs since August, while many more have seen their salaries reduced or unpaid for months.[6] UNDP has projected unemployment could rise by over 40%,[7] while 97% of Afghans could be living below the poverty line by mid-2022.[8]

As a result, ordinary Afghans do not have enough cash in their pockets to buy food, pay for medicine, or afford transportation to health clinics. As the Afghani depreciates, the cash available is worth less and less each day. As people can neither access savings in the bank nor receive daily wages, the demand for goods has plummeted.

Foreign businesses and commercial actors are disengaging from Afghanistan for fear of running afoul of sanctions. Sanctions on the Taliban were imposed two decades ago, but have taken on new implications since the shift in power that the US has yet to fully clarify. Many foreign banks, including those that act as correspondence banks for international wire transfers, are unwilling to facilitate transactions into Afghanistan. Some of the commercial banks deposits are caught up in frozen assets, while other funds were held abroad but are now stuck in limbo as international correspondent banks are hesitant to engage with the central bank. The reason seems to be fear of being caught up in the sanctions regime. The US Treasury Department has been helpful in clarifying the range of humanitarian activities that are not subject to sanctions. But at the time of writing there is little clarity about commercial activities, including whether commercial fuel imports or machine parts imports are a sanctions risk. Yet Afghanistan depends on imports for 80% of its electricity and nearly all fuel.[9] The chilling effect, on suppliers and their financial backers, is obvious.

State services are crumbling, from health care to education. Many civil servants havent been paid in six months or more, creating a risk that they leave their jobs or even the country with a ripple effect across service delivery. Some workers have already quit. The government cannot afford to procure items or pay for basic operations. Warnings of state service collapse are not hyperbolic. By September - just weeks after funding for the health system was halted - a mere 17% of previously supported health facilities could fully function.[10] By early November, IRC assessments found 60% of health clinics we assessed did not have the capacity to deliver nutrition programming as malnutrition rates spiked. Afghanistan is now confronting its fourth wave of COVID-19 with this collapsing health system, with ripple effects across disease surveillance, COVID-19 vaccination campaigns, and treatment. While the UN has provided stop gap measures at facilities run by NGOs, support for government-managed facilities is nearly non-existent. All COVID-19 hospitals, 1,000 health clinics, and over 60 hospitals at provincial levels all excluded from current funding plans. By September, a quarter of COVID-19 hospitals had already shut down.[11] Despite stop gap measures via UN agencies, even funded health facilities are struggling to afford fuel for ambulances and power generators, water, and even food for patients. One hospital has resorted to cutting down trees around the hospital for heating.

Last fall, our staff spoke to Farida[12], a midwife at an IRC-supported health clinic. She is also the sole earner for her family. She reported she and the rest of the staff at the clinic had not received salaries in six months, faced shortages of medicines and lacked running water. She warned, if no one helps health clinics or provides their salaries then we cannot help those women who come here and need our help. The IRC had previously been providing Covid-19 infection prevention and control at the clinic, but we scaled up efforts after World Bank funding was suspended, including by paying salaries, bringing running water and solar power to the clinic. Farida described the challenges she sees in her patients: the majority of the pregnant women who visit us have financial problems... When I tell them to eat good food because you are pregnant, they say we can't. They cannot afford fruits or other necessary nutrition. Despite these challenges, Farida is determined to continue her work, I feel very happy that I can help women in need... I am able to serve my people.

The crisis is affecting every aspect of life for virtually all 40 million Afghans and sending humanitarian needs spiraling. The entire population faces the prospect of poverty, while half face hunger. Even Afghans that were spared previous periods of conflict and crisis - those in urban areas, the upper middle class and the well-educated - are now affected. Only 2% of Afghans have enough food to eat today.[13] Almost 9 million people are one step before famine conditions.[14] This is the highest figure ever recorded in Afghanistan and the largest in the world today. Food is still available in markets, yet the threat of famine looms as people have no access to cash to buy the food. In places like Herat, our staff even hear reports of people resorting to selling organs. Others are leaving for Iran through informal and illegal routes because they cannot meet their most basic needs inside Afghanistan.

In one of the worlds youngest populations, the welfare of a generation of Afghan children is at risk. Nearly half of the population is under 15 years old.[15] Many of these children have missed two years of school due to COVID-19. Girls should be allowed to go to school, and we welcome recent announcements from Taliban leaders to this effect, but no child will learn if schools remain closed without funds to pay teachers. Some of these children may never return to school if the economic crisis means they need to support their families. IRC staff are already seeing rises in child labor. Families are being forced to make decisions no one should have to make, including selling off young daughters so they can buy food for the rest of their children. One woman was about to resort to selling her daughter for $200 until she received cash assistance from the IRC that allowed her to help support her family.

Our staff on the ground spoke to a woman named Hajeera[16] who recounted how she had lost her job as a house cleaner and her family could no longer even bring in cash from begging. Nowadays, the problems have multiplied there is no money or sight of money." Two of her children, both under the age of five, had died within the past two weeks. She said both were malnourished and her infant daughter is now sick because she cannot afford food. When I take my baby to the doctor, he says there is no medicine left. If I take it somewhere else, I cannot afford it. We are facing a lot of problems. Right this moment, we do not have flour to make bread. She explained how her family did not have enough food, clothes, or even wood to keep warm. The family had resorted to burning plastic to try to survive the winter. She said, My message to the world is that please help us please send us food or other supplies so I can rescue my children.

Across the country, Afghan women like Hajeera, whose rights are held up to justify Western policy choices, are in fact the people bearing the brunt of this crisis. Our staff say uncertainty defines every aspect of life for Afghans - uncertainty over the next time they will have an income or their children will return to school. Afghans tell us they feel completely in the dark about their own futures.

Charting a way forward

The wealthiest and most powerful countries have spent nearly six months deliberating the way forward, but Afghans lives are worsening every day that goes by without action. We understand that some of the choices in front of the US and its allies may be unpalatable, but the choices facing too many Afghan families are unimaginable: to sell a body part or a child to survive. These stories are sensational, but sadly not sensationalist.

The severity of the crisis requires the US and its partners to radically and urgently shift their approach and to move quickly across the following five areas. The US has a unique role to play in each given its direct control of the majority of Afghan financial assets, the wide-ranging impact of the US sanctions regime, and its position as the largest contributor to key international financial institutions.

First, support the urgent reprogramming of the full World Bank-managed Afghanistan Reconstruction Trust Fund (ARTF) for basic services like health and education. There is $1.2 billion remaining in the fund, which provides a proven, trusted method for service delivery. The US should press for the scope of the fund to broaden given the severity and scale of unmet needs, for instance funds should ensure that health clinics have not only medicine and other health supplies, but also fuel, electricity, and clean water. These funds should also be used to pay essential civil servants who are the lifeblood of these services. We welcome the new guidance last week from the US Treasury that salary payments for public employees are permissible in Afghanistan today. Afghanistan is not the first place where the world has grappled with this challenge. The World Bank has adopted similar programs in Yemen and Somalia, including funding for civil servant salaries. These funds could be directed through UN agencies and NGOs to bypass the government. With new legal guidance and past experience to draw on, we now need political will to move it forward.

Second, clarify the limits of US sanctions to catalyze private sector engagement in Afghanistan. US sanctions on the Taliban have existed for twenty years, but the change in power in August has sparked new uncertainty about the reach of these sanctions. It remains unclear whether the US government considers the entire Afghan government to fall under sanctions on the Taliban. General licenses for humanitarian actors have been vital for our aid operations, but private actors have received little clarity on commercial and financial transactions beyond those for humanitarian activities - but upon which the humanitarian response and 40 million Afghans depend. When there are gray areas, private actors will take the most risk averse stance. Commercial actors and international banks are effectively treating the Central Bank and line ministries as sanctioned entities. The US government should engage in more public, proactive, forward leaning guidance on allowable commercial activities, including essential imports, to address the chilling effect on private actors and catalyze immediate engagement.

Third, inject liquidity to help the economy to start functioning again. A phased release of funds is the foundation to allow Afghans to access their deposits, to enable banks to provide loans and allow traders to pay for essential imports. The clearest way to do so at the scale required is to start to release frozen Afghan assets. We appreciate legal questions that require the attention of the US government. However, the US should prioritize efforts to separate out private assets from government assets and release private reserves. The US should also encourage European capitals to release assets under their control, estimated at around $2 billion. The US should work to support the UNs proposed Humanitarian Exchange Facility that could help provide some liquidity by facilitating dollar-for-afghanis swaps between humanitarian organizations and Afghan companies, even if it is not a scalable or long-term solution.

Fourth, support technical efforts with the central bank and finance ministry to stabilize the economy. The central bank is the linchpin to ensuring the steps I have outlined have their desired effect. Microeconomic steps should be accompanied by a macroeconomic approach. If frozen funds are released or Afghani banknotes are shipped in, then the central bank has an irreplaceable role to play in currency auctions to stabilize the currency and avoid further depreciation or inflation. It can help rebuild confidence in the banking system so that greater functionality of banks and eased financial transactions leads to deposits in the banks once more, rather than capital flight. There are no sustainable workarounds that try to bypass the Central Bank and create parallel, shadow systems. No private bank could effectively take on this role.

Foreign technical assistance, including from the World Bank and IMF, will be critical to restore the core functions of the central bank and ensure sufficient monitoring and oversight of funds to rebuild the confidence of donors and Afghans alike. The US should seek to ensure institutions like the World Bank and IMF have sufficient legal guidance from the US and mandates from their executive boards to allow them to engage with the central bank. The US should help convene a meeting on the Afghan economy, bringing together the World Bank, IMF, and major donors to determine a pathway forward.

And finally, rally international support for the humanitarian response. More than half of the population needs life-saving humanitarian aid this year. Meeting their needs requires $4.4 billion - a more than tripling compared to last year. The UN pledging conference planned for mid-March is an important opportunity to galvanize pledges to fully fund the response. The US announcement of $308 million last month is a welcome step. But humanitarian aid is not a silver bullet. If the other measures I outlined are not taken, then requirements for humanitarian aid will only rise. As the head of UN OCHA, Martin Griffiths, warned, without action, next year well be asking for $10 billion.[17]

Afghan staff on our team say to me: nation building is our job, not yours, but you can either help or hinder, and we want Western help. The steps I have outlined can halt the slide towards the worst case scenarios like famine and buy time for the international community to chart a path forward for its engagement with Afghanistan so we are not back here in a years time facing the same dilemmas.

There is no shortage of technical ways forward - but there is a shortage of political will to act on them. The options in front of the US will get worse the longer it waits to act. If the state is allowed to collapse, with civil servants leaving the country en masse and the financial system left in ruins, the investments of the past twenty years will be lost and it will take a generation to rebuild this capacity and expertise.

Thank you for your attention to this crisis and the opportunity to provide IRCs perspective on the complex humanitarian challenges facing the people of Afghanistan. I look forward to answering your questions.

David Miliband's Written Testimony to the Senate Foreign Relations Committee Subcommittee on Near East, South Asia, Central Asia, and Counterterrorism

Afghanistan: The Humanitarian Crisis and U.S. Response

Take action: Tell the U.S. government to act today to prevent catastrophe in Afghanistan.

Sources:

[1] South Asia Macro Poverty Outlook, World Bank Group, October 2021. https://thedocs.worldbank.org/en/doc/5d1783db09a0e09d15bbcea8ef0cec0b-05...

[2] Ibid.

[3] Editorial Board, "Let Innocent Afghans Have Their Money," The New York Times, January 14, 2022, https://www.nytimes.com/2022/01/14/opinion/afghanistan-bank-money.html

[4] "Afghanistan Humanitarian Needs Overview 2022, UN OCHA, January 2022, https://reliefweb.int/sites/reliefweb.int/files/resources/afghanistan-hu...

[5] Michelle Nichols, "U.N. has millions in Afghanistan bank, but cannot use it," Reuters, February 3, 2022, https://www.reuters.com/world/asia-pacific/un-has-millions-afghanistan-b...

[6] Employment prospects in Afghanistan: A rapid impact assessment, International Labour Organization, January 19, 2022, https://www.ilo.org/asia/publications/issue-briefs/WCMS_834525/lang--en/...

[7] "Afghanistan: Socio-Economic Outlook 2021-2022," United Nations Development Programme, November 30, 2021 https://reliefweb.int/sites/reliefweb.int/files/resources/UNDP-AFG-Afgha...

[8] "97 percent of Afghans could plunge into poverty by mid 2022, says UNDP," United Nations Development Programme, September 9, 2021, https://www.undp.org/press-releases/97-percent-afghans-could-plunge-pove...

[9] South Asia Macro Poverty Outlook, World Bank Group, October 2021. https://thedocs.worldbank.org/en/doc/5d1783db09a0e09d15bbcea8ef0cec0b-05...

[10] "Statement by Dr Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization, and Dr Ahmed Al-Mandhari, WHO Regional Director for the Eastern Mediterranean on their visit to Kabul," World Health Organization, September 22, 2021, https://www.who.int/news/item/22-09-2021-acute-health-needs-in-afghanist...

[11] "Funding pause results in imminent closure of more than 2000 health facilities in Afghanistan,"World Health Organization, September 6, 2021, http://www.emro.who.int/afg/afghanistan-news/funding-pause-results-in-shut-down...

[12] Pseudonym used to protect her identity.

[13] "Afghanistan Food Security Update," World Food Programme, December 8, 2021, https://docs.wfp.org/api/documents/WFP-0000134768/download/

[14] Afghanistan: Acute Food Insecurity Situation September - October 2021 and Projection for November 2021 - March 2022, IPC Info, October 2021, https://www.ipcinfo.org/ipc-country-analysis/details-map/en/c/1155210/?i...

[15] "Afghanistan Humanitarian Needs Overview 2022, UN OCHA, January 2022, https://reliefweb.int/sites/reliefweb.int/files/resources/afghanistan-hu...

[16] Pseudonym used to protect her identity

[17] "Afghanistan: UN launches largest single country aid appeal ever," UN News, January 11, 2021, https://news.un.org/en/story/2022/01/1109492

About the IRC

The International Rescue Committee responds to the worlds worst humanitarian crises, helping to restore health, safety, education, economic wellbeing, and power to people devastated by conflict and disaster. Founded in 1933 at the call of Albert Einstein, the IRC is at work in over 40 countries and over 20 U.S. citieshelping people to survive, reclaim control of their future, and strengthen their communities.Learn more at http://www.rescue.org and follow the IRC on Twitter & Facebook.

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David Miliband's Testimony to the Senate Foreign Relations Committee Subcommittee on Afghanistan - International Rescue Committee