Is Venezuela a bigger problem than North Korea?

It seems as if the most plausible threat doesn’t come from the East

Is Venezuela a bigger problem than North Korea?

Leer en Español: Venezuela:¿un problema más grande que Corea del Norte?

The rhetoric that has been used between the leaders of the United States and North Korea could make anyone believe that a worldwide conflict is inevitable, as Republican Senator Bob Corker of Tennessee told the New York Times. But while the Head of State of the North American nation keeps the Asian country within sight, there is a territory much closer to the superpower that needs more attention: Venezuela.

Last Sunday, the South American nation held elections for state governors, in which the national government party obtained 18 of the 23 mandates. Thus, this reduces the opposition’s power within the administration.

Nomura Securities director, Siobhan Morden, told Forbes that electoral fraud was more than evident, as President Maduro would not easily let go of his power, "If this were free and fair elections, then the opposition would have easily won", said Morden, recalling the results.

Venezuela - a country that is only three hours south of Florida by plane - presents imminent risks for the United States due to its humanitarian crisis that is spreading over neighboring countries and Maduro's political ties with Russia, China, and Iran.

Read also: Venezuela: the paradox of the Socialist victory

Humanitarian crisis

More than 50,000 Venezuelans came to Colombia in August, compared to 22,700 in June, according to Bloomberg citing Migration Colombia; the exodus is likely to continue. Lack of food and medicines, hyperinflation, currency devaluation, high crime rates, rising hunger, and malnutrition are pushing the South American country into what seems the worst humanitarian crisis in the continent.

Given its geographic proximity to the US, it is essential that Venezuela achieves democratic stability for the benefit of the hemisphere. Otherwise, the exodus could change its course and affect the North American nation. "The United States should have a good reason to concern itself and treat Venezuela as a top foreign policy priority, now that it is taking restrictive immigration measures," Shifter added.

Crude, Venezuela’s lifeline

Russia and China, in particular, are providing a lifeline to the Venezuelan economy, but they do so in exchange for capital and joint ventures to exploit oil fields, says Dany Bahar, a member of the Brookings Institution to Bloomberg.

According to the Venezuelan constitution, the country must own most of the oil associations, but this has not been fully implemented since the arrival of President Maduro says Bahar. "Russia has become an important partner in joint exploration. Russia and China have important bases in Venezuela; the United States should be concerned about these actions", the expert clarified.

The financial crisis in Venezuela is becoming a red flag for the United States. Venezuela is one of the nations with most debt. It’s 120% in debt over its GDP and many of the country's bonds are in Wall Street; "the probability of default is very high" says Bahar. To avoid defaulting, Venezuela turned to Russia for credit and liquid assets. For this, Maduro's administration is using CITGO, a subsidiary of PDVSA based in the United States, as guarantee.

Members of Congress have warned President Trump that Russian oil company ROSNEFT could own CITGO, posing a danger to the US national security. US Senators Bob Menendez and Marco Rubio have persuaded the Trump administration to oversee the political crisis in Venezuela as a shift in oil assets could seriously hurt the nation.

Venezuela is the third largest oil supplier of the United States, behind Canada and Saudi Arabia, reason why the crisis that the government is facing is of such great importance. A possible ban on Venezuelan oil exports would affect jobs while it boosts oil prices.  

 

Latin American Post | Carlos Eduardo Gómez Avella

Copy edited by Susana Cicchetto

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…