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Given the Debt, Venezuela is out of Money

How bad is it? Hey Bernie, Hillary….what say you? Could there be yet another insurgency coming into the United States of refugees?

A new decree issued by the Venezuelan government that forces workers to take agricultural jobs has been denounced as “forced labor” by human rights organizations and unions.

The Nicolás Maduro administration made the controversial regulation public on July 22, saying it was an attempt to curb the country’s widespread shortages of food.

The decree said the Venezuelan government, through the Labor Ministry, can arbitrarily force public and private companies to “lend” them  employees for farm work.

In a statement on July 29, Amnesty International called the new system “forced labor.” More here.

 

Venezuelans carrying groceries cross the Simon Bolivar bridge from Cucuta in Colombia back to San Antonio de Tachira in Venezuela, on July 17, 2016 (AFP Photo/George Castellanos)

Fleeing the country

Bogota (AFP) – Venezuela’s economic crisis has sent a huge but largely ignored wave of people into Colombia, and many more could be on the way, a senior UN refugee official said.

“It’s a silent arrival of a lot of people who are crossing the border and staying illegally on the Colombian side,” said Martin Gottwald, the United Nations Refugee Agency’s representative in Colombia.

No exact figures are available, but the number of Venezuelans fleeing to Colombia is already “quite large,” and Colombia should prepare itself for more, Gottwald told AFP in an interview.

“The avalanche is probably going to increase, with or without the reopening of the border,” he said.

Venezuelan President Nicolas Maduro closed the countries’ border in August 2015 after an attack on an army patrol. He blamed right-wing paramilitaries from Colombia.

The leftist leader briefly reopened it last weekend to allow Venezuelans to stock up on food, medicine and other basic supplies amid severe shortages in Venezuela.

Gottwald said a sizeable number of Venezuelans who entered Colombia probably never returned.

Venezuela’s cash could run out ‘within a year’

Venezuela is running out of money and time.

CNN: The country’s central bank only has $11.9 billion in reserves, down sharply from $30 billion in 2011. A few large debt payments are coming due soon. Starting in October, Venezuela owes a total of $4.7 billion in a series of payments.

Venezuela is in the midst of a deep economic, political and humanitarian crisis. Its citizens are suffering from massive food shortages and hospitals lack basic medicine and equipment. Experts say Venezuela has prioritized paying the debt over dealing with the shortages.

“Within a year they’re going to run out of money,” says Russ Dallen, an expert on Venezuela’s debt and managing partner at Caracas Capital, an investing firm in Miami. Dallen pointed out that the country has been almost “suicidal” in its focus on making debt payments.

Related: Venezuela is selling oil for food to Jamaica

Experts’ guesses vary over exactly how much time Venezuela has before it runs out of cash. But all agree that at this rate, Venezuela does not have enough reserves to make all its payments for the next two years.

Much of Venezuela’s reserves are in gold, some of which the country has shipped to Switzerland this year to help repay its debts. As of May, Venezuela had $7.4 billion of its reserves in gold. However, it sent more gold in June, Swiss data shows.

“It doesn’t seem that Venezuela is going to be able to make all payments for next year,” says Mauro Roca, a Latin American economist at Goldman Sachs (GS). “The probability for default is much higher for next year than this year.”

Related: What went wrong in Venezuela

It is a dire situation and ironic for a country that sits on the world’s largest oil reserves. It’s true that oil prices have dropped dramatically and Venezuela hasn’t been able to earn enough money for its oil. But whatever money Venezuela earns from its oil is going to pay down its debts to lenders like China, bondholders, oil drilling companies and importers.

Even oil drilling companies are starting to cut business in Venezuela. For instance, in April, Schlumberger said it would reduce operations in Venezuela due to unpaid bills. It’s also one of the key reasons why the country’s oil production has plunged to 13-year lows.

Related: Why Venezuela’s oil production plunged to a 13-year low

According to Bank of America (BAC), Venezuela’s imports — which include food and medicine — declined between 40% and 45% in the first five months this year compared to the same time a year ago. (There isn’t reliable government data on imports).

“It’s a dramatic cut…they’re making a big effort to pay the debt,” says Sebastian Rondeau, an economist at Bank of America. He estimates that Venezuela can make debt payments until April of next year. “Then the second half of next year is going to be very complicated.”

There is still a chance that Venezuela could default this year. Venezuelan officials are currently working with bondholders of the country’s state-run oil company, PDVSA, to exchange short-term debt, which is due in October and November, with longer-term debt. If bondholders don’t agree, it could be a problem.

“It would just kick the can further down the road…we still think the government is highly likely to default over the next two years, if not in the next six months,” says Edward Glossop, an economist at Capital Economics, a research firm.

But China may be coming to Venezuela’s rescue. China is reportedly in talks to give Venezuela a one-year grace period on repaying its debt and only make interest payments. Since 2007, China has loaned Venezuela $65 billion and Venezuela has been slowly repaying that via oil shipments.

Last year, Venezuela shipped 579,000 barrels of oil per day on average to China, an audited financial statement from the country’s oil company shows. It appears China may now cut Venezuela some slack, so it can sell oil to bring in some money.

Regardless of a new debt deal or temporary relief from China, experts say Venezuela’s current path isn’t sustainable.

“It’s like saying how long can you hold your breath under water?” says Dallen.

Refugees Have Temporary Status in U.S. but not under DHS

The United States has been taking in refugees, migrants and asylees from Latin America and several dozen countries for decades. This is supposed to be a temporary condition but the truth is it has never been temporary.

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Now with 45 million people from just 2015 displaced from their home countries around the world, there is a crisis that is hard to define much less solve. The United Nations is the lead organization that is under pressure to find solutions and world leaders are not in any kind of collective agreement. Meanwhile, there are people, mostly innocent that are suffering. This is a historical time, one that was in fact not only predictable but solvable if civil war, conflicts and terrorism was addressed long before it manifested.

At issue is the total cost of war where there is no end in sight but more, the cost of creating a viable and living long term solution for migrants to include education, healthcare, law enforcement, jobs, entitlements to list a few. No country is monetarily prepared for the future costs many yet to be known, studied or funded.

Related reading: Bodies found off coast of Libya as migrant toll climbs

The United States had every opportunity in 2011 to launch humanitarian action missions to offset refugee conditions especially as Islamic State was born, and predicted to become a global terror operation directly after Abu Musab al-Zarqawi was killed. He is the original father of Islamic State…al Qaeda in Iraq.

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As a result of the long war in Iraq, Syria and Afghanistan, the complete damage to cities and towns where normal infrastructure has been destroyed, there is no viable location to go back to. There are no schools, hospitals, roads, buildings and commerce has stopped except for black markets and smuggling. Further, no countries are stepping up with funds to help rebuild or as many call it, nation building.

In summary, refugees are in fact a new permanent status for wherever they are located, including the United States.

Consequently, the United Nations is chartered with drafting a global solution with world leaders.

The first cut a the draft is found here.

In part from the NewYorkTimes: Refugees and migrants will be the biggest issue at the gathering of world leaders at the United Nations next month. President Obama plans to lead a meeting at the General Assembly in an effort to nudge countries to take in more refugees and contribute to countries that have taken them in for years.

The United Nations secretary general, Ban Ki-moon, also plans to hold a meeting on the plight of refugees and migrants. The document under negotiation will be the centerpiece of his meeting.

While the draft text has no force of international law, every sentence has been argued and negotiated. The resulting language is sometimes so vague that it is likely to bring little comfort to the millions of men, women and children who are seeking safety and opportunity abroad.

Eritrea, for instance, recently complained that the many references to human rights in the document were “redundant.” (A United Nations committee earlier this year accused Eritrea of atrocities against its own citizens.)

Russia resisted a sentence that called for countries to share in the “burden” of taking in refugees. (Russia takes in very few, except lately, from parts of Ukraine.)

The United States suggested a phrase asserting that detention is “seldom” good for children. Activists for immigrants and refugees found that suggestion so appalling that they fired off a letter on Friday to President Obama. They argued that any international agreement should make clear that detention is “never in the best interests of children” and should commit to ending the practice. (The United States detains children who arrive from Mexico without legal papers.)

Amnesty International said in a statement over the weekend that “with some states trying to dilute the agreement to suit their own political agendas, we may end up with tentative half-measures that merely reinforce the status quo or even weaken existing protection.”

This draft agreement sets out a long list of principles, most already enshrined in existing laws. It says refugees deserve protection and should not be sent back to places where they could face war or persecution. It urges countries to allow refugees to work and to let their children attend school, though it stops short of saying refugees have a right to either jobs or schools.

It asserts that migration can be good for the world, which is wording that migrant-sending countries wanted. It also calls for countries to take back their citizens if they travel illegally and fail to get asylum, which is what migrant-receiving countries, especially in Europe, wanted.

An early draft had proposed a global compact to allocate where refugees could be permanently resettled, but that proposal failed. African and Latin American countries wanted to know why the compact was on refugees alone, according to diplomats involved in the negotiations. Why not also have a compact on the rights of migrants, they asked.

The latest draft sets a 2018 deadline for two compacts — one for refugees, a second for migrants.

The draft text also says nothing about the rights of the 40 million people who are displaced in their own countries, or about those who are leaving their homes because of climate change.

 

 

Russia Weaponizing the Arctic

Russian Military Build-Up in Arctic Highlights Kremlin’s Militarized Mindset

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Jamestown: Despite Russia’s economic crisis, which has already imposed restrictions on military spending (see EDM, May 3), the Kremlin is trying to implement a questionable buildup in the Arctic, aimed at strengthening Russian military might. During a recent board session of the Russian Ministry of Defense, Minister Sergei Shoigu paid special attention to the implementation of the “2020 Activity Plan by the Northern Fleet.” He reminded participants that the Northern Fleet, an “inter-service strategic formation,” was formed over two years ago “in order to protect [the] northern borders of Russia” (Mil.ru, July 27). He mentioned in particular that the construction of “closed-loop” (self-sustaining) military towns will be finished on the Franz Josef Land archipelago and the Novosibirsk Islands in 2016. A joint situational awareness system is being created to support air defense.   The Russian defense ministry intends to build or reconstruct ten airfields in the Arctic. “Russia’s Federal Agency for Special Construction [Spetsstroy] is building military infrastructure facilities on six islands in the Arctic,” Izvestia quotes a ministry official. According to this source, over 100 tons of military equipment for more than 150 facilities are planned to be delivered to these remote military garrisons. In addition to the materiel supply, more than 190 tons of construction materials—including precast concrete, cement, metal, pipes, fittings and equipment—will be delivered to the Arctic for building the facilities (Izvestia, July 11). The construction and renovation of runways and other structures is ongoing at Severomorsk-1 airfield (Murmansk oblast) as well as Nagurskoye air base (Alexandra Land Island, in the Franz Josef Archipelago). The airfields at Rogachevo (Arkhangelsk oblast), Tiksi (Yakutia Republic) and Temp (Kotelny Island in the Arctic Ocean) are also under construction. It was announced that beginning next year, Tiksi is to become the permanent base for a formation of high-altitude MiG-31 interceptors (Rossiiskaya Gazeta, July 19).   Meanwhile, troops deployed in the Arctic are undergoing intensive training. Specifically, units of mobile rapid-reaction forces are being exposed to the conditions of the Far North. During several snap inspection exercises in the past year, the Russian General Staff has concentrated on the ability to reinforce three land-based brigades in Murmansk oblast—the 200th Motorized Rifle Brigade (Pechenga), the 80th Arctic Motorized Rifle Brigade (Alakurtti) and the 61st Marine Brigade (Sputnik)—with airborne units based in Ivanovo and Pskov (western-central Russia) (Mil.ru April 9, 2015).   Over the last decade, the Russian leadership has become obsessed with the notion that climate change will result in the imminent melting of the polar ice cap in the Arctic Ocean. At this point, these politicians argue, Russia will be able to tap a wealth of heretofore inaccessible natural resources, such as oil and natural gas from the seabed. In addition, the role of the Northern Sea Route (which hugs Russia’s Arctic coast) will increase dramatically, providing huge revenues to Moscow from cargo ships allowed to pass through this transit corridor connecting Europe, Asia and North America.   However, climate change is unlikely to bring only benefits for Russia. In addition to polar ice, the Arctic permafrost will also melt. Consequently, a belt of Russia’s northern coast is expected to turn into a swamp many kilometers deep, making it impossible to build the infrastructure necessary to serve the Northern Sea Route or the facilities required to extract the region’s oil and gas. Moreover, the United Nations Convention on the Law of the Sea (UNCLOS) prohibits parties to the agreement from placing restrictions on foreign ships passing along the Northern Sea Route. Thus, Russia (a party to UNCLOS) is obligated to provide passing foreign vessels with communications as well as meteorological, hydrological and rescue services at its own expense. This means that President Vladimir Putin’s dream of cashing in on the route is wishful thinking. Even now, his plans clearly diverge from reality. Transit traffic via the Northern Sea Route has dropped catastrophically: from 1.18 million tons in 2013, to 39,000 tons in 2015 (Regnum, December 8, 2015).   For almost 80 years of this route’s existence, no one had any reason to question its economic viability. Military bases and prison camps were the main destination and departure points along the Northern Sea Route. Now, with transcontinental cargo traffic having collapsed, Moscow’s main hope is that this route will be used for transporting offshore oil. However, all major Western oil companies have so far refused to develop the Arctic shelf: it is too dangerous and expensive. Furthermore, sections of the Northern Sea Route are inaccessible to larger ships. Vessels with a draught of over 12 meters cannot operate in the vicinity of the Novosibirsk Islands, for example (Fni.no, November 8, 1999).   Future prosperity in the Arctic looks highly doubtful, but the Kremlin lives according to a different logic. It believes that the possession of even hypothetical treasures in the Far North will inevitably encourage other countries to forcibly take them from Russia. Therefore, the Kremlin has demanded that the defense ministry “strengthen the battle capability” in the region.   In executing this order, the Russian military is bound to redevelop old Cold War–style scenarios, even though none of the other Arctic-region countries have shown any sign of militarization in recent years. Nearly Russia’s entire military potential in the Far North is currently concentrated on the Kola Peninsula—the extreme west of the Russian Arctic. This was no accident, and it stems from the Arctic region’s role as a zone of military confrontation between the Soviet Union and the United States throughout the Cold War. It was convenient to deliver nuclear strikes against the enemy from the depths of the ice-covered ocean. The main task of all Soviet Armed forces in the Arctic—the naval surface fleet, the air force and ground troops—was to ensure nuclear submarine combat patrols and the protection of their bases on the Kola Peninsula. No one at that time suggested the need to control and defend thousands of miles of ice desert. Surface vessels of the Northern Fleet, in fact, cannot operate east of Novaya Zemlya—beyond this point they lack ground support and air protection. To ensure wide-scale patrols, it is not enough to restore Soviet-era airfields and station there a few dozen jets. Thousands of tons of fuel will also be required. Deploying small garrisons in the Arctic makes no military sense either. Thus, Russia is spending massive resources simply for Shoigu to be able to report to Putin that the country’s unobtainable natural wealth is being protected.

 

–Aleksandr Golts

Hillary’s Relationship with Russia is Approved Espionage

Dealing with evil, the evil empire as President Reagan declared. Quite actually under the Barack Obama administration it is nothing more than groveling with the Kremlin.

The United States has an Open Skies Treaty. and one must question why. Further, the Russians have taken full advantage of it.

Then there was the red line threat by Obama where it was later dismissed and handed over to Putin to handle those chemical weapons in Syria for removal.

Then we heard about the Bill and Hillary deal with the Canadian operative on Uranium One giving over rights of U.S. uranium supply to Russia.

But now we have yet another operation concocted by the White House and the Hillary State Department and this one is a blockbuster as noted by going back in history through the original WikiLeaks cables.

It is highly suggested to read the full document below, as it summarizes how Hillary allowed trade secrets and professional Russian espionage within the United States.

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The full document is here.

FROM RUSSIA WITH Money

Hillary Clinton, the Russian Reset, and Cronyism

NYPost: Key players in a main component of the reset — a Moscow-based, Silicon Valley-styled campus for developing biomed, space, nuclear and IT technologies called “Skolkovo” — poured tens of millions of dollars into the Clinton Foundation, the report by journalist Peter Schweizer alleges.

As the Obama administration’s top diplomat, Hillary Clinton was at the center of US efforts on the reset in general and Skolkovo in particular, Schweizer argues.

Yet, “Of the 28 US, European and Russian companies that participated in Skolkovo, 17 of them were Clinton Foundation donors” or sponsored speeches by former President Bill Clinton, Schweizer told The Post.

“It raises the question — do you need to pay money to sit at the table?”

In one example cited by Schweizer, Skolkovo Foundation member and then-Cisco CEO John Chambers donated between $1 million and $5 million in personal and corporate cash to the Clinton Foundation, the report says.

But Skolkovo wound up making America less safe, Schweizer argues, because it shared advanced US technology that Russia can develop for both civilian and military applications, a concern raised already by Army and FBI officials.

Many of Skolkovo’s research projects involved “dual-use” technologies, meaning they would have both civilian and military uses, the report said, citing one in particular — a hybrid airship called an “Atlant” developed at the Skolkovo Aeronautical Center.

“Particularly noteworthy is Atlant’s ability to deliver military cargoes,” including “radar surveillance, air and missile defense and delivery of airborne troops,” the Skolkovo Foundation bragged in a document Schweizer cites.

Hillary Clinton personally launched the State Department’s efforts toward a Russian reset, presenting her Russian then-counterpart, Sergei Lavrov, with a prop reset button in Geneva in 2009.

The reset petered out by the end of 2011, when Russian President Vladimir Putin accused Hillary of fomenting Russian protests over suspicions of fraud in that year’s parliamentary elections.

But by then, the damage had already been done, Schweizer feels.

“I think the idea that you’re going to help develop a Russian version of Silicon Valley, which, by the way, will be controlled by the Russian government, and then not to expect that the technology will be siphoned off for military uses, is incredibly naive,” Schweizer said.

As early as 2010, cybersecurity experts also expressed deep concerns about Russia using Skolkovo to develop hacking capabilities.

Russia’s FSB spy agency — the successor to the KGB — reportedly keeps two of its information warfare “security centers” at Skolkovo, the report says.

“There certainly is an irony that as we are now concerned about Russian cyber-attacks on the US, that the reset played a role in enhancing their cyber-capabilities,” Schweizer said.

In this latest report, as in his book, “Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich,” Schweizer concedes he found no “smoking gun” evidence that any of the donors who poured cash into the Clinton coffers actually were promised, or received, any State Department favors in return.

“We don’t have an email or a pirated voice mail message saying, ‘We’ll give you money if you help us with Skokovo,’” Schweizer told The Post. “But what we do have is a pattern that shows a high percentage of participants in Skolkovo who happen to be Clinton Foundation donors.

“I think that everybody at the Russian reset table seems to walk away with something,” he added.

“The Clintons, they get their donations and speaking fees in the millions of dollars. The Russians get access to advanced US technology. The tech companies [that participated in the reset, including Cisco, Intel, Microsoft] get special access to the Russian market and workforce.

“But the American people get nothing. In fact, we get a rival — Russia — with enhanced technological capabilities. At best, that makes them a tougher competitor [in legitimate commerce],” Schweizer said.

“At worst, they get a more robust military, with technologies that we helped develop, and that can be sold to our enemies.”

The Clinton Foundation is sure to be a sore spot in Hillary’s campaign for the presidency, Schweizer predicted — tainted as it is, despite its laudable philanthropy.

“At the entire Democratic convention, they did not mention the Clinton Foundation once,” he said. “And it’s been the Clintons’ life work for 16-plus years.”

The Clinton campaign did not respond to requests from The Post for comment on the report.

“All I ask is that people look at the money. Who made the deals, who benefited from the deals,” Schweizer said. “We can’t get inside people’s heads as to why they did something, but we should follow the money.”