A "BLACK SPOT" FOR CARACAS

Today the attention of the entire international community is focused on Venezuela. Events in this Latin American country are becoming more dramatic, especially after they have crossed internal borders also covering the traditional confrontation between Caracas and Washington.

The Constitutional Assembly challenges the opposition

Since the beginning of April, Venezuela has been exposed to massive protests, which resulted in the death of more than 120 people. The reason for the clashes is the growing conflict between the government headed by President Nicolas Maduro, the successor of the legendary Hugo Chávez, and the pro-U.S. right-liberal opposition.

In late July, a new round of domestic political confrontation unfolded in Venezuela. President Maduro initiated the elections to the National Constituent Assembly, which was formed in contrast to the opposition-controlled parliament. The opposition did not recognize the elections claiming that the Constituent Assembly should have been convened through a nationwide referendum. According to unofficial reports, the turnout was only 3.7 million people, which contradicts the official figure of 8 million people. Many members of the Constitutional Assembly were elected not in open elections, but from public organizations controlled by President Maduro. A large percentage of voters was civil servants who feared losing their jobs or food stamps.

On August 18, the Constituent Assembly, which has called itself the Constitutional Assembly, took the decision to dissolve the parliament and to empower itself with legislative powers in order to weaken the position of anti-government forces. Incidentally, it was not the first time that happened in the modern history of Venezuela. In 1999, during the presidency of Hugo Chávez, the Constitutional Assembly suspended the work of the parliament. The referendum held a few months later adopted a new Constitution. Later, the former parliament was dissolved, and a new one was formed instead. The current parliamentarians however refuse to comply with the decision of the Constitutional Assembly. Vice Speaker of the opposition-controlled parliament Freddy Guevara called this decision "fraudulent" and said: "The Parliament confirms its competence as a legislative body".

The Maduro government ignores the will of the pro-opposition parliament and is developing a new Constitution, which will be adopted through a referendum. The Constituent Assembly took the relevant decision supported by all 545 deputies. Perhaps, this decision would minimize the drama in Venezuelan political circles but the opposition is strongly supported by the United States, which openly demonstrate their intention to dump President Maduro and his left-wing government.

The U.S. State Department accused the Constitutional Assembly of Venezuela of "seizing power". "The United States strongly condemns the assumption of legislative powers by the illegitimate Constituent Assembly. This power grab is designed to supplant the democratically-elected National Assembly with an authoritarian committee operating above the law," said State Department spokesman Heather Nauert. But, most importantly, Washington made it clear that it used all its economic and diplomatic power to support the anti-government forces of Venezuela "as long as the Maduro regime continues to behave like an authoritarian dictatorship."

However, the U.S. President Donald Trump went even further saying that he was considering all possible scenarios against Venezuela, including the military operation. This statement created quite a stir in international political circles leading to believe that Washington intends to use force again to overthrow yet another government unfit to American interests.

Official Caracas has made critical remarks against the White House. President Maduro said that the actions of Donald Trump "open the way to fascism." Apparently, the Venezuelan leader has duly assessed the seriousness of the threat voiced by Trump. This is indicated by Maduro's appeal to Pope Francis to help in preventing the U.S. invasion to Venezuela. Meanwhile, the Archbishop of Caracas, Cardinal Savino, also sharply opposed the idea of ​​"American assistance" to the Venezuelan crisis. He believes that such "help" is another threat for the Venezuelan people, and military intervention will only aggravate the problems.

Will Bolivar withstand the economic impact?

It is obvious that the U.S. has opted for economic influence on the Venezuelan authorities. During the recent tour of the U.S. Vice President Mike Pence to Latin American countries of Colombia, Argentina, Chile and Panama, much was said about the need for a peaceful solution to the political crisis in Caracas. Pence has confirmed that Washington was considering all the scenarios against Venezuela, but he has stressed the priority of diplomacy and peace process. As for the economic influence, according to Pence, it is primarily about the introduction of "targeted sanctions" against Maduro and his closest associates. However, the Venezuelans, which have been exposed to quite a tangible outcome of the economic crisis after the global drop of oil prices, will suffer the effects of American sanctions more than the government. By the way, the states of South America are in unison with the United States. So, Venezuela was excluded from the trade and economic union of South American countries, Mercosur, for an indefinite period. This was confirmed by the Foreign Ministers of Argentina, Brazil, Paraguay and Uruguay during the meeting in Sao Paulo.

Venezuela is experiencing an acute food crisis. The government has officially declared humanitarian disaster. Many experts predict economic default in Venezuela. According to IMF, Venezuela's GDP fell by 18%, inflation reached 550%, and unemployment 21% in 2016. The budget deficit is estimated at 17% of GDP, external debt exceeds $130 billion, gold and foreign exchange reserves decreased by $6 billion and make up $10.6 billion only. It should be noted that Venezuelan economic problems should also be blamed on the government authorities, which have failed to introduce a normal, competitive economic policy and reduce dependence on natural resources (oil). Hence, it seems that the U.S. intend to inflict a far more serious blow to Venezuela, aiming at the most important sphere of its economy - the oil sector. The White House has publicly declared its intention to introduce restrictive measures against Venezuela's oil sector, which has been completely nationalized since the 1970s. Since the bulk of Venezuelan oil exports falls to the U.S., the sanctions can indeed completely weaken the economy of the Bolivarian Republic.

Washington is also considering the introduction of sanctions that will limit Venezuela’s access to foreign currency. The Wall Street Journal reports that a new blow to Maduro could be a ban on U.S. banks for transactions with Venezuela's public debt - both with government bonds and with securities of the state oil company PDVSA, which provides 95% of the national income. This can lead to drastic consequences for Venezuela's financial system, especially vulnerable after the currency shortage experienced since the beginning of the year, which has crashed the value of the local currency (bolivar) fourfold and skyrocketed the inflation rate to 80% in the once richest Latin American country.

It is not surprising that the Permanent Representative of Venezuela to the UN Rafael Ramirez regarded the U.S. sanctions as "a manifestation of aggression towards other countries."

The Chávez-Maduro Principle

The aggravation of the situation in Venezuela is part of geopolitical processes in Latin America, which have been developing for several decades in the context of confrontation between certain regional countries and the U.S. The main reason of this confrontation is Washington's desire to establish control over the entire American continent. This is counteracted by various leftist and socialist-oriented governments of individual Latin American countries primarily led by Venezuela (with a possible exception of the last "staunch tin soldier" of communism, Castro's Cuba).

Once Hugo Chávez elevated the anti-Americanism to the status of Caracas' state policy, which has been mainly manifested through the refusal to accept the U.S. claims on the control over Venezuelan oil. Like Chávez, his successor Maduro also follows the same principle: the wealth of Venezuela, including her oil reserves, must belong to Venezuela. So, this is the main reason of the conflict between Caracas and Washington, which threatens to become yet another hot spot in the world suffering from numerous armed confrontations.