Following reports that the Bank of England had persistently refused the Venezuelan government’s attempts to retrieve $1.2 billion in Venezuelan gold-reserves throughout January, and the US Treasury Department’s announcement on January 28 that it had frozen $7 billion in PDVSA-assets in the United States, this decision has broad geo-political implications.
By Padraig McGrath
Published on InfoRus, Mar 4, 2019
In a press-conference held with Russian foreign minister Sergey Lavrov in Moscow on Friday, Venezuelan vice-president Delcy Rodriguez announced that President Maduro had ordered the Lisbon office of Venezuela’s state-owned oil-company PDVSA to close, and to relocate to Moscow.
“This is done in line with our plans to expand technical cooperation in the oil production area with Rosneft, with Gazprom. The moment now is the most suitable to do so. We are changing the format of our relations,” she said.
Vice-President Rodriguez stated that this decision was being taken, also, because the EU had shown that it was no longer able to safeguard Venezuela’s legal assets.
This move follows reports that the Bank of England had persistently refused the Venezuelan government’s attempts to retrieve $1.2 billion in Venezuelan gold-reserves throughout January, and the US Treasury Department’s announcement on January 28th that it had frozen $7 billion in PDVSA-assets in the United States.
In addition to the immediate need for the Venezuelan government to safeguard its legal assets, this decision should be seen as an act of retaliation for the decision of the governments of many EU member-states, including Germany, France, Britain, Spain, Austria, the Netherlands and Poland, to recognize the US-backed pretender Juan Guaidó as Venezuela’s “interim” president. Insofar as the Venezuelan government’s subsequent decision has much broader geo-political implications.
Firstly, as the move to install Guaidó as Venezuela’s president was essentially an American-led initiative, the Venezuelan government’s retaliatory action is calculated to further weaken the Atlantic consensus and to accelerate it final dissolution. The EU is being taught that there are economic consequences attached to its continued support for the fading US-hegemon. On a broader geo-political level, the Venezuelan government is prudently attacking the weakest link in the chain of American hegemony, a move which is undoubtedly coordinated with both Russia and China.
Furthermore, insofar as the Venezuelan government’s most immediate problem with regard to access to its legal assets in the EU concerns the Bank of England’s decision to refuse Venezuela’s request to retrieve its gold-reserves, its decision to relocate PDVSA’s European operation to Moscow is calculated in order to further exacerbate UK-EU relations, which are already in an exceptionally problematic state given the protracted Brexit-negotiations. Given that so many EU member-states had recognized Guaidó as Venezuela’s head of state on February 4th, it created a retroactive pseudo-legal rationalization for the Bank of England’s arbitrary seizure of Venezuela’s gold, so the EU is being retaliated against for its support for bad British behavior. This should have some influence in further antagonizing the ongoing Brexit-negotiations.
The Venezuelan government’s decision is not simply a measure to safeguard its assets, but is also skillfully conceived to simultaneously press a number of different geo-political levers.
However, with the would-be usurper Guaidó having fled to Colombia and the regime-change momentum having flatlined, we should consider the possibility that the regime-change narrative which Washington professed so unabashedly was only ever an elaborate pretext for the arbitrary seizure of Venezuelan government assets. With Venezuela’s being able to call on 2 million well trained army-reservists, the overwhelming majority of them resolutely loyal to the Bolivarian revolution, regime-change never actually looked doable in Venezuela. Even if a US-led invasion had occurred, profitable access to Venezuelan oilfields would have been prevented by interminable guerrilla-warfare on a scale which would probably have been far worse than Iraq and Afghanistan combined. There was simply never a realistic chance that US military power could have turned Venezuela into a profitable colony. The entire regime-change scenario had “quagmire” written all over it from day 1.
So, with all of that taken into account, we have to consider the distinct possibility that the US-initiated regime-change narrative concerning Venezuela was nothing more than an elaborate pretext to engage in economic terrorism and banditry.
However, one has to wonder just how carefully this move was considered from the American perspective. As laughable as it sounds in the wake of the 2008 and 2011 financial crises and massive bailouts of US financial institutions, the point remains that financial systems are still dependent on a certain minimal level of trust in order to continue operating. Foreign governments will be far less likely to leave their assets in American banks if “the new normal” is that those assets can be arbitrarily frozen, seized or expropriated at any time. In the long term, this will strengthen both Russian and Chinese financial institutions. How carefully have American officials considered the long-term consequences of the erosion of trust which inevitably results from this? With the list of countries under US-sanctions ever-expanding, can any foreign government really feel that its US-holdings are safe? For example, we might speculate about what the governments of recently untethered former US vassal-states such as Turkey and the Philippines may be thinking.
Considering that the world’s 4 largest banks are now all Chinese, and only 2 American banks are now in the top 10, the United States’ position as a financial superpower has also fallen a long way since its 1990’s apex, in addition to the decline of its manufacturing sector and the systemic strain caused by the problem of chronic military over-reach. This “new normal” whereby the US quite arbitrarily seizes, freezes or expropriates the assets of foreign governments (Venezuela, Iran, Russia, etc) opens a Pandora’s box which inevitably accelerates the United States’ decline as a financial superpower.