Hit by low oil prices, mismanagement and the impact of US sanctions, Venezuelan President Nicolas Maduro is seeking support from Russia. The country already owes Moscow billions, but an increasingly isolated Russia is keeping its friends close. Venezuela is one of Russia’s most…
Hit by low oil prices, mismanagement and the impact of US sanctions, Venezuelan President Nicolas Maduro is seeking support from Russia. The country already owes Moscow billions, but an increasingly isolated Russia is keeping its friends close.
Background
Venezuela is one of Russia’s most important trading and military allies in Latin America (after Brazil), making a strong bond in the bilateral relations between the two nations. Much of this is through the sale of military equipment; since 2005, Venezuela has purchased more than $4 billion worth of arms from Russia. During the crisis in Bolivarian Venezuela, in an article of Russia’s Military-Industrial Courier, a journal popular with military officers of the Russian Armed Forces recommended that the Russian government provide military intelligence to the Bolivarian government, and assist proxy leftist militant forces to maintain the Bolivarian government’s power. Maduro, who took over following the death of Hugo Chávez in 2013, has come under strong pressure from Donald Trump’s administration, which calls him a “dictator”.
While he won the May elections, most of the international community did not recognise the results. Formally, Maduro’s second mandate only begins in January next year. Hit by low oil prices, mismanagement and the impact of US sanctions, Venezuela is in freefall and Maduro is seeking support from allies after winning a second presidential term this year. Food and medicine shortages have sparked an exodus of some 2 million people. The International Monetary Fund projects hyperinflation of 10m% next year.
Analysis
Vladimir Putin has voiced support for the Venezuelan leader, Nicolás Maduro, as he visited Moscow seeking financial assistance for the socialist country’s collapsing economy. At a meeting at Putin’s residence outside Moscow, the Russian president told Maduro: “We support your efforts to achieve mutual understanding in society and all your actions aimed at normalising relations with the opposition.” Putin added: “Naturally we condemn any actions that are clearly terrorist in nature, any attempts to change the situation by force.”
Maduro told Putin he was sure their talks would bring “good news for cooperation between our countries and for the economies of our countries”.
Putin’s spokesman, Dmitry Peskov, said ahead of the meeting that Maduro had travelled to Moscow specifically to ask Russia – itself the target of US sanctions – for financial assistance.
“The talks will focus on the help that the Venezuelan leadership needs,” Peskov told reporters, declining to be more specific on how much Russia could lend. He said the economic situation in the Latin American country remained difficult but noted “signs of improving dynamics”.
Venezuela, which has been rocked by deadly protests and economic chaos, is counting on Russian support amid growing international isolation.
After talks last year between Maduro and Putin, Russia, Venezuela’s major creditor, agreed to restructure $3.15bn of debt from a loan taken out by Caracas in 2011 to finance the purchase of Russian arms. Largely isolated from the international community, Maduro is now trying to shore up support from his allies. He was visiting Moscow after hosting his Turkish counterpart, Recep Tayyip Erdoğan, in Caracas.
The timing shows that Russia is not merely interested in providing charity. Putin and Maduro had their meeting just before the OPEC meeting in Vienna, where members will discuss cutting oil production to drive up global prices. Russia will be one of the countries taking part in additional talks on 7 December, since it is not a member of OPEC. The Venezuelan and Russian economies are highly dependent on the price of oil.
Counterpoint
Though the countries have long-standing ties, the partnership is all the more important for Russia against the backdrop of its increasing global isolation. Venezuela, too, is under international sanctions, which the Kremlin condemned this week.
Venezuela is one of Russia’s main partners in Latin America. With no sign that the sanctions will be dropped, he said it remained all the more important for Moscow to be able to have a long-term “strategic partner” in Venezuela, particularly on the international stage. Venezuela had almost always supported Russia in votes before the UN General Assembly and other international organisations. Venezuela was also one of the few countries to recognise the annexed Crimean Peninsula as part of Russia and to recognise the Russia-supported breakaway regions of Abkhazia and South Ossetia in the Caucasus.
Sanctions have pushed Russia to look for new partners in Asia, Africa and Latin America in recent years.
Assessment
Our assessment is that Putins support comes with a caveat – that Maduro must choose to rule in concert with the opposition and further that he must not use ‘terrorist ‘ methods to extend his rule. We believe that Putin is aware that both the political and economic situation is very fluid in Venezuela and that he must look at Russia’s long term interest to befriend an unorthodox leader like Maduro.
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