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Venezuelan Crisis: Ports on the Edge (Part 1 of 2)

Peter Stewart, PortandTerminal.com, January 28, 2019

The crisis in Venezuela is spiralling out of control. Three million Venezuelans have fled their country out of desperation and hunger. Venezuela before this exodus had a population of 32 million people. As of today, almost 10% of its citizens have fled their country. To put an exodus of these proportions into perspective, the UN estimates that the same number of Syrians have fled their country since war broke out.

Those who remain in Venezuela are desperate for food, medicine and political change. Politics in Venezuela today boil down into two camps:

  1. Nicolas Maduro, who is widely accused of rigging the election that took place on January 10th and saw him elected into a second 6-year term. His term runs out in 2025
  2. Juan Guaidó, who has declared himself the country’s interim president until the country rids itself of Maduro

America supports Juan Guaidó

America and most of the Western-aligned world support Juan Guaidó’. As this article is being written the White House national security adviser John Bolton has just warned president Nicolas Maduro against violence or intimidation against opposition leader Juan Guiadó, saying such action would trigger a response from the United States.

Other countries have reacted to the deepening crisis along geopolitical lines. Canada and a dozen Latin American countries swiftly recognised Juan Guaidó, the self-declared acting president of Venezuela. Guaidó, the young leader of the once-fractured opposition, has labelled Maduro a dictator, responsible for the economic and political crisis that has engulfed Venezuela.

Juan Guaidó, self-declared, acting president of Venezuela at a rally amongst his supporters.

Britain, Germany, France and Spain have all said they would recognise Juan Guaidó unless Maduro calls national elections within eight days.

China and Russia though have predictably come out in support of Maduro in their own manner.

Russia as usual

Russia yesterday criticised the US for violating Venezuela’s sovereignty by supporting the leadership claim of opposition leader Juan Guaidó.

England’s Guardian reported on January 27th that “Russia denies sending mercenaries to shore up Nicolás Maduro’s position”. Few though find any Kremlin denial reassuring these days.

Last Sunday, Maduro oversaw a display of the army’s Russian hardware in Puerto Cabello, Venezuela’s top cargo port and home to a strategic military naval base.

The show was for optics of course. Maduro desperately needs friends right now. Russia, the Venezuelan military and China are his best bets if he hopes to hang on.

Source: The Guardian, January 27, 2019

China cautious but backing Maduro for now

Meanwhile, China is playing its cards more cautiously than Russia. China is oil-rich Venezuela’s main ally and creditor and have loaned billions to the country. China is wary of losing what it is owed. Venezuela also has two things China needs: the world’s largest proven oil reserves and abundant coltan, a mineral used in smartphones.

Is China’s end-game acquiring Venezuelan ports?

In one recent article, Mike Rogan at the Washington Examiner raised the question of whether China might try to set up a military base in Venezuela in exchange for concessions and additional loans to the Maduro camp. Others seem to agree that beleaguered Maduro is ready to offer up just about anything to hang onto power. Suggestions have been made that Maduro may even offer up Venezuelan ports to the Chinese in exchange for support and hard currency. He wouldn’t be the first leader who found himself in a pinch to do so.

“At this stage of the collapse of not only the Venezuelan economy, but also the regime, I believe that Maduro is ready to sell the farm at any price”, said Diego Arria, Venezuela’s former permanent representative to the UN, now exiled in New York. “A concession of the Venezuelan ports is also a potential giveaway” he went on to say.

Arria, a diplomat who served as president of the United Nations Security Council in 1992, said the Chinese would never have provoked the U.S. by seeking a military presence in this hemisphere in the past. Now, he’s not so sure.

“A concession of the Venezuelan ports is also a potential giveaway.”

Diego Arria, Venezuela’s former permanent representative to the UN, now exiled in New York

Possessing a range of deep-water ports like the one at Puerto Cabello, Venezuela would give China a base to set up shop. It would also give China a base from which to exert its influence over the nearby the Panama Canal strategic choke point.

Greek lessons

Following the global economic crisis in 2008, Greece suffered an economic meltdown not dissimilar to the one Venezuela is experiencing now. On the back of the crisis, Chinese state-owned shipping line Cosco was able to purchase Greece’s main port, The Port of Piraeus, located south of Athens.

Chinese naval vessel arriving at Greece’s Port of Piraeus in 2017

Under its Greek subsidiary, Piraeus Container Terminal (PCT), the Greek port has become Cosco’s outstanding overseas performer in less than two years. It has also offered China a potential strategic foothold in the Mediterranean for its military fleet.

In 2017, three Chinese navy ships sailed into the Port of Piraeus as part of a Chinese event called the “Belt and Road International Cooperation Summit Forum”.

The strategic significance of Chinese warships entering into a Chinese owned port in the European Mediterranean arena was lost on no one attending the event.

Will Venezuela be the next stop for China’s maritime ambitions?

Opportunity knocks for China.

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