Venezuelan Opposition Economist Demonstrates Damaging Effects of Sanctions on Venezuela

Orinoco Tribune, February 24, 2024 —

There is a growing consensus in Venezuela regarding the damaging effects of the unilateral coercive measures imposed on Venezuela by the United States and the European Union. According to the polling firm Datanálisis, more than 69% of Venezuelans condemn the intensification of the blockade as a mechanism of political pressure. Similarly, according to the various representative organizations of the sectors of the economy, such as Fedecámaras and Conindustria, the sanctions have negatively impacted the Venezuelan economy.

The government of President Nicolás Maduro has presented exhaustive evidence showing how harmful the sanctions have been for the Venezuelan State. In addition, there are economics experts, even those who are not supporters of the Veenzuela government, who condemn the effects of the sanctions with their own empirical studies.

Among the latter group, the economist Francisco Rodriguez stands out. He has been holding conversations with representatives of civil society, academia, and trade and political organizations in Venezuela under the slogan “A pact for the future of Venezuela.” Despite being politically opposed to the government, his arguments coincide to a great extent with the denunciations made by the government.

Rodríguez has analyzed the impact of the unilateral coercive measures on the Venezuelan oil industry, and highlighted the drastic drop it has suffered, with the current production of oil being around 800,000 barrels per day, compared to the more than three million barrels per day it used to produce. Rodríguez has pointed out that the decrease in oil production accelerated notably with the imposition of sanctions.

According to the economist, “Venezuela used to produce more than 2.4 million barrels per day, but after the sanctions were imposed, the rate of decline accelerated significantly.” According to his research, the monthly decline rate was approximately 1% before the sanctions, but increased to 3% after the first unilateral coercive measures were implemented against the PDVSA in August 2017.

Rodríguez also pointed out that the drop in Venezuela’s gross domestic product by more than 70% is a direct reflection of the 93% decline in oil revenues between 2012 and 2020, the tipping point of which came with the implementation of the US strategy of maximum pressure.

“Of course, if we consider a country whose main production and export was oil, then if those revenues vanish, the economy is going to collapse,” he said.

As an “authorized” voice within the opposition establishment, Rodríguez’s recognition of the responsibility that falls on the Venezuelan opposition leaders for the sanctions is important.

He has highlighted how “the leaders of the National Assembly [of 2015] approached several international banks to ask them not to provide financing to the Venezuelan government,” which resulted in the suspension of possible refinancing operations and forced the country to cut imports. He also mentions that a part of the opposition leadership openly supported the economic sanctions imposed by the Trump administration in 2017, which had negative consequences on Venezuela’s oil production and export revenues.

Rodríguez has also highlighted the hypocrisy of the United States in relation to the so-called easing of sanctions through the issuance of licenses. According to the economist, General License 44, which authorizes PDVSA to sell oil in the United States, has had no effect because the control of PDVSA’s accounts in US territory is in the hands of the “PDVSA ad hoc board,” a fictitious entity that was led by the extinct fake government of Juan Guaidó and is now in the hands of the fake “National Assembly of 2015,” whose term expired in January 2021. This prevents the Venezuelan oil industry from being able to make any use of the license.

According to Rodríguez, the real easing of sanctions would require the recognition of the Venezuelan state by the US and its allies and the reinsertion of Venezuela in the international financial and oil markets. The continued recognition of parallel institutions without political control in Venezuela reveals the real hidden intention behind the Guaidó project: the plundering of Venezuela’s resources.

“The interim government no longer exists, but even then there is a legal dispute in which millions of dollars are spent on lawyers in English courts,” Rodríguez explained, referring to the legal battle in British courts for the Venezuelan gold illegally withheld by the Bank of England, where the fake “ad hoc board of the Central Bank of Venezuela” has a representation that has done nothing but wasted Venezuelan money in law firms.

Rodríguez uses similar arguments to explain why CITGO is under threat. He has pointed out that when a country faces difficulties in meeting its legal obligations with creditors, it has the option to restructure its debt, something that Venezuela could not do because the United States, which controls the global economic and financial system, illegitimately recognizes the non-existent “National Assembly of 2015” which has no real control over the oil industry or anything else.

The Venezuelan government, which does have the real authority over the oil industry, was prevented from legally representing the country and, therefore, could not negotiate its debt. This situation has been taken advantage of by the creditor corporations of the Venezuelan debt to plunder CITGO’s assets.

The policy of unilateral sanctions, implemented by the United States and the European Union, has been used as an instrument to promote regime change, at the expense of the socioeconomic stability of an entire country. This strategy has allowed the looting of Venezuelan resources and assets that could have been used to mitigate the effects of sanctions on the population.

In Venezuela this situation is so evident that even opposition analysts are discussing it with their audience in forums and in media. It is therefore surprising that, despite this clarity, the US government and the far-right Venezuelan opposition leaders continue to use these measures as threats to try to achieve objectives that they were already unable to achieve through the same actions.