Faced with unstoppable deterioration of economic situation in Venezuela, its president has come to seek help in one of his most loyal allies. President Nicolas Maduro has traveled this Wednesday to Moscow to meet with Russian leader Vladimir Putin and to address possibility of a new restructuring of Caracas debt. "We see that Venezuela is going through a difficult time, but it gives impression that you, however, could establish some contact with political forces that oppose you," Putin said. According to Russian analyst estimates, from 2006 to summer of 2017, Russia has provided loans for 17 billion dollars to Venezuela.Learn More
- The Kremlin in Caracas
- The Venezuelan economy, a chronic illness
In an International energy forum in Moscow, Maduro has said that he wants to improve conditions of debt that his country, plunged into a deep economic crisis and confrontation with opposition, maintains with Russia. "As any financial commitment you may have with a bank, financial agent or state, it is prone to restructure," Venezuelan leader on debt has admitted. "We have no problem in continuing to carry our commitments with Russia and any refinancing or restructuring to pay in better conditions will surely be subject of agreement between two countries," he has sentenced. Maduro has traveled to Moscow with vice president of economy, Ramón Lobo.
This week, Russian Finance Minister Anton Siluánov reported that Russia and Venezuela are working to find a mutually acceptable formula. The minister confirmed that Caracas had asked for a restructuring due to its difficulties in meeting payment terms. Debt renegotiation is made within framework of Paris Club, but also at bilateral level, he clarified.
In December 2011, Russia opened a line of credit to Venezuela for 4 billion dollars [3.4 billion euros] for purchase of weapons. By end of 2013, Russian companies had supplied Caracas with $2.65 billion of goods. In April 2015 it was known that Venezuela had received 962 million additional and, in March 2016, Caracas began to renquear in payment of maturities and was obliged to resort to successive extensions. In September 2016, Russia restructured part of Venezuelan debt and postponed its payment for 2019 and 2021.
In addition, Rosneft State Oil consortium has invested $6 billion in Venezuela as an advance for supplies of common oil farms, a representative of company said in August. This amount, which must be amortized in 2019, is considered "very risky" by oil analysts. One of m, Mikhail Krutijin, believes that it can happen with Venezuela as well as Iraq and that a possible new regime does not recognise se obligations.
Rosneft is one of Russian companies undergoing sanctions for Moscow policy in Ukraine and its president, Igor Chin., is a man of Vladimir Putin's trust since times when both worked toger at mayor's office in St. Petersburg. He, who established a close relationship with President Hugo Chávez — who died in 2013 — tried to involve more Russian companies in energy businesses in Venezuela, but many have withdrawn from that market.
In his speech, Maduro extolleded Putin "for everything he has supported Venezuela and Caribbean." "We must give thanks to life for having in world a true leader," he said. "The leader of emerging world and world in which we want to live is President Vladimir Putin, who bears flag of decorum, of peace and of dignity," he said.
"A true leader"
"We don't have to ask Russia for help." We've got it. Russia now supports us, said Venezuelan president, referring to "mutual admiration" between two countries. He explained maturely that "Tuning and chemistry" established between Putin and Chávez paved way for military cooperation with Russia when Caracas was deprived of American armament. "Russian military teams are very good, extraordinary, and our armed forces have a solid defense capability, three times more than 15 years ago," he said.
According to Maduro, "Strengning of cooperation in technical-military field with Russia" has been "very beneficial for our country". Asked if he would ask for more assistance (military), Maduro said: "It is enough that we have, is growing, because y are agreements that are being reviewed all time". "I am sure that without asking for it y will give us more support for Venezuela's defensive capacity," he declared.
The relationship with Russia allows Venezuela to "explore ways to win-win in all fields," said Maduro, according to which "in se last three years" Venezuela has been subjected to a "financial persecution" by US. "We have had to suffer fall of " Prices of our oil of $100 a barrel at 30 and 20 dollars and in same period we had to meet international commitments for more than 60 billion dollars, he said. "Despite constraints of income in dollars and convertible currency, Venezuela has fulfilled all its commitments on a timely and impeccable basis."
Maduro said that all western banks have refused to refinance or lend a single dollar to Venezuela because of US sanctions. "We are ready." No one will be stopped by Venezuela. We have taken steps to protect our country from a financial standpoint. Fortunately we have excellent economic, commercial, financial and energy relations with emerging countries, said Maduro who riveted: "Beyond western bank of United States, dollar is anor world." "We have to stand in front of new world that is emerging."