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U.S. and Russia To Come Up With An Agreement On How To Resolve Venezuela Crisis

Moscow strongly warned the United States “against any temptation to resort to military power” in Venezuela. Russian state news agency TASS quoted Deputy Foreign Minister Sergei Ryabkov as saying. “We assume that Washington treats our priorities seriously, our approach and warnings.”

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Special Representative for Venezuela Elliott Abrams speaks at the State Department in Washington, March 15, 2019. VOA

U.S. Special envoy for Venezuela, Elliott Abrams says Russia and the United States have failed to come to an agreement on how to resolve the crisis in Venezuela following talks in Rome. He did not rule out a future meeting between both sides and said the talks helped both sides gain a better understanding of each other’s views.

The United States Special envoy for Venezuela, Elliot Abrams, described the Rome talks with Russian officials on the crisis in Venezuela as “useful, substantial and serious.” He said the conversations allowed the United States to understand that “Russia sees the crisis in Venezuela as very serious, unlike President Maduro,” mainly, Abrams said, in regard to the economic and humanitarian aspects.

Following a meeting with Russian Deputy Foreign Minister Sergei Ryabkov, Abrams said, “We did not come to a meeting of the minds, but the talks were positive in the sense that I think both sides emerged with a better understanding of the other’s views.” The two sides remain at odds over the legitimacy of Venezuelan President Nicolas Maduro.

The United States has recognized self-declared President Juan Guaido as Venezuela’s legitimate leader, while Russia continues to recognize Mr. Maduro. Italy also has not given Mr. Guaido recognition.

FILE - Venezuelan opposition leader Juan Guaido, who many nations have recognized as the country's rightful interim ruler, takes part in a rally against President Nicolas Maduro's government in Valencia, Venezuela, March 16, 2019.
Venezuelan opposition leader Juan Guaido, who many nations have recognized as the country’s rightful interim ruler, takes part in a rally against President Nicolas Maduro’s government in Valencia, Venezuela, March 16, 2019. VOA

Abrams met with the Pietro Benassi, the diplomatic adviser of Italian Prime Minister Giuseppe Conte. Abrams said the United States is not applying pressure on the Italian government to recognize Guaido as Venezuela’s legitimate president.

The meetings in the Italian capital took place as the United States imposed fresh sanctions on Venezuela, this time targeting the state-run gold mining company Minerven and its president.

President Donald Trump and visiting Brazilian President Jair Bolsonaro speak during a news conference in the Rose Garden of the White House, March 19, 2019.

But at the White House, President Donald Trump on Tuesday reiterated that “all options are open” on the future of Venezuela.

“We are not looking for anything other than taking care of a lot of people that are starving and dying in the streets. What’s happening there is a disgrace,” he said.

Abrams stressed that negotiations are not underway because “We do not negotiate the future of Venezuela with Russia or others because the future of Venezuela will be chosen by the Venezuelans.”

Also Read: Know The Venezuelans Ways to Cope with Inflation and Hunger

Moscow strongly warned the United States “against any temptation to resort to military power” in Venezuela. Russian state news agency TASS quoted Deputy Foreign Minister Sergei Ryabkov as saying. “We assume that Washington treats our priorities seriously, our approach and warnings.”

Abrams did not exclude a future meeting with Russia on the Venezuela crisis but said no date had been set. The White House said President Trump will also discuss the Venezuela crisis with Caribbean leaders on Friday. (VOA)

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Russia’s Alternative to Western Credit Card Debuts in London

Russia will next year diversify its foreign currency holdings in its National Wealth Fund

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Employees demonstrating a payment card
Employees speak while demonstrating a payment card during a tour at a branch of VTB bank in Moscow, Russia. VOA

A Russian backed bank payment card, introduced after Western sanctions upended Russia’s financial system five years ago and prompted Visa and Master card to deny electronic services to some of the country’s leading banks, is set for its European debut on London Wednesday, when a pilot project will be launched in collaboration with the Dutch global payment company PayXpert.

Moscow authorities hoped to get the MIR card accepted eventually in foreign markets, but progress has been slow outside Russia for the MIR payment system,  which operates outside of Western-controlled international financial systems such as Swift, which banks use to transfer money.

The pilot project with PayXpert “will lay the foundation for new promising trends in the foreign expansion of Russian payment cards,”  according to Vladimir Komlev, the head of Russia’s National Card Payment System, which operates the MIR system.

De-dollarization efforts

The effort is seen by analysts as part of the  Kremlin bid to de-dollarize the Russian economy to lessen the sting of Western sanctions. A Russian Finance Ministry official this month told Reuters that Russia will next year diversify its foreign currency holdings  in its National Wealth Fund, which supports Russia’s public pension system, aiming to lower the share of dollars in the fund’s reserves.

Dmitry Dolgin of the Dutch banking group ING said in  a report this month that de-dollarization efforts are now obvious across most sectors, including local business loans and bank-held international assets, although he said the dollar’s role  has actually increased in company and household savings and cash assets, partly because dollar interest rates have been higher than those offered for euros.

Credit Cards offers unique features
American Express, Visa and Master Card is displayed in this image. Each Credit Card offers unique features and benefits, along with unmatched privileges. Pixabay

U.S. authorities have been able advance sanctions by targeting companies that use dollars, and the establishment of electronic payment systems not tied to the dollar or largely controlled by U.S. businesses is one way for the Kremlin to reduce the impact of the West’s serial punishment of Moscow. Washington and the European Union have imposed a wave of sanctions since 2014 to punish Russia for the 2014 annexation of Ukraine’s Crimean peninsula, alleged meddling in the 2016 U.S. elections, and the poisoning of a defected Russian spy in England.

Komlev told Reuters this year that “In the next three years we want MIR cards to be operational in countries where Russians are used to traveling.” He projected MIR cards would be operational at some banks in at least a dozen countries by the end of this year. Turkish banks started to conduct transactions this year with MIR, which means both “peace” and “world” in Russian.

MIR was launched initially as a national payment system, with the first cards issued in December 2015. Russia’s leading bank, state-owned Sberbank, started issuing them in October 2016, and by the end of last year more than 70 million MIR-based cards had been issued by 64 Russian banks. The Kremlin has mandated that state welfare and pension payments must be processed through the system by next year, along with salaries paid to civil servants.

The card has a long way to go before it rivals VISA our Mastercard internationally. It is not accepted by international shopping platforms or major online booking services for airlines and hotels, although APEXX Fintech, a British start-up global payment company, said Thursday it would now start working with the MIR system. Among smartphone applications only Samsung has concluded an agreement with the MIR system.

Meanwhile, de-dollarization has been moving quickly. Russia’s Central Bank has currency swap deals in place with Iran, China and Turkey, allowing direct trade to be conducted in local currencies instead of U.S. dollars. Russia reportedly lost $7.7 billion in its bid to reduce dollars held in its reserves. Some of the dollars were turned into gold, and since January the bank has purchased 96.4 metric tons of gold.

People stand in line as they wait to enter the bank with their card
People stand in line as they wait to enter a branch of Sberbank of Russia bank. VOA

Alexei Zabotkin, head of the Russian Central Bank’s monetary policy department, has conceded that it would be impossible to completely empty the country’s foreign exchange reserves of dollars, as this would be  “fraught with excessive risks.” According to central bank data the  National Wealth Fund has $45.5 billion, 39.17 billion euros and 7.67 billion British pounds.

In August, the state-controlled Rosneft oil giant announced it would stop using the U.S. dollar for its export contracts.

ALSO READ: India Grapples with Credit Issues

Nonetheless, analysts say there are limits on how far Russia can de-dollarize – the ruble is highly volatile and remains unattractive for investors and de-dollarization brings additional and sometimes prohibitive trading costs.

European regulators will be watching the London project closely. EU officials have been sympathetic about Russia’s de-dollarization bid, suspecting that as a spin-off the euro will be boosted as an international currency. In June the European Commission concluded that “the euro clearly stands out as the only candidate that has all the necessary attributes of a global currency that market participants could use as an alternative to the U.S. dollar.” (VOA)