Saturday December 14, 2019
Home Lead Story Venezuela Unr...

Venezuela Unrest Creates A Battleground For U.S. And Russia

The State Department was more muted, saying only that Russian and Cuban intervention was “destabilizing for Venezuela.”

0
//
Venezuela
Venezuelan Crisis Spurs May Day Rallies, Clashes. VOA

The unrest in Venezuela is turning into a battleground of rhetoric between the United States and Russia.

After a telephone conversation between Secretary of State Mike Pompeo and Foreign Minister Sergey Lavrov on Wednesday, the Russian warned of “the most drastic of consequences” if the U.S. continued what he called “aggressive steps.”

The State Department was more muted, saying only that Russian and Cuban intervention was “destabilizing for Venezuela.”

U.S. national security adviser John Bolton talks to reporters at the White House in Washington, May 1, 2019.
U.S. national security adviser John Bolton talks to reporters at the White House in Washington, May 1, 2019. VOA

But White House national security adviser John Bolton said, “This is our hemisphere. It’s not where the Russians ought to be interfering. This is a mistake on their part. It’s not going to lead to an improvement of relations.”

Pompeo said again Wednesday that the U.S. was prepared to use military action in Venezuela: “If that is what is required, this is what the United States will do.”

But Pompeo and President Donald Trump have not specified what would prompt the U.S. to intervene militarily.

Cuba denies troops in Venezuela

Meanwhile, a top Cuban diplomat denied U.S. accusations that thousands of Cuban troops were on the ground in Venezuela.

“Cuba does not participate in military operations nor in security operations in Venezuela,” Cuban Chief of U.S. Affairs Carlos Fernandez de Cossio told the Associated Press.

He said the 20,000 Cubans in Venezuela were primarily medical workers.

But he did say, as hemispheric partners, Cuba and Venezuela have the sovereign right to military and intelligence cooperation.

Cuba and Russia are longtime allies of Venezuela and its socialist government. Russia has supplied economic support and military equipment to the Maduro government, while Venezuela has sent billions of dollars in oil to Cuba in exchange for medical aid.

Guaido: More demonstrations

Supporters of opposition leader Juan Guaido, who is recognized by the U.S. and more than 50 other nations as Venezuela’s rightful president, filled the streets again Wednesday, hurling rocks at police who responded with tear gas.

Guaido said a staggered industrial action would start Thursday, leading to a general strike.

“We’re going to remain in the streets until we achieve freedom for the Venezuelan people. The regime will try to increase the repression. It will try to persecute me,” he told demonstrators Wednesday.

As head of the opposition-controlled National Assembly, Guaido used the constitution to declare Nicolas Maduro’s presidency illegitimate, saying his election in December was a fraud.

Millions of Venezuelans — sick of out-of-control inflation, severe food and fuel shortages, a lack of medical care, and periodic blackouts — have fled the country.

Maduro accuses Guaido of coup

Maduro is accusing Guaido of trying to carry out a U.S.- and Colombian-supported coup and says the opposition will fail.

Also Read: Supreme Court Gives EC Notice, Plea Challenging Jail Term For Questioning EVMs

He said demonstrators would be prosecuted “for the serious crimes that have been committed against the constitution, the rule of law and the right to peace.”

Neither Maduro nor Guaido can succeed, however, without the support of Venezuela’s powerful military. While many of the rank-and-file soldiers have joined the opposition, Maduro still has the backing of generals and other top military chiefs. (VOA)

Next Story

Russia’s Alternative to Western Credit Card Debuts in London

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

0
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)