Caracas- Venezuela has to target its alliances with China and Russia to overcome the economic crisis it faces since 2015, amid the harsh US sanctions, economist Juan Carlos Valdez said.
“The key to the economic recovery of Venezuela is in alliances with China and Russia, without a doubt, we are being forced to change markets, not only from the point of view of trade, but also of finance,” he said.
The economist, host of the “Boza con Valdez” program, broadcast on the Venezuelan state television channel, explained that US sanctions are affecting everyday life in the Caribbean nation.
Venezuela imports almost everything that its inhabitants consume, and the currencies for this come from the oil market, and that is where Valdez considers the weak point of this country’s economy.
“Where is the Achilles heel of Venezuela? In that it is an basically importing country, we import almost everything and that is where they attack us most, because US sanctions prevent us from using the currencies we need to import,” he said.
The oil sector has been affected since late 2014 by a sharp fall in its prices, and since 2017 by the sanctions it has applied against the US Government.
The state-owned Petróleos de Venezuela SA cannot refinance its debt or acquire loans, nor is it allowed to use the US financial system for transactions and almost all companies and individuals in that nation are prohibited from commercial relations with this company.
The sanctions, the fall in the price of crude oil, and corruption cases have caused in Venezuela a crisis that the International Monetary Fund recently described as historic, revealing that in 2019 the economy will contract 35%.
End of hegemony
The expert explained that what happens in Venezuela is a consequence of global changes that point to the end of US economic hegemony.
“This displacement of the United States is basically taking place in three areas: in the commercial and financial sphere, in the military sphere and in the energy sphere, and it is here, on that last point, that Venezuela plays an important role,” he said.
The nation that passes Venezuela on its side, the expert added, will have an advantage in what he called “an energy war,” since that nation owns 20% of the world’s proven oil reserves.
China, Valdez insisted, has displaced the US as a manufacturing country, and Russia in military power.
Therefore, in his opinion, the White House is increasingly uphill to economically isolate sanctions that do not respond ideologically to their interests, as is the case in Venezuela.
In addition, he explained that the attacks on Venezuela are not only carried out through sanctions, but also through the destruction of the currency, with the use of fictitious markers of the price of the dollar.
If Venezuela were committed to offering its products such as Russia, China or Turkey, they do so in their national currencies or through an alternative financial system for international transfers, other than Swift, it would be taking, for Valdez’s consideration, a step towards financial independence.
However, he stressed that in the Venezuelan Government there are obstacles and figures that bet on a liberal economy, which convinced President Nicolás Maduro that generating more bolivars (local currency) would only cause inflation, “but not having money to pay” only The country is heading towards increasing the use of the dollar as a piece of exchange, something that has increased in the last four months.