Published On: Wed, Nov 6th, 2013

Willem Alexander’s King’s Gambit in Venezuela

Jacob Gelt DekkerKing Willem-Alexander of the Netherlands will pay an official visit to Venezuela, later this month. A friendly visit to a neighbor country of Aruba, Bonaire and Curacao, three Caribbean islands that form part of the Kingdom, could be just standard courtesy and diplomacy, after years of a cool and formal relationship. Several times, former president Hugo Chavez laid claim to the islands as part of the Venezuelan continental shelf extension. He also accused the islands of facilitating preparations for a USA-led military invasion of Venezuela, and radar espionage. Pdvsa, the Venezuelan State owned oil company, is the lessee of the former Shell oil refinery on Curacao, till 2019. Meeting the successor of Hugo Chavez who died from cancer last March, and thus lending credence to the new regime could be an opportunity, or become a liability. Venezuelan President Nicolás Maduro, the handpicked successor of deceased president Hugo Chavez, is overwhelmed by financial woes. His Socialist, strongly anti-American government, is totally dependent on the country's oil revenues, but capacity is officially only at 76%., and unofficially not even at 50%. Last year's explosion and fire at the Amuay refinery crippled production. A major joint venture in oil exploration with the Chinese never got off the ground, and key Russian companies pulled out of Orinoco exploration and exploitation projects. Crime rates in Venezuela are amongst the highest in the world, and , as a cocaine exporting country, it has overtaken Colombia. Hugo Chavez 14 year-long Bolivarian Revolution, based on Cuba- Fidel Castro communism, has brought little, but wide spread poverty and a total destruction of the middle class. Maduro and the ruling layer in Venezuela's state and public-sector bureaucracy, the so-called boliburguesiae blame all mishap on sabotage by American-led international conspiracies. Supposedly, documents obtained by a contributor to RT’s Spanish channel, Eva Golinger, detail a structured plan to erode the stability of Venezuela with a view to “returning real democracy and independence that have been hijacked for more than 14 years.” Allegedly, the plans are the product of a conference between American company FTI Consulting and two right-wing Colombian groups affiliated with former President Alvaro Uribe in the Colombian city of Cucuta in June of this year. Former President Uribe was an outspoken critic of former Venezuelan President Hugo Chavez, referring to him openly on Twitter as a “dictator” and an “assassin.” But José Bodas, general secretary of Venezuela’s Federation of Oil Workers Union, does no longer buy the sabotage circus of the president and points at "The overall commonality we're seeing is the lack of maintenance [and] investment, and the incompletion of security regulations." A power outage on September 3, that hit two-thirds of the country, including the capital, Caracas also was met with official claims of sabotage, even though it likely resulted from a lack of investment in a relatively old distribution network, confirmed by energy minister Jesse Chacón's explanation that it was the result of a metal shield falling on a transmission line. Maduro's most pressing problem though, is the weakness of the Venezuelan currency, the Bolívar. The Bolivar is the most devalued currency in Latin America, and third in the world, according to economic newspaper El Economista America. The Bolívar dropped 31.74 percent versus the U.S. dollar since the beginning of 2013, and is presently traded at around 6.28 Bolivar through the Central Bank of Venezuela's Commission for the Administration of Currency Exchange (CADIVI). But in the black market, the Bolivar has been trading at up to 45 Bolivars to the US dollar. The devaluation is a direct result of high inflation and budget deficits. The Venezuelan government officially devalued the currency in February, its fifth devaluation in nine years. Since then, there have been rumors of an upcoming sixth devaluation, which the president denied. A sixth devaluation could officially bring an exchange rate of 12-14 Bolivar per US Dollar. The country's annualized rate of inflation reached 45.4 percent in August, the highest level since the introduction of the Bolivar fuerte, five years ago. The accumulated inflation over this five-year period was 323 percent Since 70% of all consumption in Venezuela is imported, the devaluations caused enormous scarcity of basic goods, including staple foods and personal hygiene products. According to reports submitted by the Central Bank of Venezuela (BCV) at the end of August, " on average any given food item was unavailable in 19.2 percent of all stores, and 16 of the most basic foodstuffs were unavailable in 41 percent of stores. Some particular items exceeded this level, with 84.2 percent of shops lacking cooking oil and over 80 percent lacking either powdered or fresh milk. Besides food, there is also a growing shortage of 19 different personal care items including toothpaste, soap, and toilet paper." In an effort to alleviate the shortages, Venezuela and Colombia announced a barter deal of bonds in Venezuela's state-owned oil company, PdVSA, in exchange for $600 million worth of food products, including beef, milk, palm oil, and butter.

"Bread and games," have long been the ingredients of politicians to manipulate the masses. But Maduro's boliburguesiae can no longer feed his people, and nobody is believing the ongoing fabrications of sabotage any longer. A change of leadership---peaceful or bloody---is not unlikely, therefore the timing of King Willem Alexander's visit is questionable.

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