Monday, November 13, 2017

EU sanctions Venezuela, debt talks starting (Nov. 13, 2017)

The European Union agreed to a range of sanctions against the Venezuelan government earlier today, including banning arms sales, setting up a system for freezing assets and imposing travel restrictions on some government officials, reports the Financial Times. EU foreign ministers meeting in Brussels announced the measures in response to regional elections last month, which they say worsened the country’s crisis, reports Voice of America. They referred to "numerous irregularities" in last month's vote. (See last Friday's briefs.)

U.S. sanctions have focused on corruption, while the EU is focusing on human rights violations. Aiming to avoid pushing Venezuela closer to collapse, the EU has not targeted individual officials yet, reports Reuters. In a joint statement, all 28 EU ministers said the legal basis for individual travel bans to the Europe Union and the freezing of any Venezuelan assets in the bloc "will be used in a gradual and flexible manner and can be expanded."

Later today the U.N. Security Council will have an informal meeting on the situation in Venezuela, organized by the U.S. and Italy, reported the Associated Press on Friday. Speakers will include U.N. human rights chief Zeid Ra'ad al Hussein, Organization of American States Secretary-General Luis Almagro, Joseph Cornelius Donnelly who heads Caritas International's U.N. office, and Julio Henriquez, international coordinator of the Foro Penal Venezolano.

A former Venezuelan diplomat living in the U.S., Diego Arria, accused the MUD opposition coalition of unsuccessfully trying to postpone the Security Council meeting in order to avoid derailing talks with the Venezuelan government to be held in the Dominican Republic on Wednesday, according to EFE.

The E.U. decision comes as investors are in Caracas for a meeting on restructuring about $60 billion in foreign debt. It comes the expiration of a grace period for three interest payments the government and PDVSA owe, altogether worth $199.6 million, explains Americas Quarterly. 

U.S. sanctions are a significant obstacle in the talks, as the two men in charge of leading the negotiations are on a list prohibiting U.S. citizens from doing business with them, notes the BBC. Nonetheless, Maduro said 91 percent of the country's bondholders are gathered in Caracas, reports Efecto Cocuyo.

And the sanctions might even help dialogue in Venezuela, according to an interview with debt expert Russ Dallen in Americas Quarterly. "... the Treasury Department in recent days has said that the U.S. would consider licensing new bonds if they are approved by the Venezuelan National Assembly, which Maduro has been thwarting at every opportunity. This gives the opposition something to go to the government with and say, "If you recognize the national assembly and treat us with respect we might be willing to do this." Interestingly, it’s turned the sanctions into a great negotiating tactic. It’s a great flanking maneuver from the U.S. government."

Yesterday Maduro insisted his country would "never" default, and emphasized talks with debtor nations Russia and China, reports Deutsche Welle.

All the leading ratings agencies forecast a Venezuelan default as highly probably, differing only on when it might occur, according to France 24

However, the case of Venezuela's inability to pay debt differs from that of other countries in similar situations because of its oil sector and need for food imports. Venezuelan oil would be blocked internationally by a default, leaving the country unable to pay for vital food and medicine imports, analyst Luis Vicente León told the BBC.

But some analysts quoted by the BBC feel Maduro could be helped in the short term by a default that would free up funds. (See last Friday's briefs for more analysis.)

Venezuela's state electricity company was declared in default on Friday, a potential harbinger of unravelling to come, reports the New York Times. Corpoelec was unable to make a $28 million payment on a $650 million bond.

News Briefs 
  • Guatemala's judiciary threatens to reverse the significant advances in prosecuting corruption made by the CICIG and the Public Ministry in recent years, according to a new Human Rights Watch report."Running Out the Clock: How Guatemala’s Judiciary Could Doom the Fight against Impunity, documents a pattern of repeated and unjustifiable delays in criminal cases brought by the International Commission against Impunity in Guatemala (CICIG) and the Guatemalan Attorney General’s Office. The report comes in the midst of a showdown between the CICIG and President Jimmy Morales' government. HRW documents how cases against powerful defendants "have been bogged down in pretrial proceedings, some for more than five years." Though "Guatemalan law sets clear limits on the amount of time courts have to address these appeals, but the courts routinely fail to comply with those limits," notes HRW. The delays will help perpetuate corruption in Guatemala,  Daniel Wilkinson, managing director for the Americas at Human Rights Watch told El Periódico.
  • As the Trump administration evaluates terminating an immigration program shielding about 300,000 Temporary Protected Status recipients from deportation, Canada fears a flood of asylum seekers, reports the Washington Post. In the meantime, a bill in Congress would allow all TPS recipients to apply for permanent residency, reports the Miami Herald. The ASPIRE Act would require applicants to demonstrate they would face extreme hardship if they were forced to return home.
  • The Miami Herald profiles some of the Nicaraguan citizens who were told last week that they have 14 months to prepare to leave the U.S.
  • El Salvador has already received hundreds of thousands of deportees from the U.S. since the 1980s. Last year the violence plagued country received 50,000 deportees, many of whom face a stigma of delinquency, though most are not criminals, reports Univisión. Decades ago, U.S. deportees famously included members of the Mara Salvatrucha and Barrio 18 LA gangs, contributing to the rise of street gangs in Central America, and tainting future deportees' reps. The current generation of deportees include few criminals, and face difficulties integrating in a country many have hardly lived in. "In an attempt to destigmatize deportation, the governments of Central America now use the term retornado, or “returnee,” instead of “deportee,” to refer to this population."
  • Puerto Rican journalist Ana Teresa Toro muses on the "revelations" of Hurricane Maria's destruction on the island in a New York Times Español op-ed.
  • Brazilian politician and potential presidential frontrunner Jair Bolsonaro is a known dictatorship apologist. But the religious nationalist is also anti-gay and pro-gun. Though it's too soon to tell if he actually has a shot in next year's presidential race, his current popularity shows the difficulties centrist candidates will face in wooing a skeptical electorate, according to the Economist.
  • Brazil is set to start receiving crude oil from a large offshore field -- but the government lacks the infrastructure to store the oil, transport it and even process it. The "offshore oil dilemma" faced by Brazil means the dividends from the field might be less than originally predicted, and demonstrate the pitfalls of nationalist oil policy, reports the Wall Street Journal.
  • A controversial plan to save an endangered Mexican porpoise by capturing the few dozen remaining in the wild and breeding them in captivity was shut down after one died after being caught, reports the New York Times. The piece looks at the difficulty of protecting a species decimated as a collateral effect of an illicit trade that sustains fishermen of the area. Conservationists point to the need to crack down on illegal fishing, but also that corruption diverts financial compensation aimed at reducing fishermen's impact on the Vaquita porpoise.
  • Rehearsals for a documentary play about the Falklands/Malvinas war took longer than the 74-day 1982 conflict itself. "Minefield," by Argentine artist and writer Lola Arias, is "not a play that explores the rights and wrongs of that conflict or, indeed, any other. What it does is look at the human experience of war and in particular what happens to those who go through it when they return to “normal” life," reports the Guardian.
  • The Chilean city of Valdivia aims to become a senior-citizen paradise, with urban infrastructure and public policies aimed at supporting elderly people and providing them with opportunities, reports the Guardian. The city's "Gerontological Hub project" could be relevant for countries around the world faced with aging populations. 
  • An elephant found on a ranch owned by drug dealers in Colombia had a successful root-canal operation on a cracked tusk in Baranquilla, paid for by crowdfunding, reports the BBC.
  • It's a Black Thing: Black Brazilians have reappropriated a disparaging quip by a television newscaster to highlight the achievements of Afro-Brazilians, reports the New York Times.

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