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161. Global Violent Deaths 2017: Time to Decide

Author:
Claire McEvoy and Gergely Hideg
Publication Date:
12-2017
Content Type:
Special Report
Institution:
Small Arms Survey
Abstract:
Lethal violence claimed 560,000 lives in 2016—more than one person every minute of every day of the year. Global Violent Deaths 2017: Time to Decide, a report from the Small Arms Survey, shows that while the global conflict death rate dropped in 2016, the global homicide rate increased for the first time since 2004. Although this does not necessarily indicate a new trend, it does signal growing insecurity in non-conflict areas. Of the five countries with the highest death rates in 2016—Syria, El Salvador, Venezuela, Honduras, and Afghanistan—only two had active armed conflicts. The study also elaborates scenarios for the future based on current trends, to assess the number of people that could be saved if states implement effective violence reduction initiatives in support of Agenda 2030, as opposed to more negative outcomes if trends worsen. If prevailing trends remain unchanged, the annual number of violent deaths is likely to increase to 630,000 by 2030. On the contrary, if states commit themselves to effectively address conflict and armed violence, the number of annual deaths could be lowered to 408,000 by 2030—even considering the population increase. In total, over the next twelve years, approximately 1.35 million lives could be saved. Within the Agenda 2030 framework and its 17 Sustainable Development Goals, states have an unprecedented opportunity to save lives. It’s time to decide.
Topic:
Security, Sustainable Development Goals, and Violence
Political Geography:
Afghanistan, Syria, Venezuela, Honduras, El Salvador, and Global Focus

162. Latin America at a Crossroads

Author:
Antonella Mori and Loris Zanatta
Publication Date:
02-2017
Content Type:
Special Report
Institution:
Italian Institute for International Political Studies (ISPI)
Abstract:
Latin America is at a crossroads. The “golden age” inaugurated with the turn of the new millennium seems a faint memory. Economies that had grown at a steady pace are now slowing down, while some are in freefall. Politically, the “pink tide” of populist movements is now ebbing. From Brazil to Venezuela, from Argentina to Bolivia, left-leaning leaders across the region seem to have lost their bond with the people. Their promises of an equitable society through an apparently never-ending redistribution of wealth crashed against the reality of shortsighted and unsustainable policies. Political and social turmoil are heralding an era of changes and – maybe – of new opportunities for Latin America. And this ‘great transformation’ is precisely what this volume is all about. Where is it leading to? Does it mark the beginning of a new age? Which lessons can be learnt from the past? Leading international scholars and experts scratch beneath the surface of Latin America’s current crisis to have a clearer glimpse of what the future holds and draw policy recommendations, especially for the EU.
Topic:
European Union, Economy, Populism, and Regional Politics
Political Geography:
Brazil, Argentina, Latin America, Venezuela, and Bolivia

163. The Culture of Political Instability and the Rapprochement of South America and United States

Author:
Henrique Carlos de Oliveira De Castro
Publication Date:
06-2016
Content Type:
Working Paper
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
The article deals with the recent foreign policy of the Andean countries, Venezuela, Ecuador and Bolivia, considering the relationship with the United States and the situation of political crises in these countries. We discuss the national context of each country and the consequences for external relations and international politics of each and of the region. We address United States interests in the effects of the current crisis in the three countries and highlight the importance of political culture for understanding reality.
Topic:
Foreign Policy, Diplomacy, Regional Cooperation, and Crisis Management
Political Geography:
United States, South America, Venezuela, North America, Ecuador, and Bolivia

164. Unasur in a Comparative Light: The Relations with Venezuela and Columbia

Author:
Fabio Luis Barbosa Dos Santos
Publication Date:
12-2016
Content Type:
Journal Article
Journal:
AUSTRAL: Brazilian Journal of Strategy International Relations
Institution:
Postgraduate Program in International Strategic Studies, Universidade Federal do Rio Grande do Sul
Abstract:
This article analyses the relation of Venezuela and Colombia with Unasur since its creation in 2008, with the purpose of exploring the reach and the limits intrinsic to a regional institution that incorporated countries with different governments in its original moment.
Topic:
Diplomacy and Regional Cooperation
Political Geography:
Colombia, South America, and Venezuela

165. Development Banks and Regional Powers: An Analytical Framework

Author:
Stefano Palestini
Publication Date:
11-2016
Content Type:
Working Paper
Institution:
The Kolleg-Forschergruppe (KFG)
Abstract:
Why do regional powers such as Brazil, South Africa, or Russia undertake different collective strategies to supply public goods in their regions of influence? When do those states prefer to delegate competences to existent multilateral financial institutions, such as regional development banks (RDBs), and when do they prefer to make use of their own national financial instruments? Why do those states create new RDBs that challenge the existing ones? The article builds and tests a set of hypotheses based on the interplay between capabilities and legitimacy to help answer these questions using contemporary South America as a case study. Through a process tracing analysis carried out for the period 2000–15, the article explains the different strategies undertaken by two states, Brazil and Venezuela, to supply infrastructure in the region, ranging from the use of the Brazilian National Development Bank to the creation of a new Bank of the South. It is suggested that the low capabilities and legitimacy expectations of both states explain the rising importance of external actors in the supply of regional public goods that we are currently witnessing in South America.
Topic:
Development, Regional Cooperation, Banks, Regionalism, and Financial Institutions
Political Geography:
Brazil, South America, Venezuela, and Global South

166. Weathering Collapse: An Assessment of the Financial and Operational Situation of the Venezuelan Oil Industry

Author:
Roberto Hernández Hernández and Francisco J. Monaldi
Publication Date:
11-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Venezuela has one of the most abundant geological endowments in the world. Oil proven reserves are among the largest globally, even if a more conservative criterion than the one used by the current government is applied. However, these resources are qualitatively different than those of other abundant regions such as the Middle East. The large majority constitutes extra-heavy oil, which generally requires higher oil prices to be extracted profitably. During the last decade, the Venezuelan oil industry wasted a unique opportunity to increase investment and production. At the high oil prices that prevailed, the massive oil reserves could have been monetized by rapidly increasing production with a large margin of profitability. Quite to the contrary, production steadily dropped due either to lack of investment in the new unconventional oil projects or for failing to compensate the decline of the older conventional fields. It is a tragic story of great potential with dismal performance. A series of trends were negatively impacting the Venezuelan oil industry even before the oil price collapse in 2014. From the revenue side, although oil prices showed an increase in real terms of 120% between 2000 and 2014, the barrels that effectively generate cash for Venezuela have shown a continuous decline. This is not just because production has been declining for the most part during the last eighteen years (a trend that has gotten significantly worse during the last year), but also because of a number of developments. First, during that period, total exports have declined more rapidly than production, and recently, net exports have declined more than total exports. Consumption in the massively subsidized domestic market increased until 2013 (when it started to decline likely because of the recession in the local economy), while imports of oil products for the domestic market have increased since 2012. The domestic market not only generates negative cash-flow for the national oil company (NOC), PDVSA, but also its expansion reduced the barrels available to export. More recently, there has also been an increase in imports of light oil and naphtha as diluents for the extra-heavy oil. Second, the Venezuelan production basket has become heavier and the share of unconventional production, generally less profitable, has increased. Third, the production wholly operated by PDVSA has been falling much more rapidly, while the production share of joint-ventures increased. Fourth, a significant share of the exports to Latin America and the Caribbean is subsidized (although these exports have declined recently). Fifth, some oil exports are committed to repay debts of PDVSA and specially the Venezuelan government, limiting the actual cash flow received by the company. In particular, the government’s debt agreements with China involve a significant and increasing amount of production, although recently those agreements were restructured, allowing for a grace period with no capital amortization. From the expenditure side, PDVSA was increasingly responsible of carrying social expenditures and activities not related to the oil industry, which limited the resources for highly profitable investments. That is in addition to the increased fiscal take due to changes in the tax legislation. Also, higher investment requirements due to an increase in the equity share of PDVSA in joint venture projects, has had an impact on its cash flow. The explanations for the underperformance of the Venezuelan oil industry basically fall into two connected categories: the multiple problems facing PDVSA; and the increase in above-ground risks for foreign investors operating in the country. The deterioration of the institutional framework, led to radical fiscal and regulatory changes, and to the nationalization of the majority of the industry. In addition, the substantial over-extraction of resources from the NOC, the significant macroeconomic distortions affecting the cost structure of oil companies, and the constraints imposed by the energy infrastructure and human capital availability; have combined to produce dismal results. The massive firing of the majority of the management and technical experts from PDVSA in 2003 following the political conflict that led to a strike, has left the company with limited capabilities to operate effectively. The recent decline in oil prices, and the changes in the international market structure, have exposed more dramatically the difficulties facing the Venezuelan oil sector, and call into question its ability to prevent a continuation of the declining trend in oil extraction. This situation becomes particularly severe if we take into account the cash flow constraints facing PDVSA, as well as its multiple operational problems, power cuts, and conflicts with oilfield services providers. These challenges are proportional to the enormous investments required to finance the projects in the Orinoco Oil Belt, where most of the reserves in Venezuela are located, and where the quality of the crude and the lack of development of the region, are just two of the many issues that need to be addressed. Since this paper is part of a wider project to understand the macroeconomic challenges facing the country in 2016-17, it focuses narrowly on the financial problems of the oil industry in the short-term and the operational challenges that could impede its recovery in the next couple of years. Within this context, it largely analyzes the upstream operations, i.e. oil extraction, rather than the downstream, given that in the former is where the oil rents are generated and constitutes the main source of foreign exchange and fiscal revenues of Venezuela. Other areas for further research are mentioned at the end of the document.2 Official figures are used to the extent that they are publicly available. An important aspect that prevents an exhaustive evaluation of the oil sector in Venezuela is the lack of available information regarding key performance indicators affecting the cost structure of oil projects, the cash flow of PDVSA, and the fiscal contributions of the oil sector to the government, among other important variables. Thus, on occasion, estimations for variables of interest and explanations for their divergence from official figures are provided. The paper has two main sections. The first one analyzes the issues affecting the cash flow of PDVSA, the effects of macroeconomic and fiscal variables on both revenues and costs, as well as other financial issues affecting the performance of the company. The second section discusses some of the operational challenges facing the industry and mentions areas for further research. 2 For a more general overview of the recent developments of the oil sector in Venezuela see Monaldi (2015)
Topic:
Economics, International Trade and Finance, Oil, and Natural Resources
Political Geography:
South America and Venezuela

167. From Financial Repression to External Distress: The Case of Venezuela

Author:
Carmen M. Reinhart and Miguel Angel Santos
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Recent work has supported that there is a connection between domestic debt level and sovereign default on external debt. We examine the potential linkages in a case study of Venezuela from 1984 to 2013. This unique example encompasses multiple financial crises, cycles of liberalization and policy reversals, and alternative exchange rate arrangements. The Venezuelan experience reveals a nexus among domestic debt, financial repression, and external vulnerability. Unlike foreign currency-denominated debt, debt in domestic currency may be reduced through financial repression, a tax on bondholders and savers producing negative real interest rates. Using a variety of methodologies we estimate the magnitude of the tax from financial repression. On average, this financial repression tax (as a share of GDP) is similar to those of OECD economies, in spite of much higher domestic debt-to-GDP ratios in the latter. The financial repression "tax rate" is significantly higher in years of exchange controls and legislated interest rate ceilings. In line with earlier literature on capital controls, our comprehensive measures of capital flight document a link between domestic disequilibrium and a weakening of the net foreign asset position via private capital flight. We suggest these findings are not unique to the Venezuelan case.
Topic:
Debt, Finance, Capital Flows, Inflation, and Interest Rates
Political Geography:
South America and Venezuela

168. Strategic Insights: Guyana-Venezuela: The Essequibo Region Dispute

Author:
Dr. Jose de Arimateia da Cruz
Publication Date:
12-2015
Content Type:
Working Paper
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
While the rest of the world is concerned about the refugee crisis in Europe, the conflict in Syria, and the potential contenders in the U.S. presidential elections of 2016, there is a brewing dispute between Guyana and Venezuela in Latin America. As a result of this diverted attention, there are few reports regarding the instability of an already fragile region. The dispute between the two nations centers on the lands west of the Essequibo River of Guyana. This stretch of land covers 40 percent of Guyana’s sovereign territory and, according to experts, is rich in gold, bauxite, diamonds, and other natural resources. The dispute over control of the Essequibo region was initially settled by international arbitration in 1899, awarding the Guyana Government the region. However, the Venezuelan Government has rejected the final decision granting Guyana the Essequibo region; and, since the 19th century, it has been laying claim to this vast mineral rich area, alleging that the decision was fraudulent and therefore null (see map of Guyana)
Topic:
Conflict Resolution, Natural Resources, Territorial Disputes, and Military Affairs
Political Geography:
Europe, Latin America, Venezuela, and Guyana

169. Russian Engagement in Latin America and the Caribbean: Return to the "Strategic Game" in a Complex-Interdependent Post-Cold War World?

Author:
Dr. R. Evan Ellis
Publication Date:
04-2015
Content Type:
Working Paper
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
In February 2015, Russian Defense Minister Sergei Shoigu traveled to Latin America to meet with leaders and defense officials in Cuba, Nicaragua, and Venezuela. Although the visit included Russian participation in a Venezuelan military exercise, the focus of the meetings in all three countries was on access to ports and airfields in the region in order to support Russian military operations in the vicinity of the United States.1 The discussions bore the most fruit in Nicaragua, where Minister Shoigu signed an agreement to facilitate Russian access to the ports of Corinto and Bluefields, as well as strengthening counter-drug cooperation and discussing weapons sales.2
Topic:
International Relations, Defense Policy, Military Strategy, and Military Affairs
Political Geography:
Russia, Latin America, Venezuela, and United States of America

170. Venezuela: How Long Can This Go On?

Author:
Boris Muñoz
Publication Date:
03-2015
Content Type:
Journal Article
Journal:
Americas Quarterly
Institution:
Council of the Americas
Abstract:
On April 10, Venezuelans stayed up past midnight to watch an event on TV that just a few weeks prior would have seemed incredible, almost miraculous: after three months of intense protests, headed by students in alliance with the most combative sectors of the opposition calling for President Nicolás Maduro's departure, the government and the opposition, thanks to mediation from the Unión de Naciones Suramericanas (Union of South American Nations—UNASUR), sat down to negotiate.
Political Geography:
South America and Venezuela