With the erosion of democracy in Venezuela, Nicolas Maduro is now widely considered to be a regional pariah. He counts on the support of three hardcore Marxist allies: Bolivia, Cuba, and Nicaragua. In practical terms, this support does little to help prop up his regime, which is staggering under the weight of hyperinflation.
Of far more value is his close relationship with Russia and China, who appear to be extending Maduro a lifeline. Russia recently allowed Maduro to restructure a USD $3 billion loan with more favorable terms, while China continues to take a high-risk gamble with Venezuela, exchanging loans for future oil deliveries.
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This week, as Venezuela declared both Brazil and Canada’s ambassadors to be personas non grata, Maduro continued to cultivate relationships with China’s Communist regime, and Vladimir Putin, who is gearing up for reelection in the coming year.
Both nations have remained steadfast in their support of Maduro, as they seek geopolitical influence in the United States’ backyard. With regard to the unfolding debt crisis, the Chinese Foreign Ministry released a statement, suggesting: “We believe the Venezuelan government and people have the ability to appropriately handle their affairs, including the debt issue.”
This is merely one Communist dictatorship going to bat for another. Clearly, Maduro does not have the support of the Venezuelan people. He has jailed opposition politicians, banned political parties, stolen elections, and refused to schedule elections that he was afraid to lose.
Venezuela is about to face a serious double whammy: spiraling hyperinflation, and an inability to meet its debt obligations. Its external debt has been estimated at nearly USD $200 billion, with $23 billion due to China alone. It has currency reserves of just $9 billion.
Thus, a more likely end game in Venezuela now may involve the nation’s creditors seizing oil shipments to pay off debts. If that were to happen, it could be the catalyst needed to force Maduro from power, perhaps into exile in Cuba.