Putin vows ‘support’ as Venezuela’s Maduro seeks financial aid

Russian President Vladimir Putin attends the talks with Venezuelan President Nicolas Maduro during meeting at the Novo-Ogaryovo residence outside in Moscow, Russia, Wednesday, Dec. 5, 2018. (AP)
Updated 05 December 2018

Putin vows ‘support’ as Venezuela’s Maduro seeks financial aid

  • Hit by low oil prices, mismanagement and the impact of US sanctions, Venezuela is in freefall and Maduro is seeking support from allies
  • Maduro, who took over following the death of Hugo Chavez in 2013, has come under strong pressure from Trump’s administration, which calls him a “dictator”

MOSCOW: Russian President Vladimir Putin on Wednesday voiced support for Venezuelan leader Nicolas Maduro as he visited Moscow seeking financial assistance for the socialist country’s collapsing economy.
Putin at a meeting at his residence outside Moscow told Maduro “we support your efforts to achieve mutual understanding in society and all your actions aimed at normalizing relations with the opposition.”
Putin added that “naturally we condemn any actions that are clearly terrorist in nature, any attempts to change the situation by force.”
Hit by low oil prices, mismanagement and the impact of US sanctions, Venezuela is in freefall and Maduro is seeking support from allies after winning a second presidential term this year.
Maduro, who took over following the death of Hugo Chavez in 2013, has come under strong pressure from US President Donald Trump’s administration, which calls him a “dictator.”
While he won the May elections, most of the international community did not recognize the results. Formally, Maduro’s second mandate only begins in January next year.
Maduro told Putin he was sure their talks would bring “good news for cooperation between our countries and for the economies of our countries.”
Putin spokesman Dmitry Peskov said ahead of the meeting that Maduro had traveled to Moscow specifically to ask Russia — itself the target of US sanctions — for financial assistance.
“The talks will focus on the help that the Venezuelan leadership needs,” Peskov told reporters, declining to be more specific on how much Russia could lend.
He said the economic situation in the Latin American country remained difficult but noted “signs of improving dynamics.”
Venezuela, which has been rocked by deadly protests and economic chaos, is counting on Russian support amid growing international isolation.
Food and medicine shortages have sparked an exodus of some two million people. The International Monetary Fund projects hyperinflation of 10 million percent next year.
After talks last year between Maduro and Putin, Russia, Venezuela’s major creditor, agreed to restructure $3.15 billion of debt from a loan taken out by Caracas in 2011 to finance the purchase of Russian arms.
Largely isolated from the international community, Maduro is now trying to shore up support from his allies.
He was visiting Moscow after hosting his Turkish counterpart Recep Tayyip Erdogan in Caracas.
Russia and Venezuela enjoy a long history of ties and Maduro’s predecessor Chavez, known for his passionate tirades against the United States, was a welcome guest at the Kremlin.


‘Clear risks’ for stability in China’s Pacific lending, Australian think tank warns

Updated 20 min 46 sec ago

‘Clear risks’ for stability in China’s Pacific lending, Australian think tank warns

SYDNEY: China’s financial largesse in the Pacific carries “clear risks” for stability if left unchecked, a Sydney think tank warned, while saying allegations of “debt-trap” diplomacy are so far overblown.
In a study released Monday, the influential Lowy Institute warned that fragile Pacific nations risked borrowing too much and leaving themselves exposed to demands from Beijing.
China has repeatedly been accused of offering lucrative but unserviceable loans to gain leverage or snap up strategically vital assets like ports, airports, or electricity providers.
While Lowy said allegations that China was engaged in “debt-trap” diplomacy in the Pacific were overblown, the trend was not positive and countries like Papua New Guinea and Vanuatu were dangerously exposed.
Between 2011 and 2018, China committed loans to the region worth $6 billion — around 21 percent of regional GDP.
A majority of that money, $4.1 billion, was earmarked for Papua New Guinea.
Only a fraction, less than $1 billion, has so far been dispersed but China is still the single largest creditor in Tonga, Samoa, and Vanuatu.
“The sheer scale of Chinese lending and the lack of strong institutional mechanisms to protect the debt sustainability of borrowing countries mean a continuation of business as usual would pose clear risks,” the report said.
The South Pacific has become a forum for intense competition for influence between China, the United States, and Australia in recent years.
The island nations sit on a vital shipping crossroad, contain vast reserves of fish stocks, and provide a potential base for leading militaries to project power well beyond their borders.
Beijing has stepped up engagement in the region through a series of high profile visits and no-conditions lending via its Belt and Road Initiative.
The Solomon Islands and Kiribati recently announced they would switch diplomatic recognition from Taiwan to Beijing after a long courtship by the country’s Communist leaders.
Six Pacific governments are currently debtors to Beijing — the Cook Islands, Fiji, Papua New Guinea, Samoa, Tonga, and Vanuatu.
Lowy said many of China’s loans carry a modest two percent annual interest rate.
But it warned that China would need to adopt formal lending rules if loans were to be made sustainable as natural disasters like earthquakes, cyclones and tsunamis can quickly upend countries’ ability to pay back loans.
“Three small Pacific economies — Tonga, Samoa, and Vanuatu — also appear to be among those most heavily indebted to China anywhere in the world,” it said.