Venezuela’s Maduro cuts ties with US after Trump backs rival, Kremlin warns of dangerous actions

Venezuelan opposition leader Juan Guaido declared himself interim president on Wednesday, winning the backing of Washington and many Latin American nations and prompting socialist Nicolas Maduro to break relations with the United States. (Reuters)
Updated 25 January 2019

Venezuela’s Maduro cuts ties with US after Trump backs rival, Kremlin warns of dangerous actions

  • Russia has warned of bloodshed if the US intervenes further in Venezuela
  • Juan Guaido declared himself interim president with the backing of Donald Trump

MOSCOW/BRUSSELS: Russia accused the US on Thursday of trying to usurp power in Venezuela and warned against military intervention, putting it at odds with Washington and the EU which backed protests against one of Moscow’s closest allies.

Venezuelan opposition leader Juan Guaido declared himself interim leader on Wednesday, winning the support of Washington and parts of Latin America. That prompted socialist President Nicolas Maduro, who has led the oil-rich nation since 2013, to sever diplomatic ties with the US. 

The prospect of Maduro being ousted is a geopolitical and economic headache for Moscow which, alongside China, has become a creditor of last resort for Caracas, lending it billions of dollars as its economy implodes. Moscow has also helped its military and oil industry and provided wheat.

Russia on Thursday accused Washington of stoking street protests and called Maduro the legitimate president.

“We consider the attempt to usurp sovereign authority in Venezuela to contradict and violate the basis and principles of international law,” Kremlin spokesman Dmitry Peskov said.

The Russian Foreign Ministry said an outside military intervention could have “catastrophic consequences.”

Turkish President Tayyip Erdogan offered support for Maduro too. “My brother Maduro! Stand tall, we stand by you!” presidential spokesman Ibrahim Kalin, writing on Twitter, quoted Erdogan as saying. China also said it supported efforts to protect Venezuela’s independence and stability.

The EU, which has imposed sanctions on Venezuela and boycotted Maduro’s swearing-in for a second term earlier this month, took a more nuanced tack.

Although it stopped short of following Washington and recognizing Guaido as interim president, it appealed for him to be protected and appeared to support calls for a peaceful transition of power away from Maduro.

“The people of Venezuela have massively called for democracy and the possibility to freely determine their own destiny. These voices cannot be ignored,” the 28-nation bloc said.

The biggest group in the European Parliament, the center-right European People’s Party, said it recognized Guaido as interim president and would call on the whole Parliament to do so next week as a senior lawmaker urged Maduro to quit.

French President Emmanuel Macron saluted Venezuelans marching for freedom. Germany, Switzerland and Portugal called for free elections, and Spanish Prime Minister Pedro Sanchez told Guaido he supported the Venezuelan Parliament.

Britain said Maduro’s 2018 election was neither free nor fair and expressed support for Guaido.

There was nervousness about how far the EU could go however.

“The problem is that we can’t recognize somebody who was not elected democratically,” said one EU diplomat. “That would create a dangerous precedent for any other person who would want to proclaim themselves the president of something.”

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

Updated 27 min 1 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.