Venezuela: Maduro Blasts Sanctions, Sets Sights on Economic Recovery

Venezuelan President Nicolas Maduro presented his annual address to the new National Assembly

By Manuela Solé
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President Nicolas Maduro speaks before the National Assembly (Presidential Press)
President Nicolas Maduro speaks before the National Assembly (Presidential Press)

Mérida, January 13, 2021 (venezuelanalysis.com) – President Nicolas Maduro addressed the National Assembly in his annual state of the union speech on Tuesday.

The Venezuelan President offered his administration’s report to the newly sworn-in deputies, following legislative elections late last year, and focused on sanctions and the country’s economy.

“We’re facing a multiform attack, targeting aspects of the economy such as income, currency, foreign debt, oil production, and imports of essential goods," the Venezuelan president stressed.

According to Maduro, the impact of US sanctions on state oil company PDVSA meant production dropped by 69 percent between 2014 and 2019. Oil exports have historically made up some 95% of Venezuela's foreign currency income.

Maduro went on to call on lawmakers to make efforts to recover the nation’s assets frozen abroad as a key element for economic recovery. The Venezuelan government has denounced some US $30 billion worth of assets frozen in recent years, including a host of bank accounts and PDVSA’s US subsidiary Citgo. The company was the subject of legal battles before US courts granted control to self-proclaimed “Interim President” Juan Guaido, and is also at risk of seizure from bondholders and multinational corporations looking to collect on international arbitration awards.

On the domestic front, the president pledged efforts to strengthen the digital economy as well as protect the Venezuelan currency. The government will also move to allow foreign currency bank accounts while seeking ways to tax the growing dollar economy.

Venezuela’s Sovereign Bolivar (BsS) has devalued by around 60 percent since December and lost almost all its value since being rolled out in August 2018. Financial authorities moved to liberalize and then remove foreign currency controls altogether, but the measures failed to halt the Bolivar’s devaluation, which in turn has led to an increasing use of US dollars.

Whilst calling on the country’s productive sector to create more jobs and overcome the rentier state-centered model, Maduro praised Venezuelans on how they have coped with the economic crisis.

“Our country reinvents itself permanently, people have demonstrated intelligence and creativity to overcome limitations imposed by sanctions,” he stated after blasting Washington for its policy towards Venezuela. The president went on to defend his government’s record on social policies, taking aim at criticisms from the “Trumpist right” and the “sleepless left.”

Several leftist Chavista organizations have criticized the liberal turn in the government’s economic policy, arguing that an increased opening towards foreign capital comes at the expense of transparency and does not solve the country’s economic woes.

Another subject addressed in the speech was the international dispute over the Essequibo strip. Maduro stressed that Venezuela will defend its claim before any international instance and condemned the opposition’s action to undermine the country’s sovereignty.

On Monday, Executive Vice President Delcy Rodríguez had expressed the government’s concern due to the joint military exercises initiated between Guyana and the US. Caracas sent a letter to United Nations Secretary General Antonio Guterres denouncing the military maneuvers and asking for his diplomatic mediation.

The military drills coincided with a visit to Georgetown from US Southern Command chief Admiral Craig Faller, who met with Guyanese President Irfaan Ali on Tuesday.

“This is a day in which we mark another pivotal step forward in the enduring partnership between the United States and Guyana,” Faller said in a press conference. The Admiral’s visit also saw Venezuela’s neighbor sign a military cooperation agreement with the United States.

The diplomatic dispute over the Essequibo territory recently came to the fore following the discovery of an estimated 15 billion barrels of oil in the strip’s maritime waters. Venezuela has voiced opposition to Guyana’s decision to allow oil giants to drill for oil, arguing that it violates the 1966 Geneva Agreement.

Edited and with additional reporting by Ricardo Vaz from Mérida.

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