By Dan Calabrese
Venezuela has become a charity basket case. It’s economy has collapsed, its currency is worthless and political institutions are hanging on by the threat of force alone. It has squandered the value of its oil resources through the corruption and mismanagement of the socialist Chavez/Maduro regime, and anyone who floats Venezuela a loan has to be prepared to never see the money again.
That puts China in an interesting position. China has a geopolitical interest in seeing a socialist state survive in the Western Hemisphere, but Venezuela is very much a double-edged sword for the Chinese communist. It may be a strategic pain in the neck for the United States, but it’s a bigger pain in the neck for its own people and the fellow leftist regimes trying to continually prop it up so Venezuela can survive in spite of itself.
Three years ago, China stopped lending Venezuela money because it was like flushing the money down the toilet. Now Nicolas Maduro is running out of places to go, and he’s returned to his old patrons in the hope they will see their way clear to turn the ATM on again.
Not so fast, say the Chi-Coms:
Venezuela was willing to “explore effective financing methods” with China and strengthen cooperation with China in the energy sector, media added, citing Maduro, without elaborating.
Xi told Maduro the two countries should promote mutually beneficial cooperation to take relations to a new stage, and they should consolidate political mutual trust, state television said.
China would, as before, support the Venezuelan government’s efforts to seek stability and development, Xi added.There was no mention in the report of China agreeing to provide new funds for Venezuela.
Over a decade, China ploughed more than $50 billion into Venezuela through oil-for-loan agreements that helped China secure energy supplies for its fast-growing economy while bolstering an anti-U.S. ally in Latin America.
The flow of cash halted nearly three years ago, however, when Venezuela asked for a change of payment terms amid falling oil prices and declining crude output that pushed its state-led economy into a hyperinflationary collapse.
Venezuela’s finance ministry in July said it would receive $250 million from the China Development Bank to boost oil production but offered no details. Venezuela previously accepted a $5 billion loan from China for its oil sector but has yet to receive the entire amount.
There comes a point where a creditor is simply out of its mind to keep floating loans to a debtor who never cleans its act up. China may like the idea of a strategic ally in this part of the world, and may have been willing to accept some losses to keep said ally in place. But you can’t keep that up forever.
China is already burdened by the challenge of its increasingly insane “ally” in North Korea, and now it’s being asked to float bad loans to Venezuela even as the Maduro regimes proves itself incapable of righting its own ship.
Here’s a thought: Maybe China chose the wrong team to play on in a global sense. The Chinese communists may like the absolute control they enjoy over their country, and the ability to help themselves to whatever wealth the country produces without any political accountability. But when all your allies around the world are corrupt, bankrupt and untrustworthy, maybe you don’t really have such a good deal going after all.
But the Maoists made their choice long ago. And now that the Soviet Union has collapsed, China is stuck in the position of being the never-ending ATM to tinhorn socialist dictators around the world who can’t do anything but keep coming to Beijing hat-in-hand.
Hell of a system, socialism. No wonder Bernie and Elizabeth and Alexandra and Barack want it here.
Dan writes Christian spiritual warfare novels and does all kinds of other weird things too. Follow all his activity by liking him on Facebook!