May 19-25, 2022 | Issue 9 - SOUTHCOM Team
Daniel Ruiz, Jhamil Moya, Stacey Casas, SOUTHCOM Team
Jennifer Loy, Chief of Staff
Venezuelan President Nicolás Maduro[1]
Date: May 20, 2022
Location: Venezuela
Parties involved: Venezuelan President Nicolás Maduro; Venezuelan government; US President Joe Biden; US government; foreign investors; Venezuelan state-owned and natural gas company, Petróleos de Venezuela, S.A. (PDVSA); Chevron Corporation
The event: The Venezuelan government has announced that they will begin offering foreign investors 5 to 10 percent stakes in their domestic companies. On Wednesday, May 11, President Maduro stated that Venezuela needs the “capital for the development of all public companies.” Domestic firms impacted in the country range from telephone and internet service providers to petrochemical producers. In response, the Biden administration has announced an easing of economic sanctions on Venezuela in a gesture to support talks between Maduro and the Venezuelan opposition. Chevron will now be able to negotiate its license with PDVSA but will not yet be allowed to drill or export any petroleum of Venezuelan origin.[2]
Analysis & Implications:
The easing of economic sanctions on Venezuela will likely increase talks between the two countries to cooperate in areas other than hydrocarbon trade. Increased cooperation will likely benefit Venezuela economically as an influx of money flowing into the country will likely help the government make needed investments in infrastructure, health, and education.
If further talks between the US and Venezuela continue and Venezuela’s economy is boosted, the government will likely provide more incentives to foreign investors by increasing their stakes in local companies. The US economy will likely benefit from reduced sanctions by purchasing Venezuelan oil in large quantities at affordable prices, very likely helping counter rising oil prices in the US.
Some high-risk investment companies will likely see a potential new market in Venezuela, considering the US easing of economic sanctions imposed on this country. By opening its economy to foreign investors, the Venezuelan economy will likely look more attractive to countries that want to invest in high-risk markets with a similar style of market politics, such as Chile, Argentina, and Ecuador. However, a 5 to 10 percent stake in a company will unlikely influence many foreign investors, who will very likely view the investment climate in Venezuela as too risky due to its political and economic issues, such as political corruption and hyperinflation. Unless Venezuela agrees to offer a higher percentage stake to foreign investors, many potential investors will likely be deterred from investment opportunities in Venezuela since current percentages are not large enough to give private investors decision-making rights within these companies.
Chevron and PDVSA will likely cooperate to improve their capabilities to extract oil from Venezuelan wells to meet US oil demand. With stakes in the company, Chevron will likely be in a better position to offer technical advice to its PDVSA partners to continue oil exploration, very likely strengthening the Venezuelan oil industry. Increasing privatization of PDVSA will likely help improve PDVSA's services to the population and thus strengthen the Venezuelan economy.
Date: May 20, 2022
Location: Asuncion, Paraguay
Parties involved: Paraguayan government; Colombian government; Colombian Vice President Marta Lucía Ramírez; Prosecutor Marcelo Pecci; Paraguayan President Mario Abdo Benítez; Colombian Police Chief General Jorge Luis Vargas; First Capital Command (PCC)
The event: During her first visit to Asuncion, Vice President Ramirez announced that the inquiries into the murder of the Paraguayan anti-mafia prosecutor Mauricio Pecci were "quite advanced." Police Chief General Vargas also announced the arrest of 19 people in a raid against drug trafficking, and according to Colombian media, the Brazilian gang First Capital Command (PCC) is suspected of being behind the murder.[3] Pecci was killed during his honeymoon on May 10 in Cartagena, Colombia by two men in a speedboat.[4]
Analysis & Implications:
Further developments in the investigations will likely lead to the arrest of more individuals involved in the murder. Authorities are likely to uncover the involvement of gangs and criminal organizations throughout the region, which will likely encourage law enforcement authorities in other countries to join the investigation. Paraguayan authorities will likely increase their investment in protecting prosecutors and investigators by improving current protection schemes and hiring more bodyguards to prevent further murders.
The cooperation in gathering intelligence between Colombia and Paraguay related to security and international crime will very likely increase, almost certainly affecting the illegal drug trafficking in Colombia and money laundering in Paraguay. The PCC will almost certainly be affected by this international cooperation since this international criminal gang operates in both countries and its expansion in South America will likely slow down. Importance will likely be aimed at combatting the constantly expanding organized crime in South America, and being the fastest-growing criminal gang internationally with businesses ranging from drug trafficking to human trafficking, the PCC will very likely be the primary target.
________________________________________________________________________ The Counterterrorism Group (CTG)
[1] "VENEZUELA-CHAVEZ-FUNERAL" by Diario Critico Venezuela is licensed under CC BY 2.0.
[2] Venezuelan Government to Sell Shares of its State Companies, Global Americans, May 2022, https://theglobalamericans.org/2022/05/venezuelan-government-to-sell-shares-of-its-state-companies/
[3] Colombian VP says progress made on Pecci's murder probe, Merco Press, May 2022, https://en.mercopress.com/2022/05/20/colombian-vp-says-progress-made-on-pecci-s-murder-probe
[4] Dos hombres en lancha llegaron y asesinaron al fiscal antidrogas Mauricio Pecci, La Gran Noticia, May 2022, https://www.lagrannoticia.com/2022/05/10/dos-hombres-en-lancha-llegaron-y-asesinaron-al-fiscal-antidrogas-mauricio-pecci/ (translated by Daniel Ruiz)