Chávez Plans to Loot $29B in Venezuelan Reserves

By Roger Noriega

 

A secret document unveiled this morning by an opposition Venezuelan congressman discloses the extraordinarily risky decision by Venezuela’s ailing dictator Hugo Chávez to transfer all of Venezuela’s $29 billion in gold and cash reserves from Swiss, British, and U.S. banks to accounts in China and Russia. Such an unprecedented move could destroy international confidence in Venezuela, wipe out citizens’ savings, and suffocate an already faltering economy.


That the regime would take such an unusually dangerous move shows that Chávez’s cronies are worried that he may lose his bout with cancer and they may have to cede power. Evidently, they are more concerned with their own fate than for the well-being of the Venezuelan people. It is not too late to halt this plan, if the people can be rallied to oppose the looting of the nation’s savings. This is an opportunity for democratic politicians to show they can lead their nation out of the mess created by 12 years of Chavismo.
Any responsible person would accept that Venezuela’s international reserves should not be moved until the people understand how this decision will impact their lives, jobs, and savings. According to experts I have consulted, every Venezuelan will suffer if these funds are moved to less reliable banks. Venezuela’s currency may be devalued, shortages of imported goods will worsen, and companies that rely on foreign exchange will be strangled. Of course, the very poorest people, who Chávez claims to champion, will perhaps suffer the most. Like the rest of the country, they are being abandoned by cynical individuals who covet wealth and power that happens to belong to someone else.
It is clear that Chávez’s men want access to Venezuela’s $29 billion in gold and cash because they are worried about losing power. The fact that this decision was manufactured in secret during Chávez’s stay in Cuba shows that Castro and Chávez’s cronies want to preserve their access to Venezuela’s riches. Patriotic members of the military should be concerned that they are left without a future and options while Castro and Chávez’s inner circle protect their selfish interests.
This precipitous decision to take Venezuela’s international reserves out of secure accounts in Europe and the United States and to move them to China and Russia will likely lead global capital markets to conclude that Venezuela is not a reliable country. Venezuela will no longer have the “international reserves” that are required to sustain any modern economy. The ability of the state-owned oil company, PDVSA, and the republic to generate capital and attract investment will be seriously affected. And, placing these precious reserves in banks belonging to Venezuela’s biggest creditors in China and Russia may suit Chávez’s friends in those countries, but it is an unacceptable risk for the Venezuelan people.
Why notoriously corrupt leaders would want to get their hands on billions in gold is not a very complicated question. However, it is important to note that one of the reasons cited explicitly by Chávez’s decision document is the possibility that Venezuelan funds or dollar-denominated transactions could be frozen by the United States. Surely, Chávez’s advisors know that U.S. laws allow such sanctions only in the case of narcostates, sponsors of terrorism, or mass murderers. We know that Chávez’s brother has pledged an armed struggle to keep power and his army chief has said he would never accept the election of an opposition president next December 2012. But, are Chávez’s would-be successors planning Qaddafi- or Assad-style massacres? If they would go that far, why would they even run the risk of holding a campaign and elections?
The idea that Chávistas would resort to brutal repression or would cancel next year’s presidential elections is unthinkable to many. But, just yesterday, few would have imagined that Chávez and his cronies would have risked the country’s economy and people for his own political advantage and selfish personal interests. If Chávez succeeds in treating the country’s international reserves as a petty cash box or pension fund for his inner circle, Venezuela’s fate will be forfeited to another generation of dangerous leaders.