Caracas Chronicles

Today, National Assembly Speaker, Julio Borges along with a group of Venezuelan assembly members, will board a plane — if the powers that be at Maiquetía let them — bound for St. Petersburg. Borges will preside over the 137th session of the Inter-Parliamentary Union’s yearly assembly to be held this year in Russia, joined by representatives of 700 parliaments worldwide.

The symbolism is serious. Law-makers from around the world over —including Russia— will recognize the National Assembly (AN), and not the National Constituent Assembly (ANC), as legitimate Legislature elected by the Venezuelan people.

Legitimacy has been the opposition’s battle flag ever since MUD’s landslide victory in parliamentary elections back in 2015. Maduro’s strategy has been to gradually strip the AN of its functions: legislating, appointing judges, appointing electoral authorities, oversight, paying its staff, and, perhaps most importantly for a cash-strapped dictatorship, approving debt issues and energy joint ventures.

When it comes to asserting its legitimacy, for all the broken promises, missed opportunities, failures and disappointments that our AN leadership has dealt us over the past two years, one effort stands out as effective, and, ironically mostly underestimated. Borges’s silent but diligent crusade of cautioning embassies, governments and investment banks that any financial operations or public contracts carried out by Maduro’s government without parliamentary approval are illegal and unconstitutional. It’s working. Along with individual and financial sanctions, Borges’s strategy has severely hamstrung the government’s drive to pawn off whatever needs pawning off to pay the next maturity. 

But how is this kind of pressure supposed to translate into the only outcome that could conceivably save Venezuela from this horrendous crisis, a change in regime? And will Borges be able to deliver before his short tenure as AN Speaker ends and UNT takes over next January, or before the window of international focus on Venezuela closes?

We sat down with Julio Borges, on the eve of his Russia trip, to ask him.

Caracas Chronicles: Did you embark on this international strategy once you became Assembly Speaker?

Julio Borges: Yes. One of the things we had already planned when we took on the role of heading the National Assembly was this strategy. We publicly announced then that we were going to demonstrate that it was Nicolás Maduro who was in contempt [and not the] Parliament. We knew we were going to walk down a path where we would demonstrate that Nicolás Maduro was outside the Constitution, knowing that we would be able to vindicate the Parliament’s authority on national interest contracts, debt and other particular laws such as the matters of strategic oil associations or joint ventures. 

CC: Was the strategy based around those letters you sent to embassies and investment banks?

JB: Yes. We started working on providing direct information to various banks about what this meant on two specific front: from the legal standpoint, we told them they were aiding and abetting a violation of the Venezuelan Constitution and Venezuelan legislation; and another which turned out to be as effective as the legal explanation: reputation, or essentially what it means for a bank to do business with a dictatorship or with a government that violates human rights or that is destroying a country’s democracy.

CC: Are you referring to the criticism of Goldman Sachs’ bond purchase operation?

JB: The Goldman Sachs case was a serious blow and eventually, a bank that has traditionally cared little about reputation matters, such as Deutsche Bank, used its own internal codes. The result was that the Goldman Sachs debacle had an impact on other very important organizations and…

CC: Credit Suisse?

JB: Then came Credit Suisse, and that has led not only the financial world, but also the political world of countries, to clearly realize that the Venezuelan government was developing an entire financial system that was absolutely illegal, that is destroying democracy and human rights in the country. It’s worth noting that when Maduro came up with the National Constituent Assembly, I have no doubt he thought that, among many things, he’d be able to sidestep Parliament’s political control and establish his own.

CC:You mean that president Maduro thought that the Constituent Assembly would be able to authorize new oil joint ventures or new debts?

JB: Exactly. One of his main motivations for convening the Constituent Assembly was that it was supposedly a mechanism established in the Constitution and everyone would recognize it, that everything he had been doing though the Supreme Tribunal of Justice, he could do through the ANC with the world’s blessing. Which is why I think that it was a surprise and a tremendous blow for the government to see how the entire world not only condemned the ANC, but also disavowed all its proceedings and appointments.

I think we have been carrying out a very important task, making sure that the world knows of only one valid entity of the people’s sovereignty, the National Assembly elected on December, 2015. This is when the government’s scheme to replace the National Assembly as an authority on financial operations, contracts, debts and all the other dealings they wanted to push through to do failed. In that regard, I think the government’s plan backfired. They thought they were clearing their illegitimacy with the ANC and ended up covered in it, because one of the things the world clearly understands about Venezuela’s situation is that the ANC is illegal, unconstitutional and illegitimate in all aspects, from its voting system, to the way it was convened and the electoral fraud itself – as stated by Smartmatic. Nearly 60 countries worldwide do not recognize the ANC’s decisions, so if we see the government’s project now, two months after its installation, it’s weak and has only been useful for repressing and persecuting dissidents, and removing the prosecutor general…

CC: In order to force a negotiation?

JB: Perhaps that’s their last ace for negotiation, in the sense that the ANC is essentially holding the State hostage, just like political prisoners are hostages for negotiation, there’s a thing called Venezuelan State that the ANC is holding for ransom.

CC: How was the strategy followed with China?

JB: In China’s case, we basically explained the situation. I had the chance of traveling to China last year as a guest of the Chinese government and we have had good relations ever since.

CC: Have the Chinese expressed concern to you about non-compliance with regards the loans they have been granting the government?

JB: Absolutely.

CC: Does this include loans approved during Chávez’s administration?

JB: Totally.

CC: After that visit, was China less willing to continue lending to Venezuela?

JB: Venezuela used to be the most important country in Latin America for Chinese investment and now, it’s been waysided. I think the Chinese have a more practical, less ideological approach.

CC: Would you say that those complaints are the reason why PDVSA Finance vice-president Simón Zerpa has not been able to reach an agreement with the Chinese for a bailout?

JB: Yes, for several reasons. Firstly, because it’s clear to them that there will be political change in Venezuela; second, the Chinese are thinking long-term, beyond a Maduro government; and third, they don’t want to keep losing money because, regardless of what people might think, the Chinese are smart, because the agreements were bound to the purchase of Chinese supplies, equipment and projects. In the end, they want the projects to work out, they want coherence, not just someone selling garbage, another one buying garbage and a third one stealing the money in the process. That’s not their approach and that’s why criticism is growing. I’m amazed by the strong, raw criticism regarding financial management and the chaos of projects started but never finished, like abandoned graveyards. These projects, such as railways and the Guarenas-Guatire train cannot be resumed now.

CC: But PDVSA’s Finance vice-president was in China for several weeks and returned empty-handed

JB: China made a political decision, they could help Venezuela or Maduro by providing certain conditions, such as when they granted a grace period. They can accept non-payment but they won’t grant new loans and they will provide some flexibility in oil shipments, but I don’t see the Chinese investing in Venezuela – even though they have the money – because they know that if they do the accounting and review of all their investments, there is nothing to show for them.

CC: Was the National Assembly lobbying as a counterweight to Zerpa’s attempts at negotiating a deal?

JB: Yes.

CC: Do the Chinese buy the legal argument that a contract requires National Assembly approval?

JB: Absolutely. I think it’s one of the fears they had when they invited us. It was a part of the conversation and also, their trust grows with the fact that we tell them that our relations with China are not ideological or political, we just want mutual benefit, progress and a long-term vision. Now, the government wants to sell the story that Putin and China are their allies, in a kind of imagined Cold War, but I think that’s not true, at least in China’s case, because we see how they are starting to cooperate with the United States regarding North Korea. I do believe, and this is a very personal opinion, that there’s a political ingredient for Russia in the Venezuelan issue, but not for ideology but rather to create a nuisance for the United States, but in that sense, Nicolás is playing the useful fool because Russia is simply using Venezuela, the interests and assets in our country to bother the United States, not because they care about Venezuela or Maduro or their so-called revolution.

CC: But Rosneft does have a strategic interest in the investments they have made in the Orinoco Oil Strip.

JB: In that case, yes, there’s an economic interest.

CC: Are you planning on visiting Moscow?

JB: I’ll be attending the meeting of the World Inter Parliamentary Union in Saint Petersburg. That’s important because we will be able to head the meeting of world parliaments and it’s a great boost for the Venezuelan parliament, which is going to be fully recognized by all the world’s parliaments. It’s a good opportunity because just like with the Chinese, we have the chance to actively dismantle the prejudices and walls they might have, regarding the idea that if we establish a government we won’t keep doing business with China and we’ll throw Moscow under the bus, and that’s a mistake, that’s not our roadmap, on the contrary. If we have relations with China, they should be for mutual benefit, just like the ones we want with the United States, with Russia and with the European Union or any other country. Everything is important in the end because the government wants to cause alarm with the myth that if we reach power, we’ll scrap all the social programs, hand over the Orinoco Oil Strip to the Americans, disregard the debt with the Chinese or break relations with Russia.

CC: Can the debt be paid?

JB: I don’t know, but we’re willing to establish a relation to allow us to refinance or renegotiate the debt.

CC: Are you considering negotiations with multilateral institutions such as the IMF?

JB: Of course. What I want to say is that it’s not our intention to establish a government and then ignore the agreements with China. If we default with China, we default with everyone because that’s now really globalized and universalized.

CC: If international recognition of the National Assembly has been secured, where do these rumors that a part of the opposition wants to recognize the ANC come from?

JB: That’s a falsehood stemming from the meeting in the Dominican Republic where the government said that one of the necessary commitments or pre-conditions that we reached with them was recognizing the ANC.

CC: Did that happen during the meeting in the Dominican Republic?

JB: That was one of the points in the government’s agenda, they want recognition for the ANC as a product of negotiations, but we don’t want that. It’s like water and oil.

CC: Do you think that the government wants that because they’re desperately trying to secure financing?

JB: When I say their move backfired, that’s because it’s not just financing. Now there’s no way for the ANC to fulfill Parliament’s role, even if we were to recognize it, the world wouldn’t. I think that, beyond the financial issue, the government has lost international legitimacy. We see it when we see Japan, a typically neutral nation, talking about Venezuela while the European Union is currently discussing sanctions, the Vatican, the Lima Group, and it’s not often that Canada imposes sanctions. We’ve seen how Venezuela has become a global issue and I don’t see any country supporting the government, except for China, Russia or North Korea.

CC: Don’t you think there could be a shift in global support, if the government buys enough time?

JB: This process is here to stay, unless there’s such a huge change that López Obrador wins the Mexican presidency, Evo Morales is re-elected and Brazil’s political map changes, which could still happen, but with world powers —beyond Latin America— I think the process is irreversible for a simple reason: if we take a look at the history of this international campaign, Venezuela’s situation used to be unknown to everyone and we had to call them to explain it, we were in a process in which some external political groups supported us while others were pro-chavista fanatics.

Now, it has become a bipartisan issue, for instance, in the United States both Republicans and Democrats are united on this; in Spain, it used to be sacrilege to criticize Chávez in the presence of PSOE and now we see them working along with PP on this matter, and Podemos has been forced to take a back seat because there’s a national consensus on this. The Venezuelan situation no longer divides but rather joins nations against Maduro, it used to be a divisive topic, so in the countries where this issue is relevant the discussion is here to stay.

This is going to get worse with the triggers of this whole situation, I mean, countries have interests in Venezuela because they share democratic values with us, but they’re also suffering the Venezuelan crisis firsthand because the migration situation is a serious issue for Latin America. There are half a million Venezuelans in Colombia; Venezuelans constitute 5% of Panama’s population, and there are between 200,000 and 300,000 Venezuelans in the United States. In cities near the border with Roraima state in northern Brazil, which used to have 30,000 inhabitants, now 70,000 Venezuelans are arriving monthly, that is, more people than are currently living in those cities, and I was shocked to learn that there are 200,000 Venezuelans in Chile, same with Spain. Venezuela is no longer an isolated issue, it’s now impacting other countries’ governability, resource management and social cohabitation. And if we add other problems such as corruption, we see what’s happening in Europe, where government cronies have turned the real estate business and the labor market upside down, and have even started corrupting political officials in those countries.

CC: Have you discussed the narconephews or accusations against Diosdado Cabello in these meetings?

JB: Yes, we have discussed them. There’s a phrase I constantly repeat: global democracies can’t allow the consolidation of a second Cuba that, unlike the original Cuba, has the largest oil and gas reserves in the world, as well as large gold and mineral deposits. A Cuba with these resources would mean subversion in all corners of the world. For instance, during our meeting with Angela Merkel, she asked me two questions, one regarding the the presence of extremist Islamic groups in Venezuela, as pointed out by the head of CIA; and the second, regarding Russia’s interests in Venezuela, which are also a problem.

CC: How does this strategy of blocking further financing fit into bringing about regime change?

JB: The entire process is focused on mounting pressure. I’m talking about this year’s street protests, Parliament’s work, international pressure, everything is focused on undermining the government’s stability and either forcing them to accept a serious negotiation, or making them collapse to allow regime change. That’s the goal of all the pressure that we’ve been trying to advance.

CC: Could the financial aspect of this strategy be the tipping point?

JB: It’s just another element. In the end, that last straw is unpredictable.

CC: Has the government been unable to get any kind of financing?

JB: They haven’t secured any fresh financing for the last three years.

CC: We understand you managed to prevent a loan from the Corporación Andina de Fomento?

JB: Yes. We prevented a loan from CAF and also an operation in gold with Deustche Bank. Every time we get reports that something like that could happen, we intervene.

CC: Have you met with companies associated with PDVSA?

JB: I haven’t had the chance.

CC: Should they be worried?

JB: I think so. This is a personal opinion, but I think oil companies can endure more and are used to doing business in the most adverse contexts, but they’re also greatly concerned about the country’s situation and this is about long-term business.

CC: Shoulnd’t you also focus your lobbying efforts on the oil companies?

JB: At least in the case of strategic associations or rather joint ventures, one of the things Chávez used to say time and again is that in order to create them, one of the great accomplishments he boasted about is that they had to obtain the National Assembly’s authorization and now they are completely ignoring that. They have tried to accomplish that through other means, such as the infamous Supreme Tribunal rulings [155 and 156] that we disregarded.

CC: What was that the main motivation behind those rulings? To allow energy joint ventures without AN approval?

JB: That was the original goal.

CC: This is why you think that the ANC was established, to circumvent these issues?

JB: Absolutely. In the current financial context, the government’s fundamental goal has been to try and bypass the National Assembly via the TSJ, the ANC or through a direct agreement without any checks, and they have only managed to destroy their own platform.

CC: What could happen in the next few months? Do you think that there will be default?

JB: I have conflicting information in that regard. Some people say yes, the government will pay, while others say they have the money but the logistics are difficult, and still others say that they have the money but I prefer not to speculate.

CC: Can you picture Maduro rectifying economic policy?

JB: They have tried to approach us for discussing other matters and we have refused them, since the Assembly can’t be valid for some points of interests and powerless for others. There are important matters that the government should consider, debt restructuring must also be approved by Parliament, but they don’t care about that or understand the economic implications. I think the issue at heart is that the government won’t change its economic model. We have been talking about that for the past four years and absolutely nothing has been done, they simply keep radicalizing the model.

I think the government believes that their only chance of survival is further destroying the economy and therefore, forcing people into having to depend on them, so that elections have to do with the carnet de la patria. The other matter that is really painful is that the government doesn’t care for the people, they’ve held onto power through hunger, death, violence and human rights violations. The government has shown that they are not moved by people’s suffering, in fact they have turned it into a practical and ideological justification to hold onto to power.

CC: But the government always ends up getting financial support through shady means

JB: On the contrary, financial support is dwindling, assets are running out and whatever they want to sell, they have to do it with the National Assembly’s approval. I think that their walls are closing in. This government’s only hope is for oil prices to rebound again.

CC: That could happen…

JB: Perhaps, but they are in such a disastrous level right now that not even a boost in oil prices could normalize the situation, since our present context includes many issues where the international opinion has made up its mind.

CC: Do you think the ANC could take over the legislative role to solve financing problems?

JB: I don’t think so, because it lacks the legitimacy to do so.

CC: Is there a possibility that ANC head Delcy Rodríguez might approach the AN to find a joint solution to the situation?

JB: I don’t think it will come to that. The government has started this negotiation process and we’re taking the first steps, to prepare not just for these fourth quarter maturities, but for the next ones, when individual and collective sanctions will be in full swing. If they pay now, they’re out of money. The chances of a default are very high and that’s why they’ll try to negotiate, but always with their arrogance.

CC: Do you have a plan on what to do with that debt if and when the opposition establishes a new government?

JB: Yes. We have various perfectly aligned working groups doing many things, and they have a clear vision of how to do things in a very short period of time both at the humanitarian and financial levels, even in terms of structural economic changes.

CC: Does that include debt restructuring?

JB: It seems that there’s no other way.

CC: We understand that you’ll step down as Parliament Speaker in January

JB: Due to internparty agreement of rotating Speakers, my term ends on January 5th, 2018.

CC: Who will follow up on this international and financial strategy next year when you’re no longer National Assembly Speaker?

CC: The next party to head the Assembly will be Un Nuevo Tiempo. Perhaps it will fall to Enrique Márquez, Stalin González, Delsa Solórzano and I understand that Luis Emilio Rondón is also a candidate. Any of them will follow up on that strategy.

CC: With the same priority as you?

JB: To me, the international matter was clearly something that had to be done. Each administration prioritizes different things, but I’m confident my successor will continue on that work.

CC: Do you see China or Russia pressuring for a solution to the political crisis in Venezuela? Do you see them as mediators?

JB: I do. Both China and Russia also want normality and stability in Venezuela. They’re already pressuring in their own way.