Caracas Chronicles

Photo: Manaure Quintero / Reuters retrieved

The People’s Republic of China has supported the Bolivarian Revolution for years, as we have reported in the past, but the involvement of the Asian giant has meant funding development projects that failed to materialize.

Recently, Angus Berwick from Reuters reported on one of those projects: roads, bridges, and a $200 million rice-processing plant signed in 2010 by CAMC Engineering, a subsidiary of the state-owned China National Machinery Industry Corporation. Now, half-finished, the plant provides less than one percent of the promised production, and according to locals, not a single grain is locally grown rice. “Everything was abandoned,” Victor Meza said to Reuters, state coordinator for rural development. “Everything was lost. Everything was stolen.”

But that doesn’t mean a few didn’t reap a good share.

According to an indictment by an Andorran high court, CAMC paid over $100 million in bribes to Venezuelan middlemen in order to guarantee at least five agricultural contracts, including the rice plant. With presence in Africa, Asia, Eastern Europe and the Americas, the company has been embroiled in similar accusations involving the governments of Rafael Correa in Ecuador and Evo Morales in Bolivia.

The involvement of the Asian giant has meant funding development projects that failed to materialize.

This is part of a wider investigation on the Banca Privada d’Andorra, which was intervened in 2015 due to suspicions of money laundering. The Andorran judiciary has brought up illegal commissions going through this bank, connected to state-owned oil company PDVSA.

Reuters also mentions Andorra investigated two projects by another state-owned Chinese company. Sinohydro, builders of the Three Gorges Dam and with a presence in over 80 countries, came to Venezuela in 2010 to develop four power plants. None of them ever became functional, but Sinohydro listed El Palito and La Cabrera thermal plants among their finished works, despite reports of the local press. However, nobody related to Sinohydro has been indicted.

Of the 12 Venezuelans charged by the Andorreans for felonies or money laundering, the most important is Diego Salazar, Rafael Ramírez’s cousin, who served as Oil Minister from 2002 and head of state-owned oil company PDVSA from 2003, until 2013. The last we heard of Salazar is that he’s currently being held by the Bolivarian Intelligence Services (SEBIN) in their headquarters in Plaza Venezuela.

Salazar is the center of what has been dubbed “the Salazar group”, a web of corruption involving PDVSA, government officials and entrepreneurs allied to the Bolivarian Revolution that include Nervis Villalobos, Energy Minister between 2001 and 2006, who is currently held by the Spanish authorities for his involvement in money laundering with yet another bank.

Overall, 16 people have been charged, among them four other Venezuelans, including the former ambassador to Beijing, Rocío Del Valle Maneiro, who is currently Venezuela’s ambassador in the UK. Maneiro, as has been reported, has $4 million stashed in the Banca Privada d’Andorra, according to the country’s financial authorities.

In total, the five unfinished agricultural projects which CAMC committed reached a value of $3 billion. According to Reuters’ Berwick, the company got half of the $200 million for the rice-processing plant project and only 40% for the four other initiatives, for a total of $1.4 billion that have yet to produce any benefits for the Venezuelans.

Neither CAMC nor any of its executives were charged in the indictment, but the company released a statement where it said that the case file presented “a large number of inaccuracies” and that their company in Venezuela works in “adherence to the idea of integrity and strives to complete every construction project with the best technology and management”.

The Chinese Ministry for Foreign Affairs sent a statement to Reuters declaring these accusations “obviously distorted and exaggerated facts” and that cooperation between the two countries will remain to be “based on equal, mutually beneficial, and commercial principles.”

Of the 12 Venezuelans charged by the Andorreans for felonies or money laundering, the most important is Diego Salazar, Rafael Ramírez’s cousin, who served as head of state-owned oil company PDVSA from 2003, until 2013.

Meanwhile, the UN Food and Agriculture Organization, which in the past had congratulated the Venezuelan government for reducing hunger,  declared that a famine is a real possibility and said that Maduro’s policies are directly responsible for it. As our own Juan Carlos Gabaldón reports:

“Furthermore, the number of malnourished people in Venezuela has tripled in just four years, from 3.6% in 2013 (when FAO awarded the government) to 11.7% in 2017, a gap of 3.7 million people.”

It remains to be seen if this affects the diplomatic relations between Venezuela and China in any way in the future. The Chinese government has lent over $50 billion to the Venezuelan government since 2007, for housing, telecommunications and, of course, oil. Maduro himself said in a 2017 speech, that these projects mounted to a total of 790.

But between unpaid loans, unfinished projects and diminishing barrels of oil every day, one wonders when Venezuela will stop being an asset and be seen instead as a liability.