Oil for Venezuela Foundation Offers Roadmap for People-Centered Negotiations

The Oil for Venezuela Foundation, led by Venezuelan economist Francisco Rodríguez, released its publication «Cooperative Responses to Venezuela’s Crisis: A Roadmap for Negotiations» on Wednesday, October 18t. The authors delve into the causes of the humanitarian crisis that Venezuela is undergoing and the different proposals to tackle it.

The text provides policy recommendations for designing humanitarian programs capable of delivering immediate and sustainable results through agreements among the country’s major political players.

«In the context of the resumption of talks between the Unitary Platform and the Maduro government, Cooperative Responses to Venezuela’s Crisis presents various options at the negotiators’ disposal to reach efficient and sustainable agreements, resulting in tangible improvements in Venezuelans’ quality of life,» Rodríguez, the book’s primary author, stated.

The publication, co-authored by economists Giancarlo Bravo and Guillermo Guerrero, delves into a range of potential cooperative agreements and deals. These require the commitment of all signing parties — whether the opposition, government, civil society, or the international community — to work collectively for the benefit of Venezuelans.

Reversing the Collapse to Address the Crisis

«Between 2012 and 2020, Venezuela’s real per capita GDP contracted an astonishing 72%, marking one of the largest economic catastrophes in modern history,» reads the book. The authors argue that this economic collapse was the primary reason behind the exodus of 7 million Venezuelans.

They point out that evidence suggests that sanctions are linked to a significant drop in oil production. While estimates vary, they believe that easing sanctions could lead to an increase of over 600,000 barrels per day in Venezuelan oil production. Coupled with a possible significant reduction in the discount at which Venezuelan oil is currently sold, this could result in an increase of up to $21 billion in export revenues.

They suggest that the best way to ensure that the revenue generated from this easing is through designing an oil-for-essentials exchange program. They propose that revenues from programs allowing crude sales could be deposited in escrow accounts jointly managed by the Maduro administration and representatives of Venezuela’s democratic forces or earmarked for pre-agreed oil-for-products swaps.

The authors estimate that the country has currently lost access to at least $11 billion in frozen liquid assets abroad and $9 billion in potential financing from Regional Development Banks, the Andean Development Corporation (CAF), the Inter-American Development Bank (IDB), the World Bank (WB), and the International Monetary Fund (IMF). They subsequently explore cooperative proposals that could allow the establishment of consensus boards among the country’s political factions to access these resources to implement humanitarian programs.

Protection of Assets Abroad

Cooperative Responses to Venezuela’s Crisis calculates that Venezuela’s debt, which creditors can legally use as a basis to seize shares of CITGO’s parent company in the US, PDV Holding, exceeds or is near the refiner’s estimated value.

The text concludes that a cooperative agreement among the country’s various political groups might be the only tangible chance to prevent the loss of Venezuela’s crown jewel abroad, CITGO. This debt far surpasses the value of the country’s liquid and non-liquid assets overseas, according to the book.

A Comprehensive and Inclusive Negotiation

Cooperative Responses to Venezuela’s Crisis determines that for future negotiations to yield beneficial results for Venezuelans, they should focus on achieving tangible improvements in Venezuelans’ living conditions and not exclusively on political matters.

In this regard, they recommend expanding negotiations to include civil society actors, non-governmental organizations, and human rights advocacy groups.

The text deeply analyzes the design and scope of the social assistance policies the Venezuelan state has implemented in recent years. These include the Local Committees for Supply and Production (CLAP) food assistance program and the Fatherland Card social assistance platform.

«The focus of the negotiations should be addressing the severe humanitarian and economic crisis impacting the most vulnerable sectors,» Rodríguez assured. «Signing the Barbados agreement is an essential step, but a genuine willingness to redirect this negotiation process to produce results addressing people’s issues is necessary.»

They assert that while the scope of both programs is significant, evidence suggests that Venezuelans aligned with the ruling party tend to benefit more from them.