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US tightens Venezuela sanctions after Maduro wins 'sham' election

© Juan Barreto / AFP | Venezuelan President Nicolas Maduro was declared the winner of Venezuela's presidential election held on Sunday May 20, 2018.

Text by NEWS WIRES

Latest update : 2018-05-22

Venezuela faced growing international isolation and a deepening economic crisis Monday following President Nicolas Maduro's contested re-election as the United States tightened the screws on his regime over a "sham" vote.

Washington's stern reaction further ratcheted up the pressure on the leftist Maduro, after the Lima Group's 14 mainly Latin American members moved to recall their ambassadors in protest at the opposition-boycotted vote.

G20 countries Canada, Australia, Argentina, Mexico, Chile and the US said they would not recognize the result and would evaluate sanctions measures.

Branding the election "illegitimate," the six countries said on the sidelines of a G20 meeting in Buenos Aires that they were "considering possible political, diplomatic and financial sanctions against the authoritarian regime of Maduro."

Addressing cheering supporters outside Miraflores Palace in Caracas, Maduro celebrated his election to another six-year term as a "historic record," after officials credited him with 68 percent of votes cast, far ahead of the 21 percent for his nearest rival, ex-army officer Henri Falcon.

The fresh mandate installs him in the presidency until 2025.

But with Venezuela's long-suffering population enduring an economic crisis marked by food and medicine shortages, violent unrest and a mass exodus by hundreds of thousands, the vote was marred by historic 52 percent abstention, and boycotted by the Democratic Unity Roundtable (MUD) opposition coalition as a "farce."

Washington echoed that assessment, with Vice President Mike Pence denouncing the vote as a "sham" and "illegitimate."

President Donald Trump signed an executive order barring Americans from buying debt obligations from Venezuela, instruments officials said had been used to garner much-needed revenue for the cash-starved regime.

Monday's order effectively tightens pre-existing sanctions and would complicate Venezuela's efforts to sell off financial IOUs.

The US has previously slapped sanctions on the president and his senior aides, and banned US entities from buying any more debt from Caracas or state oil company PDVSA.

Vote buying allegations

Falcon, a loyalist of the late leftist firebrand leader Hugo Chavez who was neck-and-neck with Maduro in pre-election polls, says the vote lacked "legitimacy" and accused the government of vote buying.

"It is obvious that (Maduro) has no popular support and has lost legitimacy," said opposition deputy Jose Manuel Olivares.

Maduro may have won, but the near future appears bleak as the country faces economic ruin.

The IMF estimates that Venezuela's GDP will continue to shrink this year, with the inflation rate expected to reach 13,800 percent.

Venezuela has always relied on its oil, but production has dropped to its lowest level in 30 years despite a recent rise in prices.

"The upcoming scenario is clear: political tension and radicalization, repression, massive international rejection, a sharpening of sanctions, and a climax to the economic crisis," said analyst Luis Vicente Leon.

Maduro, a former bus driver, union leader, foreign minister and Chavez's hand-picked political heir, has presided over an implosion of the once-wealthy oil producer's economy since taking office in 2013.

The socialist leader insists Venezuela is the victim of an "economic war" waged by the conservative opposition and external powers including the United States aimed at toppling him.

US pressure

The US market is crucial, as one third of Venezuelan oil exports go to the United States. But Washington has threatened to stop buying Venezuelan oil.

Venezuela's crippled oil industry lacks investment and its assets are increasingly prey to debt settlements as the country defaults.

Maduro's win "paves the way for an escalation of US sanctions -- possibly on the oil sector -- and a messy sovereign debt default and restructuring," said London-based Capital Economics.

Maduro is placing his trust in allies China and Russia.

Russian President Vladimir Putin congratulated Maduro on his win, but hoped for "national dialogue in the interests of the entire Venezuelan people," the Kremlin said.

In Beijing, the foreign ministry said the parties should "respect the choices made by the people of Venezuela."

At his victory rally, Maduro called for a "national dialogue," even though the opposition said it would step up pressure for "legitimate elections" later in the year.

But the opposition is deeply divided, with Falcon stirring up a hornet's nest when he left the coalition to run for president.

As for Maduro, his biggest risk is an "implosion" if government officials are cornered and pressed by the international sanctions, Leon said.

(AFP)

Date created : 2018-05-22

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