Venezuelan president on world tour to boost economy

Nicolás Maduro visits Moscow as part of a tour of China and several OPEC countries to seek financial assistance and cooperation on falling crude oil prices.

Venezuelan president on world tour to boost economy

World Bulletin/News Desk

Venezuela's president arrived in Moscow on Monday as part of a tour that will also include China, Saudi Arabia, Iran and Algeria, to seek financial aid and cooperation on falling crude oil prices.

Venezuela's economy, which officials admitted last week was officially in recession, relies heavily on oil exports, and Nicolás Maduro is now turning to allies for direct financial support, and from cooperation from fellow oil producers to cut production to counter plummeting prices, according to Venezuela's Notícias24 news site.

In a televised address Sunday before his departure, Maduro said the trip would be "very important to tackle new projects over the circumstances that our country is facing, including the loss of revenues due to sharp fall in oil prices."

Initially expected to begin in China, officials  said the president had decided to stop in Moscow.

"@NicolasMaduro is on a technical stop in Moscow at the start of this presidential tour of China, Saudi Arabia, Iran and Algeria," Jacqueline Faría, Venezuelan Minister for Communication and Information and member of Maduro's ruling PSUV party, tweeted Monday, along with a picture of the meeting with Russian Deputy Foreign Minister Sergei Ryabkov.

Faría said Maduro had pledged his continued "solidarity" with the government of Russian President Vladimir Putin in the face of "destabilizing" actions by the U.S., which has led to sanctions against Russia in recent months due to the ongoing conflict in eastern Ukraine. Russia has also seen its oil-dependent economy hit hard by recent falling oil prices.

The team of top Venezuelan politicians, including Foreign Minister Delcy Rodríguez, Defense Minister Vladimir Padrino López and Finance Minister Rodolfo Marco Torres, will now continue to China, an important source of credit for Venezuela, and are expected to seek further financial assistance. 

Maduro said he will meet Chinese President Xi Jinping to discuss financial, energy, and development projects, among other issues, before participating in a two-day summit between China and the Community of Latin American and Caribbean States that begins Jan. 8.

After China, Maduro will travel to several fellow OPEC members to discuss steps to shore up oil prices, likely by agreeing to cut production to drive prices back up.

This is particularly important for Venezuela, as the price of its crude oil has dropped more than 50 percent since mid-2014. Venezuela gets 96 percent of its foreign currency from oil exports, meaning a dramatic reduction in income and shortages of many products, from basic food products to car parts.

Venezuelan crude closed 2014 trading at under $47, while a 2014 Deutsche Bank report suggested Venezuela needed crude prices above $120 a barrel to balance its budget --higher even than before the recent slump.

The central bank announced last Tuesday that the economy had been in negative growth throughout 2014, as it confirmed GDP figures for the first three quarters of the year: contracting 4.8 percent, 4.9 percent and 2.3 percent, respectively.

The bank also said the country's annualized rate of inflation had reached 63.6 percent in the year to November -- among the highest in the world.

Last Mod: 05 Ocak 2015, 22:13
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