Maduro, Citgo and why countries that supported Guaidó are concerned

Beyond the decision of the US court, the countries that support Guaidó are more concerned about his leadership

Venezuelan President Nicolás Maduro at a press conference

Venezuelan President Nicolas Maduro in a news conference on Friday, January 25, 2019 / REUTERS 

LatinAmerican Post | Laura Viviana Guevara

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The oil company Citgo, a subsidiary of Venezuela's state-owned PDVSA in the USA, is not only one of the largest refineries in that country, but it is also one of the most important Venezuelan assets outside the South American country. Because of its importance, it has been a target of Donald Trump's economic sanctions to pressure Nicolás Maduro to leave power.

Leer en español: Maduro, Citgo y la preocupación de los países que apoyaron a Guaidó

Thus, on June 25, it was announced that President Maduro's Government filed a lawsuit before a Delaware Court, USA, to ratify and recognize the board of directors appointed by his government as the legitimate one. In addition, through the lawsuit, Maduro will seek to recover not only Citgo but other subsidiaries of PDVSA and, if he wins the process, he would recover at least $ 30,000 millions in annual revenues, as stated by América Económica.

We must remember that since January 2019, Juan Guaidó was ratified as Venezuela's interim president and, in February, he appointed a board of directors in charge of PDVSA "with power to appoint new directors for the subsidiaries in the United States as PDV Holding, Citgo Holding, and Citgo Petroleum", as stated by the same media.

You may be interested in reading: Citgo's legal issues continue to affect Venezuelan government

Will the court rule in his favor?

LatinAmerican Post had the opportunity to speak with Ronal Rodríguez, researcher of the Observatory of Venezuela at the Universidad del Rosario, who affirmed that "the Bolivarian revolution has not fared very well on international stages when it has taken cases internationally, (... ) it has generated the image that it is a Government that does not respect the rules of international trade and much less the dynamics of companies that theoretically should not be compromised by political interests. At different times, the Bolivarian revolution has taken cases of expropriation and those have not had good results." The expert added that "it is very unlikely that the company's administration will be given to a regime that has proved to do things inconsistently and has even broken businesses that are quite prosperous."

However, Rodriguez remarks that the result may be very different and that it depends on the US court and on the alignment that it has at that time with the United States Government and even with Nicolás Maduro's Government. "Do not forget that the opposition Government is usually aligned with Donald Trump, if the court rules in favor of Maduro, it would be considered an anti-Trump response."

If this were to happen, Maduro's victory would be more a method of propaganda than really winning, since for the arrival of money to Venezuela "the instruments that the US State has to block the access of these funds to the country go far beyond Citgo's dominance." In this way, Trump would exercise sanctions and blockages with much more pressure.

Problems for those who legitimize Guaidó's Government?

Faced with whether the countries that support Guaidó's Government could suffer the consequences of the court ruling in favor of Maduro, Rodríguez emphasizes that "if Juan Guaidó loses or gains control and dominance with Venezuelan assets abroad, it takes away from him the ability to maneuver"

In addition, he emphasizes that these countries' concern should not be for the consequences of the assets abroad, but the moment of transition that will arrive in January 2020, as"it is very likely that at that moment a break in the opposition will be generated, because it is supposed to correspond to minority parties". "I do not believe that they would be much affected, I believe that the concerns come from the passage of time and the date of January of 2020 where he or the opposition would have to redefine a new leadership," he concluded.

A period of uncertainty begins

Although more than 50 countries have recognized Juan Guaidó's Government as legitimate, one of its main problems is how it has not materialized proposals and a clear government plan. Rodríguez affirms that "the transition Government [Guaidó] does not have a great capacity to manage these assets, everything has remained in the moment, more symbolic than a real one; more regarding public than financial opinion (...) they still do not have the capacity to control these resources".

Another important factor for Guaidó, and the opposition in general, is that he has until January 2020 to redefine if he will continue with his leadership or another person will come to replace him, "The United States considers that the opposition is rather fragmented and that there is no one to articulate with to do something that allows the departure of Nicolás Maduro".