VRIC MONITOR No. 01: February 2019

The VRIC Monitor is a one-of-a-kind, monthly report from SFS tracking extra-regional influence in Latin America. VRIC stands for Venezuela, Russia, Iran, China where Venezuela represents the country itself, but also the broader Bolivarian Alliance or ALBA. Likewise, Iran represents the Islamic Republic and a growing presence of Middle Eastern actors in Latin America, namely its chief proxy, Hezbollah. The monitor is comprised of open source information selected by SFS analysts and fellows. This is not a complete list of media reports on VRIC presence in Latin America, but a snapshot of open-source media highlighting the major areas of VRIC influence.

Overview

The commencement of Nicolás Maduro’s illegitimate second presidential term in January has provided a platform for extra-regional actors to attack democracy in Latin America. The fight for legitimacy in Venezuela has formed two blocs around the globe: those who support Maduro, and those who oppose him. China, Russia, and Iran have used the Venezuelan crisis to counter U.S. influence by proxy; all three of these nations have denounced the U.S. stance on Venezuela and have vowed to protect the Chavista regime and the Bolivarian revolution. However, this heightened political tension in Venezuela should not distract from the persistent diplomatic, economic, social, and military engagement by these same foreign forces throughout the region. While Russian, Chinese, and Iranian state news outlets flood the media with their interpretation of current events, these nations are still aggressively pursuing their goal to offset U.S. influence in Latin America. Meanwhile, the VRIC bloc is opening opportunities for other extra-regional actors, namely Turkey, to do the same.

2019 began with an ongoing political crisis in Venezuela. Nicolás Maduro’s illegitimate second term in office is challenged by the National Assembly and the constitutional interim president, Juan Guaidó, who swore into office on January 23 before millions of Venezuelans. This quickly divided most of the world into two camps: those supporting Guaidó and those supporting the Maduro regime. The Lima Group, comprised of 14 countries, signed a declaration denouncing Maduro, and joined the U.S. and many other nations worldwide in recognizing Guaidó as the interim Venezuelan president. The only hold out of the Group is Mexico, who has declared neutrality on the issue. However, extra-regional actors such as Russia, Iran, China, Turkey, Hezbollah, and Hamas quickly voiced their support for the Maduro government and warned against U.S. intervention in Venezuela. As international pressure mounts against the illegitimate Maduro government, the regime continues to strengthen its alliances.

• Venezuelan opposition leader and interim president Juan Guaidó said Monday that President Nicolas Maduro is trying to transfer up to $1.2 billion to a bank in Uruguay. – Voice of America on 04-FEB
• President of Bolivia, Evo Morales, made a quick visit to Venezuela to see Nicolás Maduro on Friday, February 1. This trip was made during Morales’ return to Bolivia from the U.S. where he was participating in a UN General Assembly meeting. – RPP on 01-FEB (content in Spanish)
• Venezuela will receive 2,000 Cuban doctors who left Brazil following a dispute between the Communist-run island and the government of far-right Brazilian President Jair Bolsonaro, who ordered an end to their stay after taking office this year. – Reuters on 17-JAN
• Salvadorans elected Nayib Bukele as their next president, shocking the two parties that emerged from the country’s civil war in the 1980s and have held power since. Bukele, who was previously with the FMLN, until his public expulsion in 2017, may still have ties to the party through his purported relationship with Jose Luis Merino and Alba Petróleos. – El Faro on 08-JAN (content in Spanish)

BOLIVIA

• Bolivian Minister of Foreign Affairs Diego Pary confirmed Bolivia’s anticipated participation in a conference held by Mexico and Uruguay in Montevideo regarding the current conflict in Venezuela. – El Deber on 03-FEB (content in Spanish)
• Cuban state media reports that El Salvador relinquished its pro tempore presidency of the Community of Latin American and Caribbean States (CELAC) to Bolivia on Monday, January 14 – Prensa Latina on 14-JAN
• Energy ministers from Peru and Bolivia agreed to discuss building a pipeline that would transport natural gas and liquefied natural gas (LNG) from Bolivia to its neighbor. The pipeline would provide crucial access to the Pacific Ocean for landlocked Bolivia, running to Peru’s southern port of Ilo. Bolivia had wanted to build a pipeline through Chile to reach the ocean and expand its gas exports, but the International Court of Justice ruled against Bolivia’s demand that Chile negotiate granting it sovereign access to the sea in October. – Reuters on 10-JAN

Russia is actively working to defend its interests in Latin America, particularly in the energy sector. Despite Venezuela’s failing economy and falling oil output, Russia stands behind its faithful ally, even so far as to reportedly provide mercenary troops for protection of the Maduro regime. As it stands, Russia owns significant portions of at least five oil fields in Venezuela. Meanwhile, it has also been enhancing its nuclear energy network in Latin America by collaborating closely with the Cuban and Bolivian governments. On January 17, the Russian Ministry on Science and Education invited Bolivian students to participate in a nuclear training program. Four days later, on January 21, Cuban nuclear physicists received awards in Russia for their research.

• A Boeing 777 belonging to Russia’s Nordwind Airlines arrived in Caracas on January 28 and could still be seen on January 30 on the tarmac at Maiquetia airport outside the capital, its presence sparking unproven claims that President Nicolas Maduro’s administration is looking to whisk what’s left of the nation’s depleted gold reserves out of the country. – The Washington Post on 30-JAN
• Private military contractors who do secret missions for Russia flew into Venezuela in the past few days to beef up security for President Nicolás Maduro in the face of U.S.-backed opposition protests, according to two people close to them. – Reuters on 25-JAN
• Cuban state media reports, PhD Katherin Shtejer Díaz, researcher at the Center for Technological Applications and Nuclear Development (CEADEN), won one of the awards of the High Energy Laboratory of the Unified Institute of Nuclear Research (IUIN), in the city of Dubna, in the Russian Federation. – Periodico26 on 21-JAN
• Cuban state media reports Russia’s State Nuclear Energy Corporation (Rosatom) and the Russian Ministry of Science and Higher Education invited Bolivian students to participate in a scholarship program to specialize in nuclear and related technologies. – Prensa Latina on 17-JAN 
• Russia acknowledges the efforts that Venezuela has made to create Petro, an oil-backed crypto-coin, to deal with the U.S. sanctions and inflation, it has said that it’s not ready to use it in bilateral trade but would continue supporting Venezuela. – Bitcoin Exchange Guide on 14-JAN 
• The Russian embassy is ready to assist suppliers looking to expand grain exports to Mexico, Viktor Koronelli, the Russian ambassador in Mexico, told Sputnik. – World Grain on 10-JAN

Iran’s presence in January has primarily manifested in active media engagement complemented by diplomatic and military outreach. Iranian state news agencies such as Fars News, Mehr News, and Iran Daily have aggressively engaged with the news cycle to promote Iran’s global agenda in Latin America. This was evident during major regional events, such as Maduro’s inauguration in Venezuela or the Colombian car bombing by the ELN, when Iranian state media covered these events with posturing from the Islamic Republic. A state visit to Venezuela by the Iranian defense minister prompted speculation of the Islamic Republic’s military adventurism, while unconfirmed reports of Hezbollah’s presence in the mining region of eastern Venezuela added to the concern. Furthermore, Turkey’s recent political alignment with Iran, possibly out of deference to its revolutionary model, could foreshadow potential new alliances in Latin America with revolutionary movements in the ALBA bloc and beyond. 

• Colombian authorities have arrested two Iranian citizens on charges of overseeing illegal mining in the department of Chocó and of having illicitly exported over $50 million worth of gold and platinum to Canada and the United States. – Insight Crime on 31-JAN
• Iran denounced events in Venezuela, saying the opposition’s claim that it held the presidency was a “coup” and an attempt to take power unlawfully. The foreign ministry spokesman Bahram Ghasemi said: “Islamic Republic of Iran supports the government and people of Venezuela against any sort of foreign intervention and any illegitimate and illegal action such as attempt to make a coup d’état.” – The Guardian on 24-JAN
• Cuban and Iranian enterprises were expected to sign agreements for cooperation in the fields of public health, commercial investment, energy, agriculture, and sports. The agreements were lined up for the two-day 17th session of Cuban-Iranian Inter-Governmental Commission, the Cuban Foreign Trade and Investment reported. – Financial Tribune on 16-JAN
• Defense Minister Amir Hatami attended the inauguration ceremony of Venezuelan President Nicolás Maduro, which was held outside the Supreme Court building in Caracas. On the sidelines of the event, Hatami and his accompanying delegation also met with Bolivian President Evo Morales and discussed international and regional developments as well as bilateral ties, ISNA reported. – The Financial Tribune on 11-JAN
• As Iran and Venezuela become increasingly isolated and sanctioned by the U.S and much of the international community, the two governments are said to be tightening their bond – with the help of Tehran’s proxy group, Hezbollah, in the middle of the action. – Fox News on 10-JAN
• Iranian warships will sail for the first time into Atlantic waters early in 2019, the deputy commander of Iran’s navy has said. The long-distance voyage would bring Iran’s military forces closer to U.S. soil, and territorial waters, than they have been since the 1979 Islamic revolution which brought the current regime to power. – CBS News on 04-JAN

HEZBOLLAH

• Following U.S. President Donald Trump’s recognition of Venezuelan opposition leader Juan Guaidó as that country’s legitimate president, not President Nicolás Maduro, Hizbullah declared its support for Maduro, condemned the “attempted overthrow” that it said was orchestrated by the U.S., and sent an official delegation to the Venezuelan Embassy in Beirut to express its support for Maduro. – Middle East Media Research Institute on 29-JAN
• On January 14, during the 13th annual Parliamentary Intel Security Forum, former Congressman Robert Pittenger stated Hezbollah has been laundering money in Paraguay. The Paraguayan Minister of Foreign Affairs, Luis Castiglioni, quickly demanded proof, which was provided by Emanuele Ottolenghi, senior fellow at the Foundation for Defense of Democracies, in a letter to ABC Color. – ABC Color on 19-JAN (content in Spanish)
• In an interview with Miami-based newspaper Diario las Américas, opposition lawmaker Américo De Grazia revealed Lebanese militant group Hezbollah controls gold exploration mines in Venezuela. De Grazia was criticizing President Nicolas Maduro’s Orinoco Mining Arc, a mega-mining project to explore 12 percent of Venezuela’s territory for non-renewable metals and minerals.- Al Arabiya on 14-JAN
• Latin American authorities cautioned against the presence of Iran’s proxy Hezbollah in South America’s volatile Tri-Border Area (TBA), noting that the group is using tens of millions of dollars in drug trafficking and money laundering proceeds to fund its jihadi activities. Referring to Hezbollah and other drug traffickers in the TBA, Fabiano Bordignon, federal police chief of Foz do Iguaçu, Brazil, told Infobae, “There is a great concern for the criminal organizations that exist in Brazil and are establishing very firm foundations throughout the border and within Paraguay and Argentina.” – Breitbart on 11-JAN 

TURKEY

• In a break with NATO allies including the U.S. and Canada, Turkey has backed Nicolás Maduro as the President of Venezuela. Turkish Foreign Minister Mevlut Cavusoglu said on Sunday that countries which support self-proclaimed president Juan Guaidó fuel the ongoing crisis in Venezuela, Reuters reported. Mr. Cavusoglu suggested that countries which have acknowledged Mr. Guaidó’s victory should have instead brokered negotiations to mediate the conflict that sparked massive ongoing protests across Venezuela. – The Washington Times on 03-FEB
• A senior Western diplomatic source told the BBC that Turkey was now considered the main concern among the countries engaging in the gold trade. They added that there are growing suspicions that gold exported to Turkey was ending up in Iran, which would violate US sanctions. Venezuela’s gold trade with Turkey is soaring. Last year, the country exported almost $900m (£688m) worth of gold to Turkey, ostensibly to be refined there and returned to Venezuela, although there is no record of re-exportation. – BBC on 02-FEB
• When Venezuela’s industry chief Tareck El Aissami swapped the Caribbean sun for the wintry skies of central Anatolia on Wednesday, he was greeted by bouquet-bearing dignitaries eager to play a role in Turkey’s growing gold trade with the Latin American state. – Al Jazeera on 17-JAN
• Turkey’s Vice President on Saturday called on Turkish businesspeople to focus on Latin America for investments. Speaking to the reporters, Fuat Oktay said there is a tremendous potential in Latin American and in Caribbean countries, adding the region is “extremely” important for Turkey’s future goals. Oktay’s remarks came after his meeting with several officials from South America in the Venezuelan capital Caracas. – Anadolu Agency on 12-JAN
• The Turkish state media reports that Bolivia plans to open an embassy in Turkey to cement bilateral relations, Turkish presidential sources said late January 9. The agreement on opening the embassy was reached at a meeting between Turkish Vice President Fuat Oktay and Bolivian President Juan Evo  Morales Ayma in the Venezuelan capital Caracas. – Hurriyet Daily News on 10-JAN

QATAR

• The Secretary-General of the Ministry of Foreign Affairs, H E Dr Ahmed bin Hassan Al Hammadi, met yesterday with Ambassador of the Republic of Argentina to the State of Qatar, Carlos Hernandez. During the meeting, bilateral relations between the two countries were discussed and ways of boosting them, in addition to discussing issues of joint interest. – The Peninsula on 17-JAN

China continues its aggressive outreach in Latin America, both in economic and extra-economic engagement. In light of the current trade war with the U.S., China is increasing its demand for agro-trade with Latin America. This is most evident in its increasing cooperation with Argentina, signing several agreements at the G-20 summit in December 2018, including 30 agriculture and investment deals and offering a $9 billion currency swap to Argentina’s fledgling economy. Above its economic interests, China continues to advance its military-run space station in Argentina and its nuclear interests in Brazil. Filling trade gaps in Latin America continues to allow China to leverage trade dependency to purchase or acquire critical infrastructure, such as the recent purchase of 60% stake in the Peruvian port Chancy undergoing construction via a subsidiary of a Chinese state-owned company. 

• When China built a military-run space station in Argentina’s Patagonia region it promised to include a visitors’ center to explain the purpose of its powerful 16-story antenna. The center is now built – behind the 8-foot barbed wire fence that surrounds the entire space station compound. Visits are by appointment only. – Reuters on 31-JAN
• China will send 90 satellites on its Long March-6 carrier rocket into orbit from the Taiyuan Satellite Launch Centre for an Argentine company, the China Great Wall Industry Corporation said. The corporation has signed a multiple launch services agreement with Satellogic, a private Argentine company specializing in Earth-observation satellites. – Punch on 18-JAN
• The China General Nuclear Power Corporation (CGN) group has bought all the existing solar and wind power assets of Italy’s Enel group in Brazil, the group said in a statement released in Rome. The assets negotiated with the Chinese company are solar power plants in the state of Piauí and Bahia. – Macauhub on 17-JAN
• Latin America represented 11% of the total of Chinese steel exports, increasing its participation by two points compared to Jan-Nov 2017, becoming the main destination of the Chinese Steel exports, exemplified by the 28 percent increase of steel imports from China to Latin America in the last six (6) months. Among the Latin American countries, Chile was the main destination for the Chinese steel. – Freight News on 16-JAN
• China for the first time positioned itself as the main market for Chilean agroforestry exports, displacing the United States. María Emilia Undurraga, director of Odepa, reported that the balance of the silvo-agriculture trade balance in 2018 grew by 17%, compared to 2017, accumulating US $11.162 billion. – Industry Trend on 09-JAN
• As America recedes into the background, Chinese foreign direct investment in Latin America and the Caribbean has skyrocketed over the last ten years, according to a 2018 report by the Economic Commission for Latin America and the Caribbean. China dropped close to $90 billion in the region between 2005 and 2016. With a growing emphasis on telecommunications, Chinese investment in emerging technology is increasingly the primary fuel behind Latin America’s tech boom. – Bloomberg on 09-JAN
• Soybean growers in Brazil, already the world’s largest exporter of the oilseeds, sold some 83.8 million tonnes of that grain last year in global markets, up 23.1 percent from 2017, according to foreign commerce data for 2018 released by Brazil’s government. Brazil’s largest soybean buyer was China, which remains embroiled in a trade war with the United States that hampered the ability of U.S. growers to compete with their Brazilian rivals. – Reuters on 02-JAN

Disclaimer: The VRIC Monitor does source a limited amount of media reports from state-owned or -controlled media outlets from VRIC nations. These media reports are carefully selected and solely intended to report on cultural, diplomatic, economic, or military activities that are not reported on by other media and relevant for understanding VRIC influence in the region. Given the inevitability that state propaganda will be mixed into these articles, we ensure that reporting from state-media outlets is no more than 20 percent of the overall VRIC Monitor and exclude any opinion pieces or anti-US (anti-West) declarations of any kind.