Posts Tagged ‘Brazil’

Brazil Probe Finds Vale Auditor, Employees Knew Dam Wasn’t Stable

February 16, 2019

Police also carried out warrants to seize documents and other material

Image result for Fabio Schvartsman, pictures

Vale Chief Executive Officer Fabio Schvartsman 
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SÃO PAULO—Brazilian police arrested eight employees of mining giant Vale SA on suspicion of murder after a judge found evidence suggesting they had known for months about significant safety problems at one of its dams before it burst last month, killing more than 160 people.

The dam’s auditors considered falsifying results of a safety inspection out of fear that Vale would cancel or alter another contract between the two companies if they failed to declare the dam safe, according to prosecutors cited by the judge in the arrest warrant. The Vale employees arrested were directly responsible for the mine. Some knew the problems there were so serious that the dam was likely not to pass the safety inspection, according to the judge, citing comments from the auditors’ email correspondence as well as testimony from other people questioned in the probe.

The judge also cited instances in which other employees at the mine noticed problems at the dam and even pleaded with their superiors to evacuate the site.

The eight Vale employees were brought in for questioning Friday and haven’t been charged with a crime. The arrest warrants are valid for 30 days, according to the police. Lawyers for those arrested didn’t respond to requests to comment.

The fresh round of arrests, which is based on evidence prosecutors say show that the officials were aware of problems at the dam long before it burst, and the court documents released in conjunction with them, significantly heighten scrutiny of potential conflicts of interest between Vale and the Brazilian unit of German certification giant TÜV SÜD, which had been hired to provide what was supposed to be an independent audit of the safety of the dam in the town of Brumadinho.

As recently as September, the contracted firm found the dam stable, despite identifying a number of safety issues that outside engineering experts said should have raised red flags, as first reported by The Wall Street Journal.

The Brumadinho dam’s collapse last month came only three years after another dam, owned by Vale and BHP Group at their joint Samarco operations, burst about 80 miles away in the town of Mariana, killing 19 people. After that tragedy, in November 2015, Vale’s management vowed to take every precaution necessary to make sure none of its other dams would fail, adopting the company slogan “Mariana, never again.”

Separately on Friday, Brazil’s mining regulator said it was investigating the independence of external auditors and the methods miners use to audit their dams. That probe came in response to an earlier request from the government of Minas Gerais, the Brazilian state where both burst mines are located, after the Journal reported the dam’s auditor had other business dealings with Vale, raising a potential conflict of interest.

Studies that TÜV SÜD conducted as part of a previous audit in early 2018 indicated the dam wasn’t stable, according to the arrest warrant issued Friday. The warrant describes an internal email exchange among TÜV SÜD engineers on May 13, 2018, in which they discuss how the engineers would brief Vale executives about their findings about the safety of the dam in a meeting scheduled the next day.

In the email exchange, Makoto Namba, a TÜV SÜD employee, said they would make clear to Vale the findings were so far preliminary and that they needed to be verified before the firm could decide whether to sign a certification that the dam had passed a safety inspection. But “as always Vale will put us up against the wall and ask: if it doesn’t pass, will you sign it or not?” Mr. Namba wrote, according to a part of the email published in the arrest warrant.

The Moment the Vale SA Dam Burst

The Moment the Vale SA Dam Burst
The Brumadinho tailings dam disaster in Brazil has killed more than 100 people as of Thursday, with hundreds more missing and feared dead. This video shows the moment the disaster began. Photo: AP/Globo TV

TÜV SÜD certified the stability of the Brumadinho dam in a June document. The firm has declined to address questions related to conflicts of interest, saying it regrets the incident and is helping authorities with their investigation. It had no comment regarding the account in Friday’s arrest warrant.

Vale said it considered the arrests unnecessary, because the employees would have voluntarily given testimony and were always available to authorities for clarifications. Mr. Namba, one of two TÜV SÜD employees detained and then released, wasn’t immediately available to comment.

According to the same email, prosecutors said, Mr. Namba wrote that a Vale employee had called to ask about the dam audit. He wrote the Vale employee knew about the possibility the dam might fail its inspection, according to part of the email quoted in the arrest warrant.

Prosecutors said emails exchanged between TÜV SÜD engineers after Mr. Namba’s first message suggested the possibility of them masking the negative results TÜV SÜD found. One engineer said there was a risk that Vale could use a separate contract the company had with TÜV SÜD to get a pass on the audit.

Prosecutors have called for more arrests of TÜV SÜD employees, but the judge said there wasn’t yet sufficient evidence against them.

In Friday’s arrest warrant, the judge also cited the testimony of a Vale employee who said his father, Olavo Coelho, worked at the mine for 35 years and became the “go-to guy” among the site’s top management. He was killed in the tragedy.

In the middle of last year, according to his son’s testimony, three of Mr. Coelho’s bosses called for his help because mud was spouting from the side of the dam. His father told them to have the whole mine evacuated because he believed it to be beyond repair. According to his son, his superiors told him they couldn’t evacuate the site because “there are too many people and jobs involved.”

He said his father later told him: “Son, since you work near the dam, don’t go to the part beneath it, and if you hear a loud noise, run toward the buildings because at any moment that thing is going to burst.”

Police have been probing what Vale knew about the dam’s safety before the Jan. 25 collapse. Apart from the 166 people confirmed dead, rescue efforts continue for 144 others missing in the disaster.

Four days after the burst, police arrested three other Vale employees as well as two TÜV SÜD employees who had signed the June and September safety reports. The dam passed the latest inspection in September, but inspectors found significant safety issues, including drainage problems and faulty equipment. The five were later released.

A person familiar with TÜV SÜD’s thinking said the one-page certificate given in September, called a “declaration of stability condition,” is a snapshot of the dam’s safety at the time it is written, not a long-term guarantee of its safety.

That certificate should be taken in context with the entire report, this person said. It certified the dam as “grade B,” this person said. That is the second- highest-risk category on the scale Brazilian regulators use.

The report made suggestions to address that risk, including to the drainage system, which would have needed to be followed up, the person said. Vale has previously said it had acted on all the suggestions made in the full report.

The certificate doesn’t guarantee the safety of a dam against outside factors, either, such as seismic activity or large trucks being driven across it, the person familiar with TÜV SÜD’s thinking said.

The tailings-dam burst released a wave of muddy mining waste that swept away nearby offices and a crowded lunchroom owned by Vale. The river of sludge also smashed into part of the town of Brumadinho, crushing residences.

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com, Samantha Pearson at samantha.pearson@wsj.com and Jeffrey T. Lewis at jeffrey.lewis@wsj.com

Appeared in the February 16, 2019, print edition as ‘Brazil Police Arrest 8 in Dam Disaster.’

https://www.wsj.com/articles/brazil-police-arrest-8-vale-employees-in-dam-disaster-11550232619?mod=hp_major_pos1

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US-China trade war could benefit Europe, Mexico and Japan

February 5, 2019

The trade war between the United States and China has caused major disruptions for global businesses — but it may also bring benefits for some.

A collage of pictures of logos of BMW, Audi, Volkswagen and Mercedes

Companies in Europe, Mexico, Japan and Canada could add tens of billions of dollars in export orders if the conflict drags on, according to a study released this week by the United Nations Conference on Trade and Development.
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“The effect of US-China tariffs would be mainly distortionary,” said Pamela Coke-Hamilton, head of UNCTAD’s international trade division. “US-China bilateral trade will decline and be replaced by trade originating in other countries.”
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The study warned that the tariffs “do little to help domestic firms” in the United States and China. And even if they end up benefiting exporters in other countries, they also risk setting off a damaging sequence of negative effects around the world.
The US and Chinese governments are scrambling to strike a deal before March 2. If they fail to reach an agreement before the deadline, the United States has threatened to hike tariffs on $200 billion of Chinese goods from 10% to 25%.
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Of the more than $300 billion of China-US trade that has been hit with new tariffs since July, about $250 billion is likely to shift to other economies, the UN estimates.
The European Union stands to gain the largest share, about $70 billion of new exports, according to the study. That’s because economies in the bloc are globally competitive and have the most potential to ramp up their exports, the report said. Mexico, Japan and Canada could all add more than $20 billion of new exports.
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“Bilateral tariffs alter global competitiveness to the advantage of firms operating in countries not directly affected by them,” the UN said.

Potential domino effect

But the gains for some countries could be undermined by other aspects of the trade war, which has contributed to an economic slowdown in China and triggered volatility in global markets.
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A continuing tariff battle may do further harm to “the still fragile global economy” by disrupting global supply chains and causing turmoil in commodity prices and financial markets, the UN said. It warned that “more countries may join the fray” by imposing their own tariffs and that “trade tensions could spiral into currency wars.”
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Even if some European industries could benefit from trade that’s pushed in their direction by the tariffs, many of the continent’s top companies are far from immune from the conflict because of their globe-spanning operations.
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German automakers Daimler (DDAIF) and BMW (BAMXF), which export high-end vehicles to China from their US plants, said last year that Chinese tariffs on American-made cars were hurting their profits.
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The US-China dispute has also distorted major industries in some economies. Tariffs on American soybeans prompted Chinese importers to switch to Brazilian suppliers last year.
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But Brazilian farmers have struggled to capitalize on this development, according to the UN. They are reluctant to make big investment decisions that could become unprofitable if the tariffs are reversed.
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The China-driven rise in soybean prices in Brazil has also pushed up costs for local businesses that need to buy soybeans for animal feed and other uses.
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US-China trade war: UN warns of ‘massive’ impact of tariff hike

February 5, 2019

A UN trade official has warned a US plan to raise tariffs on Chinese goods next month would have “massive” implications for the global economy.

The US plans to increase tariffs on Chinese goods if the two sides fail to make progress on a trade deal by 1 March.

The comments followed a report by a UN trade agency on the impact of the US-China trade war.

A factory worker with wheels in a Chinese factory

It said Asian countries are likely to suffer most from protectionism.

The US and China are locked in a damaging trade dispute that has seen both sides levy tariffs on billions of dollars worth of one another’s goods.

In December, both countries agreed to hold off on new tariffs for 90 days to allow for talks.

The US and China have a deadline of 1 March to strike a deal, or the US has said it will increase tariff rates on $200bn (£152bn) worth of Chinese goods from 10% to 25%.

The UN Conference on Trade and Development (Unctad) has warned that there will be huge costs if the trade war escalates.

“The implications are going to be massive,” Pamela Coke-Hamilton, Unctad’s head of international trade, said at a news conference.

“The implications for the entire international trading system will be significantly negative.”

Smaller and poorer countries would struggle to cope with the external shocks, she said.

The higher cost of US-China trade would prompt companies to shift away from current east Asian supply chains.

A container terminal at Yangshan port in ShanghaiImage copyrightGETTY IMAGES

Unctad’s report estimates that east Asian producers will be hit the hardest, with a projected $160bn contraction in the region’s exports.

But it warns the effects could be felt everywhere.

“There’ll be currency wars and devaluation, stagflation leading to job losses and higher unemployment and more importantly, the possibility of a contagion effect, or what we call a reactionary effect, leading to a cascade of other trade distortionary measures,” Ms Coke-Hamilton said.

Unexpected winners and losers

The higher cost of US-China trade would prompt companies to shift away from current east Asian supply chains, but report suggests it’s unlikely that US firms would pick up that business.

The study found that US firms will only pick up 6% of the $250bn in Chinese exports that are subject to US tariffs.

Of the approximately $85bn in US exports that are subject to China’s tariffs, only about 5% will be taken up by Chinese firms, the UN research shows.

The study found that European exports will grow by $70bn, while Japan, Canada and Mexico will see exports increase by more than $20bn each.

Other countries that could benefit include Australia, Brazil, India, the Philippines and Vietnam, the report said.

https://www.bbc.com/news/business-47126114

John Bolton says ‘all options are on the table’ for intervention in Venezuela

February 1, 2019

National security adviser John Bolton said there are no imminent plans for a military intervention in Venezuela, but stressed that all options were fair game.

In a radio interview Friday with Hugh Hewitt, Bolton was asked whether military intervention by the U.S., Brazil, Colombia, or a mix of the countries was imminent.

“No, the president said all options are on the table,” Bolton said. “But our objective is a peaceful transfer of power.”

Hewitt also pressed Bolton about being photographed earlier this week with a note “ 5,000 troops to Colombia.” But Bolton remained tight-lipped and didn’t reveal any new details.

“You know, when we say all options are on the table, we want to keep it at that level,” Bolton said. “And going beyond that, I think, would be imprudent, as George H.W. Bush would say.”

President Trump announced his support last week, along with U.S. allies, for the leading opposition figure who claimed the constitutional authority to supplant Venezuelan leader Nicolas Maduro.

Trump backed Maduro’s ouster by affirming that Juan Guaido, the National Assembly president, stands as the interim president of the country, days after the lawmaker declared Maduro’s inauguration invalid and invoked a constitutional provision authorizing him to assume the presidency and oversee new elections.

“We’ve been imposing economic sanctions, increasing political pressure from around the world,” Bolton told Hewitt. “The overwhelming majority of the people of the country want the Maduro regime thrown out. That’s what we hope and expect to do.”

Bolton and Treasury Secretary Steven Mnuchin unveiled new sanctions against Venezuela’s state-owned oil company Petroleos de Venezuela SA earlier this week in an attempt to choke the Maduro regime.

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Chinese iron ore jumps to 16-month high after Vale disaster

January 28, 2019

Rio Tinto (RIO +0.8%) and BHP (BHP +0.2%) are only modestly higher even as iron ore prices in China spike to a 16-month high and investors expect the global miners to claim more share of global iron ore production after Vale’s (VALE -17%) dam disaster in Brazil.

The most traded iron ore on the Dalian Commodity Exchange rose as much as 6% to 567.5 yuan/metric ton ($84.23), the highest since September 2017, before paring gains to close 2.8% higher at 550.5 yuan.

The Corrego do Feijao mine shutdown will result in a 1.5% production loss for Vale, which will have a “negligible” impact on supply, Argonaut Securities analyst Helen Lau tells Reuters.

“We do not expect to see a big rebound in iron ore prices in view of this deadly accident as China’s iron ore demand over the short term will be mild due to weak seasonality,” Lau says.

However, some Chinese iron ore traders say they are concerned that supplies of high-grade Brazilian ore could tighten if the government orders other Vale mines shut to probe for additional safety issues; Vale is the world’s top supplier of low-aluminum iron ore, preferred by Chinese mills for its low impurity level.

Other relevant tickers include OTCQX:AAUKFOTCPK:AAUKYOTCQX:FSUMFOTCPK:GLCNFOTCPK:GLNCY

https://seekingalpha.com/news/3426456-chinese-iron-ore-jumps-16-month-high-vale-disaster

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Reuters

Vale SA’s deadly mine disaster in Brazil has created uncertainty for China’s iron ore market at a time when demand for supply from the South American country is rising, multiple Chinese ore traders said on Monday.

A dam holding mine waste at Vale’s Corrego do Feijao mine collapsed on Friday, burying mining facilities and nearby homes in the town of Brumadinho, killing dozens and leaving the community in shock as hundreds remain missing.

The Corrego disaster is the second deadly collapse at a Vale-owned mine since 2015, when a dam holding tailings, or mine waste left after ore extraction, was breached at a mine owned by Samarco Mineracao SA, a joint venture of BHP Group and Vale.

The Corrego mine accounts for 1.5 percent of output for Vale, the world’s largest iron ore miner, said Helen Lau, analyst at Argonaut Securities. However, four Chinese iron ore traders said they were concerned that supplies of high-grade Brazilian ore could tighten if the government orders other Vale mines shut to probe for additional safety issues.

Bridge swept away after dam disaster at Brazil’s giant mining company Vale, near the town of Brumadinho in southeastern Brazil, on January 25, 2019. AP photo

“We’re worried that the mine accident might lead to higher premiums on low-aluminium iron ore,” said an iron ore trader with Zheshang Development Group. He declined to be identified due to company policy.

Vale is the world’s top supplier of low-aluminium iron ore, preferred by Chinese mills for its low impurity level.

(Graphic: Iron ore inventory at Chinese ports – tmsnrt.rs/2Hy91j2)

The Samarco site remains closed after the 2015 incident, though Vale Chief Executive Officer Fabio Schvartsman said on Friday the site could resume one-third of its output in 2020.

Vale did carry out safety tests at its other mines in Brazil after the Samarco disaster and its main export port in the region, Tubarao, was closed for four days in 2016 to fix environmental issues.

“(Samarco) led to a long halt in operations and we don’t know if this one will cause even longer and broader disruption for mining activities at Vale,” said an iron-ore trader based in Qingdao.

He declined to be identified as he is not authorized to speak to media.

China’s demand for higher grade ore is returning as profit margins at steel mills have risen in recent weeks because of increasing steel demand.

(Graphic: China crude steel production vs rebar & hot-rolled coil margins – tmsnrt.rs/2S2A2yQ)

If margins remain high, mills will increase high grade iron ore consumption to boost output, said the Qingdao trader.

The most-active iron ore futures on China’s Dalian Commodity Exchange soared nearly 6 percent on Monday trade to 567.5 yuan ($84.31) a tonne, their highest in 16 months.

($1 = 6.7313 Chinese yuan renminbi)

Reporting by Xu Muyu in BEIJING; additional reporting by Enrico Dela Cruz in MANILA; writing by Dominique Patton; editing by Christian Schmolinger

Reuters

Maduro backs down on demand that US diplomats leave Venezuela

January 27, 2019

Maduro suffering a “loss in power,” analysts say

Venezuela abandoned its decision to sever diplomatic ties with the U.S., stating that each country agreed to keep a so-called interest section open in their respective capitals.

The U.S. embassy building in Caracas.

The U.S. embassy building in Caracas.   Photographer: Yuri Cortez/AFP via Getty Images

The Saturday evening announcement that the missions would remain open was a retreat after days of bellicose rhetoric prompted by the U.S. decision to recognize National Assembly leader Juan Guaido as the nation’s rightful head of state. President Nicolas Maduro’s election to a six-year term last year has been widely criticized as a fraud designed to keep him and his military allies in power despite the country’s years-long spiral into misery and hunger.

National Assembly President Juan Guaido Holds Rally As United Nations Meets To Discuss Situation In Venezuela

Juan Guaido arrives for a rally in Caracas, Venezuela   Photographer: Carlos Becerra/Bloomberg

This weekend, Guaido’s supporters maintained a united front from New York and Brussels to the streets of Caracas, and the country’s military attache in Washington declared allegiance to the newcomer. The European Union demanded speedy elections and U.S. Secretary of State Michael Pompeo told the UN that the socialist Maduro must go.

“It is time for every other nation to pick a side. No more delays, no more games. Either you stand with the forces of freedom, or you’re in league with Maduro and his mayhem,” Pompeo told the UN Security Council on Saturday during an emergency session called by the U.S.

Effective Retreat

Pompeo and President Donald Trump have been intransigent in the face of Maduro’s fury. Despite the regime’s threats to throw out diplomats and cut off electricity, the U.S. had refused to close its embassy.

However, nonessential staff were leaving the country, Foreign Minister Jorge Arreaza said in a statement, calling it “an effective retreat.” Venezuelan diplomats in Washington were already returning to Caracas on Saturday, he said.

National Assembly President Juan Guaido Holds Rally As United Nations Meets To Discuss Situation In Venezuela

Attendees gather at a rally in Caracas   Photographer: Carlos Becerra/Bloomberg

Now, the governments have 30 days to reach an agreement that will establish interest sections, which permit basic consular functions, but are the lowest level of diplomatic exchange. Remaining personnel will stay in their respective embassies, protected by “diplomatic prerogatives” during that time, according to Arreaza’s statement.

There was no immediate response from the U.S.

Locked in Struggle

Venezuela’s competing leaders — Guaido is a 35-year-old engineer-turned-lawmaker while Maduro succeeded the late President Hugo Chavez in 2013 — are vying for support in the streets, the military and the mainstay oil industry.

The nation’s diplomatic outposts are more leverage Guaido would like to seize. At a Saturday morning rally in Caracas, he said that many diplomats were heeding his calls to stay in place in defiance of Maduro. “Remember all those consulates that were going to close?” Guaido asked the crowd. “I’ve got good news for you: They’re going to stay open for a long while!”

National Assembly President Juan Guaido Holds Rally As United Nations Meets To Discuss Situation In Venezuela

Juan Guaido   Photographer: Carlos Becerra/Bloomberg

Colonel Jose Luis Silva Silva, Venezuela’s top military diplomat in the U.S., said in a video widely circulated on social media Saturday that he supports Guaido.

“The armed forces have a key role in restoring democracy in the country,” Silva said, calling on the government to “stop the usurpation of executive power.”

Backing Down

Carlos Luna, a professor of international relations at the Central University of Venezuela in Caracas, said Maduro’s decision to allow interest sections represents a “loss in power.”

“He made a threat and didn’t complete it,” Luna said. “He’s doing this to ease tensions with the U.S. When he made the decision to break relations he did so because he felt obligated, but forcing diplomats out by force carries consequences, especially if you’re staring down the world’s greatest military power.”

Guaido’s success in keeping a unified opposition to Maduro at home and abroad — and Maduro’s reluctance so far to arrest Guaido — raise the prospect of a grinding standoff.

The U.S. is betting it has the clout to tip the scales after Trump’s decision to recognize Guaido was joined by countries including Argentina, Brazil, Colombia and Panama. EU powers shifted toward the U.S. position Saturday with envoys of the U.K. and Germany saying the European Union would recognize Guaido as interim president unless a new election is called within eight days.

Arreaza called the push for a new election “almost childlike.”

Read More: Maduro Faces Wider Western Front as EU Toughens Line

Maduro has stood firm in the face of demonstrations against his rule this week, winning the endorsement of key military leaders and vowing to defeat what he calls a U.S.-backed coup against his government.

Pompeo on Saturday urged countries to help isolate the Maduro regime economically, saying they should “assure that they disconnect their financial system from the Maduro regime.”

The UN hearing was mostly a symbolic clash. With Venezuelan allies China and Russia holding veto power, there was little chance the UN body would agree to take action. Among the countries rejecting the U.S. request for an emergency meeting was South Africa.

Russia has helped Maduro’s government with loans and weapons exports. China has provided more than $62 billion, mostly in loans, to Venezuela since 2007 and it’s paid back in crude.

Moises Rendon, associate director of the Americas Program at Washington’s Center for Strategic and International Studies, said Saturday that Maduro’s opponents should ready themselves for a long struggle.

“The path to restoring Venezuela’s democracy and stability will undoubtedly be long and arduous,” he said.

https://www.bloomberg.com/news/articles/2019-01-26/venezuela-softens-demand-that-u-s-diplomats-leave-this-weekend

China’s Davos: Gloomy, Fearful and the “We Wreck Ourselves” Theme — But plenty of money for a great party!

January 26, 2019

Democracy is not Working and China is Rising

Saving the planet becomes a growing part of the conversation at the World Economic Forum — But for Whom?

Roula Khalaf

A few hours into my first day at the World Economic Forum in Davos, I became a tree — virtually, I mean.

I planted a seed, donned virtual reality gear and was transplanted to the Amazon. I saw myself grow, my branches blossom and hug the twittering birds. Then I felt the wind blow and watched the fire sparks approach. Heat rose through my body as I was consumed by the flames.

The virtual reality experience was designed to raise awareness about deforestation among the global elite gathered in the Swiss resort. As one of its creators told me, if trees can’t speak for themselves, we humans must become them. Saving the planet is increasingly part of the Davos conversation.

Image result for george soros, pictures

George Soros

More so this year perhaps because of a shortage of political noise. Many world leaders stayed away. Last year, US president Donald Trump’s appearance dominated the Davos shindig. This time the star was David Attenborough, the veteran naturalist and film-maker, who warned that if we wreck the natural world, “we wreck ourselves”.

There were repeated references to wreckage in my conversations at Davos, where the mood was distinctly gloomy, though not enough to prevent some extravagant partying (Sting performed at the Salesforce festivities).

From trade war to populist resistance, from the mercurial Trump presidency to Britain’s Brexit ordeal, the world order in which the Davos set has long thrived is slowly crumbling. I heard enriching discussions about a more responsible globalisation that would address the grievances of those left behind. Yet no one knew when or how the turbulence would be contained.

Those who know China and the US well were hopeful for a trade deal, but no one expected an end to an increasingly adversarial relationship.

“The trade war is not about a trade war, it’s about the rise of China,” an executive with ties in Beijing told me.

On the plus side, the late cancellations of many leaders (including Britain’s Theresa May and France’s Emmanuel Macron) were a relief. “All we talked about last year was Trump,” one European legislator reminded me.

But there was disappointment too, Davos being one of the few places on earth where you can rub shoulders with leading politicians and business figures, and occasionally even eavesdrop on their chats.

Some delegates expected Jair Bolsonaro, Brazil’s newly elected rightwing president, to cause a stir and inject excitement.

They were frustrated by a brief, overly scripted performance on stage. Sometimes Davos week feels like one long virtual reality experience, with thousands of people isolated on a mountain, hustling on a main street transformed into a corporate festival, all the while imagining they are changing the world.

Many attendees, however, travel to the Swiss mountains with a purpose.

Image result for davos, photos, sign, snow

This year, for example, Russian businessmen under US sanctions were determined to assert their presence, after the WEF disinvited and then re-invited them. Still, they were warned they would be unable to interact with the forum’s American staff and would have to stay clear of US corporate receptions.

Big tech companies, meanwhile, were on a mission to prove they were “nothing like Facebook”, firmly committed to data privacy and transparency.

And then there was Huawei, the Chinese telecoms group under growing international suspicion that its equipment could be used for spying.

For the first time in years, the Davos programme included a Huawei dinner with journalists.

Over crab salad and baked salmon, company representatives insisted Huawei was independent and would never be at risk of government interference.

Finally, there was George Soros, whose annual dinner at the Hotel Seehof is his chance to reflect on the state of the world.

The billionaire philanthropist labours so much over his yearly speech that when I met him back in December he refused to discuss China because he was saving it for Davos.

It was certainly a big, bold message: China’s technological advance, warned Mr Soros, made President Xi Jinping the most dangerous opponent of open societies and he implored the US not to let up in challenging China.

roula.khalaf@ft.com

https://www.ft.com/content/13c22984-208a-11e9-b2f7-97e4dbd3580d

Related:

Image result for Ren Zhengfei, with Xi Jinping, pictures

Though not at Davos, China’s Xi Jinping and Huawei’s Ren Zhengfei were much talked about

China ‘opposes’ foreign interference in Venezuelan crisis — China Worries About its Oil, Gold Capers in Venezuela (Some Call It “Looting”)

January 24, 2019

“It is not good that a dictator, however evil, no matter how corrupt, should be allowed to be thrown out power.”

Image result for Pictures, maduro, Xi Jinping

China said Thursday it opposed external interference in Venezuelan politics, after the US and major South American countries sided with opposition leader Juan Guaido over President Nicolas Maduro in a power struggle.

China is Venezuela’s main creditor and Maduro visited the country in September, striking energy and gold mining deals as he sought Beijing’s support to help his crisis-hit nation.

Maduro now faces trouble at home, where Guaido proclaimed himself acting president on Wednesday amid rival protests in Caracas.

Image result for Xi Jinping, waving, pictures

“China has consistently pursued the principle of not interfering with other countries’ internal politics, and opposes the interference (in) Venezuelan affairs by external forces,” said Chinese foreign ministry spokeswoman Hua Chunying at a press briefing in Beijing.

“We are paying close attention to the current situation in Venezuela and are calling on all parties to remain rational and calm, and to seek a political resolution to Venezuela’s problem through peaceful dialogue within Venezuela’s constitutional framework,” Hua added.

China is Venezuela's main creditor and Maduro visited the country in September, striking energy and gold mining deals as he sought Beijing's support to help his crisis-hit nation

China is Venezuela’s main creditor and Maduro visited the country in September, striking energy and gold mining deals as he sought Beijing’s support to help his crisis-hit nation AFP

Asked whether China recognises Maduro, Hua recalled that Beijing had sent a representatives to his inauguration earlier this month.

Image result for Maduro, beijing, Xi Jinping, pictures

“We support the efforts made by the Venezuelan government to maintain the country?s sovereignty, independence, and stability,” she added.

Image result for Maduro, beijing, Xi Jinping, pictures

Major regional players Brazil, Colombia, Chile, Peru and Argentina all gave their backing to Guaido’s self-proclamation as acting president.

The European Union called for free elections to restore democracy.

After US President Donald Trump recognised Guaido as interim leader, Maduro said he was cutting off diplomatic ties with Washington and gave US diplomats 72 hours to depart.

The US State Department responded by saying “former president Maduro” did not have the authority to sever relations.

Maduro was re-elected last May in voting boycotted by the majority of the opposition and dismissed as fraudulent by the United States, European Union and Organization of American States (OAS).

The 56-year-old leader was sworn in as president on January 10.

Maduro has control of virtually all of Venezuela’s political institutions and enjoys the support of the military, but many blame him for the country’s economic woes, which have left much of the population living in poverty with shortages of basic foods and medicines.

China has extended more than $60 billion in credit to the South American country over the last decade.

Venezuela still owes Beijing about $20 billion and has been repaying the debt with oil shipments.

AFP

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When Investment Hurts: Chinese Influence in Venezuela

https://www.csis.org/analysis/when-investment-hurts-chinese-influence-venezuela

France’s Macron calls election of Venezuela’s Maduro ‘illegitimate’ — Bad day for Socialism

January 24, 2019

French President Emmanuel Macron on Thursday called the 2018 election of Venezuela’s President Nicolas Maduro “illegitimate”, throwing his weight behind the opposition by hailing the thousands protesting in the streets.

AFP file picture | French President Macron calls the election of Nicolas Maduro ‘illegitimate’

In a tweet, Macron said that “after the illegitimate election of Nicolas Maduro in 2018, Europe supports the restoration of democracy. I welcome the courage of the hundreds of thousands of Venezuelans who march for their freedom”.

The backing for Juan Guaido, who proclaimed himself acting president on Wednesday in a bid to oust Maduro, puts Macron at odds with Russia which has slammed the attempted “usurpation” of power.

(FRANCE 24 with AFP)

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Juan Guaidó holds a copy of the constitution at a rally in Caracas, Venezuela, Jan. 23. PHOTO: BORIS VERGARA/ZUMA PRESS
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Juan Guaidó: US backs opposition leader as Venezuela president

Citizens raise their hands as Juan Guaido, President of the Venezuelan Parliament, announces that he assumes executive powers
 Guaidó declared himself “acting president” on Wednesday. EPA photo

US President Donald Trump has said he recognises Venezuelan opposition leader Juan Guaidó as interim president.

The announcement came minutes after the 35-year-old declared himself acting leader in Caracas on Wednesday.

A number of South American countries, including Brazil, Colombia and Peru, have also recognised Mr Guaidó as Venezuela’s legitimate president.

It comes amid mass protests against President Nicolás Maduro who has overseen years of economic freefall.

Hyperinflation, power cuts and shortages of basic items have driven millions of people out of Venezuela.

Mr Maduro was sworn in for a second term earlier this month, after a vote marred by an opposition boycott and widespread claims of vote-rigging.

What’s the latest?

In response to Mr Trump’s recognition of the opposition leader, Mr Maduro broke diplomatic ties with the US and gave its diplomatic staff 72 hours to leave Venezuela.

He accused Washington of trying to govern Venezuela from afar and said the opposition was seeking to stage a coup.

“We’ve had enough interventionism, here we have dignity, damn it!” he said in a televised address from the presidential palace.

Venezuelans hold a sign during a protest called by the Venezuelan community against President Maduro
Tens of thousands of people have been demonstrating against President Maduro. EPA photo

Some counter-demonstrations are also being held in support of Mr Maduro, but these are reported to be on a much smaller scale.

Earlier on Wednesday, Mr Guaidó told a cheering crowd in Caracas that the protests would continue “until Venezuela is liberated”.

“I swear to formally assume the national executive powers as acting president,” he said, while raising his right hand.

Mr Guaidó, who is head of the National Assembly, called on the armed forces – who have so far backed Mr Maduro – to disobey the government.

But Venezuela’s defence minister has condemned Mr Guaidó, who has promised to lead a transitional government and hold free elections.

The BBC’s Latin America Editor Candace Piette says Mr Maduro has worked hard to keep the military leadership on his side, giving officers key government posts and offering lucrative oilfield services contracts to military-linked firms.

Some 13 people had been killed during Wednesday’s protests, the rights group the Venezuelan Observatory of Social Conflicts said.

Thousands gather for rally against Venezuela’s Maduro

What does the US say?

In a statement, Mr Trump described Mr Maduro’s leadership as “illegitimate”and said the country’s congress was the only “legitimate branch of government” in the country.

“The people of Venezuela have courageously spoken out against Maduro and his regime and demanded freedom and the rule of law,” his statement said.

The statement also said the US would hold Mr Maduro’s regime “directly responsible” for any threats to the safety of the Venezuelan people.

Secretary of State Mike Pompeo rejected Mr Maduro’s move to cut ties with the US, saying that the US did not recognise him as leader and would instead conduct relations “through the government of interim President Guaidó”.

Mr Pompeo urged Venezuela’s military to support efforts to restore democracy and said the US would back Mr Guaidó in his attempts to establish a government.

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A senior US official also said “all options are on the table” and suggested tougher sanctions could be imposed on Venezuela.

In the announcement, Mr Trump also urged other nations to follow suit in supporting Mr Guaidó.

So far, seven South American countries – Brazil, Colombia, Chile, Peru, Ecuador, Argentina and Paraguay – have done so.

Canada has also given its backing to Mr Guaidó, while European Council President Donald Tusk said he hoped the EU would “unite in support of democratic forces”.

But Mexico, Bolivia and Cuba have expressed support for Mr Maduro.

The Organization of American States (OAS) has also recognised Mr Guaidó as president.

“Our congratulations to @jguaido as acting President of #Venezuela,” Secretary General Luis Almagro said in a tweet.

In 2017 Venezuela announced it would withdraw from the organisation, which aims to aid co-operation across the continent – accusing it of meddling in its internal affairs.

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Maduro’s biggest challenge

By Jonathan Marcus, BBC Diplomatic Correspondent

Several Latin American countries have followed the US lead, underscoring the regional antipathy to a regime that has compounded Venezuela’s many problems.

The question is what happens next? Does the Trump administration have a coherent plan for raising the pressure on the Maduro regime – freezing assets and so on? Crisis could simply lead to a greater calamity for the Venezuelan people.

Much will depend on which way the Venezuelan military jumps. For now, its generals may be backing the current regime. But will the lower ranks remain loyal to Mr Maduro or will they heed the growing unrest inside the country and the chorus of powerful voices coming from abroad?

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Who is Juan Guaidó?

Venezuela"s National Assembly head Juan Guaido speaks to the crowd during a mass opposition rallyImage copyright GETTY IMAGES
Image captionMr Guaidó has energised Venezuela’s opposition since he became head of the National Assembly

Mr Guaidó was a relatively unknown figure until he became president of Venezuela’s opposition-controlled parliament earlier this month.

Upon taking up the role, he said he had a constitutional right to assume the presidency until fresh elections were held.

As a student, he led protests against the late socialist leader Hugo Chavez who handpicked Mr Maduro as his successor.

His appointment as National Assembly leader has energised the opposition, which has been fragmented in recent years.

The opposition won parliamentary elections in 2015, but in 2017 Mr Maduro set up a separate body, the constituent assembly, which has taken over legislative powers.

Why are people protesting?

What drives someone to cross South America on foot?

Mr Maduro, who took office in 2013 after the death of Hugo Chavez, has been condemned at home and abroad for alleged human rights abuses and for his handling of the economy.

There are severe shortages of basic items such as medicine and food, and an estimated three million people have fled the country.

The annual inflation rate reached 1,300,000% in the 12 months to November 2018, according to a study by the National Assembly.

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Wednesday’s demonstrations come just two days after 27 National Guard soldiers were reported to have revolted against the government at a guard post in the capital, Caracas.

But there is still a loyal core of people who support the government and say that Venezuela’s problems are caused by a right-wing opposition supported by the US and hostile neighbours.

They say that US sanctions have hampered the government by making it hard to restructure its debt.

https://www.bbc.com/news/world-latin-america-46980913

Revolt in Venezuela

January 24, 2019

A desperate nation rises to swear in a new democratic leader.

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Juan Guaidó holds a copy of the constitution at a rally in Caracas, Venezuela, Jan. 23. PHOTO: BORIS VERGARA/ZUMA PRESS
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Will this be the moment that Venezuelans finally reclaim their democracy? Millions dared to hope on Wednesday as they poured into the streets of Caracas and other cities to demand the resignation of dictator Nicolás Maduro in favor of the president of the National Assembly, 35-year-old Juan Guaidó.

In a midday outdoor ceremony surrounded by his supporters, Mr. Guaidó took the presidential oath. He will now have the power to act as interim head of state until new elections are held. Aerial photos captured crowds jamming the wide boulevards of Caracas to celebrate the transition of power.

Around the country rich and poor used the anniversary of the 1958 fall of military dictator Marcos Pérez Jiménez to call for a return to democracy. Like the “people power” rebellion in the Philippines in 1986, and the “color” revolutions in Europe, this is a revolt that has more democratic legitimacy than Mr. Maduro, who stole last year’s election with the help of the Cuban intelligence services.

The National Assembly that elevated Mr. Guaidó was elected in 2015. But Mr. Maduro rigged a separate election in 2017 for his own “constituent assembly” and made the National Assembly irrelevant. He then won another presidential election in 2018 with 68% of the vote as most of the nation boycotted.

On Jan. 4, before Mr. Maduro had himself sworn in for a new six-year term, the Lima Group of 14 Western Hemispheric nations (the U.S. isn’t a member) branded him illegitimate. The group called on Mr. Maduro to “respect the power of the National Assembly and temporarily transfer to it the executive power until new presidential and democratic elections take place.” (Mexico’s new leftist President Andrés Manuel López Obrador refused to sign the statement.)

Mr. Maduro responded Wednesday that “I am the only president of Venezuela,” and he isn’t likely to leave without a fight. His predecessor, Hugo Chávez, was briefly removed from office in 2002 for his authoritarian maneuvering. But after 17 more years of judicial usurpation, arresting opponents, smothering the free press and failed socialist economic policies, Venezuelans are desperate. Photos of the bony bodies of children tell the story of widespread malnutrition. Treatable diseases go untreated.

One question is whether the military will stick with Mr. Maduro. A recent small uprising was quickly put down. But Mr. Guaidó has been publicly asking the military to side with the people, pledging amnesty for anyone who does. A younger officer corps might also split from the generals holding power.

Then again, Mr. Maduro has reportedly ordered the arrest of Mr. Guaidó and he could tell the army to fire on civilians. That could trigger even bloodier protests and lead to terrorism or guerrilla war. There is also the question of how much independence Mr. Maduro even has, given his reliance on Cuba to stay in power. Havana will not want to give up its oil-producing satrapy in Latin America.

Nearly all of the rest of the Americas is lining up behind Mr. Guaidó. Countries near and far have had to absorb some of the nearly three million refugees that have fled the country’s crime and food shortages.

President Trump also quickly took to Twitter to recognize Mr. Guaidó as “the Interim President of Venezuela,” noting that “the citizens of Venezuela have suffered for too long at the hands of the illegitimate Maduro regime.” Colombia, Brazil, Peru, Canada, Argentina, Paraguay, Guatemala, Ecuador and Chile along with Luis Almagro, secretary general of the Organization of American States, also endorsed Mr. Guaidó on Wednesday.

Mr. Maduro immediately broke relations with the U.S. and ordered American diplomats to leave the country within 72 hours. If his pattern holds, he will blame the U.S. for the protests and use Cuban influence to spread doubt about Mr. Guaidó’s loyalty.

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But the truth is that this revolt is made in Venezuela after two decades of socialist failure and corruption. Chávez was a gifted demagogue who used majority backing to gradually but relentlessly destroy democratic institutions. Supporters outside Venezuela, including some in the U.S. Congress, assisted his power grab by forgiving his every depredation because he had once been democratically elected.

There may be a lot of ruin in a nation, as Adam Smith said, but Venezuela now lies in ruins. It’s tempting to think the U.S. should send in troops, a la Panama in 1989, to assist the rebellion. But Venezuelans have to win their freedom themselves, and if they do they are likely to prize it all the more.

Appeared in the January 24, 2019, print edition.

https://www.wsj.com/articles/revolt-in-venezuela-11548289111