China Loans Venezuela $5 Bn for Petroleum Development

Big news in the world of economic cooperation: The Development Bank of China has approved a loan of US$5 billion for Venezuela to increase petroleum development. According to reports the money will be used for upgrading much of the equipment and methods to produce petroleum in the country. This move comes as there has been an increase in economic cooperation between China and other countries.

Many will be celebrating this anti-imperialist cooperation. Venezuela has been reaching dire straits in the last few years due to a combination of (largely) economic sabotage by the US, and poor policy choices by the government of Nicolas Maduro. This money is not simply a boost to the economy, but it could be something much more valuable.

Venezuela has its roots in imperialist servitude. This means making the country a single export commodity, and a heavy importer as well. By doing this, the primary imperialist power, the United States, can control the country by enforcing blockades against the main industry. Which in the case of Venezuela, is petroleum production.

Much of this problem continues to this day due to choices made by successive Bolivarian governments. Despite the fact that Venezuela’s main industry is oil, almost all of its oil-related means of production are produced in other countries. Machinery and other necessities in the oil industry are produced in countries where the US has serious clout. Much of the needed industrial infrastructure for oil extraction has been withheld from the state oil company, in order to cause its failure.

The logical course of action that should have been taken was to begin domestic production of such equipment. Yet, neither the Chavez nor Maduro governments sought to do so. As a result, much of the oil production is using outdated, damaged, or non-functioning equipment. This has been a tremendous error on the part of the Bolivarian Revolution.

The loans by China seek to upgrade this manufacturing process which is sorely needed. It’s my hope that some of this money will be spent on domestically producing the equipment the industry needs. This will eliminate the need for further loans from China, and combat sanctions the US has placed on the country. This is a serious weakness in the Venezuelan economy that simply must be addressed.

I adamantly support Venezuela’s anti-imperialist efforts. But a rightful criticism must be made here. If they’re going to have oil production, they need to be self-sufficient in the products necessary to carry out that production.