Header Ads

Toxic legacy

Balance of Power
Bloomberg

Such were the excesses of the oil-fueled boom years of the 1970s that Latin America's biggest producer became known as "Venezuela Saudita" — Saudi Venezuela.

Hilton established hotels in the capital, Caracas, and at the Caribbean coast, while Concorde flew a direct route from Paris. Immigrants from neighboring countries and Europe flocked to Venezuela, where more whiskey was reputedly drunk than in Scotland.

Now, Venezuela is broke and an international pariah left to squeeze what it can from its collapsing oil industry.

Subject to international sanctions, President Nicolas Maduro's government is unable to export the crude that underpins the economy or import spare parts for maintenance.

The result is a downward spiral of spills, scarcity and economic suffering, Fabiola Zerpa, Peter Millard and Andrew Rosati report. What's more, Venezuela can't rely on sanctions relief from U.S. President-elect Joe Biden, who has called Maduro a dictator.

While many circumstances are specific to Venezuela, its plight offers warnings to some other petrostates. With oil demand falling during the pandemic, and investors increasingly unwilling to underwrite more carbon-heavy varieties of crude, the point may be reached where it's no longer economical to get it out of the ground.

Venezuela, which has the largest crude reserves in the world, might just become the biggest victim of the end of oil. — Alan Crawford

Fishermen in Las Piedras, Venezuela, near the Amuay refinery, on Nov. 16. 

Photographer: Adriana Loureiro Fernandez

Tell us how we're doing or what we're missing at balancepower@bloomberg.net.

Global Headlines 

It's official | Senior Republicans are signaling to President Donald Trump that it's time to abandon his election challenges. The dam holding back recognition that Biden will be sworn in Jan. 20 as the 46th U.S. president began to crumble yesterday as members of the Electoral College confirmed the Democrat's win. Still, Trump's bid to dispute the results threatens to keep roiling the party.

  • Biden's visit to Georgia today on behalf of two Democratic Senate candidates underscores how much his first-term agenda depends on having both chambers of Congress on his side.
  • Russian President Vladimir Putin sent Biden a congratulatory telegram after the Electoral College formalized his victory, making him among the last world leaders to recognize the president-elect.

Top lawman | Attorney General William Barr's Dec. 23 departure will leave the Justice Department in the hands of his deputy during Trump's final month in office. Jeffrey Rosen could face pressure from Trump to sustain his false claims of election fraud and pursue his political enemies, Chris Strohm reports.

Narrow path | Brexit negotiators are engaged in a last-ditch bid to complete a trade accord before the U.K. leaves the European Union's single market in 16 days. Following a weekend of intense activity, Michel Barnier, who leads the EU team, said he can see a path to a deal if the two sides can resolve what he called significant differences. Ben Sills explains how a deal might still get done.

Turkey sanctions | New U.S. sanctions over Turkey's purchase of Russian S-400 anti-aircraft missiles will put more strain on a key NATO member's military. The penalties effectively cut off Turkey's top defense procurement agency from U.S. financial institutions, military hardware and technology. Although the economy and defense industry as a whole weren't targeted, the sanctions could endanger Ankara's military clout in the Middle East.

A Russian S-400 defense system.

Photographer: Vasily Maximov/AFP

Fresh restrictions | Millions of Londoners will be ordered to comply with England's toughest coronavirus rules starting tomorrow, as U.K. authorities warned a "new variant" of the disease may be driving a rapid rise in cases. Europe is also sharpening curbs on people and businesses to slow Covid-19's spread, risking another blow to battered economies even with the rollout of a vaccine tantalizingly close.

  • Governor Andrew Cuomo said New York is headed toward a second full shutdown if coronavirus cases and hospitalizations continue at their current pace.

What to Watch

  • As members of the U.S. Congress race to complete a Covid-19 assistance plan before they break for the holidays, Democratic leaders face increasing pressure to allow a vote on a proposal that doesn't include the aid for states they've said is vital.

  • Australian Prime Minister Scott Morrison said today a Chinese ban on his country's coal imports would breach World Trade Organization rules, as his government urged Beijing to resume talks to ease a worsening diplomatic dispute.

  • Singapore will start a new travel lane for "business, official and high economic value travelers" that will allow them to avoid quarantine for short-term stays and instead reside in a dedicated "bubble" facility near the airport.

  • Hundreds of workers rioted over unpaid wages at an Apple supplier plant in southern India, deepening the company's geopolitical challenge as it tries to expand its production base away from China amid political tensions between the U.S. and Beijing.

And finally ... With 270 million people suffering from or at risk of famine this year, a still-growing global population and the impact of climate change looming, questions have arisen over whether humanity will be able to feed itself. As Adam Majendie reports, the answer is yes. And it's even possible without using more land. But that would require reducing waste in the fields and on the way to markets in poorer countries — and at shops and the table in richer ones — as well as stopping using edible crops for fuel and eating a lot less meat.

Cattle on a farm in Gunnedah, Australia, on May 29.

Photographer: David Gray/Bloomberg

 

 

Like Balance of Power? Get unlimited access to Bloomberg.com, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.

 

No comments