By Kyle Griffin and Jonathan StempelWith Venezuelan President Nicolas Maduro, a socialist who’s been accused of human rights abuses and other crimes, facing mounting international criticism and increasingly strained ties with the West, the region has been the focus of a growing crisis of regionalism.
It’s not just Venezuela, either.
There are concerns that a rising number of nations are being drawn into the dispute, and that regional powers are being used to protect their interests and prop up a dictatorship.
The region is increasingly becoming an arena in which regional power struggles and regional power grabs can play out.
In the meantime, Venezuela is looking to diversify its resources and foreign investments to build a new domestic economy.
With its oil exports in decline and the economic crisis ravaging the country, Venezuela has been looking to focus on its domestic energy sector, hoping to generate a large amount of foreign capital that will help it keep its economy growing.
But the latest developments, as Venezuela’s foreign policy team is still grappling with the Maduro administration’s economic policies, may have left some Venezuelans in a more uncertain position than before.
Venezuela’s Foreign Ministry announced Monday that it has approved a new $15 billion deal with Japan to help it build a refinery in Japan, the first time the country has signed a foreign investment deal with a foreign company in more than three years.
The ministry said the agreement, with Japan’s Mitsubishi Corp., would allow Venezuela to “improve its domestic refining capacity, as well as to develop and diversify sources of petroleum.”
The new agreement includes construction of a new facility, the foreign ministry said.
In January, Maduro announced that he would approve a $15.6 billion deal to buy $1.5 billion in American bonds from Citigroup to boost domestic oil production.
It was the latest in a string of moves by Maduro to boost foreign investment in Venezuela.
The country is one of the world’s largest oil producers, and Maduro has said that he wants to boost the country’s oil exports, but critics say that the country is also a major exporter of natural gas, which is considered a key ingredient in the countrys energy mix.
Analysts say the new deal with Mitsubishis could be a step in the right direction.
But they caution that there could be more to come as Maduro tries to push through measures that could further weaken Venezuela’s economic position and lead to further instability.
“I don’t think there’s any doubt in my mind that it’s going to get worse,” said Luis Paez, senior analyst at the International Monetary Fund.
“It’s going back to the old playbook of trying to squeeze the economy and that’s what Maduro is trying to do.”
The foreign ministry also announced that it is seeking $500 million from Japan to invest in the construction of new schools and public housing, as part of a series of programs to promote education and infrastructure in Venezuela, which has been hit hard by the economic meltdown.
The new investment will be funded through a Japanese company, and it will help support infrastructure projects that will “strengthen the social, economic, and political status of the Venezuelan people,” the ministry said in a statement.
The deal will not affect the $1 billion Mitsubisheri has already committed to helping Venezuela develop its infrastructure, the statement said.