Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue No. 27 - Evidence - Meeting of June 7, 2017
OTTAWA, Wednesday, June 7, 2017
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 5:08 p.m. to study on foreign relations and international trade generally (topic: recent developments in the Bolivarian Republic of Venezuela).
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Honourable senators, the Standing Senate Committee on Foreign Affairs and International Trade is meeting today. The committee is authorized to examine such issues as may arise from time to time relating to foreign relations and international trade generally. Under this mandate, the committee will hear testimony today on the situation in Venezuela.
The committee heard witnesses in 2016 describe the political situation and the growing economic crisis in that country. A short report was published in June 2016.
The committee continues to welcome opportunities to keep apprised of developments in Venezuela, the challenges facing the Venezuelan people and the implications for the region.
Accordingly, we are pleased today to welcome Dr. Pablo Heidrich, Assistant Professor, Bachelor of Global and International Studies, Carleton University.
Welcome, Dr. Heidrich. I also apologize that we were delayed due to a ceremony to unveil the portrait of a Speaker of the Senate. We appreciate your indulgence with that.
Welcome to the committee. I think you understand how we operate here. There will be a statement from you, and senators will then welcome the opportunity to place questions to you. Thank you for your indulgence and particularly thank you for your expertise and for being here. The floor is yours.
Pablo Heidrich, Assistant Professor, The Bachelor of Global and International Studies, Carleton University: Thank you for the invitation to appear before this committee. My opening statement will focus on the economic situation in Venezuela and how that is influencing the current political crisis there. While I understand such a crisis can be constructed as more than political, given the terrible social and human costs that we have been witnessing, in other ways it represents a rather classical example of a political regime crisis, as has been observed in other Latin American and particularly other oil-exporting nations over time.
There are particularities in this case as there are in others, but we should remain cognizant that what we are witnessing is not extraordinary.
As you all know, Venezuela has been for over century an oil-exporting nation. Oil has gradually become the main and currently almost the only product that it exports to the rest of the world. Furthermore, the combination of very high oil income in the last decade and a half and the political and economic reforms undertaken under the Hugo Chávez regime have rendered Venezuela incapable of producing most of the manufactured goods and commodities that it needs to function as a society. It currently imports, for example, 95 per cent of its medicines, and 80 per cent of its food. Such a level of external dependency is extreme. Actually, it's only paralleled by some other very small but oil- rich emirates in the Gulf.
Thus, Venezuela's story has become a story of the oil price. Chávez came to power when oil in international markets was at $8 per barrel in 1998, and it went up to $25 per barrel by 2002, when he faced a coup. Eventually, it rose all the way to $147 per barrel at its peak in 2008. Venezuela accrued close to $900 billion in oil exports revenue between 2000 and 2016, most of that between 2007 and 2012.
The average cost of producing that amount of oil is about 20 per cent, so Venezuela has accrued US$700 billion of pure profit in 15 years for a country of 30 million people.
That enormous rent has propelled Chavismo to expand and eventually create a system of wealth redistribution to reduce poverty, inequality and also to foster allegiance to the regime. Such policies of oil rent redistribution are actually well known in oil-exporting nations and they're very well studied in the Middle East, central Asia and Latin America itself. That is typically known as the resource curse, whereby resource-abundant nations tend to do much worse than resource-poor ones, in terms of economic and social development, because of their mistakes in how they manage their resource rent. Such mistakes become more visible once the resource prices, such as the price of oil, go down and the country is left without alternative means to support itself without great hardship.
The innovation of Chavismo in Venezuela to these typical problems of oil-exporting countries is a crucial point to understand Venezuela's circumstance today. Chavismo sought to control not only the demand side in Venezuela's economy by assigning employment, subsidies and contracts according to political connections, as that has been usually done in Venezuela and in most other oil-rich countries, but it also sought to control and very radically, the supply of goods and services coming into the economy. By controlling both the supply and demand, Chavismo harnessed oil's domination of the Venezuelan economy to drive it to his intended political goal, which he named "socialism of the 21st century.''
In other words, Chavismo undertook a gradual displacement of private actors from the economy to make it mostly state managed. Several high-profile national and foreign companies have been expropriated and many more have been driven out or forced to close by increasingly aggressive controls on foreign currency, labour relations and access to credit. Unlike other regimes with oil rents, those "vacancies'' in the economy have not been covered by regime clients or relatives of the people in power. They have simply been left vacant. The need for those goods has been covered by more imports, dictated in quantity, supplier and importer by the state.
The crisis of the regime came once the price of oil fell from an average of $100 per barrel in 2010 to 2014 to what is nowadays barely $50 a barrel. That perfectly replicates the evolution of Venezuela's economy, which has been shrinking by 8 to 10 per cent per year for the last three years and has an increasing rate of inflation up to 800 per cent for this year. Basically there is no more money because oil is worth less than before, just as the state had undertaken its ever-expanding role. In terms of supply, that means it doesn't have enough money to cover imports just when it decided to control all imports and eliminate local industry to replace it with imported goods and services.
Now the consequences of this for the regime are truly monumental. Since the government basically imports everything that the economy needs to function and decides who gets what and what gets bought and at what price, it faces a tremendously complex task. In a well-functioning state, this would require huge efforts of coordination and excellent information on the economy. But the Venezuelan state has neither and the collapse that you see is the result, plus the fact that now they have maybe a third of the money that they had four years ago. Besides, corruption has naturally flourished and grown even more with such an uncharismatic leader as Nicolás Maduro. Corruption makes the administration of such an expensive and ineffective state even more complicated and more inefficient, actually.
As the system has grown so complex, expensive and corrupt, and the funding has shrunk, you can understand the social and political protests that have intensified given the terrible results that this is having for the population in terms of well-being. Other presenters have already covered the deterioration in democratic rules and institutions, so I'm not going to cover that. I'm just trying to give you a complementary economic understanding of what this crisis is.
Going forward, I assume that President Maduro is basically retrenching to resist opposition to the very last breath since he feels he has nowhere to go. The same applies to those he has brought closest to him, and that includes the armed forces and some of the core constituencies that used to be part of the Chavista movement among the poor and the party followers distributing goods to them and managing their support for the regime. The armed forces, for example, are currently in charge of importing and distributing all food and medicines into the country, and the distribution system follows channels controlled fully by the party and community groups that are enrolled with it. In other words, this is no longer a government that is seeking to supply the population at large to build any widespread popular support; it's just working to keep the allegiance of the minimum percentage necessary to stay in office. For all involved with him, a future without Maduro would be a much worse reality than the present, so you can understand the levels of resistance to change. Those who are not in these groups obviously assume a different fate for themselves and therefore the determination of the protest you have witnessed or read about.
For the coming weeks, the constitutional change that is about to happen is just the legal superstructure of what I've already described. This is a regime seeking to maintain its control on a much reduced oil rent to guarantee its permanence in government and increasingly impunity from what crimes it may have committed so far, initially of economic corruption and now more political or of human rights. The reaction from the opposition is what we really need to watch for.
Venezuela has a long history of political struggle, and very often in the form of violent conflict. Such an outcome is not unpredictable. In terms of what the Government of Canada could do in regard to this situation, I have a series of specific policy recommendations, but I leave that for the question period.
The Chair: Thank you, Dr. Heidrich.
[Translation]
Senator Saint-Germain: In your conclusion you say that you have some potential solutions to suggest to us. I would like to hear more about these potential solutions.
[English]
Mr. Heidrich: The main recommendation would be that I think Canada should strive, together with its allies, to support the opening of a humanitarian channel to facilitate the supply of food and medicine to Venezuela. The position of the Venezuelan government so far is that there is no humanitarian crisis. However, I think some things could be done through informal channels and through what remains of civil society in Venezuela. There is a strong Venezuelan diaspora in Canada and that could be a starting point, but maybe not the only one.
Another thing that could be done is to support the multilateral efforts being spearheaded by OAS, the Organization of American States, to return Venezuela to the rule of law, democratic principles, respect for human rights.
Another one is to try to support the mediation mechanisms that are already in place through the Vatican and Latin American states through UNASUR, to make those mechanisms of mediation more effective.
I have a negative recommendation. I would suggest that the Venezuelan political elite should no longer be targeted with individual sanctions, as has been done, for example, by the United States, because I recently read a paper which said that out of the 14 people sanctioned so far, 13 of them have been promoted inside the regime.
Since Maduro feels he has no exit, he is surrounding himself by people who would feel likewise, and that entrenches more extreme positions. Remember, this is a state that is extremely well-armed. You don't want it to feel like he has no exit. You want the opposite. You want him to see that there is an exit.
As parliamentarians, you would understand this better: Some parliamentarians in Venezuela have been persecuted, and the Parliament is being emptied of its capacity to function as an independent power. I think working through international parliamentarian unions and systems of cooperation among Parliaments would be most useful to support that institution, which is the only clear representation that the opposition has.
The opposition should also be given the possibility of feeling that there is an alternative to violence; otherwise, the situation will become more violent from their side, too.
Senator Saint-Germain: Can you tell us more regarding the informal channels of civil society you referred to? I'd like to know more about that.
Mr. Heidrich: Sure. I understand that they are associations of the Venezuelan diaspora. Venezuela traditionally had a relatively small diaspora of about a quarter million. Right now the number that is usually estimated is 2.5 million people who have left the country. There is a significant number of Venezuelans also in Canada. Many of them do not hold Venezuelan passports, which are hard to get if you want to leave the country, but Italian or Spanish or Portuguese, because they are descendants of immigrants from those countries. That could be one possibility.
The other one is through civil society organizations that are based in Colombia and Brazil, and they provide linkages into Venezuela.
Senator Eaton: You talk about an exit. Would there be a way of assuring him a laissez-passer, Maduro, some of the people in the military, to get him out of the country and to say go and live in Switzerland or Ghana or Colombia or Uganda? Would that be a possibility? Could the UN arrange a safe laissez-passer that he not be prosecuted for war crimes as long as he left Venezuela and left his bank accounts? That would be up for negotiation, obviously, because I don't know the figure he could have taken. Would that be a possibility?
Mr. Heidrich: Yes, that is a very workable possibility. There are several countries in Latin America that would readily accept Maduro and many members of his government, and also of the organizations that have been linked with the government for a decade and a half to basically go into exile.
The President of Bolivia recently visited Maduro and gave assurances that the Bolivian government would stand behind him. There are other governments in Latin America that may not like Maduro but would have no hesitation to take him in, provided that would facilitate an exit to the crisis.
Senator Eaton: He has to be shown that it would be a way out, that the world would accept it?
Mr. Heidrich: Yes. The crimes committed so far I wouldn't say that they amount to war crimes, but there are certainly violations of human rights. Linking that to Maduro as an individual would be difficult.
Senator Eaton: I'm interested in the role Cuba is playing in supporting Venezuela. I guess Cuba gets as much cheap oil from Venezuela as it can get. What do the Castro brothers do for Venezuela? Do they send Venezuelans food? Is it more than moral support?
Mr. Heidrich: Cuba has been sending, I believe, between 20,000 and 30,000 doctors, nurses and social workers that constitute an important part of what the Venezuelan state missions are called. Those are specific initiatives of the government to improve health and literacy indicators, among the poorest in the country. That is a system that Cuba has been using to pay for the oil that it receives from Venezuela.
Senator Eaton: Do they really improve things in the country or is it just the victim?
Mr. Heidrich: Yes, they have. The country is very big, so you could be improving health for some sectors of the population, but for others, indicators may be falling. Recently the Minister of Health in Maduro's cabinet was fired because she provided data to the public as to how infant mortality had grown by 30 per cent in just one year, from 2015 to 2016.
Senator Eaton: Of course they would support Maduro, wouldn't they, the people coming from Cuba?
Mr. Heidrich: Yes.
Senator Eaton: Or once they get into Venezuela, politically they go their own way?
Mr. Heidrich: No, the Cuban state has systems in place to guarantee those people will return.
Senator Eaton: They will return to Cuba and support Maduro?
Mr. Heidrich: Yes, they support Maduro through the work they do. I have to say that Cuba has already developed a system of insurance in case Maduro would not be able to stay in power. They are already negotiating with China to get loans that would cover for the energy needs of Cuba, and the Cuban budget that is being discussed for 2017 and 2018, they already considered that they would receive a lot less of an oil subsidy from Venezuela. The way this works is that Venezuela sells the crude to Cuba, Cuba refines it, uses a part of it and sells the rest abroad at the market price.
Senator Eaton: China would become Cuba's new bank?
Mr. Heidrich: Yes. It would also provide technology to explore for oil and gas around Cuba's island.
Senator Woo: Of course China is doing with Venezuela exactly what you described they might do with Cuba by providing oil for substantial loans.In fact, China is one of the reasons the Maduro regime has been kept afloat.
Can you talk a bit about the geopolitics of why China is playing this game in Venezuela, far away from Asia, clearly a failing state, probably not very popular in other parts of South America, so not clear it's winning political points in the broader region? Can you talk a bit about what you see China is thinking in this game and how China might or might not be a solution to the horrible plight that Venezuelans are facing?
Mr. Heidrich: China is perhaps the single most important influential actor that could hypothetically be brought upon Maduro's government to change his policies or eventually accept a call for overdue elections. In all likelihood, there would be defeat in those elections.
However, the Government of China has been involved in Venezuela already for more than a decade. It has already lent over US$60 billion to Venezuela. Venezuela has committed about one quarter, a little bit less, maybe 20 per cent of its oil production for the next 10 years to pay for that debt. As the price of oil has been going down since the loans were signed, the amount of oil that Venezuela has to produce to pay China has actually increased. So China has made a very good investment.
China is already involved in exploration and extraction of oil through one of the Venezuelan state companies in joint ventures. It is also involved in mineral exploration, just like a couple of Canadian companies have been invited as well.
Looking at the performance of China with other regimes that are very rich in oil but sometimes unstable, China has a policy of not intervening. It does intervene but never directly because it's very important to its reputation to maintain that image of being a non-interventionist trading partner.
Senator Woo: Can we go a bit further? By the same token, China doesn't want to be party to a failed regime and to mass social unrest that will undermine its own investments and its own ability to get the payoff on the oil it's owed for the next 10 years. We saw in Myanmar, for example, China resisted the change there. It was an oppressive, authoritarian, military regime; but in the end, China quietly, tacitly agreed to change. Myanmar still has a lot of problems, but they went from a military regime to a more democratic, elected government.
What are some conditions that might entice China to be a more constructive, if I can put it that way, player in Venezuela? Do you have any ideas there?
Mr. Heidrich: Maduro would have to make some mistakes. Maduro would have to perhaps expropriate some of the investments made by Chinese companies or to allow extortion of Chinese businesspeople who are established in Venezuela. Those kind of things could trigger a more critical reaction from the Chinese government. However, just like in the case of Myanmar, the position of China has increasingly become, "Yes, we have been your ally; yes, we have been a good trading partner and so on; but no, we will not lend you any more money.''
Maduro has already gone to Beijing twice and come back with empty hands.
Senator Woo: Interesting.
Mr. Heidrich: That is a clear sign for people engaged with China. When China says no, it means something more than a no.
Senator Marwah: I'd like your comments or thoughts on what some of the regional players might do. As you know, the OAS hasn't condemned it, but it has made some calls for Venezuela to change their thoughts on restoring constitutional order. Mercosur has done the same; UNASUR has done the same. They have all acted. Can any more pressure be brought to bear on the regional players that have a lot of interest in keeping one of their fellow countries stable? They all have cross-regional investments. Can more pressure be brought there?
Mr. Heidrich: Some pressure has been brought. It hasn't been successful. For example, we can take the case of OAS, the Organization of American States. A recent vote was going to be taken. It was finally not taken because there were not enough votes to pass it. The countries that were the deciding factor behind that, the ones that changed or maintained a position close to Venezuela, were countries in the Caribbean. Bahamas and Jamaica were the two crucial votes that sided with Venezuela, and that has to do with the initiative of Venezuela called PetroCaribe. Not only does it provide a lot of oil at subsidized prices to Cuba but also to many countries in the Caribbean and Central America.
The opposition in Venezuela made a mistake by very clearly stating that if they come to power all those programs will finish, and the Caribbean nations were listening, so they are voting now accordingly in OAS and blocking a statement that would definitely condemn Venezuela and tell Venezuela to call elections or be suspended from the organization because it would no longer be considered a democracy.
In the case of UNASUR, the position has been more trying to maintain an open dialogue between opposition and the government. So UNASUR has not taken the step of condemning the Venezuelan government because then the Venezuelan government would not participate in the meetings any more.
In the case of Mercosur, Venezuela has been suspended, but no other measure can be taken except that. The same was applied to Paraguay when they had a coup.
Senator Marwah: Just a follow-up question on the oil infrastructure in Venezuela. As you know, it's been shaky at best, and with the lack of investment over the last 10 years it's getting shakier by the day. Is that sustainable or is that another way to bring pressure if that starts falling apart, or do other countries refuse to support the infrastructure? They can't do it locally; it's all coming from outside.
Mr. Heidrich: Venezuela used to have a world-class state-owned oil company. When Chávez wanted to change the rules for that oil company to make it more responsive to the state, that oil company led a coup d'état against Chávez. Eventually Chávez won and decapitated the company and fired half the staff and replaced them with his own people. The PDVSA, the state company you have today that is producing less and less oil, is a company that was defeated by Chávez. Still the Chavista and now the Maduro regime do not trust PDVSA.
It's ironic that a government that says it is on the left actually increasingly depends on foreign investors to keep its own state oil company under control because it doesn't trust it. So that's why you have these invitations from Maduro to oil companies from Russia, Iran, China, actually also from Italy and France, to participate in the Venezuelan oil business.
The oil production of PDVSA may be going down, but Maduro has proven quite ready to bring in foreign investment.
The Chair: Can you talk a little more about investment? I understand Pirelli has left. They cannot get the supplies they need. GM has pulled out. Much of Venezuela depended on a commercial base that came, as you said, from the immigrants from Portugal, et cetera. They came from Madeira. They were commercial entrepreneurs, et cetera. Many of them are leaving, so there's that problem at a commercial level.
I'm interested in the investment because there was a lot of investment. Is it drying up, or are we just hearing about isolated companies that can no longer operate? They're not making a political judgment; they're making an economic decision.
Mr. Heidrich: Yes. Most companies that have been leaving Venezuela were even leaving when the oil was not at such low price and the crisis was not as big. They were leaving because the increasing controls on currency were stopping those companies from sending their profits abroad. So they eventually had to close their operations since they didn't find it profitable to continue to reinvest in a country from which they had no exit for their profits.
So there have been negative FDI flows or foreign direct investment flows into Venezuela for some time. Many multinational companies — GM and the full list — have left Venezuela. They have basically given up their investment because they are not able to sell. They basically write it all off.
The case of oil is different, because Venezuela not only has the second or third-largest reserves of oil in the world, but it literally accounts for maybe 10 per cent of global oil reserves. There is no oil company in its right mind that would totally give up Venezuela. They would try to get back in.
The Chair: Could you comment then on the U.S.? We've heard testimony here and seen in the press that while the sanctions have been applied in the U.S., they have certainly not stopped the purchase of the oil and the investment there. How does that prop up Maduro?
Mr. Heidrich: Well, it is the main lifeline for the Maduro regime. The U.S. remains the biggest customer for Venezuelan oil. Venezuela and the U.S. are in a symbiotic relationship in terms of oil. They have been so for a century. Venezuelan oil is a heavy oil somewhat similar to the oil sands, and it can only be processed in Venezuela and a couple of refineries in Texas and China. No one else has the technical capacity to readily process that oil. So the United States would be under a very difficult situation for its own companies if it decided to set a blockade for Venezuelan oil, because several American companies geared to exclusively process Venezuelan heavy oil would lose a tremendous amount of money.
However, to make an economic blockade on oil on Venezuela could make this terrible situation absolutely horrendous because there would be no money going into the country, and the country is already so divided and violent. You already have the spill of hundreds of thousands of people going across the border to Colombia and Brazil. With a U.S. oil blockade, you could have a situation like in Syria where millions cross the border.
The Chair: You said the country is divided. You also said that the opposition has made mistakes and they're in a different situation. If we don't take the ultimatum of the U.S. cutting off the oil which could force Maduro, it would be at the cost of the Americans being the cause of the strife within Venezuela. With that background, where is this heading, civil war as some of the journalists seem to say?
In other words, if there isn't something immediate, is it just going to accelerate at the cost of the people, which there has been some history of in the past?
Mr. Heidrich: I try not to imagine that. Yes, it could lead to what is called a low-intensity conflict for some time. There is a Venezuelan precedent to this. In the 1950s and early 1960s, it was the end of a dictatorship in Venezuela. There was agreement among the three centre-left and centre-right parties to basically alternate in power and have a democratic regime since. There was one section of the political opinion that was left out, and that was the hard left. The resort that hard left took was to become a guerrilla force. Thus, there was a guerrilla war in Venezuela in the early 1960s. Between 20,000 and 30,000 people were killed. That was the cost of not including them in a political pact. If there was some kind of regime that decides today, such as Maduro, to continue in power regardless of the consequences, you could have a similar episode.
The Chair: Is there sufficient memory not to go that route? Because there are other countries who have experienced that who say never again, that's not a solution for their country, or is it too many decades?
Mr. Heidrich: I think memory is one thing, but also you have to think of the alternatives. If people in the opposition feel there are no alternatives, then I do not know what can happen.
Senator Eaton: Speaking of bad influences, how big a role does FARC play in Venezuela?
Mr. Heidrich: FARC is demobilizing, so the elements of FARC that are in Venezuela are reducing in number. In that sense, it would be positive. The potential negative is — as you can remember from conflicts in Central America — when you have the demobilization process, that might produce an overflow of handguns and light weapons in the countries around.
Senator Eaton: Because Colombia has made an agreement with FARC, has Colombia closed its border with Venezuela?
Mr. Heidrich: No.
Senator Eaton: So FARC is not fleeing into Venezuela and taking refuge there?
Mr. Heidrich: There are elements of FARC that are in Venezuela. They might be returning to Colombia, depending upon the specifics for each one of these groups inside the peace agreement. Not all sectors of the FARC are treated the same. But the problem is what happens with the weapons.
The Chair: Perhaps a supplementary to Senator Eaton's first questions about a safe haven for Maduro. Canada has stood very staunchly for rule of law. The foreign minister yesterday reinforced that. We've been a strong advocate of the International Criminal Court, no impunity; maybe short of war crimes, but our position has been not to support safe havens, paying off dictators, et cetera. If this were the approach, Canada would be in a conundrum then. They would either say peace and Maduro out, but then you run into is this justice for the people. So this is the no peace without justice, no justice without peace debate that Canada is often caught in. We found that in Liberia, Sierra Leone and other places. I'm just using those as an example.
What do you think would be a fair position for Canada in those situations? As you say, there are discussions with other countries in South America. What should Canada's stand be or should be?
Mr. Heidrich: I think a line must be drawn between crimes that might be of policy malpractice or economic corruption and crimes that are of human rights. That is a little bit like making a deal with the devil. However, you need to see what the potential benefits are from doing this.
There is a further complication I haven't touched on in my presentation, but you may have heard it from others. That is the increasing involvement of parts of the Venezuelan regime, and particularly the armed forces with narco traffic, with drug trafficking. That is very complicated.
It has the ironic role of relieving pressure on Colombia and facilitating the peace process there, because a lot of the drugs are now going through Venezuela, and a lot of the logistics for that have improved. Especially if you have the logistics of the entire Venezuelan Armed Forces at your disposition. The mingling of drug trafficking and the military there makes it complicated for any kind of political settlement afterwards.
Senator Gold: In some sense, my questions have already been asked.
However, you described the degree of control over the economy that the state has assumed over the years and suggested some possible ways in which the international community might respond — humanitarian aid being one and pressure from China another. Without putting you in the position of predicting, is there any realistic chance that the regime so state-dominated and corrupt as you have just described can or would yield power sufficient to resolve the political and humanitarian crisis, or have they gone beyond a point of no return? It is such a failed state economically. The opposition in part, I think, would like to see some reform in the economic and political structures. Has it gone beyond the point of no return?
Mr. Heidrich: No, I would hope not.
Senator Gold: So would we, but that's not what I'm asking.
Mr. Heidrich: It's very difficult. We are going to see in the next weeks as this constitutional assembly is put together by the Maduro administration to basically change the structure of government and make it a one-party state what the reaction will be from the opposition and the population at large.
I can give you a positive example of what the Government of Mexico has been doing. The Government of Mexico was trying to reduce the humanitarian crisis in Venezuela, so it offered food and medical assistance. The Venezuelan government said, "No, there is no humanitarian crisis. We don't need your help.''
So the Government of Mexico changed the wording and said, "What about Mexican solidarity with you?'' We will package everything as Mexican solidarity with the Venezuelan people. The government said, "That's fine.'' Once the aid got to Venezuela, the government wanted to control everything through its own channels, either through the armed forces or through the party and so on. The Mexicans played a game of sometimes being late or sometimes being early in the deliveries. In that way, some of the aid was for groups not controlled by the government. Through the very tremendous situation of corruption, they managed to provide aid to people who are not in these circles, under the tutelage of the state.
It is a very messy solution, and the aid from Mexico is not on a tremendous scale, but it has shown the way to other Latin American countries to explore doing the same. Brazil is trying to do the same on the border. One of the reasons it's trying to do it is because it has gone from zero to 100,000 refugees in a few months — people from Venezuela into northern Brazil. In all likelihood, this is going to increase.
The Chair: Dr. Heidrich, we have completed our questions. You have covered a broad range of issues. I'm not sure you've left us in any way optimistic, but on the other hand, you have not given up on perhaps finding some solution. We look at all the alternatives. We understand that Canada doesn't have the influence in Venezuela that perhaps other countries have, but maybe that's a lever we can use.
Thank you for being able to canvass that area.
Mr. Heidrich: I only want to add two very small points. One of them is explicit policy recommendations for Canada. In the position that Canada takes toward this issue in Venezuela, it should reiterate publicly and very clearly that the only type of opposition that would continue to deserve the support of Canada should be one that is exclusively peaceful. A very strong line must be drawn there. No tolerance for violence from the opposition side, because otherwise it would play a game that would have terrible consequences.
The second one is that Canadian mining or oil companies should be very careful about signing any agreements with this government, because they would be very much tainted. The offers of agreement are going to become increasingly attractive, but when things are too attractive, they are really too attractive. You shouldn't engage in that, because it could have a very high cost for the reputation of Canada and those companies as well.
The Chair: Dr. Heidrich, thank you. I would reiterate there should be a peaceful solution from both sides. I believe that has been the position of this committee previously. We urge both sides not to resort to any violence, whether the government that has more means to do that or the opposition. In the end, it is not in the best interests of Venezuela.
A peaceful solution to Venezuela's crisis is what we hope for. Our feeling is sometimes a bit of desperation in terms of what we can do that would be positive and not contribute to any further instability.
If you have any more thoughts or suggestions on that, you can certainly contact the clerk. Otherwise, thank you for covering so many areas. We appreciate your patience in waiting for us, and we very much appreciate your input.
Senators, we are adjourned until tomorrow when departmental officials will be here to discuss the Venezuela situation.
(The committee adjourned.)