Amid crises, Xi seems set to uphold Party’s rule at secretive China conclave

Amid crises, Xi seems set to uphold Party’s rule at secretive China conclave
By Ben Blanchard, Kevin Yao and Keith Zhai

BEIJING/SINGAPORE (Reuters) – China’s Communist Party leaders will on Monday start their most important meeting this year, with President Xi Jinping expected to champion the Chinese model of governance while fighting protracted economic and political crises at home and abroad.

The four-day conclave comes at a critical time, as Hong Kong grapples with anti-government protests for the fourth month, drawing Western criticism of Beijing for trampling on the rights and liberties of Hong Kong people in its handling of the violent demonstrations.

China’s economy is also growing at its slowest pace in nearly three decades, hurt in part by a prolonged trade war with the United States. Stable growth has been fundamental to the Party’s political legitimacy.

It is key for Beijing to use the occasion to cast the Chinese political system as meritocratic, unchallengeable and superior to Western democracy, said Wang Jiangyu, director of the Asian Law Institute at the National University of Singapore.

Party leaders have repeatedly warned that without Communist rule, China would descend into chaos and fall prey to hostile Western powers. In September, Xi said China was entering a period of “concentrated risks” – economic, political and diplomatic – and the country must be ready to fight.

“China’s Party-state wants to show that its political system is more attractive overseas, and others should stop their finger-pointing,” Wang said.

Plenums, as such Communist Party meetings are formally called, are generally held every autumn. The upcoming plenum will be the fourth since the last Party congress in late 2017.

It is a closed-door meeting of the party’s Central Committee, which comprises about 370 people and is the largest of its elite bodies that rule China.

Some expected the fourth plenum to have been held last autumn, but it was not, sparking speculation in Beijing of disagreements at the top of the party about the direction of the country.

“The fourth plenum will implement reform plans, and they will talk about how to improve governance, which is pressing,” one Chinese policy insider told Reuters on condition of anonymity, because of the sensitivity of the matter.

“They need to transform the overall state governance capacity and adapt to changes in global rules and withstand stress tests from external risks,” the insider said, adding that the trade war is exacerbating such pressures.

The Communist Party spokesman’s office did not respond to a request for comment on what would be on the plenum’s agenda.

IDEOLOGY

Policy insiders say the trade war, China’s slowing economy and Hong Kong will be discussed, even if there is no direct mention of them in the final closing communique, released by state news agency Xinhua once the meetings have ended.

Two Chinese officials who reviewed the draft of the communique said the document was largely political and focused on ideological innovation.

Still, any ideological change may hint of new economic trajectories, because “ideology in China is never just about grand designs,” said Chucheng Feng, co-founder of GRisk, a political risk analytics firm based in Hong Kong.

“It is deeply linked to reform and the economy,” Feng said.

China’s gross domestic product (GDP) grew 6% in the third quarter. But U.S. President Trump said this week growth was “probably minus-something”.

Chinese leaders are expected to chart the course for the economy in 2020 at a key meeting in December.

So far, China has shown no overt sign of changing or slowing its economic reforms. Notably, it has embarked on a long-term upgrade of its industries and modernisation of its technological capabilities while moving away from low-end and polluting manufacturing.

But to appease U.S. demands for greater access to Chinese markets, Beijing has pledged open its markets and roll out some relatively pain-free reforms such as new rules next year meant to make it easier for companies to do business in China.

RESHUFFLES

The Party will also look ahead to the next congress in 2022 at this plenum.

How exactly Xi’s continuation of power will be handled after presidential term limits were removed last year will be the “elephant in the room” at the plenum, one senior Western diplomat said on condition of anonymity because of the sensitivity of the matter.

“It’s unclear exactly what will happen in 2022,” the diplomat said.

One title Xi still does not hold is party chairman, and since the last party congress there has been speculation he could seek to resurrect the position.

Xi is the party’s general secretary, but not its chairman, a title Mao Zedong and his two successors, Hua Guofeng and Hu Yaobang, both held.

Xi also has no obvious successor.

But diplomats and leadership sources says several senior leaders could be in contention, most notably three people close to Xi: Shanghai party general-secretary Li Qiang, Chongqing party boss Chen Miner, and Guangdong party boss Li Xi.

The party has also lined up younger officials, born in the 1970s, from which it can choose the country’s next generation of leaders. Party bosses could spend the next few years promoting them to key regional positions as governors, ministers, or their equivalent.

Some of the notable young officials include 48-year-old Zhuge Yujie, general-secretary of the Party Committee of Shanghai; 49-year-old Shi Guanghui, who oversees political and legal affairs in Guizhou; and 46-year-old Guangxi deputy governor Yang Jinbai, according to leadership sources and experts.

(Reporting by Kevin Yao and Ben Blanchard in Beijing and Keith Zhai in Singapore; Editing by Ryan Woo and Gerry Doyle)

Hong Kong police shoot teen as protest violence escalates

By Jessie Pang and Donny Kwok

HONG KONG (Reuters) – Hong Kong police shot a teenager on Tuesday, the first time a protester has been hit by live ammunition during four months of demonstrations, as the Chinese-ruled city was rocked by widespread unrest on the 70th anniversary of the founding of the People’s Republic.

In cat-and-mouse clashes that spread from the upmarket district of Causeway Bay to the Admiralty area of government offices on Hong Kong island, police were pelted with petrol bombs and responded by firing tear gas and water cannon.

Police said an officer shot an 18-year-old man in the shoulder in the Tsuen Wan area of the New Territories with a live round. Protesters have previously been hit before with bean bags rounds and rubber bullets and officers have fired live rounds in the air.

Verified video footage of the incident widely shared on social media shows a chaotic melee with riot police battling protesters wielding metal bars, before an officer fires a shot at close range.

As the wounded man steps back and falls, someone tries to help, but another policeman tackles him to the ground.

“A large group of rioters was attacking police officers in Tsuen Wan,” police said in a statement. “Police officers warned them, but they were still attacking police. A police officer’s life was seriously endangered. In order to save his and other officers’ lives, they fired at the attacker.”

There were no immediate details on the wounded man’s condition.

Former colonial ruler Britain said the use of live ammunition was disproportionate.

Nearly four months of street clashes and demonstrations have plunged the former British colony into its biggest political crisis in decades and pose the most serious popular challenge to President Xi Jinping since he came to power.

Protesters had vowed to seize the opportunity on China’s National Day to propel their calls for greater democracy onto the international stage, hijacking an occasion Beijing sees as an opportunity to showcase China’s economic and military progress.

“I’m not young, but if we don’t march now, we’ll never have the chance to speak again, it’s as simple as that,” said one marcher near Causeway Bay, a 42-year-old woman with her own logistics company who identified herself as Li.

POLICE BAN DEFIED

Thousands of black-clad protesters, some wearing Guy Fawkes masks, marched on Admiralty, defying a police ban. Violence escalated across the harbor to Kowloon and beyond to the New Territories. Police vans chasing down pro-democracy protesters in the key drag of Hennessy Road.

Police said 31 people had been wounded across the territory, two critically, without giving details.

Protester Jerry, 26, dressed in black and sitting amid the wreckage in Causeway Bay, denounced the police.

“The Hong Kong police, they’ve just lost their minds,” he told Reuters. “They just follow orders. They say it’s to protect lives, but they see the people as objects.”

British Foreign Secretary Dominic Raab criticized the use of live ammunition.

“Whilst there is no excuse for violence, the use of live ammunition is disproportionate, and only risks inflaming the situation,” Raab said in a statement.

In the Admiralty area, police fired water cannon and volley after volley of tear gas to disperse protesters throwing Molotov cocktails outside central government offices and ordered the evacuation of the Legislative Council building next door.

Petrol bombs were also thrown at MTR metro stations, including at Causeway Bay and Admiralty and Sham Shui Po in the New Territories. Many stations were closed to stop protesters moving around. Shutting stations has made them a common target for attack during the weeks of unrest.

Chinese banks and Chinese-backed businesses were targeted with petrol bombs and anti-China graffiti. Local broadcaster RTHK said it was pulling all its reporters away from the violence after one was hit on the head.

BIRTHDAY PARADE

Hong Kong has been tense for weeks, with protests often turning violent, as authorities tried to avoid activists spoiling Beijing’s birthday parade.

Hundreds of officials and members of Hong Kong’s pro-establishment elite began the day with a flag-raising ceremony and National Day reception at the Convention and Exhibition Centre, held early and moved behind closed doors. Roads to the center were closed and tightly policed.

Hong Kong had benefited from China’s support under the “one country, two systems” policy, Acting Chief Executive Matthew Cheng told the assembly, referring to guarantees of political freedoms after the city’s handover from British to Chinese rule in 1997.

But he said escalating violence was disrupting social order and hurting the economy.

The government of embattled leader Carrie Lam has already canceled an annual Oct. 1 fireworks display over the city’s Victoria Harbour, citing public safety.

Lam, who was trapped in a stadium for hours last week after attending the “open dialogue”, left for Beijing on Monday to celebrate China’s birthday on the mainland.

In contrast to events in Hong Kong, Beijing’s carefully choreographed anniversary festivities included troops marching through part of Tiananmen Square with new missiles and floats celebrating the country’s technological prowess.

Lam was shown on television smiling as a float celebrating Hong Kong went past as she sat with Chinese officials.

The Communist Party leadership is determined to project an image of national strength and unity in the face of challenges including Hong Kong’s unrest.

“On our journey forward, we must uphold the principles of peaceful reunification and one country, two systems; maintain lasting prosperity and stability in Hong Kong and Macau … and continue to strive for the motherland’s complete reunification,” Xi said in a nationally televised speech in Beijing.

Hong Kong protesters are angry about what they see as creeping Chinese interference in the Asian financial center.

China dismisses the accusation and has accused foreign governments, including the United States and Britain, of fanning anti-China sentiment.

(Reporting by Jessie Pang and Donny Kwok, Additional reporting by Sharon Tam, Felix Tam, Poppy McPherson, Anne Marie Roantree, Farah Master, James Pomfret, Twinnie Siu, Alun John, David Kirton, Jennifer Hughes and Keith Zhai; Writing by Clara Ferreira Marques, Bill Rigby and Nick Macfie; Editing by Raju Gopalakrishnan and Alex Richardson)

Exclusive: Amid crisis, China rejected Hong Kong plan to appease protesters – sources

Protesters carry placards as they gather to condemn alleged sexual harassment of a detained demonstrator at a police station, in Hong Kong, China August 28, 2019. REUTERS/Anushree Fadnavis

By James Pomfret and Greg Torode

HONG KONG (Reuters) – Earlier this summer, Carrie Lam, the chief executive of Hong Kong, submitted a report to Beijing that assessed protesters’ five key demands and found that withdrawing a contentious extradition bill could help defuse the mounting political crisis in the territory.

The Chinese central government rejected Lam’s proposal to withdraw the extradition bill and ordered her not to yield to any of the protesters’ other demands at that time, three individuals with direct knowledge of the matter told Reuters.

China’s role in directing how Hong Kong handles the protests has been widely assumed, supported by stern statements in state media about the country’s sovereignty and protesters’ “radical” goals.

Beijing’s rebuff of Lam’s proposal for how to resolve the crisis, detailed for the first time by Reuters, represents concrete evidence of the extent to which China is controlling the Hong Kong government’s response to the unrest.

The Chinese central government has condemned the protests and accused foreign powers of fuelling unrest. The Foreign Ministry has repeatedly warned other nations against interfering in Hong Kong, reiterating that the situation there is an “internal affair.”

Lam’s report on the tumult was made before an Aug. 7 meeting in Shenzhen about the Hong Kong crisis led by senior Chinese officials. The report examined the feasibility of the five demands of the protesters, analyzing how conceding to some of these might quiet things down, the individuals with direct knowledge said.

In addition to the withdrawal of the extradition bill, the other demands analyzed in the report were: an independent inquiry into the protests; fully democratic elections; dropping of the term “riot” in describing protests; and dropping charges against those arrested so far.

The withdrawal of the bill and an independent inquiry were seen to be the most feasible politically, according to a senior government official in the Hong Kong administration, who spoke on condition of anonymity. He said the move was envisioned as helping pacify some of the more moderate protesters who have been angered by Lam’s silence.

The extradition bill is one of the key issues that has helped drive the protests, which have drawn millions of people into the streets of Hong Kong. Lam has said the bill is “dead,” but has refused to say explicitly that it has been “withdrawn.”

Beijing told Lam not to withdraw the bill, or to launch an inquiry into the tumult, including allegations of excessive police force, according to the senior government official.

Another of the three individuals, who has close ties with senior officials in Hong Kong and also declined to be identified, confirmed the Hong Kong government had submitted the report.

“They said no” to all five demands, said the source. “The situation is far more complicated than most people realize.”

The third individual, a senior Chinese official, said that the Hong Kong government had submitted the report to the Central Co-ordination Group for Hong Kong and Macau Affairs, a high-level group led by Politburo Standing Committee member Han Zheng, and that President Xi Jinping was aware of it.

The official confirmed that Beijing had rejected giving in to any of the protesters’ demands and wanted Lam’s administration to take more initiative.

In a statement responding to Reuters, Lam’s office said her government had made efforts to address protesters’ concerns, but did not comment directly on whether it had made such a proposal to Beijing, or received instructions.

Written questions to China’s Foreign Ministry were referred to the Hong Kong and Macau Affairs Office (HKMAO), a high-level bureau under China’s State Council. HKMAO did not respond to a faxed request for comment.

Reuters has not seen the report. The news agency also was unable to establish the precise timing of the rejection.

The two Hong Kong sources said the report was submitted between June 16 – the day after Lam announced the suspension of the extradition bill – and Aug. 7, when the HKMAO and China’s representative Liaison Office in Hong Kong held a forum in nearby Shenzhen attended by nearly 500 pro-establishment figures and businesspeople from Hong Kong.

The question of Beijing’s influence strikes at the heart of Hong Kong’s “one country, two systems” governance, which promised the city a high degree of autonomy and wide-ranging freedoms that don’t exist in mainland China.

More than two months of protests have embroiled Hong Kong in its most severe crisis since the former British colony returned to Chinese rule in 1997.

What began as a movement to oppose the extradition bill, which would have allowed people to be sent to China for trial in Communist Party controlled courts, has morphed into a broader campaign for greater rights and democracy in a direct challenge to Beijing.

‘HER HANDS ARE TIED’

Ip Kwok-him, a senior pro-Beijing politician who sits on Hong Kong’s elite Executive Council, which advises senior officials, including Lam, told Reuters that “if the central government won’t allow something, you can’t do it.” Ip did not know about the proposal to withdraw the bill.

A senior businessman who attended the Shenzhen meeting and has met with Lam recently said “her hands are tied” and Beijing wouldn’t let her withdraw the bill. The businessman spoke on condition of anonymity because of the sensitivity of the matter.

At the Shenzhen meeting, Zhang Xiaoming, the head of the HKMAO, said in televised public remarks that if the turmoil persisted, “the central government must intervene.”

Since then, there have been signs of Beijing taking a harder line.

For instance, officials have likened some protests to “terrorism,” Chinese paramilitary police have conducted drills near the border, several Hong Kong companies have been pressured to suspend staff supporting the protests, and security personnel have searched the digital devices of some travelers entering China.

On Friday, Joshua Wong, a prominent democracy activist, was arrested, according to his political party, Demosisto.

(Reporting by James Pomfret; Additional reporting by Clare Jim, Farah Master and the Beijing newsroom; Editing by Alex Richardson and Gerry Doyle)

In Venezuela talks, Maduro allies said they would consider fresh elections: sources

FILE PHOTO: Venezuelan opposition leader Juan Guaido, who many nations have recognised as the country's rightful interim ruler, attends a session of Venezuela's National Assembly in Caracas, Venezuela August 13, 2019. REUTERS/Manaure Quintero/File Photo

By Mayela Armas and Corina Pons

CARACAS (Reuters) – Allies of Venezuelan President Nicolas Maduro had discussed holding a presidential election in the coming months during talks to find a breakthrough in the country’s political crisis, four sources told Reuters on Monday.

Opposition politicians will travel to Washington to speak to U.S. officials this week, the sources said.

Maduro and a delegation representing opposition leader Juan Guaido have been meeting in Barbados as part of talks to resolve a political stalemate in the struggling OPEC nation that is suffering from a hyperinflationary economic collapse.

Guaido’s delegation had proposed a presidential vote in six to nine months on a number of conditions including changes to the elections council and supreme court, said the sources, who asked not to be identified because the talks are confidential.

The government had, in theory, agreed to a presidential vote on the condition that the United States lift economic sanctions, Maduro be allowed to run as the Socialist Party candidate, and that the vote be held in a year, one of the sources said.

However, the government has since pulled out of the talks to protest a new round of sanctions by Washington, and no new date has been set to resume the discussions, despite a visit by Norway foreign ministry officials – acting as mediators – seeking to revive them.

U.S. officials have expressed support for an election but without Maduro as a candidate, which may be a point of discussion, two of the sources said.

Venezuela’s information ministry, Norway’s foreign ministry and the U.S. State Department did not immediately reply to requests for comment.

Preparing the groundwork for an election requires a raft of changes to state institutions, including both the elections council and the supreme court – both of which have aggressively intervened in election processes to favor Maduro.

Another possible roadblock would be the existence of the Constituent Assembly, an all-powerful legislative body controlled by Socialist Party supporters that opposition leaders say could also intervene in any potential vote.

(Reporting by Mayela Armas and Corina Pons in Caracas; additional reporting by Lesley Wroughton in Washington; Writing by Brian Ellsworth; Editing by Rosalba O’Brien)

U.S. peace plan conference is blip on Israel’s radar as political, Iran crises swirl

By Dan Williams

JERUSALEM (Reuters) – A U.S.-led conference in Bahrain designed to drum up investment in the Palestinian economy and pave a path to peace with Israel has gone largely unremarked by Israelis preoccupied with a political crisis and their arch-foe Iran.

Palestinians, who view the Trump administration as biased towards Israel, boycotted this week’s meeting in Manama.

It was also held without an official Israeli delegation.

Organizers said privately this was due to worry about a further dent to the event’s credibility after an election in Israel in April election failed to produced a new coalition government.

FILE PHOTO: Israeli Prime Minister Benjamin Netanyahu sits with his ministers and former Israel's Defence Minister Avigdor Lieberman at the plenum at the Knesset, Israel's parliament, in Jerusalem May 29, 2019. REUTERS/Ronen Zvulun

FILE PHOTO: Israeli Prime Minister Benjamin Netanyahu sits with his ministers and former Israel’s Defence Minister Avigdor Lieberman at the plenum at the Knesset, Israel’s parliament, in Jerusalem May 29, 2019. REUTERS/Ronen Zvulun

With Prime Minister Benjamin Netanyahu facing proliferating challengers in a new election due in September, and beset by corruption scandals, the hazier-than-ever peacemaking horizon with the Palestinians drew scant discussion in Israeli media.

Economy Minister Eli Cohen went as far as to suggest that Bahrain may have closed the door on further diplomacy.

“We saw that, even in an economic conference where the Palestinians were meant to come and get money, to come and get tools and inducements, to come and develop their economy, they did not come,” he told Israel’s Reshet 13 TV.

“We see, really, that they do not want a peace accord. They simply don’t want us here…Again, the Palestinians’ true face has been exposed.”

The Palestinians, who have shunned the United States since it recognized disputed Jerusalem as Israel’s capital in late 2017, suspected the conference sought to lure them into surrendering their statehood goal in return for global financial relief.

It is not clear whether a peace plan promised by the Trump administration will call for a “two-state solution” sought by the Palestinian Authority and backed internationally, which involves creation of a Palestinian state alongside Israel.

Netanyahu voiced conditional acceptance in 2009 of a future demilitarized Palestinian state. He has since said its creation would not happen on his watch and that he plans to annex some Jewish settlements in the occupied West Bank, communities many countries view as illegal.

Stalled since 2014, peacemaking has been on a backburner for some Israelis, while others feel a need to work for coexistence.

FILE PHOTO: White House senior adviser Jared Kushner speaks at the "Peace to Prosperity" conference in Manama, Bahrain, June 25, 2019. Peace to Prosperity Workshop/Handout via REUTERS

FILE PHOTO: White House senior adviser Jared Kushner speaks at the “Peace to Prosperity” conference in Manama, Bahrain, June 25, 2019. Peace to Prosperity Workshop/Handout via REUTERS

“This is a matter that’s important to me. We need an end to this situation,” said Jerusalem chef Israel Bachar, 45.

“It’s a little odd that the Americans held this (Bahrain) conference without convening the two main parties involved. I don’t think it’s helpful to try to impose things from outside.”

Netanyahu described the Bahrain gathering as part of a U.S. effort “to bring about a better future and solve the region’s problems”.

Two days before it opened, he toured the strategic Jordan Valley, the eastern-most part of the West Bank that borders Jordan, with U.S. National Security Adviser John Bolton and said Israel must retain a presence there in any peace deal.

Israeli journalists were at Bahrain, a rarity for a Gulf state that does not formally recognize Israel. The resulting coverage focused as much on wider Israeli-Arab contacts and Bahrain’s tiny Jewish community as on the Palestinian no-shows.

Cohen, a member of Netanyahu’s security cabinet, said Arab delegates saw Bahrain as a chance to close ranks with Israel on bilateral commerce and in the face of a common adversary.

“This was, in fact, a regional summit against Iran,” he said. “We see here a coalition in the Middle East…They (Arab powers) understand that their security threat is Iran.”

Washington and Tehran have exchanged threats and heated rhetoric in recent weeks, with a U.S. increasing sanctions on Iran and Iranian forces shooting down a U.S. drone in the Gulf.

The Institute for National Security Studies at Tel Aviv University gave a cautious welcome to the initiatives announced in Manama, including a global investment fund for the Palestinians. But it said these could not trump statecraft.

“While a willingness to earmark huge investments in economy, infrastructure, education, health, and welfare in the West Bank and Gaza Strip should be good news…what is also required is a political plan that is both creative and beneficial to the Palestinians,” INSS scholars Tomer Fadlon and Sason Hadad wrote.

Israel captured the West Bank and Gaza in the 1967 Middle East war. It pulled its troops and settlers out of Gaza in 2005 and Hamas Islamists, who have called for Israel’s destruction, now rule the enclave. Palestinians seek both territories for a future state.

(Writing by Dan Williams; Editing by Jeffrey Heller and Angus MacSwan)

With Venezuela in collapse, towns slip into primitive isolation

A man weighs coffee beans, given as a means of payment, in a hardware store in Guarico, Venezuela April 24, 2019. Picture taken April 24, 2019. REUTERS/Manaure Quintero NO RESALES. NO ARCHIVES.

By Corina Pons

PATANEMO, Venezuela (Reuters) – At the once-busy beach resort of Patanemo, tourism has evaporated over the last two years as Venezuela’s economic collapse has deepened and deteriorating cellphone service left visitors too afraid of robbery to brave the isolated roads.

Gone are the vendors who once walked the sands of the crescent-shaped beach hawking bathing suits and empanadas – a traditional savory pastry.

These days, its Caribbean shoreline flanked by forested hills receives a different type of visitor: people who walk 10 minutes from a nearby town carrying rice, plantains or bananas in hopes of exchanging them for the fishermen’s latest catch.

With bank notes made useless by hyperinflation, and no easy access to the debit card terminals widely used to conduct transactions in urban areas, residents of Patanemo rely mainly on barter.

It is just one of a growing number of rural towns slipping into isolation as Venezuela’s economy implodes amid a long-running political crisis.

From the peaks of the Andes to Venezuela’s sweltering southern savannahs, the collapse of basic services including power, telephone and internet has left many towns struggling to survive.

The subsistence economy stands in stark contrast to the oil boom years when abundance seeped into the most remote reaches of what was once Latin America’s richest nation.

“The fish that we catch is to exchange or give away,” said Yofran Arias, one of 15 fishermen who have grown accustomed to a rustic existence even though they live a 15-minute drive from Venezuela’s main port of Puerto Cabello.

“Money doesn’t buy anything so it’s better for people to bring food so we can give them fish,” he said, while cleaning bonefish, known for abundant bones and limited commercial value.

In visits to three villages across Venezuela, Reuters reporters saw residents exchanging fish, coffee beans and hand-picked fruit for essentials to make ends meet in an economy that shrank 48% during the first five years of President Nicolas Maduro’s government, according to recent central bank figures.

Venezuela’s crisis has taken a heavy toll on rural areas, where the number of households in poverty reached 74% in 2017 compared with 34% in the capital of Caracas, according to an annual survey called Encovi carried out by private Venezuelan universities.

Residents rarely travel to nearby cities, due to a lack of public transportation, growing fuel shortages and the prohibitive cost of consumer goods.

In some regions, travel requires negotiating roads barricaded by residents looking to steal from travelers. At one such roadblock in eastern Venezuela, a Reuters witness saw a driver fire gunshots in the air to disperse a crowd

“I haven’t been to the city center in almost two years. What would I do there? I don’t have enough (money) to buy a shirt or a pair of shorts,” said a fisherman in Patanemo who identified himself only as Luis.

“I’m better off here swapping things to survive.”

COFFEE FOR FUEL

Venezuela is suffering one of the worst economic collapses in modern history. Inflation has topped 1 million percent, according to figures released by the opposition-run congress. The United Nations says 4 million citizens have fled Venezuela, 3.3 million of them since 2015.

A fisherman carries a plastic bag full of fish that can be used as a means of payment at a fishermen's camp in Patanemo, Venezuela May 17, 2019. REUTERS/Manaure Quintero

A fisherman carries a plastic bag full of fish that can be used as a means of payment at a fishermen’s camp in Patanemo, Venezuela May 17, 2019. REUTERS/Manaure Quintero

Maduro blames the situation on an “economic war” waged by his political adversaries as well as U.S. sanctions that have hobbled the oil industry and prevented his government from borrowing abroad.

The central bank in April released economic indicators for the first time in the nearly four years, showing a less severe cataclysm than figures published by Congress. But the bank’s data underscored a dramatic contraction and spiraling consumer prices, nonetheless.

The bolivar has lost 99% of its value since Maduro took office in 2013.

In the mountains of the central state of Lara, residents of the town of Guarico this year found a different way of paying bills – coffee beans.

Residents of the coffee-growing region now exchange roasted beans for anything from haircuts to spare parts for agricultural machinery.

“Based on the cost of the product, we agree with the customer on the kilos or number of bags of coffee that they have to pay,” said hardware store manager Haideliz Linares.

The transactions are based on a reference price for how much coffee fetches on the local market, Linares said. In April, one kilo (2.2 pounds) of beans was worth the equivalent of $3.00.

In El Tocuyo, another town in Lara state, three 100 kilo sacks of coffee buy 200 liters (53 gallons) of gasoline, which is in increasingly short supply in the OPEC nation due to chronic operational problems at state oil company PDVSA.

Keila Ovalles works in her garden to harvest vegetables and fruit, which she uses to for bartering, in Borburata, Venezuela May 17, 2019. REUTERS/Manaure Quintero

Keila Ovalles works in her garden to harvest vegetables and fruit, which she uses to for bartering, in Borburata, Venezuela May 17, 2019. REUTERS/Manaure Quintero

In Borburata, another town a few miles from Patanemo, Keila Ovalles harvests eggplant, tomato and passion fruit in the backyard of her modest home. She said it was similar to the way her family lived in the early 20th century.

She stopped drinking coffee after being unable to pay for it, and now makes tea out of lemongrass instead.

“I tell the guys that I’m swapping passion fruit for something else, they spread the word and someone always comes,” said the 55-year-old woman.

(Reporting by Corina Pons; additional reporting by Keren Torres in Guarico, Tibisay Romero in Valencia and Angus Berwick in Cumana; Editing by Daniel Flynn and Tom Brown)

Venezuela blackout leaves streets empty, school and work canceled

Commercial area is pictured during a blackout in Caracas, Venezuela March 26, 2019. REUTERS/Ivan Alvarado

By Vivian Sequera and Brian Ellsworth

CARACAS (Reuters) – Venezuela canceled work and school on Tuesday as the second major blackout this month left streets mostly empty in Caracas and residents of the capital wondering how long power would be out amid a deepening economic and political crisis.

President Nicolas Maduro’s Socialist government, which blamed the United States and the opposition for the previous power cut, blamed an “attack” on its electrical system for the blackout that first hit on Monday. The outage shuttered businesses, plunged the city’s main airport into darkness and left commuters stranded in Caracas.

The blackout came amid tensions with the United States over the weekend arrival of Russian military planes, which led Washington to accuse Moscow of “reckless escalation” of the country’s situation.

Russia, which has major energy investments in OPEC member Venezuela, has remained a staunch ally of Maduro, while the United States and most other Western nations have endorsed opposition leader Juan Guaido.

Citing the constitution, Guaido in January assumed the interim presidency, saying Maduro’s re-election last year was fraudulent. Maduro says Guaido is a U.S. puppet attempting to lead a coup against him and has blamed worsening economic difficulties on sanctions imposed by Washington.

Power was restored to much of the country by Monday evening but went out again during the night.

Western cities, including Maracaibo and Barquisimeto, both in the west of the South American country, as well as the central city of Valencia, had no power on Tuesday, according to witnesses.

Many people on Caracas’ streets went to work because they did not know about the government’s suspension of the workday, which was announced by the presidential press office in a 4 a.m. (0800 GMT) tweet.

“How am I supposed to find out, if there’s no power and no internet?” said dental assistant Yolanda Gonzalez, 50, waiting for the bus near a Caracas plaza. “Power’s going to get worse, you’ll see.”

Information Minister Jorge Rodriguez on Monday said the blackout that began in the early afternoon was the result of an attack on Venezuela’s main hydroelectric Guri dam which had affected three major transmission lines.

Rodriguez did not explicitly blame Monday’s outage on any particular individual or group. But he said, “the intention of Venezuela’s far right is to attack, generate anxiety and anguish, in order to seize power and steal all our resources.”

The country suffered its worst blackout ever starting on March 7. For nearly a week it left millions of people struggling to obtain food and water and hospitals without power to treat the sick. Looting in the western state of Zulia destroyed hundreds of businesses.

Electricity experts say the outages are the result of inadequate maintenance and incompetent management of the power grid since the late President Hugo Chávez nationalized the sector in 2007.

Russia, which has warned Washington against military intervention in Venezuela, declined to comment on the planes on Tuesday or respond to the accusations from the U.S. State Department.

Venezuelan Socialist Party Vice President Diosdado Cabello confirmed that two planes had flown to the country from Russia during the weekend, but he did not give a reason or say whether they carried troops.

In 2017, U.S. President Donald Trump said the “military option” was on the table regarding Venezuela, prompting a strong backlash from regional leaders wary of U.S. troops being deployed to Latin American soil.

U.S. Senator Marco Rubio – like Trump, a Republican – on Tuesday wrote on Twitter, “I hope the members of Congress & the regional leaders who said they opposed U.S. ‘military intervention’ in #Venezuela will be just as forceful now that #Russia is sending (its) military to Venezuela.”

(Reporting by Diego Oré and Vivian Sequera; writing by Brian Ellsworth; editing by Jonathan Oatis)

Four dead, hundreds detained after Venezuela blackout: rights groups

By Shaylim Valderrama

CARACAS (Reuters) – Four people were killed and at least 300 were detained in association with protests and looting that took place during Venezuela’s nationwide blackout, rights groups said on Thursday.

The OPEC nation suffered its worst blackout in history last week following technical problems that the government of President Nicolas Maduro called an act of U.S.-backed sabotage but critics dismissed as the result of incompetence.

Rights groups Provea and the Venezuelan Observatory of Social Conflict said via Twitter that three people were killed in the central state of Lara and one person was killed in the western state of Zulia. The cause of the deaths was unclear.

Alfredo Romero of rights group Foro Penal said at a news conference that 124 people had been detained in protests over public services since the March 8 blackout and that another 200 were arrested over looting.

The Information Ministry did not immediately respond to a request for comment.

Power has returned to many parts of Venezuela, though service has not been fully restored to scattered areas of the capital Caracas and much of the western region.

Venezuela plunged into a deep political crisis in January when Juan Guaido, head of the opposition-controlled congress, invoked the constitution to assume an interim presidency, arguing Maduro’s 2018 re-election was a sham.

That move has put Venezuela at the heart of a geopolitical tussle, with the United States leading most Western nations in recognizing Guaido as the legitimate head of state, while Russia, China and others support Maduro.

Guaido is scheduled to join a meeting of local residents in the El Hatillo district of the capital of Caracas on Thursday.

The blackout that began a week ago left hospitals struggling to keep equipment running, and food rotted in the tropical heat. The nongovernmental organization Doctors for Health said 26 people died in public hospitals during the blackout.

The western state of Zulia suffered intense looting that hit some 350 businesses.

(Reporting by Shaylim Valderrama and Vivian Sequera, Editing by Rosalba O’Brien)

One year on, Baghdad falls silent to mark defeat of Islamic State

A member of security forces flashes the victory sign, during marking the one year anniversary of the military defeat of Islamic State, at Tahrir square in Baghdad, Iraq December 10, 2018. REUTERS/Thaier al-Sudani

BAGHDAD (Reuters) – A hush descended on central Baghdad on Monday as Iraqis observed a minute’s silence for those killed in the battle against Islamic State a year after the group was defeated.

Fireworks were scheduled to be set off later in the evening. The government has made the date a national holiday and dubbed it “victory day” but some Iraqis felt little cause for celebration, however.

Iraqis with security forces stop during a minute of silence, marking the one year anniversary of the military defeat of Islamic State, at Tahrir square in Baghdad, Iraq December 10, 2018. REUTERS/Thaier al-Sudani

Iraqis with security forces stop during a minute of silence, marking the one year anniversary of the military defeat of Islamic State, at Tahrir square in Baghdad, Iraq December 10, 2018. REUTERS/Thaier al-Sudani

Little meaningful reconstruction has taken place in cities decimated by battles against the jihadists between 2014 and 2017, and Iraq is in the throes of a new political crisis which has prevented it forming a government that can tackle widespread corruption and lack of jobs and services.

Meanwhile, Islamic State militants are still carrying out insurgent-style attacks against security forces and have been blamed for car bombs and assassinations of local notables.

“Iraqis are scared that the problems in parliament … and the inability to form a full cabinet … have helped create the (unstable) environment for Islamic State cells to re-emerge,” Najah Jameel, 48 a civil society activist, said.

Another Baghdad resident, Dawood Salman, 55, said he would remember the soldiers and fighters who were killed battling the jihadists.

“We congratulate the military and the Popular Mobilisation Forces,” a grouping of mostly Shi’ite paramilitaries, he said.

Iraq’s military, Kurdish forces and the Shi’ite militias backed by U.S.-led air strikes and special forces drove Islamic State militants out of areas they had controlled for three years in 2017.

Former prime minister Haider al-Abadi declared the Sunni Muslim extremists defeated in Iraq on Dec. 9, 2017. The group had ruled over a self-styled caliphate, governing large parts of northern Iraq and eastern Syria according to its fanatical interpretation of Islam and Islamic law.

“This is a day that we are all proud of when our courageous country defeat the enemies of peace,” Prime Minister Adel Abdul Mahdi said in a televised address.

(Reporting by Reuters TV in Baghdad; Editing by Matthew Mpoke Bigg)

Ukraine halts all cargo traffic with rebel-held territory

FILE PHOTO: Activists walk along carriages loaded with coal from the occupied territories which they blocked at Kryvyi Torets station in the village of Shcherbivka in Donetsk region, Ukraine, February 14, 2017. REUTERS/Konstantin Chernichkin/File Photo

By Pavel Polityuk and Alexei Kalmykov

KIEV (Reuters) – Ukrainian authorities on Wednesday halted all cargo traffic with rebel-held territory in the east of the country, formalizing an existing rail blockade by Ukrainian activists that has fueled the worst political crisis in nearly a year.

In a standoff that is hurting the economies of both sides, separatists have seized control of some Ukrainian businesses in their territory after having their coal and steel shipments halted in the rail blockade.

Tensions have escalated in recent days, leading to clashes between law enforcement agencies and the activists, who have been joined by some members of parliament.

The blockade posed a dilemma for President Petro Poroshenko: breaking it up by force could provoke a major domestic backlash, but allowing it to proceed unilaterally risked undermining the state’s authority.

Poroshenko’s Security and Defense Council introduced the state-led cargo ban to counter what he described as the political and social threat posed by the unofficial blockade.

The decision “is dictated by the necessity to prevent the destabilizing of the situation in the country, which is being undermined by political operators,” he told the council.

“Our wish is to prevent social strife,” he said.

The suspension will remain until rebels hand back control of a number of Ukraine-registered businesses and comply with a 2015 peace agreement, according to the Security Council.

The asset seizures have mostly affected businesses in the financial and industrial group owned by Ukraine’s richest man, Rinat Akhmetov.

On Wednesday, Akhmetov’s DTEK Energy said its main mining assets in rebel-held territory, already idling because of the blockade, had been taken under separatist control. On the international debt market, its 2024 dollar bond fell 1.6 cents to a two-week low on the news.

The crisis has put pressure on Prime Minister Volodymyr Groysman’s government just as it is about to lose its year-long immunity from facing any vote of no confidence. It was appointed last April by a fragile coalition that includes Poroshenko’s party, after the previous government fell.

Rebel leader Alexander Zakharchenko said Ukraine’s decision had nothing to do with the separatists, saying it was instead “evidence of an internal power struggle in Kiev.”

The suspension will further squeeze the Ukrainian economy, already facing potential rolling blackouts and monthly economic losses of up to 4 billion hryvnias ($150 million) from the existing blockade, according to the government.

The central bank says expected economic growth could nearly halve this year to 1.5 percent if rail traffic does not resume.

Poroshenko expects the government on Thursday to come up with fresh forecasts for the impact of the broader ban on the economy, energy security and currency stability.

The trade squeeze has highlighted the complicated economic relationship between the two sides and represents a new phase in a stand-off that has killed more than 10,000 people.

Germany, which has taken a leading role in trying to end the conflict, said it was seriously concerned about “increasing partitionist tendencies” in eastern Ukraine.

Foreign Ministry spokesman Martin Schaefer told a government news conference: “The danger of a military escalation is far from over.”

He said Berlin was urging Ukraine and Russia to live up to agreements made as part of the 2015 Minsk peace process, citing troubling actions by both sides, including the rebel asset seizures and the government’s decision to cut off trade.

(Additional reporting by Andrea Shalal in Berlin; Writing by Alessandra Prentice; Editing by Matthias Williams and Mark Trevelyan)