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)

Four million Venezuelans have fled crisis: U.N.

FILE PHOTO: Venezuelan migrants walk along a trail into Brazil, in the border city of Pacaraima, Brazil, April 11, 2019. REUTERS/Pilar Olivares/File Photo

GENEVA (Reuters) – Four million Venezuelan refugees and migrants have fled an economic and political crisis in their homeland, all but 700,000 of them since the end of 2015, U.N. aid agencies said on Friday.

The “alarming” figure highlights the urgent need to support host countries, mainly in Latin America – led by Colombia, Peru, Chile, Ecuador, Brazil and Argentina – the U.N. refugee agency and the International Organization for Migration (IOM) said in a joint statement issued in Geneva.

(Reporting by Stephanie Nebehay; Editing by Andrew Heavens)

U.S. cruise operators stop sailing to Cuba, travelers vent anger online

Tourists enjoy a view of the city in Havana, Cuba, June 4, 2019. REUTERS/Alexandre Meneghini

(Reuters) – Major U.S. cruise operators said on Wednesday they will no longer sail to Cuba following the Trump administration’s ban on travel to the Caribbean island, angering travelers and prompting worries about trip cancellations and company earnings.

The new restrictions are aimed at pressuring Cuba’s Communist government to reform and stop supporting Venezuelan President Nicolas Maduro.

“Due to changes in U.S. policy, the company will no longer be permitted to sail to Cuba effective immediately,” Carnival Corp said.

A spokesman for Norwegian Cruise Line Holdings Ltd said the company had ceased all calls to Cuba and was modifying previously scheduled sailings.

The U.S. State Department said on Tuesday the country would no longer permit visits to Cuba via passenger and recreational vessels, including cruise ships and yachts, as well as private and corporate aircraft.

American Airlines Group Inc, JetBlue Airways Corp and United Airlines, which started flying to Cuba in 2016, said they were reviewing the revised regulations.

Delta Air Lines Inc said it had stopped accepting bookings to Cuba under the so-called people-to-people license as of midnight on June 4. Customers who booked under the exemption before that time will be allowed to travel.

“The reduction in the number of travelers will probably mean the end of U.S. commercial air flights from places outside Florida because there won’t be sufficient demand to fill regular flights,” said William LeoGrande, a Cuba expert and a professor of government at American University.

The ban was effective as of Wednesday, the U.S. Commerce Department told Reuters, giving cruise lines no grace period to change destinations and sowing confusion among cruise passengers.

Both Carnival and Royal Caribbean said they would stop at different non-Cuban ports and would offer compensation to travelers.

Carnival said the guests currently aboard its Carnival Sensation cruise that set sail on June 3 would now stop in Mexican island Cozumel on Thursday instead of Havana. The company said the guests would receive a $100 onboard credit for the inconvenience.

“We are working as quickly as possible to secure alternative itineraries for the remainder of our Cuba voyages and expect to have information for sailings further out in the next 2-3 days,” Carnival said. It has three cruise lines that sail to Cuba.

Royal Caribbean said all cruises on the ‘Majesty of the Seas’ and ‘Empress of the Seas’ this year will have alternative ports in the Caribbean. It is also working on alternate itineraries for 2020 sailings.

Guests can cancel their current booking for a full refund, or can keep their sailing date with a new itinerary and receive a 50% refund, Royal Caribbean said.

On Tuesday, Royal Caribbean said its ships sailing Wednesday and Thursday would no longer stop in Cuba.

Travelers took to Twitter to vent their anger and frustration over the forced changes in their vacation plans.

“Has anyone’s cruise to Cuba from @CruiseNorwegian been rerouted yet? If so where did they change the port of call to? Im (sic) booked for July and PISSED! Thanks Trump!” tweeted Sabrina Carollo @superbri_22.

Susan Berland, a parenting coach from Huntersville, North Carolina, said she was enraged that a vacation designed around visiting Cuba had been upended by the Trump administration.

“To say I’m angry is an understatement. This whole (sic) cruise was chosen around going to Cuba and now we can’t,” tweeted @SusanBerland.

Neither responded to requests for further comment.

Cuba accounts for a small percent of sailings at about 4% for Norwegian Cruise, about 3% for Royal Caribbean, and about a percent for Carnival, Wolfe Research analyst Jared Shojaian wrote in a note.

Shojaian said that while cruise lines can easily swap a Cuban port for another non-Cuban port, guests may have purchased the itinerary entirely for Cuba.

“That means cruise lines may need to issue refunds or future cruise credits to compensate guests, which makes forecasting the earnings impact to 2019 even harder, and potentially more of a headwind,” he said.

Shares of Norwegian Cruise closed down 3.5%, while Royal Caribbean and Carnival ended about 3% lower.

(Reporting by Uday Sampath and Nivedita Balu in Bengaluru, Additional reporting by Barbara Goldberg in New York, Tracy Rucinski in Chicago and Sarah Marsh in Havana; Editing by Shinjini Ganguli, Maju Samuel and Tom Brown)

Venezuela healthcare collapse: Four children die in same hospital this month

Relatives carry a coffin containing the body of Erick Altuve, a 11-year-old boy who died from respiratory problems while in care for stomach cancer at the public Jose Manuel de los Rios hospital, at Petare neighborhood in Caracas, Venezuela, May 30, 2019. REUTERS/Ivan Alvarado

By Vivian Sequera

CARACAS (Reuters) – Under a wooden arch decorated with white balloons in a small house in Caracas’ largest slum, the body of 11-year-old Erick Altuve lay in a small coffin covered in cuddly toys and cartoon drawings, one of four children who have died this month in Venezuela’s main pediatric hospital.

Altuve died on May 26 from respiratory problems while being treated for stomach cancer at the Jose Manuel de los Rios public hospital, a concrete tower ringed by a white security fence in the center of Caracas.

For the past six months, Altuve had not received his medication, his mother, Jennifer Guerrero, said, because of widespread shortages of drugs and medical equipment that have devastated Venezuela’s health system.

“My son really wanted to live,” said Guerrero, a 30-year-old housewife, during a protest over the deaths of the four children by their relatives and nurses outside the hospital.

Children have paid an especially heavy price from the collapse in Venezuela’s healthcare system as the economy has shrunk by over a half during six years of recession.

The most recent figures from Venezuela’s Health Ministry show that infant mortality, covering children age 1 and below, rose 30% to 11,466 cases in 2016 from the year before. There is no official data on children’s’ deaths from cancer.

More broadly, the mortality rate for children under 5 years has risen by 40% since 2000, the humanitarian group Save the Children said in its 2019 report.

Altuve’s death in particular has generated a wave of anger and grief across Venezuela, with outraged newspaper headlines, calls from the opposition for an investigation and an outcry from medical nongovernmental organizations.

Altuve and the three other children who died were part of a group of 30 kids at the hospital, better known as JM, waiting to go to Italy to receive bone marrow transplants under a 2010 agreement financed by the Venezuelan government that was intended to cover the cost of transportation and the operation.

The opposition has blamed their deaths on President Nicolas Maduro, whose socialist administration has presided over the collapse of the once-wealthy nation’s economy and severe reductions in health-care spending.

Maduro’s government, however, says U.S.-imposed sanctions were responsible for the children’s deaths, by freezing funds allocated to buy medicine and send the children to Italy for treatment under the 2010 agreement.

Maduro’s critics noted that his government in 2013 cut the allocation of foreign currency to the health sector by one-fifth.

According to hospital and pharmacy representatives, the supply of medicine and medical equipment has steadily declined since the cuts to dollar funding in 2013, while the U.S. government began to impose sanctions in August 2017.

Virginia Segovia, president of the Foundation to Help Children with Cancer (Fundanica) in Carabobo state west of Caracas, said that in its first 22 years, the charity registered 98 child deaths from the disease in that region.

“In the past two years, we already have 105 dead children … and that is due to the lack of supplies and equipment in hospitals, the extreme emergency we have due to lack of medicines and chemotherapy,” she said.

Venezuela’s Information Ministry, which handles news media inquiries, and the health ministry did not respond to requests for comment.

‘SENTENCED TO DEATH’

Altuve was taken to the JM hospital on Dec. 25, 2018, due to a sharp pain in his stomach, his mother said. The hospital cleared him to go home after a few days but he returned on Jan. 14, 2019 and never left, according to his mother.

“He was saying that he was going to get better and the cancer wouldn’t take him,” his mother said.

On Friday, dozens of mourners carried his coffin through the narrow streets of Caracas’ eastern Petare slum from his grandparents’ house where the wake was held to a cemetery outside the city.

Children from his school clustered around to say goodbye as speakers played Vallenato, accordion-based music from Colombia’s Caribbean coast. “Erick, one more angel in heaven,” read a note on the coffin.

Venezuelan Foreign Minister Jorge Arreaza said on Monday that state-run oil firm PDVSA had signed a cooperation agreement in 2010 with Italy’s bone marrow transplant association. State-funded Venezuelan television network Telesur reported on Tuesday that the agreement had funded treatment and transplants for almost 900 patients since then.

Arreaza said on Twitter that U.S. sanctions had frozen 1.6 billion euros ($1.78 billion) of government funds held at Portugal’s Novo Banco, including 5 million euros ($5.57 million) allocated for fund bone marrow transplants for 24 Venezuelan patients.

Novo Banco and the Italian transplant association did not respond to requests for comment.

There are 52,800 new cases of cancer among adults each year in Venezuela, which has a population of 30 million people, according to Juan Saavedra, director of Venezuela’s anti-cancer society. In 2017, 26,510 people died from cancer, 15% more than the year before, Saavedra said.

“When you are born in Venezuela, you are already sentenced to death,” said Mauricio Navas, whose six-year-old daughter Mariana is being treated for leukemia at the JM hospital.

(Additional reporting by Tibisay Romero; Writing by Angus Berwick; Editing by Daniel Flynn and Jeffrey Benkoe)

From Colombia, Venezuelan defectors arm themselves to ‘liberate’ their homeland

FILE PHOTO: People protest at the Simon Bolivar International border bridge between Colombia and Venezuela, on the outskirts of Cucuta, Colombia April 30, 2019. REUTERS/Juan Pablo Bayona/File Photo

By Helen Murphy and Luis Jaime Acosta

CUCUTA, Colombia (Reuters) – Wearing camouflage shirts and combat boots, a Venezuelan militia group stands in formation in the Colombian city of Cucuta as their commander, a former Venezuelan army sergeant, outlines plans to seize towns across the border before heading to Caracas to help oust President Nicolas Maduro.

Eight men, who said they were defectors from Venezuelan police, army and intelligence services, had gathered near the two nations’ tense frontier, from where they said they will lead an attack aimed at overthrowing Maduro and handing the reins of power to opposition leader Juan Guaido.

Dubbing their planned offensive “Operation Venezuela,” the ex-army sergeant, Eddier Rodriguez, said there were around 150 men ready to take part with his group. Reuters was unable to independently confirm the status of the eight men or the size of the militia.

“Our goal is to liberate the country,” said Rodriguez, 37, who said he is currently working as a security guard in Bogota. “We’re troops willing to give our lives if necessary, all 150 of us.”

The Venezuelan defense ministry and the information ministry – which handles media inquiries for the government – did not respond to a request for comment about the formation of militias in Colombia.

Victor Bautista, border director for Colombia’s foreign ministry, said any groups who actually took up arms would be considered a paramilitary organization and would be detained by authorities if they were found.

“That would be totally rejected by our government and fully taken up by the appropriate authorities to apply corresponding legal measures,” said Bautista.

A Colombian intelligence official, who asked not to be identified, said the intelligence service had detected an unspecified number of Venezuelan militia groups in the country but could not act against them because they had not yet committed any crimes. Separately, a high-level Colombian government official who asked not to be named said arrestable offences could include illegal possession of weapons and conspiracy to commit a crime.

FILE PHOTO: Venezuelan military deserters of the National Guard are seen at the Simon Bolivar International border bridge between Colombia and Venezuela, on the outskirts of Cucuta, Colombia April 30, 2019. REUTERS/Juan Pablo Bayona/File Photo

FILE PHOTO: Venezuelan military deserters of the National Guard are seen at the Simon Bolivar International border bridge between Colombia and Venezuela, on the outskirts of Cucuta, Colombia April 30, 2019. REUTERS/Juan Pablo Bayona/File Photo

An estimated 1.2 million Venezuelans have crossed into Colombia in recent years, fleeing a painful recession and hyperinflation in their homeland that has left millions of people suffering from hunger and shortages of basic goods. They include increasing numbers of defectors from the armed forces, some of whom are forming militias with the intention of pushing for the overthrow of Maduro.

While such militias are vastly outnumbered in the face of Venezuela’s 150,000-strong military, the men told Reuters they were willing to face any consequence if they can rid their country of Maduro’s government, underscoring the frustration and desperation of many Venezuelan migrants.

Guaido cited the constitution in January to assume an interim presidency, saying Maduro rigged last year’s election. He has appealed to Venezuela’s armed forces to turn against Maduro.

The United States and most Western nations have recognized Guaido as the South American country’s rightful leader. Maduro accuses him of being a coup-monger and so far has retained the loyalty of the bulk of the armed forces.

Rodriguez said his group had been meeting different “resistance” groups in Colombia. He did not provide further details of those groups, or of how they planned to cross the border and launch an attack.

He said they had acquired handguns, easily available along the border, and were seeking to raise funds to buy further weapons, explosives, bullet-proof vests, food and water.

‘MINIMAL BLOODSHED’

Colombian President Ivan Duque has recognized Guaido as Venezuela’s rightful ruler and branded Maduro a dictator. Maduro severed diplomatic relations with Colombia after Duque backed opposition efforts to bring U.S. aid into the country in February, although Duque has ruled out supporting any military intervention.

More than 1,400 members of the national guard and other members of the armed forces have left Venezuela for Colombia since Maduro’s troops violently drove back the aid convoys, according to Colombia’s migration office.

As per an agreement with the Venezuelan opposition, Colombia provides dissident military officials with food and housing, and the right to work.

In an interview in Caracas, Guaido said that if any decided to take up arms that would be due to Maduro’s refusal to agree to free and fair presidential elections.

“This reflects the discontent that there is in the armed forces: soldiers looking for alternatives and solutions because Maduro has shut off the electoral option,” Guaido told Reuters.

He did not immediately reply to a request for comment on Bautista’s assertion that groups who took up arms in Colombia would be detained.

Maduro has said last year’s presidential vote was fair and has branded defecting soldiers as “traitors.”

On April 30, Guaido attempted to rally Venezuela’s armed forces to rise up, but only a few dozen soldiers and one top government official defected. The military top brass reaffirmed their loyalty to Maduro.

Over the years, Maduro – and former President Hugo Chavez – won the loyalty of the armed forces in part by promoting hundreds of officers to the rank of general and rewarding them with lucrative positions in state-run entities, like oil company PDVSA.

Rodriguez’s team said they have made contact with garrisons in Venezuela and many were ready to fight once the operation began. He did not provide details about specific garrisons and Reuters could not independently verify the information.

“They’re waiting for us to enter to make their troops available (to fight),” said Pedro Meneses, an industrial engineer and rights worker who said he managed the militia’s logistics. “We want to do this with minimal bloodshed.”

Former Sergeant Major Efren Fernandez, who deserted to Cucuta in February, told Reuters that he was also ready to fight for Guaido.

“Mr President Guaido, rely on our support,” he said. “Here are your soldiers ready for battle, for combat.”

(Reporting by Helen Murphy and Luis Jaime Acosta, Additional reporting by Andres Rojas, Editing by Rosalba O’Brien)

Shortages plague Cuba as U.S. sanctions sharpen economic woes

FILE PHOTO: People buy chicken in a supermarket in Havana, Cuba May 13, 2019. REUTERS/Sarah Marsh

By Sarah Marsh

HAVANA (Reuters) – Israel Hidalgo and his wife left home around 7:30 a.m. to reach a supermarket across Havana, Cuba because they heard it might be selling chicken, a staple of the Cuban diet increasingly scarce on the shortage-plagued island.

After Cuba started limiting sales this month, partly blaming tightened U.S. economic sanctions on the Communist-run island, the couple wanted to buy as much as possible and lined up for three hours under the Caribbean sun to get tickets guaranteeing them their rations.

Inside, they lined up again to collect two bags of chicken thighs each, as fellow shoppers elbowed one another in pursuit of their own rations, and headed for the checkout feeling like they had won the lottery.

“We were born in this revolution and are used to rough times,” said Hidalgo, a 61-year old blacksmith. “We are bracing ourselves for it to get worse.”

Long lines outside shops with mostly bare shelves are increasingly common in Cuba, and the government has indeed signaled that things are going from bad to worse.

Cuban President Miguel Diaz-Canel, in a speech last month, accused the Trump administration of engaging in an “asphyxiating financial persecution that makes the import of goods and resources of primary necessity particularly difficult.”

The degree to which new U.S. sanctions, due in part to Cuba’s support for Venezuelan President Nicolas Maduro, have compounded its economic woes is open to debate.

The economy had already stagnated in recent years in tandem with the implosion of strategic ally Venezuela, resulting in cuts in fuel and energy use by state entities and this year shortages of basic goods such as bread, chicken and eggs.

But the increase in sanctions, which have hit the key tourism sector and added to investor and bank jitters about dealing with Cuba, has some economists predicting the economy will slip from stagnation into a full-blown recession later this year.

The economy has averaged 1% annual growth over the last three years, compared with the 5% to 7% rate economists say is needed to recover fully from the depression caused by the fall of its former benefactor, the Soviet Union, in 1991.

“While the crisis will not be as bad as in the 1990s, it will have a worrying social impact on the most vulnerable households, which are already on subsistence salaries,” said Pavel Vidal, a former Cuban central bank economist who teaches at Colombia’s Universidad Javeriana Cali.

Bracing for harder economic times, the government has resorted to what it knows best to manage the crisis and prevent social unrest: more control.

Interior Commerce Minister Betsy Diaz said two weeks ago the government would “temporarily” ration sales of a handful of basic products like eggs on a monthly basis, using ration books distributed after the 1959 Revolution, and limit the sale of others like chicken to ensure everyone gets their fair share.

“A CRITICAL MOMENT”

Some Cuban economists say the developing crisis stems fundamentally from an inefficient centrally-planned economy that imports more than two thirds of its food needs. Calling rationing little more than a short-term solution, they say the government must open up to a series of market-oriented economic reforms before the crisis deepens.

“This could be a critical moment that generates the consensus necessary to apply changes,” said Vidal. “The government needs to give more space to the private sector and investment.”

Cuba has enacted some economic reforms in recent years, including expanding the private sector from 2010 onward and introducing a new foreign investment law that cut taxes by around 50% in 2014.

But local economists like Omar Everleny say the reforms undertaken have been too cautious so far. The government has backtracked on overhauls of areas like agriculture and the dominant public sector remains deeply inefficient.

Cuba was already behind on an estimated $1.5 billion (£1.1 billion) in short-term commercial debt and warning of austerity before U.S. President Donald Trump started the latest round of tightening of the decades-old U.S. trade embargo.

Aid from Venezuela, in the form of subsidized oil, had long masked the true extent of Cuba’s economic problems, but it started to fall from 2015 when a drop in oil prices roiled that OPEC nation’s economy.

Venezuela’s crude shipments to Cuba are now about half what they were four years ago, and they could soon fall further. Last month, the United States also began targeting vessels and companies that ship oil to the island from Venezuela for sanctions, threatening the energy grid and transportation.

U.S. sanctions against its old Cold War foe are also hitting the two bright spots in the otherwise glum economy: tourism and foreign investment. Both had boomed briefly after the announcement of a Cuba-U.S. detente in 2014.

Tourism revenues dropped by 4.6% in 2018, according to official data released last month. The announcement in 2017 of tighter travel restrictions on U.S. citizens played a role.

“At one point U.S. visits dropped more than 40 percent,” Cuban Tourism Minister Manuel Marrero told Reuters, adding he still hoped tourism would grow this year.

Meanwhile the Trump administration has activated a long dormant law under which Cuban-Americans can sue foreign companies that profit from their properties nationalized during the first years of the 1959 Revolution.

Western diplomats and businessmen have called the threat of potentially costly U.S. court battles another clear disincentive for banks and outside investors to do business with Cuba.

The United States has also threatened to further tighten restrictions on travel and to impose a cap on cash remittances to Cuba, measures that could hit the economy hard.

SIEGE MENTALITY

Cuba’s government has said it will continue moving down the path toward reform. But it has failed to respond so far to calls from the island’s entrepreneurs for basic changes such as the creation of wholesale markets for the private sector, and the right to import and export.

Instead of opening the economy further, some Western diplomats and analysts say there is risk Cuba’s leadership will adopt a siege mentality in the face of increased U.S. hostility. That could mean turning to allies like Russia, Vietnam and China for help to muddle through while keeping its stranglehold on economic life.

“The U.S. sanctions could be counterproductive,” said one diplomat who asked not to be identified. “Cuba has historically closed up at times like these.”

Cubans are not going hungry like they did during the so-called “Special Period” after the collapse of the Soviet Union. But they are increasingly connected to the rest of the world via the internet and foreign travel, and many have grown weary of government attempts to blame the U.S. embargo for the bulk of their country’s woes.

“We are in total freefall,” said Hidalgo’s wife, Carmen Lozano, 55, clinging to her two bags of rationed chicken. “They should have allowed free production and sales from the beginning of the revolution.”

Inequality has risen in recent years in Cuba and many believe the economic crisis could have a more disproportionate impact now than it might have in the past.

In a country where the government’s claim to legitimacy rests to a large extent on ensuring a certain level of equality, the authorities seem well aware that most people lack the cash to stock up on whatever basics they need on the black market.

“The government’s new rationing program is trying to address that simmering discontent by making the small quantities of goods that are in stock more widely available,” said William LeoGrande, a professor of government at American University.

“The government understands that discontent over the economy is their biggest political vulnerability so they will do everything they can to maintain supplies of basic goods.”

(Reporting by Sarah Marsh; Additional Reporting by Marc Frank and Nelson Acosta; Editing by Daniel Flynn and Tom Brown)

Soldiers held hostage, villagers killed: the untold story of Venezuelan aid violence

FILE PHOTO: A crashed car is seen at the scene where Venezuelan soldiers opened fire on indigenous people near the border with Brazil on Friday, according to community members, in Kumarakapay, Venezuela, February 22, 2019. REUTERS/William Urdaneta/File Photo NO RESALES. NO ARCHIVES

By Maria Ramirez

KUMARAKAPAY, Venezuela (Reuters) – At dawn on February 22, as Venezuela’s opposition was preparing to bring humanitarian aid into the country, a convoy of military vehicles drove into the indigenous village of Kumarakapay on its way to the Brazilian border.

Members of the Pemon community, a tribe whose territory includes the road to Brazil, wanted to keep the border open to ensure the aid got through despite President Nicolas Maduro commanding the military to block it.

Before dawn, the villagers had ordered military vehicles headed toward the border to turn around, citing the tribe’s constitutionally guaranteed autonomy over their territory.

But the army convoy that arrived at dawn was moving quickly and the tribesman were only able to stop the last of the four vehicles – a Jeep carrying four National Guard officials, who told the villagers they were working on a mining project.

Believing the officers were on their way to block the aid, several villagers pulled them from the vehicle, seized their weapons and detained them, according to interviews with 15 villagers.

Some of the other soldiers, who had stopped several hundred meters ahead, got out of their vehicles with weapons in hand and approached. Shouting broke out and one of the soldiers fired a shot downward onto the road, according to the villagers and a cellphone video seen by Reuters that was filmed by a resident.

The remaining soldiers began firing repeatedly in the direction of the village as they ran back toward their vehicles, according to witnesses and the video.

The shooting would leave dozens of villagers wounded and three villagers dead, an unusually bloody confrontation between Venezuelan troops and indigenous people.

The incident itself was widely reported on the day it took place but has drawn little scrutiny until Reuters examined it.

The repercussions included the arrest of 23 Pemon tribesmen, some of whom say they were beaten in custody. Pemon villagers also held more than 40 members of the military hostage, some of whom suffered severe bites after being left half-naked atop ant nests in retribution for the killings, according to interviews with Pemon tribe members.

The incidents are a stark illustration of how Venezuela’s economic and political crises have undermined the once-close relationship between impoverished indigenous communities and a socialist movement launched two decades ago by Maduro’s predecessor, president Hugo Chavez, which had promised to help them.

“We couldn’t understand the attitude of Maduro’s regime of using arms against indigenous people,” said Guillermo Rodriguez, brother of Zoraida Rodriguez, one of the people killed in Kumarakapay.

Rodriguez now lives in the Brazilian border town of Pacaraima after fleeing the violence in late February. He is one of nearly 1,000 members of the Pemon tribe who crossed into Brazil, many on foot, according to the Brazil office of the International Organization for Migration.

They now live in wooden huts they built themselves or camped under canvas donated by the United Nations refugee commission.

The incident followed recent tensions in southern Venezuela between military officers and Pemon tribesmen involved in informal gold mining operations. The Pemon complain of extortion and shakedowns by troops.

The National Guard, the information ministry – which handles media enquiries for the Venezuelan government – and the defense ministry did not respond to requests for this story.

However, Maduro’s government has in the past denied mistreatment of the Pemon. It says the Pemon, who live in southern Venezuela and northern Brazil and number about 30,000 in total, have benefited from state resources and increased autonomy.

The government has not commented on the extortion accusations, but Maduro in recent years has said that opposition leaders are involved in gold “mafias.”

Bolivar state governor Justo Noguera of the ruling Socialist Party in a March interview with Reuters blamed the violence on armed members of the Pemon tribe, without presenting evidence. He added that the incident is under investigation.

“Unfortunately, there were terrorist acts. They attacked a unit of our Bolivarian Army that was only carrying communications equipment,” said Noguera. “There were elements within the peaceful community of Kumarakapay that were armed, and the community rejects that.”

U.S.-BACKED AID CONVOYS

Opposition leader Juan Guaido, who invoked the constitution in January to assume an interim presidency, led the attempt to bring U.S.-backed aid convoys across Venezuela’s borders in an effort to shame Maduro for refusing to accept foreign aid despite shortages of food and basic goods.

Maduro said the aid effort was a disguised invasion by Washington. He said the Trump administration should have lifted economic and oil industry sanctions if it really wanted to help Venezuelans.

The tribal leaders of Kumarakapay were the first of the main Pemon communities in the area to openly support the aid plan.

When residents learned of the killings in Kumarakapay on February 22, a group of them beat the four members of the National Guard held hostage that morning, according to two villagers who witnessed the events.

That same day, a group of around 10 Pemon tribesmen from the village of Maurak detained 42 members of the National Guard at a small airport in the town of Santa Elena, about 10 kilometers (6.2 miles) from the border with Brazil and 75 kilometers (47 miles) south of Kumarakapay, according to one Pemon tribal leader.

They drove the troops to a small farm at the edge of the jungle and ordered them to sit on top of fire ant hills, said a second tribal leader, who also asked not to be identified because he was not authorized to speak on behalf of the tribe.

Bites by fire ants can be painful and are known to cause blisters severe enough to warrant hospital attention.

Some of the troops were tied up and beaten, one of the leaders said, noting that some Pemon members had objected to their detention and to the violence against them.

“Everything was out of control,” he said.

A second leader, who also asked not to be identified, said that during the detention villagers put hot peppers in the troops’ mouths and on their genitals.

The Pemon chieftain’s council did not respond to requests for comment.

The following day, on February 23, residents of Kumarakapay sought to block another group of military vehicles from reaching the border. Four village residents brought in General Jose Montoya, the National Guard commander for Bolivar state, to help convince the military convoys not to go to the border.

However, National Guard troops handcuffed the four Pemon, covered their faces with masks and pushed them into police vehicles, according to resident Aldemaro Perez. Montoya was detained at the same time and all five were taken to an army base called Escamoto.

“So you Pemon tribesmen think you’re tough? You’re going to die here,” Perez recalls one police officer shouting.

FILE PHOTO: The covered body of a dead person is seen after Venezuelan soldiers opened fire on indigenous people near the border with Brazil on Friday, according to community members, in Kumarakapay, Venezuela, February 22, 2019. REUTERS/William Urdaneta/File Photo NO RESALES. NO ARCHIVES

FILE PHOTO: The covered body of a dead person is seen after Venezuelan soldiers opened fire on indigenous people near the border with Brazil on Friday, according to community members, in Kumarakapay, Venezuela, February 22, 2019. REUTERS/William Urdaneta/File Photo NO RESALES. NO ARCHIVES

Perez, 35, a community leader in Kumarakapay, did not identify any specific policemen or soldiers involved in his detention. Details of his account were confirmed to Reuters by three other detained Pemon tribesmen and a representative of civil rights group Penal Forum, who also said they were unable to identify the specific individuals or military units involved.

Noguera, the Bolivar state governor, denied the detained men were beaten in custody.

Reuters was unable to determine why the National Guard used police vehicles to transport detainees to the army base, nor why they detained Montoya – who was stripped of his post in a resolution published days later in the Official Gazette. The resolution did not say the reasons for his dismissal.

Reuters was unable to obtain comment from Montoya or determine his whereabouts.

A regional military command center operating in Bolivar state and the interior ministry, which oversees the National Police, did not respond to requests for comment.

(Additional reporting by Anthony Boadle in Pacaraima, Brazil; Writing by Brian Ellsworth; Editing by Daniel Flynn and Edward Tobin)

Venezuela dialysis patients face uncertain fate after power cuts

FILE PHOTO: Lesbia Avila de Molina, 53, a kidney disease patient, holds her stomach due to pain in her house during a blackout in Maracaibo, Venezuela, April 12, 2019. REUTERS/Ueslei Marcelino

By Mariela Nava and Ueslei Marcelino

MARACAIBO, Venezuela (Reuters) – Seconds before William Lopez was set to be connected to a dialysis machine at a state-run clinic in the western Venezuelan city of Maracaibo in April, the power went out.

Missing dialysis treatment, which removes toxins that build up in the blood of people who suffer kidney failure, leaves Lopez feeling dizzy and nauseous. Like any chronic kidney patient, he could die if he goes too long without treatment.

Unable to complete his treatment that day, Lopez had little choice but to return home.

When he arrived, the power was out there as well.

“The impotence that I feel makes me want to cry,” said Lopez, 45, one of 11,000 Venezuelans whose dialysis treatment has been thrown into disarray by a wave of blackouts in the oil-rich but crisis-stricken South American country.

“Some people go to sleep while they are in treatment. I do not, because I am scared I will never wake up.”

FILE PHOTO: Children use mobile phones during a blackout in Maracaibo, Venezuela April 12, 2019. REUTERS/Ueslei Marcelino

FILE PHOTO: Children use mobile phones during a blackout in Maracaibo, Venezuela April 12, 2019. REUTERS/Ueslei Marcelino

Electricity has largely been restored to the capital city of Caracas after two nation-wide power outages in March and April.

But many other parts of Venezuela now have power for only several hours per day under a rationing plan put in effect by President Nicolas Maduro.

Few places have been harder-hit than sweltering Maracaibo, the country’s second-largest city, which still experiences power cuts lasting 10 hours or more per day. That has led to water shortages, making it hard to provide the minimum 120 liters (32 gallons) of water doctors say is needed for a full dialysis session.

Dialysis requires consistent supplies of power and water to provide the recommended treatment of three or four hours, three times a week.

Venezuela’s public hospitals for years have provided free dialysis treatment, thanks to abundant oil revenue and generous health-care spending. But since the economy crashed along with oil prices in 2014, new equipment rarely arrives and the existing machines are not maintained, doctors say.

Maduro says healthcare problems are caused by U.S. sanctions that blocked funds in foreign bank accounts that could be used to pay for imports of equipment and medicine. He says the recent power outages are the result of Washington-backed sabotage of the electrical system.

His adversaries say those problems were created by incompetence and corruption, and that he has refused to recognize the severity of the situation.

The information ministry and the health ministry did not reply to requests for comment.

Lesbia Avila said she woke up feeling ill one recent morning after receiving just one hour and 40 minutes of treatment the prior day due to lack of power and equipment shortages at her Maracaibo clinic. She said she feels like she is choking when she does not receive full treatment.

“I just ask God that if I die, it will not be of choking,” said Avila, 53, as she lay in a hammock at her home in a working class neighborhood in western Maracaibo.

While speaking to a reporter, she turned pale and began to sweat. Her husband, who was laid off from his job at a nearby auto parts factory two months ago, took an old refrigerator drawer for her to vomit into.

She said at the privately-owned dialysis center where she goes for treatment, only 18 of 35 dialysis machines are working.

The situation is similar at the 136 state-owned dialysis clinics across the country, said Carlos Marquez, the president of the Venezuelan Nephrology Society. Many of the country’s 1,600 machines are not working, he said. The health ministry does not publish figures.

Some private Maracaibo dialysis centers charge patients $70 for a three-hour session, said 48-year-old kidney-disease patient Antonio Briceno. That is equivalent to nearly a year of minimum wage.

“I should have been born rich to be able to buy myself a new kidney,” said Aidalis Guanipa, 25, who lives with her 83-year-old grandmother in Maracaibo. They get by on her grandmother’s pension and from sales of homemade sweets.

“I have not had dialysis for two days because there has been no electricity. I am scared.”

 

(Additional reporting by Mayela Armas and Vivian Sequera in Caracas; Writing by Luc Cohen; Editing by Rosalba O’Brien)

‘It’s time to rise up,’ Venezuelan general tells military officers in video

FILE PHOTO: Venezuelan residents in Colombia protest against Venezuelan President Nicolas Maduro's government in Medellin, Colombia, May 1, 2019. REUTERS/David Estrada.

By Brian Ellsworth

CARACAS (Reuters) – A Venezuelan general called on the country’s armed forces on Sunday to rise up against President Nicolas Maduro, who has relied on the backing of the military to hold on to power despite an economic collapse.

Ramon Rangel, who identified himself as an air force general, said the Venezuelan government is being controlled by the “communist dictatorship” in Cuba – a key Maduro ally.

“We have to find a way to get rid of the fear, to go out into the streets, to protest, and to seek a military union to change this political system,” Rangel, dressed in a suit with a copy of the constitution in his hand, said in a video posted on YouTube. “It’s time to rise up.”

While Rangel’s pronouncement marks another blow to Maduro after a handful of similar defections by senior officers this year, there is little to indicate that he will tip the scales.

Officers who have disavowed Maduro have fled the country and the military top brass – most notably those who command troops – continues to recognize Maduro.

The information ministry did not respond immediately to a request for comment. Reuters was also unable to obtain comment from Rangel.

Air Force Commander Pedro Juliac posted a picture of Rangel on Twitter on Sunday with the words “traitor to the Venezuelan people and the revolution” printed across the image.

Rangel was an active military officer who fled to Colombia last month, according to a source close to Venezuela’s military who asked not to be identified.

Unlike other officers who have made similar pronouncements, Rangel did not voice support for Juan Guaido – the opposition leader who invoked the constitution in January to assume the interim presidency, arguing that Maduro’s 2018 re-election was a fraud.

More than 50 nations, including the United States and most South American nations, call Guaido Venezuela’s legitimate leader. Guaido and a group of soldiers called on the armed forces on April 30 to turn on Maduro, but the military never joined and the uprising collapsed. The government called the event a coup attempt and accused a group of 10 opposition legislators of treason for joining rallies that day.

Venezuela is suffering a hyperinflationary collapse that has fueled a migration exodus of some 3.5 million people in the past three years.

(Reporting by Brian Ellsworth; Editing by Paul Tait)

Deputy of Venezuela’s Guaido arrested and dragged away by tow truck

FILE PHOTO: Juan Guaido (R), new President of the National Constituent Assembly and lawmaker of the Venezuelan opposition party Popular Will (Partido Voluntad Popular), and lawmaker Edgar Zambrano of Democratic Action party (Accion Democratica), leave the congress after Guaido's swearing-in ceremony, in Caracas, Venezuela January 5, 2019. REUTERS/Manaure Quintero/File Photo

By Angus Berwick and Mayela Armas

CARACAS (Reuters) – Venezuelan intelligence agents detained opposition leader Juan Guaido’s congressional deputy on Wednesday, using a tow truck to drag his vehicle away with him inside, prompting the U.S. government to warn of “consequences” if he was not released.

The SEBIN intelligence agency seized Edgar Zambrano, vice president of the opposition-controlled National Assembly, which Guaido heads, in the first arrest of a lawmaker since Guaido tried to spark a military uprising last week to bring down President Nicolas Maduro’s government.

Venezuela’s pro-Maduro Constituent Assembly agreed on Tuesday to strip Zambrano and six other lawmakers of their parliamentary immunity to allow their future prosecution. The opposition does not recognize the assembly’s decisions.

The Supreme Court had earlier accused those lawmakers of conspiracy, rebellion and treason, and accused another three opposition legislators of the same crimes on Wednesday.

The opposition says Maduro has stacked the court with his own supporters, while the U.S. government this week threatened to sanction all its members.

The U.S. government’s Venezuelan embassy, now based in Washington, said Zambrano’s “arbitrary detention” was “illegal and inexcusable.”

“Maduro and his accomplices are those directly responsible for Zambrano’s security. If he is not immediately freed, there will be consequences,” the embassy said on Twitter.

An attempted uprising last week led by Guaido, recognized by the United States and other Western countries as the rightful head of state, failed to dislodge Maduro, as have a series of U.S. sanctions against his government. Maduro decried the events as an attempted coup.

“One of the principal conspirators of the coup has just been arrested,” Diosdado Cabello, head of the Constituent Assembly, said in comments broadcast on state television.

“They will have to pay before the courts for the failed coup that they attempted,” he said.

‘KIDNAPPED’

Zambrano said on Twitter at about 6.40 pm local time (2240 GMT) SEBIN agents had surrounded his vehicle outside the headquarters of his Democratic Action party in Caracas’ La Florida district.

“We were surprised by the SEBIN, and after refusing to let us leave our vehicle, they used a tow truck to forcibly transfer us directly to the (SEBIN headquarters) Helicoide,” he said. It was not yet clear if Zambrano was already at the Helicoide.

Guaido said on Twitter: “The regime has kidnapped the first vice president.”

Guaido invoked the constitution in January to assume an interim presidency, denouncing Maduro as illegitimate after he secured re-election last year in a vote widely viewed as fraudulent. Maduro has overseen the collapse of Venezuela’s economy, which has shrunk by half over the past five years, forcing more than 3 million Venezuelans to emigrate.

The Constituent Assembly removed Guaido’s parliamentary immunity in early April. Authorities have not tried to arrest him since then, but Maduro has said he will “face justice.”

U.S. President Donald Trump’s administration has threatened Maduro’s government with a harsh response should it ever detain Guaido.

Earlier on Wednesday, the Supreme Court’s head, Maikel Moreno, rebuffed the U.S. government’s threats to sanction his court’s members if they did not reject Maduro’s government and Guaido.

The U.S. Treasury Department imposed sanctions on Moreno and the seven principal members of the court’s constitutional chamber in 2017 for rulings that “usurped the authority” of the National Assembly.

U.S. Vice President Mike Pence said on Tuesday the Trump administration would soon sanction the 25 remaining members of the court. Pence said the United States was lifting economic sanctions on a former Venezuelan general who turned against Maduro in order to encourage other Maduro allies to follow suit.

The head of the Organization of American States, Luis Almagro, said: “We demand the SEBIN stop the intimidation, respect the lawmakers’ parliamentary immunities, and immediately release Edgar Zambrano.”

(Reporting by Angus Berwick and Mayela Armas; Editing by Rosalba O’Brien, Lisa Shumaker and Paul Tait)