200,000 carats of diamonds
OCTOBER 27, 2008
What's Up With Venezuela's Diamonds?
By Douglas Farah
One of the signs of the internal decomposition of the Chávez government is the growing corruption and internal rot. Given my past experience in Africa, one of the most intriguing things that has gone missing over the past three years are Venezuela´s diamonds.
The latest report from Partnership Africa Canada, a leading group in combating the use of blood diamonds and monitoring the Kimberley Process (KP), documents how the relatively small but still lucrative trade in Venezuelan diamonds has gone rogue.
The KP was designed to monitor the path of diamond from mining to sale, to insure that only licit diamonds make it to the world market.
The report, which reviews the compliance of many nations, blasts Venezuela particularly harshly. Given the documented support of Chávez and senior members of his intelligence apparatus for both the FARC in Colombia and Hezbollah (and the close ties to Iran), the disappearance of 200,000 carats of diamonds of years is a risk.
This untraceable revenue stream could become even more important as oil prices continue to plummet, leaving the Chávez government with rapidly shrinking revenues. This, in turn means that the social expectations generated by his revolution will remain unmet.
Perhaps more importantly, Venezuela's ability to heavily subsidize oil to its allies in Cuba, Nicaragua and elsewhere, and the billions of money thrown around to spread Chávez's brand of socialism, is now sharply curtailed. My sources say Venezuela needs the price of oil to remain above $90 a barrel to pay of its current policies. My full blog is here.