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EXCLUSIVE: UN greenlights massive new humanitarian fund for Venezuelans | via: The New Humanitarian

Daniela Mohor | Santiago de Chile | October 17, 2023 | Image: Carlos Garcia Rawlins/Reuters

‘The UN has a responsibility to work to implement it as soon as possible.’

UN Secretary-General António Guterres has given the green light for the UN to start administering a new fund worth hundreds of millions of dollars to address emergency needs in Venezuela, three informed sources have told The New Humanitarian. 

The move comes almost a year after the government of President Nicolás Maduro and the opposition signed an agreement to create the fund, which calls for some of the $3 billion in Venezuelan assets currently frozen by sanctions overseas to be diverted to finance programmes in four areas: health, education, food security, and electricity.

The trust fund is unlikely to be up and running imminently, said the sources, who spoke independently to The New Humanitarian on condition of anonymity because they weren’t authorised to speak publicly. Layers of UN bureaucracy and the need to identify the funds that can be transferred will take time to navigate. Both Maduro’s government and the opposition must agree to the unblocking of specific funds for it to happen, and it is then unclear how long it will take them to be able to mobilise the money.

Sources said the full $3 billion – which has been held in foreign banks due to sanctions imposed by the United States and other Western countries – will not be available any time soon, and now estimate that about $600 million could be progressively unfrozen. 

More than 7.7 million Venezuelans have fled the country’s economic collapse since 2015, and the remaining 28.7 million face food shortages, the breakdown of the healthcare and education systems, and runaway inflation.

Venezuela has received only about 30.8% of the $720 million requested in the Humanitarian Response Plan put together by the UN’s emergency aid coordination body, OCHA. This was supposed to assist 5.2 million Venezuelans by the end of this year.

Despite the multiple overlapping crises plaguing the country, it took months of negotiations to obtain the UN’s authorisation to have the funds released – a decision that is expected to be made public in the coming days. 

Talks about the trust fund started during the so-called “Mexico dialogue” meetings that brought Maduro’s government and the opposition to a negotiating table in 2021 to find a way out of Venezuela’s political crisis and organise free elections in 2024. 

The “Second Partial Agreement for the Protection of the Venezuelan People”, also referred to as the “social agreement”, was signed in November 2022 and considered a historic breakthrough given Venezuela’s political tensions and the Maduro regime’s presistent denials of the humanitarian crisis. But political negotiations between Venezuelan parties stalled after that, and it took the United States six months to agree to shield the fund’s account from creditors, and another five months for the office of the UN secretary-general to agree to administering the trust fund. 

Although sources say it is not related, the UN green light comes as the Venezuelan government and the opposition released a joint public statement on 16 October, saying they had agreed to resume political negotiations – with Norway as a facilitator. Members of both parties will restart conversations in Barbados today, less than a week before the 22 October primaries

The Washington Post and other media reported that in conversations with Maduro’s government, Biden’s administration said it would ease sanctions of Venezuela’s oil industry if the meeting led to the Venezuelan regime and the opposition signing a deal to have internationally monitored elections take place next year.

“The restart of negotiations is a good sign. Now it’s more urgent than ever that the humanitarian agreement reached by the parties is implemented,” Geoff Ramsey, senior fellow on Venezuela and Colombia at the Atlantic Council, told The New Humanitarian. “The UN has a responsibility to work to implement [it] as soon as possible. This is something all parties in Venezuela have been pushing for for months”. 

The trust fund: a life saver for Venezuelans

Informal conversations about using sanctioned money to meet Venezuela’s humanitarian needs started in 2019 after Mark Lowcock, the UN’s emergency relief coordinator at the time, visited the country and pushed for finding a way “to unlock Venezuelan resources to contribute more to humanitarian action”. 

The appeal didn’t gain much traction until the COVID-19 pandemic hit and some limited funds were released, allocated to the regional health agency PAHO and UNICEF for COVID-19 response.

When formal conversations eventually started in Mexico in August 2021, they raised hopes that the trust fund would soon offer broader help for Venezuelans. But progress became bogged down by a clutch of thorny issues: the legal status of some of the assets, which are frozen in jurisdictions in both Europe and the United States; stalled political negotiations; US doubts about hosting the account; and concerns at the UN over assuming the responsibility to manage the fund.

“Venezuela is among the countries with the most underfunded humanitarian response plans in the world.” 

HumVenezuela, which monitors the humanitarian emergency, estimates that some 19 million Venezuelans – 66% of its 28.7 million people – need assistance, and that another 18.7 million people have irreversibly lost or exhausted their means of livelihood. Malnutrition is rampant.

“The time it is taking to set up the fund is not very humanitarian,” said Susana Raffalli, a Venezuelan nutritionist and emergency aid adviser. “The UN as an intermediary is a very expensive and inefficient option, but in the medium term this money will help recuperate some of the much-needed public services.”

Feliciano Reyna, founder of Acción Solidaria, a Venezuelan NGO providing medication and treatment to HIV-positive Venezuelans said, “Venezuela is among the countries with the most underfunded humanitarian response plans in the world.” 

“Whatever the amounts of the transfers, it will make a difference by helping expand the humanitarian response,” Reyna said. “It will also be great news for what it means if it can contribute to finding solutions to political conflicts that also have a social impact on the country.”

According to Samir Elhawary, head of OCHA’s office in Venezuela, humanitarian access has improved since 2019, but funding has not met the country’s needs.

“We saw a 7% fall last year, and this year we’re expecting a 15-20% fall compared to last year,” Elhawary told The New Humanitarian. “So we are worried”.

Beside the high cost of food, Venezuela’s healthcare system has failed, and few children are getting an education. For those who chose to leave, the situation is dire. Slowing economies in the region have lost the ability to absorb refugees and services are in short supply. 

Last month, the UN’s migration agency, IOM, reported that more than four million Venezuelan migrants and refugees struggled to meet basic needs — food, shelter, education, and formal employment — in the Americas.

“The response outside is finding it increasingly difficult to raise money,” said Elhawary. “But if we don’t put more resources and efforts to respond to needs inside Venezuela, we won’t address the underlying causes of migration.”

Unlocking of funds delayed by reputational risk

The delay at the UN level, sources said, was related to the high level of risk in managing the fund and the need to mitigate them. Specific challenges have included: figuring out how to handle assets under litigation from creditors; minimising fraud and corruption, and establishing control mechanisms to ensure the proper implementation of the agreed programmes.

Reputational risk was likely another factor causing the UN’s decision to linger for months.

“There is some residual concern regarding failed experiments in managing large funds in other countries in the past, particularly with Oil for Food in Iraq,” said Ramsey, referring to the 1995 programme that allowed Iraq to sell oil in exchange for food and supplies of humanitarian assistance. That programme was terminated after a corruption scandal

Sources close to the Venezuela process said that before the humanitarian agreement reached the UN’s headquarters in New York, there needed to be consensus on the management of the social fund and which programmes to finance.

PAHO, UNICEF, the World Food Programme (WFP), and the United Nations Development Program (UNDP) will implement the programmes over a three-year period to remove them from electoral politics; while Venezuelan government and opposition experts will supervise the rollout, the sources said, adding that final adjustments to the original structure are still being worked out.

The New Humanitarian reached out to OCHA in New York but obtained no official confirmation of a forthcoming announcement. Eri Kaneko, OCHA’s spokesperson, sent this message: “The UN continues to engage with the parties with a view to finding a solution allowing for the implementation of the social agreement.”

Neither the UN Secretary-General’s office, the US Department of the Treasury, nor Gabriela Jímenez, the Venezuelan minister of science and technology who has been involved in the negotiations, responded to repeated requests for comment.

Edited by Tom Brady.