Russia is getting out of Venezuela. Thanks Russia.

Wall Street Journal - In a Blow to Maduro, Russia Withdraws Key Defense Support to Venezuela

Russia has been one of Maduro’s major supporters in its standoff with the U.S.

By Thomas Grove

June 2, 2019

MOSCOW—Russia has withdrawn key defense advisers from Venezuela, an embarrassment for President Nicolás Maduro as Moscow weighs the leader’s political and economic resilience against growing U.S. pressure.

Russian state defense contractor Rostec, which has trained Venezuelan troops and advised on securing arms contracts, has cut its staff in Venezuela to just a few dozen from about 1,000 at the height of cooperation between Moscow and Caracas several years ago, said a person close to the Russian defense ministry.

The gradual pullout, which has escalated over the past several months, according to people familiar with the situation, is due to a lack of new contracts and the acceptance that Mr. Maduro’s regime no longer has the cash to continue to pay for other Rostec services associated with past contracts.

Russia has been among Mr. Maduro’s biggest international supporters, but the winding down of Rostec’s presence shows the limits of Russia’s reach in the South American country at a time when Moscow is facing economic difficulties—in part due to the impact of U.S. sanctions—at home. Venezuela has been one of Moscow’s largest customers in South America.

Rostec’s withdrawal of permanent and temporary employees is a major setback for Mr. Maduro, who has frequently touted assistance support from Russia and China as a sign that other global powers are willing to assist him in his bitter standoff against the U.S. Russian military support has been central to Mr. Maduro’s pledge to defend Venezuela from any foreign invasion.

His government’s inability to pay Rostec also reflects the economic calamity gripping facing the country. The Maduro government didn’t respond to a request to comment.

Under Russian President Vladimir Putin, Moscow’s defense exports have become a foreign-policy tool. The arms trade is overseen in some places by embassy employees themselves to help strengthen ties with political partners from Asia to South America, according to one of the people familiar with the situation. The defense contractor, run by Mr. Putin’s longtime friend Sergei Chemezov, has been hit by financial difficulties as U.S. sanctions have derailed several big contracts.

A person close to the Russian government said Rostec weighed the political benefits of supporting Mr. Maduro against the regime’s growing economic liabilities, forcing the company to make a strategic decision on ties with Caracas.

“They believe the fight is being lost,” said the person.

The final major contract Rostec fulfilled was the construction of a helicopter-training center for military helicopters in March. Other longstanding plans, including the construction of a Kalashnikov rifle production facility, were expected to cease, the people said.

Russia-Venezuela defense ties flourished under Mr. Maduro’s predecessor, Hugo Chávez, with arms contracts for attack helicopters, jet fighters and tanks.

“This cooperation has grown a lot,” Vladimir Zaemskiy, Russia’s longtime ambassador to Venezuela, said in an interview Wednesday. “Among other things, Venezuela has bought assault rifles, multiuse aircraft, helicopters from the Mi-17, Mi-35 and Mi-26 models, T-72 tanks, as well as various anti-aerial defense systems.” He said that because of the sophistication of the weaponry, “it’s obvious that the Venezuelans needed Russian assistance and those contracts that we have signed since 2006 foresaw, among other things, the training of Venezuelan personnel and maintenance of that equipment.”

By the end of last year, contracts were still continuing for missiles and air-defense systems, but money had stopped coming in, said a person close to Russia’s defense ministry.

“Since the Venezuelans aren’t paying, why should Rostec stay there and foot the bill on its own,” the person said. The person added that, for months now, Venezuela hasn’t been paying for services like the servicing of military hardware.

Rostec said the allegations weren’t true. “The composition of the representative office has not changed for many years. Technical specialists periodically come to the country to carry out repairs and maintenance of previously supplied machines,” the Rostec statement said.

A Kremlin spokesman didn’t respond to a request to comment.

Both President Trump and Secretary of State Mike Pompeo have signaled that Russian influence was at the center of the continuing standoff between Mr. Maduro and Venezuela’s opposition, raising the specter of a Cold War-style confrontation with Moscow close to U.S. borders. Mr. Pompeo said last month that Russia persuaded Mr. Maduro not to flee the country during an attempt to oust him.

In March, the deputy chief of the general staff Col. Gen. Vasily Tonkoshkurov, landed in Venezuela aboard an Ilyushin passenger jet with 99 Russian military specialists. They were accompanied by an Antonov An-124 cargo plane that carried 35 tons of military hardware.

The Russian military plane was sent to make up for Rostec advisers and technicians who had since slowed their work with Caracas.

That planeload of soldiers ultimately escalated tensions around Venezuela and prompted President Trump to threaten Russia to “get out” of Venezuela.

“It was a public show of support by the defense ministry because real cooperation between Rostec and Venezuela had already slowed to a trickle,” said one of the people familiar with the situation.

Even as Rostec has drawn down its presence, Russia has tried to maintain a military presence. Mark Galleotti, senior associate fellow at the Royal United Services Institute said Russia’s defense ministry and other corporate security companies likely had a presence of about 300 officers in the country.

Importantly to Caracas, Mr. Putin has publicly stood behind Mr. Maduro in his standoff with the U.S., whom Moscow has accused of interfering in Venezuela’s internal affairs.

The Kremlin sees Venezuela as the latest front in what it touts as a global contest against U.S. hegemony and a chance to inflict revenge on Washington for what it regards as meddling in the politics of nations close to its borders, such as Ukraine.

Rostec has been facing its own financial problems since the U.S. in 2017 began sanctioning third-party countries for dealing with Russia’s arms industry.

Since then, a number of countries have delayed their purchases of Russian arms. Kuwait said earlier this year it would delay a contract for T-90 tanks. Indonesia has delayed a shipment of Su-35 fighters, and the Philippines announced last year it wouldn’t buy a package of Russian arms President Rodrigo Duterte had promised to buy.

Worries over Venezuela’s future, however, have spread to other sectors where Russia has a strong presence, such as oil. Venezuela is by far the largest recipient of investments by oil giant Rosneft outside of Russia. And there is no easy way for Rosneft to divest itself of its commitments, which have mostly been spent on prepayment for Venezuelan oil or joint-venture costs with Venezuela’s state oil company.

Rosneft wasn’t immediately available for comment.

—Alan Cullison and Maolis Castro contributed to this article.

Write to Thomas Grove at thomas.grove@wsj.com

Appeared in the June 3, 2019, print edition as 'Russia Pulls Key Military Aid To Venezuela.'