Political Volatility in Venezuela and Its Effect On U.S. Foreign Policy
In scouting the riches of the New World for the monarchs of Spain, Christopher Columbus once remarked that the Orinoco Delta and its surrounding lands may be the closest thing to a “terrestrial heaven.” More than half a millennium later, the territory surrounding the Orinoco now constitutes the nation of Venezuela, a place that is perhaps the farthest thing possible from paradise. Since global petroleum prices were nearly halved in 2014 the country’s economy, dependent on the commodity for 96 percent of its exports and nearly 40 percent of its government budget, has fallen into a tailspin due to inflated spending on social programs and a failure to diversify its economic rents during the overly socialist and oftentimes authoritarian presidency of Hugo Chavez. As a result, while the economies of traditional industrialized nations have capitalized on cheaper energy prices to recover from the Great Recession, Venezuela’s economy has lost over a third of its value. Due to its government commanded supply chain, this contraction has forced the country to severely reduce imports, leading to massive shortages in the availability of consumer goods and produce and contributing to a profound humanitarian crisis in the region.
While his country languishes in hunger, once eradicated diseases return, and the economy is hyper-inflating at 10 million percent, incumbent president Nicolas Maduro has been solidifying his grasp on power and perfecting the authoritarian playbook of his predecessor. Since stacking the country’s Supreme Court with loyal Chavistas in 2015 and following up with the establishment of the National Constituent Assembly (a pliable surrogate of the constitutional National Assembly) in 2017, Maduro has pursued a deliberate campaign of dictatorial terror by imprisoning opposition members and brutally suppressing pro-democracy protest. By focusing on grabbing power, the incumbent has neglected his duties to govern responsibly, tarnishing Venezuela’s already dismal governance indicators, and failed to implement any meaningful economic reforms, deciding to dismiss the economic turmoil as “fake news.” Maduro has already flexed his political muscle by having the National Electoral Council dismiss a scheduled recall referendum, and has rallied the country’s security establishment around his persona.
The deplorable economy and authoritarian direction of Venezuela had already sparked massive protest movements, especially during and immediately after the National Constituent Assembly elections. On Jan. 23 the political crisis intensified as opposition leader Juan Guaidó declared himself to be the country’s interim president with the support of the National Assembly and thousands of protestors who gathered to witness his inauguration. The move comes after the start of Nicolas Maduro’s second term as president on Jan. 10, after his overwhelming victory in a snap election that took place seven months early and which was fraught with allegations of vote rigging and fraud. As of last week, while Guiadó’s supporters dwarf those of Maduro in the streets, he has not secured public support from any senior government officials, with only a handful of rank and file bureaucrats, scattered Venezuelan diplomats in the U.S. and a single Supreme Court Justice who fled to the U.S. days before the announcement supporting him.
The recent events in Venezuela have garnered international attention, in part due to the diverse support and opposition that Juan Guaidó has received. As has become typical in international relations in the second decade of the twenty-first century, the established democratic and capitalist West is once again at odds with the authoritarian and hybrid-economies of less amicable regional powers. Along with the typical troop of tyrants, such as Turkey’s Recep Tayyip Erdoğan, up and coming authoritarian Nicolas Maduro is supported by the global actors of Russia and China, both seeking to secure their economic and ideological positions in the region.
While the Caribbean may be a distant preoccupation for Beijing and Moscow, both countries have significant financial stakes in Venezuela. Russia is heavily involved in the country’s petroleum trade, with Russian state-owned oil giant Rosneft having a strong partnership with the Venezuelan state-owned oil enterprise PDVSA. For its part, China is the largest supplier of cheap no-strings-attached loans to the country, having recently approved a new $5 billion credit to the government. Its growing involvement in the country’s domestic strife can be seen as a way for it to ensure that its influence and chances of repayment are not jeopardized by regime change. Furthermore, the significance of having a strong ally, with the world’s largest proven oil reserves, at America’s doorstep is not lost on the powers, with Russia having recently demonstrated the strategic possibilities of such an arrangement by sending two Tu-160 nuclear-capable bombers to the country.
Juan Guaidó has also received considerable support from the international community. American president Donald Trump, who often sides with his more authoritarian counterparts, and the U.S State Department were among the first and most important entities to support Guaidó. While a move against Maduro was expected, the United States typically does not support non-elected claimants to power, especially those sure to cause instability, and the quick announcement seems like a departure from typical U.S. foreign policy in the region. Indeed, the United States has a dirty history of supporting authoritarian regimes in Latin America and has been recognized as a stability seeking power in foreign affairs. However, the regional instability caused by Maduro’s governance has become a concern for the U.S., especially since the internal displacement of over three million Venezuelans is sure to lead to northbound migration, the prevention of which has become a top priority for the current administration.
Furthermore, the support offered to Maduro from America’s chief rivals in Europe and Asia (Russia and China, respectively) has forced the U.S. to pivot its policy of neo-containment to its backyard. While the frontlines of the South China Sea and Eastern Ukraine are still on America’s radar, the possible infiltration of a country less than a thousand miles from America’s coastline has become an immediate concern. The official alignment of Venezuela with America’s chief adversaries would be dangerous for U.S. geo-strategic security and pose a significant threat along the lines of communist Cuba during the Cold War.
China has already demonstrated its ability to leverage debt default into maritime asset acquisition, and is likely to do the same should Venezuela not recover from its abysmal economic situation. Such an outcome would likely hamper U.S. maritime strategy against the country and leave it within striking distance from American ports and the strategic waterway of the Panama Canal. Additionally, Russian influence over Venezuela’s petroleum industry has already led it to acquire a pledge from PDVSA guaranteeing the company’s 49.9 percent stake in Citgo, one of the ten largest oil refiners in America, as collateral for a $1.5 billion loan in Nov. 2016. Such a development has demonstrated to the U.S. that further collusion between Venezuela and Russia could seriously jeopardize America’s energy infrastructure. Thus, by supporting instability today, the U.S. is aiming for regime change that will alienate its rivals and provide for greater security in the future.
It remains to be seen whether this domestic debacle will spiral into an international incident. In any case, Venezuela is certainly in a serious predicament stuck between an unpopular dictator who is supported by a vastly expanded security establishment and a popular but powerless politician promising to revive democracy. The latter would restore common sense economics and is supported by the U.S. which would provide Venezuela with helpful economic assistance (already received by its neighbors) and represents the country’s largest trading partner. However, Maduro has the easily obtainable economic power of China behind him, as well as support from a leader desperate to undermine the U.S. and reassert Russian interests. Finally, while he remains unpopular the age-old adage that one man with a gun can control one hundred without one has remained true until now, and any attempt to remove Maduro is not likely to be bloodless.
