Policy Recommendation: US – Venezuela

The following text was produced as a result of intellectual exercise as part of my Masters degree in International Security at Sciences Po.

External Consultant Policy Recommendation to the United States President and the 114th Congress on How to engage with the current Political Crisis in Venezuela.

Executive Summary: The country of Venezuela is facing an aggravated domestic crisis with Maduro’s government failing to secure basic food and health needs, facing an economic free-fall and questions of legitimacy have been raised for the upcoming parliamentary elections. This report will look to the American policies in place and how they failed to tackle the poor governance of Venezuela. We will express the need to reform these policies in order to tackle more efficiently and in a multilateral manner the current political crisis.

Background

The US has historically maintained positive diplomatic relations with Venezuela until the election of the populist President Hugo Chavez (1999-2013) and his successor Nicolas Maduro (2013 – present). These last two leaders have based their popularity largely on an anti-capitalist rhetoric, criticizing the US governmental foreign policies and its relationship with Latin American countries.[1] As such, Venezuela under Chavez was an attempt to be a regional reference point, providing assistance to the Caribbean countries, founding ALBA (Alianza Bolivariana para los Pueblos de Nuestra América) and being the primary trade partner with Cuba. Chavez founded ALBA, which is an intergovernmental alliance between the Latin American countries and the Caribbean states for political, economic and social cooperation. In many ways, this strength Chavez popularity beyond borders, blocking any American initiative to get deeper involved in the region. Nevertheless, the regional redistribution and support was only possible during the oil boom years. In fact, it was also the revenue from the oil boom that reduced massively poverty in the country through governmental-sponsored social programs. However, with the decrease of international oil prices and poor policy choices alongside with corruption and the failure to reinvest or develop other sources of income, Venezuela faces now expected triple-digit inflation for this year.[2] Most importantly, the progress that was made under Chavez (2003-2012) in reducing poverty has now been cancelled out with the crisis in place.[3]

Despite this friction, the US has always sought to respond to the humanitarian needs of Venezuelan citizens. This is reflected in the increase of USAID budget in recent years, with the administration asking for $5.5 million on the FY2016.[4]

The difficult conditions that Venezuelans have been living under, led to revolts against Maduro’s government, with complains about lack of political freedom and human rights violations. These uprisings, led mainly by students, escalated in February 2014 and resulted in 44 fatalities and 347 injuries in several cities around the country.[5]

Last June, a private diplomatic meeting between the Venezuelan National Assembly speaker, Diosdado Cabello, and the US State Department Counselor Thomas Shannon took place in Haiti. This was an important meeting in restoring a good relationship between the two countries. Note that Cabello, the second most important man in Venezuela, is currently under US investigations for drug trafficking and money laundering.[6] The US primary goals for this meeting were 1) to push for parliamentary elections (which was successfully accomplished), 2) to ensure that external observers supervise these upcoming elections and 3) to release political prisoners. Both sides were fairly content with the result of the meeting and optimistic with regards to the future US-Venezuelan relations.[7]

The upcoming parliamentary elections, scheduled to take place in 6th December 2015, rose expectations about a possible early presidential election, which otherwise is not expected until 2019.[8] The premise is that as long as the opposition, the Democratic Unity (MUD) alliance wins the parliamentary elections, it is likely that they will recall for a referendum next year to hold earlier presidential elections.

Current Policy Analysis

This report is highly critical of the current political and economic sanctions in place. These policies have had little impact in changing the reality in Venezuela, and have only promoted anti-US campaigns and the discontent of the ALBA countries about these unilateral actions. Furthermore, not only have these policies failed to address the main issues but they also do not address the upcoming elections, which is a crucial turning point in the governance of the nation.

The US Congress has responded to the violence against political protestors in Venezuela with financial sanctions on seven Venezuelan officials and visa restrictions for human rights abuses and arbitrary detention on protestors.[9] This policy was not well seen by other regional countries and especially by Maduro’s government who has labeled this action as the most “aggressive, unjust and poisonous step that the U.S. has ever taken against Venezuela”.[10] This is a consequence of the US delivering sanctions unilaterally and defining Venezuela as a core threat to national security.[11] The region was not in favor of the US statement. It seems quite contradicting that on the one hand the Obama administration is trying to regulate relations with all the countries in the region (with the lift of the embargo to Cuba) and on the other hand is imposing unilateral sanctions that are leading to friction with the regional states.

In fact, the region has proved to be capable of managing some of the humanitarian concerns without the US interference. For example, on the recent border and migration issues with Venezuela and Colombia, regional representatives of the Union of South American Nations (UNASUR) and of the Community of Latin American and Caribbean States (CELAC), Uruguay and Ecuador respectively, were involved in the talks and successfully normalized the relations between these two neighboring countries. This should be a clear message to the American leaders that no unilateral action would be as well off as a multilateral engagement resorting to other regional governments. Ultimately, these economics sanctions are harming certain Venezuelan individuals, but they are not making an impact on decision-making at the government level.

From the economic sanctions to the financial aid provided by the USAID, this has also been an ineffective initiative. It is not such a controversial policy as the economics sanctions, however it has not been delivered efficiently due to the level of corruption and bad policy choices. This is reflected on the ground with scarcity of food and medical equipment. Altogether, these policies failed to make an impact on the governance of the country, which has become increasingly authoritarian and chaotic.

Alternative Policies

The corruption of this government is destroying and leading Venezuela to an economic free-fall as we have seen in previous sections. The primary goal has to be the guarantee of transparent parliamentary elections, which is likely to influence the presidential elections. An effective policy will have to look at the economic and political risks and consequences on the current Venezuelan government. There are two main alternatives to attain these goals, illustrated below under Policy A and Policy B. In the section after, we will debate why Policy B is a better option.

Policy A: proposes a strong, firm position in pressuring for international observers for the elections, with representatives from the US, which will ensure the transparent and legitimate process. It requires a direct American influence to ensure effective outcomes.

President Obama has already declared that the political situation in Venezuela is a national core threat and hence “declare a national emergency to deal with that threat”.[12] This should mean that the US is ready to fully engage in a direct manner with the humanitarian and economic crisis happening, which is caused by the misconducting of the government in place. The US should then pressure the IMF and the Venezuelan government to work in partnership for the recovery of the economic crisis. Furthermore, the American authorities should publicly support the opposition party running for the parliamentary elections in order to enhance its legitimacy and be able to influence their economic agenda setting. This will guarantee that the party will meet the expectations of engagement in preventing insurgency, illegal traffic of goods and ensure freedom of speech and association. Equally important, would be the Congress sending an American team to supervised the elections at the different voting sites. This is crucial since that on the 2013 presidential elections, the Venezuelan government chose their own observers, which arguably jeopardized the legitimacy of the elections.

Now, this policy ensures a ‘hands-on’ the subject, and it could account for more effective outcomes since the US will be supervising first hand the elections and the formation of the priorities in the parliamentary agenda. The negative consequences of this policy is as we have seen previously, there is general negative impact when the US acts unilaterally – whether it is under humanitarian causes or national interest. Hence, they should seek the approval of the opposition party in Venezuela to welcome American support. Otherwise, this will be a clear violation of non-interference policy and will boost popularity of Maduro’s anti-Americanism propaganda. Perhaps a better solution would be to look at policy B.

 

Policy B: is built in accordance to the consequences of the already existing policies, and hence calls for a multilateral cooperation and deeper engagement with regional actors. Pressures for the release of political prisoners and for open and free elections. Suggestion over prescription will be better seen in the region and avoid the US been accused of interventionism.

First and foremost, the US should pressure for it pledge during the private meetings last June, and call for the liberation of the opposition political leaders, especially Leopoldo López, prominent leader of MUD. Last month, he has been sentenced to 14 years of jail.[13] This measure would be most successful by negotiating a trade off with the current Maduro’s government – perhaps by lifting some of the financial sanctions.

It is crucial to ensure supervision on the voting sites as well as on the counting of votes. As a result of the successful handling of the Colombian and Venezuelan border issues, it seems prudent to resort to international observers representative of UNASUR and CELAC, as their mediation was successful, but perhaps add two more actors. A United Nations Observer and a representative of Cuba would also be ideal to be present on the counting of votes. Mainly because Cuba has for many years been a huge ally of Venezuela, so Maduro would hardly oppose this. In fact, Cuba is already involved in supporting Venezuela with medical assistance. In addiction, it will be a good sign of faith by the US to encourage Cuba to take a role in as a regional mediation, as their diplomatic relations are being restored. With regards to the teams on the voting sites, this would have to be discussed again with the regional actors, and the US should avoid having its own people on the ground.

Furthermore, leading to the elections days, the US does not necessarily need to publicly support and finance the opposition party MUD because recent
polls give them the advantage, as you can observe on the graph.[14] Moreover, otheUntitledr sources have shown that the Venezuelans are discontented with the government, with only 25 per cent of the population approving Maduro’s leadership.[15] There should not be an extreme need of US involvement, when clearly the citizens are already calling for political reform.

Another crucial point would be to consult ALBA and UNASUR, which are economic alliances respected and corroborated by Venezuela to come up with an emergency plan that could help boosting the Venezuelan economy. US should not take a leading set, but it should most definitely be available to collaborate and finance the economic reconstruction.

 

Policy Action Most Recommended

Policy B seems to offer the multilateral engagement that the Obama administration has pledged to follow on their foreign policy actions. Even though policy A seems to suggest a more effective outcome, and ensure a free election, it could also fuel Maduro’s rhetoric and not lead to early presidential elections. After the normalization of relations with Cuba, Venezuela is really the only government in the region that still resorts to an anti-American rhetoric. From my point of view, this rhetoric could potentially be aggravated if an aggressive policy such as option A is implemented.

However, Policy B leaves too much in the hands of the new parliament – who has the MUD as highly likely winners of the elections. Now this may present a negative aspect because the manifesto given by MUD does not present a reform to Venezuelan economic crisis. The counterargument provided by the party is that they are fighting against a system and there is not place yet to further elaborate on the economic side without winning the polls. True and I would further elaborate on that by saying that Venezuela alone will not be able to solve the economic crisis. And as Policy B recommends, it is the case of coordinating the economic alliances that Venezuela is part of in order to elaborate an emergency economic plan, to which the US should offer its support, without leading the discussion.

Conclusion

The current situation is in fact a sum of the latest years under Chavez, with inflation reaching three digits this year, with lack of medical equipment and assistance and most importantly lack of food security. Action must be taken fast, but this is the responsibility of the regional countries to determine how to manage the current situation. They have so far managed to successfully handle the border and migration issues between Venezuela and Colombia. The US needs to pledge its commitment to human rights and democrat transparency, but it must not get ahead of itself and instead find ways to work alongside regional actors. The USAID provides financial aid to combat the current situation but Venezuela needs a trustworthy government that will efficiently reallocate the sources and search for other sources of revenue, now that the oil boom is over. Hence, the main focus has to be in the release of political prisoners; pressure regional actors to get involved in the monitoring of the voting sites and suggest other external actors to be present in the counting of votes. The remaining economic and social issues will be left to solve through dialogue and regional cooperation to which the US should offer support but not delegate roles or prescribe solutions.

 

Bibliography

Carasik, Lauren, “Fighting Words”, Foreign Affairs, 1 Oct. 2015, available at https://www.foreignaffairs.com/articles/united-states/2015-04-02/fighting-words.

Cardenas, J, “Have U.S. Sanctions Against Venezuela Actually Helped Maduro?”, Foreign Policy, March 30, 2015, available at http://foreignpolicy.com/2015/03/30/have-u-s-sanctions-against-venezuela-actually-helped-maduro/

Council Foreign Relations, “Assessing Venezuela’s Economic and Strategic Position: Venezuela Update: Internal Politics and Regional Relationships”, June 23 2015, available at http://www.cfr.org/venezuela/assessing-venezuelas-economic-strategic-position/p36686

Crisis Group Latin America Briefing N°33, “Venezuela: Unnatural Disaster”, International Crisis Group, Caracas/Bogotá/Brussels, 30 July 2015, available at http://www.crisisgroup.org/~/media/Files/latin-america/venezuela/b033-venezuela-unnatural-disaster.pdf

DREF Final Report, “Venezuela: Civil Unrest” , International Federation of Red Cross, 25 November 2014, available at http://reliefweb.int/sites/reliefweb.int/files/resources/MDRVE002prelimdfr.pdf

Federal Register/Vol. 80, No. 132/Friday, July 10, 2015/Rules and Regulations, available at http://www.treasury.gov/resource-center/sanctions/Programs/Documents/fr80_39676.pdf

Government of Venezuela, “Venezuela, Colombia agreed to gradually normalize relations”, 22 September 2015, available at http://reliefweb.int/report/venezuela-bolivarian-republic/venezuela-colombia-agreed-gradually-normalize-relations

Lohman, D., “Venezuelans can’t get even the most basic lifesaving medical supplies”, The Washington Post, 29 April 2015, available at https://www.washingtonpost.com/posteverything/wp/2015/04/29/venezuelans-cant-get-even-the-most-basic-lifesaving-medical-supplies/

Maduro, Nicolas, Maduro Addresses the UN General Assembly, UN News, September 29, 2015, available at http://www.un.org/apps/news/story.asp?NewsID=52060#.Vg6F-rTraON

Miroff, N, “Argument between U.S., Venezuela puts Cuba in awkward position”, The Washington Post, March 10, 2015, available at https://www.washingtonpost.com/news/worldviews/wp/2015/03/10/the-escalating-u-s-venezuela-clash-where-cuba-fits-in/

Miroff, N, “Venezuela sets date for election that could give major boost to opposition”, The Washington Post, June 22, 2015, available at https://www.washingtonpost.com/world/the_americas/venezuela-sets-date-for-election-that-could-give-major-boost-to-opposition/2015/06/22/99554334-1917-11e5-bed8-1093ee58dad0_story.html

Reid, Michael, “Obama and Latin America”, Foreign Affairs, September/ October 2015, available at https://www.foreignaffairs.com/articles/americas/obama-and-latin-america

The Americas Team, “Muddled, yet united”, The Economist, October 3rd, 2015.

US Department of State, “US relation with Venezuela – Fact Sheet”, July 20, 2015, available at http://www.state.gov/r/pa/ei/bgn/35766.htm

Washington AFP, “US, Venezuela in ‘positive’ talks in Haiti”, Jamaica Observer, June 15, 2015 available at http://www.jamaicaobserver.com/news/US–Venezuela-in–positive–talks-in-Haiti

Welsh, T., “Venezuela Sanctions Backfire on Obama”, US News, April 10, 2015, available at http://www.usnews.com/news/articles/2015/04/10/venezuela-sanctions-backfire-on-obama

[1] US Department of State, “US relation with Venezuela – Fact Sheet”, July 20, 2015.

[2] Crisis Group Latin America Briefing N°33, “Venezuela: Unnatural Disaster”, International Crisis Group, Caracas/Bogotá/Brussels, 30 July 2015.

[3] Ibid.

[4] Crisis Group Latin America Briefing N°33, “Venezuela: Unnatural Disaster”, International Crisis Group, Caracas/Bogotá/Brussels, 30 July 2015

[5] DREF Final Report, November 25, 2014.

[6] Miroff, The Washington Post, June 22, 2015.

[7] Washington AFP, Jamaica Observer, June 15, 2015.

[8] Miroff, The Washington Post, June 22, 2015.

[9] Reid, “Obama and Latin America”, Foreign Affairs, September/October 2015.

[10] Maduro in Welsh, T., “Venezuela Sanctions Backfire on Obama”, US News, April 10, 2015,

[11] Barack Obama in Federal Register, Vol. 80, No. 132, July 10, 2015, Rules and Regulations.

[12] Ibid.

[13] The Americas Team, “Muddled, yet united”, The Economist, October 3rd, 2015.

[14] Graph from The Americas Team, “Muddled, yet united”, The Economist, October 3rd, 2015.

[15] Miroff, The Washington Post, June 22, 2015.

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