More US-Venezuela Sanctions Brewing

I am supposedly taking a break for two weeks, but there has been some movement on US Venezuela policy that merits some quick comment.

Yesterday the Wall Street Journal reported that the US will soon be rolling out new sanctions that could include a prohibition of trading certain Venezuelan bonds. This could be an interesting measure insofar as it might restrict the Maduro government’s ability to mortgage Venezuela’s future without immediately reducing the income necessary to import food and medicines.

New York Times Español published a crack op ed by political economist Francisco Monaldi looking at potential measures that could be used as sanctions. He suggests that a program of multilateral, selective and gradual sanctions could have some success in pushing a resolution of the political crisis. But, he warns that if sanctions “are applied in an arbitrary, unilateral and extensive manner, they could devastate the population, block a democratic transition, and increase the geopolitical influence of Russia and China in Latin America.” We hope this op ed is translated soon since it provides the type of reality-based analysis that is so far (at least publicly) absent from the discussion in and around the US government.

For example, the Wall Street Journal article cites an unnamed Trump administration official’s saying “the next set of actions could still cause economic pain in the short term.” This statement is based on an assumption of success entirely unsupported by recent experiences–sanctions on Russia come to mind. Thus one has to start by assuming that economic pain meant to be transitional could well end up being long term.

These statements came in the context of Vice President Mike Pence’s visit to the Venezuelan enclave of Doral Beach, Florida. This visit was unfortunate because while presidential administrations generally want to address foreign policy issues in ways that create short-term victories, when foreign policy issues become means to engage expatriate communities they can unleash nonlinear political logics. Policies that have been clearly ineffective–for example 50+ years of economic sanctions on Cuba–can persist because they succeed in mobilizing expat resources and constituencies for electoral campaigns, especially in the all important state of Florida.