Venezuela Weekly: U.S. Zeros in on Venezuela

Marchers on January 23, 2019 ©Rodrigo Romero

On Monday, the United States announced far-reaching sanctions on Venezuela’s state oil company PDVSA. This is a high-risk move that will complicate the government of Nicolás Maduro but could also exacerbate Venezuela’s humanitarian emergency as well as the regional migration crisis. The United States did not block Venezuelan oil but rather prohibited US companies and individuals from having financial transactions with PDVSA. All proceeds for oil from PDVSA, then, would go to blocked accounts that will at some point be given over to the interim government of National Assembly President Juan Guaidó. This effectively means PDVSA will no longer ship oil to US refineries (see this AP explainer on the sanctions). US National Security Advisor John Bolton says the measure will mean an $11 billion loss for Venezuela over the next year.

The sanctions also include a prohibition on the sale of refined petroleum products to Venezuela, including the diluents it needs to process and transport its heavy crude, as well as much of the gasoline the country consumes. Venezuela will eventually be able to reorient its oil sales to Asian markets and get the diluents from other sources, but both alternatives will reduce profitability.

US officials justified the sanctions in terms of preventing the Maduro government from stealing resources that belong to the Venezuelan people. Senator Marco Rubio tweeted that “#Venezuela’s oil belongs to the Venezuelan people & the money for oil will now go to them through the legitimate government of @jguaido”. (See State Department statement also.) In a CNN en Español interview, Juan Guaidó, president of the Venezuelan National Assembly who has assumed the role of interim President, echoed this rationale, saying he supported the measures so that Venezuela’s assets are not “looted” by Nicolás Maduro.

Monday’s measures were just the most recent steps in the U.S.’s new prioritization of Venezuela. Other actions in the past week included:

  • Vice President Mike Pence’s video encouraging opposition protests.
  • Donald Trump’s immediate recognition of Juan Guaidó. Reports later confirmed what was obvious at the time: that this had been previously coordinated.
  • Secretary of State Mike Pompeo’s statements that there would be severe consequences if Maduro used violence or repression against US diplomatic personnel, Juan Guaidó or the National Assembly.
  • The naming of Elliot Abrams as special envoy for Venezuela. Abrams is infamous for his role in US Central America policy during the presidency of Ronald Reagan, including the repeated denials of the El Mozote massacre and the Iran-Contra scandal.
  • The U.S. bringing the Venezuela crisis to the United Nations Security Council.
  • Repeated statements that “all options are on table” and the (intentional?) leak of the possibility the US will send 5,000 troops to Colombia.

Signficance

The new sanctions are effectively the “nuclear option” in US pressure, rather than the gradual tightening many had predicted. They seem to be aimed at provoking an economic collapse that will lead to regime change. However, the track record of such measures is not good, as the cases of Cuba, Zimbabwe, Syria, North Korea attest. These measures will indeed pinch the Maduro government in the short term; however, over the coming months they will be able to find alternatives. In the meantime it is the Venezuelan population, most of whom are barely hanging on, that will suffer most.

Already before the sanctions announcement, Francisco Rodriguez had estimated that Venezuela’s GDP could contract by 30% this year if the conflict continues. If the U.S.’ gambit does not produce the rapid collapse that proponents have in mind, and instead weaken the population vis-à-vis the Maduro government and make them more dependent on it, Juan Guaidó could effectively be blamed for having supported oil sanctions. While the US government may authorize Guaidó to receive the resources generated by Citgo or PDVSA in the US, short of setting up a parallel Central Bank, Guaidó will have no practical way of using them in Venezuela.

Furthermore, while Russia does not seem to have the resources to effectively support Venezuela, China does and has already criticized the sanctions, saying the US “should bear responsibility for the serious consequences from this.” It is not unlikely that China, which in recent years has not given the Maduro government the help it sought, could decide to do so this time.

Threats of military action have likely prevented the Maduro government from arresting Guaidó, and have thereby kept the opposition mobilization alive. But they probably also contributed to the military’s reaffirmation of their support for Maduro after a long, conspicuous silence in the hours after Guaidó swore himself in. Threats of military action tend to set into motion interests and processes that can create a self-fulfilling prophecy. In the case of Venezuela, an invasion would likely be disastrous (see this thread from US Naval Academy professor John Polga).

Other Foreign Pressure

  • Over the weekend, the European Union effectively gave the Maduro government an ultimatum, saying it would consider recognizing Guaidó as president at its next meeting this Thursday if new elections were not called.
  • Canada has called an urgent meeting of the Lima Group on February 4, to discuss the crisis.

The Military

  • All eyes, before and after Guaidós assumption of the interim presidency, have been on the military. After a long period of silence on the afternoon of the 23rd, they manifested support. The next day the Minister of Defense criticized what he called a “criminal plan” to “dismember the republic” and swore his loyalty to Maduro.
  • Since then Guaidó and the opposition have been publicly discussing a draft amnesty law, handing out copies to members of the Armed Forces, who made shows of burning it. Human rights groups have suggested that the law needs to include clear statements that crimes against humanity and serious human rights violations will not be pardoned.
  • Maduro has been doing all he can to demonstrate to the world that he has the military’s loyalty. He participated in military exercises over the weekend and called for much larger exercises in mid-February.

Death and Detention

  • At least 35 people have been killed during the crisis. In contrast to previous waves of protest in 2014 and 2017, which were populated largely by middle class residents and took place in more affluent eastern Caracas, Protests over the past week have been more evenly distributed, with at least a third taking place in working class sectors around the metropolitan area. And instead of using anti-riot gear and vehicles driven by the Bolivarian National Guard, this time around the government has used the Special Action Forces (FAES) known for their violence. Read the stories of some of those killed here.
  • On January 27, President of the National Assembly Juan Guaidó denounced the deaths that occurred and said the legislature would be reaching out to human rights NGOs for further information. He also called on Bachelet to move up a planned visit to Venezuela.
  • Alfredo Romero of human rights group Foro Penal said that the January 23, 2019 had been a historic day in terms of arbitrary detention, with 328.

Media Censure

  • Venezuela’s Press and Society Institute reported that January 23 and 24 were marked by censorship of foreign broadcasts, self-censorship in domestic news, and internet blockages.

The goal of Venezuela Weekly is to provide a news digest that is brief yet highlights concrete information. Did I miss something important or get something wrong? Let me know at [email protected]