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But its resolve isn’t absolute.
By: Allison Fedirka
It’s no secret
that the United States wants regime change in Venezuela. Since 2019,
Washington has intensified its efforts toward that end by boosting
support for the political opposition, backing a parallel government and
employing sanctions against the state’s most lucrative businesses. But
none of these efforts has produced Washington’s desired result – and any
future ones will likewise encounter strict limitations.
Washington’s
interest in Venezuela lies in its interest in securing the Western
Hemisphere. Venezuela’s position in the Caribbean basin, its ties to
Cuba, its anti-U.S. alignment and its status as a major drug trafficking
country make it uniquely suited to potentially disrupt hemispheric
security. For the U.S., a secure Caribbean engenders maritime trade,
reduces illicit business flows and keeps adversaries at a comfortable
distance. Instability in Venezuela, then, threatens vital U.S.
interests. Under the government of President Nicolas Maduro, Venezuela
has grown markedly less stable, and it shows no sign of stabilizing –
not with the U.S. sanctions regime against it, and not with its few
allies financially unable to assist it. The status quo will continue to
spur emigration, social unrest, nationalist sentiment and political
radicalization, so Washington wants to make sure whoever replaces Maduro
isn’t indifferent or hostile to U.S. considerations.
Sanctions have
been Washington’s tool of choice for forcing Caracas’ hand. The U.S.
first employed them in 2014 to target high-profile individuals. In 2018,
Washington added state-run companies such as oil firm PDVSA and various
financial transactions to the list. This latter round proved
particularly costly to the Venezuelan economy, so the next year the U.S.
began to allow select energy companies to conduct business with
Venezuela under specific conditions. It was not until October 2023 that
the U.S. government issued a six-month suspension of all sanctions
against Venezuelan state-owned companies and financial transactions – a
result of a political agreement between the Maduro government and the
opposition known as the Barbados accords, which also called for free and
fair elections. Yet at the beginning of 2024, Maduro disqualified the
candidacy of the winner of the opposition's primary, calling into
question his fealty to the Barbados accords. In response, the U.S.
reimposed sanctions on Minerven, the state-run gold company, and
threatened to reimpose sanctions on the oil industry by April 18 if no
conclusive progress has been made.
Notably, American
businesses are against the sanctions. Heavyweights like Chevron,
Fidelity Investments, T. Rowe Price and Greylock Capital have much to
gain in Venezuela and have thus advocated easing sanctions, arguing that
it’s in Washington’s best interest that private U.S. firms are free to
counter foreign competitors.
Last year, for
example, Russian prospecting company RosGeo signed an agreement with
PDVSA that develops technical advising, vocational training and
geophysical prospecting for oil and gas deposits. This opens the door
for Russian ships to conduct studies off the Venezuelan coast in the
Caribbean basin. Certain Wall Street financial firms warned that
investors from Qatar, the United Arab Emirates and Cyprus – all places
known for funneling Russian money – had purchased billions of dollars
worth of Venezuelan bonds. In response, the U.S. government allowed bond
purchases to continue instead of sanctioning them again with the gold
mining licenses.
Also factoring
into Washington’s Venezuela policy is the need to preserve other
relationships in the region. ExxonMobil, for example, has said it plans
to drill in Guyana this year. And though it said it would do so in
uncontested waters (Venezuela disputes the ownership of some offshore
oil wells) the announcement nonetheless triggered Venezuela to again
deploy a small number of troops to Guyana’s border. Washington is all
but forced to side with Guyana, but it has no interest in a military
intervention, which would alienate Washington from the rest of Latin
America. To help share the responsibility of stabilizing Venezuela,
Washington turned to Colombia and Brazil. Brasilia led talks at the
start of this year to help reduce border tensions between Venezuela and
Guyana. And Colombian politics, not to mention its close ties with both
the U.S. and Venezuela, makes Bogota a key player in facilitating a
political resolution in Venezuela.
This latter point
is particularly important because Venezuela’s domestic political
landscape is among the biggest constraints to improving bilateral ties
with the U.S. The Maduro government came to office as the hand-picked
successor of Hugo Chavez. Maduro still holds a grip on power through a
series of economic, illicit, political and security networks, and he
still controls virtually the entire state apparatus. But the country’s
dramatic economic decline created political fissures within the
once-united Chavista camp centered on Maduro supporters, traditionalists
and reformers. Maduro supporters agree with the government’s more
aggressive foreign policy and are generally content to turn a blind eye
to the domestic crackdowns that have occurred to keep political support
in line. Traditional Chavistas criticize Maduro for corruption and
mismanagement. They favor a return to the political and economic
structures that are consistent with Chavez’s original intentions. This
camp finds its support largely among the military and lower classes. The
reformists support a more pragmatic approach. Many of them studied
overseas and come from the middle class and business class in Venezuela.
Their pro-business stance leads to a more pragmatic and technocratic
approach to governance.
Then there is the
opposition, led by Maria Corina Machado. She presents as a technocrat
in that she studied finance and public policy both domestically and
overseas, but her activism took off in 2013 after Chavez’s death. She is
a harsh critic of Maduro and traditional Chavismo. Her political
platform calls for systematic reform by reducing the role of state
companies, lowering welfare payments, promoting the private sector and
weakening the executive’s power. In terms of political capital, she has
no rival in the opposition. Her hardline stance has endeared her to the
public but has made her a target for the regime.
If the U.S. wants
to engage Venezuela, it needs to engage all three groups. It can’t
afford to completely circumvent those who control state institutions,
nor can it ignore the institutional reformists who, along with the
pro-democracy open-economy opposition, would be the vanguard of a
political transition, which needs to find a way to allow Maduro to save
face. Machado’s rhetoric indicates that she understands Maduro’s
position and that there is a greater need to move forward than to
retaliate.
All these moving
pieces will weigh on Washington’s decision on whether it will renew
sanctions on Venezuela’s oil sector come April 18. As the political
drama unfolds, the U.S. will adjust its calculus – for instance, by
determining if it will punish Venezuela for imprisoning political
activists and expelling U.N. human rights officials. Washington remains
committed to a political transition in Venezuela that includes allowing
opposition candidates to run for office, announcing electoral calendars
and formally inviting election observers from the European Union. But
its resolve is not absolute; even the U.S. must operate within its
constraints. |