Facing A Socio-Economic Catastrophe
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Venezuela has been hit by the most large-scale crisis not only in Latin America but in the entire Western Hemisphere. The major benchmark which proves this point is definitely GDP. Having been in constant decline since around 2013 it has been getting lower and lower with every year (countryeconomy.com, 2016). The economic output in Venezuela fell by 16% in 2016, and by 14% in 2017 and predictions are by no means optimistic. According to the latest World Economic Outlook Report, the estimated Venezuelan GDP would decrease even more by as much as 18% and is expected to keep plummeting in subsequent years (International Monetary Fund, 2018).
Poor economic conduct culminated in a spike of Venezuelan external debt that reached its peak in 2013 (Tradingeconomics.com, 2018). This, in turn, led to fiscal deficit growth. Facing a dismal economic situation current president Nicolas Maduro turned to enormous monetary expansion. Such measures have resulted in a vast hyperinflation, probably the most protracted one compared to the rest of the region. As of October 2018, the inflation rate has reached 94% per month (Henke, 2018). It has been estimated by the International Monetary Fund that 2019 will witness inflation in Venezuela skyrocket up to 10 million per cent (Reuters.com, 2018).
Figure 1. Hyperinflation in Venezuela. Source: The Guardian
In order to take the inflation under control, Venezuelan government resorted to implementing a new currency – the “sovereign bolivar” accompanied by cryptocurrency – “petro”, which is oil-backed. However, its credibility was questionable from the very start since it had no trading ability (Rooney, 2018). It did not take long for the U.S. to outlaw any procedures within the United States involving any digital currency issued by, for, or on behalf of the government of Venezuela (Rooney, 2018).
The problem is that Venezuela cannot address the international community to provide financing since the current debt is a major obstacle to that. Without debt restructuring it is impossible but the government does not seem to be eager to do it. Moreover, with U.S. sanctions in place it is even more difficult. Here Russia steps in becoming sort of a patron for Venezuela. Russia now owns significant parts of at least five oil fields in Venezuela in exchange for moderate loans (Faiola, 2018). China has also become a crucial player in Venezuela by extending large-sum credits to the crisis-hit country. In fact, it has been a key lender for Venezuela for about a decade (Bloomberg.com, 2018).
The other thing that does not help to improve the situation is a downturn of oil prices. When the oil price boom, which had lasted for a decade, ended in 2014, Venezuela lost not just the oil revenue on which Chavez’s popularity and international influence had rested on but also access to foreign credit markets. This left the country with an overwhelming debt overhang: the loans taken out at the time of the oil boom still had to be serviced, and the income stream was much less than it used to be. Thus, the country ended up with politics that are characteristic of dictatorships that discover oil: a rapacious, rent-seeking oligarchy that disregards regular people as long they stay quiet and that violently suppresses them when they try to speak up. Oil prices collapsed from more than $100 a barrel in the summer 2014 to less than half of that by January 2015 (Johnson, 2018). Given that oil accounts for roughly 80% of all exports the fall of its prices has delivered a substantial blow to Venezuelan economy. However, this is not the key reason of the crisis. Even though oil is trading at the highest levels since late 2014 there is practically no positive impact on the situation in Venezuela since the country’s oil production has plummeted (Witschge, 2018). Oil production does not generate any significant revenue for Venezuelan government because a vast share of them goes to China and Russia to repay debts.
Figure 2. Oil Production Decline. Source: Trading Economics
In addition, the public sector has been dwindling. Policies of price controls, exchange rate controls, stifling regulations, and frequent state dispossession of private firms sharply degraded the ability of the domestic private sector to supply goods in sufficient quantities. The other thing is that corruption in Venezuela is pervasive, with the country ranking 169th out of 180 countries according to Transparency International’s most recent Corruption Perceptions Index (Transparency Inernational, 2018). The extent of corruption and criminality can be illustrated by a specific case that involves ex-officials- former deputy ministers. It is alleged that they were a part of a network of corrupt officials who received $2.3 billion in bribes from companies in exchange for lucrative contracts with Venezuela’s state-run oil company (BBC News, 2018). The latest corruption incident revolves around Venezuela ex-treasurer involved in unlawful foreign currency operations (Cohen, 2018).
The legitimacy of Maduro’s regime is also questionable, as well as his policies. From March to July 2017, protesters urged President Maduro to release political prisoners and regard the MUD-dominated National Assembly. Security forces curtailed protests, with more than 130 killed and thousands injured. Maduro then orchestrated the controversial July 2017 election of a National Constituent Assembly to rewrite the constitution (Naím and Toro, 2018).
Venezuela’s democratic institutions have been consistently cleared out to such an extent that most of the countries of the Western Hemisphere dismissed the country’s last presidential election, earlier this year, as illegitimate. The Lima Group, an ad hoc group of countries representing more than 90 percent of the non-U.S. population in the Americas, has repeatedly denounced “the loss of democratic institutions and the rule of law” in Venezuela (Government of Canada, 2018).
The economic disaster has resulted in the decline of imports, which, in turn culminated in significant food, medical supplies and core products shortages. Certain research surveys demonstrate that a vast share of Venezuelans have lost weight and are going to bed hungry.
Figure 3. Poverty Rate in Venezuela. Source: Caracas Chronicles
According to studies, 87% of Venezuelans are now living in poverty and a shocking 61.2% are living in extreme poverty. Approximately 64% of those surveyed said they had lost more than 11 kilograms in 2017. Moreover, deficits have contributed to flourishing of black markets. The food packages that the government sells at regulated prices only reach around 12.6 million people – which is less than a third of the country’s population (Singer, 2018). One-third of the population eats twice per day or less (Sequera, 2018). Moreover, people now favor cheaper but less nutritious food high in carbohydrates which is not beneficial for the nation’s health.
Figure 4. Social Disaster. Source: ENCOVI
The healthcare system is also collapsing quite rapidly. According to the CNN report, most laboratory services and hospital nutrition services are discontinuous or entirely out of action. Astonishing statistics emphasize the shortages of items such as basic medicines, catheters, surgical supplies and infant formula. Water, the survey found, was seldom available at the participating facilities – 79% of them had no access to running water whatsoever. Around 14% of intensive care units have been closed down because of their inability to function properly – and the vast majority of open ICUs have intermittent breakdowns due to a lack of supplies, according to the report. Almost a quarter of pediatric ICU’s have been closed. The ones affected the most by this entire situation are the newborns and senior citizens (Jones, 2018). The infant death rate has increased by at least 30 percent and maternal mortality has risen up to 65 percent since the government stopped announcing health outcomes in 2015. Patients with chronic diseases such as cancer, renal failure, or diabetes cannot access the medicines they need to take regularly (The Guardian, 2017).
It is highly unlikely that all the measures taken previously – such as cryptocurrency introduction or lopping off five zeros from the currency – will have a significant impact on the situation since the root of the problem has remained intact – the immense imbalance in the currency exchange regime, oppressive regulations, and frequently unreasonable government controls over the economy. Such measures could at best “sustain the agony”.
Struck by Unprecedented Migration and Humanitarian Crisis
As the humanitarian situation in Venezuela is getting worse and worse by a year, the largest migration and refugee crisis the Western Hemisphere has seen in modern history has been taking place for quite some time. According to the recent United Nations Refugee Agency announcement, the number of refugees and migrants from Venezuela worldwide has reached three million. Countries in Latin America and the Caribbean Basin host approximately 2.4 million refugees and migrants from Venezuela, while other regions account for the rest (UNHCR, 2018). In Colombia alone, the number of Venezuelans has most likely already reached 1 million people. The Colombian government estimates that the costs of providing emergency health care, education, vaccinations, and other services could exceed 0.5% of the country’s GDP. Other common Latin American countries for Venezuelan migration include Peru, Ecuador, Argentina, Chile and Brazil (Janetsky, 2018).
In recent years, the major route out of Venezuela has been through Cúcuta, the Colombian city that borders San Antonio del Táchira in Venezuela. Having reached this city, a lot of Venezuelans either settle in Colombia or proceed to other destinations by public transport. However, some Venezuelans are short of money to use any means of transportation and all what is left for them is to walk kilometers in search for a decent home (Abramovits, 2018). In total, the Venezuelan border has been crossed by more than 253,575 families (Alhadeff, 2018).
Venezuelan refugees are placing a significant strain on the country’s neighbors. Even though Colombia has provided temporary residency and work authorizations to nearly 1 million refugees, it has begun to show increases in anti-immigrant sentiments, particularly in border communities. Threats by Colombian President Iván Duque to close the border resulted in an increase in migrant flows. Similar situation with Venezuelan migrants is happening in Brazil which has seen multiple xenophobic incidents as well. Both countries stated that they would take action count the number of Venezuelan migrants who have entered their territory. Moreover, Ecuador and Peru have declared states of emergency meant to facilitate the deployment of doctors and social workers to meet the migrants’ needs (Valencia, 2018). Some countries, like Ecuador and Peru, have begun to tighten visa requirements as well as deport Venezuelan refugees in August (Taj, 2018).
Figure 5. Migration from Venezuela. Source: UN Migration Report July 2018
New restrictions raised concerns that more Venezuelans would be forced to cross the borders between Venezuela and Colombia and Colombia and elsewhere illegally, exposing them to criminal activity and armed groups that flourish in border regions.
In the United States, Venezuelans have become the number one nationality to seek asylum. There are more than 72,000 Venezuelan asylum requesters in the United States as of June 2018. Between 2011 and 2016, 46.4% of Venezuelans were denied asylum (The U.S. Department of Homeland Security, 2018). According to the Entry/Exit Overstay Report by Department of Homeland Security, Venezuela was responsible for around 10% of all the visa overstays for regular temporal visas during 2017 (The U.S. Department of Homeland Security, 2018).
In sum, there is a number of significant challenges that must be confronted in order to respond effectively to the ongoing Venezuelan displacement crisis.
- Inadequate resources for humanitarian response;
- Lack of organizational infrastructure to address refugee problems;
- Fledgling articulation and harmonization of migration policies;
- Rising of xenophobic sentiments;
- Formation of more limitative policies toward Venezuelan refugees and migrants.
- The Venezuelan leaders who are driving their citizens to despair and imposing tremendous costs on neighboring countries.
Despite the catastrophic situation at home, Venezuelan government has been rejecting help offers. At a special meeting of the Organization of American States in September the delegates from Mexico, Brazil, Colombia, Peru and the United States encouraged Venezuelan President Nicolas Maduro to embrace food and medical supplies for his country’s most vulnerable people and allow international aid groups to work in the country. Maduro has turned down multiple offers made by groups to deliver aid, perceiving it as part of a “vicious plan” to undermine his socialist government (NBC News, 2018).
Repercussions for U.S.
Relations between the United States and Venezuela continually degrade in the early 2000s as a result of Venezuelan government increasing its repressive policies. In 2002, the Venezuelan military set up a failed rebellion which was meant to overthrow President Chavez. The latter partially blamed the attempt on the U.S. Central Intelligence Agency. Even though the link to the CIA has not been officially confirmed, the coup attempt was purportedly traced back to President George W. Bush’s administration. On the national level, Chavez stamped out opposition groups, eradicated the independent media, and used military force to suppress protests. This stimulated a distrust of the United States. After the death of Hugo Chavez in 2013, President Nicolas Maduro took power and continues to resort to the policies of his predecessor. This does not contribute to the improvement of the bilateral relations that have yet to recover.
However, despite all the suspiciousness between the two countries, the U.S. has to pay attention to Venezuela in view of various factors.
It is not unlikely that the extensive human exodus from Venezuela could potentially destabilize socio-economic and political state of affairs in the bordering countries and therefore and thus inflict extensive harm on U.S. national security interests.
- An influx of refugees into border communities that used to be controlled by Revolutionary Armed Forces of Colombia (FARC). Certain efforts have been implemented to resolve the complicated situation which had been going on for more than 50 years. The refugee crisis is already enforcing an additional economic and humanitarian burden on local officials;
- The small Caribbean islands are at risk as well. Given their size even a few thousand migrants could overwhelm local services and thus boost social tensions. Many of these countries lack legal provisions and institutions to deal with asylum seekers and migrants, making matters even more difficult;
- The ongoing refugee crisis could impede U.S. efforts to overthrow transnational drug and criminal organizations. Venezuela has become a major transit country for Colombian cocaine headed to the United States and Europe, with alleged involvement of senior officials in drug trafficking and crime syndicate operation. A refugee swell could exacerbate these challenges, as criminal organizations could exploit a large and vulnerable population for recruitment;
- Disturbance within Venezuela could also interrupt the daily flow of the several hundred thousand barrels of Venezuelan oil to U.S. refineries – an estimated 8% of all oil imports – obstructing individual businesses in certain parts of the country and possibly raising retail gas tariffs;
- The current situation in Venezuela is posing a substantial threat to the U.S. hegemony in the Western Hemisphere which has been in place since the 19th century. Former Secretary of State Rex Tillerson announced his commitment to keeping the U.S. as the region’s “steadiest, strongest, and most enduring partner”: “It’s as relevant today as it was the day it was written,” Tillerson said of the 1823 Monroe doctrine (Gramer, 2018). Given the involvement of other players, such as Russia, China, and Iran, in Venezuela, a wedge could potentially be driven between the U.S. and its historic relations within the hemisphere. Thus, the status quo in the region is likely to be overturned.
Current U.S. Approach
As mentioned above, the United States has had close relations with Venezuela, a key U.S. oil supplier, but friction intensified under the Chávez government and has exacerbated under the Maduro regime. U.S. statesmen has been preoccupied the most with deterioration of human rights and democracy in Venezuela and the insufficiency of bilateral cooperation on antidrug and counterterrorism efforts (Congressional Research Service, 2018).
In the light of elections perceived as unlawful, the Trump Administration and a bunch of other governments have intensified pressure on the Maduro government. On June 5, 2018, the Organization of American States’ Permanent Council passed a resolution declaring that Venezuela’s electoral proceedings lacked legitimacy and authorizing countries to take “actions deemed appropriate” to ensure a return to democracy in the country. The Trump Administration is helping other countries establish sanctions regimes.
However, sanctions have already been in place during Obama times (and even before that). Targeted sanctions, such as asset blocking and visa restrictions, against individuals who impede democratic processes or institutions, resort to violence, are involved in human rights abuses, or engage in corruption were authorized in 2015. Obama has also declared Venezuela a threat to U.S. national security (Buncombe, 2015). The trend continued with D. Trump taking office.
- In addition to another set of targeted sanctions against individuals, President Trump has imposed broader economic sanctions on Venezuela because of the government’s serious human rights abuses, antidemocratic actions, and responsibility for the deepening humanitarian crisis.
- In August 2017 Trump issued a special decree prohibiting access to the U.S. financial markets by the Venezuelan government, not least Venezuela’s state oil company, Petróleos de Venezuela, with certain waivers to play down the impact on the Venezuelan people and U.S. economic interests. The sanctions strive for curtailing the Venezuelan government’s access to U.S. debt and stock markets. Among the exceptions are transactions by U.S. owners of Venezuelan obligations on secondary markets, financing for agricultural and medical exports, and short-term financing to stimulate trade.
- As mentioned earlier, this spring transactions involving issuance and use of digital currency by the Venezuelan government were prohibited. Moreover, purchase of Venezuelan debt was banned. D. Trump has thus “taken action to prevent the Maduro regime from conducting ‘fire sales,’ liquidating Venezuela’s critical assets” – those the country will need to rebuild its crumbling economy (Olorunnipa, 2018).
- On November 1, 2018, President Trump put even more pressure on Venezuela by implementing a new set of sanctions. Trump signed an executive order to rule out the possibility of anyone in the United States dealing with any institutions and individuals who have anything to do with “corrupt or deceptive” gold sales from Venezuela. As U.S. National Security Adviser John Bolton noted, “the Maduro regime has used this sector as a bastion to finance illicit activities, to fill its coffers, and to support criminal groups” (Rampton, 2018).
- In addition, the Trump Administration has occasionally indicated its intention to impose broader sanctions, such as an embargo on some U.S. exports to and imports from Venezuela (for example, oil) or a ban of all financial procedures with PdVSA. In November 2018, there have been reports which claimed that the Administration was contemplating denoting Venezuela as a sponsor of international terrorism. Just four governments — Iran, North Korea, Sudan and Syria — have received that label, which is given to states accused of repeatedly providing “support for acts of international terrorism”. This designation would bring about a range of sanctions, which would comprise aid restrictions, requirement for valid export licenses for certain items, and other financial constraints (Erickson, 2018). Adding Venezuela to the list could further undermine the Maduro government by making it harder for American oil companies to keep doing business with Venezuela. But that is highly unlikely to actually help push Maduro out of power.
…that do not work
If we are considering the case of Venezuela, any further U.S. sanctions could potentially result in the following unintended outcomes:
- Worsening the country’s profound economic and humanitarian crisis;
- Providing the Maduro regime with the ability to sustain its rule by casting the United States as an “imperialist” scapegoat for Venezuela’s ills;
- Harming U.S. workers and businesses even as these unilateral measures fail to achieve their intended objective.
Several members of Congress, in a letter to former Secretary of State Rex Tillerson, warned against an oil-import ban: “The risk now is that U.S. policy will go too far. The White House is reportedly considering sanctions on Venezuelan oil exports, which provide an overwhelming majority of the country’s export revenues, including a possible ban on the approximately 700,000 barrels a day that go to the United States. That action would be devastating to Venezuela’s 30 million people, who already face disastrous shortages of food and medical supplies. It will also give the Maduro regime an excuse for the catastrophic economic conditions it has created — and for which it now bears exclusive blame…If the constituent assembly is called, the United States should react decisively — but it should do so in ways that punish Venezuela’s corrupt rulers, not its long-suffering population” (Bond, 2018).
According to U.S. trade statistics, Venezuela’s oil exports to the United States were valued at $11.7 billion in 2017, which is almost 3 times less than in 2014. Therefore, another major worry is the effect that stronger sanctions could have on the U.S. economy, including potential increased costs for U.S. consumers and oil refiners that import Venezuelan oil. A complicating factor is that PdVSA owns CITGO, which operates three crude oil refineries, three pipelines, and numerous petroleum product terminals in the United States.
Figure 6. U.S. Imports of Venezuelan Oil. Source: Congressional Research Service
- Military response consideration…
In August 2017, Trump told reporters that he and his administration “have many options for Venezuela including a possible military option if necessary”. According to a special statement, the White House had turned down a request from Maduro to speak by phone with Trump. The statement said: “President Trump has asked that Maduro respect Venezuela’s constitution, hold free and fair elections, release political prisoners, cease all human rights violations, and stop oppressing Venezuela’s great people. Instead Maduro has chosen the path of dictatorship. President Trump will gladly speak with the leader of Venezuela as soon as democracy is restored in that country.” In July 2018, sources revealed that Trump had repeatedly asked aids about the feasibility of an armed invasion – and earlier in September, Trump reportedly met with current and former Venezuelan military officers to discuss plans for a military coup to overthrow Venezuelan president. However, US officials in the end refused to assist the coup plot
- Trump’s intentions have proved useless. In fact, Maduro responded by ordering military exercises, and sending loyalist demonstrators on to the streets of Caracas to condemn Trump in demonstrating empirical ambitions (Bronstein, 2017).
…would prove disastrous
Thus, a military response – especially one led by the U.S. – is not a good idea since:
- U.S. troops are unlikely to get a warm reception. A February poll shows an overwhelming majority of Venezuelans (approximately 72%), including a plurality of those in Venezuela’s opposition, are against an invasion. Only 28% of the population are in favor of resorting to violence to deal with the crisis. The rest supports the method of negotiations (DATIN CORP, 2018). A U.S. military presence would play into, and would at least in part validate, Maduro’s loudly proclaimed imperialist conspiracies.
- Taking prolonged political and economic divisions and no cohesive government into consideration, rebuilding the nation will be a prolonged process. And any failure would be attributed to the U.S.
- Unlike Grenada or Panama, the two Latin American countries invaded by the U.S. in the Cold War times, Venezuela is twice the size of Iraq with only a slightly smaller population, which is on the brink of chaos. Any invasion would call for preparations on a similar scale, meaning deployment of the forces well over 100,000 of military personnel.
- Humanitarian crisis/refugee crisis assistance…
USAID’s Office of U.S. Foreign Disaster Assistance (USAID/OFDA) and Office of Food for Peace (USAID/FFP) are responding to a complex emergency stemming from an influx of people fleeing an economic and political crisis in Venezuela to neighboring countries, including Brazil, Colombia, Ecuador, and Peru.
On September 25, U.S. Vice President Mike Pence announced more than $48 million in additional US Government humanitarian aid in response to the Venezuela regional crisis, including approximately $21.6 million in U.S. Department of State Bureau of Population, Refugees, and Migration funds, $18.8 million in USAID/ Food for Peace Program means, and $7.8 million in USAID/ Office of Foreign Disaster Assistance funds. The USAID funding includes approximately $18.6 million for food, health, nutrition, and livelihoods assistance for more than 144,000 insecure individuals in Colombia affected by the Venezuelan regional crisis; $6 million in food assistance for nearly 25,000 food-insecure people in Ecuador; and $2 million in food assistance for approximately 6,600 vulnerable Venezuelans and host community members in Brazil. The announced funds bring the U.S. Government humanitarian assistance total to about $97 million since 2017 (USAID, 2018).
… – still not enough of it
The scale of the assistances does not seem to be adequate. While the United States cannot easily force a political change in Caracas, it can at least do much more to help refugee Venezuelans and the nations hosting them. Otherwise, it risks allowing the disaster in one nation to become a regional crisis.
- Despite Trump’s statements of sympathy for Venezuelan refugees, they are not exempt from his administration’s immigration clampdown. Nearly 260 Venezuelans were deported from the U.S. in the first half of 2018 alone, up from 248 deportations in all 2017 and 182 in 2016.
- Venezuelans are frequently denied political asylum. Over the past five years, immigration judges have rejected nearly 50% of all Venezuelan asylum applications. Tourist visas for Venezuelans have also been often revoked.
- Even though politicians from both parties in Florida, home to the United States’ largest Venezuelan community, say they would be in favor of giving Temporary Protective Status to Venezuelans, The Trump administration, which is in a court fight over its termination of TPS for most immigrant groups, says Venezuelans do not qualify for protected status.
Interestingly, D. Trump has used the refugee crisis in the run-up the November mid-term elections. In essence, the U.S. President has blamed Democrats for in his opinion inadequate healthcare policies. “The new Democrats are radical socialists who want to model America’s economy after Venezuela” – D. Trump said (Aponte-Moreno, 2018).
- Support for Organization of American States (OAS) Efforts on Venezuela…
Over the past three years, the U.S. government has backed the organization’s efforts under Secretary General Luis Almagro to address the situation in Venezuela. It must be mentioned that the U.S. ability to exert influence within the organization has decrease considerably since the beginning of the 21st century.
In March 2017, OAS Secretary General Almagro released a new report to the Permanent Council, which encouraged Venezuelan government to carry out a set of actions to return to the constitutional order, including holding general elections without delay, otherwise the OAS would impose a suspension on Venezuela. It concluded by calling on OAS member states to apply Article 21 of the Inter-American Democratic Charter to suspend Venezuela from the organization if the Venezuelan government failed to address the report recommendations positively within 30 days.
Upon the OAS General Assembly meeting in June 2017, 20 countries voted for adopting a resolution (introduced by Peru and supported by the United States) to press the Venezuelan government to take certain actions, but the measure failed because there were not enough voices in favor of it (BBC News, 2017).
A year later, U.S. again urged other OAS members to suspend Venezuelan membership in the organization in view of Maduro remaining in power because of allegedly fabricated May 2019 presidential election results. U.S. Secretary of State Mike Pompeo said OAS member states should impose new sanctions on Venezuela to further isolate it diplomatically (Landay, 2018). Which they did by adopting a special resolution (Russia Today, 2018).
…which proved ineffective
- Although a suspension would indicate Venezuela’s diplomatic isolation, it is uncertain whether such an action would have any significant impact on the Maduro government’s policies. President Maduro has ordered his foreign minister to begin the process for Venezuela to withdraw from the OAS as a protest of the organization’s recent actions, marking the first time in the organization’s history that a country has sought to quit.
- The withdrawal process, which takes two years, would require Venezuela to pay $8.8 million in back dues to the OAS. Since the country in crisis is in a desperate need of funds, this fact does not look good for the resolution of the situation.
- By taking the decision to withdraw from the OAS, in response to the organization’s actions, Venezuela, a major Latin American country, has shut itself off from its neighbors, thus impairing their power to influence it.
Before 1990-2000s, there was not much doubt as to what would happen when a crisis of such an extent developed in the Western Hemisphere: The United States would interfere, for better or worse. It would mediate an election, or support rebels, or back a coup, or, if there were such a need, invade. But despite some recurrent bluster, President Trump is simply the latest of three consecutive presidents to duck the chaos in Venezuela. His administration has applied mere palliatives. The United States has no more striven to direct a response to Venezuela. As in the Middle East, that has left a vacuum that allies have struggled to fill, and adversaries have taken advantage of. China just handed the flailing regime of Nicolás Maduro another $5 billion loan; Russia has helped it hang on to its refineries and gas stations in the United States.
In Latin America, a special committee of a dozen nations, excluding the United States, formed in 2017 in order to try to come to a solution. The Lima Group tried to exert pressure on the Maduro regime to hold a fair presidential election, and when that failed, announced it would not recognize its outcome. These are largely half-measures. They will do little to weaken the Maduro regime. Thus, the United States should participate more actively to resolve the situation in Venezuela
So, what can be done? Here is a set of recommendations which, in our opinion, could assist on this matter.
- Carry out substantial leadership in response to the Venezuelan refugee crisis:
- Terminate the deportation of Venezuelan immigrants. Whereas duly condemning the ruthless repression and humanitarian crisis confronting the Venezuelan people, the United States has at the same time denying asylum to the vulnerable people and deporting undocumented Venezuelans back to their home country. As a matter of enforcement policy, these deportations must stop at once.
- Grant Temporary Protected Status (TPS) to all Venezuelans currently in the United States. It is not sufficient to simply amend U.S. immigration implementation priorities, given that the magnitude of state collapse and political turmoil in Venezuela surely meets the requirements for a TPS designation “that there exist extraordinary and temporary conditions in the foreign state that prevent aliens who are nationals of the state from returning to the state in safety” (Act 244 – Temporary Protected Status)
- Increase financial support for Venezuela’s affected neighbors, notably Colombia. Countries should also pursue ways to take advantage of international financial institution resources, particularly those of the Inter-American Development Bank, to share the obligation of assisting Venezuela’s immediate neighbors in South America and the Caribbean as they are the most affected by the refugee crisis and have to accommodate enormous numbers of Venezuelan refugees.
- Dealing with the Maduro regime, the U.S. should:
- Denounce the option of military intervention. By resorting to this alternative, the United States would further escalate the crisis and give Maduro a premise to justify his actions by demonizing U.S. Plus, this option is a costly one. The funds used for its implementation would be more useful if invested in humanitarian assistance.
- Endorse a future-oriented strategy aimed at promoting an urgent democratic transition, including elections, humanitarian relief and the economic recovery of Venezuela. In response to Maduro’s illegal and undemocratic measures, this effort begins with dynamic diplomacy encouraging other key governments to refuse to recognize the legitimacy of Maduro, the constituent assembly, or any regional elections held under the current corrupt authorities.
- Be extremely careful when imposing more sanctions. The question of additional sanctions is rather complicated. As with a military intervention, this option could work in favor of the regime, rather than undermine it. On the other hand, individually imposed sanctions, such as freezing bank accounts and other assets to declare Venezuelan officials people “personae non gratae” in other countries, could assist in combating with corruption and money laundering. Additional sanctions on Venezuela’s oil industry are not indispensable bearing in mind that the detrimental effect of current sanctions is already contributing to a breakdown in oil production by restraining access to vital capital. Should sanctions be implemented, they are to be imposed on middle- and high-ranking government officials and military officers who have effectively exploited the system in order to secure their positions while enriching themselves through corruption and illegal activities. In any case, the less targeted sanctions are, the more likely they might affect the Venezuelan people who are already living under one of the worst humanitarian crises the hemisphere has seen.
- Engage more countries in an international coalition to increase political and economic pressure on the Maduro regime. The more countries are involved in the Venezuelan crisis management by working on advocating peaceful solutions, the more successful the outcome will be. This will demonstrate that the majority of countries is in favor of a diplomatic solution to the situation and have no violent intentions. The U.N. playing a more active role could also facilitate the efforts taken by the international community.
- The U.S. should be ready for further financing:
Establish and provide funding of multilateral restoration and humanitarian assistance fund. The people of Venezuela need to have hope that a better future awaits them following the Maduro regime. This is essential because in absence of such hope, it is highly unlikely that Venezuelans in the country will be able to create the kind of internal pressure needed to complement external pressures and effect change. A clear commitment of support from the international community can help generate confidence when regime transformation tales place.
The situation in Venezuela demands a large-scale international involvement. Even though the United States cannot provide a magical solution regarding the crisis, certain steps can be taken in association with other countries. The United States and the international community, however, have yet to set up all the non-violent assets on hand. The crisis unfolding in Venezuela demands that these countries come to the assistance of the Venezuelan people – both those who have been coerced to escape from the crisis and those who continue to suffer under unbearable conditions.