Right way to tackle the crisis in Venezuela
Until a strategy is in place to help usher in a more positive situation, hastening the economic collapse of the country would be irresponsible
nsurprisingly, US President Donald Trump hasn’t held back when speaking about the political crisis in Venezuela. Before the United Nations General Assembly he demanded the full restoration of “democracy and political freedoms” in the Latin American country. A month earlier, he stunned many by stating that he would not rule out a military intervention. His UN ambassador, Nikki Haley, has echoed the fierce rhetoric, declaring that the US will not tolerate a “dictatorship” in Venezuela.
I have no sympathy for Venezuelan President Nicolas Maduro, a left-winger who has maintained power by creating an unconstitutional new national assembly. But let’s put that aside. Few administrations are truly consistent in their foreign policies, and any such consistency would probably be overrated in any case. Moreover, there is a much better reason to be perplexed about the White House’s approach to Venezuela.
It’s this: Given the strong rhetoric, it seems odd that the US has not yet used many of the non-military arrows in its policy quiver. For example, the US could restrict the sale of its own oil and refined products to Venezuela. It could ban the sale of certain US equipment needed by Venezuela to produce oil. It might also outlaw imports of Venezuelan crude oil or, perhaps, prohibit the use of US dollars for Venezuelan oil transactions, as it did with sanctions on Iran. The impact of these different measures on the Venezuelan economy would vary significantly. But the fragility of the political situation in that country, and the extreme lack of diversification of the economy, make it very vulnerable to sanctions — even unilateral ones by the US.
So why has none of this happened? The most obvious explanation is that these measures could also impose costs on US consumers and companies. Or that they could create unwanted complications — such as the US government having to step in to prevent the Russian oil company Rosneft from suddenly assuming partial ownership of Citgo, the US-based oil company (and with it, some American energy infrastructure), were Venezuela to default on its debt. But other possibilities are at least worth considering — and may come into play if policy makers take a more historical look at the tools at hand.
First, if the goal is simply to speed the collapse of the Venezuelan regime, then a more aggressive set of sanctions geared to bring about default would make sense. The Maduro government is already teetering on the verge of default, with the state and the state-owned oil company Petroleos de Venezuela together owing $5 billion (Dh18.4 billion) in principal and interest by the end of this year. Measures that would further reduce the foreign currency the regime received from its oil sales by increasing transportation costs or forcing the regime to accept deep discounts in price could bite hard.
Comprehensive strategy
A ban on the use of dollars in oil transactions could be calamitous. A default could be a precursor to regime collapse, especially if debt restructuring involved further austerity measures and put even more restrictions on imports of essential goods. But no responsible foreign-policy practitioner can believe that the US’s end goal is the immediate collapse of the Maduro government. If regime change was not accompanied by other measures — to stem immediate humanitarian distress and to pave the way for a sustainable political transition — an implosion of the regime would serve neither US interests nor those of the Venezuelan people. Until a more comprehensive strategy is in place to help usher in a more positive situation after the end of the Maduro regime, hastening the economic collapse of the country would be irresponsible.
Looking back at South Africa, it is easy to forget that the only UN sanction imposed on the apartheid regime was an arms embargo. Most of the sanctions against Pretoria were not comprehensive; they were as diverse as the countries applying them. Even the US was selective in the sanctions it imposed. It maintained diplomatic contact with the government of South Africa and allowed some economic links to continue. US aid was not terminated, but instead, significant funds were channelled to civil society groups; it was one of the first US assistance programmes that openly embraced political objectives and did not go through the government.
Venezuelans caught in the crisis, and the rest of the world watching it unfold, are impatient for a sensible US policy toward its hemispheric neighbour. The Trump administration does not yet have one in place. But one should not necessarily equate imposing all available sanctions on Venezuela with getting serious about the situation there. It may be that, like South Africa, a sensible strategy geared toward getting the Maduro government out — and a new government in — requires more finesse and less bludgeoning than commonly assumed.
Meghan L. O’Sullivan is a Bloomberg columnist. She served on the National Security Council from 2004 to 2007, and was deputy national security adviser for Iraq and Afghanistan.
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