Making sense of the crisis in Venezuela

The Beaver discusses the state of the current situation in Venezuela with Asa Cusack, Managing Editor of the LSE Latin America and Caribbean blog, and expert in the region.

Venezuela is currently facing a humanitarian and political crisis of unprecedented magnitudes, sparking a wave of migration affecting the region. Recently, tensions at the Brazilian and Colombian border have  risen dramatically, with escalating levels of violence. The country is currently immersed in a power struggle between Nicolás Maduro – who has the backing of the military and is in power after a questionable election in January – and Juan Guaidó, an elected representative of the opposition and president of the National Assembly. Guaidó has declared himself interim president and has rallied the Lima Group (most Latin American countries, the United States and Canada) to increase pressures on Maduro. Most recently, the country has seen escalating levels of violence as the opposition has become more vocal, and tried to get humanitarian aid into the country.

Fairless: What is the state of the humanitarian crisis in Venezuela?

Cusack: By all accounts it’s quite severe. Some of the discourse on what’s happening in Venezuela is, for me, a bit too strong in the sense that it almost sounds like it’s Ethiopia in the 1980s in the way it is described. There are particular issues like malnutrition in children which are very serious in themselves, yet there is a tendency to talk about mass starvation and even famine. Then again, there’s a tendency for everything in Venezuela to go to the extremes both in terms of defending and attacking the government.

Clearly there are severe problems that are leading to the migration crisis as well. Particularly, shortages of medicines in hospitals and people not being able to be cured of long-curable diseases just for lack of medicines and medical facilities. People are having to rely on family abroad to send these things [medicines] or money to pay for things in the black market. The normal migration figure that is shared around is approximately 3 million people, which is about 10% of the Venezuelan population – although perhaps the first million of those were already abroad and belong to a different phase of migration.

Fairless: About migration. How is the crisis affecting the region?

Cusack: It has been surprising how other countries have been affected and responded in quite extreme ways. For example, former allies like Ecuador where you have the border being shut down even if they have the right to enter. In Ecuador, there has been a demonization of Venezuelan migrants, especially after a high-profile murder by a migrant.  In Peru we have seen similar things going on, and in Brazil there have been attacks on migrant camps. Clearly, people in those areas are concerned about migrants coming in who they don’t know, possibly undercutting them in terms of jobs. Also, states must spend on resources to take care of the influx of migrants. The crisis affects all the region, with Venezuelans going as far as Argentina or Chile even to try to get away of the Venezuelan crisis. It has thus become a massive regional issue, and there is no sign of it changing in the near future.

Fairless: There has been a tendency to blame socialism for what is happening in Venezuela. What is your take on that?

Cusack: There are various things going wrong in terms of the economy, some of which date back to the Chavez era, others, like the 2014 fall in oil prices, are more temporary and only really hit Maduro. In terms of the underlying problems, most of them were certainly there and date back to 2004. 2004 was key moment in which Chavez was facing a recall referendum and needed a way to bolster his support amongst his core voters. He did this by providing social programmes through the (national) oil company and not the normal state institutions, at that point establishing even less control over this parallel state than you used to have in the normal Venezuelan state, that has always had problems anyways.

This general lack of control in Venezuela is vital to understanding the crisis, which to some extent goes back to being a heavily oil dependent economy. When things are going well and oil production is good, they can really afford to do things in an inefficient manner, but when oil production has been dropping for years, coupled with the oil price collapse of 2014, you lose that luxury.

Other factors such as corruption related to currency arbitrage and contraband of subsided goods are important to understand how the state has lost a lot of oil revenue, on a scale that is almost unimaginable: 30 billion through just currency arbitrage in a year, maybe another 20 billion into Colombia, Brazil and the Caribbean through petrol and subsidised food. Part of what Chavez wanted to do to counter this was to try to instil a different mentality through cooperatives and self-managed factories (some of which were nationalized). I think that did fail to some extent, there was a belief that just by implementing these kinds of systems you would get around the mentality of getting hold of profits from the oil.

I see it as a battle between this 21st Century Socialism versus all the bad incentives that come from having such a dependency in oil. That battle was clearly won by the oil.

Fairless: The other international talking point on the situation is US-involvement. Considering the US’s long history of involvement in the region, do you see what is happening now as a continuation of what the US has done in the past?

Cusack: I suppose that it is kind of unusual in the sense that probably the people in the country itself would like to get rid of Maduro. If you gave the people a free vote, I would expect him to lose. There is this debate going on at the moment were people say that you can either be with socialist Maduro or with Trump and intervention, as if there were only two things in play. It’s not really that simple. Most Venezuelans seem to want not-military intervention, but also  not-Maduro – it’s just a question of how to get to that.

On the other hand, there is clearly a link between Guaidó, the people behind Guaidó who are traditional opposition members, and the countries behind supporting the opposition. This has clearly been orchestrated with the help of the US, there were minutes between the declaration of the interim presidency and the release of a statement in support of it by the US.

There’s a worry that, if they go so far down this road particularly with the efforts to get aid inside of the country, and there is some military response from Venezuela, then you start getting into a possible provocation where things could escalate quite quickly.

Fairless: Do you think armed intervention is likely?

Cusack: I don’t think it’s impossible. [Especially] given the people involved, who are a throwback to past military interventions. Elliott Abrams who has been appointed [as special envoy to Venezuela] was involved in many of the worst atrocities in Central America in the 1980s and then you’ve got John Bolton [US National Security Advisor] – they are the most hawkish of the hawks. Given that Trump himself is entirely unpredictable and will potentially see a lack of progress as an embarrassment and will want to do something about it; then it becomes a question of whether there is anyone who can stop him within the institutions in the US.

I thought it was unlikely at first, but it seems to be rumbling in that direction at the same time.

Fairless: Maduro recently announced that Russia will be sending humanitarian aid to the country, in what seems to be an effort to counter the opposition’s push for aid to go into Venezuela. What is the role of other international actors like Russia and China?

Cusack: That is typical of Maduro. Anything that the opposition does he has to do the opposite. You see this even with the concert organised by the opposition [Maduro hosted a rival concert]. It seems even infantile.

The US aid is, I think, an attempt to provoke Maduro. It is not really about the aid itself, they could easily find a better way if they wanted to do that.  

Russia always seems to be – you could almost say – trolling the US. They will take any opportunity to counterbalance US actions anywhere where they are both involved. They also have a lot of interest in Venezuelan oil and maybe to a lesser extent in minerals. China is a bit more pragmatic, they have got many loans which are paid back in petroleum which they need themselves; they may also be worried that the debt could be written off if there is a change in government as well. Both these countries will help Maduro by picking up the slack against the sanctions imposed by the US, providing facilities to refine oil for example. Whether they are willing to go as far as the US is hard to say.

Fairless: If negotiation doesn’t seem to be an appropriate solution – Maduro has undermined negotiations before – an armed intervention would be devastating. How does this get resolved?

Cusack: I don’t think anyone really knows. I still favour a negotiated solution, but it’s hard to see how that would work. One aspect that I think is kind of interesting is the Uruguayan proposal [to host negotiations between the government and the opposition]. Maybe if you could get someone like José Mujica to participate on a more kind of moral and personal level with Maduro, trying to give him some kind of way out, which is consistent with his own idea of himself. He needs to think he is doing something good, or something Chavez would have done. This element has been missing from negotiations. If anyone could do it, it would be somebody with gravitas from the left, like Mujica. He has ruled himself out of criticizing Maduro at all for that purpose. That may help with the negotiated solution, but it’s not clear that it would be enough.

Fairless: Uruguay and Mexico have been the most prominent backers of a negotiated solution within Latin America. Do you think that more international pressure by others like the Lima Group would help?

Cusack: International pressure is assumed to have some sort of effect. But Maduro has come so far with the support of the military. If sanctions have enough of an impact on the state’s resources that he can no longer keep the support of the military by distributing the oil revenue, he may fall into a problem. There is no guarantee that is going to happen.

Even if Maduro loses a lot of resources, he may be able to rumble on and maintain the crucial military support. Unless there is a movement in the military, it is very difficult for lower ranks to just decide to go against the government, as it would risk their family’s source of income and security.

Fairless: So, it will essentially come down to incentives?

Cusack: Well, there is another aspect. The first thing that Chavez did even before he was president, was this idea of a Civico-military doctrine; the military is central to society and has this social role to play, also having a strong anti-imperial aspect to it.  People within the military will be opposed to Guaidó since his moves come from the US. On the other side, they know what people are going through, since they tend to be poorer. So, they are stuck in this situation of not wanting the US to come in like that, but also that this is not what they signed up for. There are all kinds of interlocking things that make it difficult to say what is going to happen.  

Dr. Asa Cusack is Managing Editor of the LSE LACC Blog. He holds a PHd Latin American and Caribbean Political Economy and a Master’s in Research Methods for Politics and International Relations, and regularly contributes to media outlets including AlJazeera, The Guardian and BBC Newsnight.

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