07 11 2019

Why the embargo against Venezuela is criminal

The three musqueteers: Guaidó, Duque and Pence The three musqueteers: Guaidó, Duque and Pence

The management of the Venezuelan economy has been surprisingly incompetent and disastrous, despite sitting on the world's biggest oil reserves. Sanctions and embargo against Venezuela have accelerated the decline, with inflation bordering on hyperinflation, a collapsing economy and mass migration. There is much to dislike in the Venezuelan Government and its policy, and by the way in the opposition, too. But sanctions and embargo is the wrong policy, causing further suffering for the Venezuelan people. Recognizing a self-proclaimed president and supporting a bogus uprising is converting it into a farce. It is old US policy to treat its foes like this. But what the EU is doing, supporting this, is very difficult to understand. Now the Europeans can no longer just blame the Venezuelan Government. They have decided to take on shared responsibility for the suffering of the Venezuelan people.

The US hostility to Venezuela has been a fixture of US foreign policy since Hugo Chávez was elected president in 1998. In 2001, they supported a short-lived military coup against him that was defeated by a popular uprising, but the hostility continued afterwards with different arguments (drug-trading, support to FARC in Colombia, collaboration with Hezbollah, buying arms from Russia, corruption, human rights violations - the list is very long).

In 2017, now with Trump as president, the pressure on Venezuela was increased with the imposition of a financial embargo that cut Venezuela off from the international financial markets. The oil production had until then been slowly declining, but now it tumbled. In 2019, a broader embargo was added, prohibiting all transactions with all Government entities (incl. PDVSA and the Goldmining Company), cutting the Central Bank off from all use of the US dollar in international transactions, confiscating the assets of the PDVSA owned US company CITGO, etc. Sanctions were instated against shipping companies transporting Venezuelan oil, particularly targeting the delivery of oil to Cuba, The US stopped short of a physical, maritime embargo - not because it would be a violation of international law (it would), but because it would be very expensive to establish and probably not effective. Furthermore, the US threatened with invading the country ('all options are on the table'). These sanctions have had a crippling effect on the already suffering economy, and presently the main challenge for Venezuela is not to produce the oil, but to be able to sell it. Not to be left behind, the UK denied Venezuela access to its gold deposited in the Bank of England. The whole thing has started to look more and more like simple acts of international piracy.

In 2018 a presidential election was held in Venezuela, where Nicolas Maduro went for a second term. The election was boycotted by the 'hard; opposition, despite that they could probably actually have won it if they had been able to agree on a suitable candidate, so only the 'soft' opposition participated. Venezuela’s election board put turnout at just 46.1%, way down from the 80% registered at the last presidential vote in 2013 (for a comparison, the turnout at the presidential elections in neighbouring Colombia the same year was a paltry 54.2%). Maduro received around 5.8 million votes compared to the 1.8 million of his nearest rival, Henri Falcón. The US, the EU and several Latin American countries refused to recognize the outcome of the elections.

Where the whole thing started to become farcical was when opposition leader Juan Guaidó in January 2019 declared himself President of Venezuela and immediately was recognized by the US, Canada, EU and several Latin American countries (among these Bolzonaro's Brazil, Ivan Duque's Colombia, Macri's Argentina and Piñera's Chile). These Latin American countries and Canada have formed the Lima Group to coordinate actions with the EU and the US to oust Maduro. When Guaidó declared a popular uprising to topple Maduro in May 2019, there were great expectations in the US, EU and among the international media, but the whole thing was an amateurish farce and fizzled rapidly out.

The recognition of a parallel exile government is a diplomatic weapon that seldom is used and very seldom produces results, but it is excellent for prolonging crises. Apparently, the hope in the US and EU was that if they went all in, the whole operation could be fast. Now it is a deadlock causing immense suffering for the Venezuelan people. In July 2019, Thomas Shannon, former undersecretary of political affairs, compared in an interview with Financial Times the effects of the US blockade against Venezuela, with one generated by a bombing. 'More or less like the bombing of Dresden and Tokyo. We are seeing the destruction of Venezuela as a country and as a society'. 'Keeping these sanctions in place, with no mediating action, will have a profoundly negative impact on the Venezuela people.' Or, as a a study by CEPR remarks, the sanctions are a “collective punishment of the civilian population as described in both the Geneva and Hague international conventions.” So there are some serious Human Rights issues involved here.

In a recent article in New York Times, Francisco Rodríguez and Jeffrey D. Sachs, note that the message from the sanctions is stark: 'Change regime or starve.' 'The risks of this approach, however, are extraordinary. The United States government is making several assumptions: that the military is on the verge of changing sides; that it will do so in a disciplined manner; that Mr. Maduro lacks popular support; that Venezuela’s foreign allies, notably China, Cuba and Russia, lack the interest, will and means to support their ally; and that bygones will be bygones after a quick regime change.'

We can safely say that all the above assumptions are wrong - except perhaps for China, which will probably accept to give up Venezuela in exchange for a trade agreement with the US. Or has already done so. Furthermore, the more or less united Latin American front against Venezuela is smouldering, as Macri lost the presidential election in Argentina, Mexico has refused to join in, Piñera in Chile suddenly has to struggle with mass demonstration asking him to resign and Duque was defeated resoundingly by the opposition in the recent Colombian regional and local elections. That leaves Bolsonaro as the last man standing.

Furthermore, what does the EU know about the opposition they are supporting? It should be remembered that the Chávez revolution in 1998 was not just a mere change of Government in Venezuela. It gave a new role to the masses of impoverished Venezuelans who had never counted in Venezuelan politics before. There is no clear political platform for the 'hard' opposition, but many of the politicians belong to the old, wealthy elite, and they want things to be as they were before Chávez. A take-over by the opposition is unlikely to be a nice democratic exercise, there will be a lot of thirst for revenge, and reverting to the old days will be resisted by a large part of the population, by force if needed. Guaidó's support for a US invasion is unlikely to be shared by a majority of Venezuelans (86% would be against it according to a recent poll). Guaidó's relation to Colombian criminal paramilitary gangs as witnessed by recent photos, either shows that he is incredibly naive ('I didn't know who they were') or willing to make alliances with the devil, if needed.

What is exactly the EU strategy in this? What is the expected 'end-game' as the strategist like to call it? They starve enough, and then we get our way? It is worth remembering that former Spanish prime minister José Luis Rodríguez Zapatero succeeded in the beginning of 2018 in reaching a draft agreement between the Venezuelan Government and the opposition regarding the presidential elections that year, after a long mediation in the Dominican Republic. Zapatero expressed his surprise, when the opposition suddenly refused to sign it. In a letter, Zapatero said that 'that was unexpected to me, the document was not subscribed to by opposition representatives. I will not delve into the circumstances and motives for this, but it is my duty to defend the truth, and I am committed to not giving up on the chance to reach a historic agreement among Venezuelans.' And he added: “I ask you, with peace and democracy in mind, for your organization to formally subscribe the agreement herein included, now that the government has pledged to scrupulously respect the agreed terms”. Clearly, a historic opportunity was missed here. The President of the Dominican Republic, Danilo Medina, who had participated actively in the mediation, stated that the government had initially wanted to hold presidential elections in March and the opposition in June, but both had settled on April 22 as a compromise through negotiations (the Venezuelan Government signed the agreementalone and went on the hold the elections on April 22). Exactly what made the opposition to withdraw is not clear, but possibly internal power struggles. Or US pressure?

The only European country which has taken a prudent stance is Norway, and they are actively trying to facilitate negotiations between the Venezuelan Government and the opposition. However, the latest draconian US sanctions, supported by the opposition, made the Venezuelan Government pull out, so for the moment the negotiations have stalled.

As things stand, the US has a large responsibility for the suffering of the Venezuelan people. But with the stupid stance that the EU has taken, it is now sharing this responsibility.

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Thorbjorn Waagstein

Thorbjørn Waagstein, Economist, PhD, since 1999 working as international Development Consultant in Latin America, Africa and Asia.

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