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Presidential Pretenders

There are many lessons in the collapse of Venezuela

The anti-immigrant right in the United States focuses almost entirely on the southern border with Mexico. If only there were an impassable wall along the border, they believe, or harsher conditions for detained refugees, or more roaming vigilantes, the United States would be able to stem the tide of migrants from the south.

Meanwhile, the escalating crisis in Venezuela dramatically demonstrates how United States foreign policy helps to produce the desperate migrants who become targets of the right’s vitriol. The Trump administration announced tougher sanctions on Venezuela on August 5, tightening the screws on the oil-dependent and increasingly dysfunctional Venezuelan economy. That came only a week after Republicans in Congress blocked a measure to grant Temporary Protected Status to Venezuelans in the United States. Already there were almost 30,000 Venezuelans who had applied for asylum in 2018—more than from any other single country—and the exodus has continued into 2019. Venezuelans have been fleeing to the nearby island nation of Trinidad and Tobago and spilling over their border into Colombia in unprecedented numbers. The United Nations estimates that about four million have fled Venezuela in recent years.

Since Hugo Chavez was elected president of Venezuela in 1998, successive U.S. administrations have sought to destabilize the country—promoting its economic isolation, funding and training opposition groups, even assisting an attempted coup d’état in 2002. Chavez renationalized the energy industry, as Venezuela claimed the largest proven oil reserves in the world. When Chavez died in March 2013, he was succeeded by Nicolás Maduro, on whose watch living conditions in Venezuela have dropped sharply. At the beginning of this year, Venezuelan politics took a series of bizarre twists that are still playing out, in what appears to be a hopeless downward spiral. Just last week, Maduro confirmed an Associated Press report that his government has held secret talks this summer with top U.S. officials. The AP reported that “the [U.S.] goal of the outreach is to ratchet up pressure on the regime by contributing to the knife fight the U.S. believes is taking place behind the scenes among competing circles of power within the ruling party.”

If the United States government is now pushing for “regime change” in Venezuela from within, the question at the beginning of the year was whether it would endorse direct military intervention.

On January 23, Juan Guaidó addressed a large, restive crowd in central Caracas. Although he had become speaker of the National Assembly a few weeks earlier, he was unknown to the majority of Venezuelans. Yet, from an elevated rostrum emblazoned with the national coat of arms, he spoke with aplomb, seemingly convinced of destiny’s generosity. He invited his supporters to raise their right hands. In his left, he waved the constitution. Then he pointed to the sky, and “before God Almighty,” he swore himself in as interim president.

More than seven months on, destiny has not yet delivered presidential powers to Guaidó, though he was quickly recognized as president by the United States and more than fifty other countries. As he has mobilized opposition to the government of Maduro, Guaidó has become the poster boy for a half-baked campaign of regime change with origins predating his own political life. He has energized this campaign with youthful audacity, but he has repeatedly undermined it with callow judgement. Maduro displays few abrasions from recent attempts to dislodge him from the Miraflores Palace. Crucially, he maintains the support of the military high command. But bound by the limits of the neoliberal state, he is unable to conjure illusions of progress. Having contributed to the social and economic turmoil that emboldens his opponents, he pursues order through an intensification of political repression.

Successive U.S. administrations have sought to destabilize Venezuela—even assisting an attempted coup d’état in 2002.

The scene was set for Guaidó’s declaration, when, on January 4, the Lima Group, a council of American states responding to political crisis in Venezuela, issued a statement repudiating the legitimacy of Maduro’s second presidential term. (Maduro had been re-elected in May 2018, but some of his main rivals were banned from running and sections of the opposition boycotted the vote.) After Maduro was sworn in on January 10, the National Assembly proclaimed the presidency vacant; that body and Guaidó argued that since he was constitutionally next in line, he was the legitimate leader.

The so-called Pink Tide of center-left Latin American governments had long since subsided. Venezuela now found itself ebbing into a surging wave of anti­-Chavismo. Mexico, under the recently elected government of Andrés Manuel López Obrador, was the only member of the Lima Group to abstain from signing the statement on Maduro’s second term. Meanwhile, the inauguration of Jair Bolsonaro as Brazilian president on January 1 confirmed the hostile reconfiguration of regional politics. During his election campaign, Bolsonaro and his sons had raised the rather fantastical prospect of a Brazilian military intervention in Venezuela. (Brazil has not gone to war with any of its neighbors for almost 150 years.) Other regional leaders had also hinted at the possibility of intervention, including Luis Almagro, secretary-general of the Organization of American States—an intergovernmental institution with no army of its own. Donald Trump, of course, had for some time been issuing occasional and indefinite threats toward Maduro, but these had not materialized into coercive military action.

In early February, the language of Guaidó and his foreign patrons shifted. While they continued to demand the “restoration of democracy,” this motif was overshadowed by expressions of concern for human suffering. The Venezuelan National Assembly had first declared a humanitarian health crisis in January 2016, three weeks after the opposition assumed its leadership. Since then, Maduro had rejected calls to open a “humanitarian corridor” into the country, despite rapidly expanding poverty and shortages of food and medicine. Guaidó now set Maduro a deadline of February 23 to accept foreign aid, and he called for Venezuelans to gather at border crossings to ensure its entry. U.S. national security adviser John Bolton then announced that twenty-five countries had pledged a hundred million dollars in emergency supplies.

Maduro predictably kept almost all of Venezuela’s border crossings closed. Guaidó would have expected his deadline to be flouted. But he might have hoped that his overtures to the Armed Forces would be more successful. By the evening, he took to Twitter to “formally propose” that the international community “keep all options open to achieve the liberation of [Venezuela].” He had sought to invoke a humanitarian imaginary constructed in the aftermath of the Cold War, according to which foreign military interventions provide a fix for pathologies of governance and underdevelopment on the periphery. So too had the Trump administration, despite its quite obvious lack of humanitarian credentials. And yet, as the spectacle dissipated, talk of military intervention died down. On February 25, Vice President Mike Pence attended a Lima Group meeting in Bogotá. With his government unwilling to lead an intervention in Venezuela, he attempted to strong-arm the Brazilian and Colombian governments into doing so. But they refused. The Lima Group issued a collective statement opposing military intervention. Guaidó went on a tour of South American capitals.

The Venezuelan government threatened Guaidó with arrest once he returned to Caracas. The opposition lost the momentum it had gained after he had declared himself president. And his strategic competence was implicitly questioned by foreign allies whose rhetoric was partly responsible for his miscalculation. Meanwhile, a split in the Trump administration became apparent: John Bolton and Secretary of State Mike Pompeo seemed set on war at all costs; Trump himself, despite his sabre rattling, remained cautious about extravagant interventions.

As one of the major oil producing states in the Americas, Venezuela has long been of strategic concern to the United States. In 1990, Venezuela’s national oil company, PDVSA, assumed full ownership of the U.S. oil refiner Citgo, and thus control of up to 10 per cent of the U.S. domestic oil market. According to Maduro, it is the country’s vast oil reserves that have made Venezuela the target of a sustained “economic war” waged by the United States. In 2013, shortly before Maduro became president, the Venezuelan government’s credit rating was downgraded, limiting its access to international credit markets. The following year, Barack Obama signed legislation that would allow him to freeze the assets or revoke the visas of Venezuelans it deemed responsible for human rights abuses. He followed through in March of 2015, issuing an executive order sanctioning seven individuals and stating that the situation in Venezuela posed an “extraordinary threat to the national security” of the United States.

Donald Trump significantly expanded sanctions in 2017. Since then, the Venezuelan government has effectively been prevented from renegotiating much of its foreign debt, great swathes of its foreign assets have been frozen, foreign banks have become wary of taking its payment for the importation of basic goods, and foreign investments in its assets have been embargoed. Until 2019, U.S. oil imports from Venezuela remained reasonably steady, despite sanctions; but, following Guaidó’s self-proclamation as interim president, the U.S. government prohibited its citizens from making direct payments to PDVSA. In April of this year, liberal American economists Mark Weisbrot and Jeffrey Sachs published a report on the impact of U.S. sanctions on Venezuela. It claims that, between 2017 and 2018, sanctions inflicted more harm on Venezuelan citizens than on the Maduro government, contributing to more than forty thousand deaths.

A report on U.S. sanctions claims that between 2017 and 2018 sanctions inflicted more harm on Venezuelan citizens than on the Maduro government, contributing to more than forty thousand deaths.

From 2013 to 2017, Venezuela’s GDP fell approximately 35 percent—a greater contraction than the one experienced by the U.S. during the Great Depression. But the Venezuelan economy took a downward turn in 2011, prior to the U.S. blockade.

The nationalization program begun under Chavez was not followed up with sufficient public investment during years of considerable economic growth. Even PDVSA, the driving force of Venezuela’s oil-dependent economy, suffered from a lack of capital investment, and this contributed to a decline in oil production. Failure to diversify the economy’s productive base, combined with a significant expansion of public bureaucracies, meant that high and rising oil prices would have been required to sustain economic growth.

As it happened, the price of crude oil dropped significantly in the second half of 2014, thrusting the Venezuelan economy into free fall. The year before, Maduro had devalued the currency to sustain living standards, but this had contributed to hyperinflation. By 2015, recession and plummeting real wages began to reverse reductions in poverty brought about by Chavez’s social reforms. Today, as sanctions deepen the economic crisis, approximately 90 percent of Venezuelans are living below the poverty line. According to one 2018 survey, about 30 percent often eat only once a day. Thousands of children go back and forth across the border with Colombia every day for food and education.

In 1997, the late Venezuelan anthropologist Fernando Coronil published a study on his country’s petropolitics, entitled The Magical State. He argued that oil had transformed the Venezuelan state into a “magnanimous sorcerer,” conjuring “dazzling development projects that engender collective fantasies of progress.” In structuring the Venezuelan economy, oil dependence had ensured continuities between dictatorial and democratic regimes. Democratization itself was inseparable from the process through which Venezuelan elites secured access to the state and its oil wealth. For Coronil, the illusion of development had had a pernicious impact on Venezuela’s insertion into the global economy. While national oil money dissolved into global financial torrents, the narrow specialization of the Venezuelan economy as a primary exporter remained in the interests of foreign capital. What economists refer to as Dutch disease—when increased production of raw materials leads to a reduction in the competitiveness of other sectors—is in fact, Coronil contended, a “third-world or neo-colonial disease.”

A decade later, Coronil argued that Chavez’s “Bolivarian revolution” had given shape to a different type of magical state, founded on a more inclusive vision of modernity, but prone to some of the same vices: presidentialism, corruption, overstretching. Coronil questioned how the Chavez government might move from its opposition to neoliberalism to the construction of “alternative futures.” But, in limiting his definition of neoliberalism to its outcomes (a reduced welfare state, increased inequality), he arguably overlooked the neoliberal organization of Chavez’s magical state. Venezuela’s oil dependence had become functional to the development of a neoliberal political economy at the beginning of the 1990s. Liberalization of the exchange rate regime and increased interest rates prevented the expansion of manufacturing industries.

Despite their anti-neoliberal rhetoric, the Latin American governments of the Pink Tide accommodated themselves to neoliberal imperatives. In general, they opted for class conciliation with progressive social reform, abstaining from structural macroeconomic transformations. The likes of Luiz Inácio Lula da Silva in Brazil, and Michelle Bachelet in Chile, became efficient administrators of neoliberal strategy, smoothing the rough edges of the market in pursuit of a frictionless and equitable capitalism. Chavez was the only Latin American president to test the limits of neoliberal order, radicalizing his program of social reform through the reorganization of state bureaucracies and the expropriation of private assets, sometimes at the cost of political freedoms. Chavez expanded welfare programs and accelerated land reform; he created a new economic elite, which supplanted segments of the residual oligarchy; but he left largely untouched the neoliberal logic of accumulation and the structural impediments to economic diversification.

Maduro, a significantly less adroit and sophisticated politician than Chavez, inherited an economy with fundamental weaknesses. His response to the instability these produced resulted in crisis. Contrary to the claims of his administration and its most loyal supporters, neoliberalism is not an ideology returning to Venezuela from exile, possibly in a heavy bomber. Rather, the Chavista magical state has been a kind of neoliberal state; but neoliberalism eventually killed the magic. Oil rent alone is now insufficient to produce the kind of developmental projects that could hold together the popular base Chavez invented to sustain his revolution. Maduro has maintained popular support in the poorer quarters, but the breakdown of social order has emboldened an opposition that never limited itself to democratic contestation; it has offered opportunities for the U.S. government to assert its regional hegemony; and it has made of Venezuela a foil to neighboring governments in their appeals to domestic constituencies.

On March 7, a nationwide power outage left much of Venezuela without light for seven days. Hospitals were unable to provide vital medical services. Phone and internet signals failed. Maduro claimed that the blackout had been caused by cybernetic and electromagnetic attacks, orchestrated by the U.S. government. The opposition accused him and state utility companies of negligence. Further outages led to street protests in the following weeks, placing strain on the government. Meanwhile, the government seemed to tighten the noose around Guaidó and his closest associates. The national intelligence agency arrested his chief of staff, Roberto Marrero. Guaidó was banned from public office for fifteen years, supposedly for financial improprieties. And the Constituent Assembly voted to remove his parliamentary immunity.

On April 30, Guaidó tweeted an awkwardly improvised video of himself outside La Carlota airbase in Caracas, calling supporters to the streets for the “final phase” of the campaign to oust Maduro. Flanked by soldiers, he claimed that he now had the military on his side. The presence of Leopoldo López, another opposition leader, unexpectedly released from house arrest, gave the impression that perhaps there had indeed been a shift in the alignment of state security forces. Foreign allies rushed to tweet their support for “Operation Freedom”; humanitarian rhetoric was now abandoned. However, within a few hours, it became clear that the government still controlled military bases and commanded the loyalty of military leadership, despite the defection of the head of national intelligence and a small number of others.

In April, Guaidó called supporters to the streets for the “final phase” of the campaign to oust Maduro. It seems likely he misjudged the support he would receive from the military.

It appeared at the time as though Guaidó had bluffed again. It now seems just as likely that he misjudged the support he would receive from the military. By the end of the day, news networks around the world published a video of a National Guard vehicle ploughing into protesters who were armed with sticks and stones. In an interview four days later, Guaidó said he could not rule out a military intervention. But intervention was now even less likely.

Lacking direction, the opposition agreed to negotiate with the Maduro administration in late May. The talks, brokered by the Norwegian government, ended without agreement, as Maduro’s representatives rejected the opposition’s precondition that he step down. In late June, the opposition abandoned a subsequent round of talks in protest at the death of a detained Navy captain, who displayed signs of torture. Negotiations soon resumed, but the government withdrew in early August, after the U.S. imposed more sanctions. Members of the opposition have expressed hope in the possibility of new elections. But agreement with the government on necessary conditions seems a long way off, despite its secret talks with the Trump administration.

Though Maduro holds the cards, there are questions as to whether his government can remain minimally functional, even with continued financial and military assistance from its own foreign allies, of which Russia and China are the most notable. U.S. sanctions now disable its mechanisms for economic recovery. And, as Maduro responds to the breakdown of political order with an expanding program of repression, he gradually transforms the state in service of his paranoia. As if to shelter from the swirling chaos for which he is partly responsible, he locks himself in a prison of the present, in which means are justified by the immediate ends of political survival. It will be for others, then, eventually, to forge “alternative futures,” new destinies. Their challenge will be to work out what to do when the magic’s gone.