January 28, 2019
IntelBrief: Venezuela, State Failure & an Opening for Russia in Latin America
In familiar echoes of decades past, Russia and the U.S. are once again accusing each other of supporting illegitimate dictatorships and plotting regime change in Latin America. Distrust between Venezuela and the U.S. has been high since former Venezuelan president Hugo Chavez took office in 1998, but now the tensions seem to have reached a tipping point. Meanwhile, Russia has moved decisively into Venezuela as a counter to the U.S., with more than $17 billion in recent loans and investments. Those investments, along with China’s more than $62 billion in the last decade, are at risk as the Venezuelan economy continues to bottom out.
The latest source of tension is the May 2018 re-election of Nicolás Maduro for a second term as president. Following allegations of election fraud Maduro’s victory was widely seen by independent observers as illegitimate. Immediately after the election, which was boycotted by most of the opposition, 14 countries recalled their ambassadors from Caracas. Maduro’s mismanagement of the country and the economy have led to widespread opposition, culminating in an assassination attempt against him in August 2018 using drones packed with explosives. The U.S. had already said it would not recognize the ‘winner’ of such a flawed election and has steadily built pressure against the Maduro government. The issue became acute when Maduro was sworn in for his second term on January 10, 2019.
American-led pressure is finally starting to have an effect. The European Union announced that it would recognize opposition leader and head of the National Assembly, Juan Guaidó, if Venezuela failed to call for new elections within the next 8 days. During a January 26 session of the U.N. Security Council that was reminiscent of the Cold War, the U.S. and Russia denounced each other with speeches filled with phrases such as ‘coup d’état’ and ‘illegitimate’. Sensing momentum, Washington flatly asked the international community to ‘pick a side’ and withdraw financial assistance and diplomatic support from the Maduro government, which has consistently neglected its civilian population and accelerated the process of state failure in a pivotal Latin American country. In addition to widespread inflation, Caracas has become one of the most dangerous cities in the world, ranking second worldwide with 111 homicides per 100,000 residents.
For its part, Russia is determined to salvage its sizable financial investments and the expanded influence it has worked to establish in Venezuela. Moscow maintains interests in both the oil and gold sectors of the country, both of which are substantial but now in collapse after years of mismanagement and disastrous economic policy. Along with Cuba—Caracas’ most important regional supporter—Russia plays a meaningful role in providing desperately-needed financial support and technical and industry support, as well as intelligence and military capabilities. From an economic standpoint, Moscow’s investment in the rapidly deteriorating Venezuelan economy is a risky proposition. Back in 1823, former U.S. President James Monroe laid out a foreign policy vision (often referred to as the Monroe Doctrine) that warned other countries of the consequences of intervening in the United States’ backyard. External intervention in the Western Hemisphere, especially in Latin America, would be interpreted as ‘the manifestation of an unfriendly disposition toward the United States.’ This doctrine has largely held over nearly two centuries, but Russian intervention is once again testing American resolve as Moscow seeks to extend its influence among a rogue’s gallery of dictatorships, from Damascus to Caracas and beyond.
American efforts in Venezuela stand in stark contrast to President Trump’s high-profile and consistent support for authoritarians, including in countries like the Philippines, Egypt, and Saudi Arabia, in which he praises ‘toughness’ over liberty. Given the U.S.’ history of anti-democratic machinations in Latin America over many decades, the current administration will need to work closely and transparently with others such as the EU and the Organization of American States—which refuses to recognize Maduro—to advance the course of freedom for Venezuela, which has suffered from a humanitarian crisis for years. If the Maduro government falls and is supplanted by a pro-Western government, it removes a pivotal cog in a global nexus of dictatorships that reach from Havana to Tehran. Perhaps most importantly to the Trump administration, regime change in Venezuela signals the failure of socialism and sends a message that capitalism, democracy, and free markets are the only real path to a sustainable future.
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