January 16, 2018
Venezuelan President Nicolás Maduro’s embattled regime ended a tumultuous 2017 by having to suppress renewed food riots resulting from the government’s failure to import sufficient supplies of pork leg, a traditional holiday staple. In one disturbance, a pregnant woman was shot dead by security forces on Christmas Eve.
Yet if 2017 ended poorly for Venezuela, 2018 is shaping up to be even worse.
Already, there have been new outbreaks of looting in the face of rampant shortages of food and basic goods. Inflation, which hit a reported 2,616 percent last year — the highest in the world — will continue to surge in 2018.
And, worst of all, due to bad management and corruption, oil production has fallen to one of its lowest points in three decades, “further depriving the cash-strapped country of its only major source of revenue and adding to the suffering of its people,” according to CNN.
It is difficult not to become inured to the daily drumbeat of catastrophic news coming out of Venezuela. After all, Venezuela under Chavismo — the movement founded by the late strongman Hugo Chávez — has been this century’s longest ongoing train wreck. Prognostications about a final reckoning have marked the past five years, at least.
What makes 2018 different, however, are two new, important variables that haven’t existed before: One, a more active U.S. policy under U.S. President Donald Trump; and two, changing political dynamics in Latin America.
Ever since an impromptu White House meeting with the wife of a then-imprisoned political prisoner last February, Trump has made clear his intent to discard the Obama administration’s passive Venezuela policy.
Already, the administration has ramped up significantly the targeting of sanctions against individuals involved in human rights abuses, undermining democracy, corruption, and drug trafficking, thereby steadily delegitimizing the government. To date, more than 30 Venezuelan officials — including the president and vice president — have been sanctioned under the Trump administration, including four more this month. Just as important, others are now following the U.S. lead in sanctioning individuals, including Canada, Colombia, the European Union, and Mexico.
Moreover, in August, the administration levied a crucial economic sanction on the Maduro regime, restricting its ability to borrow money from U.S. creditors — severing one of its last economic lifelines. At the time, Treasury Secretary Steven Mnuchin said, “Maduro may no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people.”
The ramifications of limiting that funding stream are on display today in Venezuela, with the regime unable to meet the import needs of the country.
Another important development to note is that the most recent sanctions target four senior Venezuelan military officials, suggesting that the Trump administration has decided to focus pressure on the military. Over the past few years, modeled on Cuba, the military has been expanding its reach into the economy by assuming more responsibilities in running state enterprises. It is now directly profiting from the country’s meager economic activity. This gives the generals a stake in maintaining the status quo.
Therefore, sowing division within the Venezuela military is an astute move. While the senior officer corps is stacked with regime loyalists afforded their special economic privileges, mid-level and rank-and-file personnel are not immune to the hardships of the ordinary population. Reports of low morale have been consistent for months. Those concerned about their own fate and disgusted with their corrupt government may be contemplating their unique responsibility to the constitution.
As the Economist put it, “[Maduro’s] future will be decided by the armed forces, not directly by the people. If they withdraw support from his beleaguered regime, change will come soon. If not, hunger and repression will continue.”
At the same time as an invigorated U.S. policy, broader changes underway in the regional landscape will impact Chavismo’s fate. Relying on friendly governments to provide diplomatic cover for his authoritarianism is getting increasingly difficult for Maduro, given the region’s ongoing political shift towards more pragmatic, market-friendly leadership. Beginning with Mauricio Macri’s assumption of the presidency of Argentina in 2015, then Pedro Pablo Kuczynski’s election in Peru in 2016, and the recent re-election of Sebastián Piñera in Chile (he served previously, from 2010 to 2014), voters are electing presidents with no sympathies for radical ideological projects like Chavismo. With six presidential elections scheduled for 2018 — including Brazil, Colombia, Costa Rica, Mexico, and Paraguay — that political realignment will likely continue.
The key issue here will continue to be the transition from rhetorical condemnation of authoritarianism in Venezuela to the implementation of more financial sanctions and diplomatic isolation. Such pressure is key to delegitimizing an unconstitutional government and raising the economic costs to the Maduro regime.
Given Chavismo’s capacity to muddle through on repression and by forcing discontented Venezuelans to migrate, it is always risky to make predictions. But what is certain for 2018 is that conditions are worsening in Venezuela, there is less money coming in (it is now offering to purchase imports with diamonds), and Maduro has fewer friends in the region. There may or may not be a presidential election in Venezuela this year, but it may not matter either way. Chavismo’s time may finally be running out.