Venezuela is poised to implode in 2018. But with limited intervention, the United States has an opportunity to prevent a national security crisis while advancing American interests.
Without U.S. intervention, Venezuela is on a trajectory to Somalization: a consolidated “state” apparatus led by terrorist-supporting narco-criminals, at least one million additional refugees, the collapse of critical infrastructure, and widespread famine. A Venezuela isolated from the international community would only benefit rogue states, criminals, and narco-terrorists, and push the Venezuelan government into further dependency on China, Russia, and Cuba.
The next few months will determine whether the Venezuelan regime crumbles under the weight of its own mismanagement or achieves stability in a process guided by the international community. United States, Europe, and Lima Group policy must take four forms:
1. Closer coordination on targeted sanctions between all parties, including the Venezuelan opposition. Preparations for an oil embargo should proceed, but implementing one now risks generating regime cohesion just prior to a rapid deterioration of the humanitarian situation, thus potentially limiting the people’s ability to implement a transition government. Sanctions targeting individuals should be expanded to include more people in leadership positions throughout the Venezuelan government and the armed forces, supporting domestic and international actors, and individuals and family members who help hide their assets.
2. As of this moment, it is absolutely crucial to support the Venezuelan parties who will manage civil and political dynamics within Venezuela when the time of inflection occurs. Advice, support, and structured channels of communication to relevant external parties should become more robust.
3. The lack of humanitarian aid to Venezuela ensures citizen dependency on regime provisions. Although the Venezuelan government refuses to permit aid shipments, the international community should dispatch food and medical supplies to trusted organizations within Venezuela via all methods possible. This will demonstrate their commitment to the Venezuelan people, and provide Venezuelan recipient organizations an ability to offer an alternative to regime dependency. Similarly, humanitarian assistance must be provided to countries receiving the bulk of Venezuela’s refugees.
4. The United States should foster a participatory and, when appropriate, public planning effort to detail components of transition. This includes: debt restructuring and economic reforms, the restoration of democratic governance systems, and security sector reform. The planning process should have multiple working groups, each co-chaired by a representative of the opposition and the Lima Group, with all relevant parties granted an opportunity to participate, including factions of the current Venezuelan regime who embrace transition, representatives of Chinese and other foreign power interests, and the primary corporate and financial players. Failure to plan with and support a transitional government leaves open the chance of quick failure and the emergence of a dangerous and fully-failed state in America’s backyard.
U.S. national security interests at stake in Venezuela’s future are multiple.
The Venezuelan refugee crisis could reach proportions comparable to that of Syria, straining the resources of American allies in the region. Over two million Venezuelans have left since Chavez came to power, the majority doing so within the last two years. The Colombian government estimates 600,000 Venezuelans are in Colombia, up 300,000 from just six months ago. Brazil and Colombia have deployed several thousand more troops to patrol their borders with Venezuela. The next wave of refugees will see increased use of boats in the now pirate-infested waters off the Venezuela coast, attempting to land in the ABC islands, Dutch territory, and risking situations in which refugees are disposed of in Caribbean waters much like those fleeing Syria and North Africa via the Mediterranean.
Venezuelan criminal networks and radical networks already present throughout Latin America would become a more critical asset to the failed state. Cuba and Venezuela have been codependent on each other since Chavez came to power — the former providing personnel to run Venezuelan government agencies and the latter providing financial support in the form of discounted oil. A collapse of Venezuela and Venezuelan oil production would require Cuba to leverage Venezuela’s illicit assets to meet the needs of the Cuban regime.
With reportedly thousands of employees from the state organizations that manage electricity and water fleeing the country over the last several months, following the tens of thousands of oil sector workers who fled over the past decade, the country is likely to see greater disruptions to these critical utilities in 2018. The longer these individuals remain outside of Venezuela to avoid its chaos, the longer Venezuela’s path to recovery, and the lower the likelihood any of these essential workers will ever return.
Oil production has fallen by over 30 percent in the last year and is expected to collapse by an additional 50 percent in 2018. Regardless of the United States’ position on embargoing Venezuelan oil exports, the U.S. needs to prepare to support the Caribbean countries that have become financially entwined with Venezuela over the last twenty years, to prevent a deterioration of states such as Jamaica and Haiti.
Venezuela owes over $60 billion to contractors and suppliers, many American. Restoring the integrity of Venezuela’s political and economic systems will permit the opportunity for American companies to collect on these debts once the country is rebuilt. A Venezuela restored is an opportunity for American investors to help develop Venezuela’s mineral, oil and gas, agricultural, and tourism sectors — each of which has uniquely abundant potential.
The United States will have difficulty launching effective counter-drug trafficking programs in Latin America with the Venezuelan state increasingly dependent on the trade. Venezuela’s senior leadership and their families have been confirmed as a party to this trade, with proceeds reportedly shared with the likes of Hezbollah, Iran, and Nicaragua.
Targeted sanctions against regime officials have reportedly been effective. But regime propaganda citing sanctions as evidence of an American economic war has not resonated with the Venezuelan people. Expanding the list of sanctioned individuals will provide an opportunity to restore assets and access to international markets to those who cooperate with transition leadership. The European Parliament’s recent statement of support for expanding sanctions and referring Venezuelan leadership to the International Criminal Court for investigation are welcome, and also underscore the importance of the need for improved coordination between all parties as actions taken by the international community escalate.
Humanitarian response is also critical for Venezuelans to return to their country before they become too settled elsewhere. China has invested and loaned over $60 billion to Venezuela over the last decade. Venezuela is the largest recipient of Chinese investment in Latin America, making China important in shaping its short-term future. China should be encouraged to support humanitarian relief efforts critical to stabilizing the country.
Recent Russian exploitation of the deteriorating situation in Venezuela to acquire oil assets in exchange for financial assistance and advanced weapons systems suggests expanded Russian presence in the region, unless there is a transition in Venezuela. This poses a territorial risk for Venezuela’s oil-rich neighbor, Guyana. Recent reports suggest Venezuela is considering mobilizing troops to seize the disputed Western half of Guyana, which in the short-term, Venezuela could use as leverage in negotiations with the international community. In the medium term, if occupation is successful, it would provide Venezuela additional oil assets for exploitation by its allies.
Improved coordination among pro-transition parties and minor investments in humanitarian and advisory assistance is the best chance of reversing developments in Venezuela. Quick action by the Trump Administration at little expense can prevent a humanitarian disaster not seen in the Western Hemisphere since Fidel Castro consolidated power in Cuba. The president has an opportunity to protect American interests and demonstrate to the people of Latin America that the United States is committed to hemispheric integrity by new models of support and cooperation — models that reflect president Trump’s theory of international cooperation that when countries are clear about their interests, it is possible to see how we can mutually benefit through cooperation.
Christopher Nixon Cox is the grandson of Richard Nixon, the 37th President of the United States. He graduated Princeton with a degree in Politics, magna cum laude. He is a lawyer in New York City and a non-resident fellow in Princeton University’s Liechtenstein Institute for Self Determination. To read more of his reports — Click Here Now.
Michael Schoenleber is a political and business strategy consultant who has been active in Venezuelan civic and humanitarian causes since 2008.