Eurasia Group | Venezuelan crisis poised to grind on in coming weeks

Venezuelan crisis poised to grind on in coming weeks

26 February 2019
Main Venezuelan opposition leader Juan Guaido on a truck carrying humanitarian aid. REUTERS.
The Venezuelan opposition, backed by the US and other countries in the region, had hoped security forces would abandon President Nicolas Maduro and allow the entry over the weekend of convoys of food, medicine, and other aid to alleviate the acute suffering in the country. But the blockade decreed by Maduro held and the gambit failed, showing that the embattled government maintains its grip on power for now. Eurasia Group expert Risa Grais-Targow discusses the next steps in the long-running crisis.

What's next for the opposition?

National Assembly President Juan Guaido, the young face of the opposition, had defied a travel ban to cross the border into Colombia to help coordinate the shipments of humanitarian aid. He needs to return to Venezuela to effectively lead the effort to oust Maduro, who continues to threaten him in the hopes that he won't return. But any move against Guaido would be risky and thus authorities will probably tread cautiously. It would likely trigger a new round of crippling international sanctions or even, in a less likely scenario, some sort of military intervention. Guaido earlier this year declared himself the country's interim president—after Maduro won reelection in a vote widely condemned as rigged—and has been recognized as such by the US and over a dozen other countries.

Guaido is expected to lead the resumption of a campaign of massive street protests that in recent weeks has attracted support even in areas of the country and sectors of society that have traditionally been bastions of support for Maduro and his predecessor, socialist leader Hugo Chavez. Economic collapse and a loss of faith in the government have left many desperate for a change that could bring a return of some normalcy to the country. But Maduro has managed to retain the support of the military, whose senior officers have profited enormously under his regime.

What's next for the international community?

Increasingly alarmed by a humanitarian crisis that has sent millions of refugees into neighboring countries, governments of the region and of the US have been redoubling their efforts to bring about a political transition in Venezuela. Colombia and Brazil provided the staging grounds for this weekend's aid convoys. The US has used sanctions to try to strangle the local economy and force the military to abandon Maduro.

On Monday, US authorities announced new sanctions targeting the assets of powerful Venezuelan governors who are Maduro allies and promised more measures in the coming days. But they don't have a lot more ammunition to deploy after last month banning imports of Venezuelan crude oil, as well as the sale to Venezuela of the US diluent it mixes with its crude before selling it. Long viewed as the “nuclear option” in US-Venezuelan relations, the oil sanctions have the potential to decimate the troubled country's chief cash-generating export. The focus is now expected to shift to stymieing Venezuela's efforts to find work-arounds to sanctions, such as selling its heavy crude to India.

Recent hawkish comments by President Donald Trump and some of his advisers notwithstanding, the US will stop short of military intervention in Venezuela, a move that would be vigorously opposed by much of Latin America and the US foreign policy establishment. Trump himself, despite his desire to curry favor with the important constituency of conservative Hispanic voters in Florida, has little appetite for foreign military engagements and assigns less of priority to Venezuela than issues such as North Korea, Iran, or US-China trade.

What's the roadmap to a political transition?

Though neither the internal nor external opposition appear to have the leverage to force a quick ouster, Maduro's days in office still look numbered. The opposition is unified, social mobilization is broadening, and economic sanctions will bite deeper over time. The regime's chief international backers, China and Russia, have little appetite for greater involvement. Though both have viewed ties with Venezuela as useful to extend their influence in the region, China's approach has switched from providing financing to getting repaid for past loans, and Russia is cautious about forcefully challenging the US on this issue at a time when the two countries have many other disagreements.

Amid this weekend's violent clashes as security forces enforced the blockade at the border, it was significant that the military's high command did not publicly express its support for the government as it consistently has throughout the crisis. To encourage military officers to peel away from the regime, Guaido and other opposition leaders have started talking about offering amnesties from prosecution for participation in illegal enrichment schemes and violent crackdowns on civilians. The next step should be to formalize these offers with legislation passed by the National Assembly and international guarantees that would give them more credibility. The US and other countries could help move the process forward by shifting their rhetoric slightly from harsh criticism and ultimatums to providing some off-ramps for regime insiders. The aim is to start a process that would lead to verifiably fair elections and a new government with the legitimacy and international support needed to start rebuilding the country. Absent those off-ramps, the alternative is a much more devastated and isolated economy overseen by a hardened and more authoritarian regime.
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Risa Grais-Targow leads Eurasia Group's coverage of Venezuela, Ecuador, Central America, and the Caribbean. In this capacity, she helps clients to understand riskier markets that are often characterized by opaque institutions and volatile politics. She worked closely with clients to help them navigate the post-Chavez era in Venezuela, including the prospect for meaningful economic reform and the government's commitment to servicing its debt amid rising liquidity constraints. She is currently focused on Venezuela's deepening economic and political crisis and the preferences of key stakeholders. She is also working with clients to navigate opportunities and challenges in Cuba as it gradually opens. Her sectoral expertise includes the oil, gas, electricity, and mining sectors.