By Guy Taylor - The Washington Times - Tuesday, December 23, 2014
The
ongoing plunge in global oil prices is pushing Venezuela toward
economic collapse just as President Nicolas Maduro — the hand-picked
successor to the late socialist Hugo Chavez — faces mounting
international criticism for jailing opposition figures after months of
street protests.
Where
Chavez once drew praise from the world’s leftist elite for using the
high price of crude oil during the 2000s to underwrite a socialist
revolution, a growing number of analysts in Washington say Mr. Maduro is
clinging to power in a country on the edge of becoming a failed state.
Venezuela still boasts some of the world’s largest known crude reserves, but it has continued for too long spending more on government programs than it has collected in oil revenue, analysts say. The average
Simply
put, the “current situation in Venezuela is unsustainable if the price
continues to fall,” said Michael Shifter, president of the
Inter-American Dialogue, a policy research group in Washington. “You can debate what a failed state is and what it looks like, but Venezuela can’t continue like this.”
Others offer an even more stark assessment. “There are parts of Venezuela where the state is already failed,” said
Adam Isacson, a senior associate at the Washington Office on Latin
America. He said there is “complete lawlessness” along several
Venezuelan border zones, and in certain “Caracas slums where you’ve had
shootouts between pro-Chavez militias and police.”
Although
national security analysts are debating what the Obama administration
might be able to do to positively affect the situation, Mr. Isacson
said, Washington should, at a minimum, be wary of the security
implications at play for the region and the world.
Venezuela is “not an area that you want ungoverned because of the way organized crime could use it as a base,”
he said, pointing to a United Nations estimate that at least 200 tons
of cocaine cross through the nation en route to Europe and the U.S. each
year.
But
such realities are largely in the backdrop of more pressing domestic
political turmoil that has gripped Venezuela since Chavez died of cancer
in March 2013.
While
reviled as a dictator by American conservatives and free market
advocates in many parts of the world, Chavez carried a glorified status
among his supporters during his 14-year rule. He built a cult of personality with followers — the “Chavistas” — who hailed him and his social programs for lifting millions of Venezuelans out of poverty.
At
the same time, the nation struggled to overcome basic problems. On
Chavez’s death, The Associated Press noted that, as a whole, Venezuelans
were afflicted by chronic
power outages, crumbling infrastructure, unfinished public works
projects, double-digit inflation, food and medicine shortages, rampant
crime and one of the world’s highest homicide and kidnapping rates.
Mr. Maduro won a razor-thin victory in
a special election a month after Chavez’s death. But the nation’s
opposition, famously wealthy and notoriously fractured during the
Chavez’s reign, was determined to make a stand. Refusing to recognize
the Maduro victory, several opposition leaders called for massive
rallies in Caracas under the message that Chavez had spent years
squandering the nation’s oil wealth and putting it on a path to
financial ruin.
At
first, it appeared Mr. Maduro might be able to weather the political
storm. But Chavez left huge shoes to fill and demonstrations in Caracas
soon spiraled out of control, resulting in the deaths of at least 43
people, including anti-Maduro demonstrators, his supporters and security
officials.
The
new president then began drawing the ire of international human rights
groups by cracking down on the opposition. In February, his government
arrested Leopoldo Lopez Mendoza, who had run for president against Mr.
Maduro. The 43-year-old Harvard graduate remains in jail on charges of
arson, terrorism and homicide.
More
recently, the government indicted longtime anti-Chavez activist Maria
Corina Machado, charging the former member of the Venezuelan parliament
with conspiracy in connection with a suspected plot to kill Mr. Maduro.
Analysts
say Mr. Maduro is acting out of desperation to send a threatening
message to an opposition eager to seize on his own plummeting approval
ratings. Polls put his approval ratings as low 24 percent amid reports
that the Venezuelan has no serious strategy for tackling the nation’s
more than 63 percent inflation rate and widespread shortages of consumer
goods such as diapers, milk and laundry detergent.
The
Obama administration’s strategy appeared until recently to be watching
the unraveling while nursing a long-delicate balance in which the U.S.
buys a small but steady stream of crude oil from Venezuela.
Analysts
say President Obama has few strategic options to pursue without
triggering a diplomatic confrontation with Caracas because serious
criticism or policy shifts from Washington are likely to be seized by
Mr. Maduro only as an example of U.S. bullying.
Chavez
had a history of boosting his own popularity in the nation and in much
of the Latin America by lambasting what he described as subversive U.S.
imperialism toward the region.
However, the Maduro government’s jailing of Mr. Lopez and leveling of charges against Ms. Machado appear to have changed things.
Last
week, Mr. Obama signed legislation to impose sanctions that could block
visas and U.S. market access to Venezuelan officials accused of
violating protesters’ rights during the anti-Maduro demonstrations this
year.
It
remains unclear whether the administration will name any Venezuelan
officials with the sanctions. “These are sanctions that don’t have a lot
of teeth and are not going to affect a lot of people,” said Mr.
Shifter, who believes Mr. Obama support can at least partly be explained
by politics.
The
president, Mr. Shifter said, has effectively created political cover
against criticism from human rights activists for pursing a historic
detente this month with Cuba — another leftist bastion in Latin American
and longtime ally to Venezuela. “It’s an astute play on Obama’s part to
show that he does care about human rights while he’s moving to
normalize relations with Cuba,” he said. “It lets the president say, ‘We
do care about human rights, look what we’re doing in Venezuela.’”
While concerns swirl about the Maduro government’s human rights posture, Venezuela has grown closer to China.
As
Beijing’s energy needs exploded over the past decade, Caracas emerged
as a key partner by borrowing billions of dollars from the rising Asian
superpower in exchange for cut-rate oil.
Some
95 percent of Venezuela’s exports to the rest of the world consist of
crude oil shipments. According to a report by Business Insider, the
exports account for more than 60 percent of the nation’s revenue stream.
But
in light of its vast government expenditures, most reports maintain
that the global price of oil needs to be as high as $120 a barrel in
order for Venezuela to turn a profit extracting and exporting the
commodity.
With
the price having plummeted, Beijing is feeling the weight of risk
associated with its investment in Venezuela. “China stands to lose a lot
here,” said Mr. Isacson, who maintains that Venezuela owes Beijing $10
billion to $15 billion in oil shipments in exchange for cash doled out
to Caracas during recent years.
“China’s
stake in Venezuela’s economy is probably greater than the U.S. stake,
and it’s not a really winning bet for them right now,” he said. “If they
want to prop up a pro-Chinese government in the short term they’ve got
to be very gentle about it.”
“China
definitely has a reason to root for Maduro, and they have a stake in
his ability to remain in office,” Mr. Isacson said. “But I don’t see
them giving any more to subsidize their current course because they’re
already losing. It would be like throwing good money after bad.”
With
the danger of default looming, Venezuela’s ability to borrow more money
is drying up. Without more credit, Caracas won’t be able to pay its own
bills at home.
The ultimate result, Mr. Isacson said, will be “a huge cutback in basic services, including energy and public security.”
“There
will be an immediate impact on housing and food subsidies, meaning the
programs that have lifted people out of poverty will go away,” he said.
Such
developments are likely to inflame the seething political tensions. Mr.
Isacson and Mr. Shifter pointed to vexing uncertainty over who may take
over if the Maduro government implodes.
“One
should be cautious about predicting the imminent collapse of the
Venezuelan government,” said Mr. Shifter, although he said the
possibility is real that the nation’s military leaders may suddenly push
for his replacement.
“But it’s unclear what the other options may be and who else can do a better job,” he said.
Mr. Isacson went further.
“Venezuela’s never had a civil war before, [but] they’ve never been
this polarized before, either,” he said. “Assuming things get so bad
Maduro can’t govern, then the big question is who has the credibility
with enough of the country to actually viably take over?”
“There’s
no single figure within the opposition, except maybe the military, so
you could be looking at a period of no clear successor, something like
Libya after Gadhafi, which hasn’t risen to the level of a huge civil war
but is chaotic like Egypt after Mubarak — but with a less-cohesive
military.”
Copyright © 2014 The Washington Times, LLC
No comments:
Post a Comment