The outcome of recent elections on May 20th has triggered renewed sanctions against the Venezuelan regime. After banning ‘Petro,’ Venezuela’s government-issued cryptocurrency, and financially limiting 62 individuals and 15 Venezuelan businesses in the US, the Trump administration issued a new Executive Order. This new measure prohibits all transactions by a US person or within the US regarding the purchase of any debt owed to the Venezuelan Government. The sanction includes the prohibition to buy any government-owned assets such as state bonds and state-owned company stocks like those of the oil company Petroleos de Venezuela S.A (PDVSA). For a country where oil revenues account for about 95 percent of export earnings, this measure is a strong hit to its economy.
In the past years, sanctions have been reinforced by US allies such as Canada, the EU, Switzerland,and Panama, by targeting personal finances and international travel capability of elite public servants, politicians (including Maduro), and members of the military. The ban on the sale of weapons and technological equipment to the Venezuelan Army has also been used as a means to provoke military uprisings against Maduro’s government and to stop civilian casualties, which reached 125 over protests last year. The strategy is to weaken the political elite behind the socio-economic and regional catastrophe that Venezuela has become, avoiding the direct impact on Venezuela’s population at large.
The Ineffectiveness of Sanctions
After several studies and examples throughout recent history, sanctions have proven fruitless and more detrimental to the local population regarding Human Rights violations and access to basic goods and services. The few cases where sanctions have been more or less successful are the cases where a negotiation with the, so called, rogue regime is established, in which an offer is made in exchange for the implementation of a given sanction. The Iranian case and the nuclear program is one example. On the other hand, Iraq and the starvation of its population in the 1990’s, is a clear example of a failed sanction-based policy designed by the White House.
Since 2014 over 1.5 million Venezuelans have mass migrated into neighboring countries such as Peru, Chile, Colombia, Brazil and Ecuador, including the US, Italy,and Spain as their main destinations. Trump’s administration issued a travel ban for Venezuelan citizens in 2017, avoiding mass migration from that country into the US. Severe border controls in the main Latin American destinations are being carried out. Furthermore, The inflation rate in Venezuela stands at 13,379 percent as per April 2018, making it the worst case in the globe. The number of acute malnutrition cases in the country has doubled between 2015 and 2017 mainly due to severe shortages in food supplies and low purchasing power of the currency.
The imposed sanctions have only worsened the situation for the civilian population in Venezuela. Despite targeting only the political elite and the military, sanctions have caused to isolate the country financially in the international system due to a corrupt and tight relationship between the political elite and the state’s assets. Having partial access to the most important financial markets leaves the government impaired when strategizing on the best way forward, affecting the population’s livelihoods and security. Oil production is directly impacted by ever-tighter sanctions, leaving one of the world’s biggest oil producers out of the big player’s list in the international market. Some of Venezuela’s Middle Eastern counterparts will have to step in to cover for its reduced oil production. In that regard, the US holds a lever by being the primary consumer for Venezuelan oil, which at the same time results in a threatening situation for the US fuel market. Rising gasoline prices would be further affected in the US if the sanction that blocks oil imports from Venezuela is finally issued.
As Francisco Rodriguez stresses, foreign policymakers behind sanctions against Venezuela are ill-informed. Maduro’s regime is considered to be authoritarian but is not a dictatorship quite yet. The regime has an electoral stronghold of 25 percent, making it enough to somewhat legitimize the regime within the country, despite the hardships it has put Venezuelan’s through. Sanctions are a tool of foreign policy, not a policy in itself, which makes it necessary to have and know the policy being pursued by any sanction. After the 180-degree change in foreign policy in the White House, shifting from strategic patience to a pressure-based foreign policy, the State Department should deeper analyze the Venezuelan case in order to pursue effective and less threatening policies for the region and for the US itself. Paradoxes like the unfriendly migration policy imposed on Venezuelan citizens contrasted with sanctions against the country are a clear sign that there is a lack of in-depth analysis coming from the State Department. There should be a basic understanding that sanctions will cause more economic instability, thus migration towards economically more stable countries like the US. Migration policies should take the basic results of sanctions into account and foresee an elevated number in asylum applications and an increase in economic immigrants. Legal, analytic and policy skills should be combined with the diplomatic skills of an administration, in order to come up with foreign policy and to determine how much political capital to spend on sanctions. Sanctions cannot make a much better Venezuela, but they are best aimed towards pushing a regime to the negotiating table. In the Venezuelan case, an offer to sit at that table is lacking.