Venezuela: Is anyone watching?
October 10, 2013
Last week, Venezuelan president Nicolás Maduro’s government expelled three U.S. diplomats, claiming they had plotted to sabotage the country’s national electric grid—prompting the reciprocal expulsion of three Venezuelan diplomats from Washington, D.C.
In recent months, Venezuela has garnered surprisingly little attention in the United States. With the chemical weapons crisis in Syria, Edward Snowden’s NSA revelations, Brazilian President Dilma Rousseff’s cancelled state visit, and the ongoing government shutdown, the news cycle has reserved little room for the ever more unpredictable goings on in Caracas.
But these issues that have grabbed much of the U.S. public’s attention render Venezuela no less important. Given the country’s involvement in drug trafficking, oil markets, and regional affairs, its own political and economic issues carry deep and far-reaching implications for its neighbors—and yes, even for the United States.
So, then, what has happened in Venezuela, and what will it mean for us?
Q1: What’s going on in Venezuela now?
A1: Following President Hugo Chávez’s death and Maduro’s narrow and still contested electoral victory last spring, Venezuela has appeared to be moving down a road of steadily growing political and economic turmoil.
Barely able to capture the presidency, Maduro’s policy mandate was flimsy, at best. Since the election, his efforts to shore up support for his increasingly erratic policies have relied on identifying scapegoats external to his administration—variably, his political opposition, power-brokers within his own party, and the United States.
And recently, President Maduro officially sought special power to rule by decree, largely seen as an effort to maintain his grip on power. While Chávez governed using decree powers several times during his tenure as head-of-state, Maduro’s attempt to do the same appears to be a response to the country’s—and even his own party’s—internal political paralysis.
That paralysis has, in turn, wreaked havoc on the country’s economy. Though oil-rich, Venezuela is currently suffering through widespread shortages of basic goods, as the import-dependent economy endures a scarcity of foreign currency, largely due to strict but totally ineffective price controls and exchange restrictions.
As the economy worsens, the political environment becomes less friendly to President Maduro and his efforts. This reality, coupled with an increasingly fractured—and, as a result, weak—military establishment, bodes ill for the stability of Maduro's leadership. Despite Chavez’s popularity, it seems that Venezuelans’ confidence in Maduro’s ability to further his predecessor’s mission is in a steep nosedive.
Q2: What can we expect in the short- and mid-term?
A2: The immediate future for Venezuela is, at best, grim. With an increasingly fractured political sphere and an ailing economy, the country faces a host of serious challenges moving forward.
Though the exact timeline remains uncertain, the downward spiral of Venezuela seems, at this point, essentially inevitable.
With Maduro’s party increasingly divided, a fractured military establishment, and the opposition united only as anti-Maduro—but not by any meaningful or cohesive policy agenda—the stability of the political system is already in jeopardy. As that system fractures still more, the underpinnings of Venezuelan governance might actually crumble.
The country’s real macro- and microeconomic condition is poor. Though from the outside, top line indicators of growth and employment may appear reasonable, the distorting role of the oil sector, faulty statistics, and bizarre currency controls leads to disproportionate estimates of standards of living and economic well-being.
The deeply divided military certainly doesn't help the situation. Though a powerful military establishment would threaten Maduro's power, a weak one can neither infringe on the executive nor ensure stability should his authority erode.
And the role of foreign and non-state interlopers cannot be ignored. Russia, Cuba, China, and the vast transnational criminal networks—particularly in the realm of drug production and trafficking—only complicate the situation further, adding more pressures to a system already on the verge of implosion.
In short, there are numerous influences on the current (in)stability of Venezuela—but none bodes well moving forward.
Conclusion: The specifics of Venezuela’s inevitable downward spiral—the whens, whys, and hows—cannot be predicted. But regardless of what (or who) delivers the fatal blow to Maduro’s government, the effects of political chaos in Venezuela will be monumental.
The security and stability of Colombia—currently engaged in negotiations to end five decades of armed conflict; the future of transnational drug trafficking; the prosperity of the Bolivarian Alliance for the Americas (ALBA); the fallout should Petrocaribe, Venezuela’s state-run oil firm with immeasurable influence in many of the region’s economies, crash—all of these will be profoundly affected by what happens in the coming months.
So while the future is difficult to predict, downplaying the implications of Venezuela's implosion is a big mistake.
Carl Meacham is director of the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Jillian Rafferty, staff assistant with the CSIS Americas Program, provided research assistance.
Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2013 by the Center for Strategic and International Studies. All rights reserved.