Venezuela's Lessons for Transition: Five Lessons For Venezuela's Post-Crisis Situation

Today’s crisis in Venezuela is one of the most serious cases of a slow-motion collapse of a nation-state in the history of the Americas. It is hard to predict how a future transition will play out, but this will certainly be one of the most dramatic and challenging transitions ever witnessed in the region. Despite the current regime’s refusal to change direction so far, Venezuela’s future leadership and the international community must be prepared to implement strategic, sustainable, and long-term reforms. International humanitarian and financial assistance will be necessary for the short-term transition to new leadership in Venezuela—whenever and however it comes. Venezuelan leaders themselves will need to make the necessary long-term policy decisions that create political and social stability and sustainable growth. A recent roundtable discussion at CSIS examined previous transition experiences around the world, including those from Africa, Russia, the Middle East, and Latin America, and their relevance for Venezuela. Out of this discussion emerged five key lessons for Venezuela and the international community.

Internally Led by Venezuelans

The transition must be a Venezuelan-led effort, guided by strong leadership and political will. This locally driven transition effort needs to involve the government at both the national and municipal levels and be open to all political parties. The society at large, consisting of intellectuals and academics, workers, Chavistas (supporters of former president Hugo Chavez) and non-Chavistas, will need to be engaged to implement reforms successfully. Venezuela has rich human resources, inside the country and abroad, to lead and guide the next administration through what will be a difficult transition. Engaging the Venezuelan society at every level, as well as effectively consolidating the disparate agendas, will minimize the risk of distraction and evaluate ideas from all sectors.

Transitional Justice and Reconciliation

Venezuela’s future will depend on the level of strength and unity present within its society. The next administration will have to put an important emphasis on reconciling and unifying all sectors of the population, including Chavistas. Promoting a transitional system of justice that seeks a fair and balanced accountability for past crimes, backed by international assistance and international law, will be a crucial step in the short term. Venezuela’s current government has committed serious violations, including widespread corruption and human rights abuses. The issue of transitional justice is essential: establishing a system that neither allows impunity nor risks becoming a “witch hunt.” Investigations will require a level of equity and fairness in their implementation—anything less would hurt the new system’s credibility and risk deepening the nation’s existing political divisions.

Innovative Social and Economic Programs

Comprehensive and coordinated economic reforms will be essential to stimulate growth and prevent a repeat of the current crisis in Venezuela. Social reforms will need to include temporary poverty alleviation programs in response to the current grave humanitarian crisis. Job creation and the promotion of conditions to foster private entrepreneurship are crucial in reestablishing and sustaining long-term economic growth. The role of the private sector and foreign investment will be critical during the transition; in addition, Venezuela’s government needs to restore domestic and foreign confidence in Venezuela. Confidence means, most importantly, clear rules, impartial courts, and strong institutions.

Diversifying the Economy

Venezuela exports little besides petroleum and imports just about everything else (including over 70 percent of food consumed). Diversifying the economy and decreasing the dependence on oil and imports will help to rebalance the country, limit expenses, and stimulate growth. A key first step in reforming Venezuela’s energy sector is cleaning up and restructuring the main state oil company, Petróleos de Venezuela S.A. (PDVSA). Institutionalized corruption within PDVSA and the nationalization of other oil contracting firms drained key assets and led to sharp declines in the production of oil. Through economic diversification, reprivatization of companies, respect for and formal recognition of private property, and increased entrepreneurship, Venezuela will help to create the kind of business environment required to attract new foreign investment in the globalized economy.

Unified Message from the International Community

The international community, including a coalition of the United States and other regional countries, needs to work closely with the Venezuelan transitional government and other local and foreign organizations to create and transmit a unified message. The global community should provide support to create a platform for information sharing and discussion within the country at all levels. The new administration must first achieve immediate successes in providing humanitarian and financial relief to the most needy Venezuelans. This will be, perhaps, the most important opportunity to legitimize the new leadership efforts to be able to undertake major long-term reforms and successfully establish the foundation of the country’s future.

Led internally by the Venezuelan people, an effective transition will require multisectoral reforms, top-down filtration to eliminate corruption, enhanced political will among the citizenry, and restructured institutions. Regardless of current political resistance to change, a new forward-looking Venezuelan leadership, whenever it arrives, must incorporate a well-conceived set of targeted, long-term reforms. Strategic and limited humanitarian and financial assistance can help Venezuela’s transitional government begin to rebuild the economy.

Michael Matera is a senior fellow and director of the Americas Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Moises Rendon is a research associate with the CSIS Americas Program.

Commentary 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).

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Moises Rendon
Senior Associate (Non-resident), Americas Program

Michael A. Matera