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Venezuela in Crisis: What Does the West’s Waning Opposition to the Current Regime Mean for the Future of the Country?

Staff writer Candace Graupera explores Venezuela’s current political and economic crisis. The West’s initial opposition to Maduro’s presidency is fragmenting and Venezuela’s future hangs in the balance of becoming a failed state or waning off their oil dependence to become a more diversified economy.

Introduction 

Venezuela is a country full of striking natural beauty and one of Latin America's most urbanized places. It is the birthplace of Simon Bolivar, contains the Los Roques Archipelago, and is famous for its Pan de Jamon (bread filled with ham and olives) and Hallacas (corn or cassava dough stuffed with meat, olives, raisins, onion, and more.). However, in recent years, Venezuela has been plagued with social, political, and economic strife. 7 million people have left Venezuela, fleeing poverty and political crisis. Many are at risk of eviction, exploitation, and are forced into debt that they could never repay. Of course, the COVID-19 pandemic made things worse, plunging Venezuelans into an even deeper economic crisis. People are forced to flee in unconventional and unsafe ways, many falling prey to smugglers, kidnappers, and traffickers. While some Venezuelans make it to the United States, many go to surrounding Latin American countries, such as Ecuador, Colombia, and Brazil. Adding to their suffering, Venezuelan refugees are stigmatized and scapegoated by the countries they flee to, with limited job opportunities and access to public services, they are often left to fend for themselves. While host communities and countries remain committed to helping the refugees, the sheer numbers mean that resources are stretched thin and finances are almost nonexistent. Understanding the present reality for many Venezuelan citizens requires examining the external factors at play.  

In this article, I explore how a country with such a rich culture and economy, due to its oil reserves, came to be in such a perilous situation politically and economically. I will also discuss how the West’s initial opposition to the current Venezuelan government is fragmenting, after many years of strong condemnation. Finally, I will discuss what is next for Venezuela and how the international community is assisting in one of the biggest humanitarian crises of the 21st century. 


How did Venezuela get here?

There are two parts to how Venezuela got into its current situation, political reasons and economic reasons. However, they intertwine and together they have engulfed the country in a crisis that has caused millions of people to flee. The executive powers of the president are incredibly strong and have only been strengthened in the past few decades. Since 1999, Venezuela has been run by two individuals from the same political party: Hugo Chavez and Nicolas Maduro. Chavez was a socialist president from 1999 until his death in 2013. He emphasized key elements such as nationalism, a centralized economy, and a strong military that frequently engaged in public projects. His approval rating was quite high, reaching up to 80% public support. He ran on an anti-corruption platform which made him very popular. He increased social welfare programs and redistributed the country’s oil wealth. Riding this wave of popularity, Chavez’s party gained control of key institutions, such as the judiciary, electoral council, and the Venezuelan Supreme Court. Over time, the system of checks and balances became weakened and the president’s power was often left unchecked. When Maduro was elected following Chavez’s death, global oil prices decreased. Venezuela’s economy relies heavily on oil, which led the country into a 7-year recession. Basic goods were scarce and inflation skyrocketed. It was clear that Maduro was not as beloved by the public as Chavez was because there were many anti-government protests between 2014-2017. It did not help that Maduro ordered a brutal police crackdown on the protestors. During this time, many Venezuelans left the country to escape the economic repression and political crisis. 

Everything came to a head in the 2018 presidential election. Despite public discontent with Maduro, he was reelected president. This election was dismissed by citizens as neither free nor fair and many accused the government of corruption to help Maduro hold onto power. Many other candidates that planned on running were imprisoned or ran from the country out of fear of imprisonment. As discussed earlier, many of the institutions in Venezuela that performed checks and balances were under the socialist party’s influence. So when these institutions were called upon to investigate the claims of a corrupt democratic election, they refused and there was a lot of division. In January 2019, the speaker of the National Assembly, one of the only institutions that was still credible and influential, Juan Guaido, declared himself the “interim president” of Venezuela. He proclaimed the seat of president vacant because Maduro’s re-election was not valid. He predicted that he would be governing the country within a few months. In hindsight, this process would become extremely complex and detrimental to the people of Venezuela.

Venezuela’s economy is very dependent on the income from oil imports and exports. So much so that Venezuela could be thought of as a petrostate, where the government is dependent on oil, power is concentrated, and corruption runs rampant. The country is home to one of the world’s largest oil reserves and while that has been financially beneficial in the past, it has also been its downfall because there has been no diversification in the economy. The oil price in Venezuela has plunged from $100 per barrel in 2014 to $30 per barrel in 2016. Even though the prices have started rising again in recent years, Venezuela is still in an economic recession where conditions remain in turmoil. This is because of oil dependence, falling production rates, high levels of debt, and hyperinflation. Many experts believe that economic diversification will be difficult for Venezuela in the future. It would take an enormous investment to first put the oil sector back on track and then develop and cultivate other industries. 

The West’s Opposition 

More than 50 countries, including the United States and the United Kingdom, recognized Guaido as Venezuela’s legitimate president. Yet the international influence was limited, as the military stayed loyal to Maduro. He remained firmly in charge of the country with the support of China and Russia behind him. In response, the US put sanctions on the Maduro government making it harder for him to sell his country’s oil in 2019 on Petróleos de Venezuela (PDVSA). These sanctions cut off the US as PDVSA’s main destination for oil exports, which restricted Venezuela’s access to foreign currency. Because the economy was in freefall, Maduro loosened the foreign currency regulation brought in by Chavez. This helped a little with the economic crisis but the majority of citizens do not have access to foreign currency, leaving them to continue to struggle.. In August 2019, the US issued sanctions on Maduro’s government blocking and freezing the property and interests in the United States and within the control of US persons. In January 2021, the US imposed oil-related sanctions on Venezuela. The Treasury targeted three individuals, fourteen entities, and six vessels for their ties to organizations attempting to assist PDVSA. This network allegedly helped PDVSA sell oil to Asia despite the US sanctions. The Treasury argues that any profits from the sale of oil help to contribute to the corruption in Venezuela’s government. 

The United States and the international community have also condemned Venezuela’s current government for its human rights abuses. The government has been repressing dissent and opposition as they did during the protests between 2014-2017. There are violent crackdowns on peaceful street protests. Since 2014, more than 12,500 people have been arrested in connection to the anti-government protests. There has been imprisonment of any potential political opponents and the prosecution of civilians in military courts. On top of removing the checks and balances system, the government has also stripped power from the opposition-led legislature. There are shortages and scarcity of medical supplies, food, medicine, and a lack of access to essential healthcare. In 2018, 80% of Venezuelan households experienced food insecurity. The infant mortality rate has increased by 30%, cases of malaria by 76%, and maternal mortality by 65%. For more than a decade, the government has abused its power to regulate the media and has worked to reduce the number of media outlets that criticize them. Self-censorship is a serious problem for fear of the media outlet being suspected, flagged, or its journalists arrested. 

The humanitarian crisis, human rights abuses, and persecution of dissents have caused a refugee crisis. According to the United Nations High Commissioner for Refugees, more than 7 million people have fled Venezuela however it could be more as many who are not registered by authorities have also left. Many are vulnerable to exploitation and abuse while in other countries because they have limited access to jobs, healthcare, schooling for their children, and other public services. 


Is the Opposition fragmenting?

Despite initial opposition and sanctions by the United States and the international community, recently the opposition has been fragmenting and waning. They have recognized that these restrictions are only making the humanitarian crisis worse. In March 2023, the United States announced that it will be sending 120 million dollars in humanitarian aid to Venezuela. This is to help relieve the limited resources that are causing the current humanitarian crisis. In November 2022, the US announced that they will be easing oil sanctions after Maduro signs an accord to create an UN-administered fund to provide humanitarian aid to his people. This agreement is part of a long-term solution to finding a common path out of Venezuela’s complex economic crisis. This will include the relaxation of limitations on Chevron’s operations in Venezuela and would allow them to re-enter global oil markets. Canada, the United Kingdom, and the European Union have recently pledged to review their own sanctions in exchange for the release of political prisoners. The Biden Administration has signaled that they are prepared to ease up on their sanctions in exchange for concrete steps by Maduro and his government to not ban opposition parties from running against him in the 2024 presidential elections. 


What is next for Venezuela? 

So who is the president of Venezuela? Is it Maduro or Guaido? If you ask who the current president is, it is clearly Maduro who has the support of the military. If you ask who the rightful president of Venezuela is, that is a more complex question. What is next for Venezuela? How will they get out of the crisis that they are currently in? How are they going to fix the economic situation in their country so more citizens have to leave in order to survive? 

For one, the Biden Administration has signaled that they are prepared to ease up on their sanctions in exchange for concrete steps by Maduro and his government to not ban opposition parties from running against him in the 2024 presidential elections. In order to survive and fix its economy, many experts believe that Venezuela must diversify its income and end its dependence on the export of oil and natural gas. This has worked in other countries such as Norway and Saudi Arabia where oil accounted for a large part of their GDP. If strong democracy was redeveloped in Venezuela, with an independent press and judiciary, this could help hold the government and oil companies accountable.  They have to strengthen their political institutions so there are checks and balances within the government. Anti-corruption is important in order to keep the government accountable in the eyes of the public to win back their trust. Most of all, they must expand their social service programs as Chavez did early on in his presidency. The humanitarian and refugee crisis is an immediate threat to people’s lives, the short-term goal if you will. The long-term goal is to push Venezuela away from being a state reliant on one source of income. International aid and intervention can only do so much; governmental and institutional reform has to come from the Venezuelan government itself by recognizing the precarious situation of becoming a failed state they are in danger of falling into.

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Grieving the Victims of US Sanctions

Managing Editor Briana Creeley examines the use of sanctions using the concept of grievability.

Sanctions are defined as the “withdrawal of customary trade and financial relations for foreign- and security-policy purposes.” The use of sanctions against countries perceived to be a threat to American interests began soaring in popularity in the 1990s, which was known as the “sanctions decade.” Since 9/11,  sanctions have become more precise in their targeting of individuals and entities, as a way to supposedly minimize the impact on civilians. They are utilized by both major political parties in the US and are painted as a more peaceful alternative to war; physical violence is not inflicted upon these target countries and American citizens can’t even feel their reverberations. The US currently has country-wide sanctions against Iran, North Korea, Syria, Sudan, Cuba, and Venezuela; more narrowly framed sanctions against individuals and entities have also been implemented, affecting an additional 27 countries. They are seen as the ultimate tool for enacting American interest and putting pressure on regimes the US would like to see ousted, while still being able to claim that the US cares about “peace” and foreign civilians- it’s a win-win for politicians and their polling numbers. 

However, while sanctions are painted as an ideal alternative to war, as it does not produce immediate physical violence, the damage that they create cannot be understated. Former UN Secretary-General Boutros-Ghali has described economic sanctions as a “blunt instrument” that very much harms civilians and causes long-term damage to a country’s ability to function. This article’s intention is to elaborate upon this claim and analyze sanctions and their effects on various countries through the lens of Judith Butler’s grievability. This ethical position argues that every life should be worthy of grief and that this recognition serves to create a more equal society. As Butler says in The Force of Nonviolence: “To be grievable is to be interpellated in such a way that you know your life matters; that the loss of your life would matter; that your body is treated as one that should be able to live and thrive, whose precarity should be minimized, for which provisions for flourishing should be available.” Sanctions are in direct violation of this principle; their implementation suggests that the lives of certain people, i.e. foreign civilians, especially those of target countries, are not of a particular value, and therefore not worthy of grief. Additionally, sanctions maintain a certain power dynamic that produces and exacerbates the precarity of the target country’s situation. As I will attempt to demonstrate, the impact of sanctions is extremely damaging which suggests that violence does not just manifest in physical acts of war, but also in the economic, political, and social institutions of a country. 


Iraq in the 1990s

In the 1990s, the United States imposed a number of country-wide sanctions in order to pressure certain regimes- this included Iraq. The United States used the UN Security Council to implement multilateral sanctions on Ba’athist Iraq, led by Saddam Hussein. These sanctions, coupled with unilateral sanctions from the US, created the most “comprehenseive embargo of a country since at least World War II.” Though the reported intent of these sanctions was to pressure Iraq to withdraw from Kuwait and to disclose the presence of any weapons of mass destruction, the results were disproportionately felt by civilians. Instead of ahcieving the desired results, these robust sanctions decimated Iraqi society and infrastructure. Prior to the sanctions, Iraq had one of the highest standards of living in the Middle East and boasted modern infrastructure. Contrary to what one may believe about 20th-century Iraq, it had an extensive healthcare system, water treatment facilities, and a school and university system. Additionally, Iraq had a significant reliance on imported food and technology. This meant that the all-encompassing trade sanctions decimated both the Iraqi economy and basic access to necessary goods. 

The sanctions made Iraqi civilians susceptible to food and water shortages, which were accompanied by the total collapse of the healthcare system. These food shortages were a direct result of UN sanctions, as Iraq heavily relied on imports of food which were subsequently cut off by the international community. Approximately 70 percent of calories in Iraq were imported thus meaning that the sanctions severely impacted the nutrition of Iraqis. While reports of malnourishment, especially among children, conflict with one another, it can be agreed that the sanctions had a very real impact on food access which subsequently led to health problems. Water has also been in short supply; the Gulf War damaged the general infrastructure of Iraq, including water pumping and treatement facilities. The country was unable to access the technology and engineering resources needed to fix these facilities as they no longer had access to the imported technology. This made water access extremely unreliable as well as unsafe due to the fact that water could no longer be properly treated. 

Furthermore, the decline in both quality and quantity of water sources reportedly led to the spread of infectious diseases such as cholera. However, the health problems that were produced by the food and water shortages could not be treated as the health-care system collapsed during this period. Firstly, the physical hospitals and medical centers can no longer be attended to as the financial resources to fix them are simply not there; access to the technology that could have once fixed medical infrastructure was no longer present. Secondly, the sanctions completely stopped the import of medical equipment and materials which resulted in a shortage- things such as stethoscopes were in extremely limited supply. Perhaps most damning is the fact that Iraqi doctors were also operating on outdated knowledge; within the ten years of sanctions, no new medical literature entered the country as it was specifically prohibited by the sanctions. 

While the Iraqi sanctions were eventually lifted in 2003, the damage was done. Iraq’s infrastructure and economy were in ruins. Furthermore, it is up for debate as to whether the sanctions even achieved their goal. However, that point is arguably irrelevant- what matters is the very real toll these sanctions took on Iraqi civilians. The impact of these sanctions on Iraqi society demonstrates the ways in which violence can manifest. While the US and the UN didn’t drop bombs on Iraq, at least not until the invasion of Iraq in 2003, they were still inflicting great violence- the tools for doing so just simply took on another shape. How is it not violent to cut off a country’s food supply? Or their access to clean water? Or medical supplies? Oftentimes, violence is only viewed through a lens of war, when in reality it has implications that transcend this purely physical understanding. Ignoring these implications is deliberate as it allows the US, as well as the UN, to continue pursuing foreign policy interests, which are quite frankly imperialist in nature, without facing legitimate consequences. The actions of the US and the UN prove that they assigned a lesser value to the lives of Iraqis. Taking Judith Butler’s grievability into account, it is important to understand that Iraq’s civilians are worthy of grief; to acknowledge their grievability is to acknowledge their value as humans. 


Venezuela

The US has a total embargo on Venezuela, which is coupled with sanctions from the EU. The goal of these sanctions is to oust President Nicolas Maduro, which has been a bipartisan effort in the US. The sanctions were announced in 2015 by President Barack Obama; as a result, foreign companies stopped doing business and Venezuela’s foreign accounts were closed. In 2017, President Trump then imposed an oil embargo that prevented the purchase of petroleum from the state oil company, PDVSA; this came alongside the confiscation of the US subsidiary CITGO. This has had a huge impact on Venezuela’s economy and the government’s capacity to function as it gets the majority of its revenue from oil.

Once again, the very real, and violent, impact of sanctions has been felt across Venezuelan society. One report estimates that 40,000 people may have died as a result of sanctions limiting access to food and medicine. In a similar vein as Iraq in the 1990s, the sanctions on Venezuela has destabilized the country’s economy and prevented access to basic necessities. It should be noted that US sanctions don’t explicitly prevent the import of food or medicine. However, Venezuela is very much dependent on oil revenue as a source of hard currency that private and public businesses can use to import goods. Once again, the specific undermining of Venezuela’s oil industry has led to a sharp decrease in imports; the average monthly public import dropped to $500 million in 2019 and subsequently dropped to $250 million in 2020. There are approximately 300,000 people who are at risk as there is a lack of access to medicines or treatment as a result of sanctions. The health-care sector has taken a major blow mainly due to the fact that the government has reduced its expenditure for the public health-care system; this is arguably a result of the fact that the government can no longer raise the necessary revenue due to the US’s oil embargo.


The Grievability of Those Impacted

“Peace” advocate Gene Sharp defines nonviolent action as “a sanction and a technique of struggle involving the use of social, economic, and political power, and the matching forces in conflict.” However, as previously demonstrated, there is a significant issue with this definition of nonviolent action and the way the concept of sanctions is perceived. The idea that sanctions can be qualified as “nonviolent” ignores the very real history of their use. While Iraq and Venezuela are only two examples of the impact of sanctions, the fact that both countries have experienced extreme shortages in basic necessities, thus causing thousands of deaths, is not “nonviolent action.” It is very real and very violent. Violence is not just acts of warfare, but it also manifests in the way economic, social, and political power is wielded. The fact that sanctions are perceived as nonviolent allows the US to engage in imperialism without facing legitimate criticism or consequences. And it should be noted that sanctions are an example of modern-day imperialism- the US has made it clear on many occasions that they utilize sanctions in an effort to oust regimes that they deem a threat to US interests. While these regimes are certainly flawed, the idea that the US has the right to dictate the internal affairs of a country, and use the deaths of civilians to do so, is imperialism. 

Furthermore, the use of sanctions allows the US to deny their responsibility for the deaths of thousands. These deaths go ungrieved in the international community which is precisely the point. As Judith Butler says: “After all, if a life, from the start, is regarded as grievable, then every precaution will be taken to preserve and to safeguard that life against harm and destruction.” Grievability essentially assigns worth to lives that have been historically marginalized, both in domestic and international terms. The fact that lives in the Global South, especially in countries deemed enemies of the US, are not seen as worthy of grief allows the US to impose these sanctions without care for their impact. If the US did start to care about these lives and respect their inherent value, they would have to stop their use of sanctions and seek out solutions that would actively protect their lives against “harm and destruction.” That would mean that US foreign policy would have to be completely reformed. Grievability is not in the interest of the US; to embrace such an ethical position would be anithetical to the US’s commitment to safeguarding American interests, which are often rooted in imperialism. However, this makes grievability of the utmost urgency. To embrace this position would be an embrace of an entirely different world, where those in the Global South are deemed valuable and therefore worthy of protection. This would challenge pre-existing power dynamics and create the incentive for solutions that prioritize legitimate self-determination and basic human rights.

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War By Another Name: The Failure of Economic Statecraft

Marketing and Design Editor A.J. Manuzzi examines the evolution and efficacy of economic sanctions, increasingly Washington’s default tool of statecraft

As the Trump Administration prepares to depart office and give way to that of Democratic President-Elect Joe Biden, its foreign policy legacy is intimately tied to the policy of sanctioning foreign governments for perceived misbehavior. President Donald Trump’s displeasure with the Obama Administration’s Joint Comprehensive Plan of Action (JCPOA), a landmark nonproliferation treaty that all but eliminated Iran’s capacity to develop nuclear weapons, led him and a cadre of Iran hawks from Secretary of State Mike Pompeo to former National Security Advisor John Bolton to level various sanctions against Iran. The so-called “maximum pressure” campaign has crippled Iranians’ standard of living while doing preciously little to limit Iran’s nuclear capabilities or its various destabilizing efforts in the Middle East. In total, the Trump Administration has also either strengthened existing sanctions or levied new ones on thousands of people, countries, or entities. Furthermore, President Trump has revelled in his capacity to deploy sanctions against adversaries of his “America First” foreign policy, threatening to “totally destroy and obliterate the Economy of Turkey (I’ve done before!)” in October 2019 in response to Turkish aggression against Syrian Kurds.

Like never before, Washington has adopted sanctions as its foreign policy tool of choice. Given America’s financial dominance, place in the international system, and numerous allies, this is perhaps natural. But in the age of the novel coronavirus, it is well to ask whether the immense humanitarian costs of sanctions coupled with the existing crises of climate change and pandemics are justifiable or even tolerable in the pursuit of American foreign policy objectives.

The Purposes of Sanctions

Traditionally, economic sanctions are best understood as efforts by governments or multilateral bodies to shape the strategic decisions made by state or non-state actors in the international system. In their practical application, sanctions may take numerous forms ranging from travel bans and asset freezes to arms embargoes and foreign aid reductions. Targets of sanctions can range from terrorist networks such as al-Qaeda to states. States and multilateral institutions such as the United Nations (UN) may impose sanctions for a variety of reasons. In the statist context, a state may impose sanctions on another nation or actor that undermines their interests whereas both states and multilateral institutions may deploy sanctions in response to perceived or recognized violations of international law or norms. For example, the UN sanctioned North Korea after its first nuclear test in violation of the Nuclear Non-Proliferation Treaty (NPT) and the U.S.’s Global Magnitsky Act freezes the assets of Russian officials alleged to have committed grave human rights violations and bans them from entering the U.S.

Sanctions are valued by their supporters because, as Benjamin Coates of Wake Forest University writes, “Sanctions have served as both the idealist’s dream and the realist’s cudgel. They have promised to the powerless a world free of war and discrimination while giving the powerful tools for domination.” Coates also notes, however, “The legitimacy and appeal of sanctions rest on blurring the lines between these two outcomes; the more Washington turns to unilateral sanctions, the less legitimacy the practice may have,” which will be explored more later in this piece.

In more recent times, there has been a debate over the efficacy of so-called targeted sanctions compared to broader economic sanctions. The Global Magnitsky Act is an example of targeted sanctions, which apply only toward certain individuals so as to minimize the suffering of innocent civilians. Human rights advocates argue that targeted sanctions address what they view as the fundamental problem with the international sanctions regime- that they are poorly conceived to change state behavior and instead subject civilians to needless suffering even as oligarchs and dictators evade their impact.

Do Sanctions Work? If So, Are They Worth It?

The practice of economic statecraft more or less emerged not when the U.S. became the undisputed leader of the global economy or during the Cold War, but rather is likely as old as economics and statecraft in their own right. The early 20th century, however, is as close as one can get to the genesis of international sanctions, defined neatly by Coates as “a collective denial of economic access designed to enforce global order.” An increasingly interdependent world during and after World War I served to illustrate the intersection between military and economic warfare. After all, the British Empire was constructed around British financial and commercial dominance reinforced by the world’s preeminent navy. During World War I, Britain put this to work in a crippling blockade of Germany that led to malnourishment that would ultimately take the lives of hundreds of thousands of civilians. 

The establishment of the ill-fated League of Nations after the war included in its covenant a provision mandating that any nation that started a war of aggression be punished with an embargo. Facing complete isolation from the global economy, the theory as supported by President Woodrow Wilson went, nations would be deterred from invading their neighbors. This provision enshrined into international norm sanctions as the preeminent multilateral tool of enforcement for world peace.

League of Nations sanctions ultimately failed to deter Italy from invading Ethiopia, a League member-state, and from subsequently falling into the orbit of the Nazis. Though the U.S. government would enact the Trading With the Enemy Act (TWEA) during WWI barring trade with Germany, TWEA would ultimately prove unsuccessful in deterring the Nazis from territorial conquest. In 1941, after Japan invaded Indonesia, President Franklin Roosevelt invoked TWEA to seize all Japanese assets held in the U.S. Britain followed suit and the sanctions cost Japan access to 75 percent of its total foreign trade and 88 percent of its imported oil. Japanese hardliners then used the sanctions as justification for the bombing of Pearl Harbor. Instead of coercing Japan to renounce its territorial conquests as Roosevelt had hoped, the sanctions emboldened Japanese hardliners aghast at an aggressive use of American economic power to the point of deploying military force.

Following Harry Truman’s invocation of national emergency powers during the Korean War to activate TWEA, the emergency remained in power for decades to follow, leading to the imposition by future presidents of sanctions on Cuba, Cambodia, and others. Then in the 1990s, the use of sanctions really began to take off, The UN Security Council, now bereft of the Soviet veto power, imposed sanctions some 12 times during the decade compared to only twice (against Rhodesia and South Africa) in the previous four decades. Human rights abusers in Yugoslavia and Rwanda and state sponsors of terror like Sudan and Libya were some of the notable targets, and the efficacy of the sanctions remains suspect.

Iraq

But the most noteworthy target of the 1990s sanctions boom was Saddam Hussein’s Iraq. Just four days after Iraq invaded neighboring Kuwait in 1990, the UN passed Security Council Resolution 661, imposing the strictest sanctions up to that point in history on Iraq. Interestingly enough, even as the U.S. led the Gulf War coalition and the effort to sanction Iraq, it had supported Iraq in the Iran-Iraq War just a decade earlier and just two years earlier had refused to sanction Hussein for his use of chemical weapons against the Kurds.

The Gulf War sanctions, which imposed a nearly complete arms, trade, and aid embargo, absolutely crippled every sector of the Iraqi economy while exacting an unfathomable humanitarian toll. When partnered with the U.S. aerial bombardment of the country’s energy and sanitation facilities, the sanctions brought about a public health crisis. The arms embargo was so broad so as to include anything that could conceivably be weaponized, including computers and tractors, goods with a clear civilian need in a nation whose electrical grid was destroyed and whose access to food was inhibited. Limitations on Iraqi exports (namely oil before the OIl for Food Programme was introduced) made it more difficult to fund humanitarian aid, while the ban on the importation of chlorine effectively made water purification impossible. 

In total, according to the World Health Organization (WHO)  the average Iraqi’s caloric intake dropped to a low of just 1,093 per day by 1995, with “the vast majority of the country’s population...on a semi-starvation diet for years.” Food rationing enacted in the mid-1990s by the Iraqi government in response to the sanctions left Iraqis deficient in nutrients critical to fetal development, leading to sharp increases in stillbirths and congenital heart disease during the decade. Mortality rates for children under five years old increased fivefold between just 1991 and 1995. The public health system lost 90 percent of its funding, overturning half a century of progress.

By any measure, the Iraq sanctions, to say nothing of more than thirty more or less consecutive years of war, completely destroyed the standard of living and physical health of multiple generations of Iraqis, all as Saddam Hussein remained in power into the 2000s and long after Iraq had ceased its WMD programs. The only change spurred by this act of economic coercion was that the Iraqi people who had suffered for decades under a dictator now found themselves suffering under the twin terrors of both that dictator and the full weight of  international economic punishment.

Cuba

The Iraq sanctions program was a multilateral, decade-long endeavor. On the other hand, America’s ongoing sanctions war with Cuba is the exact opposite: a six decade, all-encompassing campaign of economic warfare imposed unilaterally. Initiated by President John F. Kennedy in 1962, the program of economic and political isolation of Cuba is now the longest-enduring trade embargo in world history. The Cuban sanctions program is the byproduct of five major statutes and a hodgepodge of executive actions. The 1962 Foreign Assistance Act was cited by President Kennedy when he enacted a complete trade embargo between the U.S. and Cuba and amendments that same year to TWEA allowed for Kennedy to expand the embargo to cut off travel to Cuba. George H.W. Bush and a bipartisan majority in Congress expanded the embargo in 1992 with the Cuban Democracy Act (CDA), preventing foreign subsidiaries of the American government from trading with Cuba and preventing vessels from loading and unloading freight in America if they had conducted trade with Cuba within the preceding 180 days.

The Clinton and Bush administrations further sanctioned Cuba via the Helms-Burton Act and the Trade Sanctions Reform and Export Enhancement Act, which codified the embargo into law, prevented the embargo from being lifted without congressional approval and confirmation that Cuba had sufficiently democratized, and effectively prohibited private financing for exports to Cuba and restricted tourist travel to Cuba. Despite the Obama Administration’s “Cuba thaw” that re-established diplomatic relations, relaxed trade and travel sanctions, and removed Cuba from the state sponsor of terrorism (SST) list, the Trump Administration ratcheted the trade and travel sanctions right back up and they threatened to add Cuba back to the SST list

Six decades after Cuba traded an American-friendly corrupt dictator with no regard for human rights (Fulgencio Batista) for a brutal dictator allied closer to Moscow in Fidel Castro, the sanctions have made Cuba no more democratic and the people of Cuba have been made much poorer. The UN estimates that sanctions have cost the Cuban economy $130 billion in total and U.S. sanctions force Cuba to source medicines and medical devices outside the U.S., inducing additional transportation costs on Cuba’s most precious export. Even the American economy is hurt by the embargo and other Cuba sanctions. A 2017 economic analysis performed by Engage Cuba, a pro-engagement group, concluded that the Trump sanctions and diplomatic rollbacks could adversely affect more than 12,000 American jobs in manufacturing, tourism, and shipping, and that the embargo costs U.S. businesses and farmers almost $6 billion a year in lost export revenue.

Moreover, the head of the office that handled SST issues during the Obama Administration justified Cuba’s removal from the SST list in the fact that, “it was legally determined that Cuba was not actively engaged in violence that could be defined as terrorism under any credible definition of the word.” And when President Obama sought to have Cuba removed from the list, he invited Congress to review the decision during a 45-day period, and they could have stopped the removal with a joint resolution, but even the completely Republican-controlled House and Senate of the time refused to take action.

Within the context of the coronavirus, Cuba’s pandemic response has been hindered by the embargo, which has obstructed the delivery of ventilators, facemasks, diagnostic kits, and other vital medical supplies. As President Obama declared “It is clear that decades of U.S. isolation of Cuba have failed to accomplish our enduring objective of promoting the emergence of a democratic, prosperous, and stable Cuba. At times, longstanding U.S. policy towards Cuba has isolated the United States from regional and international partners, constrained our ability to influence outcomes throughout the Western Hemisphere, and impaired the use of the full range of tools available to the United States to promote positive change in Cuba.  Though this policy has been rooted in the best of intentions, it has had little effect…[W]e should not allow U.S. sanctions to add to the burden of Cuban citizens we seek to help.”

Venezuela and Iran: The Failure of Maximum Pressure

“Maximum pressure” has been the Trump Administration’s policy of choice for both Iran and Venezuela. In the case of Iran, the approach of an inundation of sanctions was meant to be a sharp contrast from the Obama Administration’s detente centered around the landmark Iran nuclear deal. Iran had been in full compliance with the nuclear deal and remained in compliance for more than a year and a half of American sanctions after the U.S. withdrawal, and those sanctions have proved to accomplish precisely none of their goals, be they regime change, bringing Iran back to the negotiating table for a “better deal,” or Iran abandoning its nuclear program. Instead, Iran has increased its stockpile of enriched uranium eightfold and exported a significant amount of its petroleum despite the sanctions, all as Iran’s hardliners have seen their credibility at home increase thanks to the sanctions campaign. 

Rather than succumbing to American pressure, Iranian hardliners found it a useful talking point to rally against, finding themselves in common cause with human rights activists who noted that the sanctions denied many Iranians access to life-saving medical treatment. All of the failures of the maximum pressure campaign can be summed up in the words of a statement made by Iranian womens’ rights activists, “While sanctions proponents claim to care for the Iranian people, their policies have left an entire nation weary, depressed and hopeless. Sanctions, and economic pressure, target the fabric of society.” 

In Venezuela, maximum pressure took the form of a more explicit regime change effort against the dictator Nicolas Maduro. But while before 2019 U.S. sanctions against Venezuela targeted Maduro, Trump’s newest sanctions focused on the state-owned oil and natural gas company PdVSA, which provides the country with thousands of jobs and billions of dollars in revenue, as well as other major sectors of the economy. The economy-wide suffering brought on by these sanctions (in distracting from his corruption and domestic crackdowns) gave Maduro greater credibility when he claimed that the U.S. was a foreign power seeking to destroy Venezuela and its people. All the while, Maduro has tightened his grip over the country, his opposition has been weakened, and Venezuela has drawn closer to American adversaries like Iran, Russia, and North Korea.

Conclusion and Policy Recommendations

These cases are indicative of a broader problem in U.S. foreign policy. Too often, sanctions have become Washington’s default foreign policy weapon of choice, as it slaps sanction after sanction on governments with which it disagrees without the slightest concern whether American objectives would actually be achieved by them and whether humanitarian suffering would be exacerbated. While targeted sanctions and arms embargoes occasionally serve American interests well in combating global human rights violations and war crimes, more generalized economic sanctions “are too often designed to inflict maximum pain on civilians, not empower them,” in the words of Rep. Ilhan Omar (D-MN). This reliance on sanctions has undermined Washington’s ability to pursue diplomatic solutions to global problems, undermined international solidarity with its foreign policy objectives, and far too often ends up hurting the very people Washington claims to be supporting.

The overwhelming majority of academic studies have concluded that sanctions rarely achieve their stated goal, with one paper estimating odds of only even partial success as low as 34 percent. Moreover, the longer sanctions last, the less effective they tend to be, as fatigue sets in for the imposing party while the target becomes more adept at evading sanctions.The pain of sanctions is widely dispersed and deeply felt by the people in sanctioned countries even as they bear no responsibility for the actions of their governments. Similarly, even in cases where sanctions are meant to combat tangible and concrete human rights abuses, such as in the cases of Cuba, Myanmar, Zimbabwe, and North Korea, research suggests that even more human rights abuses occur when widespread (non-targeted) economic sanctions are in place than without them. As strongmen face foreign economic pressure campaigns that threaten to topple them, they try to cling to power by any means necessary, including by doubling down on repression of critics.

While there remains a future for targeted sanctions and arms embargoes to more effectively promote human rights and de-escalate conflicts, the constant reliance on harsh, generalized economic sanctions ought to be reconsidered and questioned. Any strategy to promote human rights and democracy that far too often augments the positions of strongmen and incites famine is inherently counterproductive and unnecessarily cruel. If this lesson cannot be understood now, in the midst of a global pandemic as the humanitarian impacts of sanctions prevent citizens of foreign governments from accessing food and vital medical care, then Washington’s obsession with sanctions will never be broken. For those advocating for a foreign policy that emphasizes diplomacy and puts human security at the center of global initiatives, there can be no path forward that prioritizes warfare- military or economic.


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Rohit Ram Rohit Ram

The Modern Midas: How Mineral Economies Hinder Political And Economic Progress

Staff Writer Rohit Ram explores how an abundance of mineral resources affects economic and social progress.

Upon cursory review, the prospect of striking large amounts of mineral wealth appears to be a cause for celebration, evoking romanticized notions of great periods of developmental transformation, like the California Gold Rush or the Texas Oil Boom. Such enticing imagery, however, only serves to veil the potentially regressive economic and social reality of such abundance. There exists a growing discourse validating the resource curse paradox, an economic theory that correlates a nation’s mineral plenitude with an inhibited rate of economic and social progress. While such a relationship might initially seem counterintuitive, upon the examination of the phenomena that underpin such a claim, one may find that there exists a substantial amount of evidence that warrants further consideration in the policy making process in relation to nations dependent on resource rents, especially those in the oil-saturated Middle East. 

Defining the Resource Curse and the Nature of the Rentier State

First coined in 1993 in his book Sustaining Development in Mineral Economies, economic geographer Richard Auty outlines the resource curse paradox, in which he notes that the economic and social welfare of nations wealthy in hydrocarbons and hard minerals were “inferior to those of non-mineral economies at a similar level of development” despite the flow of wealth one would expect from the additional means of taxation and foreign exchange. He explains that much of this dissonant relationship is due to the nature of a nation’s mining and extraction industries being more dependent on foreign capital than domestic labor, with most export revenue leaving the country to feed back into foreign capital investment and leaving the exporter with only residual tax revenue. Auty’s most compelling explanation of the resource curse’s hindrance to development, however, lies within his observation of how mineral economies are often at the mercy of the economic phenomenon known as the Dutch disease. Originally referring to the Netherlands’ lagging manufacturing sector, the term refers to a change in “exchange rate movements following a large inflow of foreign currency… due to a natural resource discovery… , foreign aid, or investment” and the subsequent detrimental economic impact on a country’s industrial and agriculture sectors. As a mineral economy subjects itself to large flows of foreign investment, its domestic currency appreciates to the level wherein the prices for non-mineral exports become too expensive to be competitive. Meanwhile, these periodic influxes of foreign wealth result in consumers demanding a “shift to the production of domestic goods that are not traded internationally” to accommodate increased consumer spending, ultimately resulting in all non-mineral market sectors collapsing in favor of consumer goods. Whilst there exists a counterargument that the flow of foreign capital would offset any need for other export industries through comparative advantage, one must not discount that, in allowing the Dutch disease to take root, developing nations with mineral economies leave themselves at the mercy of often volatile mineral markets amidst shrinking sectors that would otherwise ameliorate crises in the event of scarcity. There exists a visible testament to this in the form of Venezuela's ongoing financial crisis. From 2007 to 2017, Venezuela's liquid steel and automotive manufacturing industries fell by 93% and 98%, while its rice and corn production fell by 58% and 55%, respectively. Whilst these declining industries may have had their losses previously concealed with petrodollar-funded imports, the oil glut of the 2010s and subsequent reduction of Venezuela's imports by three quarters from 2012 to 2017 served to mark how truly fragile a mineral economy can be, as one may witness from the subsequent commodity shortages and scarcity that have greatly served to perpetuate the ongoing political violence. 

Whilst the long-term economic risks posed by a mineral economy’s unwillingness to diversify exports has the capability to drive developing democracies into economic ruin, it is this very same lagging development allowing other developing nations to perpetuate autocratic governments, particularly within the context of the petroleum-rich rentier state. Brought into modern discourse through the writings of former Egyptian Minister of Finance Hazem El Beblawi, the rentier state is characterized by its dependence on “external rent… to sustain the economy without a strong productive domestic sector”, more often than not through rents on mineral resources, with “the government [being] the principal recipient of the external rent”. Such a term is often used in the context of the various petroleum-exporting nations of the Middle East, particularly;Gulf States such as Saudi Arabia who possess oil profits that comprise over 90% of their respective budget revenues. Due to the state being the primary medium of distributing these mineral rents to its citizens, the government is able to freely “[distribute] favors and benefits to its population”. This, when coupled with the minimal or nonexistent taxation in most rentier states, creates an environment that is inherently contradictory to the democratic social contract of government representation at the cost of taxation. Instead, political apathy dominates as a citizen of a rentier state has little incentive to participate in civil society or agitate for social change. Furthermore, in the event that mounting political pressure does lead to calls for democratization, the state’s absolute control over mineral rents ensures that it is able to mollify any dissenting groups through favorable rent payments. One may see this phenomenon at work in the wake of the initial Arab Spring protests in Tunisia, after which the Kuwaiti government announced that each citizen would receive the equivalent of $3,500 and free food staples for 13 months, or through Saudi Arabia’s $10.7 billion social welfare increase following the fall of Hasni Mubarak’s regime in Egypt. This pacificatory of state patronage may also take a less overt form through government mandated employment, with rent-funded programs such as Saudi Arabia’s Nitaqat and Qatar’s Qatarization initiatives offering their citizens guaranteed job security in the public sector for the sake of preventing job insecurity from adding to the costs of living in an autocratic state. 

Preparing for a Post-Rentier Future 

Despite the elaborate way in which this unique form of social contract has upheld authoritarian rentier states for decades, there does exist a growing trend that indicates such regimes--particularly those in the Middle East--are to inevitably plan for a post-rentier future. With OPEC crude oil prices having fallen by 38% from 2019 to 2020 and the COVID-19 global economic crises resulting in economic contractions for the majority of rentier states, many rentier states both abroad and in the Middle East have found themselves unable to sustain their generous distribution of rents. Such crises serve a twofold detriment to the rentier state, as they not only highlight said governments’ atrophied public health institutions in favor of those that produce resource rents, but also the inability of such states to sustain its pacification measures when under economic duress. In such cases, upper-class citizens in rentier states who have offered guaranteed employment, namely the Gulf States, have engaged in an en-masse departure from their countries of origin in an effort to secure financial stability elsewhere, resulting in overwhelming waves of capital outflow. For a country directing their rents primarily towards the middle class, however, the consequences of this pressure to abandon the rentier system appear to be much more severe, resulting in explicit civil unrest. Nigerian President Muhammadu Buhari’s 2020 decision to cease the country’s long standing and popular subsidization of oil and electricity, spurred by the need to reallocate oil rents to combat the coronavirus, has resulted in the mass eruption of protests that threaten to undermine the foundations of the current Nigerian government. For increasingly youth-saturated rentier states such as Saudi Arabia, a nation with 25% of its population being below the age of 14, typical rentier systems of mollification such as state-mandated employment may find itself no longer able to guarantee employment to the eventual influx of youths entering the workforce. With the insidious regression caused by the resource curse made apparent, one must reconsider if the United States’ attempts to embargo foreign nationalized oil industries truly do serve only as mere economic retaliation. Though the United States has been criticized for its recently tightened sanctions directed towards Venuzuela’s state oil company, Petróleos de Venezuela, S.A. (PdVSA), for their admitted role in harming the nation’s economy through “accelerating a decline in oil production”, policy-makers must consider the true value of accelerating recovery at the cost of allowing Venezuela to depend on an industry responsible for siphoning its agricultural sector and leading it into its current crisis. 

Though the United States itself can hardly be considered a rentier state, policy-makers must be wary of its constituent states’ susceptibility to the resource curse, namely the states of Alaska, North Dakota, and Wyoming, who draw 72%, 54%, and 39% of their respective net tax incomes from mineral severance taxes. It is apparent that the same 2010s oil glut responsible for Venezuela's economic downfall has not left these oil-dependent states unscathed, with Alaska in particular, a state dependent on energy taxes for 90% of its general fund revenue, dropping by as much as 84% from its 2007-2013 average. Whilst the United States possesses the necessary economic and political institutions to mitigate persistent economic regression in such instances, it is necessary that policy-makers regard the reality that even the United States is not immune to the economic fragility wrought by the resource curse, and ensure that states that normally flourish from severance taxes do not do so at the expense of a diverse industrial base and neglected non-mineral industries. 

In light of how mineral wealth gnaws at the foundations of the democratic social contract and supports regimes built upon apparati of repression, one must use this knowledge to both understand future global trends concerning the rentier state and the operational possibilities such an understanding offers. For rentier regimes that have indicated that they are ready and willing to diversify their economy in preparation for a post-rentier future, it is recommended that the United States  accelerate this transition via selective multilateral trade negotiations. However, the United States must also prepare itself for the inverse concerning rentier regimes expected to enter a period of mass civil unrest following the collapse of the rentier system if it is to successfully prevent possible regressions into failed states.

Notwithstanding the presence of a strong social contract and relatively stable democratic institutions, the United States must nonetheless acknowledge its constituent states’ susceptibility to the economic vulnerability wrought by the resource curse, and is urged to take any steps it deems necessary to diversify its local economic sectors. In regards to its dealings abroad, however, it is apparent that the US may capitalize on the rentier state’s dependence on mineral wealth through embargoes on such goods, forcing any repressive regimes build upon the rentier system to diversify their economy and subsequently develop in a way that facilitates a civil society conducive to democratic ideals.

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Taisuke Fox Taisuke Fox

Defender tu derecho: The Rise of Maduro’s Dictatorship

Guest Writer Taisuke Fox outlines the descent of Venezuela into a dictatorship under President Maduro.

“A people that loves freedom will in the end be free.” – Simon Bolivar

The Bolivarian Revolution 

On December 6, 1998, over 3.5 million Venezuelans showed up to polls across the country to elect Hugo Chávez of the Movimiento Quinta República Party (MVR) as the 45th President of Venezuela. With the message of taking from the rich and giving to the poor, Chávez quickly enacted socialist policies and programs which became known as the Bolivarian Revolution. This ideology created a keen focus on encouraging both nationalism and government control over the country’s economy. In the early stages, Chávez’s vision proved fruitful for the average Venezuelan; his social welfare policies subsidized food, improved the educational system, and built an enviable healthcare system. According to the Economic Commission for Latin America and the Carribean (ECLAC), Chávez's policies cut Venezuela’s poverty rates in half

Nicolás Maduro’s Impact on Venezuela

When Nicolás Maduro was elected as the 46th President of Venezuela in 2013, he echoed the sentiments of the late Hugo Chávez and promised the continuation of those same policies. Yet, in just six years, we have seen the meteoric rise of Venezuela crumble to the ground, evident by a widespread lack of food and medical supplies, constant riots, and the nosedive of both its economy and democratic institutions. Between 2013 and 2017, the International Monetary Fund (IMF) reports that Venezuela’s Gross Domestic Product (GDP) has fallen by over 35 percent. To put that into perspective, it’s a sharper drop than the one seen during the Great Depression in the United States. So what went wrong?  

PDVSA’s Role in the Venezuelan Crisis

For a country in crisis, it’s interesting to note that Venezuela is home to the largest oil reserves in the world, specifically in the Orinoco Belt. The Orinoco oil reserves, however, consists of extra-heavy crude oil that is challenging to produce. This dilemma incentivized the Venezuelan government to reach out to international companies such as ExxonMobil, BP, Chevron, and ConocoPhillips for help with extracting the oil. But when oil prices started to skyrocket, the Venezuelan government under the Chávez administration began expropriating assets from these companies (usually illegally). With near control of all oil exports, Venezuela consolidated their assets into Petróleos de Venezuela S.A. (PDVSA), the state-owned oil and natural gas company. This flood of revenue is what allowed Hugo Chávez to invest heavily in his socialist policies. The problem was that with Chávez’s unwavering ability to scale back on Venezuela’s dependence towards oil meant that these programs would come tumbling down if oil prices began to fall.

Hyperinflation and Mismanagement

Shortly a year after Maduro was elected as President, this concern became a reality; oil prices rapidly fell in 2014, and Maduro failed to adjust. With his mismanagement of the PDVSA and acts of cronyism that left his close friends in charge of the company, hyperinflation rocked Venezuela. The IMF notes that inflation has hit a shocking 800,000 percent in 2019 compared to just 19 percent before Nicolás Maduro took office. With food and medical supplies that were once subsidized and offered to the poorest of the Venezuelans now gone, most of the population suffered, creating a massive human rights crisis. In 2017, the Encuesta Nacional de Condiciones de Vida Venezuela  (National Survey of Living Conditions of Venezuelan Life) noted that nine out of 10 Venezuelans can’t afford to buy food and over 60 percent of the country reported going to bed hungry.

First Steps Towards a Dictatorship

So if Maduro is the cause of these major problems, why not just wait out his term limit and then vote in someone else? In fact, many local polls in 2016 showed that around 80 percent of Venezuelans want him removed from office. However, Maduro has taken numerous steps in the past few years to consolidate his power. Maduro’s political ambitions became apparent in December of 2015 after the Democratic Unity Roundtable (MUD) won a two-thirds majority in the National Assembly which put Maduro’s rule at risk. With the Supreme Court and the National Assembly as the two biggest checks against his power, Maduro quickly began amalgamating his rule; he forced out Supreme Court justices and replaced them with governmental loyalists and political allies.

The Creation of a National Constituent Assembly

In July of 2017, Maduro took another major controversial step by invoking Article 347 of the Venezuelan Constitution which allowed him to hold a vote to create what is now known as the National Constituent Assembly; a body that would have the power to rewrite the Venezuelan constitution, subsequently replacing the current National Assembly. This action would leave virtually no opposition to Maduro’s rule. July 30, 2017 was set as the date of the vote but Venezuelans were only given the choice to vote for its members, not whether there should be a National Constituent Assembly in the first place. All opposition groups boycotted the vote calling it illegitimate which lead to the National Constituent Assembly consisting of a pro-Maduro majority being elected. One of the first moves it took as an Assembly was to remove Luis Ortega, leader of the opposition, from his position as Attorney General.

Controlling the Currency

The final step that Maduro took was to ensure that close military allies would remain loyal to him and not attempt a coup d’état. To do this, Maduro used a convoluted currency system that he carried over from the Chávez regime. He exploited the system by setting the official exchange rate of 10 bolivars to 1 US dollar which he only gave access to his friends and military allies. With the mismanagement of the economy, hyperinflation had rapidly devalued the currency, making the exchange rate 12,163 bolivars to 1 US dollar which is what the rest of the Venezuelan people were given access to. Moreover, Maduro gave full access of the food supply in Venezuela to military officials. This action allowed them to import food at the 10:1 exchange rate and then sell it on the black market at the 12,163:1 exchange rate wielding major profits and keeping them loyal to the Maduro administration.

Food for Vote Schemes

With the military on his side and all other opposition nearly gone, Nicolás Maduro took the final step to maintain his rule in May of 2018 in which he was re-elected as President of Venezuela in what many call a massively fraudulent election. Venezuela’s National Election Council, unsurprisingly run by pro-Maduro sympathizers, reported that over 67 percent of the nine million people that went to the polls that day voted for Nicolás Maduro. The result of the 2018 election came as a shock to none as the pro-Maduro National Election Council barred many of Maduro’s opponents from running. Maduro himself enacted an “I Give and You Give” voting strategy in which he dangled food boxes for votes. With more than 5 million Venezuelans undernourished, according to the United Nations, Maduro wielded food as a political tool to either buy votes or intimidate hungry people. After Venezuelans voted, they were promptly brought to a so-called Red Spot. At these locations, they presented their special identity cards, that they had to use to vote for the election, which was used to receive their food. Maduro had figured out how to manipulate the local people into doing his bidding.

The Rise of Juan Guaidó

It wasn’t until the start of 2019 that any sort of opposition to Maduro began to make its presence felt on the streets of Caracas. On January 5 of 2019, a little known lawmaker by the name of Juan Guaidó was appointed the head of the National Assembly (not to be confused with the pro-Maduro National Constituent Assembly). After just 18 days as head of the National Assembly, sparked by the nation-wide riots and protests, Juan Guaidó proclaimed himself Venezuela’s interim president, dismissing the 2018 Presidential Election as illegitimate. In the next few months, many countries began showing their support for either Nicolás Maduro or Juan Guaidó. More than 50 countries including the United States, Canada, Brazil, Colombia and almost all the countries in Latin America expressed their support for Juan Guaidó and currently recognize him as Venezuela’s President. On the other hand, left-wing governments like Cuba and Bolivia, as well as Turkey and Iran, refused to recognize Guaidó. The most notable backer of Maduro is Russia, a country that always enjoys supporting anti-US allies.

Operacion Libertad: The Fight for a Free Future

The most recent action by Juan Guaidó was called Operacion Libertad (Operation Freedom) in which he called upon the military to switch sides and fight with him. Seen as those most crucial in breaking the impasse, Guaidó has promised amnesty if these military officials break away from Nicolás Maduro. With the murder rate in Venezuela surpassing that of the most dangerous cities in the world, swift action must be taken. Whether Maduro postpones the next presidential election or re-writes the entire constitution remains to be seen. For now, he has unprecedented power over a country that continues to spiral out of control. 

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Abigail Grifno Abigail Grifno

The United States & Venezuela: Economic Influence, Despair, and One Last Chance

Staff Writer Abigail Grifno breaks down the pros and cons of American involvement in the Venezuelan political crisis.

Venezuela, once a booming oil economy, seems to be falling into despair and no one knows when it will end. Many have deliberated about the roots of Venezuela's economic troubles, and journalists such as Patricia Sabga of Aljazeera believe that they are the result of poor economic and political policies, culminating in what could become a total economic meltdown. According to Francisco Rodriguez and Jeffrey Sachs of the New York Times, the Venezuelan economy may be seeing the light at the end of the tunnel as socialist President Nicolas Maduro, largely blamed for current economic woes, is no longer recognized by influential countries like the United States and Britain. Maduro is charged with illegitimately claiming the presidency through staged elections and laws that prevent his removal. Due to this, the United States recognizes the leader of the opposing party, the National Assembly’s Juan Guaido. While this action could alleviate some of the suffering of the Venezuelan people, the same cannot be said for other recent US actions. The essay aims to examine the different recent economic policies that the United States has taken towards Venezuela, their potential ramifications, and positive steps that should be taken.

First, it’s important to recognize the precarity of Venezuela’s situation. According to the Council on Foreign Relations, Venezuela is a petrostate, listed alongside nations like Saudi Arabia and Algeria. Petrostates are characterized by weak political institutions, highly concentrated minority power, and economic reliance on exportation of oil and natural gas. Venezuela first struck oil in 1922 and foreign investors flooded in, prompting the government to put more resources into their growing energy economy, including capital and land investments. This move, while creating the groundwork for a successful oil industry, prevented Venezuela from developing other aspects of their economy, such as agriculture. Oil is highly affected by boom and bust cycles. With no other markets to rely on, when the oil market began experiencing economic problems, such as oil companies in other nations entering and exiting the market, the downward spiral became hard to prevent and the economic situation slowly grew more precarious. Furthermore, poor political decisions designed to maintain government power by helping oil industries meant that when oil prices fell in 2014, Venezuela had no money to subsidize the oil industry or invest in other areas of the economy. The Index of Economic Freedom describes the results, including ever increasing hyperinflation (according to Steve Hank of Forbes magazine, a whopping 80,000% in 2018 that is only expected to increase), food and dollar shortages, and political turmoil.  

According to the Department of State, Venezuela and the United States have a long and evolving relationship that officially began in 1835. Their relationship was previously diplomatic, but since the rise of socialist leader Hugo Chavez and his successor Nicolas Maduro, tensions have risen. Venezuela regularly criticizes American policies and Maduro calls the Venezuelan crisis a Western creation. While the relationship has slowly deteriorated, the United States remains the largest importer of Venezuelan products, importing approximately US $10.9 billion of crude and petroleum oil in 2016. As US dollars become largely unavailable to Venezuelans, US imports continue to decrease drastically, decreasing by 36% between 2015 and 2016, as prices of products become too expensive for Venezuelans to buy. The US continues attempts to give aid during food shortages, but Maduro has rejected every offer. After the United States recognized Guaido as president, Maduro called for a break in diplomatic ties, but the United States refused to recognize his authority by removing American diplomats from Venezuela. The culmination of worsening US-Venezuela relations, the devastated Venezuelan economy and a volatile political situation have led to the current crisis.

President Trump has taken a much more hard-lined approach than President Obama, who was criticized for not doing enough to prevent Venezuela’s economic downfall. Obama’s policies towards Venezuela began with a very soft-lined approach. According to Antonio Delgado of the Miami Herald, the Department of State was hesitant to put sanctions on Venezuela and instead hoped to stabilize the region by creating open dialogue between the two countries. While this was a move designed to maintain peaceful relations, the lack of action likely led to further deterioration. According to Teresa Welsh of U.S. News, when Obama finally issued sanctions against Venezuela for human rights abuses, it widely backfired due to contestation by Latin American nations and Venezuela’s increasing economic precarity. Despite their controversy, Obama’s sanctions only limited visas and froze assets of officials, ultimately having no real impact on the economic situation of Venezuelans. By 2016, it was too late for Obama to help end the Venezuelan crisis, but according to the Washington Post in 2017, there is still hope for Trump.

Trump’s policies put an increasingly tight leash on the Venezuelan economy, with the hope of pushing Maduro to concede the presidency to Guaido. According to Public Radio International Trump’s sanctions began similarly to those of Obama,  targeting high-ranking officials. Slowly, sanctions have also begun targeting Venezuelan oil, with the goal of using economic pressure to push Maduro to allow a peaceful transition. These economic policies have only made Maduro angrier, and with support from the Kremlin, it’s clear that these policies will fail to make a substantial difference in the crisis. PRI continues that on January 28th, 2019, the Trump Administration imposed the harshest sanctions to date, which could potentially cripple the Venezuelan economy for good. These sanctions are aimed at Venezuela’s national oil firm, Petroleo De Venezuela SA (PDVSA) and will currently freeze exchanges and block imports. Furthermore, according to Kenneth Rapoza from Forbes magazine, if Maduro refuses to relinquish control by April 28th, 2019, there will be a complete ban on PDVSA and any oil company that the Venezuelan government owns 50% or more of.

According to Frida Ghitis of CNN news, Trump’s policies could be the solution, but he must proceed with caution. The direction of his policy actions are clear; he won’t stop until the Maduro regime is destroyed, but the outcome of his actions are risky. His policies rely on an assumption that Venezuela’s allies, such as China and Cuba, will not have the means or interest to support Venezuela. It also rests on the assumption the causing such significant damage to the Venezuelan people will be enough to finally overthrow the illegitimate government. If Trump’s plan fails, Venezuelans will likely be left starving in a totally destroyed economy. Only time will tell if Trump’s policies will be successful, but one thing is true: it’s one of the only options outside of direct military action that has not yet been exhausted.   

With a failing economy, Venezuelans are desperately in need of solutions, and since the soft-lined approach failed, Trump’s plan, while viewed by many as rash, may be necessary. The United States’ policies towards Venezuela have yet to be successful, and relations are quickly deteriorating. Oil sanctions are therefore the last peaceful tool the United States can utilize to bring democracy and peace to Venezuela. While there could be significant downfalls if Trump’s proposal fails, it seems to be the only option left which is why Venezuelans and the United States government should cautiously support it.  

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South America Gretchen Cloutier South America Gretchen Cloutier

Crisis in Venezuela: The Fall of the Left in Latin America

Staff Writer Gretchen Cloutier examines the political landscape of Venezuela.

Venezuela is in crisis. Falling oil prices have severely stunted the state-run economy, where petroleum products account for roughly 96 percent of total export goods. Government revenue has taken a deep plunge as the world price continues to fall, and printing money in attempts to offset decreased income has resulted in high inflation – projected to hit 480 percent in 2016 and top 1,640 percent in 2017. There are also chronic shortages of basic goods and food; store shelves remain empty, and people line up for hours with the hope of receiving necessities such as rice, medicine, and toilet paper. To make matters worse, desperation has turned violent in recent months, with incidences of protests, riots, and looting reaching into the thousands.

Venezuela’s economic crisis has been exacerbated by low oil prices, however the roots of the current situation stem from Chavismo policy implanted under the populist leader Hugo Chavez, who held power in Venezuela from 1999 until his death in 2013. As with most socialist revolutions, Chavez’s aim was to redistribute wealth and land, and improve poor Venezuelans’ quality of life. The cornerstone of Chavez’s economic policy was petroleum-funded state spending on social services and human development projects. Chavez also implanted price controls to keep the cost of basic goods affordable for everyone. In theory, these practices seem as though they would transform Venezuelan society for the better. However, while they did some good for Venezuela’s poor, in practice the long-run economic consequences of these policies proved severe.

Price controls decreased profit incentives for the increasingly shrinking sector of private businesses, discouraging them from stocking the forcibly under-priced basic goods. While a boom in the oil market meant that the government could prop up a supply of these goods in state-run stores with artificially low prices, as discussed previously, the country’s dependency on revenue from petroleum exports and high rates of government spending was unsustainable in the long run. The drop in oil prices meant government spending was forcibly slashed, and the artificially high supply of goods at artificially low prices have vanished. The official private sector is weak due to nationalization that occurred under Chavismo, and goods on the black market are being sold for hundreds of times more than their official prices. For example, a recent report found that milk, which is capped at 70 bolivares, is being sold on the black market for upwards of 7,000 bolivares. The same is true for other staple goods such a flour, sold at 3,000 bolivares instead of its capped price of 190 bolivares, and pasta, sold at 3,000 bolivares instead of its usual 15. As inflation spirals out of control, the problem is likely to get worse.

Nicolás Maduro, Chavez’s successor, has had little success in finding a solution while maintaining leftist economic and social policy in Venezuela. Maduro’s approval rating, currently hovering just above 20 percent, has plummeted along with the country’s economic stability. In December, the opposition won controlof the national assembly for the first time in 17 years, demonstrating Venezuela’s discontent with the status quo of socialism. More recently, the national electoral council has announced that they have collected enough signatures to begin the process of holding a recall referendum, and polls show that over 60 percent of the public would vote to remove Maduro from office.

Maduro has accused the opposition of organizing a coup d’état against his regime, while the opposition maintains that they are solely seeking a recall referendum to replace him. In attempts to quell the opposition, authorities have carried out numerous arrests under direction from Maduro. Other repressive techniques employed by the regime amid recent protests include deployment of military in Caracas and creating a no-fly zone above the capital. As public unrest and economic insecurity grows, Maduro will face increased challenges remaining in power. Although the military is still on his side, the opposition is gaining strength in numbers.

The case of Venezuela, though extreme, is not unique in South America. Recently, the region has experienced a falling political left and a rise of the political right. It seems that the so-called pink-tide of socialist Latin American governments is subsiding. Although this phenomenon may be observed across the continent, the most relevant cases to be discussed in this article, in addition to Venezuela, are those of Argentina and Brazil. By analyzing the political and economic situation of Argentina and Brazil, which are further along in developing center-right policies, one can consider possibilities for Venezuela’s future, and learn from the policy mistakes of other administrations.

Brazil’s senate recently impeached president Dilma Rouseff, ending thirteen years of leadership by the socialist Worker’s Party. After the 61 to 20 impeachment vote, a center-right politician from the PMDB party, Michael Temer, has replaced her. Dilma was the Worker’s Party successor to Luiz Inacio Lula da Silva, who was President from 2003 to 2011. Under da Silva’s leadership, Brazil thrived.

Although also involved in a corruption scandal, da Silva was fortunate enough to enjoy high approval ratings that stemmed from a booming economy. He focused on improving the microeconomic situation of Brazilians, and thus created the Bolsa Famila conditional cash transfer program. Consequently, 36 million Brazilians were lifted out of extreme poverty and the middle class expanded rapidly during da Silva’s two terms in office. Brazilians also witnessed real wage increases, expansion of credit, and increased employment during this period. For da Silva, socialist policy worked.

However, Rouseff’s policies were far less successful. She was unable to sustain the healthy economy seen under da Silva, which caused social unrest and tension between the government and its people. Rouseff’s involvement with a corruption scandal involving her party and contract bribes with the nationalized oil company Petrobras, along with violation of state budget laws, led to her final demise. Rouseff was impeached on the latter charges, although she has pledged to appeal the impeachment, which she has called a parliamentary coup – despite parliament carrying out the impeachment proceedings in accordance with Brazil’s constitutional framework. With Rouseff’s impeachment, it appears that socialism has come to an end in Brazil.

Temer, Brazil’s new President, has vowed to restore the state’s political and legal credibility. Additionally, he is planning to enact austerity measures to improve Brazil’s credit rating – which was downgraded to junk status under Rouseff – and reduce the deficit. Temer also plans to overhaul the state pension system and transition national infrastructure projects to the private sector by auctioningthem off to foreign investors. However, he will need Congressional support to pass these tough measures that have made him deeply unpopular with the public. With Temer’s term just beginning, it remains to be seen how successful Brazil’s swing to the center-right will be.

In late 2015, Mauricio Macri, a center-right politician from the Republican Proposal party, was elected president of Argentina, ending 12 years of leftist leadership by the husband and wife team Nestor Kirchner and Cristina Fernandez de Kirchner. Macri is both fiscally and socially conservative; he is anti-abortion and opposes marijuana decriminalization. In fitting with his party’s center-right platform, Macri is also a proponent of free-market economic policy, and has cut energy and transport subsidies in order to reduce government spending. However, he has promised to continue and improve upon welfare programs started in the Kirchner era.

The largest challenge facing Macri is reining in fiscal policy enough to lower the deficit and reduce inflation without letting social programs and infrastructure suffer, and while also continuing to grow the economy. Inflation in Argentina continues to rise; when Macri was elected it stood at about 25 percent, and it topped 40 percent last April. The Central Bank has raised interest rates to 38 percent, hoping to increase savings and decrease spending that contributes to inflation. Macri has also announced that the government is unlikely to meet its year-end goal of 4 percent deficit reduction, which stood at 5.4 percent of GDP when Macri took office.

However, the Central Bank expects recession recovery to begin soon, predicting that GDP will rise 3 percent next year. Macri’s is also seeking to attract investors and new business to the country to help bolster the economy. Recently, Argentina held a conference in Buenos Aires for global investors and received over $32 billion in corporate pledges, signaling that the reforms are being taken seriously by multinational industries.

Despite an 18 percent drop in approval ratings this past summer – down to a moderate 46 percent approval rating – Macri has remained committed to his economic reforms. While Argentinians are feeling the squeeze of austerity measures, they are necessary to get the economy back on track, decrease inflation, and balance the budget. However, with legislative elections set for October 2017, Macri will need to demonstrate to the people that these measures work in order to avoid the government swinging too far back to the left and halting economic reform.

As demonstrated by these cases, the fall of the Left and subsequent rise of the Right is not a singular occurrence but rather a marked phenomenon in recent Latin American politics. The region has experienced a number of political and economic ideologies since its independence from Spain and Portugal was won in the 1800s. In the last half-century alone, the region has shifted from inward looking import substitution industrialization, to socialist and communist regimes, and later responded with neoliberal economic policy. It is only expected that countries and regions undergo economic and political reform as ideology changes and people look to restore balance after moving too far in one direction. The economic policies necessary to get the economy back on track will be painful in the short term, as seen in Argentina and Brazil. If these policies are not met with political stability and social welfare programs, the people may push out these new governments just as swiftly as they ushered them in. As nascent center-right regimes take hold in Venezuela, Brazil, and Argentina, only time will tell how large, and successful, the shift will be. For now, the pink tide of Latin America is receding.

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