SOC300 Honors Case Profile (400 poi.docx

SOC300 Honors Case Profile (400 points)
The Collapse of Venezuela
I. Overview
Home to twenty-nine million people, Venezuela plays an
important role in South America, and through its energy wealth,
the global economy. The seventh largest country by land mass
in Latin America, it shares more than three thousand miles of
borders with its neighbors Brazil, Colombia, and Guyana. Its
economy is powered by the world’s largest known oil reserves.
For the United States, Venezuela poses difficult policy choices.
Despite Venezuela’s sending one-third of its oil exports to
Texas refineries, its politics have become increasingly anti-
American, first under Hugo Chavez, a leftist leader who
governed Venezuela from 1998 until his death in 2013, and then
under his successor, Nicolas Maduro.
Years of high oil prices combined with easy access to
international markets enabled Chavez to redistribute wealth to
his supporters through expansive domestic social spending. This
brought immediate benefits to Venezuela’s marginalized
populations, reducing poverty, improving access to health care,
and expanding education. Chavez also launched foreign policy
programs such as PetroCaribe, which distributes subsidized oil
to Central American and Caribbean neighbors.
Yet a heavy statist (see glossary; this is an important term to
know — Dr. Cronin) hand, from increasing market interventions
to outright expropriation of numerous businesses, led to steep
declines in investment and production in the non-oil economy.
And even oil began to falter as underinvestment and
mismanagement at the state-owned energy company, Petróleos
de Venezuela, S.A. (PDVSA), led to production declines. At the
same time, populist economic policies spurred inflation. And
even as poverty indicators improved, crime — especially
homicide rates—rose.
The Venezuelan government lost domestic political support

after Maduro, Chavez’s long-time deputy, took over as president
in 2013. Maduro’s administration repeatedly responded to
challenges by cracking down on dissent. It arrested opposition
leaders and decried alleged meddling by the United States.
Starting in 2014, the plummeting price of oil, the country’s only
major export and principal source of foreign reserves, drove the
economy into crisis. With high debt levels, an economic
recession, and rising inflation, the government saw international
reserves dwindle, curtailing imports of even basic goods such as
milk and toilet paper.
Meanwhile, crime escalated in many forms. In urban areas
including Caracas, kidnappings, murder, and robbery plague not
just poor neighborhoods but also affluent ones. The United
States has confirmed that terrorist organizations such as the
Fuerzas Armadas Revolucionarias de Colombia (FARC, or the
Revolutionary Armed Forces of Colombia) and the National
Liberation Army (ELN) use the rural Venezuelan-Colombian
border as a safe haven and drug trafficking corridor.
II. Case Assessment
While reading the case material, you should keep in mind:
1. What the current situation in Venezuela is and what
contributed to its emergence? What kind of threat to the
country, its people and the overall region does this situation
pose?
1. What are the U.S. policy options in this case, and what are
their advantages and disadvantages?
1. What U.S. interests are at stake in this case? As a
policymaker, how would you prioritize these various interests,
and why?
1. Who (were) (are) Hugo Chavez, a leftist leader who governed
Venezuela from 1998 until his death in 2013, and his successor,
Nicolas Maduro and what is the basis of their ideological
compatibility?
1. What is the significance of oil to Venezuela and to this

political situation specifically?
1. What are the economic, security, political and other
challenges that Venezuela faces internally and how do these
difficulties affect its crisis and any international response to it?
III. Main Concepts in the Case
· Economic collapse
· Political uncertainty
· Humanitarian catastrophe
· A weak or failed state
· Possible civil war
IV. Your Assignment
Bear in mind that this is a theoretical case study only and the
current Maduro government in Venezuela is still in power.
What we are examining is here are the actions the U. S. MIGHT
take IF his government fell and he fled the country.
You will be one of five members of the National Security
Council (NSC) who advises the president about security
developments on a global level, and it is your job to decide
whether American interests are involved and/or threatened as
situations arise around the world. In this case, regardless of the
role you choose, you are to write a three-page paper assessing
the economic, military and humanitarian situations in
Venezuela. Your paper will be numbered and divided into three
sections in which you decide:
(1)If any national interests of the U.S. are involved, then what
are they? If no interests are involved, then why not?
(2) Does the U.S. have a responsibility to protect (R2P) the
people of Venezuela or intervene in any way?
(3) If action is called for, then what policy options are available
to the U.S.? (See the following section). If no action is
recommended, why not?
This is a project in which you choose one of the five NSC

positions listed below and, based on the three questions above,
recommend whether the president should intervene in
Venezuela.
· If you choose to be the vice president, you serve as an all-
purpose presidential advisor as well as the individual who
makes diplomatic trips abroad.
· If you choose to be the secretary of state, you are to
concentrate on America’s bilateral relationships, the
relationships between foreign countries and the U.S. and
analyze the behavior and interests of foreign governments
toward the United States.
· If you choose to be the secretary of defense, you are to assess
the likely implications of U.S. military involvement, both for
the immediate crisis and for the United States’ overall strategic
position in the region under review.
· If you choose to be the chairman of the Joint Chiefs of Staff
(JCS), you are to determine the likely implications of U.S.
military involvement, both for the immediate crisis and for the
United States’ overall strategic position in the region under
review.
· If you choose to be the national security advisor (NSA), you
are to make certain a full range of viable policy options has
been articulated, coordinate those options and make certain that
the prospects for success and failure have been identified for
the president.
· Regardless of your role, in your summary you must include
factors such as: (1) should the U.S. intervene or not, and if so,
what form of intervention do you recommend? and (2) In
addition, if you do recommend intervention, then should it be
unilateral or multilateral?
· I will hold one conference call in the first two weeks of the
course to discuss this assignment and answer questions, so it is
imperative that you try to attend it. If you absolutely cannot do
so, I will record the call so you can refer to it for any
clarification.
V. About the Case (Remember: this is a theoretical overview)

Its reserves depleted, Venezuela’s government defaulted last
month on a large package of foreign loans, and the ensuing
financial panic precipitated a true economic collapse. Their
bolivars suddenly worthless, and with food and basic necessities
in short supply, protestors stormed the Miraflores Palace,
causing President Nicolas Maduro to flee the country. (Again,
Maduro has not as of yet left the country, but for the purposes
of this case study, he has).
Two members of the Partido Socialista Unido de Venezuela
(PSUV, or United Socialist Party of Venezuela) have since
claimed the presidency, but neither has been able to rally the
disparate parts of the party, stabilize the economy, or establish
control over most of the country’s territory. Meanwhile,
protests continue and factions of the military have abandoned
the government. Violence is escalating, led in part by the
colectivos, autonomous armed community groups that Chávez
created. Venezuela’s borders and coasts are increasingly
unpatrolled, leading to rising reports of activity by drug
traffickers and the FARC, the guerrilla group and U.S.-
designated terrorist organization that has long battled the
government of neighboring Colombia. Although some oil
exports continue, PetroCaribe has abruptly ended, depriving
countries including Cuba, Nicaragua, Jamaica, Guyana, and
Belize of some two hundred thousand subsidized barrels of oil
per day.
The disorder in Venezuela poses economic, political, and
security challenges to the United States, but also offers
potential opportunities. The chaos has immediate socioeconomic
consequences for Venezuela’s people and those of neighboring
countries. If prolonged, the crisis could cause oil prices to rise
and criminal and terrorist activity in Venezuela to intensify, and
possibly lead to a failed state in the Western Hemisphere.
The United States has a strong interest in supporting the return
of democratic institutions to Venezuela. The current political
crisis provides an opening to reinvigorate democracy in Latin
America’s sixth most populous country, bolster Venezuela’s ties

with other countries in the region, and improve U.S.-Venezuela
and U.S.-Latin America relations. The National Security
Council (NSC) will need to recommend a course of action to the
president. This entails considering how to prioritize and pursue
the U.S. interests at stake, including economic stabilization,
regional security, a stable flow of oil, protection of human
rights, and restoration of democratic governance and the rule of
law.
The president has asked the NSC for options on whether and
how the United States could pursue any form of intervention in
Venezuela. NSC officials (and you will choose your own role)
will need to consider the pressure on the United States to act,
including the responsibility to protect (R2P), as well as the
significant costs, benefits and risks of a unilateral or
multilateral intervention.
VI. Roles
1. Vice President of the United States
1. Secretary of State
1. Secretary of Defense
1. Chairman of the Joint Chiefs of Staff
1. National Security Advisor
Role-play
1. There is no right or wrong way to write up your research, but
the better prepared you are, the more you will get out of the
experience.
1. Ensure that you carefully weigh the consequences of various
decisions.
1. You cannot win or lose in this assignment. Instead, you
should aim to offer a well-reasoned articulation of your
position.
1. Your individual grade on this assignment will depend
exclusively on the three pages you write about your assessment
of the situation and the quality of your recommendations to the
president about whether he should take action on climate
change.

VII. The Interagency Process (The National Security Council)
Whether it aims to meet an acute national security threat or to
advance a long-term objective, a successful foreign
policymaking process starts with the clear articulation of U.S.
interests and goals. The NSC plays a critical role in this effort
by serving as the president’s principal forum for considering
national security and foreign policy matters with his senior
national security advisors and cabinet officials. Its mission is
to help the president effectively use a variety of instruments,
whether military or diplomatic, to forge policies that advance
U.S. national security objectives. The NSC and its staff try to
even-handedly manage the policymaking process so that the
president can receive a full spectrum of advice from the
agencies involved in national security.
VIII. The Members of the National Security Council
Vice President
This is second-highest-ranking official of the U.S. government
and first in line to assume the presidency if the president dies,
resigns or becomes unable to serve. Though given only one
responsibility in the Constitution — to serve as president of the
U.S. Senate, with the power to break ties — the vice presidency
has become a visible part of the modern White House. Today’s
vice presidents undertake a variety of functions, from serving as
an all-purpose presidential advisor to carrying out diplomatic
trips abroad.
Secretary of State
The Department of State maintains the U.S. diplomatic presence
around the world, conducting foreign relations and using an on-
the-ground perspective to generate country-specific knowledge.
As head of the department, the secretary draws on this
knowledge to present an authoritative view of the United States’
bilateral relationships, the relationships between foreign
countries and the behavior and interests of foreign governments.
Secretary of Defense

The secretary of defense is the principal defense policy advisor
to the president, under whose direction he or she exercises
authority over the Department of Defense. In NSC meetings,
the secretary analyzes the security situation in the relevant
region and explains the likely implications of U.S. military
involvement, both for the immediate crisis and for the United
States’ overall strategic position.
Chairman of the Joint Chiefs of Staff
The chairman of the Joint Chiefs of Staff (CJCS) is the highest-
ranking member of the U.S. military and the principal military
advisor to the president, the secretary of defense, the NSC and
the Homeland Security Council. The CJCS does not exercise
command authority over U.S. troops. Instead, he or she works
with the heads of the U.S. military services to provide advice to
the president and other senior leaders.
National Security Advisor
The national security advisor (NSA) has a special role in crisis
management, serving as the “honest broker” for the national
security policy process. Although the president makes final
decisions, the NSA is responsible for ensuring that he or she has
all the necessary information, that a full range of viable policy
options has been articulated, that the prospects for success and
failure have been identified, that any legal issues have been
addressed, and that all members of the NSC have had the
opportunity to contribute.
IX. The Role of the United States
The United States has strong interests in ending the current
instability in Venezuela and ensuring that a new government
operates in a lawful and democratic manner. Indeed,
Venezuela’s collapse is an opportunity for the United States to
improve the situation in an important country that has spiraled
into crisis. The United States has long been concerned with
advancing democratic values in Venezuela. It has provided tens
of millions of dollars in assistance to Venezuela for democracy
projects through the U.S. Agency for International Development

(USAID) and the National Endowment for Democracy.
Additionally, U.S. officials have criticized the Chavez and
Maduro governments for the deterioration of democratic
institutions and threats to freedom of speech and the press, as
well as imposed sanctions for human rights violations.
The broader implications of Venezuela’s complete economic
and political collapse could also harm U.S. interests. The spread
of drug trafficking organizations could seriously undermine
U.S. efforts — including Plan Colombia and the Merida
Initiative in Mexico — to disrupt the drug trade in the Western
Hemisphere. It could also undermine Colombia’s peace
negotiations with the FARC. Some worry too that other terrorist
groups such as al-Qaeda, Hamas, or Hezbollah could inhabit
these ungoverned spaces. Some evidence indicates that between
1999 and 2003, Islamic extremist groups used the Tri-Border
Area (TBA) between Argentina, Brazil, and Paraguay, known
for its lawlessness, to plan operations, launder money, and
traffic drugs. Venezuela’s economic breakdown could also have
global economic consequences. The country is the world’s
twelfth largest producer of crude oil and provides 10 percent of
U.S. oil imports. An interruption in Venezuelan oil flows could
raise both global oil prices, driving up costs for U.S.
manufacturers and consumers at the pump. PetroCaribe
countries, many U.S. allies, risk more severe economic effects
from Venezuela’s disorder.
Policy Options
In this context, the United States has four major policy options
to consider. These options are not mutually exclusive, and most
can be combined.
1. Direct military intervention
The United States could mount a direct military intervention,
either multilaterally or unilaterally. The goals of such an
intervention would be to restore and maintain order, facilitate
an agreement among competing political groups, and oversee a
political process leading to free and fair elections.
Accordingly, intervention in this case would look more like a

policing than a combat effort. Between eight thousand and
fifteen thousand troops would be required.
2.Containment
The United States could aim to limit the repercussions of the
crisis for itself and the region through containment. This would
mean working with Venezuela’s neighbors — Brazil, Colombia,
and Guyana — to secure Venezuela’s borders and prevent the
spread of criminal and terrorist activity, and to help refugees
fleeing the violence. Building on Vice President Joseph Biden’s
Caribbean Energy Security Summit held January 2015, the
United States could also help PetroCaribe beneficiaries — in
particular allies such as the Bahamas, the Dominican Republic,
and Jamaica — cope with the oil price shock generated by the
program’s collapse. Assistance to other beneficiaries,
specifically Cuba, could help move the traditionally
antagonistic relationship in a more positive direction,
coinciding with the broader bilateral policy shifts under way.
3.Diplomatic and economic interventions
The United States could use various diplomatic and economic
means to help reestablish basic order and support the
reemergence of democratic institutions and economic stability
in Venezuela. The United States could support organizations
providing assistance to Venezuelans and facilitate or support
negotiations toward a democratic transition. Economically, the
United States could offer funds or other assistance to keep
Venezuela’s oil flowing, work to provide emergency loans, and
help Venezuela renegotiate its debt.
4.No action
The Tools at America’s Disposal
The United States could decide that the costs and risks of any of
the above steps outweigh the benefits and are disproportionate
to the U.S. interests at stake. In this case, policymakers could
decide to take none of the actions above — an option that
deserves as much consideration as the others. However, this
option would still require NSC members to consider certain
decisions that might arise as the situation in Venezuela evolves.

The United States plays a critical role in establishing and
maintaining international order in an increasingly globalized
world. The range of foreign policy issues that require its
attention or involvement is vast. From conflicts in Afghanistan,
Iraq, and Syria to tensions with North Korea and Iran; from
longstanding alliances with European and Asian powers to
complex, evolving relationships with Brazil, China, India,
Russia, and South Africa; from the stability of global finance to
the promotion of economic opportunity in low-income
countries; from climate to health to nuclear proliferation to
terrorism — there is little around the world in which the United
States does not have a vested interest. Furthermore, issues such
as immigration, trade, and cybersecurity underscore the fading
distinction between domestic and international matters.
U.S. leaders use a range of tools to pursue a foreign policy that
they believe will protect national security and achieve U.S.
goals. These tools include:
· diplomatic tools, such as bilateral or multilateral consultations
and negotiations, treaties, defense and security agreements,
resolutions in global and regional bodies such as the United
Nations (UN), and public diplomacy to promote U.S. views and
culture;
· economic tools, such as trade and investment agreements,
tariffs, sanctions, embargoes and boycotts, bilateral and
multilateral development assistance, loans for the purchase of
U.S. exports, and sales of arms, equipment, and technology;
· military tools, such as missile strikes by manned or unmanned
vehicles, nuclear deterrence, ground force deployments, ship
and submarine patrols, blockades, unilateral or partnered
military exercises, foreign military training, and special
operations forces;
· unconventional tools, which are actions, sometimes secret,
taken by the U.S. government and its proxies, such as training
and assisting foreign intelligence services, supporting armed
nonstate actors, private security contracting, and cyberwarfare.
Effective policymaking and policy implementation require the

deft use of different combinations of these tools, depending on
the circumstances. To accomplish this, policymakers must
clearly define U.S. interests and gauge the interests, resources,
and motivations of foreign governments and nonstate actors.
The U.S. intelligence community helps policymakers in their
work by collecting and analyzing a vast range of information,
including satellite images, communications records, documents,
data, and personal observations.
Foreign policy successes and failures are often associated with
decisions made by presidents. Less explored is the decision-
making apparatus that helps the president make those critical
choices and coordinate their implementation. This guide will
help you understand the system through which the United States
creates and implements its foreign policy.
X. Context
After decades of rule by the military and other strongmen,
Venezuela’s experience with democracy—albeit with significant
weaknesses — began in 1958. That year, three major political
parties, Acción Democrática (AD, or Democratic Action), the
Comite de Organizacion Politica Electoral Independiente
(COPEI, or Political Electoral Independent Organization
Committee), and Union Republicana Democratica (URD, or
Democratic Republican Union), came together to create the
Punto Fijo Pact. The URD would later abandon the agreement.
Between 1963 and 1988, COPEI and AD effectively traded the
presidency every five years. The Punto Fijo Pact ensured the
continuation of partidocracia(particracy), as each accepted its
losses, waiting until the next election. During this time, the two
parties extended their influence to all aspects of life — jobs,
sports teams, even beauty pageants — using the public largesse
from oil production to benefit supporters and loyalists.
Through this crony patronage system, they maintained political
stability even as many other Latin American governments fell
into authoritarianism. But the alternation of power between the
parties eventually bred skepticism about the electoral process
and whether elections truly represented the will of the people.

Additionally, this political duopoly was vulnerable to a decline
in the government resources that funded party patronage
networks.
During the mid-1980s, oil prices plummeted. As government
revenue dwindled, Venezuelan leaders implemented austerity
measures as part of a funding arrangement with the
International Monetary Fund (IMF). The measures sparked
popular unrest, which reached a peak in February 1989, when
the popular former President Carlos Andres Perez came back
into office and deepened the cost-cutting reforms. After he
announced a program to hike bus fares, chaos ensued. Several
days of protests, riots, and looting in the capital Caracas
resulted in nearly three hundred deaths. In 1992, unhappiness
with the economic and political situation led a young lieutenant
colonel named Hugo Chavez to attempt a coup d’état. Although
unsuccessful, it brought Chavez to prominence on the national
stage.
Economics
Venezuela began extracting oil in 1917, and since 1930 it has
been the primary driver of Venezuela’s economy. In recent
years, oil has represented upward of 95 percent of total exports.
In response to the oil price spike in the 1970s, the Venezuelan
economy grew dramatically and Venezuelans enjoyed one of the
highest standards of living in Latin America. When the
government nationalized the oil industry in 1976, creating
PDVSA, federal revenues from oil tripled. From 1974 to 1979,
the Venezuelan leadership spent more than in the previous 143
years combined. The government poured money into
modernization efforts including roads, railways, schools,
housing projects, industrial parks, and hundreds of state-owned
enterprises. Much of the influx was squandered, though, in
mismanagement and corruption.
The sharp oil price declines of the 1980s led to a decade of
unprecedented economic crises. Severe inflation and growing
unemployment led to discontent among Venezuela’s poor. The
country’s historically high living standards also dropped

significantly. Between 1984 and 1995, poverty rates increased
from one-third to two-thirds of the population. Extreme poverty
rates tripled, from 11 to 36 percent. The Venezuelan economy,
which had grown upward of 7 percent a year during the 1970s,
contracted sharply. In 1989, GDP fell by 8 percent and inflation
reached 89 percent. These economic problems unraveled the
traditional political system.
Pre-Chavez Foreign Relations
Starting in the mid-twentieth century, Venezuela held an
influential position on the world stage as an oil-rich and
relatively democratic country. In 1960, it helped found the
Organization of Petroleum Exporting Countries (OPEC),
increasing its weight in global markets. As a regional player,
the country has often leveraged its influence within the United
Nations (UN), Organization of American States (OAS), and
other organizations. Venezuela has mediated crises in Latin
America, including that in 1990 when, along with Colombia,
Mexico, and Panama, it pushed Daniel Ortega and the
Sandinistas in Nicaragua to allow democratic elections, a shift
from its previous support of the regime.
The U.S.-Venezuela relationship before Chavez’s 1998 election
was largely positive. The United States was, as it is today,
Venezuela’s largest trading partner. For decades, Venezuela
supported the United States in the Cold War and voted
alongside the United States on several notable issues in the
OAS, including the controversial expulsion of Cuba from the
organization in 1962. Venezuelan leaders at times spoke out
against the United States; for instance, Romulo Bentancourt —
President John F. Kennedy’s contemporary — criticized U.S.
courtship of autocrats as part of its anticommunist policies. But
overall the two countries enjoyed a friendly relationship and
pursued shared interests in the region.
Recent History
Chavez’s Degradation of Public Institutions
Chavez came to national attention in 1992 when he led an
unsuccessful coup against President Andres Perez. As a

condition of his surrender, Chavez addressed his co-
conspirators on national television. His now infamous “Por
Ahora (For Now)” speech inspired Venezuelans tired of
cronyism, corruption, and austerity policies. After a presidential
pardon, Chavez ran for president in 1998 under the banner of
his newly created political party, which called for an end to
corruption, more spending on social programs, and
redistribution of oil wealth. Chavez won the election with 56
percent of the vote, bringing puntofijismo to an end and
ushering in what he called twenty-first century socialism, or
Chavismo.
Chavez used both democratic and antidemocratic tactics to
maintain power. Following his election, he quickly moved to
rewrite the constitution. Approved by referendum in 1999, the
new constitution called for special elections in 2000. The
public reelected Chavez and his coalition increased its ranks in
the National Assembly, which then passed an Enabling Act,
granting the president the power to implement laws by decree
for one year. Chavez used this power to announce forty-nine
laws on issues such as land reform and oil industry regulation.
Early on, Chavez faced resentment from segments of
Venezuelan society. In 2002, these groups supported a short-
lived coup that removed Chavez from power for several days. In
the wake of the attempt, PDVSA management led a major strike
from 2002 to 2003 to protest the president’s efforts to control
the company. Chavez stifled this dissent by firing nearly 50
percent of PDVSA employees, replacing them with loyalists,
and allegedly blacklisting the instigators, making it difficult for
them to find new jobs. Similarly, he responded to the attempted
coup by undermining civil liberties. He cracked down on
freedom of expression with a 2004 law enabling government
censorship of opposition media. In 2007, he revoked the license
of the antigovernment network RCTV, and other networks,
afraid of being shut down, reduced their criticism of the
government.
Chavez successfully undermined the opposition’s attempts to

compete in the electoral realm during his presidency. In 2005,
opposition leaders, frustrated with perceived unfairness of the
electoral process, boycotted parliamentary elections. Instead of
prompting any changes, their strategy gave pro-Chavez parties
complete control of the National Assembly. In 2008, hundreds
of opposition candidates were banned from participating in
regional elections, among them opposition leader Leopoldo
Lopez, who faced unsubstantiated accusations of corruption. By
February 2009, Chavez secured a referendum abolishing term
limits for elected officials. He then ran and won a fourth
presidential term in 2012 — the most successive terms of any
Venezuelan president.
Worsening Security
Security eroded during the Chavez years. With institutions to
ensure the rule of law weakened, petty crime, homicide, and
kidnapping rates increased. Other criminal and terrorist
organizations operated more openly in the ungoverned border
region between Venezuela and Colombia, which became a
significant conduit for drug trafficking. Beginning in the
1990s, Colombian traffickers, often in collusion with corrupt
elements of the Venezuelan military, began to move shipments
of cocaine to the United States and Europe. In 2005, the U.S.
government declared Venezuela uncooperative in the fight
against drug trafficking, and in 2009 concluded that drug
trafficking through Venezuela had increased fourfold between
2004 and 2007.
In the last decade, Venezuela’s ungoverned border region
became an operating zone for terrorist organizations such as the
FARC and ELN. The expansion of their activities in this refuge
could destabilize the ongoing peace talks among the two groups
and the Colombian government. Some security reports place
Iran-backed terrorist organization Hezbollah in the area as well.
Economic Restructuring
During his presidency, Chavez restructured the economy and
significantly increased spending. The erosion of the non-oil
economy, declining production at PDVSA, and years of excess

spending laid the foundation for an economic crisis.
Chavez took control of PDVSA, Venezuela’s main revenue
stream, early in his tenure. Once run independently by
professional technocrats, the company’s operations quickly
became politicized. His administration took complete control of
the oil industry in 2007 when he expropriated foreign operations
in the Orinoco belt. Chavez consistently used oil revenues for
social programs rather than reinvestment in PDVSA. By 2013,
crude oil production had fallen to 2.5 million barrels per day
from a high of 3.3 million in 1997. PDVSA officials also face a
corruption investigation led by the U.S. Department of the
Treasury.
Chavez also nationalized other sectors of the economy, such as
telecommunications, electricity, steel, and cement, which hurt
domestic businesses, reduced local entrepreneurship, and
weakened the non-oil economy. In the 1990s, nearly 25 percent
of Venezuelan exports were non-oil products (including
agricultural and manufactured goods); today the proportion is
less than 5 percent. Western companies grew wary of investing
in Venezuela, and Chinese investment, mostly in energy, has
only partly offset steep declines.
Chavez used oil proceeds and debt to boost government
spending on social programs, an integral part of his populist
appeal. Social spending rose to 21 percent of GDP in 2006, four
times the 1998 figure. The number of primary care physicians
increased more than tenfold between 1998 and 2008; emergency
rooms nearly doubled. The government also subsidized food
items, enlarged school food programs, and expanded special
programs for the poor. The number of public schools rose by 20
percent from 2000 to 2005, and enrollment systematically
increased across all levels.
Fuel subsidies giving Venezuelans some of the cheapest pump
prices in the world raised government spending dramatically.
In 2013, when global oil prices topped $100 a barrel, these
subsidies cost Venezuela more than $12 billion. In 2005,
Chavez created a $100 billion National Development Fund for

public works and heavy industry. Many projects remain
unfinished. Military spending also increased. Venezuela spent
more than $4 billion on fighter jets, attack helicopters, and tens
of thousands of Kalashnikov assault rifles in 2005 and 2006
combined. Between 2004 and 2011, the government bought $13
billion in arms, more than any other Latin American country.
To fund these expenditures, Venezuela borrowed heavily. The
country’s public debtincreased to $216 billion in 2012 from $31
billion in 1999. Debt servicing became the largest component
of Venezuela’s budget.
Foreign Relations
From the start, Chavez took an anti-American stance,
spearheading opposition to the United States and seeking to
undermine U.S. interests in the region. Following the 2002 coup
attempt, blaming the United States for not warning him, Chavez
ratcheted up anti-U.S. rhetoric. By 2006, he was referring to
President George W. Bush as the devil during a UN speech. In
2008, Chavez declared the U.S. ambassador persona non-grata
and expelled him. Both the Chavez and the Maduro
governments have continuously blamed the United States for
Venezuela’s economic woes and political unrest to
distract attention from their own mismanagement. Nonetheless,
Venezuela continued to sell its oil to the United States — eight
hundred thousand barrels per day in 2013.
Within the region, Chavez reached out to Cuba. In 2004, the two
countries formalized an exchange of Cuban medical and
educational resources for Venezuelan oil and military training.
Venezuela also spearheaded the creation of the Bolivarian
Alliance for the People of Our Americas (ALBA), a regional
bloc of ten like-minded countries. In 2005, Chavez created
PetroCaribe, a program to supply subsidized petroleum to Cuba
and twelve other Central American and Caribbean countries.
The program charges between 5 and 50 percent of the cost up
front — depending on the current market price — allowing
recipients to pay the rest over time at low interest rates.
Globally, Chavez pursued strategic alignments with

authoritarian powers that included Russia, Iran, and China.
Venezuela signed a major weapons deal with Russia in 2005 and
soon became one of its most important customers. Iran also
invested in the Venezuelan oil industry and sold arms to the
government. Venezuela’s relationship with China is mostly
based on trade, foreign investment, and oil. All of this
contributed to Venezuela’s position as a regional font of anti-
Americanism.
Transition of Power and Continuing Problems Under Maduro
Chavez, battling cancer, defeated opposition candidate Henrique
Capriles in the 2012 presidential elections, but died two months
into his fourth term in 2013. His hand-picked successor,
Nicolas Maduro, narrowly won the special election following
Chavez’s death but was immediately plagued by a lack of
legitimacy. Capriles called for a recount, citing voting
irregularities. Lacking Chavez’s charisma and military ties,
Maduro had less influence on the disparate PSUV party factions
and leadership and was unable to mitigate the worsening
economic and political crisis. With oil prices falling, the
economy contracted 10 percent in 2015 and inflation officially
topped 180 percent that same year; private analysts believed the
inflation was even higher. Facing $10 billion in debt payments
in 2016, and with few possibilities of loans from traditional
creditors, Venezuela had little money to pay for even basic food
imports. Maduro’s approval rating tanked.
Increasingly hostile to the opposition, Maduro jailed its leaders,
including Leopoldo Lopez and Caracas Mayor Antonio
Ledezma. As economic and political pressure mounted, Maduro
accused the United States of attempting coups. In March 2015,
President Barack Obama declared Venezuela an “extraordinary
threat to the national security” and the United States froze the
assets of seven Venezuelan officials deemed to be egregious
human rights offenders. In response, the Venezuelan National
Assembly passed the Anti-Imperialist Law for Peace, granting
Maduro the power to rule by decree until the end of 2015.
In December 2015, Venezuela’s opposition Democratic Unity

coalition won 112 of 167 National Assembly seats in legislative
elections, the first time the opposition controls congress since
Chavez’s rise to power in 1999. The supermajority gives the
opposition the power to remove central bank directors, supreme
court judges, and cabinet members. In April 2016, the
opposition began a process to recall Maduro through a
referendum. This process was suspended by Venezuela’s
electoral council in October 2016 after alleged instances of
fraud in the campaign’s preliminary petition.
Root Causes
Three major issues have shaped the crisis in Venezuela:
economic mismanagement, an escalation of crime and the
breakdown of democracy.
1. Economic Mismanagement
Government spending — on social programs, the military,
gasoline subsidies, and economic development projects —
helped many marginalized Venezuelans. Inequality (measured
by the GINI coefficient) decreased from 0.5 in 1998 to 0.39 in
2011, and the proportion of people living below the poverty line
halved. But it left the country with an unsustainable debt
burden, the servicing of which consumed some 20 percent of the
budget in recent years. Other programs were also expensive.
Arms purchases from Russia alone cost Venezuela several
billion dollars.
The social and other spending undercut reinvestment in PDVSA
production, leading to long-term declines in oil production and
current and future oil revenues. This in turn made government
finances even weaker. Heavy-handed government policies and at
times outright expropriation undermined private-sector
investment and production.
The downturn in oil prices in 2014 precipitated a financial
crisis. Because it had no new funding sources, Venezuela faced
potential default on its sovereign and PDVSA debt obligations.
Rapid inflation wiped out personal savings of Venezuelans and,
because less money was flowing into the country, international
reserves tanked. Tight import restrictions leading to goods

shortages were not enough. Millions of Venezuelans lost their
jobs and the economy entered a recession.
2. Escalation of Violence
Violence has long been on the rise. Homicides in the country
rose from five thousand in 1998 to twenty-five thousand in
2013. That same year, Caracas ranked as the second most
dangerous city in the world. According to a 2013 Gallup poll,
Venezuelans reported the lowest security levels in the world: 19
percent were afraid to walk alone late at night and 22 percent
said they or a family member had been robbed in the past year.
Such extreme levels of violence reflect the breakdown of the
rule of law in Venezuela. According to TheEconomist, the
judicial system is corrupt and overstretched, and the police are
poorly trained. As a result, the vast majority of crimes go
unpunished. Easy access to firearms and a dysfunctional prison
system further aggravate the situation.
The growth of organized crime and drug trafficking has also
contributed to the problem. In 2009, the U.S. Government
Accountability Office (GAO) identified Venezuela as a hub for
drug trafficking. In an annual White House report, President
Obama identified Venezuela as having violated international
counternarcotics agreements in 2012, 2013, and 2014. As the
government’s reach wanes in the mountainous border region
Venezuela shares with Colombia, drug trafficking organizations
have expanded their operations.
Government-sponsored repression also escalated.
Colectivosintimidate members of the opposition, send death
threats to journalists, and assault staff from opposition
television networks. During the February 2014 protests,
colectivos attacked protestors, and police were accused of using
excessive force and even torture to quell the opposition. Forty-
three people died and hundreds more were injured. In January
2015, anticipating future repression, the Venezuelan congress
passed Resolution 8610, authorizing police to use deadly force
to control public demonstrations.
3. Democratic Breakdown

Chavez’s erosion of democratic institutions helped lay the
foundation for the current political crisis. During his tenure, he
undermined the trademark institutions of successful liberal
democracies, including the Supreme Court, the CNE, and the
free press. His government also harassed and repressed
opposition leaders and critics. In 2004, pro-Chavez legislators
expanded the number of Supreme Court justices from twenty to
thirty-two. The newly appointed justices were pro-Chavez,
effectively eliminating this check on presidential power.
The CNE, the public agency in charge of ensuring free and fair
elections, consistently ruled in Chavez’s favor despite
substantial evidence against the government. An analysis of the
electoral registry revealed many inconsistencies: an improbable
growth in the total number of voters, voters lacking addresses or
identities, thirty-nine thousand voters over the age of one
hundred, and individuals listed dozens of times under different
identity numbers.
Since 2003, Freedom House has consistently ranked
Venezuela’s press as “not free.” The 2004 Law on Social
Responsibility in Radio, Television, and Electronic Media
allowed Chavez greater power in censoring opposition press.
The Chavez regime successfully took television stations such as
RCTV off the air and closed dozens of radio stations.
Independent newspapers were bought by those with ties to the
government.
Today, few functioning democratic institutions remain from
which to build consensus and work to solve the economic and
security crises. This has pushed the opposition into the streets.
Other Interested Parties
Neighbors: Leaders of Venezuela’s neighboring countries—
Brazil, Colombia, and Guyana—have clear economic, political,
and security interests in Venezuela. Because they do, they may
be important U.S. partners in restoring stability, as described in
the context of the options above.
Colombia would likely be the most affected by Venezuela’s
collapse because such an event could upend the current peace

negotiations between the Colombian government and the FARC.
Venezuela’s ungoverned spaces could provide greater refuge
and leverage to the guerilla group in negotiations. Already a
close U.S. ally, Colombia would likely cooperate with U.S.
efforts.
PetroCaribe: Those countries receiving subsidized oil through
the PetroCaribe program have a vested interest in Venezuelan
stability. Terminating PetroCaribe would have ripple effects
throughout the Caribbean, opening an opportunity for the
United States to reaffirm support for long-standing allies and
change the tenor with historical adversaries, including Cuba and
Nicaragua. Some nations have already taken steps to lessen
their dependency on Venezuelan support. Guatemala withdrew
itself from the program, and the Dominican Republic and
Jamaica have securitized their debts owed to Venezuela. Cuba
has begun normalizing relations with the United States.
OPEC: Venezuelan oil coming off the market could raise world
prices, benefiting OPEC. Still, having one of its founding
members in crisis weakens the already fragile cohesion of the
cartel and its influence on a global stage.
China: Like other creditors, China would suffer from a
Venezuelan default. Venezuela owes China at least $20 billion.
This could be an incentive for China to support multilateral debt
negotiations and perhaps efforts to restore stability, such as a
UN peacekeeping operation.
XI. Notes
(1) The paper must be at least three pages long, not including
graphics, which works out to approximately one page for each
question in Section VI, Your Assignment.
(2) You must double-space your lines in 12-point font and not
have any extra spacing between sections or paragraphs.
(3) You don’t have to cite the articles I have given you below,
but if you use any outside sources, they must be listed in a
bibliography and cited in the text in the APA style.

(4) Do not capitalize any of the positions in the NSC, including
that of the president unless the person’s name follows. (i.e., The
president was in Florida. We saw President Truman in
Florida.)
(5) Do not use the personal pronoun “I” in your analysis and
stay away from writing in short, choppy sentences.
XII. Glossary
Alliance: an official partnership between two or more parties
based on cooperation in pursuit of a common goal, generally
involving security or defense.
Austerity: strict economic measures, such as tax increases and
cuts to social spending, intended to reduce government deficits
and debt. Such programs are common as a condition of bailout
funds, including in Europe’s financial crisis in recent years.
Austerity’s champions, such as Germany, view it as an essential
step for indebted governments to rein in their spending.
Detractors, such as the United States and countries receiving
bailouts, such as Greece, argue that austerity compounds human
misery and stymies the growth necessary for countries to
eventually pay down their debts.
Blockade: an act of war wherein a foreign military cuts off
access to a specific location, usually a port, to impede
deliveries of supplies. In 1962, President John F. Kennedy
ordered a blockade of Cuba — calling it a “quarantine” to avoid
the implication of declaring war — in response to Soviet missile
activity on the island.
Bolivarian Alliance for the Peoples of Our America (ALBA): a
regional organization of eleven countries in Latin America and
the Caribbean grounded in an ideology of South American
integration and opposition to the liberal economic model

espoused by the United States. Formerly called the Bolivarian
Alliance for the Americas, the bloc was formed by Venezuela,
under Hugo Chavez, and Cuba, under Fidel Castro, in December
2004.
Hugo Chavez: the leftist president of Venezuela from 1999
until his death in 2013. Chavez first came to national attention
as an army officer when he led a failed coup d’état in 1992.
After running for president on a socialist platform, he
restructured the economy, increased social spending, pursued
regional cooperation with leaders sympathetic to his ideology,
and expressed vehement anti-American views.
Chavismo: Hugo Chavez’s ideology of twenty-first century
socialism. Though not precisely defined, Chavismo tended to
include a populist focus on providing social and economic
benefits to the masses, as well as anti-corporate and anti-
American sentiments. Chavez also emphasized popular political
participation, though in practice he sought to strengthen his
personal political control.
Colectivos: armed community groups created during Hugo
Chavez’s presidency to support and enforce his government’s
policies. Colectivos have been responsible for violence as well
as improvements in various communities.
Coup d’état: a government takeover, often led by the military,
that does not use the country’s codified mechanisms for
changing power (such as elections).
Debt service: payments on debt made by a borrower, such as an
individual, company, or government
Default: failure to make a payment on a bond or loan as
scheduled

Expropriation: government acquisition of private property for
public use without the consent of the owner, often with little or
no compensation. Chavez often expropriated business
operations in Venezuela. In the United States, the government
may take private property for public use under the principle of
eminent domain, but only with fair compensation.
Foreign direct investment (FDI): an investment in an enterprise
in one country made by a party from another.
Foreign reserves: assets held in reserve by a country, often in
the form of major foreign currencies such as the U.S. dollar, but
also potentially in gold or other forms. These reserves can be
used for such purposes as paying the country’s foreign debts,
buying foreign goods to import, meeting the country’s needs in
a crisis, and intervening in foreign exchange markets to affect
the value of the country’s currency. Some countries, including
Venezuela, accumulate reserves through the international sale
of oil or other commodities.
Fuel subsidy: a government payment intended to lower the cost
of fuel for drivers and other consumers. The payment can take
various forms but typically compensates producers for charging
less than market price. Though often criticized for burdening
government budgets while encouraging wasteful consumption,
subsidies are tremendously popular among consumers and
therefore difficult for governments to remove.
Fuerzas Armadas Revolucionarias de Colombia (FARC, or
Revolutionary Armed Forces of Colombia): aleft-wing,
nominally Marxist guerrilla group that has fought against the
government of Colombia since it was established in 1964.
Designated by the United States as a terrorist organization in
1997, the FARC derives most of its revenue from kidnapping
and drug trafficking, for which it uses the Venezuelan-
Colombian border region as a safe haven. The Colombian

government and the FARC have been conducting peace
negotiations since 2012, though some unrest has continued.
Hezbollah (The Party of God): a Shi’a militant group and major
political party in Lebanon.
International Monetary Fund (IMF): a multilateral financial
institution established in 1944 that exists to foster stability and
growth in the international monetary system, in part by
observing countries’ monetary and currency exchange policies
and providing them with technical assistance. As the global
economic crisis firefighter, the IMF offers loans to struggling
countries, usually conditional on the adoption of certain
policies to manage their economies and return them to
sustainable growth.
Multilateral: undertaken among three or more entities, usually
countries. The term frequently describes organizations such as
the United Nations (UN).
National Liberation Army (ELN): a guerilla group, founded in
1964 by radical Catholics inspired by Cuba’s communist
revolution, whose principal adversary is the Colombian
government. Smaller than the Revolutionary Armed Forces of
Colombia (FARC), the ELN has nonetheless mounted deadly
attacks and earned significant revenue from kidnapping,
extortion, and, more recently, drug trafficking.
Nationalization: a process in which a private business or
industry becomes a public one operated by a national
government. Nationalization may or may not involve
compensation to the previous owners. Leaders may nationalize
businesses or industries in order to seize greater control of
profits or natural resources, but may also do so for other
reasons, as when the United States nationalized the provision of
airport security after the September 11, 2001, attacks.

Nicolas Maduro: the president of Venezuela since 2013 and
Hugo Chavez’s longtime deputy and handpicked successor.
Many Venezuelans and observers see Maduro as less
charismatic than Chavez, and his tenure has suffered from a
shortage of legitimacy and decreased influence on party
leadership, the military, and government institutions,
compounded by Venezuela’s worsening economic crisis.
Nonstate actors: individuals or groups that do not belong to or
act on behalf of a state. This may refer to nongovernmental
organizations such as Amnesty International, media outlets such
as The New York Times, or terrorist groups such as Hezbollah,
ISIS and al-Qaeda.
Oil price shock: a large and rapid change in the price of oil.
The term typically refers to a price increase, which tends to hurt
consumers and countries that import oil. However, the price of
oil can also quickly decline, reducing the income of oil-
producing countries such as Venezuela.
Organization of American States (OAS): a regional organization
whose membership consists of the thirty-five countries of the
Americas. Founded in 1948 to strengthen peace, democracy,
and cooperation among its members, the OAS today works on
such issues as human rights, security, development, and
democratization.
Organization of Petroleum Exporting Countries (OPEC): an
organization of twelve oil-producing countries seeking to
coordinate their policies to keep oil markets stable and advance
their interests as producers. In particular, OPEC often seeks to
affect oil prices by increasing or decreasing production, though
its ability to do so is imperfect. Venezuela was among five
founding members of OPEC in 1960.
Orinoco belt: an area in north-central Venezuela that contains

most of the country’s oil reserves. The belt is one of the richest
oil deposits in the world.
Partido Socialista Unido de Venezuela (PSUV, or United
Socialist Party of Venezuela): the ruling party of Venezuela,
founded by Hugo Chavez in 2007 through a merger of coalition
parties.
persona non-grata: a designation given by a government to a
foreigner, often a diplomat, signifying that the person is
unwelcome. People declared persona non-grata must leave the
country if they are present and will not be allowed to enter.
PetroCaribe: a program established by Hugo Chavez in 2005 in
which Venezuela provides subsidized oil to thirteen Central
American and Caribbean countries.
Petróleos de Venezuela, S.A. (PDVSA): Venezuela’s state-
owned energy company. Long a massive source of government
revenue, PDVSA’s operations began to falter as Chavez sought
greater control over the company and failed to reinvest enough
money to keep its production steady.
Public debt: the debt held by a government. The term is often
used interchangeably with “national debt.”
Puntofijismo: the governing system that emerged from the
Punto Fijo Pact signed by the three major Venezuelan political
parties in 1958. Two of those parties followed through on the
pact and came to trade the presidency every five years between
1963 and 1988. The system provided considerable stability as
the parties accepted election results and rewarded their
supporters through patronage. However, many later grew to
doubt puntofijismo’s democratic character.
Referendum: a vote, typically organized by a government, in

which participants approve or reject a certain policy proposal.
This is a form of direct democracy, in which citizens themselves
(as opposed to elected representatives) make a policy decision.
Sanctions: a tool of statecraft, frequently involving economic
measures such as asset freezes and trade restrictions, used to
exact a certain behavior or outcome from another party. The
U.S. and EU sanctions against Russian companies and
individuals that aim to encourage Russia to end its interference
in Ukraine are an example.
Statism: This is a fascist doctrine that holds that sovereignty is
not vested in the people but in the nation state, and that all
individuals and associations exist only to enhance the power,
prestige and well-being of the state. It repudiates individualism
and the family and exalts the nation as an organic body headed
by the Supreme Leader (in this case, Nicolas Maduro) and
nurtured by unity, force and discipline. Thus, the state is
greater than the sum of its parts and that individuals have a
moral obligation to serve the state. In sum, it is the practice of
concentrating economic and political power in the state, by
giving a centralized government control over economic planning
and policy, resulting in a weak position for the individual or
community with respect to the government.
Unilateral: undertaken by only one entity, generally a country
Tariff: a tax on goods arriving from a foreign country, generally
used as a tool of trade and foreign policy to penalize adversaries
or favor allies or domestic producers
XIII. Background Articles
The Post's View
Opinion by the Editorial Board ‖ October 17, 2017
The Hope for Change in Venezuela Suffers a Crushing Blow
HOPES THAT Venezuela could emerge from its catastrophic

political and economic collapse by democratic means suffered a
crushing and perhaps terminal blow on Sunday. Having
abolished the National Assembly, crushed street demonstrations,
jailed nearly 500 opposition activists and all but wiped out
independent media, the government of Nicolás Maduro staged
elections for provincial governors. Polls showed the opposition,
which reluctantly agreed to participate, would win up to two-
thirds of the races — which was logical, since only about a fifth
of Venezuelans still say they support the government. Yet the
results announced by pro-regime election authorities were
nearly the opposite: Seventeen of 23 governorships were
awarded to Mr. Maduro’s party, which was said to have
collected 54 percent of the vote.
Stunned opposition leaders were unable to immediately point to
tangible evidence of fraud in the vote count, though some of the
results beggared belief: In the province covering greater
Caracas, a longtime opposition stronghold, polls showed its
candidate ahead by nine points, but the official count had him
losing by six. Still, the pre-rigging of the election was clear
enough. Among other measures, election authorities abruptly
moved the polling places of more than half a million voters in
anti-government neighborhoods to regime-friendly areas and
printed ballots including multiple opposition candidates,
including those who had been defeated in primary voting.
The electoral travesty was quickly denounced by the State
Department, while the secretary general of the Organization of
American States, Luis Almagro, said, “The results of an
election in a country with no guarantees for the effective
exercise of democracy cannot be recognized.” But the damage
has been done. Mr. Maduro and his shrinking circle of
international supporters, centered in Cuba and Russia, are
claiming that his regime has proven it has a democratic
mandate. In reality, it has all but shut down peaceful avenues
for rescuing the country.

That Venezuela needs help is beyond question. In addition to
the regime’s violent repression of dissent, the country is
paralyzed by shortages of food and medicine so severe that most
of its citizens say they have lost weight, and hundreds of
thousands have taken refuge in other countries. The inflation
and murder rates are probably the highest in the world. Mr.
Maduro and his clique, including senior military leaders, have
set new standards for Latin American corruption, pocketing
millions in graft and bribes and trafficking cocaine to the
United States.
The Trump administration has rightly broken with a long history
of U.S. passivity. Most of the regime’s elite are banned from
visiting the United States, and tough financial sanctions could
eventually force a default on its huge foreign debts. But with
military intervention not a workable or politically acceptable
option, U.S. options are limited. Drastic measures, such as an
embargo on oil imports from Venezuela, would only inflict even
more misery on its 31 million people.
Mr. Maduro has been a spectacular failure at governing, but
under the tutelage of his Cuban overseers he has succeeded in
closing off almost all avenues for change. The best of those was
a free and fair democratic election. Sunday’s result suggests
that such a vote is no longer possible.
Council on Foreign Relations
Venezuela in Crisis
President Nicolas Maduro’s efforts to consolidate power amid a
deepening economic and humanitarian crisis have drawn
widespread international condemnation.
Backgrounder by Claire Felter and Danielle Renwick ‖ Last
updated August 1, 2017
Venezuela is in the midst of an unprecedented economic and
political crisis marked by severe food and medicine shortages,
soaring crime rates, and an increasingly authoritarian executive.
Critics of President Nicolas Maduro and his predecessor, Hugo

Chavez, say Venezuela’s economic woes are the fruit of years
of economic mismanagement; Maduro’s supporters blame
falling oil prices and the country’s “corrupt” business elites. In
2016, opposition lawmakers took a majority in the legislature—
the National Assembly—for the first time in nearly two decades.
However, the Maduro government has taken steps since to
consolidate the president’s power, including usurping some of
the legislature’s authorities. Maduro’s actions have been met
with massive protests and international condemnation.
Chavez’s ‘Bolivarian Revolution’
Chavez, a former military officer who launched an ill-fated
coup in 1992, was elected president of Venezuela in 1998 on a
populist platform. As a candidate, he railed against the
country’s elites for widespread corruption, and pledged to use
Venezuela’s vast oil wealth to reduce poverty and inequality.
During his presidency, which lasted until his death in 2013,
Chavez expropriated millions of acres of land and nationalized
hundreds of private businesses and foreign-owned assets,
including oil projects run by ExxonMobil and ConocoPhillips.
Chavez, whose rhetoric often drew inspiration from Simon
Bolivar, the Venezuela-born revolutionary of the nineteenth
century, aimed to align Latin American countries against the
United States. He led the formation of ALBA, a bloc of socialist
and leftist Latin American governments, and established the
Petrocaribe alliance, in which Venezuela agreed to export
petroleum at discounted rates to eighteen Central American and
Caribbean states. Chavez also greatly expanded the powers of
the presidency. Shortly after he took office, voters approved a
new constitution that allowed him to run for another term,
removed one chamber of Congress, and reduced civilian control
over the military. In 2004, two years after he was briefly
removed from office in a coup, Chavez effectively took control
of the Supreme Court by expanding its size and appointing
twelve justices. In 2009, he led a successful referendum ending
presidential term limits.
Venezuela's Chavez Era (1958–2013)

Chavez remained popular among the country’s poor throughout
his presidency, expanding social services including food and
housing subsidies, health care, and educational programs. The
country’s poverty rate fell from roughly 50 percent in 1998, the
year before he was elected, to 30 percent in 2012, the year
before his death.
Maduro, who narrowly won the presidency in 2013, pledged to
continue his former boss’s socialist revolution. “I am ensuring
the legacy of my commander, Chavez, the eternal father,” he
said after the vote.
An Oil-Based Economy
Venezuela is highly vulnerable to external shocks due to its
heavy dependence on oil revenues. Oil accounts for about 95
percent of Venezuela's export earnings and 25 percent of its
gross domestic product (GDP), according to figures from the
Organization of the Petroleum Exporting Countries (OPEC).
The state-run petroleum company, Petroleos de Venezuela, S.A.
(PDVSA), controls all the country’s oil exploration, production,
and exportation. Critics say PDVSA is grossly mismanaged and
suffers from cronyism, a bloated payroll, underinvestment in
infrastructure, and a lack of budgetary oversight.
As global oil prices fell from $111 per barrel in 2014 to a low
of $27 per barrel in 2016, Venezuela’s already shaky economy
went into free fall. That year, GDP dropped 10 to 15 percent
and inflation soared to 800 percent. By early 2017, the country
owed $140 billion to foreign creditors while it held only $10
billion in reserves, raising fears of a default. By early 2017, the
country owed $140 billion to foreign creditors while it held
only $10 billion in reserves.
Many critics fault the Chavez government for squandering years
of record oil income. During the oil boom years from 2003 to
2013, “they were spending as if the price of oil was $200 per
barrel,” said Ricardo Hausmann, a professor at Harvard
Kennedy School and a former minister of planning in
Venezuela, in a CFR interview.

Price Controls and Shortages
Venezuela’s economic crisis is marked by soaring inflation and
shortages of food, medical supplies, and staples like toilet paper
and soap. Experts say the government’s strict price controls,
which were meant to keep basic goods affordable for the
country’s poor, are partly to blame. Many manufacturers in the
country cut production due to limits on what they could charge
for their goods.
Another policy contributing to the country’s economic
problems, many experts say, are currency controls, which were
first introduced by Chavez in 2003 to curb capital flight. By
selling U.S. dollars at different rates, the government
effectively created a black market and increased opportunities
for corruption. For instance, a business that is authorized to buy
dollars at preferential rates in order to purchase priority goods
like food or medicine could instead sell those dollars for a
significant profit to third parties. In July 2017, the official
exchange rate was ten bolivars to the dollar while the black
market rate was more than eight thousand bolivars to the dollar.
Imports reportedly fell to $18 billion in 2016, down from $66
billion in 2012, as foreign-made goods became increasingly
expensive. Many consumers are faced with the choice of waiting
for hours in line for basic goods or paying exorbitant prices to
so-called bachaqueros, or black market traffickers.
Experts say widespread expropriations have further diminished
productivity. Transparency International, which ranks
Venezuela 166 out of 176 on its perceived corruption index,
reports that the government controls more than five hundred
companies, most of which are operating at a loss. (By
comparison, Brazil, which is more than six times as populous as
Venezuela, has 130 state-run companies.)
A Humanitarian Crisis
Observers have characterized the situation in Venezuela as a
humanitarian crisis. In 2016, the head of the Venezuelan
Pharmaceutical Federation estimated that 85 percent of basic
medicines were unavailable or difficult to obtain. Hospitals

reportedly lack supplies like antibiotics, gauze, and soap. Infant
mortality in 2016 increased 30 percent and maternal mortality
65 percent over two years prior, according to government
figures. Diseases like diphtheria and malaria, which had been
previously eliminated from the country, have reemerged.
Poverty has also spiked. In 2016, a local university study found
that more than 87 percent of the population said it did not have
enough money to buy necessary food. Another study by a local
nutrition organization found that 30 percent of school-aged
children were malnourished. According to a 2016 report from
Human Rights Watch, the Maduro administration “has
vehemently denied the extent of the need for help and has
blocked an effort by the opposition-led National Assembly to
seek international assistance.”
Infant mortality in 2016 increased 30 percent and maternal
mortality 65 percent. Poverty and lack of opportunity are
exacerbating Venezuela’s high rates of violence. Long one of
the world's most violent countries, in 2016 Venezuela
experienced its highest-ever number of homicides: 28,479, or
roughly 91.8 homicides per 100,000 residents, according to the
Venezuelan Violence Observatory, an independent monitoring
group. (The U.S. rate, by comparison, is 5 per 100,000.)
Maduro’s administration has deployed the military to combat
street crime, but rights groups and foreign media have reported
widespread abuses, including extrajudicial killings.
The humanitarian crisis has spilled across Venezuela’s borders,
with thousands of desperate people crossing into neighboring
Brazil and Colombia; others have left by boat to the nearby
island of Curaçao. By some estimates, as many as 150,000
Venezuelans left the country in 2016 alone.
Political Turmoil
Amid the crisis, the Maduro administration has become
increasingly autocratic. Opposition lawmakers, under the
Democratic Unity Roundtable coalition, took the majority in the
National Assembly in 2016 for the first time in sixteen years,
but Maduro has taken several steps to undermine them.

In September 2016, Venezuela’s electoral authority, which is
considered loyal to Maduro, ordered the opposition to suspend a
campaign to recall the president, sparking protests and
international condemnation. The following month, the Supreme
Court stripped the National Assembly of powers to oversee the
economy and annulled a law that would have freed eighty
political prisoners, including opposition leader Leopoldo Lopez.
In March 2017, the judicial branch briefly dissolved the
National Assembly. The court revised its order days later
following an international outcry, but kept the legislature in
contempt, effectively preventing lawmakers from passing laws.
A week later the government barred opposition politician
Henrique Capriles, who narrowly lost to Maduro in the 2013
presidential election, from running for office for fifteen years.
On July 30, Maduro’s government held an election for a new
constituent assembly with sweeping authority to rewrite the
country’s laws and constitution. Supporters of Maduro won all
545 seats in the election, in which the electoral authority said
more than eight million people voted. The opposition, which
boycotted the election, and independent observers have disputed
the results.
More than one hundred people have been killed in clashes
between police and demonstrators since early April.
Government security forces have attacked journalists, and
several foreign reporters have been detained and, in some cases,
expelled, according to the Committee to Protect Journalists. In
2017, Freedom House rated Venezuela as “not free,” making it
one of two countries in the Western Hemisphere, along with
Cuba, with the democracy watchdog’s lowest ranking.
The Region Reacts
Mercosur, an economic and political bloc comprising Argentina,
Brazil, Paraguay, Uruguay, and Venezuela, suspended
Venezuela in 2016. In March 2017, the secretary-general of the
Organization of the American States (OAS), Luis Almagro,
recommended suspending Venezuela from the bloc unless the
Maduro administration moved to hold elections. Venezuela

announced its withdrawal from OAS the following month,
seemingly to preempt its suspension. In June, several OAS
members, including the United States, put forth a resolution
calling on the Maduro administration to end the violence and
respect human rights, but the measure failed to achieve the two-
thirds majority required to pass.
U.S. policy under President Trump appears to resemble that of
former President Barack Obama, writes CFR Adjunct Senior
Fellow Matthew Taylor. The Trump administration imposed
sanctions on Vice President Tareck El Aissami and eight
members of the Supreme Court in the first half of 2017, and
days before the July election it added to that list more than a
dozen current and former officials. After the vote, the United
States sanctioned President Maduro, making him just the fourth
foreign leader to receive such a penalty. Despite tensions
between Washington and Caracas, the United States remains
Venezuela’s largest trading partner.
Meanwhile, the Maduro administration retains the support of
allies in Bolivia, Ecuador, and several Caribbean nations.
China has lent Venezuela more than $60 billion since 2001, and
is the South American country’s largest creditor. Meanwhile,
Venezuela has sought significant ties with Russia. Before oil
prices fell in 2014, Venezuela was set to become the largest
importer of Russian military equipment by 2025. In February
2017, Russian Foreign Minister Sergey Lavrov reaffirmed
Moscow’s support for the Maduro government, saying bilateral
relations “are on the rise.”
Council on Foreign Relations
Can Venezuela Resurrect Its Economy?
President Nicolas Maduro has neither the desire nor the capacity
to institute the market reforms and debt restructuring needed to
revive Venezuela’s sinking economy, says economist Ricardo
Hausmann.
Interview by Sebastian Pellejero ‖ July 26, 2017
Ricardo Hausmann, Interviewee, Professor, Harvard University

The misguided policies of President Nicolas Maduro and his
predecessor, Hugo Chavez, along with falling oil prices, have
destabilized Venezuela’s economy and triggered shortages of
vital supplies, says Ricardo Hausmann, a professor at Harvard
Kennedy School and a former minister of planning in
Venezuela.
Hausmann argues that it will almost certainly take new
leadership in Caracas to introduce the market reforms and debt
restructuring he says are needed. “A recovery would require a
greater availability of foreign exchange, so Venezuela must
restructure its debt and ask for international financial
assistance,” he says.
P: Venezuela is experiencing its worst-ever economic crisis.
How did it get to this point?
H: The two causes of the Venezuelan disaster are a full-fledged
assault on market mechanisms and a crazy macroeconomic
policy. The assault on market mechanisms by former President
Hugo Chavez and his successor, Nicolas Maduro, has
undermined society’s capacity to organize itself in order to
produce and satisfy consumer needs. Imports are restricted and
exchange rate operations are severely regulated. In addition,
there is a draconian system of price controls with very heavy
penalties for those who violate it. These price controls distort
economic incentives and lead to shortages. Furthermore, there
has been a generalized insecurity of property rights: over 1,400
companies and nearly four million hectares of arable land have
been expropriated.
Finally, there has been a massive process of financial
repression, with inflation upwards of 500 percent and a
maximum annual interest rate on credit cards of 29 percent. All
of that has created a destruction of the market mechanism. All
the policies the regime has announced would worsen the crisis.
The government simultaneously adopted a macroeconomic
policy that sextupled the public external debt during its 2004–
2013 oil boom; in 2012 — when oil averaged $100 per barrel —
the state ran a public sector deficit of 17.5 percent of GDP,

which means that they were spending as if the price of oil was
$200 per barrel. The debt build-up caused Venezuela to lose
access to voluntary debt markets in 2013. This was followed in
2014 by declining oil revenues as the price of oil collapsed.
The Maduro regime responded to this situation by stopping
payments on imports and then halting imports altogether. That
collapse of imports—now down 75 percent relative to 2012 —
has contributed to a collapse in output and a shortage of
supplies. That is what triggered this incredible humanitarian
crisis.
P: How does President Maduro plan to manage shortages and
currency instability?
H: I don’t think that the Maduro regime has a strategy. They
have tried to remain current on foreign debt, prioritizing
servicing its debt to Wall Street above other policy objectives.
They have been trying to issue debt to pay their maturing
obligations at fire-sale prices. The last known operation was to
Goldman Sachs at an interest rate of 48 percent, demonstrating
the government’s willingness to mortgage the future in order to
allow the system to live an extra day. Rather than pursue
anything significant on the economic policy front, it has
focused on eliminating the political power of society by
convening an unconstitutional constituent assembly.
P: Why has Maduro focused on debt repayment?
H: That is a mystery to most people. It would sound like the
policies of a financial elite that prioritizes its own welfare over
anybody else’s. In part it is because many well-connected
Venezuelans own part of the debt. They may also have the
perception that if the government were to default or restructure
its debt, it would lose legitimacy. In the meantime, people
starve. It’s a puzzle; there is no easy explanation for such
awkward behavior.
P: How would default or the restructuring of debt affect the
regime?
H: The stability of the regime is compromised by things beyond
financial considerations, mainly the fact that it can only hold

power by systematically violating the constitution. The
constitution empowers the Venezuelan people through their
democratically elected institutions. Maduro’s government
realizes it can’t live with the elected National Assembly, nor
call for elections because it would lose. Instead, it relies on
pliant institutions — the armed forces and the Supreme Court —
to preserve power. This led to a large majority of Venezuelans
finding the situation unacceptable — Maduro’s approval rating
has fallen below 20 percent. I would say that beyond anything
that would happen on the financial front, it is the people’s
outrage that threatens the stability of the regime.
P: Can the government resolve the crisis?
H: What people have focused on is changing the regime, rather
than lobbying to change the policies of the current regime,
because it’s clear that it has neither the ideological desire nor
the administrative capacity to address the crisis. The interesting
questions are how the opposition can change the government,
and what a new government would have to do.
All the policies the regime has announced would worsen the
crisis, such as using the constituent assembly to nationalize the
remaining private activities in the oil industry, the only part of
the oil industry that is growing as Petroleos de Venezuela
(PDVSA) — the state-owned oil and gas company — collapses
at double-digit rates. Nothing it is planning to do will address
the crisis, so the interesting questions are how the opposition
can change the government, and what a new government would
have to do to recover Venezuela’s living standards and
economy.
P: What would a new leader have to do?
H: A recovery strategy would have to involve significant policy
reform and the support of the international financial community.
Policy reform will need to reintroduce free market mechanisms
so that society can self-organize and start producing again.
This includes securing property rights, reunifying exchange
rates, price liberalization, and changes in oil policy and other
pro-market policies. Venezuela was ranked 187 out of 190

countries in the World Bank’s “Ease of Doing Business” index,
beating out only Libya, Eritrea, and Somalia. So there’s a lot of
work to be done.
A recovery would require a greater availability of foreign
exchange, so Venezuela must restructure its debt and ask for
international financial assistance — similar to the recent
support for Greece. The current levels of debt are unaffordable:
Venezuela holds the largest debt-to-export ratio in the world,
along with the highest interest burden. Trying to recover the
economy with that burden would be impossible, as this debt
overhang would make Venezuela unattractive for new domestic
or foreign investment. Venezuela does not have the productive
capacity to recover and service this debt at the same time.
P: How has the Trump administration positioned itself toward
Venezuela? What can the United States do to ameliorate the
situation?
H: The United States has demonstrated concern about
Venezuela and Maduro’s democratic violations, having said so
explicitly at the recent Organization of American States (OAS)
special assembly. What the United States would do in the
context of a Venezuelan transition to democracy and a market
economy is still an open question. I hope the United States will
convene foreign actors in support of a strategy such as the one I
have outlined, creating a consensus that Venezuela requires
policy reform, international financial support, and debt
restructuring.
P: How has the current crisis affected Venezuela’s
relationships with other Latin American states?
H: A failed proposition put forth by five OAS member states
condemning Maduro’s democratic charter violations received
twenty votes, representing nearly 90 percent of the Latin
American population and more than 95 percent of the region’s
GDP. This charter places a legal responsibility on OAS member
states to collectively defend democracies in the region. The
Maduro government is thus almost entirely isolated, relying on
the support of Bolivia, Ecuador, Nicaragua, the Dominican

Republic, and some islands in the Caribbean.
Regional actors are worried that Venezuela’s humanitarian
catastrophe is expressing itself across its borders via massive
Venezuelan immigration — northern Brazil and Peru have been
overwhelmed by the arrival of Venezuelan nationals, and
Venezuela leads in asylum seekers in the United States.
Venezuela is also a public-health concern for the region. The
collapse in health care has caused an increase in infectious
diseases such as AIDS. Endemic diseases formerly eradicated
in Venezuela, such as malaria and diphtheria, have also
reappeared. A collapsing Venezuela also poses a risk for
countries in the region because it entails the loss of a relevant
trading partner.
P: Venezuela has played an important role in the Caribbean, so
how would this change?
H: Venezuela has a hugely expensive subsidy scheme with
Cuba, giving away some one hundred thousand barrels of oil a
day. When Venezuela tries to stabilize itself, it will need to
revisit that agreement. A country that needs international
financial assistance and debt restructuring cannot
simultaneously transfer to Cuba almost 10 percent of Cuba’s
GDP — these things are incompatible. Venezuela’s relationship
with the rest of the PetroCaribe [oil alliance] needs to be
reconceived, with oil producers in the hemisphere — the U.S.,
Canada, Colombia, Mexico, and Brazil — assuring the energy
needs of the Caribbean islands. The Caribbean islands today
have incomes per capita that are several times larger than
Venezuela’s. Venezuela cannot be solely responsible for
assuring their energy needs.
World Order 2.0: The Case for Sovereign Obligation
By Richard Haass, January – February 2017
For nearly four centuries, since the Peace of Westphalia, which
ended the Thirty Years’ War, the concept of sovereignty — the
right of nations to an independent existence and autonomy —

has occupied the core of what international order there has
been. This made sense, for as every century including the
current one has witnessed, a world in which borders are forcibly
violated is a world of instability and conflict. The globe’s
traditional operating system — call it World Order 1.0 — has
been built around the protection and prerogatives of states. It is
increasingly inadequate in today’s globalized world. Little now
stays local; just about anyone and anything, from tourists,
terrorists, and refugees to e-mails, diseases, dollars, and
greenhouse gases, can reach almost anywhere. The result is that
what goes on inside a country can no longer be considered the
concern of that country alone. Today’s circumstances call for
an updated operating system — call it World Order 2.0 — that
includes not only the rights of sovereign states but also those
states’ obligations to others.
From the late 1990s onward, a new liberal idea gained ground:
that governments that mistreat their populations and foment
instability in their neighborhoods forfeit their sovereign right to
rule. The International Criminal Court, which encroaches on
sovereignty in the name of justice, was established in 1998.
One year later, British Prime Minister Tony Blair laid out his
doctrine of liberal interventionism in Chicago, declaring that, in
a world of growing interdependence, “the principle of non-
interference must be qualified in some important respects.”
In 2005, the UN General Assembly endorsed the “responsibility
to protect,” the concept that when a state fails to prevent
atrocities, foreign governments can intervene to do so. Such a
concept of “sovereign obligation,” it is worth pointing out,
differs from the notion of “sovereignty as responsibility,” which
lies at the heart of the legal doctrine known as “the
responsibility to protect,” or R2P. R2P refers to the obligations
a government has to protect its own citizens — commitments
that, if ignored, are supposedly enforceable by other states
through measures up to and including military intervention. It
clearly represents a potential infringement on classic
Westphalian sovereignty, and it has supporters and opponents

for that very reason. (Instructor’s emphasis)
By contrast, sovereign obligation is about what a country owes
to other countries. It stems from a need to expand and adapt the
traditional principles of international order for a highly-
interconnected world. Sovereign obligation thus retains a
respect for borders and an opposition to their being changed
through coercion or force. It supports actions to enforce the
norm against aggression, whether the incident involves Iraq
invading Kuwait or Russia invading Crimea. And it retains a
respect for governments’ rights to act generally as they wish
within their borders, subject to the constraints of broadly
accepted provisions of international law, such as the Universal
Declaration of Human Rights and the Genocide Convention.
Sovereign obligation does not reject or replace the traditional
approach to order—one that remains necessary but is no longer
sufficient—so much as it builds on it.
In Chávez, Maduro Trusts, Maybe to His Detriment and
Venezuela’s
By William Neuman ‖ March 9, 2015
CARACAS, Venezuela — He thunders about conspiracies and
assassination plots. He says that he sleeps with both eyes open.
Few Venezuelans even know where he lives. But no matter the
dangers, President Nicolás Maduro says that no one will scare
him, fool him or divert him from carrying out the mission that
the “eternal Commander Chávez” has given him “until the end
of the end of the roads, now and forever.”
Mr. Maduro came into office seeking to imitate his charismatic
predecessor and mentor, Hugo Chávez, in nearly every way: the
way he talked, the way he dressed and in his fulminations
against American imperialism. But now, two years after the
death of Mr. Chávez, with his country sinking deeper into an
economic crisis, what was once Mr. Maduro’s greatest
advantage — his absolute loyalty to the former leader — may
have become his greatest handicap.
“The government inaction, the inertia, comes from a belief that

you find in Nicolás Maduro and his government about defending
Chávez’s legacy, as if nothing that Chávez left can be touched,
nothing can be changed or corrected because that would be
considered a betrayal,” said Victor Álvarez, a leftist economist
and former government minister under Mr. Chávez. Well
before Mr. Chávez’s death on March 5, 2013, it became clear
that many of his policies needed to be revised or even discarded
to set the nation’s economy on the right track, Mr. Álvarez said.
But wary of breaking from his mentor’s course, Mr. Maduro,
who repeats Mr. Chávez’s name like a mantra and calls himself
the son of Chávez, has doubled down on the same policies,
which economists say have contributed to a storm of economic
problems, including recession, soaring inflation and chronic
shortages of basic goods.
“Maduro has a tragic destiny,” said Alberto Barrera, a
newspaper columnist and novelist. He argued that Mr. Maduro
has to blame the United States and other enemies for the
country’s problems because to do otherwise would recognize
that Mr. Chávez’s legacy is flawed. “Maduro knows that he has
to confront a very big crisis, but to accept and recognize the
crisis is to recognize that Chávez and the revolution failed,” Mr.
Barrera added.
While Mr. Maduro sticks to Mr. Chávez’s legacy in economic
matters — including price controls and government ownership
of major companies that have stagnated and been mismanaged
— many Venezuelans argue that he may have surpassed Mr.
Chávez in one area: his attacks on the political opposition.
After dispatching troops during protests last year, Mr. Maduro
has jailed a succession of prominent politicians. Last month, the
intelligence police raided the office of Antonio Ledezma, the
mayor of Caracas, and hauled him off to jail. He has been
accused of taking part in one of the many coup plots Mr.
Maduro has alleged.
Mr. Ledezma now sits in the Ramo Verde military prison, along
with Leopoldo López, the leader of a political party who
championed last year’s protests, and Daniel Ceballos, a former

mayor. Another former opposition mayor, Enzo Scarano, was
recently released.
Mr. Chávez also sought regularly to intimidate the opposition,
and he drove some opposing politicians into exile with threats
to have them arrested. But opposition leaders say that being
politically active is much riskier today. “Maduro’s problem is
that he does not project leadership, so he has to make up for it
by trying to look strong,” said Stalin González, an opposition
legislator. “People laugh at him; they don’t take him seriously.
It’s like a bully at school. They laugh at him, and he resorts to
violence so that they will respect him.”
Mr. Maduro, a civilian with no military background, has loaded
his government with military officers to a greater extent than
Mr. Chávez, a former paratrooper who celebrated the trappings
of military life. The ministers of finance, the interior and food
and Mr. Maduro’s chief of staff are military officers, as are
numerous other cabinet members. “The ministerial positions
that manage the greatest economic resources are in the hands of
military officers,” said Rocío San Miguel, president of Control
Ciudadano, a group that monitors the military. She said that
more than a quarter of government ministers were now current
or former military officers, compared with one in five near the
end of Mr. Chávez’s presidency.
Mr. Maduro has also lavished perks on the military, giving the
armed forces their own television station, a bank and other
prizes. That has raised questions of whether Mr. Maduro has
drawn the military close to build alliances, whether he is a
captive of interests beyond his control, or both. Mr. Maduro
was handpicked by Mr. Chávez, who was sick with cancer, to
succeed him, and Mr. Maduro won a presidential election by a
narrow margin in 2013.
Top of Form
Bottom of Form
Top of Form
Yet to many he still seems stuck in Mr. Chávez’s shadow. Even
his backers describe him in relation to his mentor. “He learned

from Chávez to look at reality straight on and attack it as it is,”
said Roy Daza, a member of Mr. Maduro’s United Socialist
Party in the Latin American Parliament, a regional body.
Critics say that attack typically focuses on the symptoms, not
the roots, of longstanding problems. Faced with huge lines and
shortages of basic items like corn flour or sugar, Mr. Maduro
has jailed retail executives while steadfastly maintaining the
price controls that many economists say cause the problem.
“Instead of attacking the structural causes that create these
problems, they are attacking the consequences,” Mr. Álvarez,
the former minister under Mr. Chávez, said of Mr. Maduro’s
government. Mr. Maduro has shown a talent for juggling
internal pressures and factions within the movement left behind
by Mr. Chávez, sidelining some rivals and accommodating
others.
He pushed Jorge Giordani, a close adviser to Mr. Chávez, out of
government and then suppressed a mini-revolt by Mr.
Giordani’s supporters in his party’s left wing. And he has
marginalized Rafael Ramírez, the powerful former head of the
government oil company, PDVSA, removing him from that post
and other crucial positions before finally packing him off as
ambassador to the United Nations.
But Diosdado Cabello, the president of the National Assembly
and a former military officer, is considered Mr. Maduro’s main
rival for power and also the government figure with the greatest
influence within the armed forces. All that has led to a kind of
Kremlinology here, with observers speculating on who is behind
government actions and whether Mr. Maduro is fully in control.
“There is a lot of internal division. Does Diosdado have more
power than Maduro, does someone else?” said Daniel Cuevas, a
government worker who voted for Mr. Maduro but is unhappy
with the country’s direction. “In the end, that hurts the people.”
Despite his tough talk, Mr. Maduro has also earned a reputation
for Hamlet-like indecisiveness. He has spoken for over a year
about raising gasoline prices, the world’s lowest, but has taken
no action. A long-promised foreign exchange reform last month

turned out to be a tweak. “He is an enigma for Venezuelans,”
said Mr. Barrera, the columnist, pointing to the mystery around
Mr. Maduro’s residence as a metaphor for his presidency.
The official presidential mansion, known as La Casona, is still
occupied by one of Mr. Chávez’s daughters, Rosa Virginia, and
her husband, Vice President Jorge Arreaza. Mr. Maduro has said
the house is for the use of the late president’s family, for their
protection. “He hasn’t even moved into the house that
corresponds to him” as president, Mr. Barrera said. “He says
that he is going to stand up to the gringos, but he hasn’t even
been able to stand up to Chávez’s daughter so that he can
occupy the presidential mansion.” A government official, who
spoke on the condition that he not be identified, said that Mr.
Maduro lives in a residence inside a Caracas military base, Fort
Tiuna.
Mr. Maduro spends many hours each week on television
denouncing his enemies inside and outside the country,
including opposition politicians and the United States, in the
style of Mr. Chávez. Last month, he ordered the American
Embassy to sharply cut its staff. On the air, he describes
himself as the victim of international machinations. The
evidence he offers is often colorful but far from convincing to
many Venezuelans, including many supporters. He rarely
appears in public without his wife, Cilia Flores, a former
legislator whom he calls the First Combatant.
At 52, his thick brush of hair and mustache often appear jet
black, as if painted on, barely showing signs of gray. Vice
President Joseph R. Biden Jr. was quoted as commenting on Mr.
Maduro’s lustrous hair when the two met recently in Brazil
during President Dilma Rousseff’s inauguration, saying, “If I
had your hair, I’d be president of the United States.” Recently,
Mr. Maduro has focused on former President Obama, sometimes
pretending to speak directly to him during his speeches. He
often describes Mr. Obama as a decent man unaware of the
sinister forces in his government intent on attacking Venezuela.
But in a recent speech, Mr. Maduro sounded hurt that Mr.

Obama had not returned the attention.
How to Clean Up the Mess in Venezuela
President Trump should assemble a diplomatic effort to stop the
crisis under Maduro's repressive regime.
By Shannon O'Neil, Opinion Contributor ‖ April 28, 2017
Venezuela announced this week that it will withdraw from the
Organization of American States, deepening its isolation and
intensifying the sense of crisis there. In recent months,
Venezuela has descended into economic, political and moral
chaos, punctuated by the arrests of hundreds and the deaths of
dozens of protesters during marches on Caracas and surrounding
cities.
Venezuela is a test for the new Trump administration, which has
declared it "a mess." To stop the worst hemispheric crisis in
decades, President Donald Trump needs a policy that includes
not only tough words but also concrete actions. But the United
States can't do it alone. To help rather than hurt U.S. interests,
the United States – the historic regional hegemon – needs to
tread carefully and build a supportive coalition.
How did Venezuela come to this point? An oil-rich nation of 30
million, it is now in its third year of a steep recession, its gross
domestic product has shrunk 18 percent in the last year alone,
while inflation has spiraled into triple digits. Many Venezuelans
have involuntarily been put on what has become known as the
"Maduro diet," shedding pounds as they slowly starve due to
food and medicine shortages.
Politically, the government led by leftist President Nicolas
Maduro has destroyed the remnants of a once proud democracy,
overriding the legislature, canceling regional elections, stifling
the press and filling cells with political prisoners. Widespread
corruption and criminality permeate the administration, with
officials absconding with tens of billions of dollars from public
coffers. Other officials shepherd Colombian cocaine and other
illegal drugs through Venezuela's airports and ports, taking
their cut as the products head to American and European

markets.
How can the United States help change Venezuela's course?
First, there are things the U.S. administration should not do.
Condemnatory and inflammatory tweets will only provide
fodder for Maduro's conspiracy theories. Countrywide
sanctions cutting off Venezuela's access to U.S. refineries, a la
Russia in 2014, will inflict even greater costs on the nation's
desperate population. Worse, they would drive away potential
allies, and provide Maduro an enemy on which to blame his
failures. Unilateral actions in general will be ineffective, if not
counterproductive, confirming long held regional suspicions of
U.S. imperialist designs. America in this case cannot "come
first."
To succeed, the Trump administration must galvanize the
international community against Venezuela's increasingly
repressive regime. The best hope for change is careful and
consistent diplomacy. This begins with Venezuela's neighbors,
who are most affected by its disintegration. Recent political
changes make such unity more likely. New presidents in Peru,
Argentina and Brazil have already suspended Venezuela from
the Mercosur trading block and have vocally questioned its
claims to democracy. The Trump administration should work to
expand the number of anti-Maduro allies.
Beyond the region, other democratic nations, particularly in
Europe, need to stand up for what is right. Pope Francis, who
played an important though ultimately doomed role in creating a
dialogue between the Venezuelan administration and the
opposition, should join these voices and denounce the Maduro
government's authoritarianism. This broader group should raise
its voice within the United Nations, naming and shaming the
Maduro regime even while heeding his call for humanitarian
relief.
Concrete actions, particularly for Venezuela's kleptocrats and
criminals, must follow multilateral words. In 2015 then-
President Barack Obama declared seven high-ranking
government and military officials persona non-grata for human

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