Why the United States and Latin America Need a New Venezuela Strategy

05/21/2015 01:32 pm ET | Updated May 21, 2016

On April 14, 2015, the Obama administration rectified a long-term anachronism in American foreign policy by announcing its intention to remove Cuba from the state sponsors of terrorism list. OAS leaders widely praised this third stage of the U.S.-Cuba normalization process (which was preceded by the December 2014 loosening of the embargo and diplomatic overtures towards Raul Castro). The isolation of Cuba was perhaps the most poignant relic of the Cold War in Latin America and a constant reminder of a period when America's image in the region was tarnished greatly by imperialistic intrusions onto national sovereignty and support for anti-Communist dictatorships.

Any soft power accrued or goodwill derived from the opening of relations with Cuba has been severely diluted by the Obama administration's decision to impose sanctions on Cuba's primary regional patron, Venezuela, a move scathingly criticized by Latin American leaders, including Cuban foreign minister, Bruno Rodriguez. While the U.S. government's rationale that Venezuela poses a threat to U.S. national security is baseless, the unwillingness of Latin American leaders or multilateral regional institutions, like the OAS and South American Union, to move beyond occasional rhetoric slaps-on-the-wrist and confront Venezuela's inexorable drift towards authoritarianism and economic crisis is concerning. The pernicious impact of Venezuela's political trajectory on regional stability is further magnified by the manner in which Venezuela has exported the Bolivarian regime's ideological flaws and anti-democratic governance tactics to other Latin American states. Nicaragua, Bolivia and Ecuador, began following the Chavez model during the region's "Pink Tide" leftist turn in the mid-2000s, and are formally aligned with Venezuela through the ALBA alliance co-founded by Castro and Chavez in 2004.

Unpacking the Current Crisis in Venezuela

Venezuela has been beset with hyperinflation -- the inflation rate was 63.4 percent per annum in 2014 and trending higher in 2015, as monthly inflation levels entered double-digit territory. Price increases for consumer goods combined with severe shortages of necessary supplies and the precipitous decline in oil prices over the past year, have caused a recession in Venezuela and triggered mass protests against government corruption and economic policies, like strict price controls, that have exacerbated the crisis. Bereft of the charismatic authority of Hugo Chavez, President Nicolas Maduro has resorted towards increasingly repressive tactics to quiesce unrest, on the grounds that protesters in Venezuela are foreign agents in a desperate attempt to drum up popular support.

The arrest of the mayor of Caracas, Antonio Ledezma, on unsubstiated grounds that Ledezma was staging a "coup attempt"; the expulsions of prominent opposition leaders, Julia Borges and Maria Machado; the politically-motivated trial of opposition leader Leopoldo Lopez; and legal action against half of Venezuela's opposition mayors ahead of the legislative elections later this year provides a basis for damning indictment of Venezuela's rapidly decaying democratic process. With Maduro's personal approval ratings hovering around 20 percent, the governing PSUV appears poised to lose the legislative elections held later this year, barring mass electoral fraud or a postponement of the democratic process. An MUD opposition victory has the potential to be highly destabilizing for Venezuela, especially if the MUD succeeds in arranging a recall referendum seeking to remove Maduro from power in 2016.

The recent wave of arrests and authoritarian methods utilized by the Maduro regime highlight severe weaknesses of Venezuela's political institutions due to the increased concentration of presidential power and the use of corruption probes to discredit opposition figures instead of strengthening the rule of law. Chavez's nationalization of 1,200 companies which mostly operate at a net loss, the illicit smuggling of $2.2 billion in oil revenues annually to Colombia and Brazil, and the siphoning of $20-25 billion in 2012 by Venezuelan elites abroad and into the black market, are among the most egregious acts of corruption worsening the economic crisis that triggered the 2014 mass protests. Corrupt and malfunctioning political institutions have been the single greatest contributor to Venezuela's economic woes, and the Chavez regime's egregious misuse of oil wealth has created a structural crisis that cannot be easily overcome, even in the event of a medium-term hike in oil prices.

How the United States and OAS can Counteract Venezuela's Authoritarian Turn

The resistance displayed by OAS leaders to U.S.-imposed sanctions during the recent OAS summit highlights the severity of the credibility gap the United States faces in its attempts to counter adverse political conditions in Venezuela. The failed 2002 coup attempt against the Chavez regime featured extensively in anti-American propaganda towards Venezuela. Chavez repeatedly insisted that he had proof of direct CIA involvement in the coup, including evidence of the deployment of U.S. aircraft and warships on Venezuelan waters and airspace. In 2005, Chavez threatened to suspend oil shipments to the U.S. due to alleged assassination plots against him and accused the U.S. of plotting to invade Venezuela via Plan Balboa. Allegations of U.S. belligerent towards Venezuela have continued to circulate since Chavez's death, ranging from claims that U.S. agents caused Chavez's fatal cancer to the expulsion of military attaches for espionage and terrorism against Venezuela.

While this hostile rhetoric has eroded U.S. soft power in Venezuela and other left-wing Latin American regimes, it is uncommonly noted that Venezuelan public good will towards the United States remains high (82 percent of Venezuelans saw America as a positive influence in 2002, which fell to a lower but still highly significant 62 percent level by 2014). Venezuela's anti-U.S. foreign policy alignments, as evidenced by its extensive military contracts with Putin's Russia, destabilization of Colombia, a U.S. strategic partner, through cooperation with FARC terrorists, and diplomatic overtures towards US nemeses like Iran and Gaddafi's Libya, should also be reconciled with its continuing economic dependency on U.S. oil refineries. By labeling Venezuela as a security threat and engaging in direct combat with the Venezuelan regime through sanctions, Obama risks destroying latent sympathy for American values amongst the Venezuelan public and emboldening the current regime to use nationalist justifications for further authoritarian defiance that will compromise prospects for a peaceful transition to a more democratic regime structure.

The United States should refrain from these combative policies and play a more indirect role in encouraging its Latin American partners to take the initiative in mitigating the brewing crisis in Venezuela. The South American union, UNASUR's democracy clause could be utilized to banish Venezuela from participation in the organization until it releases political prisoners and combats graft by decentralizing assets from the control of state and regime allies. In light of the Bolivarian regime's emphasis on a Pan-Latin American identity, regional isolation will be a severe blow to its public legitimacy. The sharpening of rhetorical criticism to specific abuses rather than moralistic denunciations of the nature of the Venezuelan regime will restrict Maduro's ability to scapegoat the U.S. for Venezuela's problems. Ultimately, the willingness of Latin American actors to address this crisis will be crucial to determining Venezuela's political trajectory and in the reversing the pernicious course taken by other left-wing populist regimes modeled after Chavez's system.