Except for Cuba during the Cold War, and occasionally Central America (Nicaragua, El Salvador) in the 80's, geopolitical rivalries have been largely absent from this hemisphere. No more. Venezuela has increasingly become a soft-power battleground amongst nation-states, with Beijing and Moscow vying for influence and Havana bartering for economic lifelines. And it's boiling down to a simple question: how much longer can president Nicolas Maduro, the inheritor of Hugo Chavez's "Bolivarian revolution," hold on?
- Until U.S. actions two weeks ago to recognize Venezuelan opposition leader Juan Guaido and then slap significant oil sanctions on Venezuela, the "over-under" bet on president Nicolas Maduro's tenure was at least 12 months. With the help of Cuba, China and Russia, most bettors would have taken the "over." But with Trump's announcement on Guaido and Secretary of State Mike Pompeo's efforts to ratchet up oil sanctions, there's a better than even chance, no later than this spring, that one or two Venezuelan army garrisons rebel; at that point, it's over for Nicolas.
- Give President Trump credit: for one of the few times in his presidency, the U.S. has actually worked with allies and coordinated diplomatic actions against the Venezuelan dictator; it's making a huge difference - as are the sanctions.
- The politics of the region are also helping: with the exception of Bolivia and Ecuador, significant shifts to the right have taken place in key countries in the neighborhood, including Brazil, Argentina, Chile and Colombia; each now supports the Venezuelan opposition, and each is aligned with President Trump's initiatives.
To be clear: when this all ends, it will be nasty. There's no George Washington or John Adams (or a Simon Bolivar) waiting in the wings, to usher in democratic rule in Venezuela; social fragmentation, armed camps, and mini-civil wars will rage while the transition sorts out.
- But the existing situation is horrific: the equivalent of death squads called the "special action forces" of the Venezuelan police, now roam the slums and execute protest leaders and sympathizers. They're helped by Cuban counterintelligence teams, who earlier had focused on middle-class protestors. Of course, the bulk of the middle class has already fled. But it's the poor in the barrios who had been the early Chavez, and until recently, Maduro, supporters; not now. It's why Maduro's days are numbered.
President Trump and his national security team are understandably worried about the impact on global energy prices of the severe sanctions on PdVSA, Venezuela's state oil company. Because Venezuela produces "heavy, sour" crude, there will be shortages at refineries that rely on this product; and some analysts, as a result, predict rising gasoline prices by the spring.
- To mitigate the effects, the president may cut Iran some slack. Last fall Trump granted waivers to six countries that allowed them to continue to purchase Iranian crude; these waivers expire in April. To cushion any increase in gas prices because of Venezuela sanctions, expect some of the waivers to be rolled over; if so, while it helps Iran in the short-term, it will be a small price to hasten Maduro's departure.
Bottom Line: we are probably approaching the end game here; take the under! If this bet pays, the U.S. and Venezuela's neighbors - Colombia especially, and the OAS as a coordinator - will need to invest years and billions in humanitarian assistance and infrastructure restoration. But hopefully, in the end, the transition from authoritarian, socialist rule will bring badly needed relief for a proud country brought to its knees by the so-called "Bolivarian revolution."
- Bolivar himself, "el Libertador," would be embarrassed to see what was wrought in his name.
