The United States may soon find that using sanctions to curb authoritarianism in Venezuela is easier said than done. As the South American country sinks deeper into economic despair, its government under President Nicolas Maduro has cracked down on his opponents and tightened political control. This crackdown has prompted international concern, and recently, U.S. Secretary of State Rex Tillerson floated the possibility of restricting the sale of Venezuelan oil abroad. It's likely the White House will soon begin internal debates about implementing heavier sanctions on the government in Caracas. But while Venezuela's government is extremely weak compared to that of the United States, it still controls most important institutions in the country. Thus, any sanctions against it may fail to achieve their goal and actually end up drawing government elites closer together as they cling to power.
An Imbalanced Relationship History
Nearly all of Venezuela's export revenue comes from oil and its byproducts, and refineries along the U.S. Gulf Coast have been the country's economic lifeline for decades. The United States, however, can buy oil from virtually any country, meaning it has substantial power over Venezuela.
But Washington has long viewed Caracas as a minor nuisance, given that it is ensconced firmly in America's backyard on the easternmost edge of the Caribbean Sea. So as Venezuela began sliding into a more authoritarian state during the past 15 years, the United States did not need or want to do anything about it. After all, Venezuela's oil shipments were a steady source of income for several Gulf Coast refiners, and it was not in Washington's immediate interest to suspend these shipments merely to stall Venezuela's slow decline into a single-party state. Even at the height of Hugo Chavez's anti-American rhetoric and consolidation of power in the mid-2000s, the United States continued to buy more than a million barrels per day (bpd) of Venezuelan oil and fuel.
But the economic relationship between Caracas and Washington began declining in the late 2000s, as Venezuela started spending more than it made in oil sales each year. Its government began signing deals with China and oil importers who granted occasional loans to prop up the country's failing finances in exchange for a steady flow of oil. The 2014 collapse in global oil prices only accelerated the rate at which Venezuela sent its ever-declining oil supply to China to repay loans. Meanwhile, the United States began producing more oil in the early 2010s. By 2017, Venezuela was producing less than 2 million bpd and sending less than 500,000 bpd to the United States.
A More Aggressive Approach
This breakdown of the U.S.-Venezuela trade relationship, along with increasing unrest in Venezuela, has prompted Washington to behave more aggressively and decisively toward Caracas — a government it now regards as a growing security concern rather than just an ideological opponent. Venezuela, once neither dictatorial enough to garner human rights sanctions nor threatening enough for national security sanctions, is suddenly a growing humanitarian crisis.
Washington's new focus on Venezuela comes both from growing regional pressure to address Venezuela's social issues and from disparate concerns within the U.S. government. Some in security-oriented Cabinet posts see Venezuela as a security problem, since the Chavista government has sheltered Colombian rebels. Agencies such as the Drug Enforcement Administration, meanwhile, are more concerned about Venezuela's role in trafficking cocaine to the United States. And the Department of State regards the country as a gross violator of human rights. Altogether, these concerns have cohered into a clear U.S. policy: Increase pressure on Maduro either to hold free elections or to step aside in a negotiated deal.
The United States clearly wants Venezuela to hold off on its scheduled April 30 election, which it regards as neither free nor fair. Washington's hope is that severe enough sanctions will push the Maduro government to the negotiating table, where all parties can hash out a deal for free elections. Washington knows that free elections will not be enough to solve Venezuela's massive economic issues, but its logic is that resolving the current political crisis would at least open up a space to address those issues.
Easier Said Than Done
U.S. bureaucrats, however, may be overlooking the very powerful impulse motivating Venezuela's slide into dictatorship: fear. Giving up power in a presidential election would put the many Venezuelan politicians who have engaged in corrupt behavior for decades in a very uncomfortable position. Should they lose their grip on the government, they risk being sidelined from the political system, jailed in their home country or, in some cases, extradited to face trial in the United States. Faced with these options, Venezuela's elites are far more likely to resist ploys for fair elections, even if threatened by U.S. sanctions that could cause the country to default on bond payments and see even sharper inflation.
Though Maduro's administration has plunged Venezuela into dire economic straits, it likely will hold strong even if the situation worsens and there is a coup attempt or more protests. The only domestic force realistically capable of destroying the current government is Venezuela's military, and security forces turning against Maduro en masse is an increasing but still distant possibility at this point. In the long term, U.S. sanctions would worsen inflation and likely erode military support within Venezuela. But in the short run, Maduro's government is prepared to clamp down on dissent and protest.
If the U.S. government decides to take a harder line against Venezuela in the next several months by implementing sanctions, their success will depend on the Maduro administration's ability to remain united in order to hold onto power. If it continues to do that — and barring a military takeover — it may even outlive the Trump administration.