Venezuelans are growing increasingly angry about the inability of their government to provide the person power and rescue equipment needed to cope with the deadly back-to-back earthquakes that hit the country on June 24.
Venezuela was in a vulnerable position even before this tragedy. The country had already been devastated by years of economic collapse and authoritarian governance. Now, it is grappling with natural disaster. The extent of the damage from the quakes remains uncertain, but official tallies on Monday recorded 3,342 deaths, 16,470 injured, and tens of thousands still missing.
To their credit, various neighboring States and international agencies such as UNICEF have been quick to respond. The United States pledged $300 million to relief agencies, mobilized civilian and military teams to Venezuela that are trained on disaster relief, and issued a limited sanctions waiver for earthquake relief activities. But these measures are far from enough. The United Nations estimates the losses from the quakes stand at $37 billion, or 32 percent of Venezuela’s GDP. To respond adequately to this crisis, the United States should spearhead a major reconstruction effort and lift all remaining sanctions on the Venezuelan economy.
The quakes hit a country deeply scarred by corruption, mismanagement, and years of U.S. sanctions. Between 2012 and 2020, Venezuela suffered the largest economic contraction ever documented outside of war. The sector that shrank the most during that period was construction, precisely the one most needed now for rebuilding. As the economy collapsed, so did state capacity: government revenues fell by a staggering 98 percent and most qualified workers left government employment. Now this disaster has completely overwhelmed the already inadequate response capacity of the Venezuelan state.
Since the United States carried out its Jan. 3 military operation to extract the country’s authoritarian leader, Nicolás Maduro, it has treated Venezuela as a virtual protectorate, directly selling the country’s oil and overseeing Caracas’ use of funds from these sales. The United States has carried out military operations with Venezuelan forces and President Donald Trump regularly boasts of the strength of the relationship between the two countries.
Despite this new treatment by the United States, the returns to Venezuela’s economy and its people, three-quarters of whom still live in poverty, have been limited. In fact, economic growth slowed in the first quarter of the year to its lowest level since 2021, and public opinion surveys show Venezuelans increasingly frustrated with the lack of visible improvement in economic conditions.
The U.S. rollback of the maximum pressure sanctions against the Venezuelan government has been slow, inadequate, and has failed to facilitate the participation by foreign investors and banks needed to revitalize the economy. For example, the country’s central bank remains under sanctions, operating under a limited license that restricts its capacity to adequately conduct the foreign exchange operations necessary for the economy to recover. Washington has also failed to address fundamental flaws that endure in Caracas’ management of its oil industry.
Tragically, the earthquakes now confront the Trump administration with the responsibility it took on last January: to repair an economy that U.S. sanctions helped damage. The single most important move that the administration could take would be to lift all remaining economic sanctions on the country. It could do so while maintaining where appropriate the personal sanctions on regime officials who have played a part in corruption or human rights violations. Evidence shows that limited waivers are insufficient to deal with major emergencies, as humanitarian organizations often face insurmountable obstacles to carry out relief activities in sanctioned environments.
Even if the United States does not lift all its sanctions on Venezuela, there is much that it could do to improve earthquake response efforts. For example, the U.S. Treasury Department could extend the license for earthquake relief issued June 25 to cover reconstruction activities for at least two years, instead of the four-month period for which it was issued. A few months of relief is not a serious response to an emergency of this scale.
Even when food and medicine are formally exempt from sanctions, banks routinely refuse to process the payments, fearing they could be penalized for an inadvertent violation, causing the exempt goods to still fail to reach the country. To address this risk, the U.S. Treasury should specify in a memo from its Office of Foreign Assets Control (OFAC) the dedicated and approved banking channels for humanitarian payments that provide pre-approved financial pathways for food, medicine, and medical devices. These channels would rely on vetted Venezuelan financial institutions operating under explicit written assurances from OFAC that transactions conducted within the framework will not trigger U.S. sanctions enforcement. The United States should assist the Venezuelan government with access to recent models for building enduring, rule-of-law-based, international financial transactions.
Given the massive reconstruction needs faced by the country, the United States and European countries should allow Venezuela to regain full access to its own funds. Despite the issuance of a license to Venezuela’s central bank in mid-April, at least $10 billion in holdings of cash and special drawing rights continue to be blocked by sanctions and foreign policy directives. These funds need to be immediately unblocked and directed toward reconstruction spending.
International institutions and other countries, plus the private sector, also need to step up. The International Monetary Fund should disburse additional funds through its Rapid Financing Instrument, free of any policy conditionality – as it did with Ecuador after an earthquake in 2016. Russia and China, the country’s largest creditors, should declare a debt moratorium to permit monies for Venezuela’s debts to be channeled to the country’s urgent reconstruction needs. The U.S. Treasury Department should establish a currency swap between the U.S. and Venezuelan Central Bank to provide access to liquidity to the Venezuelan government and strongly support efforts to stabilize prices and the exchange rate.
A serious commitment to Venezuelan political reconciliation must be prioritized. This tragedy should prompt deep reflection and action for the country’s dueling political factions to put their political differences aside and work jointly to address the emergency. Prior to the earthquakes, a meeting between the top opposition and government lawmakers suggested the start of a new cooperative approach. The United States should assist the formation of a joint task force to oversee and coordinate reconstruction efforts. Such cooperation should come alongside institutional reforms and guarantees offered by all sides that lead to free and fair elections.
Shortly after Venezuela was hit by an earthquake of similar magnitude in 1812, independence leader Simón Bolívar famously warned about the perils of building “republics in the air,” governments incapable of addressing the real needs of their constituencies. Hugo Chávez and Maduro, who claimed to be inspired by Bolívar’s ideas, instead left Venezuelans with a corrupt and incompetent regime unable to protect or rescue them.
In January, Trump and U.S. Secretary of State Marco Rubio eagerly took on the role of Venezuela’s de facto leaders. Let us hope, in the wake of this national crisis, they fulfill their responsibilities and leave a different legacy than Chavez and Maduro.
