(Este artículo también se encuentra en español aquí.)
Yesterday evening, the Biden administration announced that it will once again extend recognition to Juan Guaidó as interim president of Venezuela for an additional year. Guaidó’s claim to Venezuela’s presidency is based on a controversial interpretation of an article of the country’s Constitution that allows the National Assembly president, in the absence of an elected president, to temporarily take charge of government while new elections are called. Since Nicolás Maduro’s 2018 re-election was neither free nor fair, Guaidó’s supporters claim, the president of the National Assembly at the time at which a new presidential term began must continue to hold office until Maduro abandons power. On Monday evening, a group of legislators of the National Assembly elected in 2015 reaffirmed this interpretation, extending Guaidó’s interim presidency by an additional year.
Guaidó’s claim is tenuous both legally and politically. He has never won a national election, his term as legislator expired more than a year ago, and his poll numbers are as low as Maduro’s. His interpretation of the Constitution is highly disputed, especially after the National Assembly’s five-year term expired in 2021. His administration of public funds has come under intense criticism – including by top members of his coalition – for its lack of transparency and associated corruption scandals. Monday’s decision counted with the support of less than half of the principal legislators elected in 2015 – though the official tally was inflated through the questionable practice of incorporating substitutes of principal legislators who do not recognize the validity of the sessions.
Many of Guaidó’s international backers recognize that his claim is problematic yet argue that continued recognition of his interim government is needed to bar Maduro from accessing the nation’s funds abroad and using them to consolidate his rule. The argument illustrates all that is wrong with the Venezuela policy that U.S. President Joe Biden inherited from his predecessor and is about to double down on.
The central idea of this “maximum pressure” approach – implemented by Trump and Biden both through economic sanctions and by the transfer of control of Venezuelan government funds to Guaidó’s interim government – is that depriving the country of the funds needed to sustain its economy will bring about regime change. It hasn’t, and it won’t. It will simply contribute to worsening the country’s humanitarian crisis, fuel animosity toward the United States, deepen opposition divisions, and weaken civil society.
In a new study published today as part of the Sanctions and Security Research Project, I argue that U.S. economic sanctions toward Venezuela – which, in contrast to those of other nations, block the country’s access to export and financial markets – have played a crucial role in limiting the country’s access to foreign exchange, contributing to a collapse of 72 percent in the country’s per capita income – the equivalent of four Great Depressions and the largest contraction ever documented in Latin America. Aggregate data show that oil production contracted after every U.S. decision to tighten sanctions, while detailed analysis of the evolution over time of output of oil-producing firms shows that companies with access to credit prior to sanctions suffered disproportionately from U.S. executive orders barring access to capital markets. According to econometric estimates presented in the study, U.S. sanctions are responsible for at least half of the decline in Venezuela’s oil production since 2017, depriving the country of the foreign currency revenue needed to import essential goods and sustain its economy.
Starving an economy of its capacity to purchase goods to promote regime change is cruel, inhuman, and contrary to international law. It is the modern equivalent of siege warfare – the attempt to starve cities into submission, which today is considered a war crime. The deliberate targeting of civilian populations should have no place in the foreign policy of a civilized nation. The European Union and Canada, among others, have explicitly limited themselves to the adoption of individual sanctions on regime officials, with European leaders explicitly stating that they will never consider sanctions that hurt all Venezuelans. It is shameful that the United States should be an outlier on this issue.
Sanctions apologists have tried to muddy the discussion by arguing that it is Maduro and not sanctions that are to blame for Venezuela’s plight. This argument is fallacious and disingenuous. No serious scholarly work has ever tried to deny that Maduro’s policies contributed to the country’s economic crisis. The United States should be seeking to design policies that do not increase Venezuelans’ suffering, instead of just arguing that it is not causing as much damage as Maduro.
Among the main reasons the Biden administration has maintained Trump’s failed strategy is the fear of antagonizing a powerful constituency of Cuban and Venezuelan exile groups in the swing state of Florida. It is understandable that those who have fled brutal authoritarian regimes should favor a hardline strategy against them, but it is rarely a good idea to let these groups take charge of designing policy toward their home countries. Ronald Reagan understood as much when, in 1987, against the calls of hardline Polish opposition groups, he heeded Lech Walesa’s and Pope John Paul II’s request to lift sanctions on the Polish economy. Far from being an obstacle to the Polish transition, the lifting of sanctions made possible the signing of the 1989 Roundtable Agreements that led to Poland’s successful transition to democracy. An extensive literature demonstrates that sanctions are rarely effective in achieving regime change, and often end up making the target regimes stronger.
As it was for Donald Trump, Biden’s Venezuela policy has been an abject failure. Predictably, the policy has fueled deep resentment toward the United States: as outlined in my report, 76 percent of Venezuelans oppose U.S. oil sanctions, while 53 percent have a negative view of Biden. The unpopularity of sanctions and the U.S.-backed maximalist strategy have helped drive a deep schism in the Venezuelan opposition. During recent regional elections, centrist parties opposed to Guaidó and critical of economic sanctions took around one-third of the national vote. The division in the opposition vote allowed Maduro’s backers to coast to victory in 19 out of 23 state races, despite receiving less than half of the national vote.
U.S. policy toward Venezuela needs a deep and profound overhaul. Its first and foremost focus should be the support of initiatives to alleviate the suffering of Venezuelans and help the country emerge from its deep economic and humanitarian crisis. The United States and international community should encourage negotiations between the government and a truly plural representation of opposition groups and civil society organizations. These should aim to create a framework that allows oil revenues and deposits abroad to be used to purchase goods essential to address the country’s humanitarian crisis under international supervision.
Individual sanctions on regime officials against whom there is credible evidence of corruption or human rights violations should continue to have a place in U.S. policy, as they do in the approach of other nations. Measures that target the whole economy, in contrast, should be phased out. Doing so will not allow Maduro to access offshore deposits, because he will continue to lack international recognition as Venezuela’s president. But the United States should cease to support the legally questionable claim of an unrepresentative faction of the opposition to manage the country’s funds abroad. Instead, it should support the appointment of a non-partisan board of overseers to manage the country’s funds subject to high standards of transparency and accountability.
Ambiguity and absence of clear guidance regarding rules issued by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) have resulted in massive overcompliance, leading financial institutions to severely restrict transactions by Venezuelans unrelated to the Maduro regime. OFAC should begin to assume the burden of establishing whether there are reasons to block transactions. It can start by issuing a list of entities pre-cleared to carry out humanitarian programs in Venezuela as well as establishing a fast-track procedure for addressing requests related to humanitarian initiatives.
Overhauling sanctions policy will not necessarily bring democracy back to Venezuela. Authoritarian regimes such as Maduro’s are hard to dislodge, and the international community needs to come to terms with the fact that the tools at its disposal to do so are limited. What the United States must do is dramatically reverse a failed sanctions policy that exacerbates the suffering of millions of people who should not be made to pay the cost for the atrocities of their ruler.