By Nick Corbishley – Nov 1, 2022
Gauidó has long outlived his usefulness. Now, he and the “interim” government he fronts are an obstacle in the way of reopening Venezuela’s oil market to US oil majors.
The foreign policy establishment in Washington is in the process of redrawing the lines of its relationship with Venezuela, whose economy it has been trying to systematically destroy for the past seven or eight years, with devastating consequences. In 2019, the Centre for Economic and Policy Research (CEPR) published a report alleging that U.S. sanctions on Venezuela had killed tens of thousands of people by crippling its ability to produce its number-one export commodity, oil, or import basic goods.
Venezuela boasts the largest oil reserves on the planet, estimated at more than 300 billion barrels, as well as 201 trillion cubic feet (Tcf) of proven gas reserves. And the US economy desperately needs to tap new energy sources to cushion the impact of the Biden Administration’s backfiring sanctions on Russia. To that end, Washington is considering loosening sanctions on Venezuela so Chevron Corp and other US oil companies can once again begin pumping oil in the country.
The End of a Painful Farce
The price Washington appears to be willing to pay is the head of Juan Guaidó, the man it helped propel from near-obscurity to become the so-called “interim” president of Venezuela. Of course, when Guaidó proclaimed himself president of Venezuela from a city square in downtown Caracas in January 2019, he had — and still has — zero democratic legitimacy. But that didn’t stop the governments of dozens of countries around the world from recognizing him as Venezuela’s legitimate leader. Ambassadors were appointed in his name, assets were seized (stolen), and military interventions were requested.
As the Argentinean journalist Bruno Sgarzini notes, the story could have been lifted straight out of a Gabriel Garcia Marquez novel. But the saga now appears to be reaching its closing act. Guaidó has long outlived his usefulness, apart from to himself and his entourage. Now, he and the parallel government he fronts are an obstacle in the way of re-normalizing economic relations between the US and Venezuela and reopening Venezuela’s oil market to US oil majors. That is what matters to Washington right now.
For the Maduro government in Caracas, putting an end to the sanctions regime that has crippled Venezuela’s economy is also a priority. During a visit to a petrochemical complex in the north of Venezuela in September, Maduro offered to provide Venezuela’s energy resources to Europe and the US, claiming that a shortage of gas and oil supplies in winter could be “tragic”:
“Now winter is coming in the north, there is a crisis in the supply of gas, oil, a crisis that could be tragic and I say to Europe and to the president of the United States, Joe Biden, Venezuela is here”.
A White House official recently told The Miami Herald that the Biden administration would not interfere if Venezuela’s opposition movement decided to oust Guaidó. “The United States continues to recognize Juan Guaidó as the interim government of Venezuela,” a U.S. national security official said. But if the Venezuelan opposition decides to call an end to the interim government, “it is their decision.”
Roughly translated, Washington is giving Venezuela’s opposition parties permission to cast Guaidó aside, which has not gone down well among Republican senators like Marco Rubio and Ted Cruz. According to two separate reports from Reuters and the Financial Times, three of Venezuela’s four opposition parties are unwilling to back Guaidó’s Washington-selected interim government as of next year. Reuters cited “four people familiar with the matter” while the FT quoted “a senior figure in the opposition alliance.”
Members of the Venezuelan opposition closest to Washington were also excluded from the recent direct negotiations between the White House and Miraflores. Those negotiations have produced important advances including a prisoner swap between the two countries as well as a slight relaxation in the sanctions regime. The Biden Administration has also called for a resumption in talks in Mexico between Venezuela’s government and opposition aimed at resolving the country’s political crisis.
Again, it’s a sign that Guaidó’s interim government is increasingly being sidelined by Washington. A spokesman for Guaidó recently said there was no clear position among the opposition parties about the continuation of the interim government. But his own “ambassador” to Washington, Carlos Vecchio, appeared to contradict that argument by stating in a recent televised interview that he felt more like an exile than an ambassador.
This drew a furious riposte from award-winning Venezuelan journalist in exile Patricia Poleo, who is certainly no friend of the Maduro government:
“In reality, Vecchio was never an ambassador. He made money and took advantage of the power Donald Trump gave him. This we need to make crystal clear: It was the government of Donald Trump that did all of this. He put all of them there. He gave his blessing… But [Vecchio] was never an ambassador. When the problems began with the Venezuelan migrants (to the United States), many of whom were detained at the border, this guy didn’t lift a finger… This guy never did anything for anybody. Never. And it wasn’t just him. None of Guaidó’s ambassadors did.”
Who knows how much money was squandered on keeping this farce going or how many Venezuelans living oversees suffered as a consequence? Much of that money came from the seizure of Venezuelan assets abroad, including its gold in the Bank of England vaults.
A Failed Open-Source Operation
The White House, together with Venezuelan opposition parties and the OAS, designed the Guaidó soft-coup as an open source operation — one that could unite disparate groups, including other national governments, around a single unifying goal: to remove Maduro. And that operation has failed spectacularly. Maduro’s government is, if anything, in a stronger position today than it was in January 2019.
But the experiment has had huge social and economic costs. The Guaidó political sideshow went hand in hand with ratcheting sanctions designed to make Venezuela’s economy, already locked in a hyper-inflationary spiral, scream. And scream it most certainly did, as Gregory Wilpert and Joe Sammut relate for the blog Venezuela Analysis:
The US government added [Venezuela’s state-owned oil company] PDVSA to the list of sanctioned entities in January 2019. These oil sanctions imposed by the Trump administration amounted to a trade embargo, cutting Venezuela off from its largest market (the United States received 35.6 percent of Venezuela’s exports in 2018). Even worse, the US government used the threat of secondary sanctions against other countries to cut off other oil markets, as well as access to credit. With this, as well as the effects of the 2017 FinCen letter and financial sanctions, the noose was tightened, cutting off Venezuela, not just from the United States, but also internationally…
Even worse, recognition of the Guaidó “government” would make Guaidó “the legal owner of funds or goods owned by the Venezuelan government.” According to Weisbrot and Sachs, this meant the loss of “most of the government’s $9 billion in reserves that [were] in gold; trade credits worth an estimated $3.4 billion; and CITGO, with estimated net assets of $5.2 billion.” The August 2017 sanctions also cut off some $2.5 billion annually of dividend payments from CITGO to the government. By the same measure, any remaining access to correspondent banks was “mostly wiped out,” which led to a situation where Venezuelans are denied the “necessary credits for importing medicine, food, and other essential goods.” In August of 2019, President Trump’s former National Security Adviser John Bolton upped the ante when he declared:
[O]ne way to summarize this to a business, for example, is: do you want to “do business in Venezuela or do you want to do business with the United States?” And I think for any international corporations, whether they’re US-based, European, wherever they may be … they ought to be asking their management if it’s worth risking for a trickle of income from the illegitimate Maduro government, if it’s worth risking their business in the United States.
The Guaidó experiment is not the first time the Blob has pursued regime change in Venezuela. In 2002, it supported a military coup d’état that ousted Hugo Chávez Frías as president, only for Chávez to be returned to power days later by a popular mobilization of Venezuelans. An article published this April by the Center for Economic Policy Research notes that the coup attempt, while far from novel, was a clear signal of intent.
[It] was the first Latin American coup in the twenty-first century, and showed that the US government would continue to prioritize its perceived geopolitical interests — and those of multinational corporations — in the region over democracy. The US would go on to support coups, and other sorts of undemocratic political transitions, in Haiti (2004), Honduras (2009), Paraguay (2012), Brazil (2016), and Bolivia (2019) — and would show support for attempted coups in Bolivia (2008), Ecuador (2010), and Venezuela (2019). Elements of the 2002 Venezuela coup playbook would also be repeated in many cases.
“More Alone Than Ever”
At the last meeting of the Washington-based Organization of American States (OAS), in early October, a group of left-leaning Latin American states ramped up the pressure on Guaidó by calling a motion to discuss ousting his representation from the organization. The motion only garnered 19 votes in favor, five short of the necessary 24. But crucially, only four out of the 33 members present were willing to vote directly against it while another nine abstained.
According to an article published yesterday in El País, Juan Guaidó is “more alone than ever”:
Juan Guaidó’s US-backed parallel presidency in Venezuela seems to have its days numbered. The main Venezuelan opposition parties do not want to continue participating in the parallel government with which for the last three years they have tried to isolate and ultimately topple Nicolás Maduro…
Washington has even opened new avenues of dialogue and negotiation with the Chavista government [in Caracas], suggesting it has even ceased to have faith in its own creation…
When Venezuela’s “interim” government was first launched, dozens of national governments recognized Guaidó as the legitimate president of Venezuela. They included all member states of the European Union, Canada, Japan, the UK, Australia, Morocco, Brazil, Colombia, Chile and Uruguay — many of the same governments that support unconditionally Volodymyr Zelenskiy’s government in Ukraine as well as sanctions on Russia.
But support for Guaidó has eroded over time. In January 2021, the EU’s 27 states downgraded Guaidó and his fellow opposition members’ status to “privileged interlocutors” for “working towards a democratic future for Venezuela.” Many of the governments in Latin America that supported Guaidó’s “interim” government in 2019 have since been voted out of office and replaced by left-wing governments, including, most recently, in Brazil, though Bolsonaro is yet to acknowledge his defeat.
Unsurprisingly, those governments do not support Guaidó’s claims to the Venezuelan presidency. A couple of weeks ago, Brazil’s President Elect Luiz Inácio Lula da Silva described Guaidó as a non-entity in both Brazil and Venezuela. “It is incredible that the ambassador of Venezuela” in Brazil “is the ambassador designated by Guaidó”, María Teresa Belandria, who “does not represent Venezuela; nor does Guaidó, who is no longer anything in Venezuela.”
A similar message was conveyed by Colombia’s Ambassador to Venezuela, Armando Benedetti, who told the Colombian newspaper Semana: “Juan Guaidó does not exist here or in Venezuela.”
Benedette also confirmed that Monómeros Colombo Venezolanos S.A., the Colombian subsidiary of state-owned Venezuelan petrochemical company, Petroquímica de Venezuela (Pequiven), will pass back into the hands of the Maduro government: “This was made clear from the moment the Gustavo Petro government recognized President Maduro. It belongs to Venezuela, not Juan Guaidó, because Guaidó is nobody.”
But some of Venezuela’s assets still remain in the interim government’s hands, including more than $1 billion of gold parked in the Bank of England’s vaults. Unlike the EU, the UK government continues to formally recognize Guaidó as interim president. After Maduro sued the BoE for access to the bullion, claiming it was required for a Covid-19 relief fund, a London judge reiterated in July that the bullion belongs to Guaidó.
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