By Carlos Ron – Oct 20, 2023
As our world progresses into a new world order described by some as “fair multipolarity”, we must acknowledge that such a transformation will not be met without resistance by the forces wishing to maintain a unipolar world order that is no longer sustainable. It is through decisive and concerted action by the countries most affected by unilateralism that we can advance towards the global equilibrium that the world requires, writes Carlos Ron, Venezuela’s Deputy Minister of Foreign Affairs for North America and President of the Simon Bolivar Institute for Peace and Solidarity Among Peoples.
A New Washington Consensus
In April of this year, US National Security Advisor Jake Sullivan delivered a speech at the Brookings Institution which was quite revealing and could lead us to understand the current geopolitical moment and the implications it will have on a new arrangement and its key resource markets, such as oil. Sullivan laid out the idea that neoliberal globalisation as it had been laid out under the Washington Consensus, was no longer viable, and that a “new Washington Consensus” was needed for the US and the world to face today’s current challenges effectively.
The challenge for the US, according to Sullivan, was to overcome the effect of neoliberal globalisation on the US economy: a significant deindustrialisation across the country that makes the US more dependent on foreign economies, such as China. Sullivan concluded, therefore, that a new consensus is needed to jump start the economy and give prosperity back to the middle and working classes. In truth, what this shift in policy indicates is that unilateral coercive measures – better known as illegal sanctions – are to be used together with supply-side government subsidies with the intent of promoting economic growth based on a military-industrial policy while placing limits on competitors.
Sullivan recognised signs of the decline of US economic leadership: growing inequality, economic stagnation, and the fact that US is losing supremacy in key technological sectors. The US must also confront the reality that both Russia and China are rapidly progressing in military and technological development, that strategic natural resources may no longer be readily available for US interests, and that important international players have engaged in cooperation – such as the BRICS+ countries – and are posing the possibilities of building a new financial architecture and discussing de-dollarisation. The US has begun responding by using all its tools to disrupt these processes and has engaged in promoting tensions, a Cold War mentality that would help it advance its interests.
Sullivan’s “new Washington Consensus” calls for domestic investment in the military industry, which is extremely dependent on oil production, as the US defends itself from what it calls the “China shock.” US public investment, therefore, is already being channelled towards the areas identified as those where the US might soon lose its hegemony: AI, quantum computing, biotechnology, semiconductors, and critical resources. Coupled with a robust sanctions policy aimed at denying access to key technologies and critical resources, this strategy seeks to strengthen US growth and undermine its competitors.
Creating Tensions around Oil
The fact that the US also claims to promote an energy transition does not alter its need to control oil markets. Oil continues to be a relevant resource for any military-industry development, but also for development in general. That is why the US is interested in shaping the energy market and does so through its illegal sanctions policy towards countries such as Venezuela, Iran and Russia. The ongoing special military operation in Ukraine has further distorted access to energy sources; to implement the new US strategy, alternatives are needed and constructed.
Back in 2015, ExxonMobil discovered important oil reserves in a region in South America that for over one hundred years was once subject to a territorial controversy between Venezuela and the United Kingdom, which was later inherited by independent Guyana. Ever since Guyana became an independent nation, this controversy has been dealt with peacefully, through a series of diplomatic channels and processes. However, ExxonMobil, with the support of the US Departments of State and Defense, began pressing to obtain maritime concessions that Guyana cannot legally grant, as the border has not been settled in a mutually-agreed process, as both countries previously agreed under the Geneva Agreement of 1966.
This US-supported push by ExxonMobil is creating political and military tensions for Venezuela and the region. Venezuela, under the administrations of both President Hugo Chavez and President Nicolas Maduro has reasserted control over its resources and conducted a production policy independent of US interests. Building tensions along the Venezuelan border is meant to not only tap into new resources, but to destabilise and threaten Venezuela as well. ExxonMobil lost its concessions in Venezuela in 2007 and is currently financing Guyana’s case against Venezuela at the ICJ.
In January of this year, the US engaged in police training in Guyana, the Southern Command visited the country in July, and joint military exercises took place in September. On September 15, Sullivan met with Guyanese President Irfaan Ali and discussed the “migration and security crisis” in Venezuela. Unprecedented Guyanese rhetoric and defiance in granting concessions was noticeable during the week of the United Nations General Assembly debates, as was the State Department’s support for Guyana’s actions.
Along with many other interventionist actions against Venezuela over the last 24 years that include illegal sanctions on the oil industry, US national and corporate interests have stepped up border tensions as part of its efforts at controlling Venezuela’s resources. Venezuela holds the world’s largest proven reserves and has been a key energy player in the region. Its energy policy towards its Caribbean neighbours has been key in promoting development and in decreasing dependence on the US Venezuela is also a founding member of OPEC, a strategic partner to Russia and China, and an aspiring member of BRICS+. It is no surprise that under the guidelines of the new Washington Consensus, political and military tensions and actions are used to prevent access to Venezuela’s resources by US competitors.
Current oil prices are at their highest level this year, with an increase of 10% only in the month of September. Together with rising housing prices in the US, they can be expected to drive up inflation at a moment when OPEC+ countries (which sanctioned Venezuela and Iran and BRICS+ members Russia, Saudi Arabia, and United Arab Emirates) have agreed to reduce production through 2024.
This will undoubtedly be a source of concern as the US prepares next year for a decisive presidential election.
Creating a Zone free of UCMs
The recent geopolitical shifts, especially the impact of the South African BRICS Summit in August, but also the emergence of an important group of countries denouncing US unilateralism and seeking to return to adherence to the principles of the UN Charter, which questions the call for a new “rules-based” order led by the US, allows for new opportunities.
The Group of Friends of the UN Charter has discussed the establishment of a Zone that is Free of Unilateral Coercive Measures: a space for engagement between countries illegally sanctioned by the US, including countries threatened with secondary sanctions, where they can freely pursue regular trade and investment transactions, through an alternative system. Such as space would seek to combat the extraterritorial implementation of the illegal sanctions and explore joint economic, commercial, legal, political, and diplomatic actions to guarantee commerce, financial exchanges, safe logistics and any other steps to mitigate the impact of these measures. It could also set the stage for concerted multilateral responses to this flagrant violation of international law that the US uses as part of its foreign policy. Together with initiatives like those discussed in the BRICS summit aimed at establishing independent financial tools, a UCM-Free Zone can allow for the consolidation of an energy market space free of US controls.
Possibilities for the Future
In the likely scenario of a repeated confrontation between candidates Trump and Biden, it seems the objectives of Sullivan’s new consensus would apply regardless of the outcome. Coming from the National Security Agency rather than a more political institution, this policy seems to reflect a shared hostility toward China and other US competitors, as well as a need to secure energy and other key resources to maintain US economic and technological supremacy.
Therefore, we can come to three important conclusions at this conjuncture:
First, as long as the US uses unilateral coercive measures as a foreign policy tool, it will continue to employ them in attempts to control the energy market and to prevent competitors from having access to resources that could help them surpass US development in key areas.
Second, there is a “new Washington consensus” promoted by US national security strategists directed at building back US technological leadership through public investment used to finance a military-industrial policy where access to oil is key. For this purpose, political and military pressures will be employed along with the sanctions toolkit.
And finally, in light of this new policy, countries must build geopolitical alternatives that diminish US influence on energy markets and financial transactions. Multilateralism and true cooperation are resources for combatting illegal unilateralism and guaranteeing that the multipolarity of our time can develop under a fair basis. The current conjuncture presents the opportunity so that new independent financial tools are created and for building an independent and international law-abiding UCM-Free Zone that does not give in to US pressures, where countries can safely carry out the transactions needed to sustain their development.
Carlos Ron is Venezuela's deputy minister on foreign affairs for North America, appointed by President Nicolás Maduro on May 22, 2018. Carlos Julio Ron Martínez was charge d'affaires at the Venezuelan Embassy in the United States, from February 23, 2017, until May 22, 2018 when he was declared persona non grata by the US Department of State. He previously work in the Venezuelan embassy in Brazil. He is also president of the Simón Bolívar Institute for Peace and Solidarity among Peoples (ISB).