A Path to Partnership With Venezuela: How the United States Can Help Turn a Dictatorship Into a Democracy

EXECUTIVE SUMMARY

The 2030s will likely determine whether Venezuela regains stability, democracy, and prosperity or remains authoritarian and dysfunctional. U.S. credibility in Latin America relies on the United States using its newfound leverage to drive democratization and economic recovery. An open and secure Venezuela would increase stability in the region and help protect the U.S. homeland and critical supply chains.

First and foremost, the United States must ensure that free and fair elections are held and certified by international monitors. Even aligned authoritarian governance will not foster long-term stability. The United States can achieve this goal by leveraging both economic carrots, including investment in resurrecting energy infrastructure, and sticks, such as placing a hold on U.S. Treasury Department licenses and oil payments to state coffers if the interim government crosses red lines.

A successful democratic transition also requires rebuilding the state’s capacity to manage the economy efficiently and fairly, ensure public safety, and administer justice. In support of these objectives, the United States should take the following steps:

Delaying elections until after 2028 risks keeping Venezuela trapped in kleptocracy and crisis. Only a comprehensive, institutional approach will deliver for U.S. interests and the Venezuelan people.

INTRODUCTION

Venezuela is one of the most strategically important countries for the United States in the Western Hemisphere. It holds the world’s largest proven oil reserves, considerable natural gas production capacity, and many critical minerals. During the Cold War, it was a stable democracy that often aligned geopolitically with the United States. Afterward, however, it became a source of threats to U.S. interests and hemispheric stability under the dictatorship inaugurated by Hugo Chávez and consolidated by Nicolás Maduro: an incubator for transnational organized crime groups; a highway for illicit drug, gold, and people trafficking; the source of one of the world’s largest recent refugee crises; and the most important South American ally of U.S. adversaries such as China, Cuba, Iran, and Russia.

The first Trump administration unsuccessfully adopted “maximum pressure” economic sanctions and diplomatic isolation to dislodge Maduro. The Biden administration tried mediated negotiation and a push for new elections as a pathway to change. But when those elections came in 2024, Maduro disqualified his principal opponent, María Corina Machado, and then robbed the candidate she backed, Edmundo González, of his landslide victory.

What finally broke the impasse was the U.S. military’s capture and removal of Maduro on January 3, 2026, to face criminal charges in the United States. Although the unilateral raid was popular in Venezuela, it divided U.S. politicians and the U.S. public, many of whom worried that the United States was again overextending itself globally, violating international law, and giving its geopolitical adversaries license to do the same, while leaving Maduro’s corrupt affiliates in place. Since the extraction, the United States has reestablished diplomatic relations with Venezuela, incentivized oil companies from the United States and allied countries to strike investment deals with Venezuela’s state oil firm PDVSA, and encouraged Chavista authorities to negotiate the terms of a political transition with representatives of the democratic opposition.

Observers have rightly raised concerns about corruption, the possibility that interim President Delcy Rodríguez is only pretending to consider political liberalization while stalling for time, and the risk that the United States is converting the country into a neo-protectorate resource colony. Some are also concerned that the Trump administration has misguidedly concluded that the only way to avoid a breakdown of order and a resulting power vacuum is regime continuity, and that the administration is thus not truly committed to pushing for new elections.

But there are also some reasons to believe a political opening is gathering momentum. Under U.S. pressure, Rodríguez has somewhat relaxed censorship and repression, affording civil society the space to participate in activism that it was systematically denied starting in 2017. A Supreme Court reform negotiated with opposition leaders is underway, and the naming of a new National Electoral Council is expected to follow—both preconditions for new, credible elections. U.S. and European energy companies are expanding or reestablishing operations in the country under a reformed hydrocarbons law, as well, and oil output has risen from roughly four hundred thousand barrels per day in 2020 to well over a million as of April 2026, although it has since plateaued.

Still, much about Venezuela’s future and the future of the bilateral relationship will likely be decided in 2029 and beyond. The 2030s could be the decade that determines whether Venezuela again becomes stable, prosperous, and U.S.-aligned—and an example to others of the benefits of U.S. partnership—or, in a worst-case scenario, remains authoritarian, violent, and economically dysfunctional, with the U.S. relationship enabling these dynamics.

It is not clear that U.S. policymakers have thought through how to handle the next phase: how to re-institutionalize a diplomatic relationship currently based on personal relationships; prevent the Rodríguez administration or other actors from delaying a return to democracy; ensure that Venezuela’s oil wealth drives broad-based economic recovery and benefits the Venezuelan public, not just a small clique of insiders; and depoliticize and professionalize the security forces while rebuilding the rule of law.

Progress toward these goals requires Washington to use its current leverage strategically to drive democratization and economic recovery forward. The United States’ reputation in the region is at stake. Publics across the hemisphere increasingly view China more favorably. Many foreign leaders are questioning whether the United States can be a reliable partner, whether its foreign policy will be guided by naked material interests and zero-sum thinking. If the United States can demonstrate, in Venezuela, that it can help a struggling country become democratic and prosperous once more, it could regain some of this lost standing. But if autocracy and corruption prevail under U.S. tutelage, such an outcome will send exactly the opposite message.

THE STRATEGIC CONTEXT: FROM PARIAH TO FRAGILE POLITICAL ALIGNMENT

The United States is no longer the Western Hemisphere’s undisputed hegemon. Mexico and much of the Caribbean and Central America remain firmly oriented toward the United States for economic and demographic reasons, and the Pentagon remains the preferred defense partner for most countries across Central and South America. But China is the dominant trade partner for most of South America and an increasingly important source of investment in new technology and digital infrastructure. China’s expanding commercial footprint, especially in sectors that affect U.S national security such as ports and telecommunications, and the need to secure critical minerals and energy supply chains have refocused policymakers’ attention on the Americas.

Conflicts across the Middle East and in Ukraine have injected volatility into energy markets, adding to the Western Hemisphere’s importance. The United States, Brazil, Canada, Colombia, Guyana, Mexico, and Venezuela are all major energy producers. Although Venezuela’s oil infrastructure is badly degraded, if it can be restored to past production rates, then the country could become a leader among this group and produce as many barrels daily as Canada within a decade. Venezuela poses minimal exploration risks and only requires the deployment of infrastructure, a likely draw for investors. Bringing Venezuelan oil production back on line will help shore up the world oil market and could indirectly help stabilize U.S. gas prices, while restoring foreign currency revenue streams to Venezuela to support economic stabilization..

Yet Venezuela’s emerging geopolitical realignment with the United States could reverse if the next administration does not have a strategy to reinforce it. In response to U.S. demands, Chavista leaders terminated their standing alliances with U.S. adversaries shortly after January 3. Iran and Russia, which previously supplied arms, intelligence, and an economic lifeline to a heavily sanctioned Maduro government, have largely withdrawn. Venezuelan oil has stopped flowing to Cuba. After the raid, companies from U.S. allied nations such as Colombia, Italy, Qatar, Spain, and the United Kingdom have expanded their investments and presence.

China has so far managed to protect some existing commercial investments while retreating from new capital projects in the country. China’s biggest source of leverage is the roughly $15 billion in outstanding Venezuelan debt owed to Chinese state creditors. How Washington and Caracas handle Beijing’s collateralized claims—whether they are respected or curbed—will likely affect both the degree to which Beijing acquiesces to Caracas’ geopolitical pivot and the extent to which it continues to cooperate in multilateral lending to other markets.

U.S. domestic politics also shape the strategic context. Politicians in both the Democratic and Republican parties, as well as many voters, are tired of failed attempts at nation-building and costly foreign entanglements. Although this sentiment may constrain the resources available to support a Venezuelan recovery, it could also discipline policy in an ultimately healthy way, requiring the United States to develop a model of assistance and diplomacy that does not squander resources or render Venezuela dependent on U.S. aid indefinitely. Polarization also affects foreign policy—especially toward Venezuela, which has become a point of division among Democrats, many of whom condemn the United States’ extraction of Maduro in the first place, and the Trump administration, which is keen to portray Venezuela as a success.

Conditions within Venezuela shape the strategic context most. There is widespread support for a democratic transition. According to a June-July 2026 CID Gallup poll, 62 percent of Venezuelans want major changes to the political system and national leadership within twelve months. An October 2026 Datincorp poll showed 61 percent view Rodríguez’s government unfavorably, and only 47 percent see the current negotiations as the most realistic route to change. The public’s patience with the slow pace of this process also appears to be running out, and the return of the country’s most popular political figure, Nobel Laureate Machado, to Venezuela in October 2026 promises to build additional domestic pressure for leadership change. Although Maduro’s removal received overwhelming support across several polls, approval for the second Trump administration has declined substantially since. U.S. policymakers face a Venezuelan population that is eager for change, but they risk losing its backing if they move too slowly.

The Venezuelan state has also lost much of its former capacity. Following a failed coup attempt against Chávez in 2002, political loyalty to Chavismo came to determine promotion across the bureaucracy. Amid expropriations of the country’s productive sectors and growing repression of political opponents, tens of thousands of technocrats left state ministries and agencies after 2003, while partisans dislodged experts from the newly nationalized heavy manufacturing, agriculture, public utilities, and telecommunications sectors.

The energy sector was hit hardest. Chávez’s purge of some eighteen thousand employees from PDVSA resulted in an unprecedented brain drain, as executives, engineers, and geologists took their talents abroad. Venezuela’s power grid faced decades of underinvestment and even sabotage by Chavista leadership, resulting in rolling blackouts in much of the national territory and energy rationing. At least 80 percent of the country’s thermoelectric backup infrastructure is completely out of service, and millions of families go without running water for weeks at a time because treatment plants and distribution pumps cannot rely on stable electricity.

The first new credible investments in Venezuela’s power sector took place in September 2026 but will require up to a year before they stabilize the grid. The catastrophic June 2026 double earthquake devastated already crumbling public infrastructure in parts of the country, and in some cases security forces looted ruined areas. The approaching El Niño drought, likely to cause crop failure and stress hydropower generation, stands to further test state institutions and a weary public.

Violence is another concern. There are many armed actors in the country, including several that the United States has classified as foreign terrorist organizations and some of which have routinely partnered with Venezuelan state officials. Although murders have fallen dramatically over the past decade, this has been largely the result of temporary factors—a wave of extrajudicial killings by security forces, economic collapse (limiting the available wealth to steal), out-migration, and potential pacts between gangs and state authorities—rather than strengthened rule of law. Ending state collusion with criminal armed networks is nonnegotiable, but U.S. and Venezuelan authorities need to dismantle such pacts strategically, over time, to prevent opening multiple security vacuums at once—especially with military pressure in Colombia and Ecuador potentially driving transnational armed groups to take refuge inside Venezuela in greater numbers.

AMERICAN INTERESTS AND OBJECTIVES

The future of Venezuela matters to American prosperity and security. A successful Venezuela with a legitimate government, sound economy, and improved internal security would mitigate stability risks at the U.S. southern border and to Venezuela’s neighbors—including the United States’ major non-NATO ally, Colombia. Bringing Venezuela back into the fold as a democratic partner would help protect the U.S. homeland and critical supply chains from China’s or Russia’s disruption or sabotage during a potential conflict.

To advance these interests, the primary U.S. objectives in Venezuela should include the following, in order of importance:

These interests and objectives matter moderately to many people and much to Venezuelan Americans, who represent an influential voting bloc in Florida. They are broader than past goals. For years, U.S. policy was almost exclusively focused on producing regime change, but the new collaborative, if complicated, dynamic with the interim government allows the United States to address a wider array of priorities—now and well into the future if U.S. policymakers maintain strong relationships and avoid losing credibility with Venezuela’s opposition.

A NEW APPROACH: A PATH TO PARTNERSHIP

In the coming years, the United States should use three main lines of effort to anchor its Venezuela strategy.

Facilitate the Restoration of Democracy

Facilitate the restoration of democracy using a mix of carrots and sticks: control over oil revenue, conditional lifting or reimposition of U.S. sanctions and criminal indictments against Chavista insiders, and foreign assistance.Once Venezuela reestablishes a broadly acceptable electoral body and elections timeline, the United States should be willing to use its leverage over the interim government to enforce free, fair, and internationally monitored elections before 2029. U.S. authorities should enforce red lines on actions that undermine democratization, including by revoking U.S. Treasury Department licenses that have thus far enabled investment; withholding funds from the U.S.-run escrow accounts (into which oil revenues flow); and conditioning the dismissal of U.S. indictments on the interim government’s cooperation. It should equally use its influence over the democratic opposition to encourage unity going into the political transition. Any election that validates unreformed Chavista rule or features fraud or mass abstention would squander a rare opportunity.

Whether to put on trial Chavistas who committed human rights abuses or partook in public corruption is a decision best left to the Venezuelan people, but in any circumstance, such a process would require an independent judiciary. U.S. foreign aid should enhance the technical capacity of reformed judicial bodies to enforce anticorruption and transparency measures as the basis of broader governmental credibility. Multilateral institutions could play a role in facilitating coexistence among different political sectors.

The United States should also encourage expert and skilled members of the diaspora to return to Venezuela to manage and staff reformed government ministries and private companies. U.S. policymakers and legislators should develop a flexible immigration category or visa arrangement to allow those who reside in the United States to travel freely to Venezuela without risking losing their immigration status by returning.

Restructure the Economy

Build an economy rooted in good governance, human development, and diversification while consolidating the United States’ position as Venezuela’s lead energy investor. Since January 3, 2026, the United States has helped restart Venezuela’s economy by issuing general licenses for sanctioned industries, thereby permitting new investment in the country’s energy, mining, telecommunications, and transportation sectors, among others. By allowing U.S. companies to reestablish footholds in Venezuela, the United States infuses dollars into the Venezuelan economy—generating additional leverage for Washington, especially as Chinese, Iranian, and Russian investors withdraw—and could eventually shore up its own strategic oil reserve. Yet a healthy Venezuelan economy requires diversification, including restored agricultural and manufacturing capacity and even new technology investments in banking and data delivery.

A diversified economy is no guarantee that the benefits of Venezuela’s economic renewal will reach all of society. To prevent future instability—and the same type of socioeconomic resentment that gave rise to Chavismo in the first place—the United States should eventually transform the current U.S. Treasury escrow account into a transparent, multistakeholder trust fund to help distribute the country’s riches fairly and tie public funds to reconstruction efforts. In the meantime, U.S. policymakers should foster opportunity inside Venezuela by dedicating resources from the Venezuelan oil revenue they currently control to extend credit to small businesses and replace food handouts traditionally used for political control with market-driven subsidies for basic goods.

The United States will not be the only relevant external actor in Venezuela’s reconstruction. The International Monetary Fund and the Inter-American Development Bank have signaled their intention to open offices in Caracas. Meanwhile, the Development Bank of Latin America and the Caribbean has established a Venezuela recovery and reconstruction fund.

Venezuela’s debt restructuring process will be messy. Although engaging U.S. bondholders and corporate claimants fairly is essential to rebuild Venezuela’s financial credibility, immediate austerity to service debt worth anywhere between $150 billion and $240 billion would only exacerbate the country’s humanitarian crisis. Instead, bridge loans, value-recovery instruments, and debt-for-equity swaps will be critical to attracting new capital despite the current freeze on collections.

Reform Security Forces

Institutionalize security cooperation and promote professionalization of the security forces.The U.S. Department of Defense should expand security cooperation with the Bolivarian Armed Forces of Venezuela to professionalize the country’s security sector, alongside regional partners that would also benefit. Under Chavismo, Venezuela’s security forces took on political and governance roles across the country. But extending themselves beyond their traditional remit of defense and citizen protection has diminished their capabilities, as evidenced by their inability to resist the January 3 intervention.

The Pentagon’s disaster response mission to support Venezuelans affected by the June 2026 earthquakes opened a door to cooperation between U.S. and Venezuelan forces. Expanding U.S.-Venezuelan intelligence and operational collaboration with vetted units to dismantle gangs and disrupt trafficking operations could help rebuild trust between the two militaries. It could also weaken armed groups that de facto co-govern some border regions and marginalized urban areas. Although the Venezuelan military’s senior ranks have long colluded with organized crime, the benefits of schemes protecting drug traffickers and illegal gold miners have largely excluded the rank and file. The United States could persuade these more junior officers to cooperate in reforming the armed forces by providing access to world-class training, maintenance and repairs on aging platforms, and the delivery of new hardware and technology.

Professionalization will require new institutional incentives: ones that reward technical and tactical competency and battlefield readiness over political loyalty. Addressing corruption, abuse, inefficiency, and malfeasance, as the United States once did in neighboring Colombia, will require significant investment—which could come from Venezuelan oil revenues. A thorough cleansing of the Venezuelan military and police is not viable overnight, but Venezuela’s stability, economic revival, and democratization depend largely on a gradual and phased process of transformation, depoliticization, and subordination of the security sector.

Likewise, future joint anti-crime efforts must occur within the law and take civilian harm mitigation seriously. In the lead up to Maduro’s extraction, the Trump administration conducted 35 deadly strikes against alleged cocaine trafficking vessels in Caribbean and South American waters, which compromised U.S. and partner military standards by committing what many international legal scholars consider extrajudicial murders. To the extent these strikes target drug boats at all, they are eliminating the drug trade’s most replaceable infrastructure and potentially the evidence needed to detain and bring to justice higher-level operators.

CONSTRAINTS AND RESOURCES

Neglecting these political, economic, and security objectives would result in a strategic setback for the United States in Venezuela and the broader Andean region. Rodríguez and her inner circle know the long-standing ideological and personality-driven fissures among the opposition, whose current unity is the primary guarantee they would defeat Chavismo at the polls. Delaying elections until after 2028 risks giving them an opportunity to exploit these fissures, reconsolidate power, and block change. A stalled democratic transition or an electoral process that dissatisfies most Venezuelans in form, or in outcome, could sow the seeds of another cycle of political instability.

Another risk is the revival of an extractive breed of capitalism that fails to attract diversified investment, reintegrate returnees from the diaspora, or begin to lift some nineteen million Venezuelans out of poverty. The early months of the country’s economic recovery have entailed cronyism and rent-seeking among decision-makers in Washington and Caracas alike. Efforts to professionalize Venezuela’s civil service and enforce transparent tender processes for critical infrastructure would guard against these hazards.

Funding will be a major constraint given Venezuela’s collapsed economy and debt burden, making private investment all the more essential for the government’s reconstruction and the country’s recovery. For its part, Washington has narrowed the focus of foreign aid following the dissolution of the U.S. Agency for International Development in 2025. Venezuela could be a test case for how the United States implements a leaner, more modest assistance package for a partner in need. Although currently barred from operating in Venezuela, the U.S. International Development Finance Corporation could eventually become an important enabler of new capital by extending political risk insurance and U.S.-backed financing to investors.

Congressional Democrats are likely to focus on fulfilling their oversight function in Venezuela matters during the next two years; this is a crucial mechanism for ensuring accountability, legality, and transparency in U.S. foreign policy. The abuse of public office for private gain, opaque oil deals, and the import of potentially criminally mined Venezuelan gold deserve scrutiny. But another risk is that Democrats will focus on a purely negative agenda—specifying what the United States should not do in Venezuela—rather than articulating a positive one.

Under either party, disengaging from Venezuela entirely would be a mistake. Regardless of who wins the White House in 2028, any future administration that withdraws U.S. support during Venezuela’s prolonged transition risks helping the Chavistas consolidate power and entrench the status quo.

CONCLUSION: ONLY A COMPREHENSIVE STRATEGY CAN DELIVER DURABLE PARTNERSHIP

The major trade-off in this approach involves predictability. Accepting Venezuela the way it is today—authoritarian, crony capitalist, and institutionally weak—ensures a certain degree of short-term predictability. But it also limits the amount of private investment that reaches the country, deepening the Venezuelan people’s frustrations; many investors beyond the energy sector are wary of engaging with a Chavista-run Venezuela that has not yet transformed. Transition means a degree of unpredictability and risk. If the transition accelerates, Chavistas may have stronger incentives to sabotage it. If the democratic opposition wins power nationally before there is significant progress reengineering institutions, it could find itself formally in command of a state apparatus it cannot truly control, with potentially adverse consequences for the economy, security, and stability. Despite those trade-offs, this approach is the correct one—possibly, the only path to a future U.S.-Venezuela relationship that benefits both countries and secures U.S. interests.