Update on Venezuela

The Crisis in Venezuela

Carlos Garcia Rawlins/Reuters
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FARGO: Thank you very much. Thank you, everyone, for joining us today for this CFR conference call.

My name is Jason Fargo. I’m the Latin America team leader for Energy Intelligence here in New York.

And I am very pleased to have with me Shannon K. O’Neil, who’s the Nelson and David Rockefeller Senior Fellow for Latin America Studies and director of the Civil Society, Markets, and Democracy Program at the Council on Foreign Relations; as well as Julia Buxton, who is the dean of the School of Public Policy at the Central European University in Budapest, and also a senior analyst at Oxford Analytica.

I’m very happy that everybody could join us. This is a very important topic, certainly for anybody who is interested in Latin America.

Just one reminder for everyone that this call is on the record. And, in addition to the CFR Corporate Program executives who have been invited, there are also members of the press on the call.

Basically, to start, I just think that this is an extremely timely call, given all of the developments that have occurred in Venezuela just over the past few days. But more broadly, Venezuela is really arguably the most tragic story in Latin America right now, as a country that not that long ago was considered to be the region’s most prosperous. It’s also one of the region’s largest oil producers, and in recent years saw inflows just of vast, massive amounts of oil wealth, up until 2014, when oil prices were high. And yet, now the country faces the kind of economic and really social collapse that is almost unheard of in countries that have not gone through major wars.

So I’m very excited to have our two speakers here today. And just to begin, I would like to throw it to Shannon. You know, obviously, we’ve seen over the past few weeks, you know, Venezuela moving increasingly into political crisis. But, you know, perhaps if you could step back a bit and tell us how Venezuela got here over the past, you know, 18 years now of rule by the Chavista movement.

O’NEIL: Great. Thank you, Jason, and thank you all for joining us on this call.

And as you mentioned, right, this is a crisis that has been 18 years, really, in the making. And I think it’s worth stepping back to the late 1990s. When you look at Venezuela there, I mean, this is a country that has the largest oil reserves in the world. But at that time, when Chavez was elected president, almost 50 percent of Venezuelans lived in poverty, so there was a real disconnect between the real and potential wealth in the nation, and then how it was distributed among the people, and hence the appeal of a populist leader like Chavez.

And so, when he came in, he did—he had massive transformations on both the political side and the economic side. And both of those, I believe, have led to kind of where we are today.

So, on the political side, he came in, he held a—he changed the constitution, held a Constituent Assembly, reworked the whole constitution, moved the nation from one that has a legislative—has two legislative bodies, a Senate and a House, to one that has just one, a National Assembly, and made lots of other changes in that process. And then, through the various years of his rule—and he did that through constant referendums and plebiscites and votes. It was always validating his political changes at the ballot box in various ways. But through that, really concentrating power within himself and within his larger party, right, the Chavista party there.

And he also, during this process, increasingly began to undercut the independent media, no longer—either revoking or not renewing licenses for those that spoke poorly of him or the types of things he was doing. He undercut the ability of the opposition—the political opposition to run for congress or to do other things, making it much more difficult, sort of stacking the deck in these various elections. But he kept holding these elections.

And then, on the other side on the political side, he introduced huge social programs. So he built health clinics. He gave out—he built housing for people. He gave out food and other types of sort of cash transfers and the like to really build his political support. And that was enabled by high oil prices and production, most of that money flying into the treasury. It was enabled by debt that he took on and sort of spending above and beyond what Venezuela was earning, which was a lot of money. But it did enable poverty levels to go down and people to have doctors, or at least nurses for the first time in their neighborhoods. So there was a lot of built-in goodwill for some of those years.

So those are the political side. And on the economic side he also made big changes. That political model then really led to a concentration of power, which enabled some of the authoritarian moves that we’ve seen more recently.

Looking quickly at the economic side, the Chavez government came in and very quickly focused on oil, which makes a lot of sense given the power and the influence and the importance for the Venezuelan treasury. So it took over PDVSA, the state-owned oil company, politicized it, and also took lots of the money out of there to pay for all these other social programs and the other things that they were doing—as well as some of it disappeared out of the country into people’s bank accounts, as well, over time. But this was—a big focus was taking over the economy. So taking over the oil sector, but also changing the non-oil sector. And so intervening with taxes, with regulations, even nationalizing farms and companies and the like. So really creating a very state-interventionist economic model.

And I think one telling statistic is that if you look at Venezuela’s exports in the 1990s, about 25 percent were non-oil-oriented exports. If you look at them today or even over the last decade, less than 4 percent are non-oil exports. So all of these interventions in the economy have really led to a point where Venezuela doesn’t make anything besides oil. That part of the economy has really disappeared in many ways. At the same time, the state intervention in the oil company and sort of the politicization of PDVSA has led to declines in production there.

So, overall, you have this confluence of consolidating political power that’s become increasingly authoritarian, and then the deterioration of the overall economic situation with intervention, and then a crisis precipitated with the decline in oil prices. You already saw declining production. You already saw the decline in the regular private sector. And then, with the decline in oil prices, it was just hard to keep it all going. And so that is sort of the crisis that we’ve seen in Venezuela over the last three-plus years, where you see sky-high inflation, you see sky-high unemployment, you see just the inability for an average Venezuelan to get the basic food and medicine and shelter that they need to live a safe and secure life.

FARGO: Well, Shannon, thank you very much. That’s a great overview of I guess sort of how we got to this situation.

And now I’d like to turn it over to Julia to speak a little bit about what we’ve seen over, say, the last months, since the government—since the Supreme Court, controlled by allies of President Nicolás Maduro, announced that they were basically going to, you know, effectively annul the legislature, the National Assembly, which is controlled by the opposition. You know, and we’ve seen this crisis sort of become exacerbated over the past month or so. You know, Julia, if you could talk a bit about the past month and whether this is actually—have we entered a new stage of this seemingly, you know, internal crisis? Are things going to get worse, or is this—is this a new normal?

BUXTON: OK. Thank you, Jason.

Well, just following on from Shannon, I would probably highlight that there were four legacies of the Chavez presidency which Maduro inherited, but which Maduro never dealt with. The first of these was the problem of corruption. The second was insecurity, the astonishingly high rates of homicide and violence that Venezuela has. Institutions—Chavez effectively built a parallel state, which he never effectively institutionalized and consolidated. And also, Shannon mentioned oil dependence and a very high level—increasing level of foreign debt.

Now, since Maduro came to power in 2013, none of these issues, the legacies of Chavismo, have been addressed by Maduro. And instead, what we’ve had has been a terrible situation of drift, of lack of coherence in policy, constant ministerial turnovers. But the key things which have been very important have been the growing division and fractionalization of the ruling PSUV; Maduro’s increasing reliance on the military, both to staff his government and also to support and effectively serve as a bulwark for the administration.

What’s happened over the last month, I think, has been a real change. We’re always hearing about change in Venezuela. The predictions of change are usually wrong. But there is something which is—which is happening now which I think is having quite transformative impacts on the political scene.

And the first of these is, obviously, that Venezuela has now withdrawn from the Organization of American States. One of the points that we have been repeatedly flagging in the Oxford Analytica analysis is that the OAS has, in our opinion—in my opinion, handled the situation in Venezuela very, very clumsily. It’s been quite a disastrous intervention, in my view, in particular on the part of the—of the head of the OAS, Luis Almagro.

Now, in taking Venezuela out of the OAS, Venezuela currently, it would seem, would be bearing more of a political and diplomatic cost than necessarily an economic or trade cost. But, in withdrawing, this does now really remove the OAS as a key interlocutor in Venezuela’s crisis. It’s removed the mechanisms through which the OAS can effectively intervene in Venezuela, which is clearly the reason why the Venezuelan government has withdrawn.

But the big problem has been that Luis Almagro has not really engaged in the kind of quiet behind-the-scenes diplomacy that was really necessary to bring many of the Chavista-supporting countries onside. Venezuela has a lot of sympathetic neighbors, particularly in the Caribbean, Bolivia, Ecuador, and Almagro just completely bypassed this. And I think that was a huge, huge mistake.

The second criticism of Almagro, which was made this week by the former president of Uruguay and Almagro’s boss, President Felipe (sic; José) Mujica, is that the OAS has really given too much of a platform to the opposition, the Venezuelan opposition, and what this has done is, in effect, radicalized the opposition demands, and also reduced the space and incentive for dialogue.

Now, the reason why I think this is so crucially, crucially important is twofold. Firstly, because Venezuela is now looking to other regional blocs, such as CELAC and UNASUR, to support the country. But as we’ve seen this week by the number of countries which didn’t turn up for the key CELAC meeting, Venezuela cannot necessarily rely on the support of regional neighbors. So these regional shifts are what has really fundamentally changed for Maduro over the last couple of months, but certainly in the period since Maduro took over from President Chavez. So a completely different regional landscape.

The second point I would also highlight clearly relates to the opposition. The opposition MUD movement for many years has been highly divided and fragmented. Its decision in the first half of the 2000s to boycott elections effectively handed Chavismo hegemony and dominance of Venezuela by default. What’s happened more recently is that the opposition is showing a level of coherence which we haven’t seen in a very long time, if ever, from the opposition movement. This is certainly putting the government under intense pressure. So, over the last month of protests, what we have seen has been far more discipline from the opposition than we saw during the protests and riots of 2014 and over the previous 10 years of the Chavez government.

But there’s a couple of problems that I’ll just highlight before handing back to you, which is that the MUD opposition should, in my view, be doing a lot better in terms of public opinion in Venezuela than it seems to be doing. Opinion polls demonstrate that we still have a substantial sector of the Venezuelan electorate who neither support the government nor do they support the opposition.

What the opposition really has to do to change this scenario round in its favor, I think, is to alter its narrative. To date, the language has been very much about prosecutions, it’s been about following up for crimes that the opposition claim that the Maduro government has committed. Now, the problem is, when you’re constantly threatening revenge, you’re really not providing any incentives for people associated with the government to break from the Maduro administration. And this relates as the high level of the government right down to low-level bureaucrats and low-level military. People will not move over from supporting Maduro to the ranks of the opposition unless they believe that the opposition will treat them fairly, and to date I don’t think the opposition has given that reassurance.

The other key thing is that the opposition has constantly and rightly complained that the state is politicized. The judiciary, the National Election Council, PDVSA, the military, every tier of the state is dominated by Maduro loyalists. Completely true. But what is the opposition going to do about this if they take power? Now, at the moment the indications would simply seem to be that we would be replacing Maduro loyalists with MUD opposition loyalists. That’s the impression that the MUD seems to be giving, both to Venezuela and internationally.

So we really, really need to have a clear plan of governance from the opposition MUD, both in order to stabilize the political situation in Venezuela, and also to bring wavering an alienated Chavistas and supporters of Maduro over to the opposition side.

Elections in this context, which have been pushed very heavily by the OAS—there’s been a lot of international calls for immediate elections in Venezuela. My view very strongly is that elections in this context will do nothing but exacerbate the instability and uncertainty in Venezuela. Until we have a competent and coherent election administration and a functioning judiciary, then elections will simply perpetuate violence because the results simply won’t be respected.

So the situation has changed dramatically. Maduro’s trying to backpedal with proposals now for a Constituent Assembly, but this is going to have no legitimacy or credibility. And I would reiterate my fundamental point that the only exit here for Venezuela is going to be through negotiations.

FARGO: Thank you, Julia.

I just wanted to follow on from your comments and ask, really, for both of your opinions. When you talk about the opposition showing unusually—an unusually high level of coherence, I think that that’s very true. But, you know, to present, say, an alternative narrative to the government, is that not—isn’t that sort of the crux of the problem with the opposition? I mean, it’s historically been united only by its shared loathing of the current administration and Chavismo. And is there really enough common ground for all of the various factions of the MUD to present a positive, say, narrative for the rest of the country that they can then use to increase their support? And more broadly, I guess, what do you see as the necessary conditions that need to take place both within Venezuela and, you know, to the extent that they can influence the situation abroad? So for both of you.

O’NEIL: Sure. Well, let me jump in on that.

And, you know, right, Venezuela’s opposition has in the past had a hard time coming together in various ways. But, you know, this isn’t all that different than oppositions to authoritarian regimes in the past. And particularly just looking at Latin America and its history, we’ve seen lots of transitions to democracy in the ’70s and the ’80s, even the early ’90s, some of them, you know, what we call pacted, so there was some sort of negotiation and coalition built; others less organized in that way. And, you know, the opposition that was successful in a lot of those places were as divided, right, between various different parties. And the question was, even if their fundamental differences were there, could they come together in a—for instance, in Chile in the no vote, right? All the Chilean opposition, from the social democrats to the communists, agreed when, you know, at the end of the Pinochet regime was in no to Pinochet, not in yes to a whole host of things. That came later.

So I think there are serious challenges for Venezuela’s opposition, but I—but I think there’s space there. Don’t count them out yet. And I think—as, you know, Julia mentioned—the recent efforts, and quite impressive efforts, to come together bode perhaps well for their ability to do so going forward.

You know, it is—I mean, what they face, though, I think which is a fundamental problem: at least for the moment, even with their numbers growing, even if perhaps they can reach into some of the poorer communities and engage with those people and the challenges that those people face in just meeting their daily needs, and direct that to opposition to the regime, right now you have a group with guns that they’re facing and they have no guns. And so I think to—as you imagine some sort of transition out of the current situation that’s a negotiated one, there has to be some sort of divide there. It’s very hard to imagine this regime giving up the control that they have if there isn’t—if that monopoly on force continues.

And I think that is the real question, as you see protesters in the street day in and day out for over a month now: Might you see a division in those that have that monopoly of lethal force? Might you start seeing some reluctant to use that on citizens of Venezuela? I think that’s a question.

Let me just talk a little bit about the international role, because I think this is—this is a tricky one. Because I think as much as so many people would like to see some sort of change in Venezuela and some sort of negotiation or dialogue or transition into a coalition that more broadly represents the political sphere in Venezuela. It’s hard to create change from the outside. I think what we’ve done—and, you know, Julia mentioned this—we’ve started to see much broader international condemnation of the Venezuelan regime and its authoritarian tendencies. So we’ve seen this in the OAS.

We’ve started to see—even with the difficulties at the OAS, we’ve started to see more countries begin to join the coalition—the sort of anti-Venezuela coalition than not, sort of some, you know, Caribbean countries now turning. And if there is a vote again, you’ll see a few more of those. It would join Brazil and Argentina and Chile and Peru and the United States and Canada and other places in a vote to condemn Venezuela, to sanction it, and perhaps even to kick it out. You’re starting to see a change there. You have seen the EU come out with a statement. And so I think that can continue, and sort of building this—that matters. It’s symbolic in many ways, but it matters.

You know, the other thing you’ve started to see, which I think is quite interesting, is you just saw the U.S. Congress or the Senate push forward a bill this week that, yes, has that condemnation and working through the OAS, but also actually has humanitarian aid in there, and has $10 million of humanitarian aid for the real social crisis that’s happening in Venezuela. And I think that is an interesting take. It’s that from the international community the signal at least that, yes, you condemn some of the practices of the government, but you don’t condemn the Venezuelan people.

And I think a question will be if that bill passes, if that aid is proffered from the United States or even if the U.N. would follow suit—and there have been some proposals beginning to develop in the U.N. for something similar—would the Venezuelan government accept that, because it definitely—while the people need it, it suggests that you’re unable to do for your people what you said you want to do. And then I think the other thing that has been a part of U.S. policy that’s interesting is targeted sanctions on particular people within the Venezuelan government who have allegedly—or there seems to be some evidence—committed crimes. Whether that’s corruption or they’re stealing money from the Venezuelan treasury or others, or is narco-trafficking, right? That they are running trafficking rings. And then there are some allegations against many high-ranking officials, including the vice president, on that side.

And there I think there is something—there is the challenge, which I agree with Julia with the—you know, the MUD. If you’re threatening people with jail, they’re much more—less likely to want to sit down and talk with you. But I think there’s also something about providing information that is there, evidence that has been collected in cases of real wrongdoing by some of these people. And, you know, I think there’s a possibility that that may—having that information out there, that kind of naming and shaming of bad behavior that’s happening, can also help create splits between people who may work with these people in terms of the overall structure, but aren’t actually involved in some of that wrongdoing. And do you really want to be associated with people who have stolen such large amounts of money, or are moving so many illegal substances and the like through Venezuela?

FARGO: Thank you. And, Julia, do you have any thoughts on what might be helpful to move this situation forward, or that might help with an improvement?

BUXTON: Well, I think what’s been interesting is that we have seen, you know, a different range of sanctions and blockades and various ways to try to undermine Chavez. We had the military coup attempt against him in 2002. So we’ve had basically nearly 17 years of efforts really to change governments in Venezuela, largely led by external supporters of domestic opposition. And all these have succeeded in doing is gluing the Chavez and subsequently the Maduro regime together, and binding loyalties.

But what has certainly changed—and Shannon was talking about the international situation—is I think Maduro has made two catastrophic mistakes amongst all of the many mistakes that have been made. But two in particular was the decision to cancel the recall referendum, which Maduro would have undoubtedly have lost, in my view. And then secondly, and straight from the heels of that, to suspend the regional governorship elections, which should have been held in December 2016.

Now, a real difference here between Chavez and Maduro, as Shannon highlighted right at the beginning, is that Chavez embraced elections with relish. Maduro is very, very worried about going into electoral competition. But I think it’s very difficult for allies of Venezuela to really support the government in the way they have previously done when they are seeing the annulling of election processes. This does really mean that other countries, such as—as I mentioned before—Bolivia, Nicaragua, Ecuador, friendly European countries, Dominica—you know, there are countries who can come forward and really try and get some traction once again on the negotiations.

I am just fundamentally of the view that any effort to overthrow the government—because there are certainly people in the opposition who believe that negotiations are a form of compromise. My real concern, and this is—this is just to go back to the point that Shannon made before that hopefully we can see that some sections of the military might desert, they won’t want to be firing on their own people. We’ve had enough bloodshed and violence and suffering in Venezuela. So any initiative now which gets parties around a negotiating table I think is absolutely central.

I agree, to some extent, sanctions on senior officials in Venezuela have maybe had some success. But the key person who really triggered the crisis of the last couple of weeks was a very senior U.S. (sic) government official, Attorney General Lillian (sic; Luisa) Ortega, who is one of the few people who is not under sanctions. Now, the big question is, would she have come out with those criticisms had she been under U.S. sanctions? Was her willingness to be critical precisely because of the fact she maybe had slightly less to lose by criticizing the administration? So that’s a slight word of caution there.

But ultimately, I really do think that it is going to be down to external willing parties. If Colombia can get round the table with the help, as it were, of Cuba and Chile and Norway, and have a negotiation peace settlement after the decades of violence and conflict in Colombia, then this is something that should not be beyond the pale for Venezuela.

FARGO: Excellent. Thank you to you both.

At this point I would like to open the call up to questions from the audience. I just want to remind everybody that the call is on the record. Operator, if you please give instructions for asking a question, that would be great. Thank you.

OPERATOR: Thank you very much.

(Gives queuing instructions.)

FARGO: Thank you. And while everybody is queuing up to ask their questions, I will ask one of my own to both Shannon and Julia.

You have mentioned the possible impacts that the Venezuelan crisis could have on Colombia with regard to the peace process. But could you elaborate a bit more on potential for spillover into Colombia as well as other countries? I know that there has been much concern in the region about a flow of refugees, I think primarily to Colombia, but I believe it was Julia that mentioned, you know, that the Dutch are viewing the situation with concern, given the closeness of Aruba and Curacao. And I read an article not that long ago that was tracing the path of Venezuelan refugees that were even crossing through the jungle to northern Brazil. So if you can talk a bit about, you know, how this affects Venezuela’s neighbors.

BUXTON: Well, I’ll just kick off first, before handing it to Shannon. I think the big preoccupation right now, the EU—European Union—is very heavily invested in the Colombian peace process. And as most people are probably aware, this peace process is a remarkable achievement but also very, very fragile. And I come from a country where we had our own civil conflict in Northern Ireland for a long time. And what we’re aware of in any peace process is the potential for spoilers, disaffected elements of an insurgent group breaking off from the peace process.

Now, there are some concerns that this may the case in Colombia, that we do have some reengage elements of the FARC which are splitting off from the main body of the organization in the peace process. A big worry here is that in a scenario—and at Oxford Analytical we work with multiple scenarios for Venezuela. But in a scenario where Maduro is overthrown, where you have a disaffected and alienated body of former Maduro supporters, even elements of the Bolivarian armed forces, who are heavily armed and see regime change in Venezuela as having been conducted illegitimately, then there is the potential and the possibility that we could see renegade elements of the left from both Venezuela and disaffected FARC elements in Colombia linking up.

We have many reports of cross-border activity between these two groups, and on the political right and paramilitary right, it has to be acknowledged. But certainly there are some worries and concerns that you could have this linking up of these—of these two factions across the borders. And that could portend a whole new arc of instability in the Andes, and certainly a very worrying cause of instability.

O’NEIL: I agree with what Julia said. And I would just add that, you know, one is that challenge of, you know, open spaces or sort of gray spaces where elements like that could operate. And the other is just the movement of people in search of somewhere to live safely and be able to live at all. And we’ve already seen movement into both those countries, Colombia and Brazil. Brazil has seen tens of thousands of Venezuelans actually come in. And so, one, it’s a challenge on the infrastructure in border towns or those near the towns, as well as the health systems, and the like, as many come with serious problems and diseases and the like that they have not been able manage or find any care for within Venezuela.

I mean, I think one of the things actually to watch, in particular with the Colombia, is the challenge is the number of Venezuelan-Colombians or Colombian-Venezuelans. And so there are roughly, by some estimates, somewhere between 4 and 5 million people who live in Venezuela, who—many are Venezuelan citizens, but of Colombian origin. And many of them fled the violence of the FARC 20, 30 years ago, and settled in Venezuela because economic times were much better and the opportunities were better. And in fact, Chavez gave them citizenship in Colombia during one of the plebiscite runs because he was—or giving them all citizenship, and a majority of them then vote for Chavez in one of these ongoing, you know, plebiscites or referendums that he liked to hold to sort of give him the electoral legitimacy for the things he was doing.

So even if they are technically Venezuelans, they’re still Colombians at heart. And if things would go to a—to an even worse situation, actually they have the humanitarian crisis or the crisis of violence that people are facing—if they would reach a point, a really breaking point, you could imagine a large number of these, you know, 4 to 5 million people trying to go back home to Colombia where they could find safety. And it’s very hard to refuse refugees that were once Colombian, and that have these deep ties. So I think that is particularly—all of the countries around them, including the small islands, Curacaos and others, could see a flood of refugees. But I think Colombia in particular is particularly vulnerable because of this population that just has historic ties, and that were Colombians up until just a decade ago.

FARGO: Thank you. Operator, is anyone in the queue for questions?


(Gives queuing instructions.)

Our next question will come from Franco Ordoñez of McClatchy.

Q: Hey, thanks so much for doing this. I wanted to build on the Colombia theme. Colombia—I mean, President Santos has been a little, I guess, cautious in pushing Venezuela, particularly with the peace process going on. I wanted to get your thoughts on kind of, like, the U.S. interest in Colombia kind of serving as more of an example, putting—adding more pressure on Venezuela, and if you thought that’s actually happening now. He’s made some statements in the recent—tweeted out some things. I wanted to get your thoughts on those things—one, the pressure from the U.S. and also kind of their response from Santos and the government.

O’NEIL: Sure, I can start. And then Julia, if you’d like to chime in.

BUXTON: Absolutely.

O’NEIL: I mean, we—right, we have seen a concern. You know, I think the administration is still getting its feet on its Latin American policy, or figuring out what matters to it. And so far, the two things that seem most to matter to the Trump administration are Mexico, for a variety of reasons, and Venezuela. And so this is really an area that you’ve seen a lot of interest from the administration, and you’ve seen a lot of interest from the U.S. Congress. So a lot of policy, as we know, is made in the U.S. Congress as well. And particular Plan Colombia and Colombia has been a focus. So you’ve had for well-over a decade a bipartisan support for Colombia and the challenges that that nation has faced, from both sides of the aisle.

And that is something that continues so far, though there’s a question with the—with the changing administration, you know, will the Trump administration—will, you know, Peace Colombia versus Plan Colombia be something that they will fund? And in fact, Santos is coming up to meet with President Trump in the coming weeks just on that—on that very subject. So I think that is an ongoing discussion. But one thing we have seen—so we have that part going on with Colombia.

The one thing we have seen in the Trump administration when they have made policy on Latin America, which, as I mentioned, is quite thin so far, Colombia—or, excuse me—Venezuela’s a big part of this. And so in the meetings with Macri, in the meeting with Pedro Pablo Kuczynski, the two presidents that he—that President Trump has met with—Venezuela came up as a topic. They’ve come up in other regional meetings, Secretary Tillerson and others. This is an ongoing subject that they have been bringing up. And there’s a lot of support in Congress from Republicans and Democrats alike, but particularly from Republicans, to make this an issue. There’s prominent Republicans like Senator Rubio and others, where they’ve really taken this issue as one of the main priorities that they’re focusing on in the foreign policy realm.

So I believe that will continue with the Trump administration. And so I believe when Santos comes up here, there’s already conversations on other levels—the secretary level and the like. But when Santos comes up, that as they’re talking about Peace Colombia, they will also be talking about Venezuela. And, you know, frankly, that was happening to some extent with the Obama administration before. But you didn’t see Venezuela in the sort of crisis point that, you know, Julia laid out, that this last month being a bit of a qualitative difference from, say, a year ago.

BUXTON: Very quickly, I would probably say that President Santos’ most recent interventions, that the question highlighted there is probably more concerned with cross-border movements of drugs, of weapons, of people. The insecurity at the border between Venezuela and Colombia is a real, real concern. And so I think Santos’ intervention, as a Nobel Peace Prize winner, is probably more focused actually of trying to contain criticism of the peace process from within Colombia because, as we know, President Uribe, former president of Colombia, and Pastrana Arango, apparently greeted by President Trump at his Mar-a-Largo complex a couple of weeks ago. So my serious concern is that there might be something of a kind of divide and rule strategy going on in the White House as far as the Colombian domestic politics are concerned. And I would dread to see Venezuela and the ratcheting up of pressure on Venezuela from Santos actually resulting from his efforts to contain Uribe’s relations with President Trump.

So, in sum, it’s a hugely, hugely complicated political game. And I think the key thing, and just going back to a point Shannon has made, is that we really need a clear signal and staffing on Western Hemisphere affairs from the new Trump administration, because at the moment there’s a bit of a vacuum. And that’s enabling some quite radical and not necessarily, in my view, helpful voices, such as Marco Rubio, to really fill that vacuum. And I don’t think that’s necessarily a good substitute for a coherent U.S. foreign policy strategy for the region.

Q: Can I ask you what you meant by a divide and rule strategy? That’s very interesting.

BUXTON: Well, I think the kind of conflict that we’re seeing between President Uribe—sorry, former President Uribe and President Santos were building up for elections in Colombia. Uribe has remained a very fervent critic of the peace process in Colombia. So my concern would be that the intentions, inadvertently or otherwise, of the Trump administration would be to try and leverage Santos to be more critical of Venezuela as a way of Santos in turn trying to increase his support with President Trump as a way of trying to push Uribe and Uribe’s influence to the side. So, in effect, Venezuela becoming kind of a collateral game within the wider political divisions over the Colombia peace process.

Q: Got it. Thank you.

FARGO: Thank you. Operator, is there another question?

OPERATOR: Thank you. Yes.

(Gives queuing instructions.)

Our next question will come from Howard LaFranchi, Christian Science Monitor.

Q: Great. Thank you. Can you hear me?

O’NEIL: Yes.

Q: Great. OK. Yeah, my question has to do with kind of the rise of corruption most recently under Maduro. And I go back—I was doing reporting in Venezuela back, kind of the rise of Chavez before. And I remember before Chavez and the elections and the political climate then, the importance of corruption—what had be in the pre-Chavez administrations and governments that was just on the tip of everyone’s tongue. Anyone you talked to on the streets, it was always—there was a certain figure that people had in their mind—I don’t remember, 24 billion, 32 billion, I don’t remember what it was—but everybody had the same figure that they would say: This is what the—you know, the ruling party has stolen from us. And, you know, we need, you know, an alternative to this.

And so I’m just wondering, could the emphasis on corruption—be it through outside through sanctions or the opposition calling more attention to this—could this have an impact of peeling the public away from Maduro? Or would it just tend to be a—oh, you know, that’s just the opposition saying that. And will people stick with Maduro?

BUXTON: Shannon?

O’NEIL: Sure. So the latest numbers I’ve heard, from when you were doing reporting, is 60 billion has been stolen. So whether that’s true or not, they’ve gone up exponentially, it seems, under Maduro. At least, it’s doubled from your earlier numbers. You know, I think, actually, when you look at some of the targeted sanctions from the United States—so, one thing is the targeted sanctions on particular individuals. And another, I think, would be opening up some of these files and investigations and providing some information on what evidence is out there on these sorts of things.

And I think there’s something to that, right? I mean, there’s a challenge in Venezuela today. And you know, you and I may be able to read it in the Christian Science Monitor and other places, but can the average Venezuelan? Do they get any news that isn’t true TeleSUR or other kinds of state-controlled media channels? But assuming that they can, through social media, if this information is presented, I do think it can provide a wedge—a wedge between sort of those that might be supportive of the regime on the streets, but actually perhaps more importantly for some of the negotiations or coalition building that we’ve been talking about between those in the regime who, you know, have a large share of this 60 billion, or whatever the number is, and those perhaps who are not—are not, you know, in the mix or participating in such bad behavior, let’s say, right?

And I think, you know, Julia’s example of the attorney general. You know, it’s hard to know what she is or hasn’t been involved in. But you know, this may be case of someone who is starting to look around and say: Look, I’m a partisan player. I believe in a lot of these values. There’s things I’m willing to do for partisan politics. But there’s criminality that I’m not willing to go into. There’s steps I’m not willing to do in sort of undermining the fundamental tenets of democracy here. And perhaps, either her or other people, there’s a level of criminality that I’m not willing to go down. And I think providing sort of an openness and uncovering some of this unsavory behavior and the flows of money that have gone to Andorran or other banks around the world, and the sheer scale of it shows that, you know, at least some of these people don’t have the best interests of the Venezuelan people at heart.

BUXTON: But I think—I think what’s really interesting is the continuity, which is highlighted. And I—when I first started working on Venezuela in the, you know, early 1990s, again, as Howard points out, the big emphasis on the corruption, the corruption of elites, the failure of the elites, and the need for change. And that simply wasn’t delivered by Chavez. And this one of the points that I made at the beginning, that Maduro inherited a legacy of corruption. And, just like Chavez, did absolutely to deal with it himself.

But I think cumulatively the key thing then that the opposition really does have to do to capitalize on the problems of corruption and the depths of corruption that we’ve seen, is to demonstrate openly to the Venezuelan electorate that they will be different, to have an emphasis on the rule of law rather than just the emphasis on corruption itself. And that’s the only thing—because you have to remember, some of these opposition figures are opposition figures from the pre-Chavez period. People like Henry Ramos Allup, the former head of—president of the National Assembly—these are figures from the old regime, as it were. So the key task for the Venezuelan opposition is to capitalize. It’s to really demonstrate how it will put in place mechanisms and institutions, not just to investigate these cases of corruption, but to ensure that it’s not a situation as normal, and this kind of behavior will not be carried on by the opposition in the event that they take power.

FARGO: Thank you. Is there time for one more question?

OPERATOR: At this time we have no further questions in the queue.

FARGO: All right. Well, thank you. Well, I will ask then, just to close out. You know, we’ve talked a little bit about the, you know, possible emergence of fractures within the ruling PSUV. And, you know, for example, the Attorney General Luisa Ortega Diaz, who came out the other month against the Supreme Court’s annulment of the National Assembly. Quickly, before we close, do either of you think that, you know, we might see internal fractures between more Chavista hardliners and, you know, perhaps more moderate, flexible elements? Could those emerge and perhaps facilitate a resolution of the current crisis?

BUXTON: Shannon.

O’NEIL: I mean, I think that is the big question, right? We saw the attorney general do it with the bold-face undercutting of any democratic trappings, right? She stepped back and said wait, wait, wait. We can’t annul the legislative assembly. And I think the other sort of moment were we might see this is if in fact these demonstrations continue and you have the military called out in having to put them down. Do you see those lieutenant colonels—that Chavez was once upon a time, way back in the ‘90s—do you see those people really decide to fire on Venezuelan citizens? And I think that might be a telling moment. But with all sorts of things in dictatorships and the like, it’s very opaque the see if there are divisions that might lead some to peel off and join the opposition in looking for, say, a negotiated transition out of this current political configuration.

BUXTON: Very quickly then, I would say that the PSUV and before that the MVR have always been deeply divided. There’s always been fractures. The key thing that held them all together was Chavez. And Maduro simply has not had the capacity or authority to hold these different factions of the PSUV and the military together. The big loss for the PSUV, I think, has been amongst the grassroots, the social organizations. His initiative currently for constituent assembly I think is an attempt to re-legitimize and reach back out to those groups. I think it’s far too late. But the big tragedy of Venezuela is that those grassroots groups, who were alienated from Maduro and Chavismo, clearly don’t feel they have a home to go to in the opposition. And that’s the gap that has to be filled going forward.

FARGO: Well, thank you very much. I very much want to thank both Julia and Shannon for sharing their thoughts on this, you know, very important topic in Latin America today. Thank you to all the participants in the call. I believe everyone can disconnect. Thank you and have a wonderful day.


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