Are we living the 60s and 70s over again? Possibly…but where is the music?

The 1960s and 1970s were characterised by the spark of two things. First, the spark of legendary music bands such as Led Zeppelin, Black Sabbath, Pink Floyd and the Queen. Second, by full-scale implementation of the Monroe Doctrine, whereby the US was customarily intervening to South American countries to ensure the replacement of democratically elected socialist governments by those of their liking (see, for instance, the 1964 Brazilian and Bolivian coup d΄état, the 1973 military dictatorships in Uruguay and Chile and the 1976 junta coup in Argentina). But of course, not all US efforts to overthrow socialist governments were successful, as exemplified by the cases of Fidel Castro in Cuba and the Sandinistas in Nicaragua. Witnessing the recent developments in Venezuela made me think that history may repeat itself, making us re-living this era but with a huge difference; rock music is not at all that great this time around!

by Prof. George Filis, Bournemouth University, UK

Over the last few weeks we observe the peak of a political crisis in Venezuela as Juan Guaido declared himself the President of the Bolivarian Republic of Venezuela (23 January 2019). Interestingly enough, he made this move just 3 weeks after he assumed the presidency of Venezuela’s national assembly.

Juan Guaido received almost instant recognition by the US, whereas a plethora of western governments followed suit. One could possibly think that the US had already pre-approved this move, although for the time being such claims can be nothing more than rumours. In any case, Guaido seems to enjoy much of the US liking anyway. It is no coincidence that many South American countries, such as Brazil and Argentina, also side with the US in this matter, since the majority of these governments are either right-wing or far-right-wing, as in the case of Bolsonaro administration (Brazil).

Following this self-proclamation, the media around the western world have released several articles and opinion pieces, where authors zealously expressed their views on the issue, promoting Maduro as a ‘dictator’, who leads his country to economic collapse (I wonder how many times we have read the same story before). In any case, this argument is coupled by claims that the 2018 national elections were rigged by Maduro, so that he could stay President for six more years. Hence, according to media rhetoric, it is imperative to restore democracy in Venezuela for the benefit of the people.

At the same time, it is rather interesting that these articles and opinion pieces either ignore or downplay the catastrophic consequences of US sanctions upon the Venezuelan economy, which have been intensified over the last two years, leading to the country’s economic downturn. Furthermore, a reader cannot stop but asking herself why the Trump administration is so eager to ‘liberate’ the Venezuelan people from a ‘dictator’, when it clearly sides with autocratic regimes around the globe?
Putting aside the rather ad-hoc nature of western responses to ‘dictatorships’, the question remains – why do they place so much faith in Juan Guaido? If democracy has been indeed damaged, how can western governments be positive that Juan Guaido will guarantee its restoration? Until few weeks back, Juan Guaido was an unknown figure in Venezuela’s political landscape rendering him almost completely unknown to the global political scene but also to many people in Venezuela.  
Even though, there is an effort from some media to explain the US attitude towards Venezuela and Guaido, there are two additional plausible explanations that we should entertain, namely, the importance of Venezuela to US energy security and the use of Venezuela as a Trojan horse to ‘take over’ Cuba and Nicaragua.

Venezuela and US energy security

It is important to invoke the US mindset towards energy and its future oil needs, if the role of Venezuela on US energy security is to be understood. The US has radically changed it energy policy over the last decade, by reducing its reliance to energy imports for its energy needs. However, research shows that the US will continue to increase its expenditure on energy reaching almost $1.4 trillion by 2030. This means that it will still rely heavily on imports and that the latter need to take place at low prices.

However, the EIA short-term energy outlook suggests that global demand is barely covered by global supply of oil, meaning that any further increase in energy demand, primarily by China and India, could push oil prices at higher levels. Even more, we observe that the OPEC’s spare production capacity is heavily reduced and such decline puts upward pressure to oil prices during periods of sudden increases in oil demand.

Let’s now turn to see how Venezuela could serve these needs. Venezuela is the country with the largest proven oil reserves in the world, although at the moment, due to obsolete technology, the oil production is constantly decreasing. Nevertheless, Guaido has promised the liberalisation of the country’s oil sector once he will eventually take his seat as President. This may well mean that the US could ‘assist’ in the development of the sector’s technology, so that it has the capacity to drill a significantly higher number of oil barrels per day. Studies show that the oil sector can produce up to 4 million barrels per day. This is approximately 4% of the current global production!

Such increase in oil production would be enough to either drop global oil prices or at least maintain them at relatively stable prices, which ties well with the US needs for cheap oil imports. It is not a coincidence that US officials have stated that a privatised oil sector in Venezuela would benefit the US greatly by reducing oil importing costs.

Another issue that is tangent to the fact that Venezuela could play an important role in US energy security is the fact that China, the main economic rival of the US, as well as Russia, are tightening their relations with Venezuela. Even more, the main oil-partner of the US, Saudi Arabia, is now the largest exporter of oil to China. China’s rise as the world’s top oil importer, its capacity to start pricing oil in Yuan, as well as, Russia’s partnership with China, may well threaten the petrodollar regime and that could be catastrophic for the US economy. Thus, a change in Venezuela’s energy policy, through a more US-friendly president, could put a halt to these projections.

Venezuela as a Trojan horse for Cuba and Nicaragua

The crisis in Venezuela could be also explained by Trump’s rather aggressive policy towards regime change of left-wing governments and socialist regimes in Latin America and in the Caribbean.

In particular, the fall of Maduro regime will constitute another blow to the Sao Paulo Forum (FSP – Foro de São Paulo), leaving even fewer of its members in power at their respective countries. Fewer members of the FSP in governments could only mean that the remaining left-wing regimes in the region would become more isolated and thus vulnerable.

More importantly, though, it is well known that since Hugo Chavez assumed the Presidency of the Bolivarian Republic of Venezuela, he played a leading role in safeguarding the economic viability of many Latin American and Caribbean countries, through the supply of cheap oil. This is particularly the case for Cuba and Nicaragua, two countries for which Trump would be willing to push for a regime change.

For instance, Cuba’s reliance on oil imports from Venezuela is massive, with more than 100,000bpd of oil flowing to the country. Along similar lines, Nicaragua is also dependent on the Venezuelan oil. Both countries import their oil in very good terms, such as long-term repayment plans or subsidies, allowing them to use oil earnings to boost welfare programmes. 

One can imagine that a regime change in Venezuela could have a domino effect on these countries since the economic consequences for Cuba and Nicaragua would be vast. Under such scenario, it may not be a coincidence that Juan Guaido has stated that he will bring an end to Cuba’s influence in Venezuela.

By no means it is implied here that the conditions in Venezuela are good. On the contrary, people are indeed suffering due to the severe economic problems (which we should not lose sight of the fact that they have been intensified by the US sanctions) and this may eventually lead to a humanitarian crisis. However, this cannot justify under any terms foreign interventions in their domestic politics, where the US is currently taking the lead. Evidently, the assertion that the US position towards the recent political developments in Venezuela is driven by its eagerness to ‘restore democracy’ is far from convincing

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