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Home » How Capitalism Could Revitalize Venezuela: Lessons from Failed U.S. Policies

How Capitalism Could Revitalize Venezuela: Lessons from Failed U.S. Policies

The case of Cuba, and how decades of failed U.S. foreign policies never achieved the goal of overthrowing that dictatorship, should be essential reading not only for all diplomats at the State Department “in front of the client” but also for high-ranking congressmen, senators, and relevant U.S. policymakers. While the sponsors of Versailles may forever shout for tougher action against the dictatorship, the fact is that Fidel died peacefully, then Raúl took over (peacefully) and remained in power as long as he desired, with Castro’s protégés continuing a “Revolution” that began in 1959. Oh, and despite the embargo, the United States was – for decades – the main supplier of many of Cuba’s needs. Now there’s Venezuela, which offers a timely and fresh reminder of how stubborn the U.S. Government can be when it makes an effort, and how it continues to complicate matters when dealing with uncomfortable neighbors to the south.

The first political mistake was ignoring Hugo Chávez. He was merely a wannabe Che Guevara who could have easily been won over if U.S. presidents had decided that a photo op in the Oval Office was better than what ensued. Then, Obama’s homie handshakes indicated that a thaw was being prepared; unfortunately, none of that materialized. At that time, Chávez was the Latin court jester at the feet of Putin and Jinping, both of whom seized every opportunity to add Venezuela to their respective spheres of influence – clearly – while pushing Uncle Sam into his own “backyard.” Consequently, clumsy policies pushed a traditional ally towards Russia and China without anyone on The Hill or in the White House stopping to say, “Hey, what the hell is going on here?”

The calculation at State was “who cares?” Such amateurism and lack of foresight are the root causes of all the headaches the U.S. Government faces today on the international stage. The suits couldn’t care less, that’s for sure.

Taking Venezuela as an example, when the country entered – albeit far from relevant positions – the problematic list, microphone diplomacy was implemented. From not talking about it to Donald Trump’s “all options are on the table,” there was a welcome shift in attitude for everyone. Certain segments of the opposition were ecstatic; they simply couldn’t believe their luck. The “white hope,” i.e., the “leader” who is a “direct descendant” of the Liberator who had no children, found himself in the driver’s seat with an absurd amount of influence over the State Department’s Venezuela policy. He chose a non-threatening yes-man (Juan Guaidó), and the rest is history.

The democratic forces of Venezuela went from celebration to anguish very quickly after Guaidó’s declaration of intentions. Guaidó’s slogan “end of usurpation, transitional government, free elections” didn’t last long. Nicolás Maduro and his Cuban, Russian, and Chinese friends saw through Trump’s nonsense and continued business as usual, despite a serious uptick in Treasury Department designations against Venezuelan officials, PDVSA, and Chavistas. The opposition went through a very public and very embarrassing dogfight. Maduro allowed some elections and, as always, crushed his enemies, not before his Minister of Elections announced that about 70,000 candidates (including from the opposition) had registered for the race.

Guaidó and López became Cassandra, for everyone but the State Department, which obstinately continues to support their “plan.” The “plan” included pressuring Maduro, with help from Maduro’s people (Maikel Moreno, Raul Gorrin, and Vladimir Padrino). Such is the level of incompetence among current U.S. diplomats.

In the face of this dismal spectacle, most European countries abandoned the opposition to Maduro at their fortune. Maduro and his allies, including the author of the book “How to Avoid Treasury Sanctions and Live Happily Ever After” (Iran), remained unfazed by what was decided up north. Oil continues to be traded with both old and new partners, with plenty of non-U.S. players willing to participate; capitalism is very much alive and well in the chavista fiefdom.

Recent news indicates that even Americans – barred by the Treasury sanctions regime – are seeking deals with Maduro. The State Department must be keeping up with this, as must the Treasury. In this new development, the branch of the “opposition” led by López – which was given control of CITGO – could not be more irrelevant, but they will not play dead and will return what they obtained. A delivery from the U.S. Government has never felt so good.

The U.S. Government must have realized by now that it played its cards wrong and with good intentions, but poor associations led it to an impossible situation. Just like with Cuba. Considering more pressing scenarios elsewhere, Venezuela has slipped a few places down the priority list, while oil, always Venezuela’s savior, hovers around $90 a barrel. Maduro is therefore laughing all the way to the Swiss, Russian, Turkish, and Chinese banks.

The only smart move left for President Joe Biden‘s administration, barring a dramatic escalation that will never happen, is to go with the flow, exit the scene, and unleash capitalism in Venezuela. All sanctions must be lifted. Maduro will not be coerced one way or another with meaningless carrots. What might relax him and make him somewhat amenable to civilized behavior is opening official and direct communications that lead to a Cordiale Entente. The U.S. Government cannot expect to grant legitimacy to Guaidó, cannot force/dictate terms, cannot expect to be a valid interlocutor in a domestic dispute while openly taking one side, and certainly cannot remotely expect that a randomly implemented sanctions regime based on information provided by thoroughly corrupt and compromised partners will make a very rich and resourceful strongman like Maduro consider anything disadvantageous to his position.

It’s very simple: Maduro sits on top, not López. As the Venezuelan saying goes, he owns the circus. Talking to clowns is a waste of time. Instead of alienating the boss, creating conditions that could lead to significant improvement is a better proposal than the current situation. Something like a rising tide lifts all boats. No one beats Americans at their own game (capitalism). Instead of pushing Maduro toward the likes of Putin, he should feel comfortable dealing with the United States and what it has to offer. For Venezuela, and most of its people, that prospect will always be much more appealing than anything that can be offered elsewhere. No one protests when Russia, China, Iran, or Cuba pull a visa. There’s no Disney World there, no Ivy League universities, no ease of doing business, no freedom, and no property rights.