Saving Venezuela: Requires both sanctions and negotiations

Andres Velasco, former Finance Minster of Chile writes:

Venezuela was once the pride and democratic example of Latin America. It can be that once again: a free, stable, and productive country, where citizens live in safety and peace – but only if the international community provides support in at least three key areas.


First, it should immediately recognize the need for large debt reduction, rather than attempting to postpone the inevitable for years. Second, the IMF and the other multilaterals will have to provide emergency balance-of-payments support. And, third, grants will be needed to meet urgent humanitarian needs and to prevent foreign debt from building up too fast once again.

But none of this can happen unless and until Venezuela gets a new, legitimate government with full control of the situation on the ground. On-and-off negotiations between the Maduro and Guaidó camps – the most recent rounds of which were sponsored by Norway – have gone nowhere. Maduro’s representatives walked away from the negotiating table earlier this month, claiming that they would not keep talking while the United States ratcheted up sanctions.

Dialogue will indeed be necessary to end the Venezuelan catastrophe. But the international community should not make the mistake of treating talks as a meeting of two parties of good will in need of friendly encouragement to subordinate their differences. Maduro heads a dictatorial regime that inflicts violence and suffering on a daily basis. The representatives of the National Assembly – Guaidó’s camp – are democratically elected officials who have been on the receiving end of that violence. Talks will not bear fruit unless the world’s democracies apply maximum diplomatic pressure on Maduro.

That raises the thorny issue of sanctions. Earlier this month, US President Donald Trump signed an executive order prohibiting all economic transactions with Venezuelan state entities and froze the assets of the Venezuelan government and of a number of Venezuelan officials. Some critics worried, understandably, about the effects on Venezuela’s poor. Others fretted over the possible indirect effect on local private firms, most of which are already on the verge of collapse.

But even those of us who find the Trump administration deeply distasteful must recognize that the case for severe sanctions is strong. Maduro will not leave power out of the goodness of his heart. The recent revelation – confirmed by US and Venezuelan officials – that high-level contacts have been taking place behind closed doors suggests that international pressure is beginning to yield results.

Besides, there is no guarantee that the regime would use additional resources to feed a starving population. During the second quarter of 2019, in the middle of an unprecedented domestic crisis and already under strict sanctions, government-owned oil company PDVSA amortized $800 million to Russia’s Rosneft. Maduro’s priorities are clear.

Given the cataclysmic political, economic, and humanitarian crisis underway, the moral imperative is to act now. Venezuela was once the pride and democratic example of Latin America. It can be that once again: a free, stable, and productive country, where citizens live in safety and peace.

It is really difficult to imagine human obsession with power over centuries. How can some of these people push so many people towards all kinds of crisis and deprivation?

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