Venezuelans Are Suffering Through a Slo-Mo Revolt

(Bloomberg Businessweek) -- There’s a saying used in Venezuela when there’s a stalemate or showdown: “Él que se cansa pierde”—“He who tires first loses.”

The standoff in Venezuela took a fatal turn over the weekend of Feb. 23, when President Nicolás Maduro sent the military to confront supporters of opposition leader Juan Guaidó on the Colombian and Brazilian borders. In the ensuing chaos, trucks full of essential food and medicine were destroyed, and about 280 people were injured, more than 60 of them by bullets. Guaidó was able to blame the violence on an oppressive regime, while Maduro framed the aid effort as an attempted U.S.-backed invasion.

And so the political paralysis continued into its second month. Guaidó, leader of Venezuela’s National Assembly, brought hope to some when he declared himself the rightful interim president on Jan. 23. However, the country’s 30 million citizens still struggle to find food and treat curable diseases. Venezuela is entering its sixth consecutive year of economic recession, with hyperinflation running to 360,000 percent annually. The minimum monthly wage is barely enough to buy a meal at McDonald’s or three liters of Pepsi.

With little visibility into the Maduro regime’s accounts, it’s impossible to say just how much money it has left. Central bank reserves stand at $8.3 billion, much of it in gold ingots, and the U.S. is threatening to sanction anyone trading precious metals with Venezuela. The U.S. has already banned the purchase of Venezuela’s crude and its exports of refined goods in an attempt to starve Maduro financially, which would in turn exert pressure on the military and his supporters to cross over to Guaidó’s side.

But the full effects of the sanctions may not be seen for months. While Guaidó has drawn the diplomatic support of more than 50 countries, including most of Venezuela’s regional neighbors, Maduro still commands thousands of generals and pro-government armed fighters who vow to defend the regime. Russia and China, his most powerful allies, haven’t extended significant loans—at least publicly—in years, and other friendly governments including Turkey seem unable to prop up the regime.

In that sense, time isn’t on Maduro’s side. With help from the American sanctions, the young opposition leader managed to wrest control of U.S. refiner Citgo from its Caracas-based parent, Petróleos de Venezuela SA, diverting a crucial source of revenue. After the failure of his aid mission, Guaidó said in a tweet that he’s willing to consider all options, which presumably includes military intervention. Some Venezuelans are beginning to ask when the U.S. Marine Corps is going to step in. After 20 years of Chavismo, many believe the only way to remove Maduro and his enablers is by force.

Trump so far hasn’t ruled out deploying the military, but any U.S. action would likely be a major challenge. “The U.S. has two alternatives: to double down or to back off,” Torino Capital chief economist Francisco Rodriguez wrote in a report. “If the current strategy fails at generating regime change, then the opposition could end up in the worst of both worlds: with its followers demobilized and disillusioned, and with its leaders potentially being held responsible for having brought about crippling economic sanctions.” Before members of the Lima Group, an organization of Latin American governments formed in 2017 specifically to respond to the crisis in Venezuela, gathered on Feb. 25 in Bogotá, many had already made it clear they weren’t willing to attempt removing Maduro by force. U.S. Vice President Mike Pence also attended the meeting, pledging stronger sanctions and more aid.

There are other options for the U.S. and its allies, including seizing more Venezuelan assets. But Maduro’s government also has cards to play that would likely deepen the crisis. Maduro could arrest Guaidó, who violated a travel ban by crossing the border into Colombia. The embattled leader could also try working around the oil ban and securing new financing, whether by legal means or through illicit activities such as trafficking in cocaine and illegally mined metals, or even off-the-books arms trading.

Calls by the European Union to seek a negotiated solution are going unheeded for now. Greg Weeks, a professor of political science at the University of North Carolina at Charlotte, says the opposition may seek Maduro’s resignation as a precondition to any diplomatic discussion. Even if the president agrees, elections would still take months to arrange. His popularity has sunk to about 14 percent, according to a poll by the firm Datanalisis, compared with 61 percent for Guaidó. For Maduro, at least publicly, the stalemate is a zero-sum game. He’s said he’ll defend the Chavista revolution with his life, if needed.

“There’s no reason to think he’s about to fall. You can limp along with a very corrupt and cash-starved government,” Weeks says. Guaidó’s opposition is unified for now, but if his supporters begin to doubt his ability to break the deadlock, it would be easy to see his bloc splintering. “He’s in a honeymoon period,” Weeks says, “and it won’t last forever.”

To contact the editor responsible for this story: Jillian Goodman at jgoodman74@bloomberg.net

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