How Venezuela’s Presidential Standoff Fizzled Out

(Bloomberg) -- For a time, it wasn’t entirely clear who was in charge of Venezuela. Two men claimed to be president, each with domestic and international backers. The campaign to replace President Nicolas Maduro has fizzled, however. Protests have subsided as Venezuelans struggle to cover their most basic needs amid an economic collapse featuring power outages, water shortages, and even insufficient gasoline in the country with the largest oil reserves in the world.

1. Who’s running Venezuela?

While Maduro and opposition leader Juan Guaido both claim to be president, Maduro maintains control of key assets including the military, media, police and state-run oil company Petroleos de Venezuela SA, or PDVSA. Guaido, the president of the opposition-led National Assembly, announced early last year that he had assumed Maduro’s powers atop a caretaker government until new elections could be held. His move was quickly recognized by the U.S., Brazil, and dozens of other countries, but his popularity has since taken a dive because he’s failed to deliver the quick transition he promised. His ties to a botched raid led by a retired member of the U.S. army special forces in late April deepened his credibility problem. Russia has continued to recognize Maduro as Venezuela’s rightful leader, as have China and Turkey, among others.

2. Is there potential for a negotiated solution?

Norwegian officials are making a new diplomatic effort after Maduro walked away from talks between the government and the opposition last year. Public pressure for the regime to make concessions has vastly receded, as the massive protests then taking place have ended. But the country’s dire economic situation could motivate the government to seek relief from U.S. sanctions at the negotiating table. The opposition has so far denied any role in talks, saying free and fair elections are the only solution to the crisis.

3. How has the coronavirus crisis affected matters?

If anything, it has made Guaido less relevant, by allowing Maduro to display his power by enforcing a nationwide quarantine since mid-March. The regime has taken advantage of the crisis to take over three major opposition political parties and restructure the Electoral Council ahead of congressional elections in December. Guaido’s promises to bring in medical supplies and pay doctors $100 bonuses have done little to rebuild his following.

4. On what grounds does Guaido claim the presidency?

With the backing of the U.S. and other countries, Guaido has argued that Maduro’s May 2018 re-election was illegitimate. The vote was marred by the jailing and disqualification of opposition politicians -- most of whom ultimately joined a boycott of the vote -- along with the coercing of government workers to vote and reports of fraud. Guaido cites Article 233 of Venezuela’s constitution, which invests temporary presidential power in the head of the National Assembly when the presidency is otherwise vacant. In a column for the Washington Post, Guaido also referenced Article 350, which says Venezuelans “shall disown any regime, legislation or authority that violates democratic values, principles and guarantees or encroaches upon human rights.”

5. What could improve Guaido’s chances?

Maduro is the protege and successor of Hugo Chavez, the leftist army colonel who was first elected president in 1998 after having been imprisoned for leading a failed coup in 1992. Top leaders of the military have benefited under the regime from government contracts and mining concessions, as well as their control of ports and PDVSA. Losing army support would be a major blow to Maduro, but while Guaido has sought to lure officers by offering amnesty to those who defect, few have heeded his call.

6. What else could make a difference?

Control over Venezuela’s oil reserves could prove critical. Oil accounts for the overwhelming majority of Venezuela’s income. The U.S. has slapped sanctions on PDVSA that effectively block Venezuela, an OPEC member, from exporting crude to the U.S., its biggest customer. Tankers known for carrying Venezuelan crude or delivering gasoline to the country have been sanctioned. And American companies are barred from selling Venezuela the light oil it needs to dilute its heavy crude, further hindering PDVSA’s ability to export.

The Reference Shelf

• A QuickTake explainer on Venezuela’s collapse.
• Who is Juan Guaido?
• A timeline of Venezuela’s economic rise and fall.
• Why Guaido’s domain is trembling following a failed coup led by an American.

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