The Standoff in Venezuela, Explained

(Bloomberg) -- Once one of Latin America’s richest countries, Venezuela is in economic collapse, plagued with shortages of everything from toilet paper to antibiotics and food. After taking office in 2013, President Nicolas Maduro tightened his grip on power even as opponents complained of economic mismanagement, corruption and political oppression. His critics inside and outside the country have talked for years of regime change. Now, in a bold stroke, Maduro’s opponents have declared his government invalid and one of their own his replacement. The two sides are locked in a standoff over who is the legitimate authority in Venezuela.

1. Who’s in charge in Venezuela?

While Maduro and opposition leader Juan Guaido both claim to be president, Maduro still has control of key assets including the military, media, police and state-run oil company Petroleos de Venezuela SA, or PDVSA. Guaido ("why-DOH"), the president of the opposition-dominated National Assembly, announced on Jan. 23 that he would assume Maduro’s powers atop a caretaker government until new elections can be held. His move has been recognized by the U.S., Canada, Australia and most of the nations of South America. Maduro responded by breaking diplomatic relations with the U.S., which he blames for orchestrating the effort to remove him.

2. 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 reelection was illegitimate. With that as the foundation, 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 Jan. 15 column for the Washington Post, Guaido also cited Article 350, which says Venezuelans “shall disown any regime, legislation or authority that violates democratic values, principles and guarantees or encroaches upon human rights.”

3. Why is Maduro’s 2018 reelection in question?

Maduro’s election to a second six-year term 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. The result was dismissed as illegitimate by the U.S., the European Union and the 14-nation Lima Group, formed to help restore democracy to Venezuela.

4. Isn’t it early to recognize a new Venezuela government?

In a way, yes. Typically, governments recognize leaders that have effective control of their countries. There are exceptions. In 1989, the U.S. withheld recognition of Manuel Noriega as Panama’s leader after he canceled elections in which polls had him trailing badly. (Three months later, the U.S. invaded and Noriega was deposed.) In 2011, the U.S. recognized Libyan rebels as their nation’s governing authority even while Muammar Qaddafi was still fighting to hold onto power.

5. Do any nations still back Maduro as president?

Yes. Russia and Bolivia have stated their continued recognition of Maduro as Venezuela’s rightful leader. President Recep Tayyip Erdogan of Turkey, who survived an attempted coup in 2016, called Maduro to say, “Stand tall, we are with you.” China’s foreign ministry spokesman noted that the country recognized Maduro’s reelection by sending representatives to last year’s inauguration and said it “opposes foreign forces from interfering into Venezuela affairs.”

6. What could tip the balance?

Rank-and-file army support shifting to Guaido would be a major blow to Maduro; he 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 pledged support for Maduro on state television. The brass have benefited under the regime from government contracts and mining concessions as well as their control of ports and PDVSA. Guaido is seeking to win over the support of officers by offering amnesty to those who defect.

7. Anything else?

Control over Venezuela’s oil reserves, the largest in the world, could prove critical. Oil accounts for the overwhelming majority of Venezuela’s income. The U.S. has issued new sanctions on PDVSA that effectively block Venezuela from exporting crude to the U.S., its biggest customer. American companies are barred from selling Venezuela the light oil it needs to dilute its heavy crude, which will further hinder PDVSA’s ability to export.

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