Jack Harding, Head of Political Risk
The crisis in Venezuela escalated over the weekend when embattled president Nicolás Maduro closed the country’s borders with Brazil and Colombia resulting in deadly clashes between security forces and protesters. On Thursday last week, Maduro had announced that he would be shutting the border with Brazil and, on Saturday, he allowed a deadline to pass for permitting international aid into Venezuela by instead ordering troops to block the Colombia-Venezuela border crossing at the Simón Bolivar International Bridge.
The deadline had been set by the Venezuelan National Assembly President, Juan Guaidó, who has declared himself the interim president, rejected the result of the May 2018 election as fraudulent and called for new elections. Guaidó has received the backing of most of the international community, including the majority of the European Union and Latin America, Canada, and the US.
Within Venezuela, there are still thousands who support Maduro and, although there have been some defections, he crucially still holds authority over the armed forces. Peaceful protestors in Caracas symbolically marched on the city’s military barracks in a call for them to abandon Maduro, while Guaidó pleaded with them to put themselves ‘on the right side of history’. Despite calls for reason, for Venezuela, this crisis could get worse before it gets better.
However, competing international interests in the country mean this is not just a Venezuelan crisis; it also heavily involves China, Russia, and the US who yet again find themselves at opposite ends of an issue where politics and economics are deeply intertwined.
Although oil output has fallen dramatically under Maduro’s presidency (from roughly 2.5 million barrels per day when he was elected to just over 1 million per day in 2018), Venezuela holds the largest proven oil reserves in the world and the US still accounts for over 40% of their crude oil exports and China for 25%. Furthermore, while China is the country’s largest bilateral lender, Russia is also owed around $6bn by Venezuela.
Therefore, the US, China and Russia all have deep economic ties to the country, but very different stances towards the preservation of the status quo. China and Russia both vehemently oppose the US role in Venezuela and notably did not recognise Guaidó as president. China is more likely to pursue a policy of non-intervention, but Russia is more politically aligned with Venezuela and sees the country as a strategic ally. Since the early 2000s they have increased their export of arms and ammunition and, in a show of support for Maduro in December 2018, sent two nuclear bombers to Venezuela.
Meanwhile, the US has announced that ‘concrete steps’ and ‘clear actions’ will be taken this week and, today, US Vice President Mike Pence, will meet the leaders of most Latin American countries, including Guaidó, in Bogota to discuss options. Initially, this is likely to come in the form of further sanctions, however, given the urgent plight of the Venezuelan people and the fact that Maduro resorted to the use of force to repel international aid trucks, the possibility of military invention may become a reality.
Russia’s response to this was to accuse the US of provocation and their envoy to the UN, Vasily Nebenzya, has stated that any perceived acts of aggression from the US will result in Russia calling for an emergency meeting of the UN security council. Serious internal divisions in Venezuela have yet again exposed the deep divisions between the world’s great powers; Venezuela’s national anthem declares that ‘la fuerza es la unión’ – strength is in unity – but with competing interests being proxied through Venezuela, further disunity and soaring diplomatic tensions between the US, Russia and China seems more likely.
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