Foreign countries seldom enter into Washington’s policy debates unless what happens in those countries could affect the lives and interests of the people of the United States. Those that usually make the cut are China, Russia, Mexico, Israel, and nations that support radical Islamist forces. North Korea has also been on Americans’ minds. Some of the global analysts I respect most, like retired Navy Admiral Bobby Inman, still consider an aggressive nuclear event to be the number one threat faced by the civilized world. And now comes Venezuela. The role of foreign players from Iran, Cuba, Russia, and China makes the Venezuelan situation of immense strategic importance for the free world.
This is reflected in trends on the Internet, for during the last 12 months, judging by the rankings of Google searches, many in the United States have started to pay attention. Venezuela has eclipsed all other foreign countries except China as a search term. Over the past week or so, the U.S. President and Vice President have declared that there is no going back, and that the former President of Venezuela, Nicolás Maduro, will have to leave the office he now usurps.
There was a major change in the attitude of the U.S. government after President Obama left office in early 2016. Obama’s “leading from behind” policy gave Maduro, his predecessor and mentor, the late Hugo Chávez, and others of their ilk free rein and left Washington playing a reactive role. More than that, Obama was pushing friendlier policies toward Iran and Cuba, two Maduro allies. The inauguration of Donald Trump changed the situation, and it is now the Maduros of this world who are in reactive mode.
I am a Buenos Aires-born U.S. citizen who has been involved in Venezuela for over three decades, and I support as much as I can all who work to recover their lost liberties. As an economist, I approach this or any similar situation based on a simple model: I focus on what is happening in the field of ideas, incentives, and leadership. I also believe that luck and providence play a role in life, but the only thing we can do in that field is pray or cross our fingers.
The model is simple, but the answers are not. As a worker in the field of ideas, I am biased on their role in the unfolding of political life, especially for the long term. But ideas without action are just ideas, so I will start with a brief description of the current people playing a leadership role.
Political Spectrum in Venezuela
Juan Guaidó, former head of the Venezuelan National Assembly and now the interim Venezuelan President, was until now an unknown figure for most. He is a member of the Voluntad Popular (Popular Will) political party. Leopoldo López is the founder of this party, which joined the Socialist International in 2014. It is obviously on the outs with the Bolivarian movement created by Chávez and inherited by Maduro, so it is by no means easy for people in the United States to make out the political divides between these various kinds of socialism. In fact, some parties in the Socialist International have zero totalitarian visions.
Once President Obama left office, and given the explicitly anti-socialist stance of the new administration in Washington, Voluntad Popular allies have been passing the word that they were withdrawing from the Socialist International. They have not yet done so, though. Their agenda is roughly comparable to that of the Democratic Party today. The Venezuelans need a different type of climate change.
Another major player during this interim period is Carlos Vecchio, of the same party as Guaidó. Vecchio had to escape Venezuela in 2014. He was named Chargé d’Affaires of the interim government, and his credentials were accepted in Washington by the State Department. Independently of my anti-socialist views, my previous employer, the Atlas Network, gave room to both Leopoldo López and Carlos Vecchio, in relevant programs. When Lopez was unjustly detained inside Venezuela, I called for his liberation in some of the most conservative and anti-socialist U.S. publications (for example, The Blaze). Compared to the current occupiers of Venezuela, I regard the social democratic polices of Voluntad Popular, Guaidó, López, and Vecchio, as a preferred alternative but, if put in practice, destined to failure in the not-so-distant future.
Closer to free society views is former National Assembly member and former presidential candidate María Corina Machado. Machado, who has ties to pro-free market organizations in the United States such as the Acton Institute, supports a free economy within a Judeo-Christian foundation. She will likely be the most conservative candidate in the next free presidential election. Machado and her family have been victims of expropriations and unjust decisions, like the one that stripped her of her congressional seat and banned her from travelling abroad. A rally she led recently through the streets of the town of Upata in Bolívar state came under physical attack in October by club-wielding adherents of the Maduro regime. If Voluntad Popular is comparable to the U.S. Democratic Party, Machado’s party Vente Venezuela (“Come, Venezuela”) would be closer to the view of establishment members of the GOP—but with much more courage than the latter to push for a right-of-center agenda.
Given the ideological differences in the Venezuelan opposition, the current consensus now is that the focus needs to be to topple the tyranny. The battle for ideas will come next, and start in full force when new elections are called.
The Friends of Liberty
Among the friends of liberty have been the bishops of the Catholic Church, who have firmly opposed the growing totalitarianism in Venezuela. The overwhelming majority of these bishops would like the Vatican to be more forceful in denouncing the Maduro regime. They understand, however, that Pope Francis does not want to be seen as promoting positions that can only lead to a violent confrontation and mass casualties. When the transition away from socialism comes, the bishops can play a much-needed role. The large majority of the victims of socialism will not be able to receive compensation and there will be need for much forgiveness and consensus-building. The Andrés Bello Catholic University outside of Caracas, under its former leader, Father Luis Ugalde, has also been responsible for helping build an ideology of prudent resistance. Ugalde, a Jesuit priest in his 80s, has earned great respect by his personal and intellectual witness. He should play a role in most relevant consultations.
Among the Venezuelans abroad, the economist Dr. Ricardo Hausmann of Harvard University stands out. The former Venezuelan minister of planning, former chief economist at the Inter-American Development Bank, and now Juan Guaidó’s IADB representative, explained in a December 2018 article the initial steps to be taken to liberate the country from Maduro’s grip. It was Hausmann who recommended that the National Assembly, elected in December 2015 with a two-thirds opposition majority, designate a new interim government “and a new military high command that can organize the return to democracy and end the crisis.” The designation of Guaidó as interim President was the first step. The plan to flood Venezuela with humanitarian assistance, which was the second step, had many goals in mind, and one of them was to encourage members of the military to move to the legitimate side.
For some time now, Hausmann and a team of economists have been preparing economic plans for the transition. One of them has been made public and it revolves around the recovery of Venezuela’s oil production, the resources from which might begin a gradual recovery and a rebuilding of institutions. Another effort led by prominent Venezuelans at home and in the United States, goes into even more detail, including steps to take in each government ministry; the latter includes members of different Venezuelan parties.
After liberation, reconstruction will not be easy. I recently recommended the creation of a commission to deal with the difficult problems of restitution to, and justice for, the victims of the Chávez-Maduro regime. Others are working on monetary solutions, including the possibility of shifting to the U.S. dollar, either as is, or with a different “Bolivarian” face, but having the same value. Also looking forward, there is a California-based group that is mapping the Venezuelan non-oil economic sector to try to attract foreign investors.
These first steps undertaken by Guaidó and his interim government, including the sending of humanitarian aid, were arranged in diplomatic circles with participation from representatives of most governments of the Americas. But one of those present was a diplomat from Mexico, which so far has advocated the interests of the Maduro dictatorship. So we can assume that the enemy is aware of part of the strategy. What is not public (and responsible friends of a free society in Venezuela should not expose) are the multi-faceted aspects of the strategy and measures that will lead to detonating the situation. Nothing is off the table.
Crucial Leverage: The Freezing of Financial Assets
Without the heroic efforts of the Venezuelans themselves, no solution to this crisis would be possible. But they have needed the support of the international community. The major catalyst, as I indicated, was the change of administration in Washington. Then-candidate Trump’s team was briefed on the issue during the election and his team has worked slowly but incessantly to win support for Maduro’s ouster among the nations of the world, at first quietly, and now overtly. Governments on different continents decided to jointly expose and punish those who had been collaborating with the Maduro regime.
Little would have been accomplished without the U.S. government’s most powerful, non-violent sticks. One is the ability to freeze billions of dollars of ill-gotten gains held by diverse accomplices of the socialist regime. Another is the ability to ban many of the accomplices and their families from entering the United States. Senior members of the Trump administration who have an official role in this effort include Elliott Abrams, the new special envoy to Venezuela; Mexican-born Sergio de la Peña, Deputy Assistant Secretary of Defense for Western Hemisphere Affairs at the Pentagon, who had previously served as attaché in Caracas; Mauricio Claver-Carone, senior director for Western Hemisphere Affairs at the National Security Council, and Landon Loomis, an advisor to Vice President Pence on Western hemisphere affairs and global economics. Some of the most effective strategists are more effective working behind the scenes.
In the Spanish-speaking world, Felipe González, former Spanish prime minister (1982-1996), is the most respected Socialist Party member. He has played a very positive role in regard to Venezuelan liberation. The opposite could be said of José Luis Rodríguez Zapatero, the other former socialist prime minister of Spain (2004-2011), who has been behaving like an agent of the Maduro regime. Luis Almagro, the Uruguayan head of the Organization of American States, also deserves recognition. Like González, he is a man of the Left, but respectful of the rule of law and the basic principles of civilized political life.
There are new governments in Brazil and Colombia, Venezuela’s neighbors, which could suffer an immense disruption by a flood of immigrants and refugees as we have never seen before in the Americas. An op-ed piece by Brookings expert on global issues argues that the situation has the potential to become worse than Syria. Those in charge of Colombian and Brazilian security can play and will likely play a relevant role in further liberation efforts.
Attempting to thwart these forces working for a freer Venezuela are powerful entities that prefer the country stay in crisis and become a major thorn in the side of U.S. foreign policy. It is not only the Cubans, the Russians, and the Chinese who think they can profit by Latin American instability. For more than a decade, the Center for a Secure Free Society has been tracking increased Iranian activity in the hemisphere. They speak of the VRIC alliance (Venezuela, Russia, Iran and China) and argue that it is dangerous to focus only on Cuba as the enemy’s mastermind. The more recent role of Turkey’s Recep Tayyip Erdogan in support of Maduro is also deeply troubling. Maduro’s forces might be taking his advice and be ready to round up and detain thousands of his opponents. How the leaders of these countries are influencing Venezuela today should be of prime concern but would deserve another article.
What the Venezuelan situation is teaching us is another Frédéric Bastiat-derived lesson in “what is seen versus what is not seen.” While in other corners of the globe we can observe nuclear facilities being built, terrorist attacks taking place, hacking, territorial invasions, and other obvious threats, the more passive, persistent threat from state-controlled entities from China, Russia, and Iran are harder to perceive. Their incentive is to weaken the role of the United States globally so they can occupy more space, both economically and politically.
For those helping the interim Venezuelan President, the task during these weeks and months will be to relentlessly go after everyone and anyone trying to extend a lifeline to Maduro and the Venezuelan entities he controls: to tighten the noose as much as possible and await the best opportunity, for those who are most affected, to take the final steps against the dictator.