The U.S. presses its advantage with Venezuela

April 9, 2015

With Barack Obama headed to Panama for the Summit of the Americas, Eva María and Wael Elasady explain why Washington is on the offensive against Chavismo.

ON MARCH 9, Barack Obama signed an executive order declaring Venezuela to be an "extraordinary threat" to the national security of the U.S., and his administration placed sanctions on seven government officials. The idea that Venezuela, a victim of multiple U.S.-backed coup attempts over the past 15 years, is any threat to the world's largest economic and military power quickly came under ridicule in Venezuela and around Latin America and the world.

Just as absurd is the Obama administration's claims that the sanctions are a response to concerns about human rights abuses and attacks on democracy by the government of President Nicólas Maduro. As many writers pointed out, the allegations reek of hypocrisy.

The U.S. is guilty of many attempts to destabilize democratically elected governments in Latin America. It maintains alliances with states across the world that are human rights abusers, and they get aid and weapons, instead of sanctions. And this is not to mention the U.S.'s own dismal human rights record, from the torture that takes place at Guantánamo Bay, to the exposure of a "black" site in Chicago where police keep suspects in a legal limbo while they are held and interrogated.

Rally for Venezuelan president Nicholas Maduro along with Evo Morales and Daniel Ortega
Rally for Venezuelan president Nicholas Maduro along with Evo Morales and Daniel Ortega (Mauricio Muñoz)

What are the real motivations for the Obama administration's sanctions on Venezuela? There have been two explanations put forward by left-wing commentators.

One is that the sanctions and U.S. saber rattling are simply more of the same--what some have called a "continuous coup," in which the U.S. is involved in continuing attempts to destabilize and undermine the Bolivarian government in Venezuela. The other explanation is that these sanctions are, in fact, "irrational" actions, resulting from internal political rivalries and special interests--which undermine U.S. foreign policy aims by weakening the Venezuelan opposition and further isolating the U.S. in Latin America.

What both of these explanations fail to take into account, however, are the effects of the slowdown in the global economy and the drastic drop in the price of basic commodities, especially oil, which has weakened many of the left-leaning governments elected over the previous decade across Latin America.

This has created a new opening for U.S. imperialism to attempt to re-establish its position in the region--and Obama's executive order represents a part of the strategy. Anti-imperialists must be prepared to challenge this and any other attempts at U.S. intervention in Venezuela.

The Pink Tide

Under the late President Hugo Chávez, who died in 2013, Venezuela became the leading force of what was called the "Pink Tide"--a wave of left-leaning governments, including Evo Morales in Bolivia, Rafael Correa in Ecuador and Luiz Inácio Lula da Silva in Brazil. These governments came to power and challenged, to varying degrees, the neoliberal policies that have been so pernicious to the region.

The Pink Tide was made possible by the rise of movements from below like the Indigenous struggle in Ecuador in the 1990s, the Water Wars in Bolivia against privatization in 2000, the mass mobilizations that brought down four pro-neoliberalism presidents in Argentina starting in December 2001 and the popular mobilizations that defended Chávez against the various attempts by the right to oust him, to name just a few.

The most radical of these left and center-left governments was Chávez's Venezuela. The masses of Venezuela have led the fight against neoliberalism from as early as 1989, when former President Carlos Andrés Pérez famously approved an IMF austerity package. It was popularly known as "el paquetazo," and it sparked the event known as "El Caracazo," a spontaneous uprising against neoliberal policies. An estimated 3,000 people were killed by the military during this day, with Caracas Mayor Antonio Ledezma leading up the orders for this massacre.

It was in opposition to these policies and the disastrous consequences of their implementation that brought Hugo Chávez into the political arena in 1992, when he and a dissident sector of the military attempted a coup to overthrow President Rafael Caldera. The coup failed, but seven years later, Chávez was sworn as president of Venezuela. His election ushered in the "Fifth Republic," with the stated aim of extending decision-making to the majority of Venezuelans, whose voices had previously been systematically excluded from all areas of political activity.

Using revenues from the state oil company PDvSA, the Bolivarian government greatly improved the lives of most Venezuelans with its popular measures. As Lee Sustar explained in the International Socialist Review:

These include a reduction of poverty from 55 percent of the population to 34 percent as the share of gross domestic product (GDP) on social spending has increased from 7.83 percent to 14.69 percent; the achievement of literacy for 1.5 million adults; the virtual elimination of hunger through subsidized grocery stores that service 13 million people; medical care provided by Cuban doctors via free clinics in slums, reaching 18 million people, nearly 70 percent of the population; access to higher education for the poor and working class; and special affirmative action programs for indigenous people.

The Golden Decade

The overall improvement in the lives of the working class and the poor in Venezuela and the rest of the region was made possible by social programs enacted by these governments and funded by a commodity boom that began in 2003. This boom was driven by high demand from emerging markets like India and China, as the price of primary commodities such as copper, soy, iron ore and, most importantly, oil reached new highs.

This period resulted in sustained high growth for the region as a whole and came to be known as the "Golden Decade" for Latin America. Among other things, the decade allowed the Pink Tide governments to carry out, in varying degrees, popular social measures, while avoiding a direct confrontation with the bourgeoisie or challenging capitalist relations of production. As long as there was high enough economic growth, the tensions could be minimized and the conflicting social sectors pacified, providing these governments with a level of stability.

In addition to underpinning social spending, the boom of the past decade also provided the new governments of Latin America with increased leverage against U.S. imperial control over the region, especially as the attention of the U.S. under Bush and Obama was focused on the costly debacles in Iraq and Afghanistan.

Several regional bodies and trade agreements explicitly excluded the U.S. from participation, including ALBA (Bolivarian Alliance for the People of Our America), UNASUR (Union of South American Nations), Petrocaribe and CELAC (Community of Latin American and Caribbean States). were developed in a bid towards further regional integration. Meanwhile, U.S. efforts to extend North American Free Trade Agreement into Central and America with the Free Trade Area of the Americas were defeated at the Summit of the Americas in 2004. Chávez was the ideological driving force behind the vote, while Brazil was the economic motor.

At the same time that U.S. influence waned, China's hunger for Latin American raw materials resulted in a surge of commercial relationships--China's trade with countries of the region increased by 1,200 percent from 2000 to 2009. The example of Venezuela is telling: Before Chávez's presidency, China's investments in the country didn't exceed $500 million per year. In 2009, they reached $7.5 billion, making Venezuela the recipient of the largest Chinese investments, in exchange for oil exports.

However, recent slowdowns in the global economy--including China, which saw its slowest year of economic growth in 24 years, and Europe, which continues to face economic and political crisis--have weakened demand for raw materials. This combined, with the overcapacity brought into being by the frenzy of the boom period, have resulted in a drastic drop in the price of primary commodities--most importantly, oil.

Commodity prices hit a 12-year low this year, which is a large part of the reason that commodity export-dependent Latin American economies have suffered GDP growth, falling from an average of 4-6 percent between 2003 and 2013 to 1.2 percent in 2014. The "Golden Decade" of strong economic growth, based on high commodity prices, seems to have come to an end.

An Opening for U.S. Imperialism

These economic changes have created an opportunity for the U.S., where political leaders had been watching with increasing trepidation their relative isolation and China's growing influence in a region that American imperial strategists arrogantly refer to as their "backyard."

Now, Latin American governments, faced with fading popularity, are having to cut social spending and impose the same neoliberal policies that the Pink Tide challenged. This has opened them up to overtures by the U.S., whose consumer-driven economy has fared better as a result of lower oil prices, increased oil and gas production and Corporate America's success in lowering labor costs.

A recent Wall Street Journal article explained how this dynamic played out in Latin America's largest economy, Brazil:

An economic downturn is prodding Brazilian President Dilma Rousseff to try to improve relations with Washington and put a nearly two-year-old U.S. spying fiasco behind the two nations. With growth stalled, trade with China slowing and Brazil's consumers pulling back, Ms. Rousseff needs to boost exports. The U.S., the world's leading consumer market, has become a focus of her diplomatic overtures.

No Latin American countries have been hurt more by the drop in commodity prices than those dependent on oil production, such as Venezuela. As a result of lower demand, increased U.S. production and the glut of oil--encouraged by the U.S.--caused by Saudi Arabia continued high output, oil prices have dropped to a low of $40 a barrel.

This has wreaked havoc on Venezuela's economy, where oil exports account for 95 percent of its export earnings and oil revenues make up more than 90 percent of the Bolivarian government's budget. Falling oil prices have exacerbated the problems facing the Maduro government, including soaring inflation, shortages of goods and an aggressive opposition doing everything in its power to take advantage of the situation.

All this has eaten into Maduro's popularity and weakened Venezuela's regional influence, since it is not able to provide oil at the same low subsidized rates or help finance its poorer Caribbean neighbors and other allies in the region.

The Carrot and the Stick

Washington has stepped in quickly to take advantage, as CNBC reported:

With the future of Venezuelan oil sales in doubt, the White House last month invited Petrocaribe countries to Washington for a Caribbean Energy Security Summit, hosted by Vice President Joe Biden.

The closed talks also included other U.S. officials and representatives from the European Union, the United Nations and financing agencies including the World Bank and Inter-American Development Bank. At the summit's conclusion, the U.S. joined a consortium providing $63 million in financing for a wind farm in Jamaica.

Another important element of this strategy has been the U.S. opening towards Cuba announced by Obama at the end of last year. While this move won support from sections of U.S. capital salivating at the prospects of taking advantage of Cuba's market, it is also seen more broadly by U.S. strategists as essential in breaking Washington's increased isolation in Latin America.

The question of the Cuban embargo has long been a sticking point for Latin American countries and a rallying point for those opposed to U.S. meddling in the region. With this change in policy, the U.S. is hoping to neutralize a grievance of its most determined opponents and lure countries to re-establish stronger links, as the New York Times suggested in an article titled "Cuba Thaw Lets Rest of Latin America Warm to Washington."

For its part, Cuba has hopes of gaining U.S. capital investment for its own struggling economy in "light of the serious political and economic problems that Venezuela (Cuba's principal ally) and Russia are currently facing, along with the relative decline in growth of the Chinese economy," as author Sam Farber explained in an article for Jacobin.

But if Washington is using soft power to draw in Latin American countries like Brazil and Cuba, it is also wielding its stick with Venezuela.

The timing couldn't be better for the U.S. Chávez died in March 2013, leaving the ruling party with the less admired and charismatic Maduro in charge. The economy has suffered the worst period of inflation in the past 15 years--around or above 60 percent for the past two years--and the situation has only gotten worse with the drastic drop in oil prices.

The U.S. is feeling confident. In addition to the aim of isolating Venezuela, it wants to send a message to Latin American nations that this is what to expect if they don't cooperate--as well as make it clear to both the internal opposition and any hesitating sectors of the Venezuelan state that the U.S. is stepping up its challenge to Maduro.

So the sanctions announced by Obama aren't an accident of dysfunctional American domestic politics, but a strategic choice by U.S. imperial planners who believe the conditions allow for moving more boldly against Chavismo and trying to bring the country to a tipping point during a period of weakness for Maduro's government.

Thus, the sanctions are likely to be just the beginning. A recent Senate Foreign Relations Committee hearing on "Deepening Political and Economic Crisis in Venezuela: Implications for U.S. Interests and the Western Hemisphere" seemed to confirm that Washington is aiming at more actions against Venezuela. As Rachael Boothroyd explained for

What the hearing did that U.S. intervention in Venezuela looks set to intensify over the coming year and will be implemented through a variety of mechanisms. Chiefly, further "targeted" sanctions against Venezuelan officials; more funding for Venezuelan opposition groups and NGOs; destabilization of Venezuela's economy, specifically its oil industry; an international media campaign against the country aimed at constructing a matrix of opinion surrounding human rights abuses; and through further efforts to weaken Latin American integration and unity.

The Empire Strikes Back?

One initial test of the prospects for Washington's maneuvers will be the Summit of the Americas meeting, to be held this weekend in Panama.

The Summit of the Americas brings together all the states of South and North America, along with the Organization of American States--it has been considered one of the vehicles for projecting U.S. power in the hemisphere. The last summit held in 2012 in Cartagena, Colombia, was heavily dominated by the question of including Cuba. That year, neither Ecuador nor Nicaragua attended the event in solidarity with Cuba, and the countries of ALBA threatened to not attend future summits unless the U.S. relented.

Now, though, the U.S. has made strides toward normalization, removing one hurdle from the upcoming summit--all states in the hemisphere will be present for the first time in history. The U.S. hopes to use this meeting to turn a new page after a decade of weakened influence.

But Washington's strategy won't go unchallenged. Condemnation of the sanctions against Venezuela has been nearly universal in Latin America, with both ALBA and UNASUR releasing unanimously approved statements demanding the measures be rescinded.

The sanctions could thus reverse some of the good will that U.S. wanted to garner with its moves on Cuba--and instead act as a rallying point for opposition to U.S. meddling in Latin America. Within Venezuela, Maduro has launched a petition drive with the goal of getting 10 million signatures demanding that the U.S. repeal the sanctions--he plans to hand the petition to Obama at the summit.

U.S. planners appear to be willing to take this gamble, however. They are betting that Venezuela's weakened position domestically and regionally will limit opposition to no more than some statements that won't endanger any real progress in U.S. efforts to re-establish its position in the region.

If Cuba's response is any indication, they may well be right. While it issued a strong statement denouncing the sanctions against Venezuela as clear acts of intimidation, and stated that Cuba could not be "seduced," there has been no effect on negotiations toward normalization of relations.

Plus, even though all the countries in UNASUR voted to support Venezuela, there seemed to have been some doubts. The meeting that was supposed to happen in Montevideo right after Obama's announcement was postponed for a week after tensions developed between Maduro and Uruguay President Tabaré Vásquez. As Argentine leftist Atilio Boron wrote:

This postponement, right in the middle of a crisis of great proportions, was not only surprising, but also extremely worrisome. It means that the governments of South America are either unaware of the gravity of the threat contained in Barack Obama's executive order, or even worse, they are aware, but they don't have the political will to perturb the imperialist dictates.

Chavismo at the Polls

If the results of the summit in Panama will be an initial test for the U.S. strategy to isolate Venezuela on the regional level, the legislative elections in Venezuela scheduled for this summer will show the impact internally.

Contrary to the lies of the right-wing media and U.S. officials, Chávez had won elections by a large margin and with high voter turnout, both before and after the formation of his United Socialist Party of Venezuela (PSUV). This was a direct result of his personal popularity and the government's social agenda.

But in recent years, economic problems, like inflation and shortages, and corruption among sections of the state bureaucracy led to a weakening in support for Chavismo at the polls. This trend started before Chávez's death, but accelerated under Maduro, who won the last election by a margin of 50.9 percent to 49.1 percent. The drop in oil prices and its effect on the economy has seems to have further eroded support--an opinion poll last fall showed Maduro's approval rating at 30.2 percent.

Obama's imposition of sanctions seems to have at least temporarily strengthened Maduro's position. A recent poll showed that 64 percent of Venezuelans are against the sanctions, and 92 percent of Venezuelans oppose any US intervention in their country.

The U.S. sanctions are so unpopular that even the right-wing Democratic Unity Roundtable party, fear of losing support in the lead up to the elections, had to come out and state that "Venezuela is not a threat to any country." In addition, the Venezuelan parliament responded to the sanctions with legislation giving the president extended powers for nine months as a defense against threats from the U.S. government.

Still, with no end in sight for the economic problems facing Venezuela, Maduro is unlikely to make up the deficit caused by his declining popularity. Chavismo may be facing its first serious defeat in an election since the former president won power.

There has been speculation that the Bolivarian government could try to postpone elections to avoid an opposition-controlled legislature, which would try to block any effort to deal with the economic crisis and possibly attempt a recall effort in 2016.

But this seems unlikely. Maduro knows such a move would certainly unite an otherwise fractured opposition and lend credence to the years of lies about Chavismo's tyranny, while deepening fissures among the PSUV's own base. And without improvements in the economic situation, support for the PSUV is likely to erode further, not improve, if elections are delayed.

On the other hand, the threat of another open coup attempt led by the opposition and supported by the U.S. also seems unlikely before the elections. It would probably fail and discredit the opposition, since most Venezuelans, including critics of Maduro, are strongly in favor of democratic avenues of political change. Another coup attempt would galvanize support for Maduro and could reinvigorate the base of Chavismo, bringing it out into the street in defense of the government as happened in the 2002 attempt to topple Chávez.

So the elections will likely go forward as scheduled, and their outcomes will set the strategic ground on which the next round will be fought out. If the PSUV loses the vote, Maduro's government will be faced with a choice: move to the left or accommodate to the new situation and shift further rightward, striking compromises with an opposition-controlled legislative assembly.

There is precedent for this latter course: Maduro's response to the opposition street protests that erupted in middle-class neighborhoods in February 2014. The president convened a "peace conference," inviting opposition figures and some Venezuelan capitalists like Lorenzo Mendoza, head of the Polar group. The unions and leaders of the social movements were left out.

If the PSUV wins, on the other hand, the U.S. will likely take a tougher line, expanding sanctions and throwing its weight again behind the hard right, as its current posturing and strategy already suggests.

Either way, the key element will be the response of the working class and the poor in Venezuela and their level of mobilization--both to challenge the right-wing opposition and U.S. attempts to drag the country back to the days before Chavismo, and to pressure Maduro and the PSUV bureaucracy toward fulfilling the promises of the "21st century socialism" declared by Chávez.

What Happens to the Pink After the Gold Is Gone?

The Pink Tide governments, including Chávez's Venezuela, were able to avoid any head-on challenge to capitalist social relations. They were able to fund social programs that kept them popular and in power, without having an outright confrontation with their national bourgeoisie--and in some cases, like Brazil and Bolivia, incorporating sections of the local capitalist class into the ruling parties.

This has all been possible because of a decade of high economic growth on the basis of the commodities boom. That period is over. Now the question is: With growth stalled, what will these governments do? Will they move to the left to continue and deepen their project, even if this means a more fundamental challenge to the free market system? Or will they accommodate and move right, becoming the governments that carry out hated policies that impoverish the working class and poor.

In places like Brazil, the latter seems to already be the case, with the traditional right benefiting by capitalizing on social frustrations and mobilizing in the streets under the slogan of fighting corruption in the government.

In Venezuela, Maduro and the PSUV leadership are trying to escape the trap of the rentier oil state by relying on Chinese investment in manufacturing and infrastructure. If the downturn in oil prices weakened Russia, Iran and Venezuela, it has been a boon to China, which is believed to be saving $600 million a day from cheaper oil imports, according to a Wall Street Journal report.

China is using some of this money to increase its economic activity in Latin America. In early January, China and the 33 members states of CELAC signed a five-year agreement that pledged investment of $250 billion in the region over the next decade, including a focus on infrastructure like transport, railways, ports and roads, technology projects, and research and development.

In Venezuela, the government has announced that it will move forward with what it calls Special Economic Zones (SEZ)--with Chinese capital making up the majority of the investment. As Lucas Koerner reported for

So far, 47 firms have committed to setting up operations in the SEZ, and a further 100 have requested more information regarding potential projects. Chinese firms constitute the bulk of the foreign partners, with $2 billion in contracts already designated to manufacturing and construction project.

Neither these projects nor Chinese investment will move Venezuela any closer to socialism or challenge capitalism. The opposite is the case, as Koerner explains:

The SEZ draw their inspiration from the Chinese model of "market socialism" imposed by Deng Xiaoping in the 1980s, which sought to promote state-regulated capitalist development in specific areas of the country.

The resulting Special Economic Zones, which now include major cities the size of Shanghai, have been widely praised as the foundation of the Chinese "economic miracle" of the previous decades. However, some have criticized the logic of SEZs, saying the lax investor-friendly regulations facilitate the trampling of labor and environmental rights.

The concerns of these critics are well founded. China is one of the world's two biggest capitalist powers. It invests in countries around the world for the same reason the U.S. does--not out of any commitment to socialism or workers' solidarity, but for profit and capital accumulation.

The alternative to a return to the U.S. neoliberal order for Venezuela and the rest of Latin America won't come through state-led development in alliance with Chinese capital--nor through accommodation with sections of national and regional capital.

Rather, the key element will be the response of the working class and poor in Venezuela and elsewhere, and their level of mobilization. This can shape the emergence of a bigger revolutionary left current, which can help lead a definitive break with capitalism and push for the fulfillment of the hopes and aspirations of the millions in the region--on display during their years of resistance to neoliberalism, whether in the favelas, barrios, workplaces or countryside across Latin America.

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