Daniel Lansberg-Rodríguez is an adjunct lecturer at Northwestern University’s Kellogg School of Management and consults on Latin American geopolitics.
On Sunday, July 30, Venezuelan President Nicolas Maduro made good on this threat to stage an election for a new constituent assembly to rewrite the national constitution. Venezuela already has an elected parliament, but since the opposition holds an overwhelming majority there, Maduro simply opted to hijack the political system to maintain his own hold on power. The election, to no one’s surprise, proved to be one tremendous exercise in fraud and manipulation, bringing a long-feared Maduro dictatorship one step closer to reality.
By doing so, Maduro has now placed thirty million long-suffering compatriots at the mercy of another erratic caudillo, one located in faraway Washington.
Two weeks ago, President Trump released a dramatic statement threatening “strong and swift economic actions” upon Venezuela should Maduro move forward with his constitutional gambit. Today, July 31, Trump announced that the United States is imposing personal sanctions on the Venezuelan president. Sanctions against Venezuela have been in place since the latter days of the Obama administration and been expanded multiple times, so this is hardly unprecedented. At issue, though, is what form further sanctions should take – and given that Trump has implied that more may be in the offing soon, this question is hardly academic.
Some sanctions impose travel restrictions and asset freezes upon specifically designated individuals — often government officials deemed by U.S. authorities to have committed human-rights abuses or engaged in egregious anti-democratic activity or narco-trafficking. These can actually weaken the regime in Caracas. They strip the impunity of corrupt political elites, open divides between targeted and non-targeted officials, and disrupt the complex networks of corrupt patronage that underpin the regime.
Yet the wording of Trump’s threats suggests he may move from sanctions aimed at individuals to more comprehensive ones targeting the country’s fragile economy and the flagging national oil industry on which it almost wholly depends. Should he do this, he will have handed Maduro the greatest gift he has received since Hugo Chávez first bequeathed him the Venezuelan presidency four years ago.
If the threat of sanctions, or their escalation, can at best serve to inhibit abusive government behavior by imposing personal costs upon those responsible for specific abuses, general sanctions tend to have the opposite effect. They reinforce a siege solidarity among those in power, galvanize public support in the face of foreign intervention, and offer a credible national scapegoat for mounting domestic misery. The United States has never successfully managed to bring about regime change through general sanctions, despite having imposed these dozens of times. In Venezuela, the government has long sought to pin virtually every domestic problem on supposed international enemies, an excuse that’s worn increasingly thin due to steadily worsening conditions. A dramatic intervention by its storied foe in Washington would be a gift for the Bolivarian Revolution.
Venezuela’s economy depends solely on oil exports, and should sanctions disrupt its ability to export its crude, either by limiting the state oil company’s market access or by spurring a repudiation of national debts, the country’s economy would implode. Unable to produce much domestically, Venezuela’s people are extremely dependent upon a fragile lifeline of international imports, channeled through the government’s coffers, to keep current shortages from becoming famine. In the past, Maduro has consistently shown himself willing to undercapitalize this crucial sector to pay for other priorities, and any economic harm caused by such sanctions would inevitably be passed on to average Venezuelans – people who surely have already been victimized enough.
When, back in 1989, public resentment spiked due to externally imposed economic reforms during a period of IMF-backed restructuring, the outrage boiled over into bloody unrest. Given today’s unprecedented levels of popular desperation, the power of criminal syndicates, and a far better-armed and more ideologically polarized population, chaos on a similar scale would today prove orders of magnitude worse in terms of destructiveness and far harder to contain within Venezuela’s own borders.
Venezuela might seem a relatively safe choice for a foreign policy show of strength. It’s a fairly weak country that makes a lot of noise but lacks the ability to nuke or invade its neighbors in response to U.S. interventionism. It’s also clear, to most at least, that the sooner Maduro’s disastrous administration is relegated to the revolutionary dustbin of history, the better.
Yet the United States, along with many countries in Europe and Latin America, has already declared that it will not recognize the constituent assembly’s authority. Isolated and increasingly erratic, Venezuela is on the verge of becoming a failed state. Should Trump intervene, with his typical sledgehammer subtlety, the result could stave off a transition for years and exponentially magnify its destructiveness. Venezuela is already a corked bottle ready to explode. Adding broad international sanctions could turn it into a Molotov cocktail.