Weakest Strongman

An Interview with Harold Trinkunas

But there's another dynamic going on that I think helps hold them together. As Ben Franklin once said, "We must, indeed, all hang together or, most assuredly, we shall all hang separately." This inner circle, and this includes the military, are all guilty of something. It could be drug trafficking, it could be corruption, it could be human-rights abuses. They know, or at least they believe, that they have no future in Venezuela if they're not in power. Conversely, the idea of a future in which somebody else is in power and they would still be okay is not something they can envision. And comments from U.S. administrations and from the opposition in exile about bringing them all to trial of course contribute to this dynamic. I think this is what helps hold them together: the sense that they're trapped, that there's no place else to go.

I think it's possible to envision that there might be a transition in Venezuela, but not to democracy. It would be simply pushing Maduro aside and bringing some other figure into power from the ruling elite, someone seen as more competent, more capable of undertaking needed economic reforms. That is possible, because that's just another one of their own who can still protect the inner circle but do a better job of managing the country.

OR: What are the real warning signs that the situation in Venezuela is about to move from a crisis to an actual catastrophe?

Trinkunas: We’re already seeing some of them. The very dramatic refugee flows, for example — perhaps as much as between five and 10 percent of the country has emigrated at this point. That is certainly a warning sign. You're still not seeing many spontaneous demonstrations, but those do happen on occasion. If they became more frequent, I think that would be an issue. Last year there was a big protest movement and a lot of oppression. Now the ranks of the military and police have been thinned by emigration and desertion, so that apparatus is less solid. We already have hyper-inflation: some estimates put it at 13,000 percent inflation this year. There’s also the plummeting oil production.

Maduro has been completely unable to reverse these trends in declining oil production, inflation, declining imports with a lack of access to foreign exchange. That really makes the situation quite dramatic. Part of the problem in Venezuela is that there's very few sources of foreign exchange that are not in government hands, unlike, for example, Zimbabwe or Argentina. Their private-sector producers had access to foreign exchange and could keep the economy more or less supplied and moving. That's proven to be very difficult to do in Venezuela, in part because the government prioritized paying debt over everything else until this past year, and that meant a huge contraction in economic production and a contraction in imports. And the government has relied on simply printing money at an astonishing rate to try to be able to make payments domestically, which fuels the hyperinflation.

I think the only silver lining to the present situation — and it's not even really a silver lining — would come if the government were to swallow its pride and go to the IMF for a bailout and agree to economic reforms. This is very unlikely, but if Maduro did this Venezuela probably would not experience what so many people fear about IMF structural adjustment plans: an economic contraction and a spike in prices. Venezuela has already gone through all that under Maduro, so the new money coming in would actually have the effect of restoring production and restoring levels of consumption in the country.

OR: How strong is Venezuela's position at the moment within regional geopolitics?

Trinkunas: On this front there has been a rather dramatic change from the time of Hugo Chávez. Chávez did a very good job of shielding Venezuela from the ability of the region and even the United States to really influence what was going on inside the country's borders. In fact, he built a network of alternative regional institutions based around Venezuela's oil wealth to support Venezuela abroad and shield it from pressure as it became less democratic. Most of the inter-American mechanisms for defending democracy — like the Inter-American Democratic Charter and the Organization of American States — work by consensus. Chávez made sure that there were countries that would prevent consensus happening: small Caribbean states that got preferential financing for their oil imports or subsidies or loans from Venezuela. He did that very well.

That has been peeling away as Venezuela's oil wealth has declined, but it still is enough to make most of the regional mechanisms completely inoperable, while other nations in the region have been so irritated with Venezuela that they've made the Venezuelan-designed mechanisms inoperable. Basically, regional institutions are not working. This is why you're seeing coalitions of the willing, like the Lima Group, taking up this issue.

The Lima Group comprises 12 countries (including Canada) but it embraces something like 90 percent of the region's population and GDP, so it's a pretty significant group. But still, other than diplomatic pressure, recalling the ambassadors, and coordinating on refugee issues, they haven't really been able to put much pressure on Venezuela.

The U.S. and the European Union have imposed some sanctions, but they've been uncoordinated and out of sync. What we know from previous experiences with sanctions, for example against Iran and North Korea, is that you really need broad, coordinated sanctions against a country for that kind of pressure to work. Of course, the worry in Venezuela is that you already have a situation where the economy has collapsed and there's large pressure for economic migration, and countries in the region are understandably reluctant to make that more acute: they're the ones receiving most of the refugees. And Maduro still continues to maintain relationships with authoritarian governments around the world: Turkey, Russia, China, Syria, Cuba. This also means that even global mechanisms like the United Nations are basically inoperable when it comes to Venezuela. Russia and China will veto anything involving Venezuela. The world doesn't have a whole lot of options.