Interestingly, I think, the one entity that has put the most pressure on Venezuela is ConocoPhillips. They have been making efforts to go after Venezuelan assets abroad after Venezuela's nationalization of their own assets about a decade ago; they now have the ability thanks to a judgment in their favor to enforce these efforts in court and to seize oil shipments and tankers that enter jurisdictions where they are able to file suit. Since Venezuela relies on two Dutch islands, Curaçao and Bonaire, for refinery and tanker facilities, ConocoPhillips has been able to use Dutch courts to go after them. It's almost like a private sanctions regime that made the Venezuelans very reluctant to export. They're keeping their tankers really close to home, which means that they're making even less money than they otherwise would at these reduced production levels.
This issue of not being able to make foreign payments is really quite difficult for Venezuela. People have to realize that Venezuela has to import oil products to be able to export oil products. Its crude oil production is increasingly heavy and sour, coming from the Orinoco Belt in the south of the country. It needs to be blended with lighter crude to make it marketable for international export. Venezuela typically has to import that lighter blend of oil, and it typically mixes it in these Dutch islands. So this is already getting incredibly complicated for them to try to keep operating, which explains partially why production is dropping.
They also aren't able to pay the international companies that provide support to the drilling operations in Venezuela, companies like Schlumberger. And so that's made it very difficult for them to keep production up as well.
OR: Where do you think Maduro went so wrong on a pragmatic level in comparison to Hugo Chávez? Does he still possess any legitimacy as a leader of the Bolivarian Revolution?
Trinkunas: Chávez was more pragmatic than Maduro. He was more secure in his relationships with key actors like the military. He was a former military officer. He understood the military very well. The generals that were coming up through the ranks were either from his cohort or people he had taught at the military academy. So he was more willing to let technocrats run, for example, the national oil company (even though he made sure he had his political figures there are well).
Chávez also had the good fortune to die at the right time. He died at the peak of Venezuela's oil boom. I think this made Chávez's legacy in the popular imagination look rosy compared to Maduro's.
Maduro had much less legitimacy from the get-go. He was an unlikely choice. Chávez chose him as his successor towards the end of his life. Chávez was always very careful never to allow other figures in the regime to shine too brightly. In Venezuela, you would say he would never allow anybody else to cast a shadow over him. Maduro was a figure who was close to Chávez, was loyal, but wasn't overly popular or otherwise threatening.
After Chávez passed away and Maduro was elected, he became almost a caretaker managing a coalition among the elites inside the government. Maduro was slowly able to push off other people from other centers of power, send them into exile. Rafael Ramírez, who had run the oil industry for a long time, was sent off to the U.N. and then he was fired. Same thing with former planning minister Jorge Giordani. Maduro was able to slowly accumulate bureaucratic and even political power within Chavismo. But he was still not a particularly popular figure and he had to rely increasingly on handouts to loyalists and on more and more authoritarian mechanisms to surveil people, guide people, and keep people on the dole.
He was also — and this may be a reflection of his weaker political position — never willing to change course on the economy, especially on the fixed exchange rate. The fixed exchange rate is one of the greatest scams in history. Venezuela received during the oil boom the equivalent of three Marshall Plans in present dollars. All of this, nearly, has been frittered away. Less than 10 billion of it is left. Part of the reason is the fixed exchange rate. It hovered between five and 10 bolívars to the dollar — which you could immediately resell into the black currency markets for 100, 1,000, or 10,000 times that much. It created this huge incentive for people in the government to take dollars at the fixed exchange rate and put them into the black market and keep the earnings (now they keep the dollars, because the bolívar is worthless). This really undermines the entire economy.
The other part — which began under Chávez, to be fair, but continued under Maduro — is the treatment of the private sector as a political threat, because the private sector was funding the opposition. So their way of going after the opposition was to deny them a basis of financial support by nationalizing companies. All were run very badly afterwards. That also affected the economy. And ultimately printing currency like there's no tomorrow, flooding the economy with these increasingly worthless bolívars — well, the bad money drives out the good. And all this is still locked into a corrupt clique at the top. Maduro has been relying on those people to stay in power, so he can't really change the system.
I think that’s why he hasn't just made some sensible changes to the economy to restore oil production, restore food production, get the economy going again. It's a very difficult situation.