South America: Venezuela Humanitarian Crisis Roiling Region

By Michael McCarthy*

A line of Venezuelan migrants at a Colombian border checkpoint.

Venezuelan migrants at a Colombian border checkpoint. / Colombia Reports / Wikimedia

The humanitarian crisis driven by both Venezuela’s increasingly dire economic situation and political repression is taxing all of northern South America, with no remedy in sight.  In what UN High Commissioner for Refugees officials call “one of the largest mass-population movements in Latin American history,” an estimated 2.3 million Venezuelans – about 7 percent of the country’s population – have poured out of the country since 2014.  According to UNHCR, more than half of them suffer from malnutrition, and a significant percentage suffer from diseases, such as diphtheria and measles, previously thought to be under control.  The crisis is posing economic and security challenges to neighboring countries:

  • Colombia has seen the greatest flow. About one million refugees have crossed the border since 2015, but arrivals have peaked – reaching about 5,000 per day – as the Venezuelan economy hits new lows.  Venezuelans’ fears that Colombia’s new president, Iván Duque, will close the border have driven part of the surge, but Venezuelan President Nicolás Maduro’s recent policy announcements – including a fórmula mágica that includes controlling inflation by lopping five zeros off current prices – are main drivers, according to most observers.
  • Ecuador received more Venezuelans in the first half of 2018 than in all of 2017 (340,000 to 287,000). Confronted with severe disruptions in border communities, Quito has declared a month-long “emergency” in four border provinces and has sent doctors and other personnel to help mitigate the impact of the arrival of several thousand Venezuelans a day.  Ecuador has announced that it is now denying entry to persons without passports.  Quito last week called for a regional summit on the crisis in mid-September.
  • Peru is the largest refugee hosting country in the Americas, but it has now begun to demand official documentation.
  • Brazil has taken in several tens of thousands of Venezuelans, but the influx is provoking local tensions. A regional judge closed the border – a decision overturned by the Supreme Court – and locals in the border city of Pacaraima took matters into their own hands vigilante-style, burning down a tent city and chasing about 1,200 Venezuelans back across the border.  Argentina and Uruguay, which last granted residency to 31,000 and 2,500 Venezuelans, are beginning to feel pressure to slow the flow.
  • Guyana is also upset because Venezuelans claiming Guyanese citizenship are arriving with claims to properties held by others since at least the 1980s. As the International Court of Justice takes up Georgetown’s case on its decades-old border dispute with Venezuela, the refugees’ arrival is an unwelcome distraction.

The United States and European Union have offered assistance, mostly to Colombia.

  • Earlier this month, Washington announced it would give Colombia an additional US$9 million in aid to provide water, sanitation, hygiene and some medications to Venezuelan migrants – bringing the overall U.S. commitment to over US$46 million over the past two years. USAID has cast the aid as supporting a “regional response” to the problem, but Washington’s closest ally, Colombia, will receive the overwhelming share.  U.S. Defense Secretary Mattis has announced he’s sending a hospital ship, the USNS Comfort, to Colombia and “possibly other destinations” to help.
  • In June, the EU committed €35.1 million (US$40.2 million), mostly for “emergency aid and medium-term development assistance” for people remaining in Venezuela and for neighboring countries affected by the crisis, and the EU Commission promised it would mobilize its migration and asylum program to provide help for migrants.

Assistance from the U.S. and EU, as well as any future help from multilateral development banks, is crucial but, ultimately, these interventions are palliatives.  Durable solutions will have to come from within Venezuela and from regional initiatives.  The summit proposed by Ecuador will produce little without strong leadership that at the moment appears absent.  The Organization of American States seems fatigued by the issue, and its Secretary General’s personalization of the struggle against Maduro over the past year has left him few options as well. UNASUR has been severely weakened – most recently by Colombian President Duque’s announcement of his country’s definitive withdrawal from the group – and its interlocutors from past efforts to find a solution in Venezuela have refrained from public comment.  The leadership of UN refugee specialists is critical, but the Security Council is very divided over the Venezuela crisis and the Secretary General has failed to gain traction with efforts to take a more active political role to address the Venezuelan crisis.  With Maduro’s fórmula mágica for resolving Venezuela’s economic challenges having next to no possibility of helping, the hemisphere should not be surprised that the flow of refugees will surely continue.

August 28, 2018

* Michael McCarthy is a Research Fellow with the Center for Latin American & Latino Studies.  He publishes Caracas Wire, a newsletter on Venezuela and South America.

Venezuelan Elections: Economic Crisis Turns Up the Heat on Chavismo

By Michael M. McCarthy*

A faded legacy. Photo Credit: Julio César Mesa / Flickr / Creative Commons

A faded legacy for Chavismo? Photo Credit: Julio César Mesa / Flickr / Creative Commons

Twenty-four long months since their country’s last national election, Venezuelans head back to the polls to elect a new National Assembly on December 6 in a tense political climate – with no promise that the government will respect the opposition’s near-certain victory.  All 167 seats in the unicameral body will be up for grabs in a race polarized between Chavismo’s pro government coalition and the Mesa de Unidad Democrática opposition coalition.  Thanks largely to a rapidly deteriorating economy, the government’s approval rating decreased from 50 percent in 2013 to 20 percent in September, according to the national Venebarómetro poll.  A range of polls in September indicated the MUD is poised to win either a simple or “qualified” (60 percent) majority.  Observers generally agree that the main measure of success for Chavismo is preventing the MUD from obtaining a two-thirds majority, and that blocking a qualified majority would be a major triumph.

For ordinary Venezuelans the campaign is overshadowed by the massive economic crisis.  Skyrocketing inflation, severe shortages of basic goods and services, and reduced social assistance programs are contributing to tensions on the street, where the campaign is not as present as in years past.  Nevertheless, heavy turnout is still expected – 66 percent of eligible voters participated in the last National Assembly elections in 2010, and pollsters report a strong intention to vote.

  • The MUD has shaped its campaign around leveraging the vote as a mechanism for punishing economic mismanagement and restoring some institutional balance to a political system that barely reflects opposition voices at the national level. Skepticism of the National Electoral Board, which rejected the MUD’s request for international electoral observation by the OAS, EU or UN, has increased.  Slashes to budgetary support for opposition governors and mayors, while the government channels funds to unelected parallel state and municipal authorities, make supporters wonder whether a victory will be fully respected.
  • The government refreshed its slate of candidates by promoting generational and gender diversity, but stalwarts, including current National Assembly leader Diosdado Cabello, remain prominent. The party is distributing last-minute pork to mobilize voters, and it’s working the system’s rural bias – each department is automatically allocated three deputies – where strong government presence gives it a strategic advantage.  Strikingly, the Chávez legacy has become a liability for President Maduro because the former President was much more charismatic and economic conditions were considerably better during his tenure.

The Maduro administration seems to have run out of diversionary moves after exaggerated external threats from Colombia and Guyana faded.  It is also on the defensive after the Rousseff administration, Maduro’s most powerful diplomatic partner, expressed unhappiness about Caracas’s opposition to its choice of a Brazilian political heavyweight to lead UNASUR’s “electoral accompaniment mission.”  The President has also been set on back on his heels by intensified international criticism of the trial and conviction of opposition leader Leopoldo López, who, according to a state attorney who worked the case, was sent to jail for 14 years on fraudulent charges.  Regardless of the outcome on December 6, the direction of the country is highly uncertain.  Maduro has said he’ll accept the results “whatever they are,” but he has also said “we have to win, by whatever means possible” (como sea and cualquier manera), and that if the opposition wins “I will not hand over the revolution” but rather “proceed to govern with the people in a civic-military union.”  In the next couple weeks, the government may still try to throw the opposition off course, but the MUD does not seem interested in renewing street protests – more violence is unlikely to advance its objectives. Neither do its leaders seem confident that a renewal of talks on rebuilding democratic institutions will help.

November 9, 2015

* Michael McCarthy is a Research Fellow with the Center for Latin American and Latino Studies.

Maduro Cites Security to Suspend Rights on the Border

By Michael M. McCarthy*

Photo Credit: Globovisión / Flickr / Creative Commons

Photo Credit: Globovisión / Flickr / Creative Commons

The Maduro government’s closure of a key border crossing into Colombia and declaration of a state of emergency in nearby towns mark not only a low in relations with Colombia but also in efforts to manipulate the playing field ahead of legislative elections slated for December 6.  President Maduro blamed Colombian “paramilitaries” for an August 19 firefight in which three Venezuelan soldiers were wounded.  He announced the deployment in the area of the “Operations for the Liberation and Protection of the People” (OLP), which are heavily armed military and police units specially created to force out alleged paramilitaries, and security forces swept through the area forcibly deporting more than a thousand undocumented Colombians.  Last week, the pro-government coalition of the Venezuelan National Assembly called for expanding the emergency measures to two other important border states.  The two countries’ foreign ministers met on August 26 for what Colombian Minister Holguin called a “positive, frank and realistic” exchange, but there was no agreement to reopen the border.

Maduro’s objectives seem to go far beyond stemming border violence.  Two reputable polls put his popularity in the lower 20s and project the opposition as likely to win a Congressional majority in the December 6 legislative elections.  His Chavista political movement is bleeding supporters amid a mounting economic crisis. Skyrocketing inflation and acute shortages of basic goods and services have created daily hardships for the popular sectors that once served as Chavismo’s base.  The opposition coalition Mesa de Unidad Democrática called the state of emergency a diversionary tactic – “to cause a situation of intense conflict and internal confusion” – and claimed that the maneuvering shows Maduro fears the election and may suspend it.  The state of emergency in Táchira, which is a renewable in 60 days, restricts the right to public assembly and gives Maduro powers to seize assets and limit the sale of basic goods and services.  The value of the annual illegal border trade is estimated to have grown to roughly $5 billion.  The order may become a mechanism for intensifying government controls over industry, which Maduro regularly accuses of waging war against the government.

Maduro’s political objectives in declaring the state of exception are obvious to reset the political agenda in line with a government narrative of external threats.  This security rationale appears greatly exaggerated, suggesting he’s more interested in scapegoating Colombia for the sorry state of affairs in Táchira than in sparking a diversionary armed conflict.  He also recently escalated an historic border dispute on his eastern flank with Guyana after Exxon discovered oil in Guyanese territory claimed by Venezuela.  So far, Maduros actions have not seemed to threaten the soft truce between Washington and Caracas, which has led to a toning down of mutual recriminations.  Over the weekend, the U.S. State Department issued a mild statement that noted “continuing concern about the situation along the border between Venezuela and Colombia,” although Washington did take him to task for the deportations.  The real implications of the emergency decree are internal to Venezuela. Maduro’s state of emergency not only raises human rights concerns in the affected territories; it suggests the specter that the government will resort to increasingly desperate measures to maintain control as its credibility, like the economy, collapses.

August 31, 2015

* Michael McCarthy is a Research Fellow with the Center for Latin American and Latino Studies.

Preparing the West Indies for the Demise of PetroCaribe

By Thomas Andrew O’Keefe*

ariwriter / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

ariwriter / Flickr / Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0)

The English-speaking Caribbean nations – whose heavy dependence on imported diesel and fuel oil to generate electricity has placed them among the most heavily indebted countries in the world (on a per capita basis) – will face massive headaches if PetroCaribe collapses.  They eagerly signed up for the Venezuelan initiative, which sells them petroleum with one- or two-year grace periods and long repayment schedules ranging from 15 to 25 years at 1 or 2 percent interest.  Participating countries can even pay with products or services in lieu of hard currency.  In the case of Guyana, Haiti, Jamaica, and the Eastern Caribbean mini-states, PetroCaribe’s financing scheme represents an estimated 4 to 7 percent of their annual GDP.  The worsening economic turmoil in Venezuela, however, raises serious concerns about PetroCaribe’s future.  According to recent media reports, PdVSA, the Venezuelan national petroleum company, is shortening repayment periods and increasing interest rates.

No doubt this is one reason why the Obama administration launched the Caribbean Energy Security Initiative (CESI) in June.  CESI seeks to diversify the Caribbean’s energy matrix away from its current heavy reliance on fossil fuels by using Overseas Private Investment Corporation (OPIC) loans and credit guarantees to encourage private sector investment in renewable energy.  It is premised upon the Caribbean’s huge potential to generate energy from the sun, wind, geothermal sources, and maritime currents.  In the past, the principal bottlenecks to harnessing these abundant resources have been hefty startup costs and small populations that make it difficult, if not impossible, for the private sector to recover profits within a reasonable period of time.  Although the initial capital investment for solar- and wind-based technology has dropped considerably in the last few years, it is unrealistic to expect Caribbean nations to make a full switch to renewable energy resources anytime soon.  A more realistic, short- to medium-term alternative is to make greater use of natural gas.  Although still a fossil fuel, gas is more efficient – and therefore the generated electricity is less costly – than fuel oil and diesel.  Moreover, electricity generated from natural gas emits 70 percent as much carbon dioxide as oil, per unit of energy output.

The shale gas boom in the United States generated by innovations in hydraulic fracturing has led to calls to lift restrictions on U.S. natural gas exports to those countries with which it does not have a free trade agreement.  The Caribbean is potentially a major target market of this natural gas in liquefied form (LNG), but this would be a big mistake.  Lifting restrictions on exports will inevitably raise natural gas prices in the U.S., thereby hurting consumers and putting the nascent revival of domestic manufacturing at risk.  It would also require building expensive LNG offloading and regassification facilities in the West Indies, which would run up against the same economies of scale limitations (except in Jamaica and Hispañola) that have undermined a mass transition to renewable energy.  A more realistic alternative is to revive plans to build a natural gas pipeline from Trinidad and Tobago to Barbados, and then up through the Eastern Caribbean.  Proposed back in the early 2000s, it was scuttled with the appearance of PetroCaribe in 2005.  Trinidad and Tobago has ample reserves of natural gas; at one point before the shale gas revolution it was the largest source of imported LNG in the United States.  The pipeline would link islands with populations of under 100,000, where LNG is economically unviable, with the more densely populated French dominions of Guadalupe and Martinique.  It would also help revive the floundering Caribbean Common Market and Community (CARICOM).

* Thomas Andrew O’Keefe is President of San Francisco-based Mercosur Consulting Group, Ltd.