Venezuela: Can Trump’s Coercive Diplomacy Help?

By Michael McCarthy*

A large auditorium-style room filled with people watching a speaker at the front

U.S. President Trump addresses the United Nations General Assembly on September 19, 2017. / John Gillespie / Flickr / Creative Commons

U.S. President Trump’s new rhetorical attacks and financial sanctions against the Venezuelan government suggest a shift toward coercive diplomacy aimed at achieving regime change, but U.S. power faces significant limits in the conflict-ridden country.  At the UN General Assembly on Tuesday, Trump called President Maduro an authoritarian and said “this situation is completely unacceptable and we cannot stand by and watch.”  Washington’s approach emphasizes sticks – sanctions against President Maduro, senior advisors, and threatened action against the oil sector – over carrots, while also voicing support for the opening of new mediated face-to-face talks between Maduro and the opposition.  A contact group of six Latin American and four European countries is promoting the talks, with the backing of UN Secretary General and the Vatican, to help avoid the worst-case scenario of open conflict.  Previous efforts to coordinate a multilateral coalition that simultaneously keeps the pressure on the government while opening negotiation avenues have failed – and agreeing on a roadmap is even more complex in view of the installation of the Constituent Assembly that stripped the elected, opposition-controlled National Assembly of its powers.

  • Trump’s new Executive Order directs financial sanctions that come close to directly threatening Maduro’s vital supports. It bans Caracas from issuing new debt in the United States and prohibits U.S.-based CITGO – a wholly owned subsidiary of the Venezuelan state oil company – from repatriating dividends to Caracas.  These measures will impose austerity on Maduro (who claims he will still make upcoming debt payments) and future actions are likely to try and undermine the government’s economic foundations.
  • In addition to installing the Constituent Assembly, Maduro seems to be pursuing a new regime-survival strategy in which he plays the role of a non-vengeful victim. Maduro criticized Trump’s sanctions and called him “the new Hitler” after the UN speech on Tuesday, but he’s also offered donations to aid post-Harvey recovery efforts in Houston and invoked John Lennon in a call for “giving peace a chance” in a New York Times ad earlier this month.  To regain a degree of credibility, Maduro will probably consider making elections for Governors slated for October 15 look competitive, but whether he has the political capital with his base to make bigger political or economic moves is unclear.  He may look to establish a new institutional equilibrium of dual legislatures, though it would hinge on removing the threat of retaliation against the opposition via the Constituent Assembly’s so-called “Truth Commission.”  He may also try to address massive fiscal imbalances by reforming the multi-tiered exchange rate, though this would be difficult as the system’s subsidized dollars help underwrite regime loyalty.

While the United States, Europeans, and Latin Americans are operating in loose formation – with Washington ratcheting up pressure while everyone else scrambles for negotiations – China and Russia are sticking to their strategic game.  As Maduro’s main financial backers, they are betting talks can stabilize the situation bit by bit.  They may kick in some more financial assistance if and when Maduro restores some stability by holding peaceful regional elections, delivering on the dialogue, and making large upcoming debt payments.  But while there is some basis for the geopolitical schadenfreude of Beijing and Moscow making it harder for Washington in Caracas, there are also signs that both have buyer’s remorse.  While they prefer Maduro stay afloat, they seem unlikely to extend loans that help stabilize the economy unconditionally.

None of the piecemeal actions that Maduro is apparently contemplating can defuse the political and social crisis, but a combination of steps may be enough to convince China and Russia to stay in the game.  Despite Trump’s statement that he was “not going to rule out a military option” in Venezuela, the Administration apparently is open to a policy of coercive diplomacy that includes genuine support for talks.  Trump attacked his predecessor for “leading from behind,” but figuring out how to sequence sticks and carrots in coordination with Latin American and European countries may require just that.  The bottom line is that the chance of a breakthrough on the biggest issues – the Constitutional road map and conditions for electoral participation – remain low, although some movement by both parties toward the middle seems realistic.  Despite the actions of outside actors, the situation is likely to remain poised over a knife-edge – without the catharsis of either peace or regime change.

September 21, 2017

* 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.

Brazilian Leadership and the Global Internet

By Sybil D. Rhodes and Leslie Elliott Armijo*

Photo credit: Blog do Planalto / Flickr / CC

Photo credit: Blog do Planalto / Flickr / CC

Brazil’s efforts as defender of internet privacy and rights may be effective even if it sparks criticism from all sides of the issue.  Along with German Chancellor Angela Merkel, President Dilma Rousseff has been among the most vocal protestors against spying by the U.S. National Security Agency (NSA).  She used her opening remarks at the United Nations General Assembly (UNGA) in September to criticize the spying.  Three months later, the UNGA passed a resolution initiated by Brazil and Germany in favor of the right to privacy in the digital age.  The Brazilian Chamber of Deputies and Senate have passed legislation, known as the Marco Civil da Internet, which web leaders and scholars consider a pioneering framework for internet governance.  Last week, Brazil hosted the international meeting NETMundial, focused on standards for name registration, domains, and IP addresses.  Rousseff and her Science, Technology, and Innovation minister, Cleio Campolina, emphasized that, as the first such event since U.S. intelligence contractor Edward Snowden leaked information about abuses, privacy concerns should be paramount at the meeting.

Brazil has considered itself an emerging leader in internet governance for at least the last fifteen years, although until 2013 “digital sovereignty” and the allocation of commercial benefits appeared to be more important goals than protecting civil liberties.  Brazil also has counted itself as an important member of a coalition — including India, China, Russia, Arab countries, and the United Nations Working Group on Internet Governance – that has called for less U.S. dominance of internet governance.  The group has proposed that the UN’s International Telecommunications Union (ITU) assume responsibility for the Internet Cooperation for Assigned Names and Numbers (ICANN), the non-profit organization in charge of distributing domain names since 1998.  An American creation, with headquarters in Los Angeles and a Board of Directors supervised by the US Department of Commerce, ICANN is seen by many as embodying U.S.-centric internet regulation.  Critics in Brazil and elsewhere claim that the private-sector and civil-society input into ICANN decisions is disproportionately pro-American.  The U.S. and its supporters, including Google, Microsoft, and civil associations like the Mozilla Foundation and the Electronic Frontier Foundation, argue that the existing regime promotes a “free and decentralized internet” – and that any changes must preserve these principles.

Since Snowden, President Dilma has also renewed emphasis on “digital sovereignty” measures.  For example, provisions in legislation passed in the lower house (but removed from the Senate version) required that Google, Facebook and other companies doing business with Brazilians store their data about Brazilians on local servers.  The government has also promoted building fiber optic cables connections that do not go directly through the United States as a way of preventing NSA espionage.  The economic and technical feasibility of some of these projects is not clear, and some of them have encountered important political opposition within Brazil – because, according to an informal survey of experts, many Brazilians are suspicious of their own government’s regulation of the internet as well.  Language in the new bill simply obligates business to obey national legislation regarding privacy.

Snowden’s revelations have given a boost to efforts to reduce U.S. dominance of internet governance, which previously was viewed as a technical issue for which the existing regulatory regime worked well.  Announcing that the U.S. Department of Commerce will not renew its contract with ICANN when it expires in September 2014, the Obama administration appears to recognize that U.S. credibility as the guarantor of a free and open internet has been undermined.  The exact technical and legal procedures through which privacy and national sovereignty might be better protected on the internet remain open questions in national and global debates.  But Brazil appears poised to play a leading role in setting a moderate middle-range course, one that allows for multipolar or global governance of the internet while protecting the liberal principles the U.S. has long claimed are core values.  Dilma could come in for criticism from both sides – U.S. conservatives who believe that only the United States can guarantee a free internet as well as “anti-imperialist” advocates who will accuse her of selling out to corporate interests.  Moderate heroes are sometimes the most unsung but also the most necessary.

*Sybil D. Rhodes is Director of the MA in International Studies at the Universidad del Cema in Buenos Aires.  Leslie Elliott Armijo is a Visiting Scholar at Portland State University and a Research Fellow at CLALS.  They are currently writing a book about international cooperation in the Western Hemisphere.