Venezuela & The U.S: Why Are We Getting Involved?
Known for its large oil reserves, Venezuela was once the fourth richest economy in 1950. Nowadays, the country holds the highest inflation rate with about 1.37 million percent, a fact that creates a myriad of issues for its citizens. Starvation is predominant in the streets, where 90% of the population live below the poverty line. With a minimum wage of $5 a month, Venezuelans struggle to keep up with increasing prices for basic consumer products. For example, a Colgate toothpaste would be worth around $7 in Caracas, Venezuela’s capital, a luxury that suits a very small portion of the population. Moreover, the healthcare system is collapsing. In 2017, 13,000 doctors left Venezuela in hopes of better opportunities elsewhere and around 85% of basic medicine disappeared from the shelves of local hospitals. Clearly, Venezuela is going through a humanitarian and economic crisis, one that the South American region has not seen since its inception. But, why did we only recently find out about this?
The South American nation has been under the microscope for its recent political debate. There are two existing claims to the presidency, one belonging to long-time socialist, President Nicolás Maduro, and a second from the President of the Venezuelan National Assembly, Juan Guaidó. The situation is quite odd, even for a country with 20 years of socialism under its belt.
In order to truly understand Venezuela’s current condition, a bit of background is required. In May of 2018, Maduro announced his victory in the Venezuelan presidential elections, electing him for a six year term through 2025. Following the so-called victory, Smartmatic, the software voting agency that was in charge at the time, announced that the balloting was indeed manipulated. Once Maduro’s official term ended, Juan Gauidó takes the stand at the National Assembly and declares “Today, January 23, 2019, I swear to formally assume the powers of the national executive as president in charge of Venezuela.” Although this was shocking for many, Venezuela’s constitution explicitly refers to the fact that a fraudulent election will lead to new, fair elections with the President of the National Assembly taking the office for the time being. Ultimately, Guaidó’s term would consist of a 30-day transitional period during which fair elections could be held for the citizens to choose an official president. In short, Venezuela’s political situation does not involve a coup, but rather a democratic outburst that has been in store since the mid 2000’s.
This hopeful attempt to release the country from communist ideals has strong support from the United States, along with 55 other countries around the globe. In recent news, President Trump commented on Venezuela’s situation, "In its role as the only legitimate branch of government duly elected by the Venezuelan people, the National Assembly invoked the country's constitution to declare Nicolas Maduro illegitimate, and the office of the presidency therefore vacant." The President then appointed to the case several officials who have been involved in previous foreign conflicts, such as Elliott Abrams. Additionally, on February 14th, the U.S. pledged more than $96 million in humanitarian aid to Venezuela. It is quite interesting to see that now, the U.S is hopping into the action, providing all of these resources to combat Maduro’s dictatorship even though it has been going on for almost two decades. At this point, the reason is still in question.
It can be argued that the refugee crisis is directly affecting the U.S. as 350,000 Venezuelans now live in the country. The total number of refugees currently ranges between 3 and 3.5 million, up 21% since 2016. If the distress continues to grow at this exponential rate, South America could be under extreme financial pressure. Colombia has already spent roughly $16 billion on the influx of Venezuelans, and that number is expected to increase according to Reuters. Barring a change in regime, the U.S. and bordering countries will continue to receive refugees. Providing aid to Venezuela would stop the problem at its root as opposed to dealing with the costly refugees.
Furthermore, a key reason as to why the U.S. is supporting Venezuela’s democratic movement is that the latter has provided China and Russia with cheap oil reserves for the past 20 years. According to Yahoo Finance, “Moscow has been using Venezuela’s deepening economic and political crisis to strengthen its relationship with the highly unpopular socialist regime of President Maduro”. As a result of this relationship, Maduro signed off on half of the Venezuelan state owned oil company, PDVSA, providing Russia with almost free oil extraction and a strong reason to care about Venezuela’s political problems. To put this into perspective, Venezuela currently produces 800,000 barrels of oil a day, which are valued at around $46 million. The deal with Russia specified that Maduro would receive $1.3 billion in cash using 49.9% of PDVSA as collateral. Since Maduro is expected to default on this debt, this deal was considered to be a sale of PDVSA’s assets to Russia. This deal was a clear steal by the western giant.
On the other hand, if Juan Gauidó becomes president, these deals would fall apart as Venezuela’s constitution refers to the sale of state assets as illegal. The National Assembly and the Supreme Court of Venezuela would deem it as a form of exploitation and Russia will go back to their old, more expensive ways of extracting oil.
In this case, the center of attention moves away from the actual humanitarian situation and focuses on the problem of regional politics. A new sense of hope for the political condition in Venezuela has sparked optimism in U.S. officials, who look to limit Russia and China’s influence on the region. A renewed, legal process to settle Venezuela’s political issues becomes the new vehicle of true power for the United States. If so, making the situation as international as possible is on the U.S. political agenda.
There are plenty of reasons for the U.S. to pay attention to what is going on in Venezuela. At least now, it provides a hint of hope for their citizens in the midst of the worst humanitarian crisis in its history. The legal basis under which Juan Guaidó has been granted the presidency has garnered international support, as well as spurred the United States to invest in a plan for democracy. The benefits are clear for the U.S, preventing a bigger crisis and gaining strategic advantage over Russia and China. Altogether, it certainly looks like a bright future for Venezuela’s suffering citizens.
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