Special Briefing: Venezuela on the Brink
WHY YOU SHOULD CARE
An opposition politician has declared himself Venezuela’s new leader. But Nicolas Maduro isn’t going without a fight.
This is an OZY Special Briefing, an extension of the Presidential Daily Brief. The Special Briefing tells you what you need to know about an important issue, individual or story that is making news. Each one serves up an interesting selection of facts, opinions, images and videos in order to catch you up and vault you ahead.
WHAT TO KNOW
What’s happening? Yesterday, on the anniversary of the day a popular revolt toppled a military dictatorship in Venezuela in 1958, Juan Guaidó — leader of Venezuela’s legislative body, the National Assembly — declared himself the legitimate interim leader of the country. That didn’t sit well with current President Nicolás Maduro, 56, whose time in office has seen once-wealthy Venezuela suffer an economic collapse. Guaidó’s international profile was buoyed when President Donald Trump quickly recognized him as Venezuela’s new president. Also, according to U.S. officials, Washington is trying to cut Maduro’s revenue streams. Within the region, meanwhile, Argentina, Brazil, Chile, Colombia, Costa Rica, Paraguay, Peru, Ecuador and Guatemala are also backing Guaidó’s bid to take power until elections can be held.
Why does it matter? Venezuela, which has the largest proven oil reserves in the world, has seen an unprecedented economic decline in recent years, with shortages of food and medicine spurring millions to flee the country. Those who support Guaidó are taking a risk — there are reports of detainees being tortured by Maduro’s regime — but many are desperate. In response to Trump’s support of his challenger, Maduro announced the expulsion of all American diplomats and claimed that Guaidó’s power grab was a coup orchestrated by the United States. On Thursday, Maduro ordered the closure of Venezuela’s U.S.-based embassy and consulates. Washington, in response, has ordered non-essential diplomatic staff to leave Venezuela.
HOW TO THINK ABOUT IT
Who is Juan Guaido? The 35-year-old engineer has been leader of the opposition and head of the National Assembly for only three weeks, but he’s been politically active for more than a decade. He formed the Popular Will party in 2009, joined the National Assembly in 2011 and was sworn in as the body’s leader on Jan. 5. Now he says last May’s elections, which won Maduro another term, were a sham — a view shared by the dozens of other countries that refused to recognize the results. According to the country’s constitution, this means the leader of the National Assembly must step in. However, many experts doubt whether he’ll get the backing he’s called for from the military to actually topple Maduro.
They love him, they love him not. While Trump, along with many Venezuelans and some international leaders, has welcomed Guaidó’s rise, there are some naysayers. One of them is Russia, which has thrown its weight behind Maduro — perhaps because Maduro’s government has substantial loans from Russia and China and uses the country’s oil income to pay off the interest. Should those loans go into default, some of the properties used as collateral are refineries located in the U.S., which could prove difficult to obtain.
Same old, same old? Not quite. Not quite. While protests are nothing new in the troubled country, which has seen violent demonstrations over Maduro’s governance for years, an opposition leader getting backed as the legitimate president by multiple countries is a huge change. And that’s not all: Protests this week spread into once pro-government working-class neighborhoods, meaning the regime may have to rely more on force than on popular support — Maduro’s approval rating is below 20 percent — to stay in power. Analysts say that might include the arrest of Guaidó and other opposition heads, or even an escalation that leads to civil war.
WHAT TO READ
This Is Venezuela’s Struggle. Trump Should Act With Caution, by Frida Ghitis in The Washington Post
“This is not Washington’s battle. This is the Venezuelan people’s struggle. Their neighbors, as a unified bloc, should stand firmly in support, leading the international response.”
Market Ponders the End of Venezuela’s Failed Socialist Project, by Kenneth Rapoza in Forbes
“Venezuela is a dictatorship now. Investors were warned this day would come. Now investors who lost millions on Venezuelan bonds are hoping popular uprisings will lead to regime change in Caracas.”
WHAT TO WATCH
Pence Calls Maduro a ‘Dictator’ and Shows Support to Protesters in Venezuela
“The United States joins with all freedom-loving nations in recognizing the National Assembly as the last vestige of democracy.”
Watch on McClatchy on YouTube:
The Collapse of Venezuela, Explained
“Hyperinflation has made medicine and food that were once subsidized unaffordable for Venezuela’s poor, who now make up about 82 percent of the population.”
Watch on Vox on YouTube:
WHAT TO SAY AT THE WATERCOOLER
A real trade war. American refiners would also be hard hit by sanctions on Venezuela’s oil. The U.S. imported more than 530,000 barrels per day of Venezuelan crude over the summer — around 45 percent of the country’s total production. That made up nearly 20 percent of crude imported to Gulf Coast refiners around Texas and Louisiana. Even without sanctions, it’s unclear how long Venezuela can keep producing: The country has suffered the worst peacetime loss of oil production in its history.