What Venezuelan ‘Regime Change’ Could Mean

Exclusive: Venezuela’s socialist government may be next on Official Washington’s list for destabilizing sanctions as violent protests sweep across the oil-rich country. But “regime change” in Caracas also could undermine the entire region’s independence, as Andrés Cala explains.

By Andrés Cala

For 15 years, the economic keystone of Latin America’s growing independence from U.S. domination has been energy-rich Venezuela’s willingness to provide discounted oil to many of its neighbors, a project now at risk amid violent opposition protests at home and threats of destabilizing sanctions from Washington.

The preferential financial terms for oil was the brainchild of Venezuela’s late leader Hugo Chavez who understood that the only way that he could counter America’s economic might was to use his nation’s petroleum to stabilize the fragile economies of Caribbean and Latin American countries, including longtime U.S. target, Cuba.

Stronger South American nations benefited, too, from the geopolitical umbrella offered by Venezuela, allowing them to stand united against U.S. diplomatic dictates, especially in Bolivia and Ecuador. In that sense, Venezuela’s oil literally fueled the region’s growing independence from Washington.

So, the thinking goes that if “regime change” in Caracas could pull away the keystone of Venezuela’s discounted oil, much of the region’s independence would collapse along with it to the advantage of Washington.

Thus, the backdrop to the violent disorders that have swirled across Venezuela in recent months is the prospect that a coup to unseat elected President Nicolás Maduro could alter the balance of power across Latin America, possibly leading to other U.S.-desired “regime changes,” even the long-sought destruction of the Castro regime in Cuba.

Though the prospect of Maduro’s ouster and a possible cascade of other “regime changes” may be appealing to Washington’s neocons and other hawkish policymakers, the impact on Latin America could be grim, a regression from the democratic gains and economic stability that the region has experienced the past two decades.

But the rhetoric emanating from Washington is increasingly hostile, portraying Maduro as a brutal tyrant and threatening painful economic sanctions. And, Venezuela’s economic difficulties, including inflation soaring to more than 50 percent annually and shortages for some basic commodities, have undermined Maduro’s control. That has encouraged extremists on both sides, pro- and anti-Maduro. The more radical camps are asserting more and more control over their movements.

Despite the war of words with Washington and the clashes in the streets, the reality is that Venezuela is not a dictatorship, even if Maduro has taken an increasingly authoritative bent in an effort to reassert his power. Chavismo has won every electoral contest over the last 15 years and the fairness of the voting process has won praise from international observers.

Prospects for a Coup

Yet, if Maduro is unable to control the violence or if he cracks down too hard and is hit with U.S. sanctions he could easily fall prey to the kind of coup that has ousted elected governments in Ukraine and Egypt, “regime changes” that drew strong support from Official Washington’s still-influential neocons and State Department hardliners.

Already, in Venezuela, the threat of U.S. sanctions has emboldened antigovernment protest leaders who perceive American support for their declared goal to force Maduro’s removal from power. Meanwhile, within the ranks of the Chavismo movement, militants favor a fiercer response to restore order.

If civil unrest worsens, the military could step in, although which side it would take is utterly uncertain. The thinking across the continent is that any unconstitutional outcome will wreak havoc on Venezuela and possibly beyond, whether a seizure of power by Venezuela’s Right or Left.

Other South American leaders are not specifically defending Maduro or even Chavismo, but rather the region’s rule of law and desire for institutional stability. In general, they also are opposed to the U.S. double standards in defense of “democracy.” The closest parallel to the current wave of right-wing protests in Venezuela was the nationwide strikes early last decade that shut down the country’s vital oil industry and ended with the 2002 coup that deposed President Hugo Chávez, suspended civil liberties, and gained the support of President George W. Bush before it was reversed by a countercoup that restored Chavez to power within hours.

The consequences then were felt globally in oil prices and also rocked Latin America geopolitically. The severity of the economic shock inside Venezuela continued for years, and indeed the country never truly recovered fully as its decrepit oil industry illustrates.

Pleading for Patience

Maduro senses this threat but doesn’t seem to know how to escape it. He may be the heir to Chavez’s Venezuelan socialist movement, but he lacks his late mentor’s charisma and political skills as he confronts political pressures from both the Right and the Left.

The Venezuelan president has been trying to calm the upper classes who oppose the country’s socialist policies while also being beset by demands from the poor who have gained important health, education and other services under Chavismo but who also are being squeezed by rising prices and food shortages.

To counter the waves of negative U.S. press coverage that he and his government have received over the past year, Maduro took the rare step of writing an op-ed piece for the New York Times, essentially pleading for American understanding. He wrote:

“The claims that Venezuela has a deficient democracy and that current protests represent mainstream sentiment are belied by the facts. The antigovernment protests are being carried out by people in the wealthier segments of society who seek to reverse the gains of the democratic process that have benefited the vast majority of the people.

“The protesters have a single goal: the unconstitutional ouster of the democratically elected government. Antigovernment leaders made this clear when they started the campaign in January, vowing to create chaos in the streets. Those with legitimate criticisms of economic conditions or the crime rate are being exploited by protest leaders with a violent, antidemocratic agenda.”

However, it’s not clear that Maduro will succeed in managing both the political unrest and the economic problems. More than 40 people have died during weeks of clashes pitting pro-government and anti-government factions in violent protests; the government arrested three generals for allegedly planning a coup; the economy is nose-diving; and civil society is increasingly taking militant positions.

At times, government authorities and Chavista diehards have responded to the protests with heavy-handed tactics denounced by Amnesty International. Thus, the blame for the violence has been placed on Maduro as well as the opposition, though Maduro has said he does not approve of the violence and promised to prosecute his own followers and security forces as warranted.

The violence has prompted threats from Secretary of State John Kerry and hardliners in Congress to impose sanctions against Venezuela. “We are prepared, if necessary, to get involved in various ways, through sanctions or otherwise, but the economy there is already quite fragile,” Kerry said last month, a warning reiterated more recently by a top State Department official who said, “we are thinking” about imposing sanctions.

U.S. economic sanctions would be sure to further destabilize Maduro’s shaky position. Instability and uncertainty would make it harder to access credit and would wipe out what little investor confidence remains, making consumer goods even scarcer. Economically, Brazil and Argentina and the broader Mercosur trade block would suffer, too.

If the additional chaos led to a coup, that would rattle regional stability even more, especially in Colombia, Ecuador, Bolivia, Nicaragua, Cuba and other nations that rely on cheap Venezuelan oil.

“Do we learn nothing from history?” asked Uruguay’s President José Mujica. “Has that attitude ever achieved anything?”

Sensing the destabilization threat to the entire region, South American countries have been working to end the standoff and have demanded that the U.S. relent on its pressure and give a chance to negotiations, which involve the foreign ministers of Brazil, Colombia, and Ecuador, plus the Vatican.

The goal is to weaken the opposition’s radical side, which is pushing the destabilization campaign, and thus buy the government time until 2015 to fix the economy. The camp of former presidential candidate Henrique Capriles is among the opposition forces that would prefer to wait for 2015 when they will be able to organize a recall referendum that would legally remove Maduro from power.

After the first round of negotiations last week, Maduro said the U.S. “has been telling other governments that Venezuela is heading toward an explosion and an economic collapse.” Maduro added that U.S. officials “shouldn’t be meddling in the internal affairs of Venezuela, threatening with sanctions.”

Maduro’s government has taken some steps toward managing the country’s economic problems and even earned some praise from the U.S. investment community – most recently Bank of America Merrill Lynch in a research note – for enacting reforms in financial, energy and currency policies.

“This time it’s different,” wrote Merrill Lynch. “We believe that Venezuela paid most of the inflationary and political cuts of the necessary adjustment in 2013 as it slashed imports and let the exchange rate depreciate via the black market. We thus believe the shift to greater pragmatism is likely to produce tangible economic benefits at limited costs within a reasonable time period.”

But some protest leaders say Maduro’s economic and diplomatic moves are too limited and just an attempt to fend off the demonstrations. They have vowed to keep up the pressure, though they face adherents of Chavismo who are better organized today than they were during the 2002 coup, despite the movement’s own internal divisions.

On one side, the political leadership of Chavismo is calling for restraint and dialogue. Another side, led by the security services, is more eager to reestablish control by force. And Cuban intelligence is acting as an invited referee, as it stands to lose more than any other country in case of instability in Venezuela.

The bottom line is that Maduro might be deposed but disposing of Chavismo would be an entirely different matter. It is well entrenched in institutions. It has also been preparing for a counterrevolution since the last coup attempt a dozen years ago.

Rather than a passive acceptance of a reestablished old order like the cozy U.S. relationship with former President Carlos Andres Perez late last century Venezuela’s poor could rise up, with the support of Chavista loyalists in the armed forces, to defend the rights that they have gained over the past two decades.

Andrés Cala is an award-winning Colombian journalist, columnist and analyst specializing in geopolitics and energy. He is the lead author of America’s Blind Spot: Chávez, Energy, and US Security.