Grandmaster Of Political Survival: How Nicolás Maduro Overcame The Crisis – OpEd

During the times of Hugo Chávez, Venezuela was quite a powerful geopolitical player with great influence in the world. Although by territory small, Venezuela had global influence due to its vast oil wealth and the fact that it has spearheaded a new socioeconomic model called 21st century socialism. Coincidentally, shortly after Chávez’s death in 2013, the country plunged into massive economic troubles, protests, riots, and foreign policy influence collapsed in large part as the price of crude oil fell to record lows.

Chávez’s handpicked successor, Nicolás Maduro, had to deal with enormous problems at home that left the country in a state where civil war was a matter of time. The economic collapse caused by hyperinflation and shortages of consumer goods was the trigger for enormous popular discontent with violent protests and repressive measures by the authorities. The crisis deepened thanks to more than disputed presidential and other elections in which Maduro and his socialists won. There was general disorder and chaos. It seemed that Maduro and the Chavista regime had no way to stay in power, especially when sanctions from Western countries were introduced. The peak occurred at the beginning of 2019, when Juan Guaidó declared himself the interim president of Venezuela and was recognized by many Western countries. Nevertheless, Maduro and his United Socialist Party (PSUV) remained in power despite all the adversities. The situation in the country has largely stabilized, Maduro has restored his international legitimacy and it seems that he will remain in power for years to come. Most important of all, even if Maduro leaves, chavismo as a movement has a bright political future ahead of it.

After almost a decade of steep economic decline, the economic situation has finally started to stabilize. The IMF and other economic analysts believe that the Venezuelan GDP will grow by 6 to 8% this year, which is a big progress when it’s known that in the period from 2013 to 2020, the GDP decline amounted to more than 75%. Hyperinflation ended, economic activities revived as well as oil refining. The supply of consumer goods has improved significantly and supermarket shelves are well stocked. According to the UN, more than a quarter of Venezuelans are still malnourished, and a number of people are still leaving the country. However, compared to what was three or four years ago, the progress is palpable.

Abandoning certain socialist economic policies has produced many positive results. Among other things, Maduro introduced economic measures to attract domestic and foreign capital that blunted the effect of Western sanctions, made a turn toward free markets and introduced currency reform aimed at encouraging transactions in US dollars. The government also announced a series of initiatives to attract foreign investment in state-owned companies. In May, it was announced that the government would place 10% of the value of the shares of several state-owned oil, gas, telecommunications and chemical companies on the Venezuelan stock exchange. A month later, Vice President Delcy Rodriguez announced that the state-owned Banco de Venezuela (BDV) would sell 5% of its shares. It’s the vice president who is the main creator of positive economic changes.

In short, the government stabilized the economy by introducing liberal reforms, reducing public spending and improving the supply of basic foodstuffs. The import of goods from China, India, Turkey, Mexico and Brazil was a saving grace. “Venezuela se arreglo” or translated as “Venezuela is fixed”, many Venezuelan citizens could state on social networks, even opponents of the left-wing government. Venezuela is no longer in economic decline, but for significant progress, many more ideas and time will need to be invested in order to implement structural reforms in areas such as production, agriculture and the financial sector. The problems are unemployment and insufficiently high wages. According to UNHCR data, about 6.8 million Venezuelans have fled to refugee status in the last decade (mostly to Colombia). It will be necessary to bring them back to the country in order to encourage reconstruction. According to estimates, GDP should also grow in 2023.

In addition to internal reforms, foreign policy made a major contribution to the Chavista regime staying in power. From 2006 to 2013, Maduro was foreign minister in Chávez’s government. Although he didn’t speak a single foreign language, he proved to be a very good minister, acting prudently and pragmatically in order to fulfill the visions of his boss. He was the main negotiator during Venezuela’s entry into Mercosur and was in charge of creating and promoting multilateral organizations in Latin America such as the Union of South American Nations (UNASUR) and the Community of Latin American and Caribbean States (CELAC). During that period, he managed to contribute to the strengthening of ties with Russia and China, for which he ardently advocated. When Chávez was absent for health reasons, he was the representative of the Venezuelan government at important events such as the Summit of the Americas in Cartagena in 2012. He used that experience for his own presidency.

After Maduro came to power in 2013, he continued his previous foreign policy. However, the economic collapse, shortages of food, medicine and fuel and the humanitarian crisis forced him to make certain changes. During almost a decade, Maduro’s foreign policy has seen ups and downs, but in the end it has allowed him and his party to stay in power, although realistically the majority of citizens want him gone. In foreign policy, unlike Chávez, Nicolás Maduro’s greatest shortcoming was the absence of charisma and a proactive approach. Therefore, Maduro has relied mostly on preserving the diplomatic relations forged by his predecessor, with rare new achievements such as the alliance with Turkey.

Turbulence in the world oil markets since 2014 has affected the deterioration of Venezuela’s international position. Although oil prices experienced a sharp jump in 2018, the government’s bad oil policy made it impossible for the country to gain a more concrete benefit. Government investment and social programs have remained modest, as has Venezuelan influence in regional organizations such as PetroCaribe, Petrosur and PetroAndina. At the same time, sanctions from the US, Canada and the European Union have reduced the government’s ability to conduct financial transactions and foreign travel.

Maduro’s foreign policy victories began with his withdrawal from multilateral regional organizations such as the Mercosur common market and the Organization of American States (OAS) in 2017. This was important in order to end cooperation with organizations that constantly criticized Venezuela due to the crisis and the authoritarian nature of the government. While most of the international community fiercely accused Maduro of being a communist dictator who imposed a dictatorship and plunged his country into a humanitarian crisis, the partnership with China and Russia gave him some international protection. The Russian and Chinese governments would defend the Venezuelan government whenever necessary. For example, in 2017, China and Russia boycotted an informal meeting at the UN led by the US, which discussed the escalating crisis in Venezuela and the alleged threat it posed to other countries. In February 2019, the Russians and Chinese vetoed the US draft resolution in the UN Security Council, arguing that the solution to the crisis in Venezuela should be peaceful and without international intervention.

Sino-Venezuelan relations experienced a rapid rise sometime in the mid-2000s because Venezuela sought to strengthen anti-American partnerships outside the Western Hemisphere, but also because China was becoming an increasingly important global player politically. Over the years, Caracas has become one of the main recipients of Chinese loans. Despite the crisis, Beijing has remained loyal to Maduro, but the political and economic turmoil has created uncertainty that the Chinese do not like. As a result, there were fewer loans to the Venezuelan government, while subsidiaries of some Chinese companies even sued the government for default.

Back in the early 2000s, Russian-Venezuelan relations experienced rapid development because the two countries were loyal to the ideals of a multipolar world, opposed America and saw mutual benefit through bilateral cooperation. Maduro condemned the global energy crisis caused by what he called “unjustified” sanctions against Russia. He was among the few world leaders who gave Putin “strong support” after the invasion of Ukraine. Somewhat ironically, although the Maduro government has been a staunch Russian partner, the escalation of the Ukrainian war in 2022 has opened opportunities for it to slowly restore cooperation with the US.

In short, for the return of Maduro’s government’s reputation and legitimacy in the international community, the most important factors are the outbreak of the coronavirus pandemic, the Russian invasion of Ukraine and the coming to power of left-wing governments in numerous Latin American countries.

Maduro’s ties to authoritarian states were important in overcoming the pandemic. Given Venezuela’s bad relations with the US, the Chavista regime approved and received vaccines only from China, Russia and Cuba. Nevertheless, this aid was important in containing the health crisis. During the pandemic, Maduro has managed to further strengthen alliances with authoritarian anti-American leaders inside and outside Latin America, including Iran and Turkey. The alliance with Turkey is Maduro’s handiwork. Just as Chávez was once close friends with Mahmoud Ahmadinejad, so Maduro became close friends with Recep Erdogan. Members of the government managed to find solutions and defy financial Western sanctions by creating business partnerships with companies in countries such as Russia, China, Turkey, North Korea, Iran and Cuba.

Russia’s aggression against Ukraine has significantly helped Venezuela become a sought-after source of oil and gas. Relatively high oil prices are helping to strengthen the Venezuelan economy, and further moves will show to what extent. American sanctions prevented Caracas from selling its oil on the US market. Foreign oil companies have a great desire to start doing business with oil in the richest country in the world. In September, during the visit of OPEC Secretary General Haitham al-Ghais to Caracas, Maduro stated that his country is ready to supply the global oil and gas market, which has been shaken by the war in Ukraine. Maduro insists his country’s oil industry has “recovered”, despite production levels falling to historically low levels until recently as a result of a lack of investment. Venezuela’s current production is around 700,000 barrels per day (Maduro claims the figure is one million barrels), compared to 2.3 million barrels per day back in 2002. Oil alone accounts for more than 90% of government revenue.

Diplomatic relations between the US and Venezuela have been poor since the beginning of Chávez’s rule. The situation worsened in 2008 when the American ambassador was expelled from Caracas. This was followed by the expulsion of most of the leading American diplomats, and finally by Maduro’s decision in 2019 to break off diplomatic relations with the US. It is still too early to say how much Venezuela will profit from the recent talks with the US envoys in Caracas. Nevertheless, the Western sanctions against Russia and Russian oil open up an opportunity for Venezuela to supply oil to the USA and the EU through the normalization of American-Venezuelan relations.

The Biden administration announced in May that it would ease some of those sanctions as energy prices rose due to the war in Ukraine. Under the proposed agreement, Washington would allow the US oil company Chevron to continue importing oil, while Maduro, for his part, would agree to restart talks with the opposition on free and fair elections. The lifting of sanctions to the Venezuelan budget would bring a new revenue stream, since Chevron has joint investments with the Venezuelan state oil company PDVSA. Moreover, a thaw in U.S.-Venezuelan relations would give Caracas an opportunity to sell its oil to China and other buyers at a higher full price since PDVSA has been selling oil at lower prices for years out of fear that the U.S. could impose financial sanctions on all countries that buy Venezuelan oil. Furthermore, the thawing of relations between Washington and Caracas could unfreeze some of the financial resources held by Venezuela in Western banks. The money could be invested in economic recovery.

The international situation for Venezuela became favorable due to the coronavirus and the global energy crisis, and it continued with most of Latin America turning left. Left-wing governments that have a positive attitude towards socialist Venezuela began to come to power in the region. The left-wing governments of Argentina and Mexico refrain from criticizing Maduro, and even support him. It was Mexican President Andrés Manuel López Obrador who broke through Maduro’s diplomatic blockade last September by inviting him to the CELAC summit in Mexico. The Mexican president has proposed replacing the OAS with CELAC, an organization that does not include the United States or Canada. His proposal came in support of the demands of countries such as Nicaragua, Venezuela and Bolivia, which consider the OAS an interventionist instrument of the US.

Chilean President Gabriel Borić is preoccupied with domestic issues, and he forms a coalition with the Communist Party of Chile so as not to put pressure on Maduro. Even Colombia, the US’s closest ally in the region, recently elected its first left-wing president, Gustavo Petro. One of his first steps was to reestablish ties with neighboring Venezuela, which his right-wing predecessor Iván Duque severed. Luiz Inácio Lula da Silva won in the second round of the Brazilian presidential elections so it will be a great support for Venezuela, as it will strengthen the regional leftist Latin American bloc that will oppose American imperialism. The return of Maduro’s administration’s legitimacy can be seen in the fact that the number of countries that recognize Guaido as president has drastically decreased, but also in the fact that some foreign airlines, whose number decreased from 25 to 5 between 2014 and 2022, have returned to the country .

It will be interesting to see how the political struggle between the government and the opposition will develop in the coming period. The opposition coalition, known as Plataforma Unitaria, recognizes internal and international changes and has begun to modify its strategy accordingly. It no longer demands the immediate departure of the government, a transitional government and free elections, but instead demands the formation of a coalition government and gradual political liberalization. The opposition was divided into factions and lost the trust of its foreign mentors and patrons. It is questionable whether Maduro will agree to real concessions to the opposition, which are a condition for improving relations with USA. The renewal of negotiations with the opposition will certainly happen, but the question of all questions is whether they will agree to completely free presidential elections under international supervision, which should be held in 2024?

In terms of elections, Maduro’s administration was the strictest. It was through various legal tricks and electoral machinations that Maduro and his party stayed in power for a decade. However, in regional elections last year, opposition candidates fared surprisingly well, even in some leftist strongholds. Maduro is politically powerful, but not too popular among the people. If truly free and fair elections are held, which the government hasn’t allowed for years, the opposition would have a chance if they gather behind one candidate. After some opposition leaders announced they would do just that in 2024, the controversial president immediately announced that he might move the general election to 2022 to gain a strategic advantage. However, it seems that presidential elections will be held as planned in 2024, while local and regional elections should be held in 2025. The favorites in these elections will be the Chavistas, and to what extent will depend to a large extent on Maduro’s skill and the creativity of the opposition.

*Matija Šerić is a geopolitical analyst and journalist from Croatia and writes on foreign policy, history, economy, society, etc.