Struggle for Power in Venezuela Maduro vs Guaido

November 19, 2021
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Executive Summary

This policy brief analyzes the past and current relationship between the United States and Venezuela. It specifically focuses on Venezuelan politics, the upcoming elections, and U.S. sanctions against Venezuela and its leadership. It analyzes the history of U.S. sanctions against Venezuela, the Chavez regime, and the Maduro regime and how U.S. policy may change based on the outcome of the upcoming elections.

Introduction

For over two decades, the United States has had a complex relationship with Venezuela and has been involved in Venezuelan politics in a variety of ways. Venezuela is an oil-based economy, making it strategically significant to the U.S. as well as Russia and China. Currently, Venezuela is ruled by an authoritarian regime, and the U.S. - recognized opposition leader is unable to exercise any power. With elections approaching, the results will determine whether or not the U.S. continues its hardline approach to sanctioning Venezuela and President Maduro, or if U.S. policy will take a less harsh approach.

Policy Analysis

History of Venezuela 

  • Hugo Chavez was elected president in 1988.
  • His presidency was characterized by corruption, authoritarianism, and increased tensions with the United States.
  • Following Chavez’s death, Nicholas Maduro narrowly won the presidency.

Given Venezuela’s history of dictatorships and military rule, economic and political instability have plagued the country for decades. Influenced by Venezuelan revolutionary Simon Bolivar, military officer Hugo Chavez established a leftist Revolutionary Movement within the army and successfully ran for president in 1988 amid an economic crisis under a corrupt two-party government.

Despite promises of a poverty and corruption-free Venezuela, Chavez’s rule was a legacy of authoritarianism. In 2008, Human Rights Watch (a New York-based watchdog agency) released a report detailing Chavez’s alleged manipulation of Venezuela’s courts and intimidation of the media, labor unions, and civil society. When he first entered office, Chavez appointed political friends to top positions in the state-owned oil company PDVSA, leading to a coup and worker strike. After Chavez’s reelection victory in 2006, he created a single political party (the United Socialist Party of Venezuela), nationalized telecommunications, electricity, and oil projects, and abolished presidential term limits.  Chavez also withdrew from the International Monetary Fund and the World Bank and then created the Bank of the South to fund infrastructure projects in South America in 2007 amid a $3.8B budget deficit and rising inflation

Along with domestic conflict, international tensions with the U.S. heightened during Chavez’s regime.  Amid Chavez’s friendship with anti-America Cuban leader Fidel Castro, Chavez created a two-million-person civilian military to defend against foreign attacks and ended a thirty-five-year-old military relationship with the U.S. In 2009, the U.S Government Accountability Office reported that Venezuela undermined U.S. counternarcotics efforts, citing the indifference towards a drug-trafficking Colombian leftist paramilitary group highly active in Venezuela. In response, Chavez announced to buy ninety-two T-72 tanks and S-300 anti-aircraft rocket systems from Russia, justifying it as necessary to prevent a U.S. attack. 

While facing political drama, Chavez was also battling an undisclosed form of cancer and became unable to serve as president in 2013. Following Chavez’s death, acting president Nicolas Maduro — Chavez’s handpicked successor — won narrowly with 50.6% of the vote.

Rise of Nicolas Maduro 

  • In 2018, Maduro used political suppression, censorship, and electoral manipulation to undermine the democratic process and secure reelection against opposition-leader Juan Guaido.
  • Maduro has overseen a large-scale economic decline in Venezuela.

Chavez’s reforms paved the way for Maduro’s transformation into a dictator rather than the president. In 2018, Maduro used political suppression, censorship, and electoral manipulation to undermine the democratic process and secure reelection against opposition-leader Juan Guaido. Massive street protests were held in response, with Guaido even attempting a 2019 military uprising against Maduro. Nevertheless, in January 2021, Maduro took control of the National Assembly following victory in legislative elections, nullifying the last opposition-controlled branch of the government. In an effort to undermine Maduro’s regime, the U.S. has placed sanctions on Venezuela’s oil sector and gold mining industry and sanctioned the Central Bank of Venezuela to limit Maduro’s access to U.S. currency and international transactions.

Under Maduro, Venezuela’s economy has further collapsed. The decline of oil prices, U.S. sanctions, and corruption have collectively damaged Venezuela’s oil revenue-dependent economy. Starting in 2014, Venezuela’s GDP plummeted more than the United States’ GDP during the Great Depression, with nearly 32 million citizens unable to afford food. 

U.S.-Venezuelan Relations 

U.S. Policy Against Maduro  

  • The United States began sanctioning Venezuela in 2006.
  • Following Maduro’s rise to power,  the United States imposed stricter sanctions targeting his regime, specifically focusing on the country’s oil exports.
  • The United States recognizes opposition leader Juan Guaido to be the interim president of Venezuela.   

The United States has been sanctioning the Venezualan Government since 2006, though the nature of the sanctions has changed since Nicolas Maduro began his reign as president of the South American nation. Since his controversial election victory in 2013, Maduro has overseen the widespread failure of his country’s economy, as the country's dependency on oil has been its downfall. The Maduro reign has also been characterized by crackdowns on protests and institutional corruption. Due to the authoritarian characteristics of his administration, the United States considers Nicolas Maduro as a dictator. 

In 2015, Executive Order 13692 allowed the US to sanction individuals or entities involved in anti-democratic activities and human rights abuses. This shifted the nature of US sanctions in Venezuela away from sanctions regarding connections to drug trafficking, towards the direct targeting of officials in the Venezuelan government, including Nicolas Maduro. 

The Trump administration increased sanctions, with the goal being to put an exorbitant amount of pressure on Maduro so he would step down and allow Juan Guaido to assume the role of President. These sanctions have primarily targeted Venezuela’s oil sector, though many sanctions encompass all of the country’s economy. Venezuela’s economy has become increasingly isolated from the global economy due to these sanctions. The Trump administration received criticism for this maximum pressure policy, as critics argued that the sanctions had an active part in the decimation of the Venezuelan economy. 

The US has preferred Juan Guaido to Maduro and has recognized the politician as president of Venezuela since 2019. However, the Venezuelan opposition is currently in disarray, as Guaido has lost his role as head of parliament and much of the opposition has abandoned him.

International Response to U.S. Action in Venezuela

  • US allies have distanced themselves from the US position that Juan Guaido should be recognized as the interim president of Venezuela.
  • The EU and many South American countries no longer recognize Guaido as the interim president, even as they continue to oppose the Maduro regime.

International reactions to American action in Venezuela have been mixed and have declined in support over time. The European Union initially recognized Juan Guaido as interim president, which was in line with the American position. Moreover, the EU did not recognize the December legislative elections that resulted in Guaido losing his position as head of parliament. Nevertheless, on January 25, 2021, the EU stated that Guaido could no longer be considered interim president. Instead, he is now considered a “privileged interlocutor” and part of the democratic opposition to Maduro. This occurred in spite of a resolution passed by the European Parliament to continue recognizing Guaido as head of state just a week prior to the statement. The EU has worked to establish talks between Guaido and Maduro, though little has come from that effort. While the Europeans are receptive to American arguments in favor of Maduro’s illegitimacy, they seem unwilling to support The United States’ position that Guiado is the interim head of the Venezuelan government. This position marks a notable shift from previous EU policy which clearly identified Guiado as the legitimate President of Venezuela. 

South American states have had a similarly mixed reaction to the United States’ recognition of Guaido. Colombia, Brazil, and Peru recognized Guaido as the interim president of Venezuela in early 2019. Brazil accepted Guaido’s appointed ambassador to Brazil while simultaneously downgrading their relations with Maduro’s government and stripping Maduro loyalists of their diplomatic status in Brazil. Colombia has continued to use harsh rhetoric against Maduro’s government. Colombian President Duque went as far as to refer to Maduro as a “dictator” in November 2021. In contrast, Argentina stated that they did not recognize Guaido and removed the diplomatic credentials of his representative in Argentina. 

As time has passed, South America’s recognition of Guaido has faded. The Lima Group, consisting of Brazil, Canada, Chile, Colombia, Ecuador, El Salvador, Haiti, Honduras, Guatemala, Costa Rica, Paraguay, and Peru, is no longer referring to Guaido as the interim president. Instead, the group issued a statement on January 5, 2021, recognizing “the existence of a Delegated Commission headed by its legitimate board of directors, established by the National Assembly, presided by Juan Guaido.” While they still recognize Guaido’s authority, the downgrade was a serious blow to Guaido’s claims of legitimacy.

While the United States continues to recognize Juan Guaido as Venezuela’s legitimate president in 2021, it does so with less international support than it had in late 2019. This does not mean Maduro has not gained much support, but he stands to benefit from a decrease in support for his rival around the world.

Maduro’s Consolidation of Power

  • Maduro has consolidated his power within Venezuela as the Guaido-led opposition continues to weaken.
  • Russia and China continue to provide support for the Maduro regime.


As the Guaido-led opposition grows weaker, Maduro continues to consolidate his power within Venezuela. After gaining control of the Venezuelan National Assembly in January 2021, Maduro’s United Socialist Party of Venezuela decided to hold its first regional primaries for governorship and mayorship since 2008. However, despite allowing nominations and elections, the process may be anything but fair. As it is now, the elections are still highly regulated by Maduro and could break up the opposition by creating competing groups within the election. As such, the primaries may only strengthen Maduro’s regime “by reorganizing its autocratic structure to maintain a cadre of loyalists with the ability to carry out the regime’s tasks” without the pressure of a unified opposition. 

Furthermore, while the United States continues to recognize interim President Juan Gauido, the Maduro regime also receives foreign support, namely from Russia and China. Connections between Caracus and Moscow grew during the reign of Hugo Chavez, who shared similar anti-American rhetoric with Russia and was open to Russian investment into Venezuelan oil. During Maduro’s presidency, these ties only became stronger due to U.S. sanctions, and Russia became the leading consumer of Venezuelan oil. However, Russia abruptly stopped in mid-2020 due to Venezuela's inability to fix its economic crisis. In spite of the economic failures, “Russian elites still greatly value their relationship with Venezuela,“ as Venezuela acts as a foothold for Russian influence in South America. 

However, arguably, the greatest economic support for Venezuela has been China. China has loaned some $60 billion to Venezuela and is the country's largest lender by far. Similar to Russia, relations between Beijing and Caracus grew due to China’s demand for oil during Chavez’s presidency. However, as oil prices fell, the relationship between the two countries became distant, but China continues to support Chavez's successor Maduro, as it continues to invest in oil and aims to maintain its influence within the region. With the sustained monetary and political backing of Russia and China, Maduro can continue to solidify the legitimacy and strength of his regime. 

Conclusion


There are two sides to the Venezeula coin for U.S. policymakers: first, restoring democracy and eliminating the humanitarian crisis in the region; second, maintaining a strong influence over Venezuela to counter the geopolitical interests of Russia and China. 

The prerequisite to restoring democracy in Venezuela is to foster legitimate and verifiable elections. In this aim, the U.S. should cooperate with international organizations that serve as neutral third parties in the country, notably the EU. For the first time in 15 years, the European Union has sent observers to Venezuela in preparation for the upcoming election cycle to enhance the verifiability of the outcome. However, such a goal will not be accomplished overnight, and the U.S. needs to work diligently in the meantime to reduce the strains of the economic crisis in Venezuela. Primarily, U.S. officials should explore enhancing the specificity and limiting the scope of the current sanction regime against the Maduro administration and its affiliates, as the present hardline stance has worsened the crisis in Venezuela

With the world’s largest oil reserves, Russia and China have significant energy interests in the country. Putin seeks “to diversify [Russia’s . . .] security ties [to] the Middle East, South Asia, and South America” by working closely with Venezuela, and China is lending defensive resources “to [ . . . ] facilitate [debt] repayment and raise oil exports.” Chinese and Russian traction in Venezuela is of concern to U.S. officials in the battle for geopolitical influence, but more importantly, because of Venezuela’s close proximity to the continental United States. The simplest answer to the complex geopolitical problem is electoral victory; if the U.S. is able to support and uphold the legitimacy of elections and electoral results, the potential for Russian or Chinese military buildups becomes near-zero, erasing the security threat posed by Venezuela's instability. 

While there is much academic discussion around the issue, upcoming elections in Venezuela will offer a unique opportunity for the U.S. to review the real-world effectiveness of its policy. Only recently, the Unitary Platform, led by Juan Guaidó, announced its plans to take part in the elections, “a reversal of their stance of boycotting recent votes.” With “more than 3,000 positions - including governors, mayors, and municipal councillors - [ . . . ] up for grabs,” the general trend of the electoral outcomes will serve as a test of the political climate for U.S. policymakers.

A sweeping victory for the Unitary Party and other Guaidó aligned politicians may serve as confirmation that current policy is working, entrenching U.S. officials’ resolve for political involvement and targeted sanctions in the region. A sway towards Maduro allies, however, may have varied implications. First, and optimistically, the U.S. could decide against its hardline approach, shifting away from sanctions and prioritizing diplomatic efforts. Second, the U.S. could move to strengthen its hardline approach by further isolating the Maduro government economically and politically. Third, and of most concern, there is an existent yet less than likely risk for a U.S. move towards military action – a policy the Trump administration frequently discussed. It's unreasonable to try to accurately predict both the elections’ outcomes and the response from U.S. policymakers, but one thing is certain: decisive electoral victories, for one bloc or other, will have reverberating and immense policy manifestations.

Author Information

Marielle DeVos
Foreign Policy Lead

Marielle is from Seattle, WA. She is a current senior in high school, and will be starting her degree in International Studies at American University next fall. She speaks both English and French and will be studying Russian in the fall. She looks forward to continuing her advocacy work and writing while in college.

Sarika Rahman
Foreign Policy Lead

Kendall Carll
Policy Analyst

Michelle Liou
Policy Analyst

Eli Pearl
Policy Analyst

Hi, I’m Eli Pearl, and I’m a sophmore in high school from California. I enjoy writing and speaking about politics, writing about sports, and Improv. I consider myself a Social Democrat who is currently researching Modern Monetary Theory and Post Keynesian Economics.

Luke Drago
VP of Policy Media

Luke Drago hails from Charlotte, North Carolina. He studies Politics & History at the University of Oxford and is a college member of St Edmund Hall. Luke has worked on campaigns at every level of government, from local elections to presidential elections. He has been a successful advocate for numerous policy initiatives, including a district-wide school security overhaul and a historic local investment into attainable housing. He is driven by a conviction that public policy can be a powerful mechanism to change lives and shape the future.

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