The Heritage Foundation

Issue Brief #4569 on Venezuela

May 26, 2016

May 26, 2016 | Issue Brief on Venezuela

Alleviating the Humanitarian Crisis in Venezuela

In recent months, the already dire situation in Venezuela has worsened. Socialist economic policies have led to food shortages, electricity blackouts, and runaway inflation. Criminal elements have taken over the government and imprisoned democratic opposition figures. All the while, a citizen security crisis has caused the Venezuelan capital, Caracas, to become the world’s deadliest city.

Recent polls show that support for President Nicolas Maduro has reached record lows, with only 20 percent of Venezuelans approving of their leadership.[1] Maduro has responded to the National Assembly’s attempts to oust him by declaring a 60-day state of emergency. With the exception of the new Secretary General of the Organization of American States (OAS), regional leaders have remained silent.

While strained relations between Washington and Caracas limit bilateral cooperation, policymakers have options. A multilateral response, particularly through the OAS, should be pursued.

What happens in Venezuela matters to the U.S. Venezuela has the world’s largest proven oil reserves and is a source country for U.S. energy. It is also a major transit source for U.S.-bound drugs and home to an aggressively anti-American regime.[2] Yet Washington appears reluctant to move beyond targeted sanctions. Containing and alleviating the Venezuelan crisis will require decisive U.S. action.

Understanding the Complexity of Venezuela’s Crisis

The recent collapse of global oil prices, coupled with socialist economic policies, has brought Venezuela’s already floundering economy to its knees. The International Monetary Fund estimates that the Venezuelan economy contracted 10 percent last year, with runaway inflation hitting 275 percent.[3] It is estimated that inflation will leap to 720 percent this year and 2,200 percent in 2017.[4] If Venezuela’s budget is to be balanced, oil needs to be upwards of $200 per barrel.[5] At this point, an economic collapse appears unavoidable, and the ruling United Socialist Party of Venezuela (PSUV) appears to be both unwilling and unable to implement the necessary economic reforms. For the time being, generous loans from China have forestalled a looming default.

At present, there appears to be no governing alternative to Maduro and the PSUV. While the democratic opposition recently achieved majority control of the National Assembly, they have been unable to act on that mandate. Their lack of consensus, coupled with totalitarian control of the government, leaves them with few options. The number of political prisoners in Venezuela has risen to levels higher than Cuba’s: Over 70 are incarcerated, including opposition leaders and former government officials.

Complicating the situation are growing revelations about President Maduro and the PSUV’s direct role in narcotics trafficking. Already, former Venezuelan cabinet levels officials have been sanctioned by the U.S. Department of the Treasury under the Drug Kingpin Act. Recently, Maduro’s stepsons were indicted by the U.S. Department of Justice on charges of conspiring to transport 800 kilograms of cocaine to the U.S.[6] At the same time, U.S. prosecutors are investigating former National Assembly President Diosdado Cabello, arguably the second most powerful person in Venezuela. It is believed by many in the U.S. Department of Justice he is leading a massive drug trade operation that involves military and other high-ranking officials.[7]

Bearing the brunt of this crisis are the Venezuelan people. Venezuela’s capital city is ranked the most violent city in the world, with the highest global homicide rate.[8] Overall, Venezuela ended 2015 with a homicide rate of 90 per 100,000, surpassing the traditionally deadly rates in Honduras and inching toward the highest in El Salvador. Countrywide kidnapping rates are higher than in Afghanistan, Colombia, Iraq, Libya, Syria, or Yemen. Chronic shortages of food, medicine, and medical supplies, coupled with frequent electricity blackouts, have caused an unmanageable health catastrophe. Venezuela is believed to have over half a million cases of the Zika virus (second only to Brazil) but lacks the resources to contain it effectively.[9]

Action by the U.S. and Regional Stakeholders Is Vital

During the anti-government uprisings in 2014, many wondered whether the end of Maduro’s rule was near. Two years later, the question is not when but under what state of affairs Venezuela will collapse. To date, the U.S. has responded by implementing targeted sanctions against human rights violators. While sanctions can be useful in addressing the Venezuelan government’s criminality, however, they are not an adequate response to the humanitarian crisis. U.S. policymakers therefore should:

  • Send a clear message of support to Venezuela’s democratic opposition. In order to deal with the Venezuelan crisis effectively, American and other hemispheric leaders must act to restore Venezuela’s democratic institutions. The Venezuelan government’s deep-seeded corruption and criminality threaten both hemispheric stability and America’s national interests. America should continue to call for the release of Venezuela’s political prisoners.
  • Work with the Organization of American States to build consensus on a regional response. Considering the regionally destabilizing impact of Venezuela’s crisis, a multilateral response is necessary. America should empower the new OAS leadership to convene a hearing of the Permanent Council, notwithstanding Venezuela’s objections. According to Articles 19 and 20 of the Inter-American Democratic Charter, which binds all 34 permanent members of the OAS, the OAS Secretary General or any other member state can convene a Permanent Council meeting to evaluate whether there is an “unconstitutional alteration of the constitutional regime [in a member state] that seriously impairs the democratic order in [that] member state.”[10] Given President Maduro’s egregious violations of human rights and democratic institutions, application of the Inter-American Democratic Charter could well be warranted.
  • Urge the Pan American Health Organization (PAHO) and regional stakeholders to address Venezuela’s health crisis. According to Venezuela’s Ministry of Health, “75% of the medicines considered ‘essential’ by the World Health Organization are not available in Venezuela.”[11] These chronic shortages are occurring in the midst of a regional Zika virus epidemic. Shortages of foodstuffs and other basic goods are expected to worsen, and a further collapse of Venezuela’s health system will affect neighboring countries Colombia, Guyana, and Aruba. Using reappropriated funds left over from the Ebola crisis, the U.S. should work with regional partners and international organizations like PAHO.

Conclusion

U.S. policymakers must respond to the deteriorating situation in Venezuela. Moreover, regional leaders and stakeholders must encourage Caracas to respond effectively to the humanitarian crisis as well. By remaining on the sidelines, their silence and inaction amount to a tacit endorsement of President Maduro’s government.

—Ana Rosa Quintana is Policy Analyst for Latin America and the Western Hemisphere in the Douglas and Sarah Allison Center for Foreign Policy, of the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, at The Heritage Foundation.

About the Author

Ana Quintana Policy Analyst, Latin America and the Western Hemisphere
Douglas and Sarah Allison Center for Foreign and National Security Policy

Related Issues: Venezuela

Show references in this report

[1] Venezuelans’ Approval of Leadership Remains at Record Low,” Gallup, May 20, 2016, http://www.gallup.com/poll/191663/venezuelans-approval-leadership-remains-record-low.aspx?g_source=COUNTRY_VEN&g_medium=topic&g_campaign=tiles (accessed May 22, 2016)..

[2] Nicolas D. Loris, Luke Coffey, Ted R. Bromund, James Phillips, Dean Cheng, Ana Quintana, Lisa Curtis, and William T. Wilson, “The Economic and Geopolitical Benefits of Free Trade in Energy Resources,” Heritage Foundation Backgrounder No. 3072, October 9, 2015,
http://www.heritage.org/research/reports/2015/10/the-economic-and-geopolitical-benefits-of-free-trade-in-energy-resources.

[3] David Biller, “IMF Sees Venezuela Inflation Rocketing to 720 Percent in 2016,” Bloomberg, January 22, 2016, http://www.bloomberg.com/news/articles/2016-01-22/imf-sees-venezuela-inflation-rocketing-to-720-percent-in-2016 (accessed May 18, 2016).

[4] Amanda Mars, “IMF Sees Inflation in Venezuela Soaring to 2,200% by 2017,” El Pais, April, 13, 2016,
http://elpais.com/elpais/2016/04/13/inenglish/1460550468_366568.html (accessed may 18, 2016).

[5] Ben Moshinsky, “Venezuela Needs Oil Close to $200 a Barrel to Balance Its Budget,” Business Insider, February 18, 2016, http://www.businessinsider.com/deutsche-bank-report-on-commodities-says-venezuela-needs-200-oil-to-balance-its-budget-2016-2?r=UK&IR=T (accessed May 18, 2016).

[6] Jose De Cordoba, “U.S. Arrests Two Relatives of Venezuelan President Nicolás Maduro on Drug-Trafficking Charges,” The Wall Street Journal, November 11, 2015, http://www.wsj.com/articles/u-s-says-it-arrests-two-relatives-of-venezuelan-president-nicolas-maduro-on-drug-trafficking-charges-1447276449 (accessed May 20, 2016). (accessed April 13, 2016).

[7] Jose De Cordoba and Juan Forero, “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub,” The Wall Street Journal, March 18, 2015, http://www.wsj.com/articles/venezuelan-officials-suspected-of-turning-country-into-global-cocaine-hub-1431977784 (accessed May 20, 2016).

[8] Mimi Yagoub, “Caracas World’s Most Violent City: Report,” Insight Crime, January 27, 2016, http://www.insightcrime.org/news-briefs/caracas-most-violent-city-in-the-world-2015-report, (accessed May 20, 2016). (accessed April 19, 2016).

[9] Joshua Partlow, “Venezuela Faces ‘Worst-case Scenario’ as Zika Outbreak Expands,” The Washington Post, February 15, 2016, https://www.washingtonpost.com/world/the_americas/venezuela-faces-worst-case-scenario-as-zika-outbreak-expands/2016/02/13/e59f7f2c-cc6b-11e5-b9ab-26591104bb19_story.html (accessed May 20, 2016).

[10] Organization of American States, Inter-American Democratic Charter, September 11, 2001, http://www.oas.org/charter/docs/resolution1_en_p4.htm (accessed May 25, 2016).

[11] DPA, “Venezuela se queda sin medicamentos esenciales,” La Vanguardia, January 27, 2016, http://www.lavanguardia.com/internacional/20160127/301697711498/venezuela-escasez-medicamentos-deterioro-sanidad.html (accessed May 20, 2016).