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Is Venezuela the New U.S-China Battleground?

Mar 07, 2019
  • Jiang Shixue

    Professor and Director, Center for Latin American Studies, Shanghai University

Each nation has its own right to decide its development path, either through doing by learning or learning by doing. No one size fits all.

The government and its opposition

Since Hugo Chávez came to power in 1999, Venezuela has pursued a unique development path. In the political field, it has implemented the so-called Bolivarian revolution. Named after Simón Bolívar, an early 19th-century Venezuelan and Latin American revolutionary leader in the Spanish American war of independence, this revolution was built upon nationalism, populism and a state-led economy under the banner of 21st century socialism. Interestingly, even Chávez failed to explain the genuine meaning of this political slogan, let alone convince people to follow its purpose.

After Chávez won the election, many left-wing politicians in Latin America came to power through the ballot box, a phenomenon known as the rise of the “pink tide.”

In the economic field, Chávez stressed the importance of government regulations by carrying out the policy of nationalization, and intensifying the role of the government. He said that the central bank in Venezuela should not be granted independence. Sadly, all the economic policies discouraged the development of the private sector, leading to an increase of a capital flight and a decrease in productive investment.

In the field of social development, however, Chávez did a wonderful job by raising the living standards of the poor people. That is why he won their strong support during elections.

In the diplomatic arena, Chávez adopted a very tough stance against the United States. He even called President George W. Bush “the devil” on the floor of the U.N. General Assembly on September 20, 2006. Moreover, Chávez maintained very close relations with Cuba. With help from Cuba, he created an anti-U.S. organization called the Bolivarian Alliance for the Peoples of Our America (or Alianza Bolivariana para los Pueblos de Nuestra América in Spanish) in 2004. No wonder Chávez was considered by the U.S. as the “New Castro.” Evidence indicates that the U.S. was behind the failed coup d'état against Chávez on 11 April 2002.

The Venezuelan economy has been suffering from a “Dutch disease” for many decades. As it depends heavily on the oil sector, any movement of the world oil price would affect the government budget. Soon after the world economy recovered from the 2008 international financial crisis, oil prices started to climb to more than US$120 per barrel, making it possible for Chávez to spend money in a lavish way. But the oil boom did not last long. Starting from 2014, the oil price sunk to less than US$40, causing great hardship to the treasury of the Venezuelan government.

After Chávez died from cancer on 5 March, 2013, Nicolás Maduro became President of Venezuela. He inherited all the political, economic, diplomatic and social legacies, bad and good, fortunate or unfortunate.

The most daunting task for Maduro is the worsening economy, as the price of oil fails to rise and oil production continues to decrease. Furthermore, the opposition seems to be more opposed to Maduro, the government and the ruling party. Surprisingly, the opposition won the election of the National Assembly in December 2015. Maduro attempted to bypass this obstacle by establishing a Constitutional Assembly in July 2017, a move further dividing Maduro and the opposition.

It is impossible to ask everyone to accept every government policy. The key question is whether or not the opposition can express its disagreement in an acceptable way on the one hand, and whether the government would be ready to listen to the opposition. Even when Chávez was alive, street protests organized by the opposition had already become the norm. So it is fair to say that the government, which has made grave economic mistakes, and the militant opposition, which is fond of “street politics”, should be blamed for today’s misery.

China-Venezuela relations

While the Venezuela-U.S. relationship has worsened, Venezuela-China ties have become closer. But, it is necessary to point out that these two sets of relations have nothing to do with each other. As a matter of fact, Chinese oil companies entered Venezuela before Chávez came to power. In other words, Chinese interest in investing in Venezuela’s oil resources has nothing to with the so-called left-wing ideology.

To put the China-Latin America relationship in context, we can say that its rapid development just coincided with the rise of the region’s “pink tide.” Again, this bilateral relationship has nothing to do with the region’s left-wing ideology.

Indeed, over the past one or two decades, China’s relationship with Venezuela and other Latin American countries has been rapidly developing. Needless to say, the U.S. is not happy to see that China is gaining a foothold in its backyard. Ahead of his visit to Latin America in early February 2018, then U.S. Secretary of State Rex Tillerson said that the Monroe Doctrine “is as relevant today as it was the day it was written” in 1823.

A handful of American scholars and government officials claimed that either Chávez or Maduro would have already lost power if China had not provided them with generous economic assistance in the form of swapping oil for loans.

This accusation is groundless. In the age of globalization, any sovereign nation can develop its economic relations with any other. The U.S. has made an enemy out of Venezuela, but until now it still imported large amounts of oil.

The innovative program of swapping oil for loans between China and Venezuela is a part of South-South cooperation. It is based on international rules and the “win-win principle.” This kind of exchanges does not target any third party. Chinese loans have been used by the Venezuelan government to stimulate economic and social development. Moreover, Chinese investment in the Venezuelan oil sector has made it possible to export oil to the U.S.

The future of Venezuela

Venezuela is now besieged by multiple crises: Economic, political, diplomatic and social. Eager to overthrow the Maduro administration, the U.S. openly supports the opposition and enforces economic sanctions against Venezuela. President Trump even warned that “all options are on the table” to force President Maduro out of power.

China has a different position towards Venezuela. China always believes that, only through dialogue and consultation within the framework of the nation’s constitution by the government and the opposition, can the current situation be overcome. It also hopes that external forces or the international community should provide constructive assistance to Venezuela on the premise of respecting its sovereignty.

In his remarks at the United Nations Security Council meeting on Venezuela on January 26, Mike Pompeo, U.S. secretary of state, claimed that the U.S. stands with the Venezuelan people. He said, “So far, many other nations have chosen to do the same and they too have recognized the legitimate government of interim President Guaido ... And now it's time for every other nation to pick a side. No more delays, no more games. Either you stand with the forces of freedom or you're in league with Maduro and his mayhem.”

Needless to say, “picking sides” on Venezuela is counter-productive to a decent solution of this issue. Is the South American nation in the danger of becoming a new battle ground for the U.S and China/Russia? It is anyone’s guess.

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