Oil and democracy in Venezuela and US policy in Latin America

"Venezuela is Latin America's biggest exporter of crude oil and has the world's largest petroleum reserves." - Brian Ellsworth and Andrew Cawthorne, Venezuela death toll rises to 13 as protests flare Reuters 02/24/2014

A little more than half of the world's oil is in the Middle East. Latin America, from Mexico to Argentina, comes in second with around percent, led by Venezuela, Brazil, and Mexico in that order. Cuba is not included, but its Gulf of Mexico fields-that could potentially hold about the same amount of oil as the United States-are not a game changer.

However, Latin America's share is expected to rise significantly as Brazil continues to certify its recently found subsalt fields, with indications that reserves could be exponentially more than currently reported. Venezuela also certified an additional 85 billion barrels in reserves early in 2011 which made its reserves officially the biggest in the world at nearly 297 billion barrels. - Andrés Cala and Michael Economides, America's Blind Spot

America's Blind Spot: Chávez, Oil, and US Security (2012) by Andrés Cala and the late Michael Economides is an oil-industry oriented analysis of US policy toward Venezuela. They call for a pragmatic, "realist" policy toward Venezuela.

The reader can be excused for wondering at time what they mean by "realism" when they repeatedly quote John Negroponte. Negroponte was one of the bad actors in the Reagan Administration's Central American policy as Ambassador to Honduras. He served as the first Director of National Intelligence and in other posts under the Cheney-Bush Administration. For some background on him, see Robert Perry, Negroponte's 'Friendly Eye' Consortium News 04/13/2005.

But they don't seem to buy into the kind of policy one might expect coming from Negroponte. They argue that the US needs to recognize how concerned the governments of Latin America tend to be in protecting democracy. And that would mean not backing coup attempts against the chavista government in Venezuela, now headed by Nicolás Maduro. They urge American policymakers to not get too bent out of shape over the regime's rhetoric about socialism and populist bluster, which continue under Maduro even if he's not as effective a blusterer as the late Hugo Chávez was.

They have some very helpful descriptions describing how, at the time of the book's writing, the Obama Administration hadn't endeared itself to most Latin American governments, as the most recent political crisis in Venezuela has illustrated once again. His Administration's willingness to recognize the coup regime in Honduras in November 2009 (the coup was in June) along with closer US allies like Colombia and Costa Rica. Chile and Mexico delayed recognition until 2010, and Argentina, Brazil and Venezuela waited until June 2011, two years after the coup, when "all criminal charges on the deposed [elected] leader [Manuel Zelaya] were dropped in June 2011, clearing the way for his return and a national unity transition."

As is often the case, events that had a big effect on the perception of the US Administration in Latin America didn't gain a lot of attention in the American media, which had celebrities and horse-race estimates on elections to chatter about. Cala and Economides write:

Obama's administration put its priorities at odds with all big [Latin American] countries, except Colombia. Stopping Chávez was more important [to them] than an unequivocal defense of democracy. And Latin America interpreted this as a serious setback, a reminder of Bush's stance on the Venezuelan coup in 2002, and of a not so distant past.

Yes, the Cheney-Bush Administration and that 2002 coup. Cala and Economides write:

... the Bush administration's perceived support in 2002 of a military coup in Venezuela forever changed relations with an outraged region. It's not that other leaders wanted Chavez in power, far from it, but it was an unforgivable reversal of the democratic principles that the United States had finally adopted in the early 1990s. The very suggestion that Washington would once again support military coups put the entire region on the defensive, starting with powerhouse Brazil. At stake was not Venezuela's democracy, but setting a precedent for a renaissance of the century of dictatorships.

The new Latin American left-of-center regimes in Brazil, Argentina, Uruguay, Bolivia, Chile, Nicaragua, Ecuador, and eventually Paraguay and El Salvador - that is, most of the continent's population living precisely in countries that suffered at the hands of American-backed militaries - grew suspicious of Washington's intentions and its democratic U-turn. [my emphasis]

That suspicion has flared anew in the latest round of political conflicts in Venezuela. They have been happening at the same time as protests that at least earlier this year looked similar to those in Ukraine, where the US was pretty painfully open about its desire for regime change there. While there haven't been such blatant indications of direct US meddling in the Venezuelan situation Secretary of State John Kerry has been notably harsh in his public indictments of Maduro's government.

And though they used the phrase "perceived support" in the quote just given, Cala and Economides make it clear that the perception was not wrong:

In private, the US Assistant Secretary of State for Western Hemisphere Affairs Otto Reich summoned continental ambassadors to reportedly back the new Venezuelan leadership and pleaded with others for similar support, which he didn't get. American ambassador to the Organization of American States (OAS) at the time Roger Noriega recognized a "provisional government."

The White House also admitted its diplomats had met several times with coup leaders before it actually took place, but it denied endorsing it. Ultimately, an internal government investigation determined no officials were responsible for wrongdoing, for promoting a coup. That said, officials did little to impede it. The United States did not condemn the coup until after Chavez had been reinstated to power.

Otto Reich was a Cuban immigrant who also had a background in the neocon shenanigans in Central America during the Reagan Administration. See Robert Perry on Reich, Iran-Contra's 'Lost Chapter' Consortium News 03/14/2013

Cala and Economides also provide this helpful background on the militant anti-chavista forces in Venezuela:

Almost four years after Chávez took office in 1999, and only months after a failed military coup in April 2002, Venezuela's anti-Chávez opposition rallied support for a nationwide strike that included PDVSA [the national Venezuelan oil company] and thus involved shutting in output. The stoppage started in December and lasted for around two months. Venezuela had to import crude not only for local supply but to meet export obligations. The entire export fleet was grounded, refineries and production stopped. The country lost $13.3 billion as a result of the strike. The GDP for the first trimester of 2002 fell 27 percent.

This is why it's important to remember Venezuela's status as a petrostate with the biggest oil reserves of any country. There are lots of people who would like to get their hands on it, inside and outside Venezuela. But the preponderance of oil in the Venezuelan economy also makes it especially vulnerable to fluctuations in oil prices and to disruptions of PDVSA (pronounced pay-day-vay-sa). "PDVSA, the state company," they write, "is not just one of the world's biggest energy companies, but a state within a state. It's involved in everything from fighting poverty to balancing the national budget."

Cara in writing on the current crisis is not in favor of the US pushing for regime change in Caracas. In What Venezuelan ‘Regime Change’ Could Mean Consortium News 4/15/2014:

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. [my emphasis]

Economides unfortunately passed away late last year: Jeannie Kever, UH Energy Expert Michael Economides Dies During International Flight University of Houston 12/02/2013.

See also Luis Boscán's review of America's Blind Spot in the LSE Review of Books 05/22/2013, and this piece by Economides, RIP Hugo Chávez but How About Chavismo? FuelFix 03/08/2013 in which he mentions some of his criticisms of the Chávez government.

Tags: hugo chávez, nicolás maduro, venezuela