by Owen McGovern
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| President Maduro of Venezuela (Wiki Commons) |
With 94.5% of its citizens living in poverty as of 2021, which is one of the highest poverty rates in Latin America, Venezuela is a prime example of how US sanctions can cripple a country’s economy. Venezuelan President Nicolás Maduro, who has been in power since 2013, has been accused of election fraud and human rights abuses during his time in office by the US and its allies. After the disputed 2018 presidential election, where it was reported Maduro won with 68% of the vote, the USA and the European Union denounced Maduro’s victory as fraudulent. Venezuela was then hit by sanctions preventing the country from exporting oil to the US or its allies, leading to the collapse of the Venezuelan economy and a financial crisis which saw its GDP fall from $98.4 billion to $44.9 billion. The average monthly wage for Venezuelans is now the equivalent of $2.50, not enough to buy a kilogram of meat, which costs the equivalent of $3.75. Furthermore, many Venezuelans only use American dollars since the Venezuelan bolívar is worthless thanks to hyperinflation. Now the US government, in many ways the architect of the destruction of the Venezuelan economy, has been forced to reopen negotiations with the struggling nation.
US officials flew to Caracas a few days ago, for talks which Maduro has since characterised as “cordial”. As a show of good faith, the Venezuelan government has released two political prisoners who had US citizenship, as well as starting negotiations with Maduro’s opposition, who dispute the results of the 2018 election and have been supported by the US since. Venezuela has also agreed to consider the USA’s request for the holding of free elections to determine the leadership of the country. In return for this the US government is prepared to lift sanctions on Venezuela to gain a steady flow of oil from Venezuela to American refineries in the Gulf of Mexico. Venezuela had previously been sending 580,000 barrels of oil to these refineries, a figure which will go some way towards making up for the 672,000 barrels that Russia had been exporting to America prior to its sanctioning, with the lifting of sanctions on Venezuela making it possible for a further 500,000 barrels to be exported every day.
Some criticism has been levelled at the Biden administration for the warming of relations with Maduro’s government, particularly from Republican ‘hawks’, a term which refers to politicians who advocate for aggressive foreign policy, being opposed by more peaceful ‘doves’. However, it is recognised that an important beginning to better foreign relations between the US and Venezuela would be to pull the South American nation out of Moscow’s orbit. Although Russia has been a key ally of Maduro’s government as the principal importer of Venezuelan crude oil since 2019, the freezing of Venezuelan money in Russian banks may spell the beginning of the end for this alliance. For the US, a renewed oil trade with Venezuela will be a lifeline for the floundering American energy industry, while for Venezuela, the lifting of sanctions represents a significant step in the country rejoining international trade and climbing out the hole of recession. Finally, the fact that two countries who have grappled for political and economic control over Latin America in a rivalry spanning four decades are now beginning to cooperate could become an inspiring example for future peace.
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