Venezuela

The Congress takes an important, positive step to reinforce Russian sanctions, but are we at risk of overusing the sanctions tool? Senate and House negotiators have reached agreement on a bill that would significantly constrain the president’s ability to ease Russian sanctions, and the legislation is expected to reach the president’s desk with veto-proof majorities this week.  While an important step in U.S.-Russia relations, and in some ways the most concrete policy change emerging from the Russia scandal to date, it is but one of a number of recent or prospective decisions by the Congress and Trump administration expanding the scope of sanctions, and perhaps not even the most consequential.  Sanctions have been a centerpiece of economic statecraft in both Democratic and Republican administrations, and especially after 9/11 with a new focus on financial sanctions in countries as diverse as Russia, Iran, and North Korea.  Yet now more than ever, sanctions policy appears to have become a policy of first resort.  The critical question is whether we are getting the balance right, and whether their extensive use presents long-term risk to the global economy. Consider the following recent sanctions news: North Korea.  In late June, the U.S. Treasury announced sanctions against the Chinese Bank of Dandong, a Chinese shipping company, and two related individuals for their involvement in providing illicit trade and finance to North Korea. The announcement by the Treasury’s Financial Crimes Enforcement Network (FinCEN) of sanctions against Bank of Dandong for acting as a conduit for illicit North Korean financial activity, and is a foreign bank of primary money laundering concern, was most notable. Such a “secondary sanction” aims to leverage the strength and role of the U.S. financial system to pressure a target (in this case, the North Korean government) by sanctioning a business or individual outside the United States (and the target country) that does business with the target. By imposing these sanctions, the administration aims to sever Bank of Dandong from the U.S. financial system, disrupting North Korean financial flows. This was a modest first step. The companies involved are small, and there is a reasonable expectation that new companies will spring up to replace the disrupted business.  Further, for U.S. firms that might be willing to do business with North Korea through intermediaries, the announcement is a clear sign that there could be material costs to supporting the North Korean government. The most significant effect of the measure may be in the signal to the Chinese government to do more. Secondary sanctions are not often used, in part because the perceived extraterritoriality of their use can cause problems for U.S. relations with the country whose institutions have been sanctioned. While the measures announced in June seem narrowly targeted and purposely limited in scope, and Treasury Secretary Mnuchin went to length to state that China was not the target, there are a number of ways that secondary sanctions could be extended, including larger Chinese financial institutions or expanding the sectors affected by the sanctions, with significant economic and political implications. The move comes at a time of significant uncertainty for U.S.-China relations. There is little doubt that U.S. policymakers are growing increasingly frustrated with the ineffectiveness of current North Korean policy. Recent presidential tweets complaining of lack of Chinese pressure on North Korea, a Taiwan arms package, the failure of U.S.-China talks last week to make progress on economic issues, and the possibility of substantial U.S. tariffs on steel imports all underscore that the economic détente following April’s Mar-a-Lago summit may be coming to an end. Venezuela.  The Trump administration is preparing to extend sanctions, promising “strong and swift economic actions,” if the Maduro government goes ahead with a controversial plan to establish a new “Constituent Assembly” that would rewrite the constitution, stripping powers from the democratically elected (and opposition controlled) National Assembly.  While sanctions are already in place against individuals associated with human rights abuses or drug trafficking (including the freezing of assets of eight members of Venezuela’s Supreme Court in May), the Trump administration may be readying a dramatic escalation in sanctions unless the Venezuelan government reverses course on the constituent assembly.  This could include broad sanctions aimed at limiting the development and exportation of oil (though there might be carve-outs in this case limiting the effect on U.S. refineries that currently import Venezuelan crude). My preference though, and perhaps even more effective, would be tough limits on Venezuela’ ability to issue new debt.  Such restrictions, which could prohibit both U.S. companies’ holding/purchasing new debt or the financing for such debt moving through the U.S. financial system, would severely constrain the government’s ability to continue to meet its debt payments.  At a time when the government is defaulting on nearly all its commitments to the Venezuelan people, it has reinforced its position by continuing to make payments on international bonds through increasingly expensive and ad hoc deals.  Now, however, the Venezuelan government appears to have exhausted its liquid and usable foreign exchange reserves, and faces substantial payments in October and November on debt owed by the state oil company PDVSA.  On its face, intensified financial sanctions at this time could be a powerful catalyst for change, and perhaps with a lower humanitarian toll than would be the case with a complete cutoff in oil revenue and a collapse in imports. Russia. The legislation now in the Congress toughens U.S. sanctions policy on Iran, North Korea, and Russia, but the focus of attention has been on the measures that would allow Congress to block efforts by the Trump administration to ease sanctions on Russia. Notably, the president would be required to send Congress a report explaining why he wants to suspend or terminate a particular set of sanctions, and lawmakers would then have 30 days to decide whether to allow the move or reject it. Given the broad set of existing sanctions in place (earlier Russia sanctions did not employ secondary sanctions but did enact broad sectoral sanctions on energy and finance), such a decision would seem to protect one of the most comprehensive sanctions programs on the books.  The bill has veto-proof majorities in both houses, even as some have raised constitutional concerns that the requirements in this proposed sanctions legislation (that Congress sign off on significant Russia policy alterations) could unduly constrain future presidents’ foreign policy authorities. Regarding other countries, the bill reportedly prevents those out of compliance with North Korean sanctions from operating in American waters or docking at U.S. ports, and adds restrictions against products produced by North Korean forced labor. For Iran, the sanctions package imposes penalties on those involved in Iran’s ballistic missile program and anyone who does business with them.  This seems in line with administration policy. While adhering to the July 2015 Joint Comprehensive Plan of Action (JCPOA), the administration appears ready to institute an economic pressure campaign to confront Iran over its conventional weapons program and support for militants. To be sure, I see a reasonably strong case for the more expansive use of sanctions in each of these cases.  Particularly in the case of Venezuela, strong financial sanctions limiting the capacity of the government to continue to finance debt payments, particularly when those deals make the future recovery of the county more difficult, should be a top priority. But has the pendulum swung too far? Facing a growing array of foreign policy challenges, one consistent feature of the new administration’s stated approach has been its willingness to move quickly to impose bilateral economic impediments to trade and finance, including sanctions. While a compelling case can be made in each instance for the use of sanctions, it’s hard not to conclude that sanctions have become the go-to weapon of choice, a Swiss army knife with a ready attachment just right for any foreign policy challenge. No doubt, sanctions have been a growing force in diplomacy for some time. The 9/11 attacks quickly renewed interest in sanctions among policymakers and, backed by a series of executive orders, as well as legislation (Section 311 of the Patriot Act), brought about a new focus on financial sanctions and an effort to harness the power of sanctions to disrupt financial flows across borders.  In cases as diverse as North Korea, Iran, and Russia, financial sanctions found a new rationale and value as a driver of American foreign policy. So it would be wrong to suggest that the aggressive use of financial sanctions is in any sense new. The question though is whether the pendulum has now swung strongly in favor of the greater use of sanctions. In Russia in particular, the use of “smart” and “asymmetric” financial sanctions by the Obama administration sought to impose substantial costs on the Russian government while limiting the damage to U.S. firms and the global financial system more generally. That meant that, when assessing a tightening of sanctions, the potential longer-term costs to global markets—such as derisking by firms, retaliation, and longer-term costs of disrupted trade and finance, were carefully weighed. Reports at the time suggest that the Obama administration took serious their responsibility to preserve and open, robust global trade and financial system. If, as many have argued, we are in midst of a consequential shift in our politics, from left-right to one where the debates revolve between advocates of more open and closed economic policies, I wonder whether this administration, or those that follow, will find it easy to get the balance right.  Reports on recent trade deliberations within the Trump administration suggest that, while there are many advocates for open markets, it is clearly understood that the most critical decision makers on trade have a more protectionist leaning, and a willingness to use unilateral action to address grievances. Could the same be true on sanctions? Without a strong advocate of open markets at the table when the decisions are made, the risk is that sanctions become seen as an easy option without significant economic costs. Without these checks and balances, the risk of their overuse is profound. There is a certain irony here.  On the Russia sanctions, the Trump administration does not want to lock in sanctions, but Congress rightly insists on its review. Beyond Russia, there seems to be a greater willingness by the administration to sanction trade and investment to achieve economic and foreign policy objectives, causing concern for those of us who see great value in U.S. leadership and support for an open, integrated global marketplace. There are economic costs, if confidence in the reliability of markets is lost, which can add up over time as sanctions are repeatedly employed. As argued earlier, in each of these current cases, an expansion of sanctions looks to be the best of a difficult set of choices.  But looking forward, we should be concerned that the pendulum will swing too far, that sanctions become too easy an option. There are some things for which a Swiss army knife is the perfect tool, but for appendicitis I’d rather see a doctor.  

This afternoon, I had the privilege of speaking alongside Cynthia Arnson, Kellie Meiman Hock, and Michael Shifter on current events in South America. Our talk covered countries from Colombia to Argentina, and subjects from climate change to corruption. You can watch the conversation here.

Venezuela announced this week that it will withdraw from the Organization of American States, deepening its isolation and intensifying the sense of crisis there. In recent months, Venezuela has descended into economic, political and moral chaos, punctuated by the arrests of hundreds and the deaths of dozens of protesters during marches on Caracas and surrounding cities. Venezuela is a test for the new Trump administration, which has declared it "a mess." To stop the worst hemispheric crisis in decades, President Donald Trump needs a policy that includes not only tough words but also concrete actions. But the United States can't do it alone. To help rather than hurt U.S. interests, the United States – the historic regional hegemon – needs to tread carefully and build a supportive coalition. View full text of article, originally published in U.S. News

I sat down today with my colleague Shannon K. O'Neil to talk about the ongoing political and economic crisis in Venezuela. It was a great conversation about the roots of the crisis and what Venezuela's options are moving forward. You can check out the video of our discussion below or on Facebook. (And I urge you to check out Shannon’s book Two Nations Indivisible: Mexico, the United States, and the Road Ahead.) Note: If the video is not displaying in your browser, please click here. Corey Cooper assisted in the preparation of this post.

This afternoon I joined James M. Lindsay, senior vice president, director of studies, and Maurice R. Greenberg chair at the Council on Foreign Relations, to discuss the political and economic crisis unfolding in Venezuela and what we can expect in the coming months. You can watch the Facebook Live video below.    

The Venezuelan constitutional chamber’s decision last week to dissolve the National Assembly has made it abundantly clear that Maduro’s Venezuela is an authoritarian regime. The judiciary is at the beck and call of chavista forces, the military is corrupt and co-opted, and despite a last-minute reversal of the court’s decision, the continued dilution of the Assembly’s powers means that there are effectively no independent institutions left with the power to check the regime. Venezuela, meanwhile, is confronting a humanitarian catastrophe. The regime has run up against the limits of its economic policy: foreign currency is too scarce to cover both debt obligations and desperately needed imports. Three quarters of Venezuelans have lost weight under the “Maduro diet”; more than two-thirds of basic goods are scarce. The regime seems willing to play out the clock, at grotesque human cost, guided by one core strategy: waiting for global oil prices to recover. But the hole is now so deep that a modest increase in oil prices— of the sort predicted for 2017— may be insufficient: debt payments due in 2017 outstrip foreign currency reserves. Dictatorships sometimes crumble under the weight of their own contradictions, and this could yet be the case for Chavismo, given the depth of the crisis. Indeed, the uncertainty generated by the court’s action last week may be a sign of fissures within the regime. But as John Polga-Hecimovich and I noted last year, the Maduro regime has a clear strategy for repressing domestic opposition. Leaders who have mobilized against the regime are in jail. The military is fully in control of food supply and appears united against any regime change that might expose leading officers to prosecution for corruption or human rights abuses. The opposition has been fractured by the regime’s delay tactics, including the simulacrum of negotiations over the past year. Venezuelans are exhausted by the daily search for sustenance which, alongside regime repression, saps their ability to protest. Although Maduro walked back last week’s court decision, he retained the power to negotiate oil deals without congressional approval, a tool which may prove very important. China or Russia could yet help Venezuela out of its hole. But China does not seem eager to play a geopolitical role and it has little to gain from saving a crisis-ridden regime in the Western Hemisphere from seemingly inevitable collapse. Russia, on the other hand, seems to be doing what it can to help Maduro through his hard spell: it is reported to be negotiating loans and further investments by Rosneft that might help the regime through a heavy bout of April debt payments. The region has been slow to respond, but is at last finding its voice. Several countries withdrew their ambassadors over the weekend. Mercosur has been proactive: it suspended Venezuela from the trading bloc last year, and invoked its democratic clause over the weekend, which could culminate in Venezuela’s expulsion. The Organization of American States (OAS) has been proceeding more slowly, despite Secretary General Luis Almagro’s hectoring. Almagro’s hopes that Venezuela might be suspended under the Inter-American Democratic Charter continue to run up against simple math; although a few countries seemed to shift their stance last week, many Caribbean nations remain beholden to Maduro, meaning that Almagro may still be short of the votes he needs, even if a special session of the body meets today as originally planned (early reports suggests that the new Bolivian chair of the Permanent Council may suspend the session). The Trump administration so far appears to be following the policies adopted by its predecessor. The United States has imposed targeted sanctions against individual Venezuelans, including Vice President El-Aissami, but has wisely avoided the temptation to more directly and unilaterally confront the regime, allowing Latin America to lead. But patience is wearing thin in Washington. A flurry of congressional declarations last week could presage more muscular legislative action in the months ahead; Senator Marco Rubio suggested that he would lean on recalcitrant OAS members, including by withholding assistance to countries that failed to support OAS action. Policymakers hoping to encourage a peaceful resolution of the crisis must pinch their noses and maintain a channel for dialogue with the regime while giving regime hardliners guarantees of non-reprisal if— but only if— they facilitate a rapid transition. Dialogue has been unproductive in the past, but keeping talks open at least offers the possibility of a strategic exit for regime members. UNASUR has been playing a key role in encouraging dialogue; it may yet be an effective good cop to the OAS’s bad cop, provided it does not allow itself to be used as a convenient pretext for the Maduro regime to string out talks endlessly. Guarantees for regime members who cooperate in finding a way out of the crisis are needed to ensure that negotiations are not seen as a zero-sum game. But the regime has played games for far too long to be trusted to negotiate in good faith. Simultaneously, therefore, regional governments must tighten pressure on the regime. The symbolic weight of an OAS suspension would be great— as Almagro said, “peer condemnation is the strongest tool we have.” But in addition to declaring the Venezuelan regime a pariah, regional and global allies could also help to keep hardliners over a barrel. Prosecutions, asset seizures, visa restrictions, and other sanctions would be most effective if they were employed not only by the United States, but also by Latin American and European allies.

This morning, I had the privilege of testifying before the U.S. Senate Committee on Foreign Relations at a hearing titled “Venezuela: Options for U.S. Policy.” Also joining me before the committee were David Smilde, Senior Fellow, Washington Office on Latin America, and Mark Feierstein, Senior Associate, Americas Program Center for Strategic and International Studies. You can read my written testimony, the written testimonies of my fellow witnesses, and watch a recording of the hearing on the U.S. Senate Committee on Foreign Relations website.  

Half of the eighteen nations of Central and South America will hold presidential elections over the next two years.[1] The number of elections is not unprecedented, but the degree of uncertainty is, given the economic doldrums and political crises that have afflicted the region in recent years. As a consequence of the electoral outlook’s uncertainty, many of the coming year’s events in Latin America will need to be interpreted through the peculiar lens of candidates’ strategic calculations and parties’ maneuvering for advantage at the polls. Of the seven largest Latin economies, all but Peru face elections before the end of 2018. Argentina is the only one of the six remaining big countries that will not be holding presidential elections, but given the hostile Congress Mauricio Macri faces, the legislative elections of October 2017 will in many ways be a referendum on the course of his presidency, determining how far and fast he can bend Argentina’s course. In his first year, Macri has chalked up many achievements in the opposition-dominated Congress, approving more than seventy new laws. Growth is projected to reach as high as 3 percent in 2017. But inflation is stubbornly high, the fiscal deficit looms, and tax reform has stalled, none of which bodes well for Macri’s reform efforts. As a consequence, the legislative elections will be a bellwether of the country’s longer-term trajectory. Chile is in many ways the harbinger of the uncertain presidential election season. It will be the first of the large countries to go to the presidential polls, in November 2017. Incumbent Michelle Bachelet is barred from running for reelection, but the social conflicts of her presidency are very much center stage. Deteriorating relations between the Nueva Mayoria coalition and civil society have been highlighted by November public sector strikes, following a poor coalition showing in the October municipal elections. The Nueva Mayoría is fractured, and while former president Ricardo Lagos remains the frontrunner for the coalition’s nomination, he has had to push back against internal competitors such as Senator Isabela Allende Busi (who has withdrawn) and former OAS secretary general José Miguel Insulza (who has not). This means that the run-up to the mid-year primary that will select Nueva Mayoría’s candidate could be turbulent. In the face of this divided center, conservative former president Sebastián Piñera looks increasingly like the national frontrunner. But relative outsiders could still roil the race, from politicians such as Senator Alejandro Guiller to businessmen such as Leonardo Farkas. Colombia holds legislative elections in March 2018, followed by the presidential contest in May. The elections hinge on the fate of the new peace deal with the FARC rebels, which was narrowly defeated in a national referendum in October, renegotiated, and then unanimously approved in a December 2016 legislative vote (boycotted by opponents led by former president Álvaro Uribe). The fate of the peace deal is so deeply intertwined with the 2018 elections that the presidential election can be said to be a second, definitive referendum. Neither President Santos nor President Uribe can run for reelection, but their rivalry is playing out in the implementation of the deal. For Uribe and the right, the calculus seems to be that the longer implementation is delayed, the more likely the FARC can be driven back to conflict, and the less likely voters will support the deal. For Santos and the center-left, the calculus seems to be that a successful deal could help voters to set aside the unpopularity of Santos’ government in favor of a legacy of peace. The degree to which implementation can be delayed in the run-up to the mid-2017 disarmament deadline may therefore have big effects as the political campaigns begin to ramp up in the second half of the year. The next question is who will run, and how: the current frontrunner in the polls is Vice President Germán Vargas Lleras, whose Radical Change party falls on the center-right, in the space between the center-left that backs the peace and the uribistas on the right. If the center-left were to gel together, they might be able to pick up a legislative majority, but the question is whether the current leading center-left candidate, peace negotiator Humberto de la Calle, will have the popular support needed to take the presidency. Meanwhile, although none of the uribista candidates are currently polling strongly, it is possible that this could be an election decided in the second round of voting. Much will depend on the peace deal’s success in coming months. Mexico’s electoral season will be dominated by a politician from other parts: Donald Trump, whose August visit to the country was seen by many Mexicans as one more in a string of strategic miscalculations by incumbent Peña Nieto. Significant reforms opening the economy have been overshadowed by recrudescent violence, a ham-handed government response to the Ayotzinapa disappearances, and a string of corruption scandals that have diminished the governing party. The PRI was severely punished in the June 2016 gubernatorial elections, and repeated stories of corrupt governors—including some on the lam—have done little to improve its electoral chances. The top running PRI candidate, government secretary Miguel Angel Osorio Chong, currently polls in third place behind the PAN’s top-seeded Margarita Zavala (wife of former President Calderón) and the PRD’s Andres Manuel Lopez Obrador. Lopez Obrador has been seen as the candidate most likely to push back against the new U.S. administration’s efforts to revisit NAFTA and migration issues and, perhaps as a consequence, he has risen to meet Zavala in recent polls. Both far outpace Osorio, suggesting that whoever wins, this election will lead the country away from the PRI. In Brazil, Dilma Rousseff’s impeachment has thrown the political class into disarray. The big question at present is whether her successor, Michel Temer, will survive until the October 2018 vote: he faces an impeachment threat of his own, and his centrist coalition appears to be fraying in the face of a massive set of plea bargains by executives at construction giant Odebrecht. Given the breadth of political corruption exposed by the Car Wash investigation, it is hard to know who will be the last man standing. At present, it looks to be a woman, Senator Marina Silva (Rede), who leads head-to-head simulations of second round voting. Former President Lula, of the Workers’ Party, continues to lead in first round voting projections, but his high levels of rejection mean that Marina Silva could prevail in a second round. The big question in Brazil may be less about the presidential race, though, then about the coalition the new president must pull together to govern effectively in 2019. The judicial phase of the Car Wash investigations is unlikely to proceed quickly enough to remove scandal-ridden legislators from office by 2018, and the intricacies of Brazilian electoral law mean that voters may not do much better at throwing the bums out, however much they may wish to do so. There is at least the prospect, then, that an electorate desirous of change may elect a relative outsider such as Marina Silva as president, only to find that she is forced to govern with the same old crowd that has caused such upheaval in the first place. Finally, Venezuela, where elections are—in theory, at least—scheduled for December 2018. The profound economic and political crisis means that it is not even clear at this juncture whether elections will happen, much less who the candidates might be. The opposition Democratic Unity Roundtable (MUD) has dominated the National Assembly since 2015, but its efforts to impose a recall referendum have so far been sidetracked by a skillful set of dodges and parries by Hugo Chavez’s successor, President Maduro. Most recently, Maduro appears to have used Vatican-sponsored talks to delay any real discussion of a recall until January of next year, thereby ensuring that even if a recall were to take place, the PSUV would continue to govern.  Given unprecedented levels of popular discontent and the depth of the crisis, however, it is hard to envision a scenario in which Maduro survives as a viable candidate for the 2018 election, or continues in office beyond 2018 with any kind of popular mandate. Venezuela is in uncharted waters. [1] Brazil, Mexico, Colombia, Venezuela, Chile, Ecuador, Costa Rica, Paraguay, and Honduras.

This morning, I had the pleasure of joining Tom Keene on Bloomberg Surveillance to discuss Venezuela, Brazil, Cuba, and China’s increasing opportunities in Latin America. You can watch the two clips of our conversation here and here.

[This post was co-authored with John Polga-Hecimovich*. It is the third of a series that begins with this post.] The collapse in Venezuela has many potential costs: democratic regression in Latin America; destabilization of neighboring countries, including, potentially, the fragile peace process in Colombia; the possibility of a significant migrant crisis; rising violence, corruption, and criminality; and threats to hemispheric energy security. A mix of frustration with President Nicolás Maduro’s recent moves and apprehension about the potential outcomes of the crisis has led to a frantic search for alternatives, none of which seems particularly likely to be effective on its own. The paucity of alternatives suggests that the best the international community may be able to hope for is to isolate the regime, demonstrate to moderates within the regime that there are costs to sticking with Maduro, and make efforts to ameliorate the worst humanitarian consequences of the crisis. Taking Advantage of Latin American Leverage In recent years, U.S. policymakers have tried to encourage South American nations to take the lead on regional matters, recognizing that the region may be better positioned to foment meaningful dialogue and consensus than the United States, especially given the checkered past of U.S. interventions in Latin America and lingering local sensitivities about U.S. involvement. But Latin America has been slow to recognize the deterioration of the Chavista regime into an authoritarian state. Chavismo’s determined but patient degradation of checks and balances over the course of seventeen years; the huge revenues available to influence regional friends; the ideological affinities between Hugo Chávez, Nicolás Maduro, and regional leaders; and the government effort to present at least a façade of comity have helped dilute regional opposition to the regime. But this tolerance is slowly changing, not least because of the deepening crisis and shifting ideological winds in South America. At the level of regional bodies, three initiatives are underway. Mercosur has taken an increasingly firm stand against Maduro. During June and July, the new Brazilian administration joined Argentina and Paraguay to overcome Uruguayan resistance and suspend Venezuela from the Mercosur presidency. It also gave Venezuela until early December to meet conditions for accession that it had never met since joining the grouping in 2012. In effect, this signaled Venezuela’s impending expulsion, given that there was never much chance that Venezuela would meet the economic requirements imposed by the bloc. But a lack of consensus meant that Mercosur did not invoke the “democratic clause” that allows the trade grouping to suspend any member who fails to guarantee basic democratic rights. The four original Mercosur members will undertake discussions on the democratic clause on the sidelines of the Ibero-American Summit in Cartagena on October 28 and 29. Such a move to call out Maduro for his authoritarianism would be a significant symbolic rebuke, after years of close ties between the four original Mercosur nations and Chavismo, and it would increase the Venezuelan government’s international isolation. But it would do little to change the internal calculus that keeps Maduro in power, and the sanctions it imposes—suspension from the trade group—will have little practical effect on the Maduro administration in light of Venezuela’s already tenuous claim to membership. A major downside is that such a move might also complicate a more energetic effort to push humanitarian aid, such as medicines and medical relief, which Maduro would be unlikely to accept from the United States, and which Latin America is unlikely to offer if Brazil and Argentina do not lead the push. A second initiative is underway in the Organization of American States (OAS), whose Secretary General Luis Almagro is one of Latin America’s most passionate critics of the Maduro regime’s restrictions of political and civil rights. But Almagro leads a fractured organization, and it will be an uphill climb to the two-thirds support needed to invoke the OAS’ Democratic Charter suspending Venezuela from membership. It is telling that even a joint communique from the organization condemning last week’s events obtained only twelve signatories. Most importantly, of the silent countries, seventeen are members of Petrocaribe, who have benefited from considerable oil subsidies from Chávez and Maduro and remain net debtors to Venezuela. There may be room to split some of these nations from their support for Maduro, but the United States itself had until recently been reluctant to invoke the Democratic Charter, for fear of destabilizing ongoing talks by U.S. officials in Caracas. So it may take a while to gear up new efforts in this regard. Finally, the Union of South American Nations (UNASUR) has been playing a complex role. Of the three organizations, UNASUR under Secretary General Ernesto Samper is the most ideologically aligned with Maduro, and therefore may offer the best prospect for bringing him into dialogue. But this also raises suspicions among the Venezuelan opposition. UNASUR earlier this year created a special commission of former national leaders José Luis Rodríguez Zapatero (Spain), Martín Torrijos (Panama), and Leonel Fernández (Dominican Republic), who visited Caracas several times beginning in May to stimulate dialogue in the run-up to the expected recall vote. But these efforts paid few dividends, and some observers, including Almagro himself, have suggested that the UNASUR mission was a calculated ploy designed to slow the recall. After a hastily arranged visit with Maduro, reportedly requested by Samper, Pope Francis on Monday offered his good offices to “avoid an escalation of violence.” Talks sponsored by the Vatican and UNASUR are to begin on Venezuela’s Isla Margarita on Sunday, October 30. But almost immediately after the announcement, it became clear that not all members of the opposition Democratic Unity Roundtable (MUD) coalition were aware that talks were being discussed, raising concerns that this might be yet another stalling action by Maduro. The repeated use of such talks by the Maduro regime to delay progress or defuse opposition mobilization has left many MUD members skeptical of the value of trying to negotiate with the regime. Washington’s Toolkit There are not many good levers available to the U.S. government as it works to ameliorate the crisis. The best option available to Washington seems to be a combination of dialogue, continued work within regional bodies to pry away votes for the Maduro regime, targeted sanctions, and planning for post-crisis reconstruction. Talks between the Maduro regime and the U.S. government have been underway, most notably during a high-profile visit by Undersecretary of State Thomas Shannon to Caracas in June. Such talks have not shown many public results, but they are important to defuse the worst paranoid rhetoric out of the Maduro regime, to keep open a channel for dialogue, and to demonstrate to the region the willingness of the United States to contribute to a negotiated solution. It may be difficult to find the ten or so additional votes needed to invoke the OAS Democratic Charter, but patient efforts to sway Caribbean nations from their support of the Chavista regime may begin to pay off as the regime’s ability to invest in petrodiplomacy falters. Vice President Biden signaled the wedge that the Obama administration hopes to drive in a January speech to Caribbean leaders, noting that “no country should be able to use natural resources as a tool of coercion against any other country.” Meanwhile, the important repudiation of the regime by previously supportive governments in South America may yet contribute to a broader shift in Caribbean sentiment. The United States has already implemented targeted sanctions against members of the regime: Obama’s Executive Order 13692 in 2015 led to sanctions against seven senior officials. There was broad outrage in Venezuela and throughout Latin America against the order, not least because it labeled Venezuela as a national security threat (U.S. law requires such a determination before sanctions can be imposed). Maduro was able to use the order as a cudgel against the opposition, and he has promoted some of those who have been sanctioned or indicted in the United States. Yet narrowly targeted sanctions, announced publicly so as to send a clear signal, may be more effective today than they were even in the recent past, given the depth of the crisis. Sanctions against individuals—such as permanent visa restrictions and Office of Foreign Assets Control (OFAC) determinations—underline to Maduro’s moderate allies that they must be careful in how far they go in their support of a wobbling strongman. Individually targeted sanctions also send a message to regional governments about the worst players in the Maduro coalition, including embezzlers, cocaine traffickers, and abusers of human rights. So too do efforts to pursue Venezuelans abroad, like Maduro’s nephews in Haiti or the failed effort to nab a former intelligence chief in Aruba. Strategically targeted sanctions may contribute to breaking apart two coalitions: domestic supporters of Maduro’s regime, and the coalition of Latin nations that is stymying international efforts against that regime. Finally, the depth of the crisis suggests that there must be a significant international effort to design humanitarian aid and financial reconstruction. On the humanitarian side, as a recent Human Rights Watch report makes wrenchingly clear, Venezuela is facing one of the most horrific self-inflicted humanitarian disasters ever seen in Latin America. Although Latin American nations (led perhaps, by Brazil’s much-vaunted peacekeepers?) may be better able to orchestrate the delivery of humanitarian aid, the United States is uniquely positioned to provide the scarce medicines and equipment that will be needed to put Venezuela on a steadier footing. With regard to financial reconstruction, as CFR’s Robert Kahn has noted, the depth of the crisis in Venezuela means that returning the country to long-term solvency will be a massive project for international financial institutions. Proactive planning is needed to structure a financial reconstruction plan, as well as to engage with Venezuela’s biggest creditor, China, to ensure the plan’s credibility. The U.S. government must also think hard about what political conditions it will require on the ground before it lent its backing to such a significant financial support package. The good news is that the U.S. government already is engaged on many of these fronts. The bad news, unfortunately, is that none of these policies seem likely to bring quick relief to the Venezuelan people. *John Polga-Hecimovich is an Assistant Professor of Political Science at the U.S. Naval Academy. His research interests include comparative institutions of Latin America, especially the executive and the bureaucracy, as well as presidential instability. He has published peer-reviewed articles in The Journal of Politics, Political Research Quarterly, Electoral Studies, Party Politics, Latin American Politics and Society, and others, and conducted fieldwork in Venezuela, Ecuador, and Brazil. His Twitter handle is @jpolga. Disclaimer: The views expressed in this blog post are solely those of the authors and do not represent the views of or endorsement by the United States Naval Academy, the Department of the Navy, the Department of Defense, or the United States government.