Latin America’s Moment

While much attention is rightly focused on Syria and the Middle East, there are a growing number of refugees in the Western Hemisphere. The largest group comes from Central America’s Northern Triangle—Guatemala, El Salvador, and Honduras. For each of the past three years between 300,000 and 450,000 Central Americans have fled north. Of these, between 45,000 and 75,000 are unaccompanied children; another 120,000 to 180,000 families (usually a mother with children); and between 130,000 to 200,000 single adults. These numbers peaked in May and June 2014 when more than 8,000 unaccompanied minors crossed the U.S. border each month. 2016 numbers are again rising, with August inflows higher than ever before. These migrants are fleeing violence (El Salvador, Honduras, and Guatemala are some of the most dangerous nations in the world), poverty, and the economic devastation wrought after three years of record droughts. They are pulled to the United States through personal ties. One study of interviewed minors found 90 percent had a mother or father in the United States. Many of these U.S. residents from Honduras and El Salvador came on temporary protected status (TPS) visas, meaning they can live and work legally in the United States but may not sponsor other family members (including their children). While the overall numbers leaving Central America have been fairly steady, those reaching the U.S. border have fluctuated dramatically. In FY2014, 257,000 were apprehended at the border; this number fell to 149,000 in FY2015. Nearly 200,000 have made it to the southern U.S. border during the first eleven months of FY2016. The differences largely reflect Mexican enforcement and absorption. The Mexican government sent back 167,000 migrants in FY2015, and likely absorbed tens of thousands into its own society. FY2016 numbers look similar so far. Other nationalities are leaving home as well—many headed for the United States. 5,000 Haitians recently showed up at the San Diego-Tijuana border crossing having traveled some 7,000 miles over land from Brazil (part of the 80,000 Haitians who have migrated to Brazil since the 2010 earthquake). In an effort to stop this exodus, the Obama administration effectively ended Haitian access to TPS visas (given after the earthquake), announcing that the 1,000 still at the border now waiting for immigration appointments and any others that come (estimates are that up to 40,000 more are on their way) will be deported back to Haiti. The order was then delayed—but not repealed—in the wake of Hurricane Matthew. Cuban migration has risen dramatically with changes on the island—since 2013 Cubans no longer need government permission to leave—and due to fears that the United States will end the 1966 Cuban Adjustment Act (CCA). Better known as the “wet foot, dry foot” policy, CCA allows Cubans that make it to U.S. soil to immediately receive a visa and access to U.S. services including social security, health care, job training, and even cash transfers. In FY2014, 24,000 Cubans came; FY2015 and FY2016 numbers grew to 43,000 and 47,000 respectively. Many first flew to South American and Central American nations and then began making their way by land north, putting stress on the migrant and refugee services in those nations on their path. These many flows will likely continue and may grow. The Food and Agriculture Organization of the United Nations estimates that 3.5 million Central Americans are in need of humanitarian assistance. Haiti (population 10 million) has been without a recognized government since June (the interim president’s term expired and was not renewed). Hurricane Matthew killed hundreds and left another 350,000 people in desperate need. And the number facing “food insecurity”—already 3.6 million—will surely rise given the decimation of harvests throughout southern Haiti. Venezuela poses a crisis in the making. Outflows have been rising, mostly to Colombia, Spain, and the United States, which has received 10,000 asylum applications in 2016 so far. A recent poll found more than half of Venezuelan voters would leave the country if given the option, following the nearly 2 million that have migrated since Chavez came to power in 1999. If the current economic and political situation implodes, the exodus could quicken dramatically. All told, hundreds of thousands if not millions of individuals and families in the Western Hemisphere could be forced to leave their country. It is hard to see where they will be welcomed.

[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.

[This post was co-authored with John Polga-Hecimovich*] The increasingly dangerous crisis in Venezuela (described in the first post of this series), has been complicated by the political economy of the Chavista regime. Three aspects of the regime as it has evolved under the Nicolás Maduro government are particularly important to understanding where things stand: the policy centrality of the country’s impending debt default; the absence of an adequate exit strategy for many members of the regime; and the central role of the military as a likely guarantor of any solution to the crisis. Venezuela’s sovereign debt is reaching a critical juncture: the country has payments of US$15 billion due by the end of 2017, against foreign reserves of only US$12 billion. Maduro faces an unenviable dilemma: continue to make debt payments and possibly run out of money to finance imports, or default, which could also deepen the government’s cash squeeze by triggering legal action (i.e. bondholder lawsuits) from creditors, limiting even further the foreign exchange inflows the government desperately needs to finance imports of key staples. The regime has so far opted for the first scenario, managing to kick the can down the road by lengthening PDVSA bond maturities through the recent partial swap. If the government defaults, it would be left with three options for financing: reserves (less than US$12 billion), borrowing in bolívares (whose issuance is already creating hyperinflation), or running arrears. None of these options are good. A second major consideration is the degree to which senior government officials and members of the armed forces benefit from their access to power, and would face consequences with a change in the status quo. Many influential members of the regime are suspected of having made small fortunes through arbitrage (raspao) on top of government policies aimed at altering public prices: selling dollars obtained preferentially on the black market; smuggling foodstuffs and other price-controlled goods; and even profiting from high-yield government debt. Government figures themselves have also spoken of more than $20 billion laundered out of the government through outright corruption. Several leading regime figures, including leading military officials (known as the Cartel de los Soles, for the sun-like emblem that decorates general’s uniforms), are known to have profited handsomely from command of drug transit routes from Colombia in the west. Given that these actors face legal prosecution and even international penalties if Chavismo loses power, they are understandably reluctant to see any kind of pacted solution with the opposition—or even engage any meaningful political dialogue. Irregular armed groups, such as the paramilitary colectivos that have played a major role in repressing public protest, would be similarly disinclined to any kind of compromise that might place them in legal jeopardy. Third, and perhaps least recognized by international observers, the military has become an increasingly influential actor within the Maduro regime, and is in many ways a “de facto branch of Chavismo.” Indeed, after his appointment in July 2016 as head of national food distribution and a coordinating chief of staff, Minister of Defense General Vladimir Padrino López has become a co-president of sorts to Maduro. But the military’s role has been building for a long time. Article 328 of Chávez’s 1999 Constitution established that the national armed forces would play a role of “active participation in national development,” and Chávez relied on the force beginning with the national emergency relief and development project, Plan Bolívar 2000, from 1999 to 2001. Chávez politicized the organization beginning with a series of purges and new patterns of regular reassignment after the failed 2002 coup, and he named close senior military officials—both active and retired—to government positions. A large number of cabinet positions, state governorships, and appointments within the state bureaucracy now go to senior officers. Maduro recognizes the enormous power the armed forces wield, as well as their vested interest in maintaining the status quo: he has named officials to cabinet positions, defended and even promoted those hit by foreign indictments, and surrounded himself by senior officers, tying his own destiny to theirs. Given their power and presence in the government, it follows that the armed forces will be the ultimate arbiters of change in the country. Taken together, these three factors mean that a pacted transition in which Chavismo leaves office voluntarily is possible, but increasingly unlikely. Maduro could plausibly reverse policies, and seek to unwind the current mess through significant reforms agreed to with international actors like the International Monetary Fund (IMF), or perhaps China, which holds a third of Venezuela’s outstanding debt. But he seems ideologically unwilling to do so. More importantly, he cannot disavow Chávez’s policies without risking a backlash from Chavistas eager to preserve the ex-president’s legacy, as well as from hardliners like Diosdado Cabello who would stand to lose a great deal from the end of Chavismo. Similarly, a solution in which Maduro steps down in favor of a moderate, like Vice President Aristóbulo Istúriz, seems likely to face internal opposition from the hardliners who have the most to lose. At this point, the options for a constitutional exit are limited. Article 233 of the Constitution stipulates that the president can prematurely leave office or be constitutionally removed via death, resignation, impeachment by the Supreme Court (TSJ), physical or medical incapacity certified by a medical board designated by the TSJ and approved by the National Assembly, abandonment of office as declared by the National Assembly, as well as by recall referendum—but it does not provide for the figure of impeachment by the legislative branch. The opposition’s goal of putting Maduro on trial in the legislative branch is unlikely to be upheld by the courts or respected by the regime. With a defanged National Assembly, packed courts, and a frustrated referendum, Maduro’s resignation may be the opposition’s best, and perhaps only, option. Members of the opposition seem to be calculating that massive street protests will force the government to open up and hold the recall referendum, or prod the military to either take part in negotiations or replace Maduro. A crucial element of this calculus is the hope that the armed forces would balk at violently repressing massive protests, given its role in the 1989 Caracazo (during which as many as 2,000 Venezuelans were killed). This is a brave gamble, not least because the armed forces are not the only armed actors who could be brought in by Maduro or hardliners in his coalition to repress protesters: the National Guard and the colectivos have been very effective in cowing opposition in the past, and as the 2014 protests made clear, the government is not shy about using these actors to violently repress dissent. To summarize, a recall referendum has all but disappeared as an option. Maduro shows no signs of resigning freely. Yet the critical economic situation also suggests that it will be increasingly difficult for Maduro to hold onto power against a restive opposition without resorting to increasingly arbitrary legal maneuvers such as those employed by regime-controlled courts last week, or violent repression of the opposition. The consequence is that the military is now the central player, whether it is as the muscle for an increasingly authoritarian Maduro presidency or as the ultimate arbiter of his removal. With these factors in mind, the next post in this series evaluates the role of the U.S. and the international community in seeking solutions to the crisis. *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.