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Events are unfolding at dizzying speed in Venezuela, as opposition leader Juan Guaid贸 has declared himself interim president, defying Nicol谩s Maduro and winning recognition from Washington and most neighboring countries. Meanwhile, Russia and China remain opposed to a democratic transition. Three 浪花直播 Center programs convened a Ground Truth Briefing on the situation and its great-power implications, featuring Caracas-based Fellow Michael Penfold.

Summary and Quotes

Cynthia Arnson

"Nicolas Maduro maintains the resolute support of Russia, China, Cuba, Turkey, and others. These countries differ in their objectives and interests, but together have provided billions of dollars in loans to the Venezuelan government and to PdVSA. In the case of China, close to $60 billion. Russia has provided billions in arms, and Cuba has provided brutally effective intelligence support.鈥�

Michael Penfold

• 鈥淢aduro completely underestimated the situation that he was stepping in when he decided to get sworn in despite the fact that the elections were considered illegitimate; and he overestimated, too, his capacities to deal with the current situation鈥� (5:31). He underestimated:
  • The ability of the opposition to consolidate under the new leadership of interim president Juan Guaid贸, who now enjoys 80 percent support;
  • The extent of the increase in international pressure that he would face;
  • His own inability to get chavismo to rally around him, given that people are very tired of the social and economic crisis;
  • The impact of hyperinflation, which will reach 10 million percent this year, on popular sectors, which has resulted in heightened protests. (8:42)
• 鈥淚鈥檝e never seen a democratic transition that is being crafted around a National Assembly鈥hat鈥檚 a very distinct element and one that has also allowed the international community to recognize Guaid贸, because at the end Guaid贸 is the reflection of the only democratic and legitimate institution left in the country.鈥� (9:47)
• Key factors going forward:

  • The top military brass are so far still loyal, but they are not acting in the same way as before.  The use of the special police, the FAES, as opposed to the military, indicates that the role of the armed forces is changing. (10:29)

  • Time is an important factor and it is not clear that it will work against the opposition.  The combined effect of sanctions is 鈥渢remendous.鈥� 12:31)

  • There needs to be a 鈥渧ery clear landing place.鈥� 鈥淕uaid贸 has done a tremendous job鈥� so far with the offer of amnesty, but other elements need to be added.  (14:53)  The offer of amnesty is not sufficient to break the loyalty of the armed forces, as 鈥渢he military is a very special and strange institution鈥oday it鈥檚 more than an institution, it鈥檚 really a corporation,鈥� with control of oil, mining, state enterprises, and the illegal trade. (48:05)

Maxim Trudolyubov

• 鈥淲hat Moscow is saying is that this is an attempt of a regime change initiated by the United States and Moscow, as a principled player/actor in the world, has to intervene鈥� (19:52)
  • For Putin, Venezuela is part of a bigger picture, part of a long story told to the Russian public and through state and social media, of the United States overturning regimes that are friendly to Russia, as in Ukraine.  Moscow projects itself as 鈥渁 white knight who comes to the rescue.鈥� (26:00) (19:10)
• Russia鈥檚 relationship with Venezuela dates back to the early years of Hugo Ch谩vez. There are interests of the state-owned oil company Rosneft, joint ventures, and loans estimated at $17 billion over the last ten or fifteen years.  (20:17)
• The scope of Moscow鈥檚 policies and ability to interfere is limited. (22:52)
• 鈥淢oscow apparently is helping Venezuela to get cash by selling some of Venezuela鈥檚 gold reserves that apparently have travelled to Moscow on two planes. Moscow apparently will try to help Venezuela get some cash against this gold in the UAE鈥�.This is almost a big spy story thriller. Any military intervention of any kind I think is ruled out. It鈥檚 a very distant place from Moscow鈥檚 view point.鈥� (23:17)

Stephen Kaplan

• China鈥檚 strategy is more defensive that Russia, aimed at protecting its financial commitments.   (26:57). There is a tendency to group both countries together, but they are pursuing different goals.
  • Whereas the narrative of Russia鈥檚 relationship is ideological, China鈥檚 is commercial, even though China also upholds the principle of non-intervention.

鈥淐hina had provided more than $50 billion to the Venezuelan government,鈥� which at one point accounted for 64 percent of China鈥檚 new loans to Latin America and accounted for more than half of Venezuela鈥檚 external financing. (29:39)

• 鈥淐hina is caught in a creditor trap鈥� in which it mispriced risk.  This is different than the debt trap decried by the United States.  China is now playing a nuanced and defensive game to mitigate risk. 
• China鈥檚 lending has gone through distinct phases.  When Venezuela was already behind in its payments to China, the country asked for a debt moratorium in 2016.  From 2016-18, Venezuela has only been paying interest on its debt to China.

鈥淭he fact that China is trying to protect its investments means it鈥檚 hedging both financially and politically.鈥�  (35:59)

• China courted opposition leaders during the 2012 presidential election and the 2015 assembly elections.
• This suggests that China may be more open to negotiations with Guaid贸 and the opposition.  Guaid贸 has specifically reached out to China, which has more scope to negotiate than does Russia.