Venezuela after Chavez

by Ambassador (ret.) Patrick Duddy

I was in Sao Paulo, Brazil with a group of Duke University business students when the local media carried the news that Venezuelan President Hugo Chavez had died.  By the time I got back to my laptop in the hotel I had already received nearly a dozen media queries.  Over the next several weeks I would speak to the New York Times, BBC, NPR, the Brazilian newspapers Folha and O Globo, Argentina’s La Nacion and Cronista, Bloomberg News, Deutsche Welle, the Washington Diplomat and others.  While I was in Brazil with my students, I begged off invitations to appear on a range of television news programs, explaining that I was a continent away, but managed to knockout an op-ed for CNN’s Global Public Square website. The media wanted to know what anyone who had a role in the Chavez story thought about his passing. They were contacting me because I was the last Senate confirmed U.S. ambassador to Venezuela and had been expelled by President Chavez in an epithet filled tirade on national television.  As it happens, I wasn’t in Venezuela when I was supposedly thrown out.  Because my wife was about to have surgery in Washington, I was with her.  I didn’t return to Caracas for nine months and my return, when it happened, was precedent setting.  I was, as nearly as anyone at the State Department could discover, the first U.S. ambassador ever to return to the same country in the same capacity, accredited to the same government after having been declared persona non grata.

By and large, the press mostly focused on three questions with me.  What was my reaction to Chavez’s death? Did I know acting President Nicolas Maduro? And, what were the chances that U.S. –Venezuelan relations would improve now that the Comandante had been called to a higher service.  Because I had initially served as ambassador for President Bush and, after being expelled in 2008, had returned to Caracas in 2009 as President Obama’s ambassador, some media added a fourth question.  How did the Obama administration’s approach to the Chavez government differ from the Bush approach? Answering three of the four questions was easy.

My first thought on hearing of Chavez’s death was that his departure would leave an enormous hole in Venezuela’s political landscape.  Chavez had seemed to me the glue that held together not only his own movement but also the rather disparate coalition of new and traditional parties that make up the opposition.  His death, I suspected, would render Chavismo vulnerable at the ballot box and offer an opportunity for the opposition to reset and mount another attempt to win the presidency in the snap election required by the constitution.  An ailing Chavez had won reelection in October of 2012 by a relatively comfortable 10-point margin and his supporters had gone on to sweep 20 of 23 governorships in the gubernatorial elections two months later.  The opposition was disappointed but could take some consolation in their success in uniting a wide range of parties and political movements behind the presidential candidacy of the young governor of the state of Miranda, Henrique Capriles Radonski.  Consequently, Capriles managed a better than respectable showing in the October contest.  At just shy of 45% he had come closer to defeating Chavez than any previous opponent.  With Chavez gone, the challenge for the Chavistas, I knew, would be to mount a national campaign without their standard bearer against Capriles, now a seasoned national campaigner with a reasonably unified base.  While Vice President Maduro had been anointed by Chavez as his chosen successor (in Chavez’s last public appearance before traveling to Cuba to be treated for a recurrence of his cancer), Maduro had never been a candidate in a national campaign.  Furthermore, the United Socialist Party of Venezuela (PSUV), the party founded by Chavez, had never run a campaign for president without Chavez at the top of the ticket. Given Chavez’s blessing and the fact that the election of a successor would have to be held within thirty days, in effect, while Chavez’s supporters were still in mourning, it was clear that Maduro would enjoy a considerable advantage in a compressed campaign. Nevertheless, Capriles looked formidable having just run a strong national race only a few months earlier. Moreover, following his defeat by Chavez he had won reelection as governor of Miranda, defeating one of the highest profile members of Chavez’s inner circle, former Vice President Elias Jaua who now serves as Foreign Minister.

I first met Nicolas Maduro years before I became ambassador when he and two other Venezuelan legislators attended a meeting of international parliamentarians in southern Brazil.  I was consul general in Sao Paulo at the time and had been asked by our ambassador to accompany a U.S. congressman attending the event.  His critics frequently deride Maduro as a former bus driver.  In fact, he was once a bus driver and union leader but that was some time ago.  When I met him he was already a legislator. By the time of Chavez’s death he had served as foreign minister for more than six years and as vice president, another appointed position, for several months.  During the final two months of Chavez’s life, Maduro had, in fact, been the head of a caretaker administration.  As ambassador I had met with Maduro from time to time both before my expulsion and after my return. In private he did not seem particularly ideological or even particularly hostile despite the fact that most of our meetings had occurred when the Venezuelans summoned me, as they did periodically, to complain about various perceived grievances.  Publicly, on the other hand, Maduro was invariably as adamantly, as obstreperously anti-American as his president, sometimes more so.

U.S. -Venezuelan relations were at close to their lowest ebb when Chavez died. Before I left Caracas in 2010, the Obama administration had announced the nomination of Ambassador Larry Palmer to succeed me. A couple of months before my scheduled end of tour, Maduro had personally informed me that the government would grant Ambassador Palmer agrement.  Their decision to do so without stringing out the process had, in fact, surprised some of us in the embassy.  I took it as a sign that there might be a little space for improving relations once the new ambassador arrived.  At the time, I thought even a slight improvement would be welcome.  Chavez never received me after my return to the country and the Chavistas had several times orchestrated protests against me when I traveled outside the capitol.  Interestingly, a senior official had said to me on my first return to the Ministry of Foreign Affairs that my expulsion had been “nothing personal.” (I had understood that but I was not reassured by this confirmation.)  As it happened, my optimism for Ambassador Palmer’s tenure was short lived.  On the pretext that Palmer had made some “unacceptable” comments in answering questions connected to his confirmation hearing, the Venezuelans revoked agrement.  We have not had a Senate confirmed ambassador in Caracas since my departure.  (We have had several first rate chargés d’affaires.)

Once Chavez departed for surgery in Cuba he was not seen again in public.  Because he had acknowledged before he left that his cancer had recurred for the second time, speculation that he was dying or dead was rampant.  A concomitant to that speculation was curiosity about whether Chavismo could survive without Chavez and whether a Maduro government would be interested in mending relations with the U.S.  The U.S. had long been and is still Venezuela’s largest trading partner, buying some 40% of all of the oil Venezuela exports, usually around 800,000 plus barrels per day.  Moreover, the significance of those exports is greater than the percentage suggests.  Venezuela’s exports to Cuba, estimated at around 100,000 barrels/day, are sold at a discount and paid for in large part through barter arrangements for technical assistance rather than cash. Exports to Venezuela’s PetroCaribe partners come with concessionary financing for up 40% of the cost.  And, finally, a portion of all of Venezuela’s growing oil sales to China is used to amortize Venezuelan debt. Bottom line: of Venezuela’s major trading partners, only the U.S. is paying full price.  As oil accounts for over 95% of Venezuela’s export earnings and export earnings reportedly account for 50% of the government budget, this means that the U.S. contribution to Venezuela’s finances is of fundamental importance.  Total two-way trade between the countries topped 55 billion dollars in 2012.  Nevertheless, Chavez had made confrontation with the United States a defining feature of his foreign policy.

The very day of Chavez’s death those of us looking for a clue as to the direction in which Maduro would seek to move the bilateral relationship were sent a clear message.  Maduro announced the expulsion of two U.S. military attaches for allegedly trying to foment trouble in the armed forces.  The expulsions turned out to be an accurate predictor of what was to come during the abbreviated presidential campaign to select a permanent successor to President Chavez and since.  The campaign itself was extraordinary by any measure, especially Maduro’s, often characterized by outside observers as something out of South America’s literary tradition of magical realism. Against a backdrop of videos of the departed Chavez and recordings of his speeches, Maduro ran not just as Chavez’s political heir but, as he put it, his political son (“hijo”), invoking Chavez’s name hundreds of times a day.  At one point, he claimed that Chavez had appeared to him in the form a small bird as he prayed in a small rural chapel.  On several occasions he insinuated that some foreign power – clearly implying the United States — had somehow infected Chavez with the cancer that killed him.  He accused dark reactionary elements within Venezuela but also in the United States of plotting first to kill his opponent and, later, him.  By the end of the campaign, even many Chavista loyalists clearly had doubts.  An advantage that reliable pollsters had estimated at more than 15 percentage points all but disappeared in just six weeks.  Nevertheless, on the evening of April 14, the National Electoral Council in Venezuela announced that Maduro had squeaked out a win by a margin of around 1 ½ %.   The opposition refused to concede and has since challenged the outcome in the courts claiming that there were more than three thousand complaints of irregularities, which if proven, could invalidate Maduro’s victory and necessitate a new election. (A decision favoring the opposition by either the electoral council other supreme court, both overwhelming dominated by Chavez appointees, is highly unlikely.)

Since the election, bilateral relations with the U.S. have become, if possible, more bitter.  During the campaign, a U.S. assistant secretary expressed hope for a free, fair transparent election.  The Venezuelans complained that this was proof positive the U.S. was seeking to intervene in Venezuela’s political process.  Later, when it was clear that the opposition was not conceding and Maduro himself indicated he would have no objection to a recount, the U.S. government suggested that a recount would help to dispel any doubt that the will of the Venezuelan people had been accurately reflected in the announced outcome.   Maduro and his allies expressed outrage.  Maduro claimed the United States “does not respect Venezuela” and his foreign minister even asserted that Venezuela would take reciprocal measures if the U.S. attempted to sanction Venezuela.  Furthermore, Maduro announced that he had personally ordered the arrest of a young American filmmaker, claiming he was a U.S. spy trying to incite violence and destabilize the country, a charge President Obama himself dismissed as “ridiculous.”

Shortly after the April 14 election and Maduro’s investiture as president, the foreign ministry announced that former Chavista legislator Calixto Ortega would be heading to Washington to become Venezuela’s new chargé d’affaires. Ortega had been a part of what was once known as “The Boston Group” which was founded in 2000 to try to promote improved understanding between Venezuelan legislators and their U.S. congressional counterparts.  I was one of many who thought naming Ortega to head Venezuela’s bilateral mission in Washington was, at least potentially, a positive development. Unfortunately, Ortega himself has said the most recent dust-up between the Maduro and Obama administration has short-circuited, for now, any effort to improve the atmosphere between the two countries.  (As of this date the U.S. continues to support a recount to resolve outstanding doubts and, noting the post-election clashes in Venezuela between government supporters and the opposition, and has urged all parties to refrain from violence.)

So, where do things stand? Relations between the governments of the U.S. and Venezuela are toxic but we continue to have a very robust trade relationship. The importance of that trade relationship to the two countries, however, is very different.  Although Venezuela is still the fourth largest foreign supplier of crude to the U.S., Venezuela’s importance to the United States has been declining as U.S. production has increased and other suppliers, especially Canada, have increased production.   Venezuela, on the other hand, continues to depend heavily on sales to the U.S. notwithstanding on-going efforts to develop other markets, especially China.  Estimates of Venezuela’s reserves have been periodically revised upward in recent years and OPEC now says that Venezuela has the largest proven conventional reserves in the world.  Venezuelan production, however, has never recovered from a general strike early in the new century.  Overall, the economy is a mess.  Inflation has been over 20% annually for most of the last four years. Blackouts and brownouts are common and electricity rationing is periodically imposed to relieve stress on a neglected national power grid.  Shortages of basic staples are widespread. And the country has become a net importer of food.  Violent crime is rampant.

In such circumstances, would the Chavistas risk making the bilateral relationship worse? It is hard to imagine but probably not impossible.  That said, for the foreseeable future, Venezuela will depend on oil receipts from the U.S. to keep the ship of state afloat. Until other markets are able to absorb a greater percentage of Venezuela’s heavy, sulfuric oil and pay full price or Venezuela’s production increases substantially, Venezuela will continue to sell to the U.S.  Just as importantly, we will likely continue to buy what they produce.  Might the relationship improve? Those who have faith in the power of common interests believe it is possible.  Moreover, during my tenure as ambassador, both the Bush administration and the Obama administration have emphasized that the U.S. would like to have a more productive, a more functional relationship with Venezuela.  I think this will be tough to achieve with a Chavista government.  Anti-Americanism is a core tenet of Chavez’s Bolivarian movement.  Tensions may ease from time to time but, as we have seen since Chavez’s death, but the antipathy of the Chavistas toward the U.S. is deeply established and never entirely absent.

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