Thursday, August 10, 2017

U.S. Leverage in Venezuela

A group of U.S. senators seem not to understand leverage. They are publicly asking Donald Trump not to impose sanctions on the Venezuelan oil industry, arguing (correctly, in my opinion) that such a move would hurt U.S. refiners and would push Venezuela more toward China and Russia.

“There is a market outside of the U.S. to receive the Venezuelan oil,” the senators wrote. “Ultimately, it is in the best interest of the U.S. and the Venezuelan people to maintain our economic ties as leverage for delivering a democratic government back to the people.”

Right now, a chunk of the U.S. economy is dependent on the continued flow of Venezuelan oil. As a result, no U.S. president has seriously contemplated stopping it. That means the economic ties do not generate any leverage. If anything, they do the opposite--Nicolás Maduro and the Constituent Assembly can feel reasonably confident that their actions will not be punished beyond the individual sanctions, which don't have much impact.

The idea that the U.S. could "deliver a democratic government back to the people" is both insulting and incorrect. The U.S. won't have much to do with the solution to the Venezuelan crisis as long as it fails to forge a multilateral solution, which right now it appears not to be doing.


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