The Venezuelan Quagmire
| Editor’s Note: Thanks to a bout of the flu, today’s Oil & Energy Investor column is one that appeared back in January, when the first rumblings of an opposing leader in Venezuela were showing up. Seven months later, the economic crisis is accelerating, if possible, even faster; the battle between Juan Guaido and Nicolas Maduro is at a stalemate; and the people are suffering. Let’s go back and see where this all started… |
As the collapse in Venezuela continues to accelerate, I can only come to one clear conclusion: The U.S. cannot do anything of consequence without making the situation there worse.
In a span of a few hours, Juan Guaido, the head of the country’s National Assembly, declared himself temporary president and demanded new elections…
The U.S. recognized him…
And current sitting president Nicolas Maduro cut relations with Washington, giving U.S. diplomatic personnel 72 hours to leave the country.
The result? Rioting and deaths in the streets are now appearing throughout the country.
Now, Maduro has had a long-standing feud with the U.S.
His winning of a highly suspect reelection followed by an attempt to replace the legislature with a body acceding to his will brought threats of American reprisals.
Meanwhile, as I have discussed here in Oil & Energy Investor for more than a year, as the Venezuelan economy imploded, civil unrest intensified.
The unknown factor at this juncture is which way the army will move.
It has supported Maduro in the past, but there has been a noticeable rift among some of the officer corps. This is a huge wildcard given the traditional position the military holds in both Venezuela and the region when it comes to settling political unrest.
The crisis is rapidly expanding.
This morning, Germany came out in favor of Guaido; Cuba sided (as expected) with Maduro; Spain is holding an emergency ad hoc meeting at the fringe of the annual economic summit in Davos, Switzerland; and Russia officially warned the U.S. against intervening militarily.
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