Mark Carney's Speech and Latin America

Canadian Prime Minister Mark Carney's speech at Davos is all about autonomy and fits exactly with my own argument with regard to Latin America.

[M]any countries are drawing the same conclusions that they must develop greater strategic autonomy, in energy, food, critical minerals, in finance and supply chains.

...

Allies will diversify to hedge against uncertainty.

They'll buy insurance, increase options in order to rebuild sovereignty – sovereignty that was once grounded in rules, but will increasingly be anchored in the ability to withstand pressure.

...

We are calibrating our relationships, so their depth reflects our values, and we're prioritizing broad engagement to maximize our influence, given and given the fluidity of the world at the moment, the risks that this poses and the stakes for what comes next.

...

The past few days, we've concluded new strategic partnerships with China and Qatar. We're negotiating free trade pacts with India, ASEAN, Thailand, Philippines and Mercosur.

...

[T]he middle powers must act together, because if we're not at the table, we're on the menu.

This is all exactly right and Latin America has been doing it since the 1990s, with acceleration once the first Trump administration demonstrated the United States could not longer be relied upon. Note the "past few days" comment. In the first year of this second term, governments are working overtime to forge new partnerships.

The United States remains extremely powerful and is always a partner, but just not to the same extent that it used to be. Governments have to hedge, they just have no choice, especially when tariffs are announced based on person dislike. Those tariffs might never materialize, and often don't, but plenty of times they do.

Watch for more trade and investment announcements. They'll be coming for sure.

Read more...

Colombia and China

In the midst of all the "Donroe Doctrine" hype I am staying focused on how Latin America maintains and deepens ties with extrahemispheric countries, which would supposedly violate the doctrine. For example, Colombia is deepening technology ties with China with a ministerial visit, following up on Gustavo Petro's visit last year. This includes connectivity, data infrastructure, and AI, plus satellites.

China's relationship with Latin America is embedded within countless contracts and agreements. Chinese and Colombian companies are working together--this isn't just talk between two governments. And it's necessary when the United States is openly an unreliable partner and reneges on agreements. Latin America has no choice but to play the field and at this point they've been doing it for a long time.

Read more...

Five (Problematic) Assumptions We're Making in Venezuela

There's a really good piece in Foreign Affairs by a former Bush administration who was in Iraq right after the invasion. She points to mistakes that need to be avoided in Venezuela. Go read that but I want to turn it on its head a bit and lay out what assumptions the Trump administration is making that seem fine in this honeymoon period but need to be watched carefully.

1. Venezuelans don't care about having control of oil. This assumption seems core and it contradicts the entire political history of Venezuela, no matter what political party you're talking about. But it also raises the question of what Venezuelans do as it sinks in that the United States has no interest in their well-being and only wants oil.

2. Venezuelan bureaucracies will work just fine. There is no well-functioning civil service. In its place is a highly politicized institutions that control distribution of just about everything.

3. The threat of U.S. force will prevent criminal groups from operating. I don't think there's much historical precedent for this anywhere.

4. Venezuelans don't mind the dictatorship continuing. Venezuelans hate this government and the repression it unleashes daily. How that translates into behavior isn't clear.

5. The dictatorship is a bloc that will be fine with change. The point O'Sullivan makes in the article is that if drug trafficking and other illicit activity drove allegiance then that will evaporate if the goodies stop flowing. Then you end up with chaos.

We're in the honeymoon period and the article shows how similar optimism on similar points prevailed in the early days of Iraq. There's oil and all we need to do is harness that--we get rid of the leader and the country will start running itself effectively. Right?

Read more...

Contradictions in Venezuela Policy

 There are some apparent contradictions, or at least dilemmas, that litter the current situation in Venezuela.

1. Venezuelan in the U.S. want the option to go home but fear they won't be allowed back into the United States (this was a point that came up in the Global Americans webinar today). U.S. immigration policy currently works against stability.

2. Donald Trump says that U.S. oil executives will get on board but the State Department also says Americans should get out of Venezuela.

3. The administration wants to restore the oil industry without a political transition, but the oil industry needs transition to make it work.

4. The administration wants to reduce China's influence in Venezuela and elsewhere but the dismantling of USAID and tariffs make that almost impossible.

5. There is a mixed message when the Trump administration talks a lot about protecting Iranian protesters but nothing when Venezuelans continue to be attacked.

It's mind blowing that the invasion occurred 10 days ago and virtually nothing of consequence has changed on the ground. It doesn't matter to Venezuelans who lack freedoms whether Nicolás Maduro of Delcy Rodríguez is the leader.

Read more...

U.S. Framework for Venezuela

Marco Rubio has said that the U.S. has a three-point plan for Venezuela. The country is completely controlled by the United States but "it will be up to the Venezuelan people to transform their country.”

1. Stabilization of the country. This basically means keeping the dictatorship in place while the U.S. sorts out the oil to prevent chaos. That will somehow enrich both the U.S. and the average Venezuelan. There aren't details.

2. Recovery. This means sorting out the oil, which in turn means selling it. To what countries and how is not stated. There aren't details.

3. Transition. This political and has zero details. When does it end? No one knows.

Rubio also said, "This is not just winging it" even though this is textbook winging it. It has the feel of a cocktail napkin plan that took no more than 15 minutes to develop.

Donald Trump talked extensively about the grab operation itself, which involved months of planning, but clearly there wasn't much thought given to the aftermath, except that María Corina Machado, who has the Nobel Peace Prize that Trump openly covets, was to be excluded and the dictatorship maintained. 

At least at the moment, there is a lot of talk but nothing has changed except the leadership. The Venezuelan people are being attacked by their own government, all U.S. sanctions remain in place, and oil tankers are being taken without any sense of what happens to them.

Read more...

China After the Venezuela Invasion

There are, and will continue to be, fairly breathless analyses about the U.S. invasion of Venezuela has thwarted Chinese ambitions in Latin America. Or wording to that effect. But be careful with broad pronouncements.

Case in point: Argentina. China and Argentina have had mutually beneficial economic relations for a long time. Javier Milei, who is gushingly pro-Trump, just said in an interview that "I’m not going to break the trade links with China." This is the problem with so many takes on China--they assume it's ideological when it's not.

Latin America has been playing the field for several decades now and the Venezuela invasion won't suddenly change that. It's not just China, but rather the whole world. Latin America has strong trade and investment ties all over.

Things change daily, but for now I expect Latin American leaders to mostly stay quiet, stay off Trump's radar, and continue doing business. Since the U.S. has proved itself an unreliable partner, increasingly that business is spread out.

Read more...

What Does It Mean for Cuba to be "Next"?

Donald Trump recently said that "“Cuba looks like it is ready to fall." But what does that mean? I don't really know and I have a sense he doesn't either. Here are possibilities:

1. There is a popular uprising that overthrows the regime. This is not likely given the tight control the government has on the population. There is no sign of it happening, at least.

2. Economic collapse leads to democratic transition. Things are bad right now. As I and others have argued plenty of times, the Special Period was disastrous and Fidel Castro held on. Economic deprivation alone does not cause regime change. So it's possible but not likely.

3. Economic collapse leads to Miguel Díaz-Canel resigning and someone more willing to work with the U.S. takes his place. This one would not involve democratic transition. Low likelihood but not impossible.

4. Economic collapse leads to chaos. If even security forces are deprived enough to form their own criminal bands that could even threaten the government, then you end up with a Haiti-type scenario. I suppose this is possible but would be very protracted.

5. U.S. "Snatch and Grab" like Venezuela. In this scenario, the U.S. grabs Miguel Díaz-Canel and chooses a pliable government figure to run the country in a way the U.S. prefers. Possible but not likely. I don't think the Cuban government is as porous as Venezuela's, but I guess you never know. Cuba's entire political framework is built on independence from the U.S. so it would be crazy to see. Plus, I am guessing Cuban security forces are better prepared than Venezuela's to protect the president.

6. Full U.S. invasion. This might be least likely since it's not popular in the U.S. and would face significant resistance in Cuba.

Estimating likelihood is really difficult in any situation but even tougher with Cuba. The Cuban revolution has hung on through invasion attempts, blockades, sanctions, loss of its main patron, economic crashes, you name it. So it's hard to envision how such a thing changes. But low likelihood still means it can happen!

Read more...

Venezuela Invasion FAQs

Here are some FAQs I put together as a way to clarify my own thoughts on the rapidly changing situation in Venezuela. They are not exhaustive and some may well change as they are overtaken by events.

1. Is it legal to grab a head of state out of their country?

    --No, and that's problematic, but international law is routinely ignored by powerful countries.

2. Did Venezuela steal U.S. oil and property?

    --No. The 1976 nationalization was uncontroversial and the 2000s expropriation by Hugo Chávez was being repaid until U.S. sanctions basically made continued payment impossible, at least temporarily.

3. Is Nicolás Maduro guilty of the crimes alleged by the U.S. government?

    --He was definitely part of a web of narcotics trafficking and corruption but the U.S. government must prove his direct involvement. For example, the Venezuelan government certainly connected to the FARC and ELN in Colombia, but was it Maduro himself? How well can we distinguish Maduro from "the regime"? He is guilty of many things but it's on the U.S. government to prove these specific charges. All that said, I can't see any scenario that doesn't involve conviction of at least some of the charges.

4. Was Maduro elected freely?

    --No. Over time he increasingly had to use fraud to win elections and in July 2024 it was egregious. He was a dictator.

5. Is Venezuela a major source of drugs in the U.S.?

    --No. Cocaine trafficking is aimed more at Latin America and Europe. Fentanyl doesn't come from Venezuela at all.

6.. Should we compare the Venezuela invasion to the 1989 Panama invasion?

    --Use care. Superficially, both involved a president indicted for drug trafficking who is grabbed and taken to court in the U.S. But Panama is small and heavily dependent on the U.S., with strong ties to the U.S (Manuel Noriega was a U.S. ally for years). Plus, the U.S. sent troops, who stayed about five weeks.

7. Did the U.S. remove the Venezuelan government?

    --No. Maduro is gone but everything else is intact. Venezuelan security is still on the streets. There is no sign yet that repression is decreasing. Venezuela remains a dictatorship.

8. Who is María Corina Machado and why didn't the U.S. name her president?

    --She is the opposition leader who was prohibited from running in the 2024 presidential election. There was another candidate (Edmundo González) but she is the face of the opposition. She is popular but putting her in power would certainly require U.S. troops, which so far the Trump administration has not been willing to commit.

9. Is Delcy Rodríguez very different from Maduro?

    --She is seen as more pragmatic. What that means in practice is not clear, especially without U.S. troops on the ground. She is a long-time regime member and is deeply implicated in all its abuses. She is a dictator.

10. Should we expect a democratic transition in Venezuela?

    --This is unclear. Given his statements, Trump has little to no interest in democratization and he has referred to a possible future transition but it remains vague.

11. Why won't the Trump administration commit occupying troops?

    --Almost certainly because of domestic political opinion. His core supporters claim to oppose this exact type of military action.

12. How should we expect Russia and China to respond?

    --The message is that you can do what you want in your sphere of influence, your "backyard." That message is not new but it's reinforced.

13. Can the Venezuelan oil industry be fixed quickly?

    --Almost certainly not. There is significant disrepair.

14. What does this mean for Cuba?

    --Both Trump and Rubio have indicated Cuba might be next. How this would work is unclear because the Cuban military is far superior to Venezuela's and so an attack will be riskier and less certain. Cuba will definitely be hit hard by being shut out of Venezuelan oil, though during the so-called Special Period of the early to mid-1990s its economy suffered terribly after the fall of the Soviet Union but the regime held on. It is very clear that Marco Rubio's ultimate goal is Cuba more than Venezuela.

Read more...

Viceroyalty Office in Venezuela

The Trump administration is working toward reopening the U.S. Embassy in Venezuela. This is worth paying attention to. There are no U.S. troops in Venezuela, or if they're there secretly they certainly do not constitute an occupying force. Imposition of U.S. will by remote control is going to be tricky and around the world, the embassy (and the ambassador) have been at the center of political control. Orders come from the ambassador.

As Ambassador Early Smith once said of Fulgencio Batista in Cuba:

    Whenever I asked President Batista for Cuba's vote to support the United States in the United Nations,        he would instruct his Foreign Minister to have the Cuban delegation vote in accordance with the United     States delegation and to give full support to the American delegation at the United Nations.

This is the sort of enterprise that takes time. There has been no ambassador since 2010 and no staff since 2019. But it is also the sort of enterprise that can be done quickly if you force it on the country and don't care about things going smoothly for a while.

Read more...

U.S. Remote Control by Kidnap in Venezuela

Things are happening and changing at a rapid pace but right at the moment we seem to be heading toward a redux of the 1901 Platt Amendment, buy which the U.S. controlled Cuba and gave itself the right to intervene if it didn't like what Cuban presidents were doing. As with Cuba, control over natural resources was a big part of it (sugar versus oil).

A huge difference is that Trump does not want to occupy the country so it will be remote control, with the idea that if the Venezuelan president (currently Delcy Rodriguez) does not follow orders, then she will be kidnapped. And Marco Rubio has said the same might apply in the future to Cuba. The notion of controlling via kidnap is a new low, I'd say, in a policy of lows. Rubio has noted some of the U.S. demands--kick out the ELN, Hezbollah, Iran, Cuba, don't traffic in drugs--though they're not exactly easy to measure when no U.S. troops are even on the ground. What "compliance" means is either secret or the administration hasn't bothered to specify.

What happens now? I won't even both trying to guess. The Maduro regime has been all about self-preservation rather than chavismo for quite some time but will they bend the knee to the U.S., which was Hugo Chavez's original enemy?

Read more...

Maduro and the Art of the Deal

I get the strong sense that Nicolas Maduro is trying to speak to Donald Trump in his own language. He is now basically saying he's ready to make a deal. Does Trump want oil? Then let's talk oil. You concerned about drug trafficking? Let's work together on it!

Can this work? I don't know! But Maduro has every reason to give it a try. It's notable that he is not using insults the way he sometimes has in the past, which was definitely Hugo Chavez's thing. He knows his position is vulnerable and that Trump has a very thin skin so he is staying careful. He knows Trump really does not want to invade but also needs to proclaim victory somehow and he wants to figure out how to do that and remain in power.

Meanwhile, he is intentionally remaining mum on the CIA attack on Venezuela, which remains totally shrouded in mystery. Vaguely we know it was a drone but given the lack of evidence I have to wonder what it actually did. This is all so strange.

Read more...

Did the U.S. Attack Venezuela?

Here's a scenario I hadn't thought about. Donald Trump announced that he launched an attack on Venezuela, which "knocked out" a "big plant or big facility" which is "where the ships come from." The twist is that no one--in either the Venezuelan or U.S. governments--confirms this. An attack on Venezuelan soil would be a big deal and would mark serious escalation. Pretending to do so without actually doing it is a liminal area that won't provide much benefit.

If there was a major attack, we would expect someone seeing it or at least hearing about it, at which point it would make its way to social media one way or the other. That said, the Venezuelan government has been brutally repressing dissent in the face of possible invasion so it's not inconceivable that it put a lid on it. I am not sure why it would want to, however, since it would be a PR boost to show victimhood. Get a nationalist boost, etc.

This has been a strange non-invasion and it's not getting less strange.

Read more...

Can An Oil Quarantine Work Against Venezuela?

There is a tanker that the U.S. Coast Guard has been following and wants to board. The problem is that if a ship refuses then the U.S. actually does not have a lot of team trained to do it. So for now they're just following it and waiting for the team.

That immediately raises the question of how effective a quarantine can be if the ships know they can keep going. If there are enough out there then they can't board them all. On the other hand, will ship captains want to keep taking the risk? Perhaps that's just a matter of money.

It also raises the questions of what happens when either mistakes and unplanned escalation bring in another country, even China. I don't think this necessarily leads to war but it can certainly weaken the U.S. position and require concessions.

Lastly, every ship that's boarded carries the risk of a U.S. soldier dying. U.S. policy toward Venezuela is already not terribly popular. Right now, I think most Americans don't perceive a problem with activities that don't involve U.S. soldiers in direct combat. Once they are involved and become casualties then everything will change.

Read more...

Peaceful Transition in Venezuela?

I love intelligent arguments that go against conventional wisdom. So I recommend Mark Feierstein's take that the transition in Venezuela could be peaceful. Feierstein is an extremely experienced Latin American expert who worked in the Obama administration. He doesn't claim it's certain or easy, but that it's more possible than people might think.

Conventional wisdom holds that Venezuela is deeply polarized, the military complicit and entrenched, and organized crime rampant such that a power vacuum will foster violence. To that point, here is what I think is the trickiest part:

A stable transition depends, therefore, on the military’s willingness to accept civilian, democratic rule and confront irregular forces, including those with which it has previously collaborated.

 

Feierstein notes that military leaders have been approached about some kind of amnesty. It would have to be extensive. He does not mention Cuba's role in intelligence and the military, and to what degree their influence would be a problem. Many in the military will lose a lot and be unhappy about it.

Militaries are also deeply nationalist. No one in the military can be happy with the Trump administration saying that Venezuela "stole" oil and land from the United States. Ceding power now also has a whiff of accepting the very imperialism that Hugo Chávez fought against.

If Trump's threats (though how many times can you say "I am not ruling out war" before you're ignored?) and intercepting oil tankers lead the military to accept transition and Marina Corina Machado takes power without violence, the president really will merit that FIFA peace prize.

Read more...