The Foreign Service Journal, April 2019

THE FOREIGN SERVICE JOURNAL | APRIL 2019 43 state-run socialism. That Maduro continues with this misguided illusion is hard to fathom, although the support of other strongmen in Turkey, Russia, China and Iran and the millions of dollars he has stolen must give him comfort. China and Russia, who are rapaciously hoovering up Venezuela’s resources in exchange for nontransparent loans, carry some of the present blame by continuing to finance the bankrupt Venezuelan state. The Way Out? So what is the way out? Whether the opposition’s present strategy of installing Juan Guaidó as acting president will work remains to be seen. However, even if it does not, Maduro’s days seem numbered since Venezuela is increasingly cut off from the rest of the world—financially, politically and morally. China only wants resources and will eventually call in its loans; Russia and others mostly want to antagonize the United States; and some of the Latin American holdouts still supporting Maduro should eventually see the light. Those who hope for a military intervention by the United States may be disappointed. The Trump administration might consider doing so if the lives of U.S. diplomats or citizens were threatened. Overall, however, Venezuela has little geopolitical or economic importance for the United States. Having become the world’s largest oil producer through shale oil, the United States no longer needs Venezuela’s piddling production, and politically Venezuela counts little without the oil money to buy opposition to America from desperate ministates in the Carib- bean or elsewhere. Moreover, the U.S. administration knows that previous invasions or U.S.-engineered coups in Latin America have left deep scars and could be used by Maduro to justify his repression. What about the destroyed economy? I ammore hopeful than most. The first move under a new regime should be to peg the worthless bolivar to the dollar to kill hyperinflation. This was done with some success in other struggling Latin American economies such as Panama, El Salvador and Ecuador—the latter under leftist allies of Chavez! While such moves can wipe out the savings of a country’s citizens, in Venezuela those savings evaporated long ago. For example, the rent on my apartment in Caracas is now well below one dollar a month, and it is worth a tenth of its pre-Maduro value. Price stability is the prerequisite for any economic reform. It will not cure everything, but nothing can be cured without it. The second measure should be to reform Venezuela’s hor- rendous business climate. This, too, is simpler than one might suppose, given the legislative vacuum and near total break- down of enforcement of regulations. Countries with far fewer resources than Venezuela have had great success by unshackling Venezuelan President Hugo Chavez with Brazilian President Dilma Rousseff in Brasilia, January 2011. AGÊNCIABRASIL/CCBY3.0BR Venezuela’s President-elect Carlos Andrés Pérez at the annual meeting of the World Economic Forum in Davos in 1989. WORLDECONOMICFORUMFROMCOLOGNY,SWITZERLAND/CCBY-SA2.0