Venezuela’s President hopes a deal with the United States will open the floodgates to foreign investment, create jobs and alleviate poverty for his country, which is in the throes of a crippling economic crisis.
Seated on a gilded Louis XVI chair in his office at Miraflores, a sprawling, neo-Baroque palace in northwest Caracas, Venezuelan President Nicolas Maduro projects unflappable confidence.
The country, he says in an 85-minute interview with Bloomberg Television, has broken free of “irrational, extremist, cruel” U.S. oppression. Russia, China, Iran and Cuba are allies, his domestic opposition is impotent. If Venezuela suffers from a bad image, it’s because of a well-funded campaign to demonize him and his socialist government.
The bombast is predictable. But in between his denunciations of Yankee imperialism, Maduro, who’s been allowing dollars to circulate and private enterprise to flourish, is making a public plea and aiming it directly at Joe Biden. The message: It’s time for a deal.
Venezuela, home to the world’s largest oil reserves, is starved for capital and desperate to regain access to global debt and commodity markets after two decades of anti-capitalist transformation and four years of crippling U.S. sanctions. The country is in default, its infrastructure crumbling and life for millions a struggle for survival.
“If Venezuela can’t produce oil and sell it, can’t produce and sell its gold, can’t produce and sell its bauxite, can’t produce iron, etcetera, and can’t earn revenue in the international market, how is it supposed to pay the holders of Venezuelan bonds?” Maduro, 58, says, his palms upturned in appeal. “This world has to change. This situation has to change.”
In fact, much has changed since Donald Trump put the sanctions on Caracas and recognized opposition leader Juan Guaido as president. His explicit goal, to drive Maduro from office, failed. Today, Guaido is marginalized, Venezuelans are suffering more than ever and Maduro remains firmly in power. “I’m here in this presidential palace!” he notes.
There has, however, been little of the one thing urgently needed to end the Western Hemisphere’s worst humanitarian disaster: compromise — from Maduro, from his opposition, from Washington.
Maduro hopes a deal to relieve the sanctions will open the floodgates to foreign investment, create jobs and reduce misery. It might even assure his legacy as the torchbearer of Chavismo, Venezuela’s peculiar brand of left-wing nationalism.
“Venezuela is going to become the land of opportunities,” he says. “I’m inviting U.S. investors so they don’t get left behind.”
Over the past few months, Democrats including Gregory Meeks, the House Foreign Affairs Committee chairman, Representative Jim McGovern and Senator Chris Murphy, have argued that the U.S. should reconsider its policy. Maduro, who these days rarely leaves Miraflores or the military base where he sleeps, has been waiting for a sign that the Biden administration is ready to negotiate.
“There hasn’t been a single positive sign,” he says. “None.”
A sudden turnabout seems unlikely. With broad support from Congress, the Trump administration cited Venezuela for human-rights violations, rigged elections, drug-trafficking, corruption and currency manipulation. The sanctions it placed on Maduro, his wife, dozens of officials and state-owned companies remain in place. While Biden’s policy of restoring democracy with “free and fair elections” is notably different from Trump’s, the U.S. still considers Guaido Venezuela’s rightful leader.
Maduro has been giving a bit of ground. In recent weeks, he moved six executives — five of them U.S. citizens — from prison to house arrest, gave the political opposition two of five seats on the council responsible for national elections and allowed the World Food Program to enter the country.
Although Maduro is seeking better relations with Washington, he has built close ties with Russia, Iran and China
The opposition, while fragmented, is talking about participating in the next round of elections in November. Norway is trying to facilitate talks between the two sides. Henrique Capriles, a key leader who lost to Maduro in the 2013 presidential vote, says it’s time for winner-take-all politics to end.
“There are people on Maduro’s side who also have noticed that the existential conflict isn’t good for their positions, because there’s no way the country is going to recover economically,” he says, taking time out from a visit to the impoverished Valles del Tuy region outside Caracas. “I imagine the government is under heavy internal pressure.”
Venezuela’s economy was already a shambles by the time Maduro took office. His predecessor, Hugo Chavez, overspent wildly and created huge inefficiencies with a byzantine program of price controls, subsidies and the nationalization of hundreds of companies.
“When Chavez came into power, there were four steps you had to take to export a container of chocolate,” Jorge Redmond, chief executive officer of family-run Chocolates El Rey, explains at his sales office in the Caracas neighborhood of La Urbina. “Today there are 90 steps, and there are 19 ministries involved.”
Once the richest country in South America, Venezuela is now among the poorest. Inflation has been running at about 2,300% a year. By some estimates, the economy has shrunk by 80% in nine years — the deepest depression in modern history.
Signs of decay are everywhere. At the foreign ministry in downtown Caracas, most of the lights are turned off and signs on the bathroom doors say, “No Water.” Employees at the central bank bring their own toilet paper.
Throughout the country, blackouts are daily occurrences. In Caracas, the subway barely works and gangs rule the barrios. Some 5.4 million Venezuelans, a fifth of the population, have fled abroad, causing strains across the continent. The border with Colombia is a lawless no-man’s land. Cuba, of all places, has provided humanitarian aid.
Sanctions on Venezuela date back to the presidency of George W. Bush. In 2017, the Trump administration barred access to U.S. financial markets, and it subsequently banned trading in Venezuelan debt and doing business with the state-owned oil company, Petroleos de Venezuela, or PDVSA.
The offensive was brutally effective, accelerating the economic collapse. Last year, Venezuelan oil production slid to 410,000 barrels a day, the lowest in more than a century. According to the government, 99% of the country’s export revenue has been wiped out.
Juan Guaido during a Bloomberg Television interview in Caracas on June 8
All along, Maduro was working back channels, trying to start negotiations with the U.S. He sent his foreign minister to a meeting at Trump Tower in New York and her brother, then the communications minister, to one in Mexico City.
Maduro says he almost had a one-on-one with Trump himself at the United Nations General Assembly in September 2018. The White House, he recalls, had called to make arrangements, only to break off contact. Maduro blames it on the foreign-policy hawks in Trump’s orbit, many of them in thrall to Venezuelan expats in Florida.
“The pressures were unbearable for him,” he says. “Had we met, history might be different.”
A onetime bus driver and union leader, Maduro has proven the consummate survivor. He defeated rivals to cement control of the United Sociality Party after Chavez died in 2013, withstood attacks in 2018 and 2019, and outlasted Trump.
Guaido, who worked closely with the U.S. campaign to oust Maduro, has been forced to shift strategy from regime change to negotiations.
“I support any effort that delivers a free and fair election,” Guaido says in his makeshift offices in Eastern Caracas, surrounded by unofficial, state-by-state counts of Covid-19 cases. “Venezuela is worn out, not just the democratic alternative but the dictatorship, the whole country.”
If Maduro feels the heat, he doesn’t show it. Several times a week, often for as long as 90 minutes, he appears on state TV to blast the “economic blockade” and pledge his servitude to the people’s power. The populist theatrics drive home a carefully scripted narrative: Venezuela’s sovereignty, dignity and right to self-determination are being trampled by the immoral abuse of financial power.
During the interview, Maduro insists he won’t budge if the U.S. continues to hold a proverbial gun to his head. Any demands for changes in domestic policy are “game over.”
“We would turn into a colony, we would turn into a protectorate,” he says. “No country in the world — no country, and even less Venezuela — is willing to kneel down and betray its legacy.”
The reality, as every Venezuelan knows, is Maduro has already been forced to make major concessions. Guided by Vice President Delcy Rodriguez and her adviser, Patricio Rivera, a former Ecuadoran economy minister, he eliminated price controls, pared subsidies, dropped restrictions on imports, allowed the bolivar to float freely against the dollar and created incentives for private investment.
Rural areas continue to suffer, but in Caracas the impact has been dramatic. Customers no longer have to pay with stacks of banknotes and the supermarket aisles, far from being bare, are often piled high.
Maduro even passed a law full of guarantees for private investors.
Henrique Capriles speaks to residents in the Valles del Tuy region of Venezuela on June 8
The reforms are so orthodox, they could be mistaken for an International Monetary Fund stabilization program, hardly the stuff of Chavez’s Bolivarian Revolution. Maduro responds that they’re tools of a “war economy.” Sure, dollarization has been “a useful escape valve” for consumers and businesses, but it and the other reluctant nods to capitalism are temporary.
“Sooner rather than later, the bolivar will once again occupy a strong and preponderant role in the economic and commercial life of the country,” he says.
It wasn’t so long ago that the U.S. saw Venezuela as a strategic ally. Exxon Mobil Corp., ConocoPhillips and Chevron Corp. had major holdings in the country’s oil industry and refineries in Texas and Louisiana were retooled to process heavy crude from the Orinoco Belt. Wealthy Venezuelans traveled to Miami so frequently, they talked about it like a second home.
All that changed when Chavez was elected in 1998. He expropriated billions of dollars in U.S. oil assets and built alliances with socialists in Cuba, Bolivia and Ecuador.
Maduro has gone further, embracing Washington’s most threatening enemies. He describes the relationship with Russia as “extraordinary” and sends a birthday card to Chinese President Xi Jinping. It’s a taunt to Biden: Keep mistreating Venezuela and you’ll be dealing with another Castro, not a leader who still holds out hope for a win-win deal.
Guests at the VIP Lounge at Simon Bolivar International Airport were reminded of Venezuela’s new friendships. Three clocks mounted in a vertical row showed the time in Caracas, Moscow and Beijing.
Asked in the interview what they signify, Maduro replies that the “world of the future is in Asia.” But an idea crosses his mind. Perhaps, he says, there should be clocks for New Delhi, Madrid and New York, too.
The following afternoon, there are indeed six clocks on the lounge wall. In this country, Maduro is still all-powerful. Except for one thing: Like so much else in Venezuela, the clocks don’t work.