All carrot, no stick: Biden seeks negotiations with Venezuela’s Maduro and his allies

By Ben Bartenstein and Alex Vasquez on 12/18/2020
Joe Biden and Nicolas Maduro
Joe Biden and Nicolas Maduro

(Bloomberg) --President-elect Joe Biden’s advisers are preparing to negotiate with Nicolas Maduro’s regime in Venezuela in an effort to end the Western Hemisphere’s worst economic and humanitarian crisis, according to three people familiar with the matter.

The Biden administration intends to push for free and fair elections, offering sanctions relief in return, said the people, who requested anonymity because the new team is forming. Maduro’s foreign backers, including Russia, China and Iran, are expected to play a role, as will Cuba, which is keen to improve relations with the U.S.

The president-elect’s team will review existing sanctions to determine where to expand restrictions with the help of international allies and what measures might get lifted if Maduro moves toward the democratic objective, the people said. 

Biden’s advisers have called the Venezuela crisis the biggest diplomatic challenge he’ll face in the Western Hemisphere. More than 5 million people have fled the South American country in recent years, escaping unrelenting economic convulsions punctuated with gang violence, power failures, widespread food shortages and the left-wing government’s hostility to dissent.

Economic Toll

Maduro has signaled an interest in improving relations when Biden takes office, expressing his desire for the new administration to ease sanctions that have crushed the nation’s oil revenue. The Venezuelan economy is expected to contract by one-third in 2020, according to Caracas-based Ecoanalitica.

Domestically, Biden will fulfill his pledge on Temporary Protected Status, which would allow Venezuelans who fled to the U.S. to stay, the people said.

A spokesperson for the Biden-Harris transition declined to comment.

One of the thorniest issues for Biden is how he’ll address opposition leader Juan Guaido’s claim to the presidency. The U.S. and more than 50 countries recognized Guaido as interim leader in early 2019, when he took the helm of the National Assembly, claiming a vacancy in the office of the presidency because Maduro had rigged the May 2018 election.

Despite presiding over the precipitous deterioration of the oil-rich country since succeeding the late President Hugo Chavez in 2013 and efforts over the years to force him out, Maduro remains defiantly in charge. Earlier this month, his loyalists won control of parliament after an opposition boycott. Canada, Colombia, Brazil and the U.S. were among the first to reject the results.

Opposition’s Agenda

In theory, Guaido will lose his seat as head of the Venezuelan National Assembly on Jan. 5. Biden takes office in Washington just two weeks later.

Since late November, the opposition leader’s team has been trying to arrange a call with Biden, without success so far, three people familiar with the efforts said. Guaido and his allies intend to run a dueling assembly, citing their constitutional mandate to stay in office until there’s a free and fair election. Many are in hiding or exile as they face threats to their personal safety.

Guaido’s office declined to comment on the matter.

The Biden administration intends to take its cue from Venezuela’s opposition and what appears to be the national consensus, according to the people with knowledge of the strategy.

That could take time to sort out. Guaido’s popular support has dwindled with the failed attempts to remove Maduro. Even some Guaido allies are reluctant to back an interim presidency indefinitely. At the same time, former presidential candidate Henrique Capriles has criticized Guaido, 37, saying the anti-Maduro movement lacks an effective leader, while Henri Falcon, who ran against Maduro in 2018, lambasted the opposition boycott.

With Guaido fighting to stay relevant in Washington, some of his advisers have floated the lofty goal of “mega elections” next year -- provided conditions are met to safeguard the process -- that would vote in a new president and parliament as well as to hold the gubernatorial races that are already scheduled, according to four people familiar with the discussions.

Negotiated Solution

Previous negotiations between the Maduro regime and government opponents have often backfired on the nation’s opposition, yielding none of their requests and leading to wariness about participating in future talks.

Complicating matters, Trump also warned of a “military option,” even though his advisers didn’t embrace it. In March, the State Department called on both Maduro and Guaido to step aside and allow a transitional government to take power to convene elections. That proposal also failed to break the stalemate.

In his push for sanctions relief, Maduro has an unlikely ally in the U.S. business community. A group of Venezuelan creditors has been lobbying for the Treasury Department to lift its restrictions on trading the country’s bonds, which led the notes to plummet in value. Other executives have their eyes on licenses that would allow them to get a foothold in the world’s largest proven oil reserves.

A more immediate concern is how to facilitate the shipment of humanitarian aid to address a mounting hunger crisis. Maduro has blocked a deal to allow the United Nations food agency into the country because he insisted on controlling distribution. The incoming U.S. government has committed to working with multilateral organizations on humanitarian matters, yet it’s unclear what it will take to break the standoff.

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