Caracas Chronicles

Luiz Lula da Silva may have dropped his biggest rebuke yet against Nicolás Maduro. After the latter spoke of a bloodbath if Edmundo González was to win power, the Brazilian responded that “when you lose, you go home and get ready to run in another election.”

The other leftist neighbor, Gustavo Petro, has reportedly been drafting a peace agreement for the election’s aftermath. At least eight other Latin American governments are calling for a serious vote and an end to political repression. And on Sunday and the coming months, the U.S. will put to test its complex negotiation process with Maduro.

The Venezuelan issue extends far beyond a contest between democracy and authoritarianism, at least for multiple states and commercial interests afar and nearby. As election week unfolds, what are international camps actually wishing for?

Camp #1: The Middlemen

Lula and Petro are probably the most high-profile regional leaders to have promoted a minimally competitive contest. Both Edmundo González and María Corina Machado have admitted to being in contact with their camp on a few occasions. The Brazilian first showed concern with Venezuelan electoral affairs when the regime raised the temperature with the Esequibo dispute, and said with a nervous chuckle that the farcical December referendum would yield the results that Maduro wants.

Lula slashed Maduro after the CNE prevented Corina Yoris from running, a move that Petro deemed an “antidemocratic blow.” A month later, Lula gladly welcomed the registration of González after his government and Petro’s pressed Caracas to accept a legitimate opposition candidate.

Petro has been a sort of brainstorming wildcard in this context. An old friend of Hugo Chávez, he promoted a negotiation restart in Bogota after the Mexico talks between Jorge Rodríguez and the Blyde-led delegation collapsed. Since then, he’s been busy with his eventful tenure at the Nariño Palace, but he found time to pitch transitional justice mechanisms for Venezuela with Lula’s backing —notably the inclusion of a “guarantees-for-all” plebiscite.

Brazil is closely monitoring the election. Lula will send two technical observers. Celso Amorim (Lula’s Chief Foreign Policy Advisor) and Jake Sullivan (Biden’s National Security Advisor) discussed Venezuela on Thursday, though neither have criticized the rising electoral violence against opposition supporters since the campaign began. 

On Friday, Lula said he’s only bothered with state-to-state relations and wouldn’t personalize relations with Venezuela (or Argentina and Nicaragua) based on who the elected president is. His statement marks a departure from the unconditional affection that Lula once showed for Chavez and other Pink Tide comrades. 

Venezuela’s authoritarian regression under Maduro—and the diplomatic crisis and exodus that ensued—has tarnished the progressive credibility of Lula and Petro, two former allies of the Bolivarian Revolution. Petro needs a stable and trustworthy counterpart in Caracas that can reduce migration and broker a peace deal with the National Liberation Army (ELN). Lula wants to solve a neighboring conflict that he largely ignored in its inception, and to vindicate Brazil as a reliable regional power.

The MUD card’s survival just days away from D-Day seems to be strongly linked with their involvement, but we’ll likely need to wait until election night to see their next back-door intervention.

Brazil and Colombia have a serious interest in Venezuela’s all-round recovery, but a proactive actor from the Persian Gulf also stepped in as a mediator. Qatar, a U.S. ally that has grown closer to the Rodríguez siblings, provided safe space for negotiations between Maduro and Biden representatives that produced the Barbados Agreement. It will also be interesting to see whether the Al Thani royals will take part in renewed talks between the State Department and Miraflores on the eve of July 28 and the days that follow. 

Camp #2: The Gringos and Europeans

For a decade, the Americans have called the shots of Western policy regarding Venezuela. Having gone from non-involvement to economic isolation, the White House drastically changed its stance by negotiating with Miraflores under Joe Biden. Everything seems to suggest that the Americans are exhausted from trying to oust Maduro and want to bring Caracas back into the fold. To do so, they gave Maduro important concessions this year (a six-month sanctions waiver, many licenses for Western energy companies, and CITGO’s extended protection) with the hopes of achieving “free and fair” elections.

The U.S. is not too optimistic about the prospects of a democratic transition. Washington insiders are skeptical that PSUV will accept defeat and reinvent itself. Officials also worry that an entrenched Maduro (once again) would land the Democratic Party another international blow before facing Trump in November. They may also feel uneasy about Machado.

For the first time in many years, the opposition’s leader acts independently and keeps her distance from the American agenda. The good-old Maria Corina would have loathed the release of Alex Saab and sanctions relief for Maduro. Instead, she hasn’t been outspoken in that regard, understanding that some of these carrots have kept her in the campaign trail and González Urrutia in the race.

Departing from the maximum pressure strategy allowed the Biden administration to better align itself with the views of the European Union. Josep Borrell, the EU’s top diplomat, once admitted that recognizing Juan Guaidó was a mistake, but the Europeans’ only practical option in January 2019 was to join the bandwagon. Incentives started to align well in 2021: Russia’s invasion of Ukraine disrupted global energy supplies, and Western companies increased pressure to return to Venezuela. 

In the past three years, corporate interests have been both a means and an end of this flexible approach. While allowing the operation of U.S. and European companies on Venezuelan soil has been useful to get small concessions from the regime, it is clear that they have driven important efforts to de-escalate a political conflict that would increase Venezuela’s country risk—an ongoing crisis that may still force the hand of the international community to take measures they’ve been trying to avoid.

The existence of a corporate block accompanying foreign policy right now should not be overlooked or underestimated—the cornerstone of the return of talks between the U.S. and Venezuela was Chevron. There are foreign companies partnering the Venezuelan government in joint ventures, oil service providers with years in the country, and groups looking to maintain stability in the region—like the folks drilling in Guyana. Then you have different groups of creditors: some that just want to recover something from the aftermath of Hugo Chávez’s expropriation policies, and others who want to cash in or redeem investments in Venezuelan bonds. In consequence, there are important resources put towards reducing Venezuela’s risk factor.

The Americans would have a hard time managing Maduro’s (potential) survival by force after this period of engagement. The Biden administration may be planning to keep an ambiguous tone over regime recognition in that scenario, and to see what happens between August and January 2025. In the long term, CITGO could be handed to the Delaware auction winners and Western companies will continue lobbying for oil and gas licenses. 

A second coming of Donald Trump (who may criminalize migrants more than ever) may actually accelerate an unscrupulous rapprochement with Maduro under the premise that the U.S. needs more drilling and Venezuela needs a stable economy that dissuades thugs from leaving the country. People like Harry Sargeant III—an influential Republican fundraiser and seasoned contractor of the US military apparatus—have been trading asphalt with PDVSA this year and will probably be keen on more business opportunities.

Camp #3: The Eastern Pals

While the foreign policy of Chávez was a gateway for the likes of China, Russia and Iran in the region, Maduro has relied on them for regime survival and recognition in the Global South. Between 2003 and 2010, Venezuela was the second-largest recipient of Chinese investment in the region, behind only Brazil. By 2013, Venezuela had received at least $50 billion in loans from the Dragon, mainly through its opaque Chinese Funds. Since Chávez’s death and with the dilapidation of Venezuelan finances, Chinese lenders became reluctant and Maduro has received almost no investment from China.

Sino-Venezuelan relations are currently centered on debt repayment, with Venezuela still owing China about $10 billion according to Reuters. As the world’s largest energy consumer, China would benefit from enhanced oil production in Venezuela and the opportunity to purchase its crude without the threat of secondary U.S. sanctions.

Xi Jinping is a conservative, business-driven leader that probably prefers to avoid having his interests compromised by an unpredictable democratic transition, despite the incompetence of Maduro. Beyond the upcoming elections, China may be betting on a stable Maduro government that honors its debt obligations (ideally with Western economic concessions) and protects China’s participation in the Mining Arc and Special Economic Zones.

The position of India—another huge energy consumer, able to refine volumes of heavy crude—isn’t too different. Trade with India became harsh at the peak of Trump’s maximum pressure. However, the Tiger has become an important ally of Maduro in recent years. The state-owned ONGC has lobbied the Biden administration for a license for some time, and Jindal Power recently struck deals for oil extraction and to operate Venezuela’s largest iron ore complex. Modi would hardly flinch to recognize a lenient business partner and fellow autocrat like Maduro.

The same goes for Putin and the Ayatollahs. Both have helped to keep Maduro afloat while benefiting from the struggles of a competitor like PDVSA. Relations with Iran and Russia have been a spiral of anti-imperial humbug, unmaterialized projects and grand corruption. For them, an isolated Maduro that relies on other pariahs for trade and status—and welcomes Moscow and Teheran’s geopolitical influence— is excellent news.

In the event of Maduro’s survival and a return of sanctions, trade relations with Russia and Iran can re-emerge from the shadows. As the 2019-2020 saga showed, Russian subsidiaries are experienced (though not infallible) traders of PDVSA’s crude, and Iran can help Maduro deal with fuel shortages. But as we saw with the El-Aissami payment schemes, billions will be lost again if those risky businesses resume.

Maduro hopes that Russia will help Venezuela join BRICS+ in August if he survives July 28, an unlikely landmark for a dismal economy like ours. While Turkey, another beneficiary of Venezuela’s destructive gold rush, wouldn’t mind an entrenched Maduro either. Erdogan also resisted the Kemalists’ presidential push in 2023 in similar conditions.

Camp #4: The Neighbors 

From across the border, Guyana and its people—along with Brazil, the U.K. and the U.S.—see Maduro’s bellicose rhetoric and military buildup with deep concern. The Guyanese would be happy to see Maduro leave, but that scenario could prompt him to re-escalate tensions to press for concessions from foreign actors, or even prevent a handover. Influential actors like ExxonMobil, who partly operates in disputed waters, and now Chevron, who expects to acquire a stake in the crown jewel of Guyanese oil, will be vigilant of Maduro’s next moves over the Esequibo. 

Deeper into the region, a great number of Latin American countries are prepared to support a democratization process that can slow migration and its chronic side effects. 

Even among the other left-wing folks, the level of recognition that Maduro could receive is not clear. The regime has signaled that it needs Bolivia’s support on July 28. Venezuela’s Foreign Ministry recently backed Arce after the failed coup in La Paz. Arce may follow the lead of Lula and Petro. In Mexico, AMLO’s mediation was a start, but the talks didn’t produce meaningful results before the U.S. and Qatar directly intervened. The fickle and detached López Obrador now claims that he “isn’t well informed” about the presidential vote. However, president-elect Claudia Sheinbaum has an opportunity to publicly boost the peacemaking momentum of Lula and Petro.

Panama’s new leader has repeatedly called Maduro to “respect the will of the people.” President Mulino recently shut three crossings in the Darién Gap, and hopes that Maduro’s defeat can reduce the number of people reaching the jungle. Chile would also welcome González Urrutia’s victory and bilateral cooperation over migration and security.

While Boric has been very critical of Maduro in the past, he’s had to remain quiet since the recent killing of Venezuelan dissident Ronald Ojeda, an Army lieutenant that escaped prison and fled to Santiago in 2018. Tarek William Saab holds that Ojeda’s killing was a false flag operation and blamed Chilean intelligence officials. And Argentina’s current government is openly hostile against Maduro and a close ally of Machado.

At least in our neighborhood, Maduro won’t find many happy faces if he manages to rule another term.