Military option to Venezuela crisis gains ground

A confluence of interests is fueling the controversial idea of a US-led military intervention in Venezuela, exposing the Opec country's weakened national oil industry to the risk of an abrupt shutdown.

Venezuela's swelling diaspora, especially the wave of prominent exiles from the 1990s and early 2000s, is pressing the US administration to lead a campaign to topple Venezuela's autocratic government of Nicolas Maduro. They argue that widespread starvation, sickness and repression compel the international community to act.

Following a high-profile visit to Colombia´s border with Venezuela last week, Organization of American States (OAS) secretary general Luis Almagro said diplomatic efforts should be exhausted but no options should be discarded in the cause of addressing Venezuela´s humanitarian crisis. "Our message is not one of violence but was and still is to stop the violence….To accept the dictatorship's refusal to accept essential humanitarian aid for the people of Venezuela is not in compliance with international humanitarian law, it is a violation of that law," said Almagro, citing the lack of international action to stop genocides in Rwanda and Cambodia.

Among the first to espouse military action was Harvard professor Ricardo Hausmann, who served as Venezuelan planning minister in the rocky 1992-93 period when rebellious paratrooper and later President Hugo Chavez tried to overthrow the elected government. "A negotiated political transition remains the preferred option, but military intervention by a coalition of regional forces may be the only way to end a man-made famine threatening millions of lives," Hausmann wrote in January 2018.

That same month Venezuelan paramilitaries allegedly killed mutinous elite policeman Oscar Perez, dashing hopes among the fractured political opposition for a military coup from the middle ranks. Corrupt senior ranks have long been dismissed as a viable agent of change, and indoctrinated lower ranks are seen as too hungry or scared to act.

Advocates of an attack from abroad argue that targeted US, EU and Canadian sanctions, and US financial sanctions, have hurt Maduro and his inner circle, but not enough to drive them out. And a possible corruption-related US judicial indictment of Maduro would have no teeth without forcing him to face justice abroad.

They have a sympathetic ear from some US government officials. For this camp, a proposed ban on oil sales to or from Venezuela is almost irrelevant because the country's oil industry is already crumbling, and China and Russia would quickly step in to take the US share of Venezuelan supply. But there is still no consensus in Washington over how to contain the Venezuelan problem and the risk it poses of destabilizing the region.

Yet the appeal of armed intervention to Venezuelan exiles concentrated in the key swing state of Florida is not lost on US president Donald Trump's Republican Party ahead of congressional elections in November. Some bondholders looking for payback on billions of dollars in Venezuelan defaults are partial to an offensive as well. "A military takeout of Maduro backed by Trump who is seeking Latin votes in the interim election is becoming more likely," one conservative financial advisor close to bondholders told Argus.

Creditors representing more than $190bn in Venezuelan external debt would want a comprehensive restructuring if Maduro is ousted. They argue that the oil industry can be resuscitated and harnessed to bring in aid as debts are worked out as part of a broad reconstruction that would tackle the debt more fairly than individual enforcement strategies, embodied by ConocoPhillips' liens on PdV assets in the Dutch Caribbean and Crystallex's attachment of shares in the indirect parent of PdV's US refining unit Citgo.

For advocates of armed action, airstrikes would be spearheaded by the Pentagon and backed by regional allies led by Colombia, which has borne the brunt of the refugee crisis. Colombia's US-backed military is battle-hardened by decades of internal conflict with leftist guerrillas and drug-traffickers that are routinely harbored by Venezuela, bolstering the Colombian case for action. New President Ivan Duque, heir to hawkish former President Alvaro Uribe, is more vocal than his predecessor Juan Manuel Santos in denouncing Maduro.

Most other Latin countries oppose military action. Although many are also struggling to control the migrant flow, some face restive political strains at home that remain partial to Chavismo. And they point to Washington´s mixed legacy of meddling in the region.

In a 15 September declaration issued by the ad hoc Lima Group focused on Venezuela, 10 countries including Brazil, Chile, Mexico, Peru and Argentina called for a "peaceful and negotiated" settlement of the Venezuelan crisis, expressing "their concern and rejection of any course of action or declaration that implies a military intervention or the exercise of violence, the threat or use of force in Venezuela." Colombia conspicuously did not sign. Neither did Panama.

Colombian foreign minister Carlos Holmes Trujillo is traveling to Geneva, Brussels and Madrid this week, part of Bogota´s campaign for international support to address the crisis.

Recent incursions by Venezuela's military into Colombian territory seem designed to provoke an attack by its historic regional rival. Whatever reluctance Colombia may have toward military action could be cancelled out by Washington´s threat of decertifying its efforts to crack down on illicit drugs, a move that would imply aid reduction.

Opponents say military strikes would only nurture Maduro´s siege narrative inherited from Cuba, the ideological inspiration of Venezuela´s ruinous Bolivarian experiment. Havana remains Venezuela´s chief political sponsor, earning some 50,000 b/d of free oil in exchange for its support and guidance.

Detractors point to the risk of sparking a civil war with huge civilian casualties, more refugees, spillover effects and the potential takeover by a more radical figure such as constituent assembly president Diosdado Cabello or industry minister Tareck El Aissaimi. And China and Russia, which have substantial interests in Venezuela´s oil industry and outstanding oil-backed loans to Caracas, would immediately reject any effort to change the regime.