Is Venezuela’s US-Appointed “Interim” President Juan Guaidó On His Way Out?

Gauidó has long outlived his usefulness. Now, he and the “interim” government he fronts are an obstacle in the way of reopening Venezuela’s oil market to US oil majors.

The foreign policy establishment in Washington is in the process of redrawing the lines of its relationship with Venezuela, whose economy it has been trying to systematically destroy for the past seven or eight years, with devastating consequences. In 2019, the Centre for Economic and Policy Research (CEPR) published a report alleging that U.S. sanctions on Venezuela had killed tens of thousands of people by crippling its ability to produce its number-one export commodity, oil, or import basic goods.

Venezuela boasts the largest oil reserves on the planet, estimated at more than 300 billion barrels, as well as 201 trillion cubic feet (Tcf) of proven gas reserves. And the US economy desperately needs to tap new energy sources to cushion the impact of the Biden Administration’s backfiring sanctions on Russia. To that end, Washington is considering loosening sanctions on Venezuela so Chevron Corp and other US oil companies can once again begin pumping oil in the country.

The End of a Painful Farce

The price Washington appears to be willing to pay is the head of Juan Guaidó, the man it helped propel from near-obscurity to become the so-called “interim” president of Venezuela. Of course, when Guaidó proclaimed himself president of Venezuela from a city square in downtown Caracas in January 2019, he had — and still has — zero democratic legitimacy. But that didn’t stop the governments of dozens of countries around the world from recognizing him as Venezuela’s legitimate leader. Ambassadors were appointed in his name, assets were seized (stolen), and military interventions were requested.

As the Argentinean journalist Bruno Sgarzini notes, the story could have been lifted straight out of a Gabriel Garcia Marquez novel. But the saga now appears to be reaching its closing act. Gauidó has long outlived his usefulness, apart from to himself and his entourage. Now, he and the parallel government he fronts are an obstacle in the way of re-normalizing economic relations between the US and Venezuela and reopening Venezuela’s oil market to US oil majors. That is what matters to Washington right now.

For the Maduro government in Caracas, putting an end to the sanctions regime that has crippled Venezuela’s economy is also a priority. During a visit to a petrochemical complex in the north of Venezuela in September, Maduro offered to provide Venezuela’s energy resources to Europe and the US, claiming that a shortage of gas and oil supplies in winter could be “tragic”:

“Now winter is coming in the north, there is a crisis in the supply of gas, oil, a crisis that could be tragic and I say to Europe and to the president of the United States, Joe Biden, Venezuela is here”.

A White House official recently told The Miami Herald that the Biden administration would not interfere if Venezuela’s opposition movement decided to oust Guaidó. “The United States continues to recognize Juan Guaidó as the interim government of Venezuela,” a U.S. national security official said. But if the Venezuelan opposition decides to call an end to the interim government, “it is their decision.”

Roughly translated, Washington is giving Venezuela’s opposition parties permission to cast Gaudó aside, which has not gone down well among Republican senators like Marco Rubio and Ted Cruz. According to two separate reports from Reuters and the Financial Times, three of Venezuela’s four opposition parties are unwilling to back Guaidó’s Washington-selected interim government as of next year. Reuters cited “four people familiar with the matter” while the FT quoted “a senior figure in the opposition alliance.”

Members of the Venezuelan opposition closest to Washington were also excluded from the recent direct negotiations between the White House and Miraflores. Those negotiations have produced important advances including a prisoner swap between the two countries as well as a slight relaxation in the sanctions regime. The Biden Administration has also called for a resumption in talks in Mexico between Venezuela’s government and opposition aimed at resolving the country’s political crisis.

Again, it’s a sign that Guaidó’s interim government is increasingly being sidelined by Washington. A spokesman for Guaido recently said there was no clear position among the opposition parties about the continuation of the interim government. But his own “ambassador” to Washington, Carlos Vecchio, appeared to contradict that argument by stating in a recent televised interview that he felt more like an exile than an ambassador.

This drew a furious riposte from award-winning Venezuelan journalist in exile Patricia Poleo, who is certainly no friend of the Maduro government:

“In reality, Vecchio was never an ambassador. He made money and took advantage of the power Donald Trump gave him. This we need to make crystal clear: It was the government of Donald Trump that did all of this. He put all of them there. He gave his blessing… But [Vecchio] was never an ambassador. When the problems began with the Venezuelan migrants (to the United States), many of whom were detained at the border, this guy didn’t lift a finger… This guy never did anything for anybody. Never. And it wasn’t just him. None of Guaidó’s ambassadors did.”

Who knows how much money was squandered on keeping this farce going or how many Venezuelans living oversees suffered as a consequence? Much of that money came from the seizure of Venezuelan assets abroad, including its gold in the Bank of England vaults.

A Failed Open-Source Operation

The White House, together with Venezuelan opposition parties and the OAS, designed the Guaidó soft-coup as an open source operation — one that could unite disparate groups, including other national governments, around a single unifying goal: to remove Maduro. And that operation has failed spectacularly. Maduro’s government is, if anything, in a stronger position today than it was in January 2019.

But the experiment has had huge social and economic costs. The Guaidó political sideshow went hand in hand with ratcheting sanctions designed to make Venezuela’s economy, already locked in a hyper-inflationary spiral, scream. And scream it most certainly did, as Gregory Wilpert and Joe Sammut relate for the blog Venezuela Analysis:

The US government added [Venezuela’s state-owned oil company] PdVSA to the list of sanctioned entities in January 2019. These oil sanctions imposed by the Trump administration amounted to a trade embargo, cutting Venezuela off from its largest market (the United States received 35.6 percent of Venezuela’s exports in 2018). Even worse, the US government used the threat of secondary sanctions against other countries to cut off other oil markets, as well as access to credit. With this, as well as the effects of the 2017 FinCen letter and financial sanctions, the noose was tightened, cutting off Venezuela, not just from the United States, but also internationally…

Even worse, recognition of the Guaidó “government” would make Guaidó “the legal owner of funds or goods owned by the Venezuelan government.” According to Weisbrot and Sachs, this meant the loss of “most of the government’s $9 billion in reserves that [were] in gold; trade credits worth an estimated $3.4 billion; and CITGO, with estimated net assets of $5.2 billion.” The August 2017 sanctions also cut off some $2.5 billion annually of dividend payments from CITGO to the government. By the same measure, any remaining access to correspondent banks was “mostly wiped out,” which led to a situation where Venezuelans are denied the “necessary credits for importing medicine, food, and other essential goods.” In August of 2019, President Trump’s former National Security Adviser John Bolton upped the ante when he declared:

[O]ne way to summarize this to a business, for example, is: do you want to “do business in Venezuela or do you want to do business with the United States?” And I think for any international corporations, whether they’re US-based, European, wherever they may be … they ought to be asking their management if it’s worth risking for a trickle of income from the illegitimate Maduro government, if it’s worth risking their business in the United States.

The Guaidó experiment is not the first time the Blob has pursued regime change in Venezuela. In 2002, it supported a military coup d’état that ousted Hugo Chávez Frías as president, only for Chávez to be returned to power days later by a popular mobilization of Venezuelans. An article published this April by the Center for Economic Policy Research notes that the coup attempt, while far from novel, was a clear signal of intent.

[It] was the first Latin American coup in the twenty-first century, and showed that the US government would continue to prioritize its perceived geopolitical interests — and those of multinational corporations — in the region over democracy. The US would go on to support coups, and other sorts of undemocratic political transitions, in Haiti (2004), Honduras (2009), Paraguay (2012), Brazil (2016), and Bolivia (2019) — and would show support for attempted coups in Bolivia (2008), Ecuador (2010), and Venezuela (2019). Elements of the 2002 Venezuela coup playbook would also be repeated in many cases.

“More Alone Than Ever”

At the last meeting of the Washington-based Organization of American States (OAS), in early October, a group of left-leaning Latin American states ramped up the pressure on Guaidó by calling a motion to discuss ousting his representation from the organization. The motion only garnered 19 votes in favor, five short of the necessary 24. But crucially, only four out of the 33 members present were willing to vote directly against it while another nine abstained.

According to an article published yesterday in El País, Juan Guaido is “more alone than ever”:

Juan Guadi’s US-backed parallel presidency in Venezuela seems to have its days numbered. The main Venezuelan opposition parties do not want to continue participating in the parallel government with which for the last three years they have tried to isolate and ultimately topple Nicolás Maduro…

Washington has even opened new avenues of dialogue and negotiation with the Chavista government [in Caracas], suggesting it has even ceased to have faith in its own creation…

When Venezuela’s “interim” government was first launched, dozens of national governments recognized Guaído as the legitimate president of Venezuela. They included all member states of the European Union, Canada, Japan, the UK, Australia, Morocco, Brazil, Colombia, Chile and Uruguay — many of the same governments that support unconditionally Volodymyr Zelenskiy’s government in Ukraine as well as sanctions on Russia.

But support for Guaidó has eroded over time. In January 2021, the EU’s 27 states downgraded Guaidó and his fellow opposition members’ status to “privileged interlocutors” for “working towards a democratic future for Venezuela.” Many of the governments in Latin America that supported Guaído’s “interim” government in 2019 have since been voted out of office and replaced by left-wing governments, including, most recently, in Brazil, though Bolsonaro is yet to acknowledge his defeat.

Unsurprisingly, those governments do not support Guaído’s claims to the Venezuelan presidency. A couple of weeks ago, Brazil’s President Elect Luiz Inácio Lula da Silva described Guaído as a non-entity in both Brazil and Venezuela. “It is incredible that the ambassador of Venezuela” in Brazil “is the ambassador designated by Guaidó”, María Teresa Belandria, who “does not represent Venezuela; nor does Guaidó, who is no longer anything in Venezuela.”

A similar message was conveyed by Colombia’s Ambassador to Venezuela, Armando Benedetti, who told the Colombian newspaper Semana: “Juan Guaidó does not exist here or in Venezuela.”

Benedette also confirmed that Monómeros Colombo Venezolanos S.A., the Colombian subsidiary of state-owned Venezuelan petrochemical company, Petroquímica de Venezuela (Pequiven), will pass back into the hands of the Maduro government: “This was made clear from the moment the Gustavo Petro government recognized President Maduro. It belongs to Venezuela, not Juan Guaidó, because Guaidó is nobody.”

But some of Venezuela’s assets still remain in the interim government’s hands, including more than $1 billion of gold parked in the Bank of England’s vaults. Unlike the EU, the UK government continues to formally recognize Guaidó as interim president. After Maduro sued the BoE for access to the bullion, claiming it was required for a Covid-19 relief fund, a London judge reiterated in July that the bullion belongs to Guaidó.

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21 comments

  1. Colonel Smithers

    Thank you, Nick.

    Further to UK recognition of Guaido, the City is mystified. PDVSA was a big client of HSBC. Representations have been made by the highest levels of the bank to Whitehall, but to no avail.

    The Labour Party is equally hopeless. The shadow chancellor, Rachel Reeves, is a former Bank of England and IMF official and buys into neo con and neo liberal policy. She even supported Guaido on the BBC as “he leads the Labour Party’s sister party”, which may explain a lot. When some mischief makers point out to her that Guaido backs Bolsonaro and Trump, she screams something id pol.

  2. Chas

    When the USA drops all sanctions on Venezuela, when the USA uses its influence on the UK to return Venezuela’s gold, when Venezuelan diplomat Alex Saab is freed, when the USA offers Venezuela reparations for all the damage that has been caused, when CITGO has been returned, then that will be the best time for Venezuela to talk to the USA about resuming oil and gas shipments.

    1. Alex Cox

      Excellent points. It’s one thing for the US to drop Greedo. But they and their EU puppets will also have to return that kidnapped diplomat and all the billions which they stole. How likely is that? Trump and Pompeo may have invented Greedo, but the Democrats and the European Union enthusiastically applauded him.

      Meanwhile, despite the sanctions, Maduro’s government has built tens of thousands of low-income housing units, and the country is almost self-sufficient in basic foodstuffs.

  3. DJG, Reality Czar

    Why does so much of this posting seem like a parable? (Ukrainians, read it closely.)

    Why do one’s “Ukraine is a sovereign state” friends never mention Guiadó? After all, didn’t Nancy Pelosi have him attend some State of the Union or other?

    Would Guaidó’s chances have been improved by being on the cover of Vogue magazine?

    And as esteemed commenter Chas notes above: What about all of those sanctions? I’m not hearing the right noises from Washington. Maybe when Antony “Banality of Evil” Blinken makes his tour of the provinces, errr, Latin America, he can suspend some sanctions as a goodwill gesture.

    Does the U.S. elite still consider goodwill a thing, as the kids say?

    The mind boggles.

  4. John R Moffett

    The Biden administration’s plans are failing miserably one after the other. The incompetence is monumental, especially considering how long Lunch Box Joe has been an integral player in The Blob. I expect Blinken is one of the not-so masterminds in all of these, clumsy, botched attempts at controlling the world. The US is losing its grip, and is flailing around like a fish on the deck. If the Biden administration keeps up this level of incompetence, things are going to get much worse for the US and the EU. Maybe after losing the midterms, the Biden administration will decide it needs to change course, but I doubt it.

    1. schmoe

      The US decision to “appoint” Ernie Pyle, I mean Juan Guaido, as President of Venezuela was made during the Trump regime.

        1. lyman alpha blob

          Indeed. One of the few things the two parties could agree on at the SOTU a few years back was to give Guy-Doe a standing O.

          1. John R Moffett

            The Democrats and Republicans work for the same people (the donor class). They don’t have innate policies built in because they are Red or Blue, they follow their marching orders. It is why most foreign policy does not change between administrations. If you are interested in some of the details of how we got here, read “The Devil’s Chessboard” by David Talbot. The US has been in this game for a very long time.

    2. LY

      Not like any better alternative for Latin American policy was on offer. Venezuela policy is Cuba 2.0, via a failed Chile 2.0, but with oil and gas.

      Do neocons and, more broadly, the DNC and the Republican party, even grok the idea of Banana Republics (not the clothing chain), much less that they have been less-than-positive experiences for those countries?

  5. Carolinian

    For all the past talk of Trump as fascist the recognition of Guaido and seizure of Venezuelan assets was his most frankly fascist act and the one the establishment refused to criticize him for. After all the Nazis were big on having Quislings to do their bidding.

    Meaning that the “fascism” resides in the deep state which managed to control Trump just as they are now controlling Biden (an enthusiastic co-conspirator) to promote their mad war in Europe. We have Quislings in this country too.

    Here’s suggesting Maduro should demand Washington’s apology and all of his country’s assets back. We Americans should demand it as well instead of turning a blind eye to the incessant FP shenanigans.

    1. Michael Fiorillo

      The #McResistance, set in its moral vanity and blinders as if in concrete, wailed about all the horrible things Trump did/would do, but was strangely (but not) silent about departing from the Iran deal and the INF Treaty with Russia. They spent years hysterically telling us that Trump was Hitler, and then silently re-authorized the Patriot Act for Hitler to govern under. Nonetheless, they still expect to be considered the moral arbiters of our politics.

      Clearly, their swollen moral sense of themselves and others is a big part of their dysfunctionality. Jettisoning Greedo might be a way for reality to start infiltrating their decisions.

  6. The Rev Kev

    Said in a comment a long time ago that good old Greedo will end up drunk in a bar somewhere trying to pick up girls by saying that he was once the President of Venezuela. Looks like it may happen sooner than later. Bringing Venezuela’s oil online may take some time. Looks like doing all that sabotage on Venezuela’s oil infrastructure is now backfiring. The negotiations will be interesting and will require not only the lifting of all sanctions but the return of all those stolen assets. Now here is the onion. What about the UK? The UK cannot get their oil from Russia anymore so they could get it from Venezuela. But then they would have to return all that gold – all $1 billion of it – or no oil at all. And Venezuela should only accept it as being returned when that gold is back in Venezuelan vaults and not in taking delivery in the UK. Or else, something “mysterious” may happen to the ship or plane delivering that gold. And if I was Venezuela, I would only ship oil after payment was received. Quite a few countries in the EU took Russian gas/oil and then did not pay after they cut off those contacts. Sadly, there is no longer an element of trust in dealing financially with the collective west anymore.

  7. Anon

    Its people are indeed suffering, but if Venezuela simply resumes the status quo ante, what exactly will they have suffered for? The Maduro government? The US has long appeared the fool in its implementation of Venezuela policy; so a mea culpa will only improve their standing. What guarantees could they possibly provide they won’t simply reimplement sanctions once Saudi Arabia loosens up (perhaps due to newly realized Venezuelan competition)? Why would Venezuela, when the US is clearly backed into a corner, go on to single-handedly fuel the New (US)American Century?

  8. Soredemos

    “In 2019, the U.S. Government Accountability Office (GAO) acknowledged that U.S. sanctions on Venezuela had killed tens of thousands of people and eviscerated the country’s economy, largely by crippling its ability to produce its number-one export commodity, oil, or import basic goods.”

    The GAO did no such thing. A think tank did that study. I’m not saying its conclusions are wrong (I see no real reason to doubt them), but the US government has not acknowledged any mass murder on its part.

    1. Nick Corbishley Post author

      You’re right, Soredemos. My bad. I got confused between the CEPR study, which was published in 2019, and a GAO report released in 2021, which does all but concede that US sanctions have exacerbated Venezuela’s economic and humanitarian crises. But as you say, it doesn’t confess to committing mass murder. Have duly amended the text. Thanks for flagging this up.

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