Venezuelan sanctions without diplomacy will fail

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Story highlights

  • Shannon K. O'Neil: The US needs to take a tougher stance against Maduro's threat against the basic freedoms of Venezuelan protesters
  • As we've seen with Cuba, sanctions alone will not work to stop government corruption or injustices against the poor, she writes

Shannon K. O'Neil is the Nelson and David Rockefeller Senior Fellow for Latin America at the Council on Foreign Relations. The opinions expressed in this commentary are solely hers.

(CNN)Despite condemnation from 40 countries and even the Pope, Venezuela's ruling party installed its new assembly last weekend. Choosing as its head former Foreign Minister Delcy Rodriguez, a loyal follower of President Nicolas Maduro, the assembly focused on efforts to stifle any dissent, beginning deliberations to undermine the opposition controlled legislature and restructure the government.

The government swiftly moved to consolidate its broader authoritarian grip, firing state workers who didn't vote, punishing the last remaining independent media outlets, ousting the outspoken attorney general, Luisa Ortega, and arresting many opposition figures.
As Venezuela descends into full authoritarianism, closing down any space for the political opposition and threatening basic freedom of expression and human rights, the United States should be pressed to do more.
    Shannon K. O'Neil
    In the lead-up to Venezuela's illegitimate election, the United States promised "strong and swift actions against the architects of authoritarianism." Even with President Donald Trump's Friday announcement that he would consider military intervention, his initial reaction has been surprisingly mild. Its sole move was to make Maduro an international persona non grata, joining the likes of Zimbabwe's Robert Mugabe, North Korea's Kim Jong-un, and Syria's Bashar al-Assad.
    Maduro responded with ridicule and undoubtedly relief. He took to Venezuela's airwaves to jeer President Trump to "bring on more sanctions" as in his earlier "I don't listen to orders from the empire, not now or ever." Meanwhile PDVSA, the state oil company, quietly continued to ship some 700,000 barrels of oil a day to US refineries scattered in Texas, Louisiana and Mississippi, netting Maduro and his ruling cabal over $150 million in hard currency just this last week.
    Indeed, the United States has to take stronger actions than the variety of sanctions that it has already imposed against Venezuela. It can expand the current list of some two dozen targeted individuals to include the members of the new Constituent Assembly and others, freezing their assets, banning them from the United States, and forbidding them from doing business with US citizens. This would hamper the lush lifestyle of the elite — curtailing surfing on Australia's Bondi Beach, studies at the Sorbonne, and the lavish vacations Venezuela's so-called Bolivarian princelings and princesslings reveal in their online selfies.
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    But expanding individual sanctions will do little to change anything on the ground.
    The United States could next ban the sale of the lighter US crude oil and diluents Venezuela needs to get its heavier crude out of the ground, processed, and suitable for export. This would temporarily disrupt production, as the South American nation looks for other sources.
    A bigger step would be to disrupt the flow of money and oil between Venezuela and the United States. The United States could refuse to pay PDVSA directly for oil shipped to US refineries, instead setting up an account, along the lines of the UN Iraqi Oil-for-Food program, that would let the government only use the money to buy food and medicines. Maduro would be unlikely to accept these terms, searching for other markets for its products — India, China, and Russia the most likely recipients. On the financial side, the United States could ban the nation from accessing the US banking system, limiting its ability to trade and to service its debt. Or the United States could impose a full embargo on Venezuela's oil and petroleum products.
    These options would devastate Venezuela's remaining economy, limiting already scarce basic goods. An oil or financial ban would likely lead the country into default on its over $100 billion dollars in foreign debt.
    But they are unlikely to revive Venezuela's democracy. Over the last 70 years the United States has sanctioned over two dozen nations — Russia, North Korea, Cuba, Iran, Syria, Burma, and Côte d'Ivoire among them. None of those sanctions have led to swift political change.
    Iran, the most recent and relatively successful use of sanctions against an oil-rich nation, shows the decisive limits. Rolled out over nearly a decade, first under President George W. Bush and then expanded under President Barack Obama, these restrictions united the UN Security Council and countries East to West across ideological lines to exclude the Middle Eastern nation from oil, financial, and commercial markets. Hobbled by diplomatic isolation and economic recession, Iran came to the negotiating table, ultimately agreeing to limit its nuclear program. But the Ayatollah remains fully in power.
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    Worse, the United States has yet to invest in diplomacy. The depleted state department's absence was keenly felt in June, when Secretary of State Rex Tillerson failed to show up at the regional Organization of American States meeting, letting a vote to condemn Maduro's actions fail despite strong support from Mexico, Peru, Argentina, Colombia, and others. Without US leadership and leverage, many Caribbean islands, including the Bahamas, Barbados, Jamaica, and Guyana, remained on the fence, denying the multilateral organization necessary for a two-third majority.
    The lack of diplomacy means the United States has yet to convert the rhetorical condemnations of European and Latin American countries into concrete actions that would support and bolster the reach of US steps. And it augurs poorly for any active UN role, as Russia and China are sure to oppose punitive measures, but could, with pressure, potentially be convinced of the need for humanitarian relief.
    As officials debate sanctioning Venezuela, Cuba remains the most likely and cautionary path. As the embargo against the island enters its 57th year, a Castro remains President, the government authoritarian, and two generations have grown up believing the United States is the villain behind their economic and political distress. Similar restrictions would grant Venezuela the same narrative, providing a scapegoat for their homegrown catastrophe.
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    Cuba's shadow hangs over the Western Hemisphere in broader ways, dividing the rest of the region from the United States. An economy-wide hit on Venezuela would likely quiet the strong anti-Maduro stances taken by Latin America's leaders, Venezuela's sins paling in comparison to the perceived historical ones of the United States, making it difficult to build the necessary multinational support to make such sanctions effective.
    On principle the United States should stand up to the Venezuelan regime. Rallying the world to defend democracy matters, as does humanitarian relief for Venezuelans' immense suffering. But true progress will require heavy diplomacy, building a broad coalition of nations to deny Venezuela's authoritarian leaders admittance to the global community and to support its beleaguered people. Sanctions are one tool. But they don't work in a diplomatic vacuum. And don't expect them to bring regime change.