[Global Focus] Venezuela's Maduro Endures Western Sanctions... Economy on the Brink of Collapse

Aftermath of Election Fraud

Severe Social Conflicts After Third Term
US Expected to Pressure Security and Military Funding

New Frontline in Democracy-Authoritarianism Conflict
Support from Russia, China, Iran, and Others

Innocent Citizens Suffer Greatly
Limitations of Economic Sanctions Also Raised

Venezuela is experiencing severe social conflict following the announcement of President Nicol?s Maduro's confirmation for a third term, but the Maduro regime appears unfazed by pressure from the United States and other Western countries. This is because Venezuela has become a battleground for the power struggle between the liberal camp, including the US and Europe, and the authoritarian camp, including Russia, China, and Iran. The West is poised to strengthen economic sanctions aimed at freezing funds necessary to maintain the Maduro regime. Once considered the richest country in South America, Venezuela is facing another economic turmoil amid hyperinflation triggered by successive leftist governments' mismanagement, leading to the collapse of citizens' livelihoods.

Will the US Unleash Another Sanctions Card?

According to Bloomberg on the 5th (local time), the United States is considering new economic sanctions in response to the Maduro regime's fraudulent election. Although specific economic sanctions have not yet been disclosed, the measures are generally aimed at pressuring various security and military funds necessary for Maduro's dictatorship.

On the election day, last month on the 29th, the Venezuelan National Electoral Council officially declared Maduro's victory when about 80% of the votes were counted, refusing citizen group observers during the counting process. This was in stark contrast to the US polling agency's own exit polls, fueling widespread allegations of election fraud. Maduro was re-elected in 2018 through a half-baked election that barred major opposition figures from running, and he is attempting to extend his regime by six more years through a third term. The US is effectively recognizing opposition candidate Edmundo Gonz?lez as the winner.

Currently, large-scale protests condemning the fraudulent election continue in Venezuela, with opposition leader Mar?a Corina Machado encouraging public demonstrations. As the police crack down harshly, violent incidents have occurred, including attacks on opposition leaders' offices, exacerbating social unrest.

Venezuela Faces Severe Economic Collapse Due to Leftist Regime Mismanagement

[Image source=Yonhap News]

Once the country with the world's largest oil reserves, Venezuela's economy has suffered severe collapse over more than 20 years under the leftist regimes of Ch?vez and Maduro. Nationalization of key industries such as steel and cement following the oil sector led to a sharp decline in foreign investment capital, and various populist policies like excessive money printing caused uncontrollable inflation. According to The Washington Post (WP), Venezuela's economy shrank by about 71% from 2012 to 2020, the largest decline in modern history for a country not at war. The country experienced annual inflation rates exceeding 800%, chronic food shortages, and a sharp rise in infant mortality.

The US has imposed over 350 sanctions on Venezuela in the past seven years. The Donald Trump administration is regarded as having imposed the harshest sanctions on Venezuela. In 2017, the Trump administration blocked the Venezuelan government and oil companies from accessing international credit markets. Over the next three years, sanctions expanded to effectively restrict Venezuela's "economic lifeline," oil exports.

Why President Maduro Is Holding On

[Image source=Yonhap News]

Despite condemnation from the US, the European Union (EU), and other Western countries over the recent election fraud controversy and increasing international isolation of President Maduro, analyses suggest that Maduro will not step down. Venezuela has become a new ideological front line between democracy and authoritarianism, beyond the left-right divide. The anti-Western camp, including Russia, China, Iran, and Cuba, has expressed congratulations on Maduro's third term.

Support from global camps opposing the West is seen as undermining efforts to pressure Maduro's resignation through diplomatic isolation and economic sanctions. Oliver Stuenkel, a political analyst at Brazil's Getulio Vargas Foundation, pointed out, "Maduro is almost free from Western pressure" and "he does not heavily rely on friendly relations with the West."

China has long served as Venezuela's economic patron, major creditor, and largest oil buyer. According to the US Council on Foreign Relations, Venezuela is the largest recipient of Chinese loans in South America, totaling about $60 billion. As US-led sanctions threatened Venezuela's oil-dependent economy, China circumvented sanctions through third-party transactions.

Russia pledged $5 billion to improve Venezuelan oil refineries and $1 billion to the gold mining industry during Maduro's regime. Cuba, a leading anti-American country in South America, signed several agreements with Venezuela in 2019 to promote the "Cubanization" of the Venezuelan military.

Some argue that Russia and China are granting political favors to Venezuela as retaliation against the US, which supports their adversaries Ukraine and Taiwan. Wolf Toene, a political scientist at Colombia's La Sabana University, assessed from this perspective that "the likelihood of President Maduro maintaining power is increasing."

Limits of US Economic Sanctions? ... Citizens' Suffering Continues

WP reported that US economic sanctions aimed at punishing the Maduro regime have maximized harm to innocent civilians, leading to discussions about the limitations of economic sanctions. Over the past decade, 8 million people, one-third of Venezuela's population, have left the country, with some choosing to go to the US. This surge in illegal immigrants in the US has become a flashpoint in US elections.

As Venezuela's election results devolve into a global ideological confrontation, the country's economic difficulties are expected to persist. Particularly, the oil industry, which constitutes a significant part of Venezuela's industrial structure, urgently needs maintenance of oil fields and refineries. However, prolonged US sanctions are causing production capacity to decline. According to Bloomberg, Venezuela's state-owned oil company PDVSA is exporting 654,000 barrels of oil per day this year, only half the amount exported before US sanctions on Venezuela's oil sector in 2019. Bloomberg also noted that as social unrest continues, the prices of Venezuela's bonds maturing in 2026 and 2027 are also declining.

This content was produced with the assistance of AI translation services.