When economic weapons empower the leaders they target.
- By Jamila TrindleJamila Trindle is a senior reporter who covers finance, economics and business where they intersect with national security and foreign policy. Her beat spans everything from the economic underpinnings of conflict to sanctions, corruption and terror finance. Before coming to Foreign Policy magazine, Jamila reported for the Wall Street Journal’s Washington bureau, covering financial regulation and economics. She has also worked as a foreign correspondent in China, Indonesia and Turkey as a freelancer for NPR, Marketplace, The Guardian and others. She moved back to the U.S. to cover the post-crisis economy for PBS in 2009.
Sanctions issued against Venezuelan leaders this week were meant to punish Caracas’s harsh crackdown on the country’s political opposition. Instead, they may have played right into the hands of Venezuela’s President Nicolás Maduro and his quest to stoke anti-U.S. sentiment.
It’s not the first time targets have turned sanctions to their advantage. Leaders who find their countries in the economic cross hairs often use them to galvanize nationalistic support, substantiate a further power grab, or cast themselves the victim.
It’s not even the first time Venezuela’s done it. In 2011, when the United States sanctioned Venezuela’s state-owned oil company for doing business with Iran, Maduro’s predecessor former President Hugo Chávez mocked President Barack Obama’s “gringo aggression.”
At the time, Chávez predicted the U.S. sanctions would boost “the nationalist and patriotic morale of Venezuela,” Bloomberg reported. Maduro’s response, which followed in his political patron’s footsteps, prompted former Cuban President Fidel Castro — himself a sanctions target — to reportedly jump on the bandwagon by praising the Venezuelan leader’s reaction to the U.S. government’s brutal plans as “brilliant” and “brave.”
“This issue of strong politicians using sanctions as a rallying cry, I think, has been quite common,” said Gary Hufbauer, a sanctions expert at the Peterson Institute for International Economics in Washington.
He said the response dates back at least to 1935 when the League of Nations sanctioned Italy for invading Ethiopia. Dictator Benito Mussolini obstinately declared Italy would face the economic measures with “our discipline, our sobriety, and our spirit of sacrifice.”
More recently, Russian President Vladimir Putin has used the West’s sanctions over his Crimean land grab to good effect: gaining ground in opinion polls and blaming his country’s economic downward spiral on the restrictions, rather than his own economic policies.
Maduro, too, wasted no time in turning the tables and using the sanctions as proof why his executive powers should be expanded.
The sanctions issued Monday freeze the U.S. assets of seven Venezuelan officials, including the head of intelligence and a top prosecutor, for cracking down on protests last year and going after opposition leaders on trumped up conspiracy charges.
Within hours, Maduro was using the U.S. move as justification to ask the Venezuelan congress to give him expanded executive powers through a special decree to “preserve the nation’s peace, integrity, and sovereignty.” Though he didn’t specify exactly what he would do with them, he was clear about where the perceived threat came from.
“President Barack Obama, in the name of the U.S. imperialist elite, has decided to personally take on the task of defeating my government, intervening in Venezuela, and controlling it from the U.S.,” Maduro said, according to the Associated Press.
Maduro regularly pins the blame for his country’s dismal economic outlook on American meddling and unsubstantiated conspiracy theories about an “endless coup promoted from the U.S.”
So far, it’s unclear what he’s getting from the finger-pointing: His approval ratings hover around 20 percent.
Venezuelans have suffered through a severe economic downturn in the past two years since Chávez’s death. The economy contracted 2.7 percent last year and, according to the International Monetary Fund, could shrink another 7 percent this year. As inflation soared to the world’s highest rate — almost 70 percent — consumers face widespread shortages of food and medicine. Falling oil prices have compounded the economic headache for Maduro because lower receipts for nationalized energy companies means less money in government coffers.
The U.S. sanctions themselves are unlikely to have much effect at all on Venezuela’s economy. Unlike punishing sanctions against Iran’s financial and energy sectors or even the more limited restrictions on Russia, the United States has so far hit only seven officials with asset freezes. They are cut off from any bank accounts or other assets in the United States and they are subject to a visa ban, which prevents them from traveling stateside.
Hufbauer points out that if the Obama administration really sought regime change, it would probably pick a bigger target, such as the country’s oil industry.
“If the U.S. wanted to topple the government there’s so much more that could be done that hasn’t been done,” he said.
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