Is the U.S. Ready for a Venezuelan Meltdown?

As Republicans and Democrats continue their standoff in Washington, developments overseas directly affecting U.S. security interests continue apace. Think of multiple boulders tumbling down a hill. Let’s just hope a distracted Uncle Sam isn’t clobbered by one of them.

In Venezuela, the United States’ fourth-largest supplier of crude oil and 14th-largest trading partner, conditions are spiraling from bad to worse. The late Hugo Chávez’s hapless successor, President Nicolás Maduro, has requested emergency decree powers, which he says are needed to save an economy in free-fall — including an inflation rate among the world’s highest, collapsing public services, and shortages of basic goods such as milk, meat, and toilet paper. This, in a country sitting atop perhaps the largest reserves of crude oil on the globe.

Until now, Maduro has become little more than a laughingstock since claiming a suspicious victory over challenger Henrique Capriles in the April election following Chávez’s death. Obsessed with blaming others for Venezuela’s travails, he has announced some 13 (and counting) conspiracies against his government, plus four assassination "plots." That strategy has run its course, however; the time for fun and games is clearly over.

Not even reported annual oil revenues of $100 billion has been enough to paper over an inflation rate of 49 percent, a scarcity index of 20 percent, the dollar trading on the black market at seven times the official rate, wanton corruption, electrical blackouts, and horrendous street crime. 

The situation is simply not sustainable — and Maduro has neither solutions nor much room to maneuver. His Cuban minders are insisting that he not only hold the line, but that he double down on command economy policies. 

Yet the key dynamic in Venezuela today is not between the government and the opposition, but within the regime itself. That’s because there is no shortage of powerful figures in the government who continue to proudly identify with Chávez’s movement, but who clearly recognize that the country is disintegrating and that Maduro’s incompetence is making matters worse. Many of them as well, especially in the military, have always resented the heavy Cuban presence at the top echelons of civilian decision-making. It will fall to these forces to pick up the pieces when Maduro’s mismanagement finally overwhelms him.

Barack Obama’s administration cannot be caught flat-footed in the event of a change in leadership in Venezuela. The State Department spent the last six months doing everything it could to normalize relations with the Maduro government, but the recent expulsion of the U.S. chargé d’affaires (the ambassador was expelled long ago) has brought that effort to an ignominious end. Now, they need quite a different plan, one that seeks to help guide a peaceful transition to a post-Maduro government less hostile to the United States. If one thing is certain, Russia, China, Iran, and Cuba — all heavily vested in the regime’s radical wing — are not about to stand idly by and let events play out.

Of course, there is always a chance that Maduro can muddle through (oil is an excellent lubricant), but that is a risky bet. A key date ahead is Dec. 8, when Venezuela is supposed to hold municipal elections. Many see those elections as a referendum on Maduro’s presidency. If the ruling party does well, it may buy Maduro time. If not, hold on tight.

A Venezuelan transition will provide significant opportunities for a welcome course correction in bolstering U.S. security interests in the region. Numerous bad actors believe they hit the mother lode in chavismo and have profited immensely, at the expense of the U.S. interests. Either way, if a post-Maduro government is interested in a less toxic relationship with Washington or not, the United States will have new leverage. U.S. interests lie in nothing less than the expulsion of the Cubans, the Iranians, and the drug cartels from Venezuela. If a new leadership in Venezuela seeks a future sans such nefarious associations, the Venezuelan people and their historical friends in the United States stand to benefit.