Rethinking Maximum Pressure

Welcome back to Foreign Policy’s Latin America Brief.

The highlights this week: Biden dials down Trump-era policies toward Cuba and Venezuela, Chile presents its new draft constitution, and Salvadoran journalists expose gang-government negotiations.

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This week, White House officials announced steps to move away from the “maximum pressure” approach of sanctions and diplomatic isolation toward Cuba and Venezuela that was a centerpiece of former President Donald Trump’s Latin America strategy. Despite campaign promises to change some policies, especially on Cuba, they have mostly continued during the Biden administration.

Now, U.S. President Joe Biden is finally rolling back some—but not all—of Trump’s sanctions on Cuba, which were applied on top of a now-60-year U.S. economic embargo on the country. The new policies include allowing increased U.S. remittance flows and select U.S. travel to the island. A Trump-era restriction prompted a bank that processed an estimated $1 billion in remittances per year to pull out of the country in 2020. The White House will also aim to provide at least 20,000 U.S. immigrant visas to Cubans each year, bringing the United States back in line with a migration accord it signed with Cuba in 1994.

Biden left in place a ban on U.S. financial entities doing business with Cuba’s main remittance processing firm due to its ownership by Cuba’s military, so while sending U.S. remittances to Cuba is now technically allowed, their route into the country remains difficult. A White House official said the administration would work to facilitate other ways for payments to reach the island but that it would “take time.”

Travel also remains restricted: While under then-President Barack Obama U.S. citizens could visit Cuba as tourists, they will now only be granted permission under certain circumstances, such as for educational purposes.

Further south, Biden plans to lift some oil-related restrictions on Venezuela to incentivize President Nicolás Maduro to return to stalled talks with the country’s opposition. Venezuela has the largest oil reserves in the world, and Washington will now allow the U.S. oil company Chevron to discuss potential future drilling with Venezuelan officials. Depending on Maduro’s behavior, this could eventually translate into U.S. permission for Chevron to resume exporting Venezuelan oil to the United States, the Washington Post reported.

The Biden administration is also working with two European oil firms in Venezuela to “divert Venezuelan oil bound for China to Europe,” Bloomberg reported. The European Union is seeking to embargo imports of Russian oil by the end of the year over Russia’s war in Ukraine, a move the United States has already taken. The demands prompted by this new energy crunch in Western nations help explain the timing of the recent U.S. overtures toward Venezuela.

On Cuba, White House officials said their changes were the result of a long-running policy review; Juan Gonzalez, the senior director for the Western Hemisphere on the White House National Security Council, told CBS that the new policies could also help address the causes of Cuban emigration. This fiscal year has seen the highest numbers of Cuban migrants arriving at U.S. borders in four decades, with more than 150,000 Cubans expected to reach the United States by the end of fiscal year 2022, on June 30.

Another more immediate event looms over Biden’s policy shifts. More than a dozen countries, including Mexico, have signaled or openly threatened that they might boycott the upcoming June Summit of the Americas in Los Angeles if Cuba, Nicaragua, and Venezuela are not invited. Biden has thus far leaned toward excluding the three countries from the summit—a semi-regular gathering of Latin American and Caribbean heads of state—on grounds that their leaders were not democratically-elected.

Although White House officials called this timing a coincidence in a briefing on the Cuba measures, observers such as El Colegio de México historian Rafael Rojas have written that Washington’s policy shifts could be an attempt to “counteract the boycott”: Even if the Biden administration does not end up including Cuba and Venezuela in the summit, these new policies show that Washington is not unshakably wedded to a hard-line position toward the countries.

“I think the Biden administration has realized that continuing with Trump policies toward Latin America, which it has basically done until now, for a year and a half, could lead to a debacle at the Summit of the Americas,” Jorge Heine, a former Chilean diplomat and now Boston University professor, told Estación Central radio.

On Wednesday, Washington and Mexico City held a round of talks over the boycott threat and Mexico City’s demands on invitees. (As of Thursday afternoon, the United States had not yet sent out invitations for the event, despite it being just weeks away.) Mexican Foreign Secretary Marcelo Ebrard posted a video to Twitter on Wednesday saying that Mexican President Andrés Manuel López Obrador had aired Mexico’s position in talks with U.S. officials, heard Biden’s perspective, and was expected to announce a decision within the coming days.

In Venezuela, the new U.S. policy toward the country appears to have spurred cautious optimism about Maduro’s potential return to negotiations. On Tuesday, government and opposition envoys tweeted a photo of them shaking hands and celebrating a return to the “spirit of Mexico,” where negotiations are based.

The Venezuelan opposition hopes talks can solidify guarantees around the conditions for the country’s 2024 elections. Isadora Zubillaga, the deputy foreign minister of the shadow government led by opposition figure Juan Guaidó, wrote in Foreign Policy this week that U.S. sanctions relief “must be contingent on progress at the negotiating table as well as concrete and irreversible democratic reforms and outcomes in Venezuela.”

Maximum pressure on Cuba and Venezuela in recent years has neither loosened their leaders’ grip on power nor improved living conditions for everyday people. While there are no guarantees that Biden’s new steps will lead to concrete political progress, in Venezuela they appear to have created an opening for it, and in Cuba their socioeconomic benefit is clear.

Sunday, May 29: Colombia holds the first round of its presidential election.

Monday, June 6, to Friday, June 10: The United States hosts the Summit of the Americas in Los Angeles.

Constitutional Convention members pose for a picture during the official presentation of the draft of the new constitution at the Ruinas de Huanchaca National Monument in Antofagasta, Chile, on May 16.CRISTIAN RUDOLFFI/AFP via Getty Images

First draft. The first complete draft of Chile’s proposed new constitution is finished, and the Constitutional Convention tasked with writing the document will now fine-tune it ahead of the country’s Sept. 4 referendum. The current version requires gender parity across all levels of government as well as free public universities in all of the country’s regions. It also says the Chilean state must be responsible for responding to climate change.

While groups opposed to changing Chile’s constitution have been campaigning on social media for weeks now, sometimes spreading disinformation about its contents, the campaign to convince voters to approve the document is just beginning. A major name to come out in support of the new constitution this week was Michelle Bachelet, Chile’s former president and the current United Nations high commissioner for human rights.

Audio proof. The Salvadoran news site El Faro published a report this week based on audio recordings that appear to confirm that the dramatic spike in violence El Salvador experienced in March was the direct result of a breakdown in negotiations between gang leaders and the government of President Nayib Bukele.

“We made an effort for almost two and a half years to make things go smoothly and showed not only him [Bukele] but the country, you guys, the people, and everyone that where there’s a will, there’s a way,” a top Bukele official told an MS-13 member in an audio message provided to El Faro.

An MS-13 source told El Faro that the gang’s pact with the government started to fray when several members were arrested after traveling in a government vehicle. When gangs began their killing spree amid the breakdown in relations, the official said in another audio clip: “I think there could have been other ways to pressure that didn’t have to do with the [dead bodies].”

Bukele did not immediately comment on the story. He has long had an antagonistic relationship with El Faro, which has reported on his relations with gangs before, and a new law passed in April says media organizations that reproduce messages from criminal groups can earn up to 15 years in prison. While the El Faro report shines an important light on the security dynamics in El Salvador, it also may put its reporters at risk.

Culinary star. The organization “The World’s 50 Best Restaurants” named Colombian Leonor Espinosa as the best female chef in the world for 2022. (The award comes on the heels of a Colombian mother-daughter pair winning a global cookbook prize last year.)

Espinosa’s restaurant Leo has helped lead a movement for Bogotá fine dining to embrace Indigenous ingredients, such as the purple Andean tuber chugua and copoazú, a rainforest fruit related to cacao. An El País interview with her recounted that when a U.S. diplomat dined at her restaurant last year, his objections over her use of the fermented coca leaf in her recipes led to a small “impasse.”

“Coca is not cocaine,” Espinosa wrote on Twitter at the time. “We are agents of change. Our social commitment is to support ancestral, cultural, and ethnic identity.”

A sign shows the exchange rate of the U.S. dollar in bolívars at a store in Caracas on April 22.FEDERICO PARRA/AFP via Getty Images

When the U.N. Economic Commission for Latin America and the Caribbean (ECLAC) released new growth projections for the region last month, one statistic in particular stood out: The agency predicted that Venezuela’s economy, long a disaster in South America, would outgrow that of Colombia, with 5 percent GDP growth compared with Colombia’s 4.8 percent.

The bank Credit Suisse had an even more dramatic prediction of 20 percent annual GDP growth for Venezuela. The country is bouncing back from a very low place: Even before the pandemic, its economy had shrunk by over 60 percent since the last time it registered growth, in 2013.

Other forecasters project more modest growth, such as the International Monetary Fund with 1.5 percent. In On Capital’s Ana Vera told Bloomberg Línea that the positive projections made sense given the de facto dollarization of Venezuela’s economy since 2019—a consequence of Venezuelan President Nicolás Maduro’s quiet relaxation of controls on transactions made in U.S. dollars. The U.S. dollar has risen in value against local Latin American currencies in recent months, and ECLAC predicted that other dollarized economies, such as Panama, would perform well this year, too. ECLAC’s Daniel Titelman said rising oil prices and Venezuela’s rising oil production also stood to give the country a boost.

Maduro’s embrace of dollarization was widely seen as a desperate effort to stabilize Venezuela’s plummeting economy. Dollarization and other pro-market reforms, such as the loosening of price and currency controls, have achieved a modest effect, with Venezuela finally registering economic growth in 2021. Yet its benefits have been unequal, with employees at firms with international connections being paid their salaries in U.S. dollars and others such as public sector workers being paid in the local currency, bolívars.

Maduro has continued to make economic policy adjustments in the past few months. In April, he instituted a tax on transactions in foreign currencies, including the U.S. dollar, in the hope of reining in dollarization and nudging more Venezuelans toward the bolívar. Last week, he also announced he would sell some shares of state-owned companies in the telecommunication and energy sectors. In other words, the attempt to curb dollarization does not represent a full stop to Maduro’s market-based reforms, but it could dampen ECLAC’s growth forecast.

Venezuela’s modest growth as of late has led many migrants who had previously fled to return to the country, Bloomberg reported in March. With more countries than ever interested in buying Venezuelan oil, this very small boom could be poised to continue.