home Economic Sanctions, Trade Security & Related, Venezuela Targeted Venezuela Sanctions, Better Late Than Never

Targeted Venezuela Sanctions, Better Late Than Never

President Obama has determined that the situation in Venezuela “constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States” and that additional economic sanctions must be imposed. The somewhat surprise move, in addition to starting to outline the national security threat that Venezuela poses to the Americas, starts to put in place a more focused approach to dealing with the Bolivarian Axis of the Americas.

Lower crude oil prices coupled with domestic unrest from a growing and better organized political opposition that cuts across socio-economic lines, petro-state dictator Nicolas Maduro continues to abuse the machine of state to crack down on any political dissent. It is an ugly means of political survival. The United States has patiently, maybe too much so, stood by to see if cooler heads would prevail. They never will. Just listen to Maduro and his henchmen. They are incapable of reason. Their masters in Havana are pulling all the strings.

The economic sanctions are a small, but important step toward containing South America’s favorite Cuba proxy.  It may give rhetorical ammunition to the regime, but targeting corrupt Venezuelan officials for human rights abuses, aiding and abetting terrorists in Colombia and maybe even Iran, is long overdue. If you’re in the camp that believes that economic sanctions empower the hardliners in Venezuela or that they never work, then what do you recommend that the United States do at this juncture? Engage them?

We’ve been buying oil from these people for decades, propping up the Bolivarian Axis in the process. From Cuba to Venezuela, Bolivia, Ecuador, Nicaragua, and elsewhere in the Americas, the Socialists are firmly in control. Fundamental freedoms have been under attack for more than decade in these places. Rule of law eroded to the point of lawlessness. Some of these places are democracy in name only and petro-state Venezuela provides much-neeeded economic life blood to this network that, in my view, is a terror network that reaches beyond the Western Hemisphere.

Once the headlines about this story fade away, and they will, I guarantee you that the financial markets and policy watchers will be paying a closer attention to Venezuela and related regional matters. I’ve fielded calls about this issue from companies for many years, as well as advised clients on how to comply with Treasury sanctions, among others. It adds, what economists call, another transaction cost on any business that engages in the Venezuela marketplace. It will also make potential investors think twice about taking the plunge in a very politically precarious market.

Sanctions are not a policy, they are tool. When wielded as part of a broader comprehensive approach, as in the case here, they work, especially in developing countries. Look to Cuba and Iran where despite critics, the regimes keep clamoring for sanctions easing. If the sanctions were “failing” , would Havana and Tehran be whining so much for access to the U.S. financial markets as well as the international banking system? The free world is not the enemy folks, nor are the sanctions. The problem is these Socialists that abuse democratic institutions to stay in power and steal from the taxpayers.

It could’ve been much worse for Venezuela. The Obama Administration could’ve labeled the regime as a state sponsor of terrorism. And it would be correct in doing so. There is plenty of material in the public domain that would put Venezuela on the SST list.  This policy prudent but politically unpopular move would also put in play a series of economic sanctions that, at this juncture, remain unpalatable for Venezuela expats as well as a few American companies with business interests in the region.

Opponents of Venezuela sanctions – basically the status quo – can’t have it both ways. You either want to end the tyranny or help keep it in power. We’ve been doing the latter for many many years and the Bolivarian Axis is one outshoot of that policy. It is easy to criticize the regime from outside Venezuela; however, the opposition leaders in prison, indeed all freedom-loving Venezuelans living in Venezuela have to deal with the daily ugliness of that socialist system head on.

The United States and other liberty loving powers should standby while a country is torn to shreds. One Cuba in the Americas is enough. Sanctions are a measured and appropriate response. Policy critics should fall in line and be part of the solution, not facilitators for Bolivarian ends. It is good to see a little Teddy Roosevelt in President Obama. Maybe some of it will rub off for other regional headaches (doubt it). He’s too cozy with Russia and China to make it so.

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