The U.S. recognition of opposition leader Juan Guaido as Venezuela’s interim president is being touted by the Trump administration as the only way to restore the country’s democracy. But as Elizabeth Pineda was stocking up on staples yesterday [Macau time] at a sidewalk market near a Caracas slum, she was bracing for things to get a lot worse, not better.
A retired secretary, Pineda survives on a monthly pension of just 18,000 bolivars, or about USD6. She supplements her income working as an astrologer, and although the stars have been telling her Venezuelans are on the road to ridding themselves of socialist President Nicolas Maduro, she doesn’t expect him to go quickly or quietly.
“The government is going to strangle us even more with their bad decisions and shamelessness,” Pineda said while sharing a bowl of beef soup with two friends, none of whom can afford the $1.50 meal on their own.
Economists agree that the longer the standoff between the U.S.-backed Guaido and Maduro drags on, the more regular Venezuelans are likely to suffer.
Maduro, who so far appears to have the backing of the decisive military, has dug in, accusing the U.S. of orchestrating a coup by encouraging Guaido to declare himself interim president and then leading a chorus of nations that immediately recognized his rule.
The high-risk and seldom-used strategy of recognizing an alternative government that doesn’t already have de facto power is tantamount to blocking Maduro’s access to Venezuela’s all-important oil revenue, with enormous legal and financial entanglements.
Directives sent Friday to the U.S. Federal Reserve will make it very hard for Maduro to access Venezuela’s overseas assets and earnings, including those from Houston-based Citgo, a subsidiary of state-owned oil giant PDVSA and the major source of revenue for the bankrupt government. Also at risk is $1.2 billion in gold reserves — 15 percent of Venezuela’s foreign currency reserves — stored in the vaults of the Bank of England.
If the Trump administration’s confrontational approach is adopted by the European Union, some of whose members have threatened to recognize Guaido if Maduro doesn’t announce new elections in eight days, it could bring oil production to a standstill, heaping more hardships on the 29 million Venezuelans already struggling with hyperinflation, widespread food shortages and anemic economic activity.
“If Maduro stays in power, Venezuela could suffer a humanitarian catastrophe,” said Francisco Rodriguez, chief economist of New York-based Torino Capital. AP
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