Trump bleeds US rivals in Venezuela

Welcome to Venezuela, the tyrant’s paradise for America’s adversaries — China, Russia, Iran, Cuba (call them the CRIC) — who have been a perpetual annoyance to the Trump administration. 

And yet, could our rivals be showing signs of political hemorrhagic fever? Is President Trump’s strategy subtly bleeding their economic and strategic resources? Is Trump winning in a patient effort to bring Venezuela back to recovery and democracy?

Several years ago, Venezuela seemed like a good place for America’s foes — a strategically located, fully corrupt oil state, with an entrenched authoritarian regime, defended by both a relatively strong military and a motorcycle gang street militia. China expands the Belt and Road Initiative into Latin America and has oil as collateral for its investment; Russia gets a strategic base for its U.S.-targeted bombers and partners with a major oil supplier to manipulate the oil market; Iran (and a whole host of Islamic terrorists) get a training and infiltration base in Latin America; and Cuba broadens its footprint and gets needed oil. 

If you’re hell-bent on global conquest and want to annoy and distract the U.S. while you wreak havoc in Europe, Asia or the Middle East, oil-rich, self-monetizing Venezuela was a no-brainer. 

But then things went south. Olympian-levels of corruption and incompetence fully cratered the Venezuelan economy. Oil production revenue fell from $60 billion 10 years ago to around $15 billion today, bringing home a paltry $6 billion in profits to a country with some of the world’s largest oil reserves. Gross domestic product has fallen from $350 billion to less than $70 billion. For a country whose public sector (non-productive, expecting to be paid but not being paid) soaks up 40 percent of GDP, that spells no electricity, weakened army and police, no health care, no food or water, no hope. Creditors, whose debt exposure runs at 35 percent of GDP and rising, won’t lend any more. And, it will all get much worse. 

Suddenly China’s Belt and Road looks like Rope and Noose. Venezuela causes the CRIC to start hemorrhaging money to sustain this strategic losing play. Russian strategic inroads become expensive and unreliable. Cuba’s economy gets worse with oil restrictions. Of course, all of these players still could get a nice piece of the drug trade action, but with the U.S. Navy upping its attention to the region, the normally smooth drug routes out of Venezuela and Cuba become more difficult. 

It’s no wonder the Venezuelan leadership reportedly looted the national treasury and may have sent over $75 billion in gold on a Russia plane from Caracas to central Africa, a traditional drug, money, arms and terrorist smuggling route. Who wouldn’t want to be in the room where the corrupt Venezuelan political, military and judicial leadership, along with the Russians and Chinese, split up that pot of gold?

And want does Trump do? He takes his time. He builds a coalition of South American states through the Organization of American States (OAS). He rolls out national security adviser John Bolton to keep military pressure on and forces the CRIC to continue to invest in secret police, military support and patching deteriorating infrastructure. He puts sanctions on oil shipments to Cuba to squeeze both Russia and Cuba. He bleeds them all until they realize it’s a losing bet.

The irony is that Trump has turned our rivals’ own military and political doctrines against them. They have created long, expensive and hard-to-defend supply lines. They have become bogged down in a costly strategy that no longer pays for itself. They are becoming isolated politically in a region that understands the motives of CRIC, the disastrous results of their socialist police state approaches, and the complete failure of the corrupt, incompetent Venezuelan regime.

From strategic, economic, political and foreign policy perspectives, Trump is playing a winning hand — especially if he ignores the calls to arms from the left (“humanitarian crisis”) and the right (“communist and terrorist beachhead”). Declining oil revenues and economic collapse will not be reversed under the current Venezuelan leadership. The CRIC are losing badly. Trump can wait. 

It’s impossible to predict what will happen next in Venezuela, when Nicolás Maduro will be replaced as president and by whom, when China will be forced to change sides to protect its investments, and how reconstruction will unfold. But, it will all change soon, and the result almost certainly will represent a strategic win for Trump and the United States —Russia and Cuba will need to pull back, China will struggle to break even.

That will be another success for Trump’s unusual, but effective, brand of foreign policy, which has been remarkably patient and avoided new shooting wars. Call it another circuitous route to Pax Trumpus.

Grady Means is a writer and retired corporate strategy consultant. He served in the White House as assistant to Vice President Nelson Rockefeller. He was chairman of the Coopers & Lybrand consulting joint ventures in Latin America in the early 1990s and led privatization initiatives throughout Latin America, including telecommunications systems in Venezuela. Follow him on Twitter @GradyMeans.