Eyes on Caracas: The Crisis in Venezuela

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This article was published by Defence iQ — an industry-leading defence news and events company — in January 2019.

Venezuela is spiralling towards collapse. The mass migration of millions of Venezuelans who are seeking refuge in neighbouring countries is threatening to undercut the relative political and economic stability of Latin America.

As President Nicolás Maduro seeks to fend off a resurgent opposition launching an internationally backed effort to restore democratic rule, Defence IQ delved into the crisis to explore its impact on Venezuela itself and the wider geo-strategic sphere of influence.

“This is a hemispheric issue and the implosion of the regime there is a direct challenge for us,” Marshall Billingslea, assistant secretary for terrorist financing at the U.S. Department of the Treasury, recently told the American Enterprise Institute in Washington.

The Venezuelan economy has steadily deteriorated since the price of oil plummeted from more than $100 per barrel in the summer of 2014 to less than $50 a year later. Unable to sustain a socialist system of subsidies and price controls, the country is facing economic ruin — and the ensuing humanitarian crisis has plunged millions into needless bouts of sickness and hunger.

Surfing what looked like a never-ending wave of oil-fuelled economic prosperity, complemented by years of stable democracy, Venezuela was once considered one of South America’s wealthiest countries; however, the country is now riddled with shortages of everything from food to coffee to toilet paper.

Hyperinflation is rampant — the inflation rate surpassed 1.3 million per cent in November, according to the International Monetary Fund (IMF) — and power cuts, a lack of running water, and shortages of medical supplies are widespread.

In 2017, Venezuelans reported losing an average of 11 kilograms in body weight, whilst outbreaks of diphtheria, measles, and malaria have continued to spread rapidly. New HIV infections, tuberculosis, rapidly ascending levels of maternal and infant mortality, and access to care for people with life-threatening chronic conditions are major public health concerns.

In one eye-opening account, The Wall Street Journal’s Anatoly Kurmanaev — who reported from Caracas for five years up until 2018 — juxtaposed the suffering of modern-day Venezuelans with the Soviet-era upbringing of his youth:

“Venezuela’s collapse has been far worse than the chaos that I experienced in the post-Soviet meltdown […] It was visible all around me: in the sagging skin of neighbours, the dimming eyes of janitors and security guards, the children’s scuffles for mangos from a nearby tree. It is profoundly depressing to watch people you know grow thinner and more dejected day by day, year after year [...] What's left is exile or further misery.”

Unsurprisingly, Venezuelans are choosing to exercise the exile option en masse. The UN High Commissioner for Refugees (UNHCR) says the number fleeing the dire socio-economic conditions of their homeland is expected to reach 5.3 million by the end of 2019 in what has swiftly become a crisis of Middle Eastern proportions. As many as one million have settled in neighbouring Colombia after making the arduous trek by bus and foot. Tens of thousands more have landed in Ecuador, Peru, Guyana, and Chile, whilst significant numbers have continued onwards to the United States. Others have ventured south to Brazil.

Having thrown the continent into disarray, the Venezuelan exodus has triggered consternation within UN agencies and nearby powers. Eduardo Stein, a joint special representative for the UNHCR and the International Organization for Migration (IOM), recently noted:

“Beyond the most immediate humanitarian impacts of the largest displacement of people in the history of Latin America, there are often quite complex implications for which we are not prepared as a region […] The impact of the enormous quantities of arrivals on the services and economies of these receiving countries is immense and overburdens their institutional and financial capacity.”

Identifying several knock-on impacts of such seismic population movements, Venessa Neumann — a Venezuelan-born terror expert and author of Blood Profits: How American Consumers Unwittingly Fund Terrorists — told Defence IQ:

“It’s a strain on their resources, on their security. The Venezuelans come with illnesses […] so there is fear of epidemics. The strain on public services and employment (because Venezuelan refugees are generally really skilled and willing to work for below minimum wage) has caused a xenophobic backlash. We saw what immigration has done to EU members, generating a rise of the far-right parties; imagine what it will do in Latin America […] whose economies are not as resilient as those [in] Europe.”

With this in mind, and due to their geographical proximity, many small Caribbean islands have been hit particularly hard. More than 100,000 Venezuelans have fled to the region, with almost 60,000 settling in Trinidad and Tobago, many of whom originally entering legally as tourists before overstaying their permits, or by traversing dangerous seas in small boats.

Amidst fears of their own humanitarian crisis, and without the infrastructure to cope with such an influx, the southern Caribbean nation’s government initially adopted a hardline approach in dealing with the newcomers. In April, Trinidadian authorities forcibly deported 82 Venezuelan asylum seekers.

“Bear in mind, we are not China, we are not Russia, we are not America,” Prime Minister Keith Rowley said at the time, defending his policy. “We are a little island — [with] limited space [for] 1.3 million people — and therefore we cannot and will not allow the U.N. spokespersons to convert us into a refugee camp.”

Such a response is hardly surprising given the variety of nefarious actors seeking to take advantage of Venezuela’s implosion in addition to the ever-present fears of overcrowding, the smuggling of drugs and firearms, and human trafficking.

“Below the surface, people are worried about who is hiding in the ranks of refugees: Iranian or Cuban operatives, defecting Venezuelan security forces, members of the colectivos [violent motorcycle gangs],” Neumann added. “All of these have been spotted.”

Hezbollah, for example, which has been categorized as a foreign terrorist organization (FTO) by the U.S. Department of State, reportedly holds significant economic control in key areas of Venezuela, particularly in the drug trafficking safe havens of the border regions.

“Hezbollah has growing recruitment centres all over Venezuela, including [in] Caracas, and Venezuela has given them full Venezuelan identities (ID cards, passports etc.) to make them invisible to western intelligence services,” continued Neumann. “In short, Venezuela has a government policy of supporting terrorism.”

It is worth noting that Trinidad and Tobago is particularly vulnerable to the additional risk posed by the possible migration of persons with ties to radical Islamic groups.

“Given that Trinidad and Tobago is already a leading source on a per capita basis for foreign fighters to the Middle East, migration from Venezuela of those affiliated with radical Islamic groups would have a potentially radicalizing and destabilizing effect on the Islamic communities [there],” according to Evan Ellis of the U.S. Army War College.

The free-for-all chaos has even spread to Venezuela’s coastal territories, creating a perfect breeding ground for illicit naval activity. Oceans Beyond Piracy, a research group specializing in the tracking of maritime security events, found that acts of piracy near Venezuela have more than tripled since 2016.

Hijackings of Caribbean-based fishing vessels carried out by Venezuelan coast guard patrols (who arrest fishermen on phoney charges of illegal fishing) are said to be on the rise.

In fact, combatting this threat is a driving force behind a number of defence procurement projects. For instance, Australian shipbuilder Austal is moving forward with building and supplying two 58-metre Cape-class patrol boats for the Trinidad and Tobago Coast Guard, whilst the newly established Jamaican Defence Force (JDF) Maritime Air and Cyber Command recently accepted the delivery of a Beechcraft King Air 350 WR maritime patrol aircraft and two Bell 429 helicopters.

Although such acquisitions involved Australian and American entities — such as the Sierra Nevada Corporation (SNC), Textron Aviation, and Bell — it is clear that China is ramping up its investments and high-level diplomatic initiatives in the Caribbean in an effort to exploit the demise of Venezuelan economic power.

As they struggle to cope with the reduced investment and oil flows from the decline of the Venezuelan PetroCaribe oil scheme, several oil-dependent Caribbean nations have turned to China for major infrastructure funding.

China’s loan commitments to Latin American and Caribbean governments totalled more than US$141 billion for the 2005-2016 period, with a growing emphasis on telecommunications, according to a report by the Economic Commission for Latin America and the Caribbean.

But China's influence is not strictly financial. The People’s Liberation Army Navy (PLAN) has expanded its operational humanitarian assistance and disaster relief (HADR) footprint in the Caribbean with the deployment of the 14,200-tonne Type 920 (Anwei)-class hospital ship Daishan Dao (‘Peace Ark’) in its first trip to Antigua and Barbuda in October.

Another significant player taking advantage of the Venezuelan crisis is Vladimir Putin. As the U.S. has urged its allies to take steps to marginalize Maduro, the Russian president has chosen instead to increase cooperation with Caracas.

“Venezuela is the most important partner of Russia in the region, not only for the huge debt Venezuela owes to Russia on military equipment and monetary assistance but also for being a rich source of exploration to Russia,” said Johan Obdola, president of the Latin America-focused security firm IOSI.

As well as owning significant parts of several oil fields in Venezuela, Moscow is reportedly seeking to create a long-term military base on one of Venezuela’s islands in the Caribbean Sea and the flight of two Tu-160 strategic bombers to Caracas in December is central to this plan, according to Russian daily Nezavisimaya Gazeta.

“The deployment is intended to send a message to the Venezuelan opposition and to Venezuela’s neighbours that they should think twice about any effort to remove the regime by force,” Patrick Duddy, U.S. Ambassador to Venezuela from 2007 to 2010, told Defence IQ. “The Russians are reminding all and sundry that Maduro still has allies.”