The U.S. allowed sanctions relief on Venezuela’s oil and gas sector to expire yesterday. The relief had been granted in October as an unofficial part of an election deal between the regime of Venezuelan President Nicolas Maduro and the country’s opposition. The U.S. State Department said Maduro failed to comply with the deal, which was meant to improve the opposition’s ability to freely contest this year’s presidential election. (Washington Post)
As we’ve written before, the Venezuela election deal has been on life support virtually since it was signed. Still, while few observers expected the Maduro regime to uphold the agreement in its totality, there was room for cautious optimism that the deal would at least level the playing field in this year’s election enough to give the opposition a fighting chance.
Now, with the sanctions on Venezuela’s oil and gas sectors reimposed, the election deal has officially unraveled, and that optimism has vanished entirely. That leaves Venezuela’s opposition in exactly the same position it has been in since 2015, in which elections are the only hope of unseating Maduro, but are so undemocratic that they offer no hope at all.
Meanwhile, the U.S. decision underscores the knotty challenge that Venezuela’s political crisis presents to Washington and other states with an interest in resolving it. Applying maximum pressure on the Maduro regime with sanctions did not change its behavior. Neither has engaging with the regime, which began toward the end of former President Donald Trump’s administration and gathered pace under President Joe Biden’s. What’s left is a pessimistic but realist approach to Caracas, in which Washington continues to maintain open channels of communication with the Maduro regime, while keeping expectations for any positive outcomes low.
More broadly, the unraveling of the election deal highlights another trend in U.S. foreign policy over the past 10 to 15 years: the overreliance on targeted sanctions to punish foreign governments and pressure them to change their behavior.
While sanctions are often effective at inflicting pain on political elites and even entire sectors of the targeted countries’ economies, they have notched few victories when it comes to changing behavior. The most prominent example of the latter was with regard to Iran, when U.S. sanctions and the promise of removing them were among the factors that led Tehran to negotiate the multilateral nuclear deal nearly a decade ago. But that success was undermined just three years later, when the Trump administration unilaterally withdrew from the nuclear deal and reimposed sanctions on the Iranian regime, undermining Washington’s credibility among adversaries and partners alike.
While sanctions have an unimpressive track record when it comes to their effectiveness as a coercive tool, another longstanding criticism of Washington’s increasing reliance on them has proven less prophetic: that doing so would undermine the supremacy of the U.S. dollar by driving foreign governments to seek alternatives to it for use as the global reserve currency and to conduct international trade. Such a development would in turn render U.S. sanctions toothless, among many other significant consequences for U.S. power. But since no viable alternatives to the dollar exist, it hasn’t happened.