Venezuela, Russia and the United States’ Cold War Politics Deja Vu
The Venezuelan Crisis
For half a decade or better, Venezuela has been in what many have called an economic and humanitarian crisis. Because of the situation, countless citizens have had extreme difficulty getting access to the most basic goods and services.
According to the U.N., an estimated 3 million Venezuelans have left the country due to the current state of affairs.
The crisis has sparked mass protests across the country and condemnations from the international community, and several world leaders calling for the current administration to be removed. Many critics attribute Venezuela’s current condition to inflation and the crash of oil prices in 2014. Others blame the crisis on the continued policies and practices of Hugo Chávez and poor leadership from the nation's current president, Nicolás Maduro, and his regime.
The United States has been a very strong vocal opponent of the Venezuelan government’s handling of the crisis, issuing several sanctions to some of the nation’s top officials–on accounts of corruption and abuse of power. In an attempt to thwart U.S. efforts, the Maduro regime has turned to Russia for support. A move that many say is similar to something straight out of the Cuban Cold War playbook.
Cuba and the USSR
To understand the comparison, it’s necessary to take a look back at some of the key elements of Cuba’s relationship with the USSR during, close to, the middle of the Cold War (1960s).
Fidel Castro, at that time, was a nationalist that overthrew what he saw as a U.S. backed president, Fulgencio Batista. It’s said that Batista was an ally to American business interests–but was also corrupt. At that time, wealthy U.S. corporations owned close to half of Cuba’s sugar industry, which was the country’s largest export. U.S. companies also had a large stake in ranches, mining and a few other areas.
Batista did very little to stop American business from having such a large influence on the nation’s economy. Castro objected to this, starting what would eventually become his anti-American policy.
After the overthrow of Batista, Castro sought to reduce American influence by nationalizing the sugar and mining industries, in addition to a land reform–seizing and placing American assets under government control. He also encouraged autonomy, telling other Latin American countries to be more independent. By him doing this, he essentially hurt American interests in the region. The U.S. then, wanting to topple Castro, slashed its sugar quota hurting the Cuban Economy.
Knowing he would need support in his quest to break away from the U.S., Castro sought out help from the USSR. This was the tipping point that prompted the U.S. to proceed with the “Bay of Pigs invasion.” This atop another secret operation afterward codenamed “Operation Mongoose.”
The USSR, seeing an opportunity to gain a foothold in the west, began trading with Cuba–buying Cuban sugar in exchange for Soviet oil. This was the beginning of what would come to be a totally dependent relationship on the part of Cuba.
After gaining the USSR’s support, Castro sought for weapons, advisers and soldiers. However, the Soviets suggested a missile defense system instead. This would be the beginning of the famous “Cuban Missile Crisis.”
In the 1980s, Cuba became more dependent on the USSR due to the fall of global oil prices. Cuba could no longer take advantage of selling cheap oil it bought from the USSR to world markets. Though Cuba became more dependent, this was ultimately the beginning of the weakening of the Cuba USSR relationship at that time.
The Rise of Hugo Chávez
To understand Venezuela’s relationship with Russia, we first need to take a look back at Hugo Chávez’ rise to power and his political agenda.
In the 1980s, many Venezuelans believed that the government was corrupt, which led to a coup attempt headed by then, Lt Col Hugo Chávez. However, the coup failed and Chávez was imprisoned.
Chávez was later released from prison and ran for public office. Chávez’ sentiment was shared by enough people at the time to help him get elected as the new President of Venezuela during his 1998 run. Once he became president, he began to consolidate power. During the course of his early power grabs, there was a coup led by the military against him that removed him from power temporarily–installing an interim leader.
However, he was able to return to office due to coup leaders dissolving legislature and the constitution (2000).
In 2002, workers from the country’s state-run oil firm, PDVSA, went on a strike that could have thrown the economy into chaos and ruined Chávez’ presidency. But the Venezuelan President saw it as an opportunity to squash a potential threat and an accused U.S. business associate, so he fired the 18,000 or more workers and replaced them with his loyalist.
Chávez was very vocal about his distaste for U.S. economic influence in Latin America. He was the leading opponent against the U.S. backed Free Trade Area of the Americas deal, which would have opened up state-owned industries to foreign direct investment. The deal was set up for 34 countries in Central and South America along with the Caribbean.
Chávez stated that U.S. free trade policies were enslaving the region. Upon convincing Bolivia, Argentina and Brazil to not support FTAA, the deal dissolved. Instead, these countries established the Mercosur agreement while the U.S., Honduras, El Salvador, Guatemala, Nicaragua, Costa Rica, and the Dominican Republic created the CAFTA-DR deal.
This was the first of a few moves Chávez made to potentially weaken U.S. economic influence in the region.
Not too soon after, Chávez accused the U.S. of attempting to have him removed from office and said that the CIA tried to assassinate him. From 2006–07, the Venezuelan President would again affect U.S. business interests by nationalizing the last privately-owned oil operation in the country, Orinoco basin–the worlds largest crude oil reserve. The majority of U.S. investment in Venezuela was tied to the petroleum sector.
U.S. companies ConocoPhillips, Chevron and Exxon Mobil were forced to hand their oil fields and operations over to the Venezuelan government. Chávez stated he was ending U.S. prescribed policies made to open Venezuela’s oil industry to foreign investment.
“We have buried this policy of the opening up of our oil … an opening that was nothing more than an attempt to take away from Venezuelans their most powerful and biggest natural resource,” said Chávez.
Chávez doubled down by withdrawing from, U.S. owned, Bank and Fund, saying it was taking advantage of small countries and a mechanism for North American imperialism. During this time, Venezuela also ended 35-year-old military ties with the U.S. and signed a $2.9 million arms deal with Russia. It was around this time that U.S. sanctions against Venezuela began.
Venezuela and Russia
As Venezuela continued to distance itself from the U.S., its relationship with Russia grew. In 2009, Russia opened a $2.2 billion line of credit for Venezuela to purchase arms and in 2010 they gave Venezuela $600 million for Russian companies to be involved in the Orinoco.
In 2013 Rosneft (a Russian state oil company) made plans to acquire a productive oil block in the Orinoco Belt from Lukoil and to, over a five-year period, invest $13 million in Venezuelan oil and gas. Rosneft also became a partner with Venezuela’s state oil company PDVSA, acquired 49.9 percent of Citco, (U.S. owned) and planned to invest $500 million in Petro Monagas (2016).
More recently, Russia has proposed to invest $5 billion into Venezuela’s oil industry and $1 billion into mining and is even talking of investment into the diamond sector. Military collaboration is also increasing, with two nuclear-capable Tu-160 strategic bombers from Russia conducting a training mission with the Venezuelan Air Force over the Caribbean. Not too soon after the training mission, Russia announced plans to set up a military base in the Caribbean on an island near Venezuela, La Orchila.
The stories of how Venezuela and Cuba formed relationships with Russia are different. However, they both do have very similar elements. Both had two authoritarian idealists rise to power–fighting against what they saw as corrupt governments. Both of those leaders promised to end corruption and sought to break up U.S. economic influence in their countries and in Latin America, faced coups and assassination attempts, did whatever it took to hold on to power, got economic and military support from Russia and gave them a stake in the west, hurt U.S. interests and have been sanctioned by the United States.
The biggest difference is that Cuba’s story with Russia began with Fidel Castro and essentially ended with the Cuban Missile Crisis. Venezuela’s story with Russia began with Hugo Chávez and is continuing to unfold with Nicolás Maduro. One can only speculate on how it will continue to develop and potentially end.
