Venezuelan power struggle plays out around the world

A torn flag hangs outside the building that once served as the Venezuelan consulate in Bogotá, the garden is overgrown and the doors shut. The embassy is similarly closed. Ever since Venezuela broke off diplomatic relations with Colombia in February, it has had no representation here.

Yet across town, a different Venezuelan envoy is at work. Humberto Calderón Berti is not the representative of the de facto government of President Nicolás Maduro but of the rival administration of opposition leader Juan Guaidó.

This curious situation of two parallel administrations — one recognised by the US and more than 50 other countries, the other by Mr Maduro’s allies in Cuba, Russia and China — is repeated across the world. The tussle between the two men, who will lead rival rallies in Caracas on May 1, is also raising increasingly thorny legal questions.

Mr Guaidó and the opposition control the National Assembly, but Mr Maduro controls all other organs of state. So who has the right to staff embassies or the authority to issue passports, to represent Venezuela on international bodies like the IMF, or to control the finances of state assets?

Citgo, the US-based refiner, is a burning case in point. Although owned by state oil company PDVSA, it is controlled by a Guaidó-appointed board of directors that Mr Maduro regards as illegitimate.

PDVSA is due to make a $71m bond payment this week, or risk Citgo being seized by creditors. Yet it is unclear who should pay the bill. Last week, the Guaidó-controlled National Assembly said it would. 

“We did it under protest so that we can negotiate better conditions for Venezuela with bondholders,” said José Guerra, an opposition member of Congress. “This is a sign of the new tone that will be the hallmark of the new government of Venezuela.”

Apart from Libya, in which two rival governments vied for power after the fall of Muammer Gaddafi in 2011, perhaps no other country has faced such an administrative schism.

In some countries like Colombia, Mr Maduro’s diplomats have been expelled and Mr Guaidó’s envoys are in charge, at least nominally. In others, such as Mexico and Bolivia, Mr Maduro’s people remain in place.

“There are precedents for governments in exile,” said David Smilde, a Venezuela expert at Tulane University. “But this is the only case I know of in which the two competing presidents are both circulating in the [same] territory with one in control while the other holds rallies, controls a diplomatic corps and significant financial resources abroad.”

The power struggle is playing out especially vividly in the US, which has led the charge to support Mr Guaidó and issued a stream of sanctions against Mr Maduro’s senior officials.

Last week, when Venezuelan foreign minister Jorge Arreaza accused the US at the United Nations of seeking “to impose a dictatorship”, 30 diplomats from other countries walked out. On Friday, the US administration froze any assets he might have in the US.

In Washington, meanwhile, Mr Guaidó’s people have taken over the military attaché’s office, prompting leftwing activists to occupy the embassy so it is not taken over too.

“Like it or not, the Maduro government is actually the government in power in Venezuela and is recognised by the United Nations,” said Medea Benjamin, one of the leaders of the two-week-long embassy vigil.

Nearby, at the Inter-American Development Bank, the tug of war is even more fraught. In March, the bank became the first international lender to recognise a Guaidó appointee as Venezuela’s representative.

But China, which backs Mr Maduro, refused to do the same, forcing the IDB to scrap its annual meeting, held this year in China, only days before it was due to start.

The IMF, even though it has drawn up multibillion-dollar contingency plans to fund the stabilisation of Venezuela’s hyperinflation-ravaged economy, is torn.

“It is for our members to indicate which authority they are recognising diplomatically so we can then follow through,” Christine Lagarde, managing director of the IMF, told this year’s spring meetings, adding that either camp would need “a large majority” to be recognised.

The most immediate financial implications of the power struggle, though, involve Citgo, which is barred by the US from funnelling any proceeds from its business back to Mr Maduro and instead must do so to Mr Guaidó. Last year, Citgo made a net profit of $851m, money the Maduro regime desperately needs.

In March, the National Assembly in Caracas authorised a $1.2bn loan for Citgo. The company said the credit complied with “US government sanctions”, but Mr Maduro blasted the move as “illegal”.

Last week, the National Assembly issued preliminary approval to meet the $71m bond payment, and PDVSA’s ad hoc board said on Monday that it had started making payment. If so, it would be an important symbolic victory for the opposition given that Mr Maduro’s government controls most day-to-day business in the country.

The opposition’s next focus is May Day, when Mr Guaidó has called for “the biggest march in Venezuela’s history”. Inevitably, in the parallel universe of Venezuelan politics, Mr Maduro has called a rival march, staged in the same city, Caracas, on the same day.




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