Venezuela is unraveling at a quickening pace, senior U.S. intelligence officials said Friday, in a crisis that the Obama administration views with growing concern but with little leverage to affect the outcome.
Venezuelan President Nicolás Maduro, already struggling to keep his country’s lights on and its stores stocked with basic food, faces a series of challenges to forestall a recall election and thwart creditors awaiting a seemingly inevitable debt default.
Two senior U.S. intelligence officials, briefing a small group of journalists on condition that they not be further identified, emphasized that the Obama administration is not acting to help Maduro’s political foes, and only seeks to avoid economic collapse and a social explosion.
“We are not rooting,” said one of the officials, referring to frequent charges by former President Hugo Chavez, who died in 2013, and Maduro of U.S. meddling. “This is really not the case that the U.S. is rooting for any outcome other than there not be an economic meltdown or social violence.”
Were Venezuela to default on its debt obligations, creditors could go to court to seek seizure of assets abroad, including refineries in Louisiana, Illinois and Texas.
Venezuela’s options grow dimmer by the week, the officials said. With a huge loss of crucial oil export revenue, Maduro’s leftist and fiercely anti-U.S. government has slashed imports and taken to selling off gold reserves to keep afloat.
Even as it aggressively depletes its reserves, the Maduro government has shown a surprising willingness to squeeze imports further and weather scarcity in order to meet debt payments and postpone a default until 2017.
Imports have fallen from a recent high of $65 billion in 2012 to a projected level of around $21 billion this year, the Eurasia Group, a New York-based political risk consultancy, said in a research report issued Thursday.
The scarcity of goods ranges from beer to toilet paper and on to condoms, and tempers are rising in Venezuela, where polls show 60 to 70 percent of Venezuelans want Maduro out of power. Looting and conflict over food occur on some scale nearly every day.
“There are reasons for concern that over the summer as Venezuela gives importance to payments on debt over imports that these events could spiral,” one of the officials said.
Maduro and his top circle are in a race against the clock. It they can manage between $6 and $7 billion of debt payments that fall due largely in the fourth quarter of this year, they may forestall an opposition campaign for a recall election. Polls show that the ruling United Socialist Party of Venezuela would suffer a severe rout.
Under the constitution, if Maduro can hang on to power until Jan. 10, 2017, then even if he is ousted, Vice President Aristóbulo Istúriz would fill out his term until 2019, keeping the party in power.
“There’s a lot of pressure to get to 2017 (and) avoid the recall,” one official said.
The more the United States intervenes, the more we’re the problem.
U.S. intelligence official
Problems mount rapidly, though. Oil production has fallen to two million barrels per day, and Houston-based oilfield services giant Halliburton Co. this month followed in the path of Schlumberger, another huge Houston-based firm, in curbing activity in Venezuela, tired of getting stiffed on payment.
Were Venezuela to default on its debt obligations later this year, creditors could go to court to seek seizure of assets abroad. Those might include assets of the subsidiaries of the state oil giant, Petroleos de Venezuela S.A., such as CITGO Petroleum Corp., which operates three refineries in Louisiana, Illinois and Texas. Some 5,600 independently owned and operated CITGO branded gas stations in the United States would not be so directly affected.
While the Obama administration is talking with governments in the region over how to help Venezuela avoid greater crisis, it is deeply reluctant to take a more direct role, the officials said, partly because the Maduro government does not appear ready to adopt measures to put the nation on sounder economic footing.
“The more the United States intervenes, the more we’re the problem,” one of the officials said.
Tim Johnson: 202-383-6028; @timjohnson4