The Simple Reason Venezuela's Neighbours Won't Do Anything To Stop The Violence

Screen Shot 2014 03 26 at 1.02.48 PMAP PhotoAn anti-government demonstrator, with a bleeding bullet hole drawn on her forehead, takes part in a protest in front of an office of the Organisation of American States, OAS, in Caracas, Venezuela, Friday, March 21, 2014. Opposition lawmaker Maria Corina Machado is scheduled to speak before the OAS council in a closed-door session Friday in Washington, D.C., presenting the situation in her country where at least 28 people have been killed in daily anti-government protests that began in early February.

When Maria Corina Machado, a leader of the opposition movement protesting in Venezuela, went to Washington, D.C., last week to speak to a group of Latin American countries about violence in the streets, she was completely shut out.

The Organisation of American States not only voted to keep her speech off the record, but also voted overwhelmingly not to discuss the situation at all.

There are two reasons for that. One is obvious: Venezuela has ideological allies in countries that consider themselves even slightly socialist. That’s Cuba, Argentina, Ecuador, Bolivia, and Brazil, to name a few.

The other reason is less obvious, but quite simple: oil.

Since 2005, 17 regional countries including Jamaica, Nicaragua, Honduras, most small Caribbean islands, Haiti, and more, have been part of a program called Petrocaribe. It’s basically an agreement in which Venezuela sells or trades oil to member nations at rock-bottom prices.

Guatemala joined but withdrew at the end of last year, saying that Venezuela didn’t deliver as good a deal as the country expected.

So last week when Machado appealed to the OAS, she was appealing to a bunch of Petrocaribe members. As a result, all but one of the Caribbean nations voted against her (with Barbados abstaining), as did Nicaragua and El Salvador. These countries may not have any socialist leanings, but they have love for Hugo Chavez and his legacy.

The Dominican Republic, for example, isn’t Venezuela’s ideological ally, but it’s hard to censure a country that sells you 40,000 barrels of oil every day for 5% of the price. The rest of the amount is paid over 25 years at an interest rate of 1%.

This is huge for countries where per capita income can be as low as $US1,300 (Haiti).

“Venezuela is teaching an impressive lesson to the world that solidarity and generosity can prevail over speculation, greed and unquenchable thirst for wealth,” said former Dominican President Leonel Fernandez at the group’s inception.

Nicaragua trades jeans, sugar, and coffee with Venezuela for oil. Petrocaribe did Haiti the favour of erasing all of its oil debt after a devastating earthquake hit in 2005, and sends Jamaica enough oil to power 95% of the country.

According to a report by think tank The Brookings Institute, this leaves Venezuela’s opposition with limited options in terms of who it can successfully appeal to for help.

Within Venezuela, people have suggested that the Catholic Church and maybe Pope Francis mediate. From within the region, former Brazilian president Lula da Silva and Uruguayan president Mujica have indicated willingness to act as brokers. Neither regional leader can be considered neutral, but either individually or as a group, they can be considered relatively honest brokers. So long as they are perceived as seeking the interests of a stable and democratic Venezuela that will work toward reconciliation, they can become acceptable.

In this instance, it’s possible that Venezuela’s deteriorating economy could work in the opposition’s favour. Venezuela may have more oil than Saudi Arabia, but it may not be able to afford basically giving it away if the country is really broke.

It could try to raise oil and gas prices at home, but when the government tried to do that in 1989, violent riots broke out in Caracas.

Another important thing to note here is that Venezuela still exports 40% of its oil to the United States, despite their horrid diplomatic relationship.

If Washington wants to, perhaps it could put some pressure on that.

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