Trump's Venezuela embargo is doomed to fail. Here's 5 reasons why
Opinion / 9 August 2019, 11:51am / Marco Aponte-Moreno
The US has announced an economic embargo on Venezuela, intended to put an end to Maduro’s authoritarian regime.
In an August 5 executive order, President Donald Trump said that the tough new sanctions – which target any company or individual outside of Venezuela doing business directly or indirectly with Maduro’s government – were a response to the Maduro regime’s “continued usurpation of power” and “human rights abuses.”
All Venezuelan government assets in the United States are also now frozen.
The new measures represent a significant escalation from previous sanctions, which mainly targeted government officials and some key industries such as oil and gas, gold and finance.
But since this economic decline has happened gradually, beginning in 2014, wealthy Venezuelans – especially corrupt government officials – have already put their money overseas, primarily in European markets. For example, Venezuelans own some 7,000 luxury apartments in Madrid, according to The New York Times.
American sanctions just can’t hurt Venezuela’s ruling class the way they might have several years ago.
Imports and exports with the private sector – a still sizable marketdespite Maduro’s socialist policies – will continue to flow freely, as will remittances from Venezuelans living abroad.
These two income sources both come in dollars, which is far more stable and valuable than the local currency. Combined, they can keep the ailing Venezuelan economy afloat for some time.
An incomplete embargo, in other words, will not provoke complete economic collapse.
3. The poor, not the regime, will be hurt the most
Venezuelans with access to dollars – through remittances or savings squirreled away before the crisis – are surviving this crisis. They can afford food, medicine and gasoline, and buy other goods to barter.
The Venezuelan minimum wage of roughly $7 per month is not enough to cover a family’s basic needs. As a result, malnutrition is spreading. Last year, Venezuelans reported losing an average of 25 pounds, and two-thirds said they go to bed hungry.
Neither of the two countries are likely to comply with an economic embargo to Venezuela. Analysts expect them to continue buying oil, goldand other valuable commodities from Maduro’s regime, providing much-needed cash to his government.
5. Remember Cuba?
Embargoes rarely produce regime change of the sort Trump seeks in Venezuela.
Just consider Cuba, which this year celebrated the 66th anniversary of its communist revolution – 57 years after the Kennedy government imposed a trade embargo against it. The Cuba embargo didn’t end the Castro regime; it fueled anti-American sentiment, handing the Castros an easy scapegoat for all the country’s problems – thereby improving the government’s own popularity.