Venezuela’s Hugo Chavez might be joining Fidel Castro as an ailing anti-American, pro-Iran strongman who ‘dies’ in the media every so often.
Or he might actually die.
AEI’s Roger Noriega examines the possible fallout in Venezuela, arguing that “now is the time when an attentive public is open to messages about recovering the Venezuela’s democratic republic.”
There will be consequences for America as well, which the Obama administration has been strangely silent about, but there will undoubtedly be implications for other countries in the region, which will echo in the rest of the world.
Take Nicaragua. It was 25 years ago this week that the International Court of Justice handed down a 12-3 decision condemning U.S. intervention in Nicaraguan affairs. Not surprisingly, the international community is largely silent on Chavez’s ongoing intervention in Nicaragua.
But it is precisely this type of intervention which will be thrust into the limelight with Chavez’s end.
In the most egregious case, Venezuela gives huge amounts of money through an opaque arrangement of private and public entities. ALBANISA, a private company in Nicaragua which is not required to disclose its books, receives oil revenues from the Venezuelan PDVSA’s sales to Nicaragua’s PETRONIC, a company over which the Ortega administration has oversight power. A portion of the revenues are kept in ALBANISA—estimated to have had total funds of about $125 million in 2009—and is widely considered to be used to prop up the Ortega regime. This has led to political controversy in recent years. Last year the IMF took issue with this lack of transparency ever so briefly, temporarily refusing to disburse the remainder of funds for a Poverty Reduction and Growth Facility project in Nicaragua. But the controversy, predictably, slipped quickly out of the international limelight.
The fragility of a Nicaraguan regime heavily dependent upon these Venezuelan “funds,” in turn dependent upon the strong friendship between the two heads of state, becomes all the more apparent with the absence of Chavez, the senior partner. Though the funds are meant to support mutually beneficial regimes (for the leaders at least), the Nicaraguan population and the Ortega regime have both become heavily dependent upon this money, which likely makes up a significant portion of the national budget. The implications of this arrangement are profound, and are becoming increasingly precarious. Its cessation would significantly reduce the standard of living and economic security in Nicaragua, while its continuance results in the derogation of explicit political rights. This will be further aggravated by the impending November 2011 Nicaraguan presidential election, in which President Ortega is only able to participate through a series of corrupt Supreme Court rulings and presidential decrees.
The perfect storm of political unrest in Nicaragua coupled with a debilitating illness of the Venezuelan president could easily disrupt the status quo. This would open the door for other countries—namely the United States and European states—to resume the aid and soft power influence in Nicaragua that has steadily declined with Chavez’s increased role over the last decade. But this cannot happen if those countries which stand to fill the post-Chavez void are not paying attention.
Of course, it is entirely possible that a transition from Chavez’s regime to the next will occur without a hiccup. But while the United States and the international community at large have seemed content to let Chavez’s Venezuela act like a petulant child for the last decade, it should take this opportunity to consider the international ramifications of his potential fall from power.
Margaret McCarthy is a public affairs assistant at AEI.