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In the Venezuela case study, what are the policy options available to the United States? Of these alternatives, which one is most likely to be selected, and why? What potential changes in the International Political System (IPS), Domestic Political System (DPS) or National Security System (NSS) would cause the selection of another alternative? Identify which alternative(s) these changes would favor.

Before listing courses of action and selecting one, it is important to understand the

decision making scenario presented by the case study.

Background

The territory occupied today by Venezuela was part of the great Spanish colony in

America. Simón Bolívar, leader of the South American movement for independence from

Spain, was a Venezuelan. Independent since 1830, Venezuela was ruled in various

occasions by authoritarian regimes until 1958.

The country, which was one of the founding members of the Organization

Petroleum Exporting Countries (OPEC), has huge oil reserves and its economy is almost

completely dependent on it.

The mismanagement of the money from oil by the government and weak

institutions was largely responsible for the inequality between classes in Venezuelan

society. This situation made possible the election of Hugo Chavez in 1998. Waving the

anti-corruption flag, the former Army Officer and leader of a failed attempt of coup in

1992 managed to convince the poor majority that his government would represent a

change for the better.

During Chavez government, a new constitution was promulgated and the

president was allowed to legislate on a range of political and economic issues. Chavez

confronted Washington with his concept of Bolivarian Revolution (named after Simón

Bolívar) which is marked by anti-U.S. rhetoric and stronger ties with Fidel Castro among

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other unpopular leaders. He also politically survived a military coup in 2002, a general

strike in 2003 and recall referendum in August this year. In theory, he can remain in

power until 2011.

Policy Options

The situational factors of this case, discussed below, recommend looking at the

interactions within the Input/Output (I/O) Model through the lens of the rational actor

mainly. For that, the oil supply to the United States, the fight against terrorism and drug

trafficking and the stability in Latin America are the national interests at stake.

Oil supply. Venezuela is one of the largest U.S. suppliers of crude oil and the

United States buys about two thirds of Venezuelan production. This interdependence is

reinforced by the fact that most of the refineries that can process Venezuelan oil in an

economic fashion are in U.S. territory.

Despite the rhetoric attacks on the United States, so far Chavez has neither

imposed oil embargo nor signaled he is willing to nationalize foreign companies.

OPEC did not change production and prices policy because of Chavez s urgings

to do so.

The recent rise in the oil prices made it possible for Chavez to spend a lot of

money on his so-called social projects in order to defeat the recall vote and win the

elections for governors in October. His candidates won twenty of twenty-two states.

Terror and drugs. The possibility of a Venezuela-Al Qaeda link, the country s

Muslim population and the unreliability of Venezuelan passports pose some threat to U.S.

homeland security.

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If it is true that Chavez is not funding the narco-terrorist groups, the cooperation

between the two countries in fighting drug trafficking is essential because great part of

drugs in U.S. illegal market passed through Venezuelan territory.

Regional stability. The way the United States changed from World War II Good

Neighbor policy on the region to Cold War interventionism caused a lot of resentment.

Different U.S. administrations either supported or turned a blind eye to coups d état and

to resulting authoritarian regimes as long as this helped to fight communism.

After return to democracy and the end of Cold War, countries like Brazil and

Argentina followed the neoliberal principles of the Washington Consensus and found

themselves immersed in stagnation and recession instead of sustainable economic

growth. Parties and individuals with Marxist background exploited this alleged

globalization failure to be elected and rule these countries. Once in power, their speech is

still filled with ideological content in order to impress the people but their acts are more

pragmatic and closer to market economy. A good example of that is the drive towards

regional economic integration, led by Brazil, which co-chairs the final phase of the Free

Trade Area of Americas (FTAA) negotiations with the United States and is campaigning

to be one of the permanent members of the United Nations Security Council. Another one

is the effort to convince other markets like China and European Union that the region is

economically attractive. In this South American context, Venezuelan oil does not play the

same strategic role as on the bilateral relations with the United States. The weight of

Venezuela is not enough to guarantee the export of the Bolivarian Revolution at

governmental level.

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U.S. Department of Defense, Members of Congress and media sectors allege that

Chavez provides support to the Colombian narco-terrorist groups most notably the

Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de

Colombia in Spanish

FARC) in the border region. Chavez responds by accusing the

United States of political manipulation and by using the border problem as an excuse to

purchase arms from Russia. In cases like this, the media helps to make the worst-case

scenario to seem very likely. Maybe it is but it takes time. It is not just about paying for

fighters like MiG-29 and receiving them next day. Even in this hypothetical example,

fighters are useless without trained and qualified pilots.

Another concern expressed by many in DPS and NSS is the connection between

Chavez and Castro, which is not much more than ideological. The current exchanges

between Cuba and Venezuela do not make them a Latin American version of the Axis of

Evil . Different from Cuba, Venezuela is an active participant of intergovernmental

organizations (IGO) like United Nations, Organization of American States (OAS) and

World Trade Organization (WTO).

The policy options are the following, in order of descending likelihood:

Bilateral diplomacy with increased intelligence activity

Multilateral diplomacy

Chavez isolation

Military intervention

Why is bilateral diplomacy more likely?

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The level of uncertainty in Venezuela is not as high as in other regions that supply

oil to the United States, namely the Middle East, the former Soviet Union and West

Africa.

The most considerable uncertainty from Venezuela in this case is Hugo Chavez s

behavior. Individuals can be confused with the IPS state actors sometimes. Like Castro,

Chavez is one of them. Letting him remain in power after the recall referendum does not

suggest that the United States stopped seeing him as destabilizing influence . So far,

much of his confrontation with the United States is about rhetoric and ideology. It is

possible that he acts this way in order to get the support of the poor majority of

Venezuelan people by blaming everything that goes wrong on United States. This seems

to be part of the Caudillo Manual

and the media takes care of the reverberation of the

bravados. Similar to Brazil, which is another important actor in the region, Venezuela has

not made major decisions against foreign interests in spite of the fact that the country is

theoretically ruled by a Marxist. The most serious disruption in oil supply since Chavez is

in office, for example, was not caused by any embargo but was a consequence of the

opposition-led general strike in 2003.

In order to stick to his social agenda, he needs money for populist projects and

most of this money comes from oil revenues to the United States.

Although Cuba is very sensitive issue of U.S. foreign police, Castro does not play

the same destabilizing role of years ago because of U.S. embargo and the end of the

Soviet Union. In another comparison with Brazil, Castro is a personal friend of President

Lula and of many others in the Brazilian government, the two countries maintain

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exchanges similar in concept to the Venezuelan ones and this has not interfered at all

with the orthodox economic policies that the country has adhered to.

A sound economic recovery is essential to solve most of the Latin American

problems such as social inequality, regional tensions and indigenous movements. The

actors

states and free trade IGOs

are getting more integrated and started negotiations

with both European Union and China. Venezuela is full member of the Andean

Community (Comunidad Andina in Spanish

CAN) and an associate member of

Southern Common Market (Mercado Comum do Cone Sul in Portuguese

MERCOSUL). This can undermine Chavez s self proclaimed independent foreign policy.

If he really wants Venezuela to be beneficiary of free trade, he needs either to

compromise control of economy or make it less subject to his mercurial temperament.

It is probable that the economic situation will force Chavez to keep the

institutional stability needed for selling the product Venezuela.

As seen during presidential campaign, Latin America is usually mentioned by the

different DPS and NSS actors when they address the illegal immigration problem.

Despite some effort from media and lawmakers, the debate about how to deal with

Chavez is not extensive and does not go deep into the problem. Solutions are not

proposed and the analysis is restricted to tagging the actors stances ( neo-con , moderate

and petro-friendly for example) and to polarization.

Past the election and at the very beginning of the second term of Bush

administration, the impact from constituencies like Florida and interest groups like

Cuban-American community and multinational oil companies has much less effect on

NSS.

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Unless the situation changes dramatically, it is unlikely that Venezuela will have a

greater influence on U.S. political environment. The fact that something like this

happened in 2003 does not mean that diplomacy must be discarded. On the contrary, it is

a good alternative for a country that has its military and intelligence overstrained around

the world in what is called Global War on Terror. Even with this restriction, intelligence

activities can collect and analyze data in order to provide early warning about Chavez s

decisions and to investigate the allegations of existing links between his government and

different narco-terrorist groups.

For the reasons presented, to keep normal relations without becoming careless

with intelligence data gathering and analysis is the more likely policy option.

Potential changes and multilateral diplomacy

The most likely changes are a new Chavez s attitude towards U.S. interests in

Venezuela (oil supply, companies and assets) and the finding of evidences of his support

to guerrilla-type nongovernmental organizations (NGO). In both scenarios, the policy

option to be adopted is multilateral diplomacy as it happened in the push for recall

referendum. During the 2002/2003 general strike, OAS sponsored the Brazilian initiative

called Friends of Venezuela Group . It was a provisional IGO, composed by the

United States, Brazil, Chile, Mexico, Spain and Portugal, with the mission to break the

political stalemate and was welcomed by both Chavez and the opposition. The group

helped OAS and NGOs like Carter Center in the negotiations and in monitoring the

referendum.

This alternative is more appropriate for damage control as shown in Haiti,

earlier this year, where U.S. Marines were relieved by the UN stabilization mission. It is

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not considered as first option to deal with Venezuela because this would bring an extra

issue to the already intricate network of regional negotiations such as FTAA, considering

everything else stable. It would also surrender part of the U.S. influence in the region to

OAS and Brazil, which is not desirable given the number of left-wing parties that are

governing countries of the region.

Another reason for bringing other countries and organizations to the decision-

making process is to guarantee the legitimacy of any U.S. policy change in case the crisis

escalates. U.S. interventionist policy in the region during the Cold War is still a delicate

issue. Many in Latin America simply disregard U.S. statements about commitment with

democracy by the simple fact that they are not considered consistent with the help given

to dictators in exchange for suppressing communism in recent past. If its policy has any

sign of unilateral interference in the sovereignty of a country in the region, the United

States will not receive support.

This option is flexible in the sense that U.S. policy can move back to the previous

one when the change effects cease or can become more aggressive if the confrontation

persists.

Conclusion

The existing contradictions in the relations between the United States and

Venezuela are resulting of the fact that both administrations are determined not to

concede to each other. The difference is that the Venezuelan foreign policy is practically

decided by Hugo Chavez while the U.S. policy is theoretically governed by a

sophisticated decision-making system.

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Bearing this in mind and considering the way war on terror is being fought, it is

not likely that the United States will escalate problems with Venezuela instead of

disregarding the aggressive and confrontational Chavez s rhetoric. In case he decides to

put his ideology into practice, this is not going to happen in a split of second and the

connections within the region do not give him much leeway to implement it.

The situation points in the direction of keeping normal relations with Venezuela

without compromise of U.S. values and interests. This policy also prevents Chaves from

gaining more popular support at the expense of the United States.

If, by chance, Chavez sets a collision course for Venezuelan foreign policy in

relation to the United States or the regional stability, the response needs to be coordinated

with other countries and organizations. Unilateralism reminds this region of the Cold War

interventionism and the resulting anti-Americanism can jeopardize other U.S. interests.

It is challenging to conduct a diplomatic policy when dealing with a foreign

leader who acts in such a provocative way and during wartime but it proves to be valid if

the risks involved are not considered high after the proper analysis of the situation