EU sanctions won’t solve Venezuela’s woes
With the European Union (EU) announcing its resolve to prolong sanctions against Venezuela for another year, the country’s already serious situation will just get direr.
The deepening political, social and economic crisis in what was once a prosperous nation has already driven millions of citizens abroad. Further sanctions are likely to exacerbate tensions, rather than relieve them. If the EU really wants to break the deadlock, a more wide-ranging policy with a greater focus on development assistance and crisis relief would be preferable over the sanctions sledgehammer.
An economy in freefall
The sanctions hit Venezuela at a time when the country’s economy is already at a standstill, as 87 percent of the population are living in poverty due to rampant hyperinflation. It’s estimated that prices in Venezuela are doubling every couple of weeks, leading the International Monetary Fund (IMF) to predict that inflation will hit an eye-popping 10 million percent in 2019.
Venezuela was once the most affluent country in South America, but the cost of basic groceries is now more than five times the minimum wage. Staples like eggs and rice are out of reach for most consumers. Medicines are in short supply too, causing a spike in black-market trading at inflated prices that has left hospitals badly affected. The Venezuelan Health Observatory has stated that less than one in ten operating theatres, emergency rooms and intensive care units are fully operational.
As such, the sanctions-hit country is facing an economic and humanitarian catastrophe that manifests itself in alarming statistics. A survey published at the beginning of each year by three of the country’s top universities claimed that Venezuelans had lost an average of 11 kilograms in body weight during 2017, with 60 percent of the population admitting they had woken up hungry due to having insufficient money to buy food. It’s perhaps unsurprising that more than half of young Venezuelans (aged 15 to 29) say they want to move abroad permanently.
Sanctions are preventing economic recovery
Unfortunately, conditions aren’t likely to improve any time soon. Previous rounds of sanctions have not only worsened economic conditions, they have also hindered Caracas from diminishing its hardships. The sanctions are effectively preventing the government from reducing its debt load and regaining some of its international footing. In spring this year, the US stepped up the pressure on Venezuela around the time of the presidential election when it introduced sanctions designed to thwart the government’s ability “to liquidate state assets at fire-sale prices”.
If that put Venezuela in a bind, then US president Trump’s announcement to impose sanctions on Venezuela’s gold exports are set to push the country over the edge. Gold has so far been one of the few lifelines left to the economy, as sales of the resource to countries such as Turkey constituted a major trade channel. With that channel about to be closed off as a result of the sanctions, Caracas is slipping further into international isolation. So desperate is the situation that Venezuelan authorities have approached the Bank of England to repatriate half-a-billion dollars’ worth of gold reserves held in the bank’s vaults in order to bolster public finances – only to be rebuked.
Squeezing Venezuela
While the EU hasn’t followed suit in enacting its own punitive measures on the Venezuelan gold sector, Brussels’ stated hope to achieve the “democratic shared solutions” it cites as the reason behind its sanctions extension is equally misguided. After all, if ordinary citizens must be more concerned about the fulfilment of basic requirements for survival, such measures won’t help return stability to Venezuela.
In fact, research has continually shown that economic sanctions are rarely effective because, as in this case, depriving the economy of export earnings shuts off the only means of financing much needed imports of food, medicine and other basic goods.
Alternative relief efforts are needed
With that in mind, a smarter EU policy would be working towards alleviating unnecessary suffering. For example, the European Parliament was right to ask for more emergency assistance to be released, as well as to call on member states to provide protection-oriented responses – such as humanitarian visas, special stay arrangements or other regional schemes.
The European Commission has shown an ability to look beyond blanket punishment and direct focus on aid as well. In August, the Commission decided to deliver a €35 million emergency aid package in support of humanitarian projects in the country. This ensured adequate supplies of healthcare, food and water to the most vulnerable people.
But prolonging the sanctions for another year now threatens to undo these positive developments. Sanctions are considered a useful tool in international politics, but allocating resources for more constructive policies sends a more positive signal to the country without the threat of choking it off from the international community. As a self-proclaimed global champion of humanism, the EC should realise that blanket sanctions aren’t the way forward.
