Update Country Report Curaçao 12 Feb 2019

Venezuela's constitutional crisis has placed many Caribbean countries in a foreign-policy quandary. Recognition of the interim Venezuelan president, Juan Guaidó, by the US, Canada and EU countries-as well as the Lima Group of Latin American countries, which includes Argentina, Brazil and Chile-has put pressure on the Caribbean to follow suit. However, this will prove challenging for Caribbean countries that either have close connections to the regime of Nicolás Maduro through humanitarian or patronage networks, or which are concerned about the potential regional security fallout from the collapse of the Venezuelan government.

The Caribbean response to Mr Guaidó's declared assumption of the presidency on January 23rd was initially mixed. The lack of consensus over how to approach the constitutional situation in Venezuela was first indicated in a vote on a motion proposed at a meeting of the Organisation of American States (OAS) on January 10th, when member states voted on whether to term Mr Maduro's new term in office legitimate or not. Out of the Caribbean members, Jamaica, St Lucia, Haiti, the Bahamas and Guyana voted in favour of the OAS resolution deeming Mr Maduro's second term to be illegitimate. Dominica, St Vincent and the Grenadines, and Suriname voted against the resolution, while Trinidad and Tobago, St Kitts and Nevis, Antigua and Barbuda, Barbados, and Belize abstained. The motion was passed.

These formations reflect the extent of diplomatic engagement between the Venezuelan government and various Caribbean countries. St Vincent and Dominica, both led by left-wing governments, have been ideologically close to Venezuela since the era of former president, Hugo Chávez (1999-2013); despite Venezuela's economic struggles, Venezuela provided humanitarian and financial aid to Dominica following devastation caused by Hurricane Irma in September 2017. Cuba, Venezuela's closest ideological and diplomatic ally, has not yet rejoined the OAS following the lifting of its suspension in 2009. Most other Caribbean countries came to depend on Venezuelan largesse through Venezuela's PetroCaribe programme, which provided oil at 5-50% of market value, with concessionary loans to repay the remainder to the Venezuelan government. Out of PetroCaribe's 17 members, 13 are Caribbean countries.

Declining Venezuelan influence

The OAS voting evidenced the relative decline of Venezuelan influence in recent years. As Venezuela has entered economic crisis and suffered a rapid decline in its oil production it has likewise been less able to continue its oil patronage: the Venezuelan government switched to selling what oil it produces in the markets at international prices. In 2017 Venezuela's oil shipments through PetroCaribe fell by 40%. Figures are not yet available for 2018, but in mid-2018 Venezuela announced that it was suspending Petrocaribe oil supplies to Antigua and Barbuda, Belize, Dominica, El Salvador, Haiti, Nicaragua, St Vincent and the Grenadines, and St Kitts and Nevis.

These countries therefore have less economic incentive to support Venezuela. In particular, some countries are suffering the economic ramifications of having to import oil at market price for the first time in a decade, creating more negative sentiment towards Venezuela. For example, Haiti's inflation is rising, in part because of higher fuel and oil import costs, while power blackouts are becoming increasingly common as the country struggles to pay suppliers.

Beyond these economic considerations, it is also becoming geopolitically more difficult to support Venezuela. Heavyweight diplomatic recognition by the US, Canada and much of the EU has put pressure on Caribbean countries to declare in favour of Mr Guaidó, or at least to remain neutral. However, so far, only the Dominican Republic, Haiti and the Bahamas have formally recognised Mr Guaidó as president. Cuba continues to recognise Mr Maduro as president, as does Suriname, Dominica, and St Vincent and the Grenadines. Most other Caribbean countries have for now remained neutral.

Playing the neutrality card

Given these conflicting geopolitical ties, most Caribbean countries have stopped short of recognising Mr Guaidó but have instead called for dialogue to end the crisis in Venezuela. The Caribbean Community (Caricom) held an emergency meeting in late January to discuss its response as a region to the Venezuelan situation. Following this meeting, 12 Caricom members stated their concern about the crisis in Venezuela but also stressed their commitment to non-interference and non-intervention in the affairs of state of another sovereign country. Caricom delegates reiterated this stance during a meeting with the UN and a special Caricom-Mexico-Uruguay international conference held in Montevideo, the Uruguayan capital, on February 7th.

Caricom's stance appears to be to promote non-interference as a means of avoiding potentially damaging divisions within the regional bloc. However, this stance might not be able to survive any further escalation of the Venezuelan crisis, such as armed clashes between supporters of the rival presidents, or any potential US-led military intervention.

The US intervention scenario would pose particular challenges for the Caribbean region, given deep economic and diplomatic links to the US. Moreover, the US maintains military installations in the Caribbean that could potentially be used to support any military action, such as installations in Puerto Rico and a Co-operative Security Location in Curaçao and Aruba. Any use of these facilities could spark fierce criticism within the Caribbean.

Between a rock and a hard place

The Caribbean's extensive links to Venezuela, and dependence and close ties with the US, mean that the region is deeply concerned with the outcome of the current crisis, and particularly those islands closest to Venezuela. Curaçao, Aruba, and Trinidad and Tobago, for example, can expect illegal migration from Venezuela to increase the longer that the political impasse continues. Should the regime hold on despite US sanctions on the oil trade, the region could also see an increase in drug-trafficking as the Venezuelan regime ramps up other sources of income. This could further destabilise a region already suffering from extraordinarily high rates of violence.

At present, the majority of countries (except Cuba) appear happy to speak through Caricom and preserve the appearance of a common regional stance. This is likely to fragment if Venezuela's crisis is prolonged, with the US likely to put increasing pressure on Caricom to declare in favour of Mr Guaidó. However, Caricom will be wary of supporting regime change, especially given the example of an abortive coup against Mr Chávez in 2002, the diplomatic and economic ramifications of which were felt in the Caribbean for years afterwards.