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Mar 20, 2017 | 09:15 GMT

Venezuela's Greatest Threat Comes From Within

The Venezuelan government's biggest concern is not what the opposition might do next, but what its own armed forces are capable of.
(FEDERICO PARRA/AFP/Getty Images)
Forecast Highlights

  • The Venezuelan government will use human intelligence and electronic surveillance to keep a close eye on its armed forces.
  • Though no military uprising appears to be in the making, Caracas will rely on careful monitoring to minimize the risk of one emerging as the economy sinks deeper into crisis.
  • As Venezuela works to stamp out threats from within, it will also have to cope with a more hostile U.S. administration and the risk of expulsion from the Organization of American States.

This year will be the most difficult for Venezuela to weather since oil prices collapsed in 2014, dragging the country's economy down with them. Less than three months into 2017, Caracas is already grappling with relentless inflation and food shortages as well as the uncertainty that has accompanied the new U.S. administration. In the face of troubles that seem to never end, the Venezuelan government has also fended off challenges from its political opponents in the Democratic Unity Roundtable by using offers of conciliation to drive a wedge between them. Caracas' biggest concern, however, is not what the opposition might do next, but what its own armed forces are capable of.

A Crisis Is Brewing

According to unnamed Stratfor sources, the Venezuelan government has taken to keeping a closer eye on its troops. The General Directorate of Military Counterintelligence has reportedly begun to monitor midranking military officers deployed to the country's Strategic Defense Regions (REDI) and Strategic Defense Zones (ZODI). Venezuela's eight REDI, which are administered by major generals appointed by the president, contain dozens of ZODI commanded by additional officers. And it is apparently these figures' loyalty that has Caracas worried.

The government's primary concern lies in the fact that REDI and ZODI officers have room to act — and encourage their subordinates to follow — without their superiors' immediate knowledge. REDI and ZODI commanders have the authority to issue direct orders to the units under their control, and in theory they could lead military action against the state while keeping the defense minister and Strategic Operational Command in the dark as to their intentions. In hopes of preventing an uprising from someday unfolding, the government has begun to scrutinize the comings and goings of these units' lower ranks.

At the end of the day, Caracas' fears of an insurrection probably won't be realized. Self-interest and persistent differences among Venezuelan troops would be difficult obstacles to overcome in an attempt to overthrow the government. But the country's civilian leaders would be foolish not to treat the military with caution. Venezuela is caught in an economic crisis of historic proportions that will continue to haunt its citizens for years to come, and as popular dissatisfaction mounts, a coup may become a more tempting option for airing long-held grievances.

These harsh economic and political realities are not just policy problems for Caracas' ruling elite to solve — they are existential threats to its rule.

Unfortunately for Caracas, there is no quick fix to the country's economic problems, which stem from more than a decade of overspending and financial mismanagement within the government. When oil prices plunged in 2014, it simply exacerbated these problems. Imports fell sharply and inflation soared; it is expected to rise again by more than 700 percent in 2017 compared with the year before. Meanwhile, Venezuelans are suffering from widespread shortages in nearly all staple food items, and by one estimate the price of these goods jumped by over 500 percent last year.

Dark Skies Ahead

The lack of clarity surrounding U.S. President Donald Trump's stance toward Venezuela has introduced an additional source of anxiety for the government in Caracas. Under former President Barack Obama, U.S. authorities opened several investigations into high-ranking members of the ruling United Socialist Party of Venezuela (PSUV), including National Guard Commander Nestor Reverol, Vice President Tareck El Aissami and former National Assembly Speaker Diosdado Cabello. Though the U.S. Treasury Department slapped sanctions on a number of Venezuelan officials, it forewent the application of the same measures against state institutions involved in criminal activity, such as money laundering.

That could change during Trump's tenure as the scope of the investigations against the Venezuelan government widens. Washington may choose to impose heavier sanctions on Venezuela, perhaps even targeting state oil and natural gas giant Petroleos de Venezuela (PDVSA). If it does, the company will have a harder time doing business with firms and people under the United States' jurisdiction, likely causing its production to fall even further. Considering PDVSA's output accounts for about 95 percent of Venezuelan exports by value, the company's declining revenue would eat even more deeply into the country's ability to import food.

Riding Out the Storm

These harsh economic and political realities are not just policy problems for Caracas' ruling elite to solve — they are existential threats to its rule. Even if oil prices start to rebound in the years ahead, inflation will likely stay high, as will the country's risk of financial default. And any new sanctions the United States levels against PDVSA will only make matters worse. Rather than trying to fix the unfixable, Venezuela's leaders have adopted the next best approach: banding together and battening down the hatches.

So far the government's strategy seems to have worked. Though polls suggest that less than a third of Venezuelans support the ruling party, President Nicolas Maduro has managed to avoid widespread unrest and delay regional elections that his party stands a decent chance of losing. The country's unexpected calm can largely be explained by the fact that most would-be protesters spend the majority of their day simply trying to meet their basic needs, such as buying food as it grows increasingly scarce. Without viable opposition parties to rally and coordinate the country's dissatisfied populace, moreover, there are limits to how much damage voters can do to the government's grip on power.

The military, however, is another matter entirely. Even if the threat of insurrection is presently low, the possibility of soldiers unhappy with their country's direction mounting a coup cannot be ruled out. Food shortages and high prices, after all, affect soldiers as much as they do civilians, particularly as imported goods become few and far between for the average Venezuelan citizen. In fact, a video released in early March of two national guardsmen scrounging for food in trash bags has gone viral among Venezuelan internet users, raising the uncomfortable question of just how loyal troops will stay to a government that cannot ease their weighty burdens. That said, military food supplies vary greatly depending on location, soldiers' ranks and access to additional funds. And though most of the rank and file are suffering alongside the rest of the population, the armed forces' midlevel and senior leaders probably aren't.

Either way, Caracas will continue to keep a wary eye on its military officers as its economic straits grow dire. The Venezuelan government is no stranger to surveilling those who might pose a threat to its rule, including opposition figures and political activists. And as hardship breeds popular frustration with Caracas, the ruling administration will continue to keep its gaze fixed on its own forces for fear of the threat rising within.

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