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Jacobin - September 22, 2019

"Many recognize that sanctions will not incentivize politicians to change course, because they are not the ones who suffer from them. Venezuelans are acutely aware of what policy analysts and academics have been saying since the announcement of the sanctions:the victims arethe Venezuelan people. The situation is perhaps best summed up by an observation a friend made, after sanctions were applied earlier this year: “El partido trancado y el pueblo con la cochina en la mano.” Drawing on a metaphor from domino, this can be translated to: “Those playing the political game have no moves left, and it’s the people who end up being screwed in the end.”

In early August, the Trump administration ramped up economic sanctions on Venezuela, freezing foreign assets and blocking companies from doing business with the Maduro government. As was to be expected, the executive order was accompanied by grandstanding by members of the Trump administration who argued that the move would “accelerate a peaceful democratic transition.”

These new sanctions made quite the boom when announced, and understandably so. David Smilde, senior fellow at the Washington Office on Latin America, has described similar, but less extensive, sanctions as a “nuclear” option. In the following weeks after the order was issued, a flurry of reports and opinions were published, speculating on the sanctions’ potential long- and short-term economic impacts.

On the ground, the new round of sanctions accelerated disparities between the US dollar and the bolívar soberano on the black market. In late July, the exchange rate hovered around 8,000 bolívares per dollar. By late August, this had risen to 20,000 bolívares. Using this black-market rate, minimum wage in the country is now at two dollars a month.

At the same time, on a day-to-day basis, the sanctions seem to be almost undeserving of discussion. Rather than a bomb, the sanctions are perhaps better described as a blip on the radar. In the words of one friend, a single mother and state employee, “Who has time to panic over esta vaina?”

Venezuelans are, of course, concerned about the sanctions. Even for those unsure of what the sanctions actually entail, they are clear on one point: the sanctions are going to make life much more expensive. However, since long before this new round of sanctions, people have expected prices to increase on a weekly, and even daily, basis. Venezuelans already factor in rapid increases in the exchange rate when considering how far their money will — or won’t — go for the month. Yes, the sanctions have accelerated increases in prices and the cost of the dollar. But this is a change of degree, not kind.

It’s Not Just the Economy, Stupid

Sanctions carry with them many social and political implications, apart from the effects they have on the economy. Indeed, there was significant political fallout after the Trump administration made its announcement. Nicolás Maduro left the negotiating table in Barbados, which, given the timing, was likely a goal of an administration that has little faith in a negotiated end to the current crisis. And though new negotiations are in the works, the sanctions undoubtedly rolled back any progress that had been made by political actors to find some middle ground.

The sanctions highlight a larger political problem that the Trump administration’s relationship with the opposition coalition has produced. It is evident that the Trump administration’s principal interlocutor is Voluntad Popular, the party of Juan Guaidó and his mentor, Leopoldo López. Despite the fact that López is an extremely polarizing figure, considered by many to be one of the most reactionary voices of the opposition, the relationship between Voluntad Popular and Trump has begun to define the coalition’s strategies and has created an expectation of support for measures, like the sanctions, over which many in the opposition are divided. ...
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