Venezuelan President Nicolas Maduro (C) speaks to a crowd of supporters at the Miraflores Palace flanked by his wife Cilia Flores (2-L) and Vice-President Delcy Rodriguez (R), as he holds up the document with which his government broke off diplomatic ties with the United States, during a gathering in Caracas on January 23, 2019. - Venezuelan President Nicolas Maduro announced on Wednesday he was breaking off diplomatic ties with the United States after his counterpart Donald Trump acknowledged opposition leader Juan Guaido as the South American country's "interim president." (Photo by Luis ROBAYO / AFP)        (Photo credit should read LUIS ROBAYO/AFP/Getty Images)
Understanding Venezuela's political crisis
02:32 - Source: CNN

Editor’s Note: Jeffrey Sachs is a professor and director of the Center for Sustainable Development at Columbia University. The opinions expressed in this commentary are those of the author; view more opinion articles on CNN.

CNN  — 

Events in Venezuela may be heading toward a catastrophic conflict. Venezuelan society is deeply divided between President Nicolas Maduro and his supporters, backed by the military, versus an opposition led by self-declared president, Juan Guaido, leader of the National Assembly.

According to a report in The Wall Street Journal, which cited a senior administration official, the US promised it would back Guaido as part of a secret plan developed over several weeks. The US, along with Canada and several Latin American governments, quickly recognized Guaido as president, while China and Russia are backing Maduro. One spark could set off a civil war.

Jeffrey Sachs

Neither side appears willing to go down without a fight and new elections in these circumstances would be fraught with peril. If Venezuela had a parliamentary system, new elections might produce a broad coalition among several small parties. Unfortunately, with Venezuela’s presidential system, an election now, if somehow organized, would amplify both the stark polarization between Maduro and the opposition – and the threat of civil war.

The US’ move to recognize Guaido is provocative. The problem is that the US has a track record of bullying Latin America and staging interventions in the region. These US interventions, both direct and indirect, have resulted in dozens of regime changes over the course of more than a century.

Even if Guaido proves successful in his bid for power, millions in Latin America and around the world will view Maduro’s overthrow as the latest case of US-led regime change.

The appointment of neoconservative Elliott Abrams on Friday as President Trump’s new special envoy for Venezuela just two days after Guaido declared himself the new leader will only fuel the charges. Abrams famously advocated for the armed support of Nicaraguan Contras and pleaded guilty to two misdemeanor counts of withholding information from Congress about secret efforts to arm the rebel forces – before he received a presidential pardon. Even if Guaido proves successful in gaining power, the view that the US once again helped to orchestrate regime change will embitter Venezuela and the region for years to come.

Instead of a US-led regime change, the two sides need to share power temporarily, until new elections, perhaps in 2021. It seems inconceivable, yet history shows this can be done. Poland’s successful transition to democracy in 1989 provides a pertinent example. In early 1989, Poland was on the brink of catastrophe, with martial law, a hugely unpopular Communist government, a collapsed economy and an incipient hyperinflation.

In Poland’s case, the rapid transformation started with Mikhail Gorbachev’s policies of perestroika and glasnost, or restructuring and openness. The Communist regime and the Solidarity opposition brokered a Round Table Agreement in 1989, which led to a partially free election for the Polish parliament later that year, which set the country on a path of deep economic reform.

While Solidarity won a significant victory with a majority in the upper chamber of parliament, the communists retained control of the lower chamber. The Solidarity movement brilliantly found a way to peacefully break the deadlock and proposed the solution known as “Your President, Our Prime Minister.” The Communists would retain the presidency and the “power ministries” of interior and defense, while one of the Solidarity leaders became prime minister with the power to appoint his cabinet.

This compromise was put into practice and it held fast under the guidance and support of Gorbachev, the US, Europe and Pope John Paul II. The Communists did not meddle in economic management. Indeed, the new Polish government launched the most ambitious reform in modern history, designed to return Poland to the mainstream of the European economy. The reforms worked. Poland’s economic collapse was reversed and economic growth resumed, setting it on course for European Union membership.

Violence was completely avoided. In 1990, Wojciech Jaruzelski, the last Communist leader of Poland, stepped down and Poland elected Lech Walesa as president. Of course by then, the international scene had changed dramatically, with the fall of the Berlin Wall and the eventual dissolution of the Soviet Union in December 1991.

There is of course no precise analogue between Poland in 1989 and Venezuela today, but the comparison is apt. Venezuela, like Poland, needs a compromise that avoids a violent confrontation between the government and the opposition, a military coup, a civil war or, even more disastrously, a proxy war pitting US-backed contingents against Russian-backed contingents. Such a grim scenario might seem fanciful, yet Syria has been blown apart by such a proxy war during the past eight years.

And like Poland, Venezuela has suffered an economic collapse. This is the sad, predictable result of Venezuela’s failed policies under Maduro, also stoked by US economic sanctions that have further squeezed Venezuela’s oil production and helped to push the country into vertiginous collapse.

Maduro won re-election in 2018 with most of the opposition boycotting the election. Hyperinflation has now reached a rate of 1 million percent per year, with signs of acceleration. Venezuela has defaulted on its external obligations, including enormous sums owed to China and Russia, which will no doubt try to protect their claims.

In short, all sides have an urgent reason for compromise. The Venezuelan military aims to protect its privileged standing within the Chavez-Maduro system, yet it would like to end the economic catastrophe and avoid mass bloodshed. Maduro aims to hold power, yet is clearly incapable of solving Venezuela’s economic crisis. He has lost the confidence of the overwhelming majority of the population. Yet for now he holds the backing of the military.

The humanitarian crisis in Venezuela is also very serious, with hunger, dire shortages of medicines, and massive refugee movements out of the country. These grim realities could propel a Polish-style compromise solution. Such a compromise would have Maduro remain as president, the military in effect hold the Ministries of Defense and Interior, and the opposition forces take over the civilian ministries and the Central Bank of Venezuela. Guaido, or some other leader in the opposition camp, would serve in effect as a prime minister, leading the civilian cabinet, and guiding Venezuela’s economic policies. Elections would be agreed upon for 2021 or 2022, perhaps under a semi-parliamentary system by that time.

The major outside powers, notably the US, China and Russia, and the neighboring countries, would agree to and oversee the end of economic sanctions and the regularization of economic relations with the international institutions and the formulation of an emergency stabilization program. All creditor nations would be ready to take urgent steps, such as debt restructuring, needed to end the catastrophic hyperinflation. The UN Security Council would support these measures.

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    We are not currently on this path. The US instead appears to be aiming for regime change and tightening sanctions to bring Maduro to his knees. Such an outcome is perhaps feasible, though it would leave a very bitter legacy. More likely, though, it would occasion further violence and an escalation of the economic crisis, possibly leading to war.

    This is the urgent time for compromise, not for a winner-take-all showdown.