Our Venezuela Policy: Tossing a Drowning Man an Anchor
Just as Iran sanctions have been intimidating banks and businesses from doing legitimate business there, Venezuela sanctions are having the same chilling effect:
As the United States has quickly ratcheted up sanctions against Venezuela to pressure Nicolas Maduro, bankers say they are shying away from doing even legitimate business with the crisis-wracked oil-producing country for fear of getting caught in the crossfire.
When we judge the destructive effects of sanctions policies, we need to take into account all of the consequences that these policies have. If fear of U.S. penalties is so great that it scares away financial institutions from processing legitimate transactions, that has to be counted as part of the costs that the sanctions impose on the targeted economy. These are predictable and likely consequences of trying to strangle the economy of the targeted country, and it is the civilian population that pays the price for all of this. One of the ways that Venezuelan civilians pay that price is by making it more difficult for relatives living outside the country to send them money:
That not only presents a challenge for banks and businesses but for families in the United States, many in Florida, who send money to relatives left in Venezuela to help them weather the nation’s widespread food shortages and hyperinflation that could reach 10 million percent this year.
As a result, “there are many major banks in the United States that have made the decision to decouple from Venezuela,” said Gutierrez, who works with 60 domestic and international banks in Florida.
Sanctions are guaranteed to make economic conditions in Venezuela even worse than they were, and they are designed to do just that. When our government slaps crippling sanctions on another country, it does so knowing full well what that means for the civilian population.
Venezuela has also been suffering from massive blackouts over the last several days. While the blackouts themselves have most likely been caused by poor maintenance, sanctions are making it more difficult for Venezuelans to cope with them:
The sanctions have affected Venezuela’s ability to import and produce the fuel required by the thermal power plants that could have backed up the Guri plant once it failed.
The people of Venezuela are struggling to stay afloat, and our government’s policy is to toss them an anchor. It is bad enough that administration policy is aimed at regime change, but the fact that it is inflicting more pain on an already suffering population makes it even worse.