MS Risk Blog

Russia in Venezuela

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After what has been a long crisis in Venezuela, the situation has now turned into a presidential stand-off between the socialist de-facto President Nicolas Maduro on one hand and self-proclaimed interim President Juan Guaido. Not only has this divide been heavily prevalent in Venezuela, but the international community is zooming in on the situation and taking sides. Amongst Guaido’s supporters we find most of the liberal western countries such as the US, most of the EU, the UK, Canada and many more. On the other side, supporting Maduro, we find countries such as China, Cuba, Turkey, Iran and last but not least, Russia. But what exactly is Russia’s interest in Venezuela? Being one of Russia’s last outpost in South America, Russia is heavily invested in having a Russia-friendly leader, Maduro, in place in Venezuela. Not only in terms of projecting power, but also protecting investments, as Russia has put big sums of money, several billions of USD, towards the oil and gas industry in the country. It is almost certain that if Maduro fails to stay in power and Guaido takes over, Russia’s influence in the country would be greatly diminished. Therefore, Russia is likely to go to great lengths to protect Maduro’s presidency, however, an outright military intervention is not likely given the severe repercussions that could entail.

Venezuela’s principal significance for Russia is most likely its location, on the doorstep to the US. Having a heavy influence in Venezuela provides a great, and possibly the only, opportunity to project power for Russia in the Americas. Russia’s interest in projecting power is, according to several experts, likely a nostalgic desire for a strong Russia as a serious player in the world arena. As recent as December 2018, Russia landed two nuclear-capable bombers, TU-160’s, on the Simon Bolivar airport in Venezuela as a show of support for Maduro’s government. The move raised serious concern in the US and was highly condemned. The US’s strong reactions to the event revealed to some extent exactly how significant the Russian influence in Venezuela is to the US, and thus, to the Russians.

Russia has invested heavily in Venezuela’ gas and oil asset, giving them even more reason to protect Maduro. Several billions USD has been forwarded towards Maduro and PDVSA, Venezuela’s state-owned oil company. Recently, Maduro visited Russian President Vladimir Putin in Russia, where Putin pledges additional funds to Venezuelan oil and mining. Reportedly, 17 billion USD has been poured into the Venezuelan oil and gas industry, and although a fair bit of it has been paid back, Venezuela still has a substantial debt towards Russia. Venezuela is having a hard time keeping up with the payment schedule, and rely on its oil reserves, one of the largest ones in the world, to be able to pay the loans back. However, due to US-led sanctions against the country and severe mismanagement of the oil production, the ability to sell oil and thus keeping the schedule is diminished. Further, if a US-friendly leader, like Guaido, were to take power in Venezuela, the investments made in the country might end up worthless and loans may not be paid back.

Maduro’s blockage of western humanitarian aid can become the catalyst for US military action. Arguably, the most sensitive conflict area is currently at the bridges on the border between Colombian town Cucuta and Venezuela, where Maduro-loyal military personnel are blocking US humanitarian aid from entering the country. Several clashes between protesters and military forces over the aid in the last days have resulted in at least two dead and several hundred injured. If sustained, the situation can lead to the necessity of military help to get the aid across the border, thus making the situation even more fragile. Russia’s possible response to a US military intervention in Venezuela is very hard to predict. Russia has a tremendous amount to lose if they lose Maduro, however, given the great physical distance between the countries a Russian military response would probably be very hard to sustain.

At the end of January 2019, Russia-connected private military company, the Wagner Group, was reported to be on the ground in Venezuela to protect Maduro. Although the links between the Russian government and the Wagner Group are unclear, it widely reported that Kremlin exerts some type of influence over the group. Sending mercenaries connected to Wagner Group instead of regular, Russian uniformed military forces helps Russia keeping their involvement in Venezuela at an arm’s length, providing plausible deniability. With the aid of the Wagner Group’s private security personnel, Maduro does not wholly depend on support from the Venezuelan military. However, it is unclear how much pressure the Wagner Group can withstand, and if enough of Venezuela’s military forces turn against Maduro, the mercenaries protecting him will likely not suffice. Russia can, in that scenario, decide to either back down and lose Venezuela to Juan Guaido, or double-down on their effort and send more help to Maduro, either in the form of more mercenaries or Russia-uniformed military personnel.

As the crisis in Venezuela continues, Russia will probably do its best to keep its involvement at an arm’s length. The possible consequences of a full-on military intervention might be very severe, as alliances have been pledged throughout the international community. It is almost certainly in everyone’s interest to resolve the Venezuela situation without resorting to military means, therefore exhausting every possible diplomatic venture before starting to mobilize military force will likely be the preferred course of action. But, to appear strong is in the blood of Russia, and most certainly Putin. Losing the influence in Venezuela would not only be a strategic and economic setback, but also a case of losing face. Because of this, military action to retain influence over Venezuela cannot be ruled out.