Venezuela Squeezes Guyana

Happy Wednesday! Chevy may have already made the best holiday ad this year. But don’t make the mistake we totally made and watch it with raw onions around. 

Quick Hits: Today’s Top Stories

• Ukrainian President Volodymyr Zelensky visited Congress on Tuesday, meeting with lawmakers to advocate for additional U.S. aid to his war-torn country. House Speaker Mike Johnson told reporters he had a “good meeting” with Zelensky, but reiterated his objection to passing additional aid without also addressing border security. Zelensky capped the first day of his Washington visit with a joint press conference with President Joe Biden at the White House yesterday evening, where both leaders pushed Congress for additional military aid. The Biden administration declassified intelligence assessments yesterday that suggest Russia’s operations over the last few months have been structured to erode international support for Ukraine by pushing the conflict towards a stalemate, even at the expense of huge Russian losses. The reports were made public in an effort to strengthen the argument for continued assistance. 
• Biden criticized the Israel Defense Force’s (IDF) bombing of Gaza in a speech at a fundraiser in Washington on Tuesday, describing the campaign as “indiscriminate” and warning that Israel will lose international support if it doesn’t change course. “Israel’s security can rest on the United States, but right now it has more than the United States,” Biden said. “It has the European Union, it has Europe, it has most of the world. … But they’re starting to lose that support by indiscriminate bombing that takes place.” National Security Adviser Jake Sullivan suggested yesterday that Israel should shift its tactics away from large-scale bombing and toward more targeted operations, and will visit Israel later this week to discuss the timetable for Israel’s military offensive in the enclave. “It doesn’t have to be that you go from [bombing] to literally nothing in terms of putting pressure on going after Hamas targets, Hamas leadership, or continuing to have tools in your toolbox to try to secure the release of hostages,” he said. “It just means that you’ve moved to a different phase from the kind of high-intensity operations that we see today.”
• Yemen’s Houthi rebels struck a Norwegian tanker with an anti-ship cruise missile on Monday while the vessel traversed the Bab-el-Mandeb Strait, which connects the Red Sea and the Gulf of Aden. No one was injured and the crew was able to put out the fire from the missile strike; the ship is now sailing to a safe port. A French military frigate operating in the area also shot down a drone from Yemen threatening the tanker, which was headed to Italy but had been selected to pick up cargo from an Israeli port next month. The Iranian-backed Houthis have claimed responsibility for a series of attacks targeting commercial vessels in the Red Sea since the start of the Israel-Hamas war on October 7.
• The Consumer Price Index rose 0.1 percent month-over-month and 3.1 percent annually in November, the Bureau of Labor Statistics reported Tuesday, compared to a flat monthly rate and 3.2 percent annually in October. November’s inflation was slightly above economists’ expectations, and core inflation—a metric that strips out volatile food and energy prices—increased 0.3 month-over-month and 4 percent annually, up from the previous month. Nonetheless, the moderate increase is still expected to keep the Federal Reserve on track to hold rates steady at its meeting later today. 
• New Hampshire Gov. Chris Sununu endorsed Nikki Haley for president Tuesday evening at a Haley campaign event in Manchester, New Hampshire. The popular Republican governor argued Haley is “the candidate with the momentum to win” and could move the party beyond Trump. “This is an opportunity for New Hampshire to lead this country,” he said. “For New Hampshire to say we’re not looking in the rearview mirror anymore.” Former President Donald Trump has a 27-point lead over Haley in the Granite State, according to the latest RealClearPolitics polling average. 

Trouble in Essequibo

There’s nothing like a little oil (or a lot of oil) to reignite a centuries-old feud—just ask Venezuelan President Nicolás Maduro as he attempts to reassert claim over Essequibo, a territory that comprises some two-thirds of neighboring Guyana’s total area and, since 2019, the site of significant and growing offshore drilling.

As Venezuelan and Guyanese troops assemble on their respective sides of the border, the brewing territorial crisis hasn’t yet turned into an armed conflict between Venezuela and its English-speaking neighbor. But Maduro’s saber-rattling over Essequibo, which seems to be driven both by political and economic considerations, has officials in Georgetown, Guyana’s capital—as well as in Washington and in capitals around the region—on edge. 

Guyana, a former British colony on the northern coast of South America with a population of fewer than 1 million people, and Venezuela have never been the best of friends. At least some of that rivalry has to do with Caracas’ claim over Essequibo—a sparsely populated, oil- and mineral-rich area west of the Essequibo River. In 1899, the border was supposedly settled in an international arbitration process: Essequibo belonged to Guyana, then known as the colony of British Guiana. Venezuela maintained opposition to that decision, and when Guyana gained independence from Britain peacefully in 1966, the question came up again. An agreement negotiated in Geneva functionally froze the conflict, which gave no particular credence to either side’s claim and demanded neither party do anything to upset the status quo pending a peacefully negotiated resolution.

The territorial dispute was largely dormant during the reign of Venezuelan dictator and Maduro-mentor Hugo Chávez, who never renounced his country’s claim on the region but did soften his rhetoric on the central foreign policy issue to maintain good relations with Guyana. Meanwhile, Georgetown has continuously administered Essequibo, and in 2018, the Guyanese asked the United Nations to settle the issue in its International Court of Justice (ICJ)—a decision that remains years away. 

But just because the conflict has been dormant doesn’t mean the region has been calm. In 2015, a consortium led by U.S. oil giant ExxonMobil discovered significant oil deposits—potentially equivalent to 11 billion barrels of crude—off the coast of Guyana, including in waters off Essequibo’s coast. By 2019, Guyanese oil fields started to come online, sending the Guyanese economy to the moon. Oil production more than doubled from 2021 to 2022, significantly contributing to Guyana’s status as the fastest-growing economy in the world in 2022, when the country’s GDP grew at an annual rate of 62.3 percent.

It makes sense that Guyana would have such significant deposits, since its neighbor to the West has the largest known oil reserves in the world. But that hasn’t guaranteed a healthy economy in Venezuela. In fact, Guyana could look to Venezuela—whose economy is in a decades-long nosedive—if it wanted evidence of all that could go wrong if your entire economy is dependent on oil production. “You have a ‘petrostate’ in ruins whose neighbor has become a rising petrostate,” Javier Corrales, a political science professor at Amherst College whose recent research focuses on the Venezuelan dictatorship, told TMD, using the political science term for a country whose fiscal and export revenues are generated mostly by oil.*

Decades of mismanagement and power consolidation by Chávez, and now Maduro, have led to hyperinflation, shortages of critical goods, stagnating growth, ballooning government debt, and ever-worsening political repression (met with concomitant international sanctions). “The biggest culprit [in Venezuela’s economic decline] is maybe 10 years of a government that used PDVSA [Venezuela’s nationalized oil company] as a checkbook to pay for all kinds of crazy projects, a lot of corruption, and no effort to ensure that the industry works well,” Corrales said, concluding that the oil industry “was essentially cannibalized by the state.” Those conditions created one of the worst migration crises in the world, as Venezuelans flee political instability and economic catastrophe.

Amid this turmoil, the strength of Venezuela’s opposition has ebbed and flowed—perhaps reaching its zenith when opposition leader Juan Guaidó was internationally recognized as interim president in 2019, nearly toppling Maduro. The opposition is on the rise again, as indicated by a hefty turnout in October’s primary election to nominate the anti-Maduro candidate, resulting in a victory for María Corina Machado. The general election is expected in late 2024.

It’s perhaps no surprise then—with Venezuela’s economy circling the drain and the opposition on the rise—that Maduro might consider now to be the perfect time to pick a fight over an issue that has most Venezuelans’ backing. “The oil in Essequibo has suddenly got Venezuela more interested in Essequibo than it has been for the last 15 years, 20 years,” former U.S. Ambassador to Venezuela Charles Shapiro told TMD. “And it serves [Maduro’s] political goals to use this [referendum] as a rallying cry to vote, to rally his supporters behind him, and use it to bonk the opposition over the head by claiming they’re not patriotic Venezuelans.”

Over Guyana’s objections, Maduro held a national referendum on December 3 to decide five questions related to Venezuela’s claim over Essequibo. Ultimately: is it Venezuelan territory? While the official reporting suggested 95 percent of those who cast a ballot were in favor of creating a new Venezuelan state called Guayana Esequiba, turnout was embarrassingly low. In fact, after reports emerged of empty polling stations in Caracas, the regime arbitrarily extended polling by two hours in an effort to juice the vote count. Maduro’s government tried to cover up the anemic turnout by reporting the number of votes cast—10.5 million (though each voter theoretically cast five individual votes, one on each question)—not the number of voters who went to the polls.

The move was also unsuccessful in hamstringing the opposition, which reinforced its support for a Venezuelan claim over Essequibo while knocking Maduro for his clumsy politicking at the same time. “Let me be clear to Guyana and the world: the citizens’ repudiation of the December 3 referendum was directed at Nicolás Maduro and his regime,” Machado said following the low-turnout plebiscite. “We Venezuelans know that the Essequibo belongs to Venezuela, and we are firmly and seriously determined to recover it and reclaim it. Hugo Chávez and Nicolás Maduro’s irresponsibility and indulgence has put Venezuela’s position regarding the Essequibo at risk, taking the controversy to the International Court of Justice.” 

Though the low-turnout referendum seemed ultimately more suggestive of an unpopular regime unable to mobilize its voters than a conclusive answer on whether to annex a large swathe of land, Maduro nevertheless claimed a victory. “This referendum is binding and I accept the people’s mandate,” he said. “Now we really are going to recover Venezuela’s historic rights in Guayana Esequiba.”

Exactly how he plans to recover those “historic rights” is still a little fuzzy—in a way that has Georgetown and its allies on edge. Maduro has made several administrative moves to create the new state, including standing up a new military region and ordering the state-owned oil company PDVSA to add an Essequibo division and start granting operating licenses to drill there. He also presented a law to the national assembly making it illegal to produce or distribute maps of Venezuela that don’t include Essequibo as a fully incorporated state. 

Guyanese President Irfaan Ali said last week that diplomacy was the country’s first recourse, but that it was not going to be caught flat-footed in the event of an armed conflict. “We are also preparing for the worst-case scenario,” he told CBS News last week. “We are preparing with our allies, with our friends, to ensure that we are in a position to defend what is ours.” An emergency meeting of the U.N. Security Council on Friday did not result in any action. 

Separate from the U.N., allies have come to Georgetown’s aid. On December 7, U.S. Southern Command conducted “flight operations” over Guyana in collaboration with the Guyana Defense Force. The exercises were a show of support by the U.S., which only recently lifted some sanctions on Caracas in response to Maduro’s agreement to hold fair elections next year. “We have an interest in no country in our hemisphere invading another country in our hemisphere,” Shapiro said of the United States’ most basic goals in the region.

Brazil, the largest economy in South America, has mobilized troops to the border it shares with Guyana and Venezuela. The country’s left-wing president, Luiz Inácio Lula da Silva, known as Lula, also successfully urged the two parties to meet on the island of St. Vincent later this week—along with the prime minister of St. Vincent and the Grenadines, Ralph Gonsalves, and U.N. Secretary-General António Guterres—to negotiate, though Ali has said Guyana will not budge on the location of the border. “I have made it very clear that on the issue of the border controversy, Guyana’s position is non-negotiable,” he said in a national broadcast this week. He has also reiterated his belief that the claim should be settled by the ICJ. 

Whether this conflict will end in a hot war between the two South American countries—neither of which have large or sophisticated militaries—is not yet clear. The possibility, though, isn’t out of the question, Corrales told TMD. “We can never rule out that a petrostate in ruins, with an authoritarian regime feeling politically insecure, will try crazy things,” he said, alluding to Russian President Vladimir Putin’s 2022 invasion of Ukraine.* “One should expect a lot of risk-taking here. The conditions are present for Maduro to take some big risks. This could include some type of belligerence, even if it’s a minor form of land grab.”

Worth Your Time

• Much digital ink has been spilled on social ills plaguing today’s teens, from the effects of smartphones and social media on mental health to the decline in time teens spend socializing in the analog world. Conor Friedersdorf, writing for The Atlantic, offers a glimpse of teen social life before the internet age, curating stories from older readers on how they grew up. Our favorite is “Donna from New Jersey,” who was a teenager in the 1960s. “My neighborhood had a lot of kids my age, and then there were the kids we met in school,” she wrote. “In the summer we would hang out at Fifth Ward Park or Warinanco Park; winter found us ice-skating on the frozen lake at Warinanco with a wooden boathouse with a pot-bellied stove we made hot chocolate on, or walking to the ice rink. Sometimes we all got together and sang a cappella or lip-synced to popular music. The ‘60s were a turbulent time in history. Vietnam images came nightly on the news. However, there was no 24-hour news, and newsmen reported the facts. No internet, cellphones, or video games. We were aware of what was going on, especially when friends/relatives got drafted, but it was not uppermost in our minds. Sounds idyllic now; conversations with my grandchildren made me realize that the ‘60s were not so bad to grow up in.”

Presented Without Comment

Axios: Jack Smith to Use Trump’s Phone Data at Trial

Also Presented Without Comment

Associated Press: Far-Right Lawmaker Extinguishes Hanukkah Candles in Polish Parliament 

Toeing the Company Line

• The war in Gaza, the January 6 raw footage dump, Essequibo, and the South China Sea. Mike was joined by Adaam, guest opinion writer John Aziz, Grayson, James, and Alex to discuss all that and more on last night’s Dispatch Live (🔒). Members who missed the conversation can catch a rerun—either video or audio-only—by clicking here.
• In the newsletters: Nick argued 🔒 that the trainwreck of a hearing with the university presidents on antisemitism represents a huge win for populism.
• On the site: John unpacks a controversial Texas abortion case, Michal Leibowitz reflects on celebrating Hanukkah in America in the aftermath of October 7, Keith Whittington explains the importance of consistently protecting free speech on college campuses, and Jonah argues populism is to blame for nonsense like “dictator-for-a-day” comments. 

Let Us Know

If you had written in to Conor Friedersdorf, how would you have described your teenage years?

Correction, December 13, 2023: Javier Corrales is a professor at Amherst College, not Amherst University. An error in the transcription of a quote from Corrales was also fixed.