The Economic War Against the Venezuelan People

The same policies used against Cuba from 1960 and against Chile from 1971.

If the imperialist bloc does not approve of a government, it will face severe repression and intervention, often in the form of a "hybrid war". The economic battle against Venezuela is a key part of this.

From: Tricontinental Institute, June 2019. ╱ About the author
This dossier was written jointly by the Buenos Aires and São Paulo offices of the Tricontinental: Institute for Social Research. The researchers at the offices worked in collaboration with the Colombian Critical Thinking Group of the Institute of Latin American and Caribbean Studies of the Social Sciences Faculty of the University of Buenos Aires (Grupo de Pensamiento Crítico Colombiano del Instituto de Estudios de América Latina y el Caribe or IEALC), with Lautaro Rivara (a sociologist and militant of the Dessalines Brigade in Haiti), and with Ana Maldonado (a sociologist and militant of the Frente Francisco de Miranda). We are grateful to them and to the researchers whose work – acknowledged in the text – has guided us.
Editor’s note: This text is part of a longer dossier by Tricontinental Institute, available here.

If the imperialist bloc does not approve of a government – often for its failure to subordinate itself to imperialism – that government will face severe repression and intervention, often in the form of a hybrid war. The economic battle is a key part of the hybrid war. All methods are used to weaken a country’s economy, rattle its population and then open up society to a ‘guerrilla war’, as Korybko suggests from his reading of the US Army Special Forces’ training documents for unconventional war (Korybko, 2015).

Imperial forces have a long history of intervening to economically suffocate the population of non-aligned countries. Having made them gasp for air, the imperialists blame the governments for – effectively – choking themselves. There is a long chain of such suffocations, with Cuba at the centre. The blockade against Cuba began in October 1960 and was escalated in 1996 with the Helms-Burton law during the Clinton administration. In the 1970s, US President Richard Nixon’s administration made the Chilean economy ‘scream’, which sabotaged the government of Salvador Allende and drove the 1973 coup d’état. In the 1980s and 1990s, the US-dominated finance and development organisations – the IMF and the World Bank – drove policies that created hyperinflation and shortages throughout Latin America; these organisations then presented neo-liberal economic policies that merely heightened the crisis. In other words, the cause of the problem was brought in as its solution. The same policies used against Cuba from 1960 and against Chile from 1971 have been turned against the governments of Hugo Chávez and Nicolás Maduro: stingy foreign investment, promotion of capital flight and currency speculation as well as erection of trade barriers that caused planned shortages (CELAG, 2019).
Having made them gasp for air, the imperialists blame the governments for – effectively – choking themselves. There is a long chain of such suffocations, with Cuba at the centre.
The attempt to suffocate Venezuela intensified in 2012 and deepened in a more belligerent and aggressive manner in 2017. Former chief of the US Southern Command Kurt Tidd laid out the objectives of the economic war in his text, Plan to Overthrow the Venezuelan Dictatorship: ‘Masterstroke’ (23 February 2018).

"Increase instability to a critical level by intensifying the undercapitalisation of the country, the leaking out of foreign currency and the deterioration of its monetary base, bringing about the application of new inflationary measures….Fully obstruct imports, and at the same time discouraging potential foreign investors in order to make the situation more critical for the population" (Kurt Tidd, US Southern Command, Top Secret/20180223).

We can summarise the multiple tools of imperialism’s economic war in three dimensions (Curcio, 2018).

(1) The production-distribution dimension

Many countries in Latin America – as in the Global South – rely on the export of primary goods for their external revenues. For Venezuela, it is oil. Until the arrival of the Chávez government, the country relied on the import of most food and consumer goods to satisfy the domestic market. Over the past two decades, Venezuela’s government has attempted to increase national production of food. But the progress has been insufficient to meet popular demand. A large percentage of consumer goods and foodstuffs are still imported by the private sector (Vielma, 2018).

The reliance on the export of primary goods and the import of food and consumer goods sets the stage for a particular tactic of the economic war: hyperinflation. The hautebourgeoisie that controls food imports engineers price increases in two ways: by encouraging shortages of goods and by currency speculation. These two mechanisms are central to manufacturing hyperinflation. Since 2017, average prices have increased by more than 2% daily, spiking in 2018 and at the start of 2019. Researcher Pasqualina Curcio (2018) argues that reliance on food traders who worked with the black market dollar rate (Misión Verdad, 2016) and the withholding of food bought at government-mandated fixed prices created induced shortages and reliance upon black market prices. This resulted in the 90% increase in food prices. These two mechanisms – shortages and currency speculation – erode the economy, setting in motion the contraband and illegal sections, which further promote instability and inflation.

This is why none of the textbook explanations for hyperinflation can be applied to Venezuela. It is not a simple problem of economic mismanagement. The economy has been manipulated to generate discontent, chaos and desperation. Latin America has experienced decades of manipulation of its money supply and goods to create hyperinflation and recession. This is, arguably, a vicious way to discipline the working-class and governments of the people.

(2) The commercial dimension.

Dependency on the export of primary goods and the import of food and consumer goods drives countries in Latin America to borrow foreign currency from commercial lenders. This produces a structural vulnerability for countries in the region. Without the free flow of dollars to finance consumption – including of food— society in the region becomes desiccated and the potential of any economic growth withers. To cut off the lending of foreign currency is essentially a death sentence for a country.

No wonder that the United States has issued more than six decrees that punish commercial relations with Venezuela. Fines and sanctions are placed on any firm – commercial and financial – that trades with Venezuela. Commercial cargo, on its way to Venezuela, is routinely confiscated. This is why there is a critical shortage of food, medicine and other basic goods in the country.

Economists Mark Weisbrot and Jeffery Sachs (2019) suggest that these sanctions and this embargo creates a manufactured ‘humanitarian crisis’ that has resulted in the deaths of 40,000 Venezuelans from 2017 to 2018 alone.

(3) The financial dimension.

Starting in 2015, with increased intensity since 2017, the United States has impeded Venezuela’s financial operations. Even the normal work of a sovereign state – the issuance of debt and financial instruments to raise funds – has been blocked since these often rely upon financial markets rooted in Wall Street and the City of London. Not only does the US prevent Venezuela from issuing government bonds, but it also prohibits PDVSA from issuing its own financial instruments to raise capital in dollars from different financial markets.
These three dimensions – production, commercial, and financial – produced hyperinflation and scarcity, withdrew the basic tools that the government could have used to solve the crisis, and aggravated the suffering of the Venezuelan people.
Over the past two years, the US has moved aggressively against Venezuelan assets. It has frozen the funds from CITGO (PDVSA’s company) that operates in the United States. It has encouraged the withholding of gold reserves (valued at US $550 million) deposited in the Bank of England. It has prevented international financial organisations from carrying out any transactions with Venezuela. It has pursued legal action to confiscate public assets of the Venezuelan people. Trump has signed four decrees that stifled the ability of the Venezuelan state to raise funds:

a. Executive Order no. 13827 (March 2018) targeted the crypto-currency Petro, which attempted to resolve Venezuela’s exchange rate problem (Teruggi, 2018).

b. Executive Order no. 13835 (May 2018) targeted receivable accounts as well as other operations.

c. Executive Order no. 13850 (November 2018) prevented the commercialisation of gold.

d. Executive Order no. 13857 (January 2019) established a blockade and froze CITGO-PDVSA’s accounts in the United States.

These three dimensions – production, commercial, and financial – produced hyperinflation and scarcity, withdrew the basic tools that the government could have used to solve the crisis, and aggravated the suffering of the Venezuelan people. This is not a normal economic crisis. This is part of a hybrid war strategy deployed by the imperialist bloc. Last year, former US ambassador William Brownfield openly admitted the use of the economic dimension in the hybrid war, saying that ‘perhaps the best solution would be to accelerate the collapse. … we should do it understanding that it’s going to have an impact on millions and millions of people who are already having great difficulty finding enough to eat’. But, he continued, ‘the desired outcome justifies this fairly severe punishment’. Along the same lines, a US State Department spokesperson said at a Mexico City press conference in 2018:

"The campaign of pressure against Venezuela is working. The financial sanctions that we have imposed…have forced the government to start falling into default, both in the sovereign debt and in the debt of PDVSA, its oil company. And what we are seeing….is a total economic collapse in Venezuela. Then our policy works, our strategy works, and we will keep it."

Donald Trump imposed new measures against Cuba that are along these same lines, making it relatively impossible for foreign businesses to operate on the island. For example, a new set of sanctions make it possible to prosecute businesses that appear to engage with any part of the economy from which a Cuban-American family had their businesses seized as part of Cuba’s reforms in the years following the revolution.

These measures against Cuba and Venezuela are a form of economic and political discipline against all of Latin America. They are a clear message from the US government on what lies ahead for any nation that dares to embark on a radical process of change counter to its imperialist interests.

This text is part of a longer dossier of Tricontinental Institute. The complete dossier is available here.


Curcio, Pasqualina 2018 Hiperinflación: arma imperial (Caracas: Editorial Nosotros Mismos)

Korybko, Andrew. Hybrid Wars: The Indirect Adaptive Approach to Regime Change, Moscow: Peoples’ Friendship University of Russia, 2015.

Misión Verdad 2016 “Los hilos económicos de la guerra contra Venezuela”,

Vielma, Franco (2018). “Razones y factores que explican el aumento de los precios en Venezuela”.

Weisbrot, Mark y Sachs, Jeffrey 2019 El caso de Venezuela (Washington: Center for Economic and Policy Research) Disponible en

Top image: President Donald J. Trump delivers remarks to the Venezuelan American community at the Florida International University Ocean Bank Convocation Center Monday, Feb. 18, 2019 in Miami, Fla. (Official White House Photo by Andrea Hanks). From: Wikimedia.


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