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In the Venezuela case study, what are the policy options available to the United
States? Of these alternatives, which one is most likely to be selected, and why? What
potential changes in the International Political System (IPS), Domestic Political
System (DPS) or National Security System (NSS) would cause the selection of
another alternative? Identify which alternative(s) these changes would favor.
Before listing courses of action and selecting one, it is important to understand the
decision making scenario presented by the case study.
Background
The territory occupied today by Venezuela was part of the great Spanish colony in
America. Simón Bolívar, leader of the South American movement for independence from
Spain, was a Venezuelan. Independent since 1830, Venezuela was ruled in various
occasions by authoritarian regimes until 1958.
The country, which was one of the founding members of the Organization
Petroleum Exporting Countries (OPEC), has huge oil reserves and its economy is almost
completely dependent on it.
The mismanagement of the money from oil by the government and weak
institutions was largely responsible for the inequality between classes in Venezuelan
society. This situation made possible the election of Hugo Chavez in 1998. Waving the
anti-corruption flag, the former Army Officer and leader of a failed attempt of coup in
1992 managed to convince the poor majority that his government would represent a
change for the better.
During Chavez government, a new constitution was promulgated and the
president was allowed to legislate on a range of political and economic issues. Chavez
confronted Washington with his concept of Bolivarian Revolution (named after Simón
Bolívar) which is marked by anti-U.S. rhetoric and stronger ties with Fidel Castro among

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other unpopular leaders. He also politically survived a military coup in 2002, a general
strike in 2003 and recall referendum in August this year. In theory, he can remain in
power until 2011.
Policy Options
The situational factors of this case, discussed below, recommend looking at the
interactions within the Input/Output (I/O) Model through the lens of the rational actor
mainly. For that, the oil supply to the United States, the fight against terrorism and drug
trafficking and the stability in Latin America are the national interests at stake.
Oil supply. Venezuela is one of the largest U.S. suppliers of crude oil and the
United States buys about two thirds of Venezuelan production. This interdependence is
reinforced by the fact that most of the refineries that can process Venezuelan oil in an
economic fashion are in U.S. territory.
Despite the rhetoric attacks on the United States, so far Chavez has neither
imposed oil embargo nor signaled he is willing to nationalize foreign companies.
OPEC did not change production and prices policy because of Chavez s urgings
to do so.
The recent rise in the oil prices made it possible for Chavez to spend a lot of
money on his so-called social projects in order to defeat the recall vote and win the
elections for governors in October. His candidates won twenty of twenty-two states.
Terror and drugs. The possibility of a Venezuela-Al Qaeda link, the country s
Muslim population and the unreliability of Venezuelan passports pose some threat to U.S.
homeland security.

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If it is true that Chavez is not funding the narco-terrorist groups, the cooperation
between the two countries in fighting drug trafficking is essential because great part of
drugs in U.S. illegal market passed through Venezuelan territory.
Regional stability. The way the United States changed from World War II Good
Neighbor policy on the region to Cold War interventionism caused a lot of resentment.
Different U.S. administrations either supported or turned a blind eye to coups d état and
to resulting authoritarian regimes as long as this helped to fight communism.
After return to democracy and the end of Cold War, countries like Brazil and
Argentina followed the neoliberal principles of the Washington Consensus and found
themselves immersed in stagnation and recession instead of sustainable economic
growth. Parties and individuals with Marxist background exploited this alleged
globalization failure to be elected and rule these countries. Once in power, their speech is
still filled with ideological content in order to impress the people but their acts are more
pragmatic and closer to market economy. A good example of that is the drive towards
regional economic integration, led by Brazil, which co-chairs the final phase of the Free
Trade Area of Americas (FTAA) negotiations with the United States and is campaigning
to be one of the permanent members of the United Nations Security Council. Another one
is the effort to convince other markets like China and European Union that the region is
economically attractive. In this South American context, Venezuelan oil does not play the
same strategic role as on the bilateral relations with the United States. The weight of
Venezuela is not enough to guarantee the export of the Bolivarian Revolution at
governmental level.

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U.S. Department of Defense, Members of Congress and media sectors allege that
Chavez provides support to the Colombian narco-terrorist groups most notably the
Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de
Colombia in Spanish FARC) in the border region. Chavez responds by accusing the
United States of political manipulation and by using the border problem as an excuse to
purchase arms from Russia. In cases like this, the media helps to make the worst-case
scenario to seem very likely. Maybe it is but it takes time. It is not just about paying for
fighters like MiG-29 and receiving them next day. Even in this hypothetical example,
fighters are useless without trained and qualified pilots.
Another concern expressed by many in DPS and NSS is the connection between
Chavez and Castro, which is not much more than ideological. The current exchanges
between Cuba and Venezuela do not make them a Latin American version of the Axis of
Evil . Different from Cuba, Venezuela is an active participant of intergovernmental
organizations (IGO) like United Nations, Organization of American States (OAS) and
World Trade Organization (WTO).
The policy options are the following, in order of descending likelihood:
Bilateral diplomacy with increased intelligence activity
Multilateral diplomacy
Chavez isolation
Military intervention
Why is bilateral diplomacy more likely?

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The level of uncertainty in Venezuela is not as high as in other regions that supply
oil to the United States, namely the Middle East, the former Soviet Union and West
Africa.
The most considerable uncertainty from Venezuela in this case is Hugo Chavez s
behavior. Individuals can be confused with the IPS state actors sometimes. Like Castro,
Chavez is one of them. Letting him remain in power after the recall referendum does not
suggest that the United States stopped seeing him as destabilizing influence . So far,
much of his confrontation with the United States is about rhetoric and ideology. It is
possible that he acts this way in order to get the support of the poor majority of
Venezuelan people by blaming everything that goes wrong on United States. This seems
to be part of the Caudillo Manual and the media takes care of the reverberation of the
bravados. Similar to Brazil, which is another important actor in the region, Venezuela has
not made major decisions against foreign interests in spite of the fact that the country is
theoretically ruled by a Marxist. The most serious disruption in oil supply since Chavez is
in office, for example, was not caused by any embargo but was a consequence of the
opposition-led general strike in 2003.
In order to stick to his social agenda, he needs money for populist projects and
most of this money comes from oil revenues to the United States.
Although Cuba is very sensitive issue of U.S. foreign police, Castro does not play
the same destabilizing role of years ago because of U.S. embargo and the end of the
Soviet Union. In another comparison with Brazil, Castro is a personal friend of President
Lula and of many others in the Brazilian government, the two countries maintain

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exchanges similar in concept to the Venezuelan ones and this has not interfered at all
with the orthodox economic policies that the country has adhered to.
A sound economic recovery is essential to solve most of the Latin American
problems such as social inequality, regional tensions and indigenous movements. The
actors states and free trade IGOs are getting more integrated and started negotiations
with both European Union and China. Venezuela is full member of the Andean
Community (Comunidad Andina in Spanish CAN) and an associate member of
Southern Common Market (Mercado Comum do Cone Sul in Portuguese
MERCOSUL). This can undermine Chavez s self proclaimed independent foreign policy.
If he really wants Venezuela to be beneficiary of free trade, he needs either to
compromise control of economy or make it less subject to his mercurial temperament.
It is probable that the economic situation will force Chavez to keep the
institutional stability needed for selling the product Venezuela.
As seen during presidential campaign, Latin America is usually mentioned by the
different DPS and NSS actors when they address the illegal immigration problem.
Despite some effort from media and lawmakers, the debate about how to deal with
Chavez is not extensive and does not go deep into the problem. Solutions are not
proposed and the analysis is restricted to tagging the actors stances ( neo-con , moderate
and petro-friendly for example) and to polarization.
Past the election and at the very beginning of the second term of Bush
administration, the impact from constituencies like Florida and interest groups like
Cuban-American community and multinational oil companies has much less effect on
NSS.

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Unless the situation changes dramatically, it is unlikely that Venezuela will have a
greater influence on U.S. political environment. The fact that something like this
happened in 2003 does not mean that diplomacy must be discarded. On the contrary, it is
a good alternative for a country that has its military and intelligence overstrained around
the world in what is called Global War on Terror. Even with this restriction, intelligence
activities can collect and analyze data in order to provide early warning about Chavez s
decisions and to investigate the allegations of existing links between his government and
different narco-terrorist groups.
For the reasons presented, to keep normal relations without becoming careless
with intelligence data gathering and analysis is the more likely policy option.
Potential changes and multilateral diplomacy
The most likely changes are a new Chavez s attitude towards U.S. interests in
Venezuela (oil supply, companies and assets) and the finding of evidences of his support
to guerrilla-type nongovernmental organizations (NGO). In both scenarios, the policy
option to be adopted is multilateral diplomacy as it happened in the push for recall
referendum. During the 2002/2003 general strike, OAS sponsored the Brazilian initiative
called Friends of Venezuela Group . It was a provisional IGO, composed by the
United States, Brazil, Chile, Mexico, Spain and Portugal, with the mission to break the
political stalemate and was welcomed by both Chavez and the opposition. The group
helped OAS and NGOs like Carter Center in the negotiations and in monitoring the
referendum.
This alternative is more appropriate for damage control as shown in Haiti,
earlier this year, where U.S. Marines were relieved by the UN stabilization mission. It is

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not considered as first option to deal with Venezuela because this would bring an extra
issue to the already intricate network of regional negotiations such as FTAA, considering
everything else stable. It would also surrender part of the U.S. influence in the region to
OAS and Brazil, which is not desirable given the number of left-wing parties that are
governing countries of the region.
Another reason for bringing other countries and organizations to the decision-
making process is to guarantee the legitimacy of any U.S. policy change in case the crisis
escalates. U.S. interventionist policy in the region during the Cold War is still a delicate
issue. Many in Latin America simply disregard U.S. statements about commitment with
democracy by the simple fact that they are not considered consistent with the help given
to dictators in exchange for suppressing communism in recent past. If its policy has any
sign of unilateral interference in the sovereignty of a country in the region, the United
States will not receive support.
This option is flexible in the sense that U.S. policy can move back to the previous
one when the change effects cease or can become more aggressive if the confrontation
persists.
Conclusion
The existing contradictions in the relations between the United States and
Venezuela are resulting of the fact that both administrations are determined not to
concede to each other. The difference is that the Venezuelan foreign policy is practically
decided by Hugo Chavez while the U.S. policy is theoretically governed by a
sophisticated decision-making system.

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Bearing this in mind and considering the way war on terror is being fought, it is
not likely that the United States will escalate problems with Venezuela instead of
disregarding the aggressive and confrontational Chavez s rhetoric. In case he decides to
put his ideology into practice, this is not going to happen in a split of second and the
connections within the region do not give him much leeway to implement it.
The situation points in the direction of keeping normal relations with Venezuela
without compromise of U.S. values and interests. This policy also prevents Chaves from
gaining more popular support at the expense of the United States.
If, by chance, Chavez sets a collision course for Venezuelan foreign policy in
relation to the United States or the regional stability, the response needs to be coordinated
with other countries and organizations. Unilateralism reminds this region of the Cold War
interventionism and the resulting anti-Americanism can jeopardize other U.S. interests.
It is challenging to conduct a diplomatic policy when dealing with a foreign
leader who acts in such a provocative way and during wartime but it proves to be valid if
the risks involved are not considered high after the proper analysis of the situation