One last chance for negotiations in Venezuela
The humanitarian agreement between the government of Nicolás Maduro and the Venezuelan opposition, which was channeling to the UN some assets frozen by U.S. sanctions, has stalled due to several factors
Two years after a formal dialogue began between the Venezuelan government and opposition, many are starting to ask how much longer before these negotiations will reach a comprehensive solution. But there is another, more urgent question: how can talks succeed unless there is a clear plan to support the partial accords that have already been reached in the process?
Hopes for a negotiated solution in Venezuela were high in August 2021, when representatives of the government of Nicolás Maduro and Venezuelan opposition met in Mexico City. There they signed a broad agreement to begin negotiations that would, in the words of the signers, “establish clear rules of political and social coexistence, with absolute respect for the National Constitution.” The process was designed to help the parties reach a series of “partial agreements” that would, ultimately, build momentum towards a comprehensive accord to restore Venezuela’s democracy.
After over a year of quiet dialogue, the parties reached a significant milestone on November 26, 2022. Once more, they arrived in Mexico City and signed a partial agreement that would divert money frozen abroad by U.S. sanctions to a fund that would be administered by the United Nations. These funds would go to prioritizing health care, malnutrition, and restoring basic infrastructure — all of which are urgent needs contributing to a migration crisis that has already forced over 7 million Venezuelans to flee their homes.
This agreement was hailed as “historic,” and received widespread media attention at the time. And for good reason. If implemented, this fund would amount to a major boost to UN humanitarian efforts in Venezuela. The UN is asking for $720 million in assistance in 2023, of which just 18%, or $130 million, of that funding has been pledged — which means there are still millions of Venezuelans in need of assistance.
Over eight months later, however, this fund is still not up and running. The humanitarian agreement, meant to be the low-hanging fruit in a series of escalating agreements ahead of presidential elections set for 2024, has instead been stalled by a combination of factors.
After the agreement was signed, the U.S. government took six months to assure the UN that the fund could exist within the U.S. financial system, and to minimize the risk that creditors could seize it over legal claims against Venezuelan government debt. This dealt a blow to the deal’s implementation, and raised questions about its future. But in May 2023, U.S. diplomats finally provided assurances to the UN that the agreement’s implementation could proceed — giving the deal a green light.
Since then, the main obstacle to implementation has been UN bureaucracy. The organization is understandably concerned about the reputational risk of implementing a program that has drawn comparisons to the controversial Oil for Food Program in Iraq — a program that was rife with mismanagement and corruption. However, UN transparency standards have improved significantly since the 1990s.
Given these advancements, and in light of both parties’ agreement to move forward under the UN framework, there is no excuse for delay. Postponing the implementation of the humanitarian agreement only serves the interest of the Maduro government, which has used the delay to try to bolster its narrative that sanctions, and not years of mismanagement and corruption, are the sole reason for Venezuela’s economic collapse.
This is the main finding in a new report published by the Atlantic Council’s Adrienne Arsht Latin America Center (AALAC), in which we provide five key recommendations for U.S. policymakers and UN diplomats to support the humanitarian agreement.
First, it is essential to recognize that the fund does not need to exist for sanctioned money to be diverted to the UN humanitarian response. There are large quantities of money in frozen assets held at financial institutions across the world that could be transferred to UN agencies efficiently and securely, even before the fund is set up. The United States can and should make clear that it stands ready to do so, placing the ball in Maduro’s court.
There is also a need for clearer engagement with multiple stakeholders involved, including with Venezuelan political actors, countries in which sanctioned funds are being frozen, and associated financial institutions, so that there are clear expectations for how to proceed. Support for the agreement, and the details of its implementation, should be communicated clearly.
In parallel, the UN should be encouraged to build off its success in managing multi-donor trust funds (MDTF) over the last thirty years. While the Venezuelan humanitarian agreement is not without risk, the UN has built the necessary systems to manage pooled financing mechanisms with transparency and accountability. The UN’s Multi-Partner Trust Fund Office currently manages nearly 100 pooled financing mechanisms, representing over 95 percent of all funds channeled through UN-administered programs. This expertise should be leveraged to ensure that this historic opportunity is not wasted.
Additionally, the United States should ensure that creditors’ valid legal claims to repayment do not prevent assistance for the Venezuelan people. Some creditors have already stated that they will not make claims to the Social Fund, a positive gesture that should be applauded. Ultimately, creditors’ valid claims should be addressed but kept separate from efforts to resolve the humanitarian crisis.
Finally, the US and international allies should commit to a coordinated messaging strategy. The July meeting of EU and Latin American diplomats with Venezuelan negotiators in Brussels, and the conference on Venezuela in Bogotá in April, demonstrate that when the international community is on the same page it can send a powerful message in support of negotiations.
The truth is that it makes sense that the window for dialogue cannot be left open forever. Maduro should understand that he faces significant costs if he gets up from the table, and the U.S. and its allies should stand ready to increase the pressure if needed. But by the same token, ongoing negotiations efforts should be given every opportunity to succeed. Failing to implement this humanitarian accord would not only mean less support for suffering Venezuelans, it would ultimately place the future of the Mexico City process in jeopardy. For the sake of all those committed to a peaceful, democratic solution in Venezuela, the fate of the humanitarian accord cannot be left in the air.
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