The world is a complicated place.
Most people don’t associate the devastation of the Venezuela by communist leader Nicolas Maduro with China, yet Venezuelan oil lies at the heart of China’s interests and as a result, they have been propping up the murderous South American leader.
Shockingly, Venezuela has the largest known reserves of oil in the world, and in 1950 had the fourth largest Gross Domestic Product in the world and second highest GDP per capita. Venezuela’s economy was six times the size of China, and as late as 1982, they were still the largest GDP in South America. However, by 2017 Venezuela’s per capita GDP had shrunk back to levels last seen at the turn of the century, and they continue to shrink in spite of its impressive oil reserves.
In a couple of decades, the country has receded from relative affluence to scenes of desperate people eating their pets to stay alive, as Maduro’s repressive communist regime continues to destroy all capital investment in the country. With their eye on both Venezuela’s oil riches and the ability to project short-and medium range missile threats to the United States from the Caribbean country, China and Russia have been sending billions of dollars to prop up the Maduro madness.
Into this mix, earlier this year, the national legislature of Venezuela declared that Juan Guaidó was the legitimate President of Venezuela and that Maduro was a usurper and the country has had street protests supporting Guaidó. The United States has recognized Guaidó along with sixty other countries, while China and Russia recognize their puppet Maduro in the hopes of getting their hands on the Venezuelan oil reserves.
Now that President Trump has wisely imposed additional economic sanctions on Venezuela which pressures the Chinese and Russians to end their financing of the Maduro terror machine, the country hangs in the balance.
While the sanctions impact the Venezuelan oil company, Petroleos de Venezuela, American companies which have been working in Venezuela since the 1920s developing the original fields, have a sanctions waiver in place until October. These U.S. based oil companies have used their expertise and capital to keep the flagging Venezuelan oil production alive and are essential to offsetting any move by Maduro to turn over his countries oil wealth to the Chinese in exchange for capital to keep his repressive regime in power.
And while the temptation might exist in some quarters to let these waivers for U.S. oil interests to expire, the net effect would be to hand over a turnkey oil operation to the Chinese which would cement Maduro’s hold on power. This is why the United States should indefinitely extend these waivers so that there is certainty in this unstable region, allowing the hoped for Guaidó government to hit the ground running when they gain control over the levers of power without having to uproot entrenched Chinese interests.
The world is a complicated place, but one lesson that America does not need to have to re-learn is that cutting off our own noses to spite our face is never a good policy. Keeping China and Russia from having a strategic and economic foothold in what is the most oil rich nation in the world which lies less than 3,000 miles from our Gulf Coast is what ultimately matters for our national and economic security, and extending the waivers for U.S. oil companies to operate in Venezuela serves that greater interest. President Trump has wisely issued the waivers, and now he should create regional certainty in this one area by extending them indefinitely.
Rick Manning is president of Americans for Limited Government.