Russia Doubles Down in Venezuela

-- Joseph V. Micallef is a best-selling military history and world affairs author, and keynote speaker. Follow him on Twitter @JosephVMicallef.

A beleaguered dictator barely hanging onto power against a rising tide of popular unrest. An economy in shambles, both from years of economic mismanagement and the crushing weight of U.S.-imposed sanctions. With a long-time client on the brink of collapse, the Kremlin injects troops and supplies in a desperate gambit to keep an ally in power. Confronted by what it sees as a Russian provocation, a U.S. administration struggles to define an appropriate and effective response while trying to decide whether it should define a red line that would prompt a military intervention. This could be Syria circa 2014, but it's not. It's Venezuela in 2019.

On March 24, Russian planes carrying approximately 100 military personnel and about 35 tons of their equipment arrived in Caracas, Venezuela. U.S. military observers quickly pointed out that the craft, an Ilyushin il-62 and an Antonov An-124, had previously been used to ferry Russian troops between Russia and Syria. The troops were led by Gen. Vasily Tonkoshkurov, head of the mobilization directorate of Russia's armed forces, and were described as a "rapid deployment force."

The Kremlin dismissed the move as a routine training mission, one of many that the Russian military had conducted with their Venezuelan counterparts. The action, nonetheless, brought a sharp reaction from the Trump administration.

White House National Security Adviser John Bolton called Russia's military presence destabilizing and warned, "We strongly caution actors external to the western hemisphere against deploying military assets to Venezuela, or elsewhere in the hemisphere, with the intent of establishing or expanding military operations."

U.S. Special Envoy for Venezuela Elliott Abrams described the Russian presence, along with the role of their Cuban proxies, as "pernicious." Abrams did acknowledge, however, that the Russian military personnel were likely there to repair Venezuela's Russian-supplied S-300 air defense missile batteries. Rolling power blackouts, which have gripped the country over the last several months, had apparently damaged Venezuela's air defense system. They may also be there to assist in the startup of a Kalashnikov factory recently built by the Venezuelan government with Russian assistance.

Several days later, in a speech at the Army War College in Carlisle, Pennsylvania, Secretary of State Mike Pompeo unequivocally told the Kremlin that "Russia's got to leave Venezuela."

Earlier in the year, U.S. President Donald Trump had declared that "all options are on the table," a declaration he has since repeated, with respect to Venezuela. Presumably that would also include the prospect of a military intervention, although the White House has signaled that it does not want to see U.S. troops fighting in yet another foreign entanglement. Instead, the U.S. has been focusing on rallying international support for interim president Juan Guaidó, while stepping up economic sanctions against the Maduro government, and coordinating its actions with Venezuela's neighbors, Colombia and Brazil.

Russia in Venezuela

There are unmistakable parallels between Syria and Venezuela. In both cases, a long-standing Russian client was on the ropes, facing a rising tide of popular opposition, in a conflict that many saw as a proxy between the U.S. and Russia. Russia's willingness to intervene and support its ally was portrayed as underscoring the resurgence of Russian military power in the world, while equally highlighting the ineffectiveness of American foreign policy.

Venezuela is an important, and long-standing, Russian ally. The Kremlin has cultivated relations with Caracas since the election of Hugo Chavez in 1998 to be Venezuela's president. Since then, Venezuela has become a major customer of Russian military equipment, spending billions of dollars over the last two decades to equip its military with predominantly Russian weapons. These international arms sales are critical to maintaining the financial health of the Russian armaments industry and its technological edge.

In addition, Russian companies have invested widely in Venezuela's mining sector, especially in its oil industry. Rosneft, Russia's second largest energy company, has made between seven and nine billion dollars of investments in Venezuela's oil industry. The company is one of the largest foreign investors in Venezuela and, in turn, Venezuela represents one of the largest foreign investments made by Rosneft. The Russian energy giant has a direct stake in seven different Venezuelan oil projects, five onshore oil fields and two offshore gas fields. In addition, Rosneft has prepaid Venezuela billions for future oil deliveries. As of the end of 2018, it's estimated that there are still about $2.5 billion owing against future oil shipments.

Venezuelan national oil company PDVSA's rapidly falling production levels are making it difficult for the company to meet its commitments for oil deliveries. At the end of 2018, Venezuela's required oil deliveries against its cash for oil deals, which it had made with China and Russia, amounted to around 90% of its current production.

Rosneft does have a security interest in a 49.9% stake in PDVSA's U.S. refining arm, Citgo Holding. Any attempt to foreclose on that collateral would be opposed by the U.S. government. Moreover, it's likely that a post-Maduro government would move to declare at least some of those loans illegal because they were made without obtaining the consent of the Venezuelan parliament. In addition to the billions of dollars owed to Rosneft, the Venezuelan government also owes billions to the Russian government for arms purchases and other loans. In short, Moscow has a lot to lose if the Maduro government is overturned. Keeping the Maduro government in power is the best way for the Kremlin to collect the billions that it and Russian companies are owed.

In addition to the Russian military personnel and technicians in Venezuela, there is also a contingent of Russian mercenaries linked to the Wagner Group. Wagner Group mercenaries have been deployed at the Kremlin's behest in Ukraine and Syria and have often appeared in Africa. In Venezuela, they appear to be providing protection to Venezuelan President Nicolas Maduro, and function as an elite security detail. It's believed their number could amount to as many as 400. An initial group was deployed prior to the recent Venezuelan elections, and a second contingent arrived sometime in December 2018 or January 2019.

According to the Organization of American States, there are also approximately 15,000 Cuban military personnel in Venezuela. Many are deployed with the Venezuelan security services, while the balance appears to have a variety of training functions with the Venezuelan military. A large Cuban role in Venezuela's intelligence agency goes back to 2002, and was initiated by Chavez in response to a failed coup against him. It's not clear what other roles the Cubans are playing. Other estimates have placed the Cuban presence in Venezuela as high as 30,000, although many of these are in civilian roles. Not all of these would be considered military personnel. Although the Cuban presence in Venezuela functions as a sort of Russian proxy, Havana has its own interest in propping up the Maduro government.

Both Hugo Chavez and Nicolas Maduro have had a close relationship with Cuba. Havana has been receiving subsidized oil shipments from Venezuela since at least 2000. Over the last two decades, Venezuela has supplied Cuba with amounts varying from 50,000 barrels a day (BOPD) to as much as 90,000 BOPD. Up to 20,000 BOPD have, in the past, been supplied at no cost. Cuba needs about 120,000 BOPD for its energy needs, and produces about 80,000 BOPD. Some of the Venezuelan oil has been re-exported by Havana, and has been an important source of hard currency for the Cuban government.

In addition, the Venezuelan government has supplied Cuba with more than $18 billion in loans, grants and investments. Venezuela's largesse has been a critical factor in keeping the Cuban economy functioning, following the collapse of the USSR in 1989, and Havana's loss of its principal benefactor.

In addition to mercenaries and Russian troops, and the financial assistance that the Kremlin has provided Venezuela, the Kremlin has also publicly signaled its support for the Maduro government in a variety of ways intended to showcase the military cooperation between the two countries. This cooperation has taken the form of joint naval exercises in the Caribbean, as well as military drills.

In December, the Kremlin deployed two Tupolev Tu-160 heavy bombers to Venezuela. The Tu-160 is considered to be "nuclear capable," and their deployment generated considerable criticism of the Russian action in Washington. The bombers conducted a routine 10-hour patrol over the Caribbean and, after being showcased to Venezuelans as tangible proof of Russia's support for the Maduro government, were withdrawn back to Russia.

While the Russian deployment precipitated considerable press coverage in the U.S., this was not the first time that Russia had sent Tu-160s to Venezuela. Occasional deployments have been going on since 2008. Moreover, while the Tu-160 is considered nuclear capable, it's highly unlikely that they carried any such weapons. It was, however, a reminder that Russian air forces could project power over the Caribbean and the confines of the U.S. from Venezuela.

The action sparked speculation that the Kremlin might seek a fully functioning Russian air base in Venezuela, a claim that the Russian Foreign Ministry denied while at the same time Moscow reasserted that "Russia has the ability and the right to open military bases anywhere in the world," including Venezuela, should the two countries agree. The latter is unlikely, as it would surely trigger a red line for the Trump administration.

The Maduro government has also received considerable assistance from Iran. There is also a significant Hezbollah presence in Venezuela, and a smaller footprint for the Iranian Revolutionary Guard Corps' Quds force (IRGC). The Maduro government has relied on the Iranians, and on Hezbollah, to organize militias to defend the government and to attack the popular opposition.

There are two main militia groups in Venezuela. The Bolivarian militia is estimated at 20,000 members by U.S. intelligence sources, although the Maduro government claims it has 100,000 members. The International Institute for Strategic Studies (IISS) estimates the size of the militias and their close supporters at 220,000. There are also the "colectivos," pro-government, heavily armed groups that were organized with the help of Hezbollah operatives and which are patterned on the Popular Mobilization Forces (militias) organized by the IRGC Quds Force in Iraq.

The Maduro government has deployed the militias in conjunction with military forces to suppress opponents. During the most recent anti-government demonstrations in March, it's estimated that around 220,000 military personnel, militias and government supporters were mobilized against the anti-Maduro opposition.

It has also received financial assistance from Tehran. For Hezbollah, Venezuela is an important logistical base for the transshipment of arms and drugs between Africa and the Americas. While the Iranians and the Russians share a common interest in keeping the Maduro government in power, just as they did in supporting President Bashar al-Assad in Syria, they are, to a large degree, working independently of each other, pursuing their own agendas.

Next Steps

The future of the Maduro government is rapidly becoming a proxy contest between the U.S. and Russia in much the same way that the future of the Assad government in Syria did. When the Kremlin intervened in Syria, Assad's regime was largely seen as on the verge of collapse. The Russian intervention stabilized the government and was responsible for Assad's de facto victory in the Syrian civil war. The move cost the Kremlin little and allowed it to reap an enormous propaganda victory. A similar outcome in Venezuela, arguably America's backyard, would be an even more significant propaganda victory. From a practical standpoint, Moscow has little choice. Only by keeping the Maduro government in power does the Kremlin have any hope of getting back the billions of dollars that Venezuela owes the Russian government and Russian companies.

The Trump administration, past saber rattling notwithstanding, has little appetite for a military intervention in Venezuela. Brazil and Colombia have significant militaries and could argue they have humanitarian reasons for intervening, but a full-scale military invasion of Venezuela, by either country, would be highly unpopular. Moreover, neither country has the wherewithal to stage a military intervention in Venezuela without considerable logistical support from the U.S. and, in all likelihood, the backing of American air power.

For now, economic sanctions remain the best alternative for forcing a change in Venezuela. U.S. sanctions are set to ratchet up by the end of the month and to make it virtually impossible for Venezuela to sell most of its oil. Even without sanctions, the country's oil output continues to drop. Barring a dramatic spike in oil prices, Venezuela simply cannot produce enough oil to fund its government.

Moscow and Beijing are both sticking with Maduro for now, but neither has much appetite for extending new loans. According to Chinese sources, Beijing did extend a $5 billion loan in September but has not made any new loans since. It's not clear how much, if any, of that loan has been disbursed. Venezuela has borrowed a total of $54 billion from China against future oil shipments. Roughly $30 billion has been paid back and $24 billion is still outstanding.

On the other hand, despite sanctions and international support of the Venezuelan opposition to the Maduro government, the protest movement is losing momentum. Juan Guaidó's absence from Venezuela, while he sought to mobilize international support against the Maduro government, has hampered the opposition movement. Guaidó will certainly be arrested if he returns to Venezuela and would be at considerable personal risk. On April 4, Guaidó called for a new round of demonstrations against the Maduro government to begin on April 6. With overt Russian and quiet Chinese support, the Maduro government believes that it can outlast the opposition.

In a drama that has played out in South America countless times, it will be the decision of the military to abandon Maduro that will finally spell his death knell. To date, the senior leadership of the Venezuelan military shows no sign they are ready to abandon the government. Only about 1,000 military personnel out of a force of approximately 123,000 have defected. Most of them have elected to seek asylum overseas rather than stay and join the opposition movement.

The Maduro government has been very successful in maintaining the loyalty of the senior military leadership through a combination of money, food and power from a lucrative patronage network based on government largesse and black market and illegal activities that include narcotics trafficking and gun running. If the military ever abandons the government, there will be little that the Kremlin can do to avoid a collapse. Until then, Moscow will continue to double down on Nicolas Maduro.

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