(WSJ, Paulo Trevisani, 1.Aug.2019) — U.S. Commerce Secretary Wilbur Ross laid out a plan including credit and investment to help rebuild Venezuela’s economy under democratic rule, as Washington continues to push for new leadership in the struggling nation.
The American plan is contingent on the removal of Venezuela’s authoritarian leader, President Nicolás Maduro, and his replacement with Juan Guaidó, leader of a fractious opposition supported by the U.S. and other countries.
Speaking in the Brazilian capital to executives from across Latin America on Thursday, Mr. Ross said 14 U.S. government agencies have a blueprint to address the economic calamities in a country buffeted by galloping inflation and a sharp economic contraction. Venezuela is also struggling with $155 billion in external debt, according to the Institute of International Finance.
“Reversing socialism will be done by facilitating private investment, rehabilitation of power generation and oil-bidding rounds,” Mr. Ross said.
The commerce secretary said the U.S. would be ready to loosen the sanctions that Washington imposed on Venezuela as the Maduro regime turned increasingly autocratic in recent years.
The sanctions have choked Venezuela’s lifeblood, its oil industry. They have also been directed at Mr. Maduro, top ministers in the government and the commanders in the security services, who are accused by the U.S. of rights abuses, corruption and drug trafficking.
“For immediate relief, the U.S. will ease sanctions, promote domestic and international trade credit, deploy technological advisers and engage international financial institutions,” Mr. Ross said.
The U.S. and many other countries recognized Mr. Guaidó, head of Venezuela’s congress, as the legitimate leader of Venezuela in January after Mr. Maduro’s 2018 reelection was marred by fraud.
But a monthslong campaign of street demonstrations, intensifying U.S. financial sanctions and efforts to get the military to turn on Mr. Maduro have failed.
The opposition and Maduro regime are expected to resume Norway-brokered negotiations soon in Barbados, in an effort to resolve the country’s political and economic crisis, Carlos Vecchio, Mr. Guaidó’s top envoy to Washington, said this week. Mr. Guaidó’s negotiators are pressing Mr. Maduro into accepting new presidential elections, which he has so far rejected, people familiar with the talks said.
Parts of the plan outlined by Mr. Ross on Thursday echo a Trump administration approach of promoting political change by facilitating investment. In its Mideast peace plan, the administration has introduced an economic blueprint to marshal investment for the region as an incentive for an Israeli-Palestinian accord.
Mr. Ross said that under the Venezuela blueprint, which runs several hundred pages, the U.S. would work to rehabilitate the country’s crippled private sector, restore its oil production, revive farming and develop financing.
Speaking at a conference of infrastructure executives organized by Washington-based consulting firm CG/L Infrastructure, he said that the U.S. and other countries would try to resolve short-term needs such as humanitarian aid, followed by efforts to stabilize the economy and the country’s infrastructure.
“Venezuela’s infrastructure needs are far more severe, in a relative basis, than any other Latin America country because of years of neglect and mismanagement,” Mr. Ross said.
Hubert Borja, a Colombian businessman, said he had worked in Venezuela and believes there will be opportunities for his industrial water-treatment firm after a regime change.
“Everything needs rebuilding in Venezuela, from hospitals to water treatment. There are opportunities for businesses helping with the reconstruction,” Mr. Borja said after listening to Mr. Ross’s remarks.
Among the more serious challenges Venezuela faces is reversing the collapse in oil production, which has fallen from 3.5 million barrels daily in 1999 to 734,000 barrels a day as of June, according to the Organization of the Petroleum Exporting Countries.
Mr. Ross said that the U.S. plan to repair the sector calls for a bigger role for private firms, which until now have faced difficult restrictions to operate in Venezuela.
Even simple necessities, such as spare parts, were neglected by the Maduro regime, Mr. Ross said. “Undoing the socialistic mismanagement in some levels like that will be relatively inexpensive,” he said.
In a post-Maduro Venezuela, he said, trained professionals who fled would return to rebuild what once was one of Latin America’s richest nations, along with an infusion of capital in oil, natural gas and electrical production.
Mr. Ross estimated potential revenue of $50 million a day from pumping oil from Venezuela’s vast reserves, the world’s largest.
The Commerce Department would create a clearing house to help business activity, providing real-time information about trade and investment opportunities for U.S. and international businesses, Mr. Ross said.
The U.S. will lift commercial restrictions on U.S. firms, mobilize business contacts with Venezuela and foster pro-market, pro-business reforms, he said.
The U.S. plan also calls for recovering Venezuela’s central bank, which hasn’t operated independently or issued financial data to the public, revitalizing the private banking sector and promoting financial reforms.
“Everything is needed,” Mr. Ross said.
—Kejal Vyas contributed to this article.
Write to Paulo Trevisani at email@example.com