Government forces US embassy to downsize|
Mar. 03, 2015 — Caracas, Venezuela
Published by Economist Intelligence Unit
The US embassy in Venezuela's capital, Caracas, has less than two weeks to reduce the number of staff from more than 100 to 17, following a directive from the Venezuelan president, Nicolás Maduro.
US visitors to Venezuela will also require visas, in a move that is reciprocal (as Venezuelan visitors to the US also need entry visas) but symbolic. Although the details are currently unclear, this could have a major impact on US business travellers, consultants and journalists looking to visit Venezuela. Venezuela has also banned senior US officials from the country, including a former president of that country, George W. Bush (2001-09), and a former vice-president, Dick Cheney (2001-09).
In addition to the new rules, four US missionaries were detained last week, before being released. Mr Maduro also said that a US pilot had been detained near the country's border with Colombia in recent days on suspicion of spying.
The last week has seen one of the most major moves yet against the US by Venezuela, after well over a decade of anti-imperialist rhetoric by the governments of the former president, Hugo Chávez (1999-2013), and his successor, Mr Maduro. The nadir came in 2006 when Mr Chávez called Mr Bush "the devil" at the UN. The US ambassador to Venezuela was expelled several times in the late 2000s, and the two countries have been without ambassadors in each other's capitals since 2010.
Venezuela says that economic problems—including 70% annual inflation, widespread shortages and deep-seated currency problems—are down to an economic war being waged against the government with a helping hand from the US. The Venezuelan authorities claim that this is part of a larger coup plot. In relation to this claim, Venezuela arrested the mayor of Caracas, Julio Borges, last month and appears to be cracking down on other members of the opposition.
Impact on the forecast
Bilateral relations with the US frequently worsen in the run-up to elections in Venezuela—a risk that we have already flagged in our forecast—as the government seeks to rally nationalist sentiment (an electoral tactic that Mr Chávez used successfully). As a result, the development does not come as a complete surprise. However, a reduced number of US personnel in Caracas will heighten the risk of a continued escalation of bilateral tensions, as there will be an absence of diplomatic personnel to mediate between the two sides.