Hosted by Christina Ruffini and Sir Richard Dearlove
Guest
Raul Stolk
Raul Stolk is a lawyer-turned-journalist and Managing Director of Caracas Chronicles and an expert on power structures propping up the Rodríguez government.
Episode Summary
Venezuela's leader Delcy Rodríguez has no constitutional legitimacy, by any standard, including Chavismo's own rules, according to lawyer-turned-journalist Raul Stolk. So who is actually running Venezuela right now? And what does the United States really want?
Raul Stolk, Managing Director of Caracas Chronicles, joins Sir Richard Dearlove and Kate McCann for a deep dive into the power structures propping up the Rodríguez government, the US military's direct line to the Venezuelan armed forces, and why opposition leader María Corina Machado may be the single biggest wild card in the country's future.
Links:
Home
https://caracaschronicles.substack.com/
https://caracasconsulting.com/
In this episode:
2:53 - Iran War Impact on Global Energy Markets
6:34 - UAE Exits OPEC: End of Saudi Dominance
8:16 - New Iraqi Government and Middle East Stability
11:31 - Japan Creates Intelligence Bureau
15:40 - Venezuela After Maduro: Trump's Business Strategy
17:34 - Delcy Rodriguez Legitimacy and Constitutional Crisis
24:34 - Venezuela Military Power Structure Post-Maduro
30:07 - US Geopolitical Goals in Venezuela
45:07 - Venezuela Oil Market China Russia Rivalry
54:47 - Machado Return: Venezuela Election Wild Card
55:48 - Sir Richard and Kate Discussion
Hosted by Sir Richard Dearlove (former MI6 Chief) and Kate McCann (Political Editor, The Times)
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Transcript
COLD OPEN
Stolk: I've said it before, but it's like an atomic bomb for the political status quo. What does The United States really want with Venezuela? Telcy Rodriguez, she gets her protection from her relationship with The United States. Right now, The United States has a direct line with the Venezuelan armed forces. We are entering a new era of Latin American politics.
Mccann: If you're China, if you're Russia, what are you seeing when you look at Venezuela?
INTRODUCTION
Mccann: Hello, and welcome to One Decision. I'm your cohost, Kate McCann, and I'm joined by my cohost and former head of MI6, of course, Sir Richard Dearlove. Hi, Sir Richard.
Dearlove: Hi, Kate. Yep. A good topic today because it takes us away from Iran, we have to look at other issues from time to time.
Mccann: Well, speaking of taking us away from Iran, tell the listeners where you are. Got a lovely backdrop. Looks very relaxing, quite —
Dearlove: I'm in a hotel in an extraordinary little town on the Mani Peninsula, which is the most southern peninsula in Greece, called Gythio. And Gythio has a famous history because it is the naval port of ancient Sparta from which the Spartan fleet sailed during the Peloponnesian Wars, I think. But it's an amazing place and it's the most, let's say, undeveloped and remote part of Greece and really beautiful and rather extraordinary.
Mccann: Well, I'll take your holiday recommendation tips this year. It sounds absolutely perfect. Shall we start with our in-brief conversation? Because, you know, there's a lot going on in the world. Coming up, we'll revisit Venezuela. It's been four months with Donald Trump's pick, Delcy Rodriguez, in charge. But The US has obviously been focused on Iran. And so I suppose the question is, you know, who is running the show there? How much attention is President Trump and Marco Rubio really giving to Venezuela? Raúl Stolk, who's the managing director of Caracas Chronicles, joins us from Miami to explain all of that. And if you're not already subscribed, by the way, to One Decision on YouTube or wherever you listen, now is the time. You really don't wanna miss a single conversation. First off, let's get into in brief, where we talk about some of the big news this week. And, of course, there is a lot going on, Sir Richard. Let's start with The Middle East because there is the ongoing war in Iran. Should we talk a bit about the wider consequences? Because, obviously, the ripples are being felt now across the world of this conflict. And, you know, domestically here in The UK, we've got the inflation aspect of it. We've got people's summer holidays — talking about your holiday in Greece, people not being sure whether they're gonna be able to get away on holiday, which might sound flippant, but is important for lots of people. But we've also seen some quite big moves. How much should we link The UAE pulling out of OPEC, for example, with what's going on in Iran? Or is this The UAE using an opportune moment to do something that they maybe had wanted to do for a while?
IN BRIEF
Dearlove: I think, frankly, it's both. But I think it also is a fundamental change of balance in the global energy market. And what it represents is the formal emergence of The United States as a dominant global energy supplier and a decline of obviously the OPEC cartel built around the dominance and influence of Saudi Arabia. And The UAE doubling down in their backing of The United States. And of course, huge advantage to The US energy economy and huge advantage to The UAE to be liberated from decisions largely dictated by Saudi Arabia. Because Saudi Arabia has that surplus production capacity so that it can switch on and off the taps to control energy prices. And personally, I think that this signals the probable end of OPEC altogether. I mean, it won't break up completely, but I think it's near. Because the only two OPEC members have surplus capacity. One of them is UAE, which of course they haven't been able to deploy. Okay, it's much smaller than Saudi Arabia. But I think this is a huge change. And I think it might be certainly planned by some of the ideologues that stand behind the Trump administration. And I think they would have talked with The UAE about it. This is my speculation. It's not a surprise in Washington, although it's a surprise to the international market.
Mccann: That's interesting. To what end? To cement the idea of American dominance in this, in a new market?
Dearlove: Well, America has become a major producer, and it's now, as it were, created a freer market, which is not going to be, well, a more anarchic market, maybe is a better way, which isn't gonna be dominated by what the Saudis decide. Which is interesting in a way because on the other hand, you have this close political alliance between Saudi Arabia and The United States. And I guess the Saudis don't have much choice in the current situation than to follow The US because a bigger problem for Saudi in the medium to long term is Iran. So you have a very dynamic conjunction of parts, some of which are economic and some of which are political. And they're in the process of, you know, a fundamental rebalance.
Mccann: I mean, picking up on both of those parts, Lee — there is an interesting decision made by Saudi Arabia about LIV Golf. So the LIV Golf tour was controversial at the time it was created. It involved a huge amount of money, huge amounts of investment from Saudi Arabia, big, big prizes. It sucked in a lot of the big names, but it was kind of frowned upon by the rest of the sport. It's now spluttered to a halt, and Saudi Arabia is withdrawing its investment. Should we look at that, and maybe you'll say both to this as well, as sort of the end of the era of sports washing, i.e. a political decision? Or, again, is this about economics?
Dearlove: Well, I think it's both. I think the reason that the Saudis are withdrawing was it turned out to be a bad investment. And they haven't quite got the flexibility of funds looking in the medium to long term. They've abandoned this project, you know, for this mega city that was gonna — is it NEOM, that was gonna flow through the desert? And they're only gonna build small bits of that. So, I mean, I think Mohammed bin Salman is a capable Saudi autocrat and is thinking long term. And I think he's beginning to realize that some of the excessive ambitions of the Saudis in modernizing and changing the shape of their economy just are not practical any longer. And I think the Gulf issue is really extraordinary because that had a very strong political symbolism, didn't it?
Mccann: Yeah. I mean, and it was also billions and billions and billions of dollars. I mean, it wasn't a small amount of money. And I suppose that that's the question about how much is sports washing worth. And sports washing, of course, being the idea of creating political legitimacy by being involved in something mainstream. So I think you're right. I think it's a really interesting turning point, and I wonder where else we might see that scaled back. And Saudi Arabia, I think, one to watch in the coming months. Should we talk more broadly though? I mean, there are lots of other stories going on around the world, and Iraq is one of them. It looks like it might be forming a government finally. President Trump has given the okay, if you like, to the new pick for prime minister. How relevant is that to what we're seeing in the rest of The Middle East and for the Trump administration?
Dearlove: Well, having been someone who was heavily involved in the war in Iraq, I am really excited to see a strong central government emerging and the decline of Shia-backed militias influencing the Iraqi political system. The progress in Iraq towards a more dominant government whose writ runs through all the regional and rather complex areas of Iraq is a big plus. But I think what it also shows you is, after the catastrophe of Saddam's regime, which lasted for so long, how long it can actually take to rebuild a country like that and give it a significant degree of political stability and pretty strong economic prospects in the medium to long term. So there's a huge lesson in that issue. And of course, all these issues were underestimated, the complexity of them at the time of the Iraq war. I mean, you know, we're now more than twenty years on. So it has taken a very, very long time indeed. But I think it's a very significant development. It's part of the sort of reordering of the tectonic plates in The Middle East.
Mccann: The most significant of which, alongside the Iraq issue, is the disappearance of the regime in Syria. Yeah. I mean, Syria is another fascinating case. I mean, Ali al-Zaidi, who is the pick, that's who we're talking about in Iraq, will also have to deal with the economic fallout of the war in Iran. And I suppose the backing of President Trump in that context is going to be, if not helpful, at least a positive.
Dearlove: Yeah, I think it's crucially important. And of course, the whole issue of the disintegrative forces inside a country like Iraq. By that, I mean the tendency of the Kurds not to recognize the remit of the central government. And of course, one of the big issues in Iraq has been whether the Kurds could sell their oil separately on the international market or whether it had to be sold through central organizations. Well, that's now been resolved. So the Kurds don't have that disintegrative policy they had heretofore, to run their economy separately. And these changes I think are hugely important. And as I say, it gives Iraq a chance of emerging as a very strong and stabilizing influence in an area which of course has been so politically dangerous and unstable.
Mccann: Yeah. Well, it's a fascinating case as you say, and I know that you are personally very interested in it. Something else you might have a personal interest in — I want to end with this, Sir Richard, before we move on to our interview about Venezuela because there is some big news in Japan. It has the green light to set up an intelligence bureau, and our listeners might find it surprising that Japan didn't already have an intelligence bureau.
Dearlove: Well, I could talk about this quite a lot because I was involved in discussions with the Japanese government a long time ago. And this has been a coming issue for — well, look. I retired in 2004. So if I was talking about it before 2004, you could see how long it's been on the books. But why didn't they have one before? Well, it's not — people might find that very strange. Well, what I should say is that the Gaimusho, the Japanese Foreign Office, did have a department that operated a little bit like an intelligence service. So to say it didn't have one is a little bit misleading. And it was certainly doing things. The Gaimusho was doing things that were not entirely what foreign officers would traditionally do because they couldn't have an intelligence organization. There is also the NPA in Japan, the National Police Agency. And the National Police Agency acted in lieu of an intelligence organization, but it was pretty risk averse. And of course, the Japanese defense forces also had some bits and pieces. So I think what you're seeing is a rationalization of these initiatives. And of course, it's hugely important to the West that Japan should have an effective intelligence organization because of its geopolitical position, because of its alliance with the West, because of the intelligence opportunities that Japan, as an important global power, has, particularly with regard to China and North Korea. And, of course, there is a huge immigrant North Korean population in Japan. I mean, many people don't necessarily understand that. So there are opportunities for gaining really important insights into what on earth is going on in North Korea, which is a very closed shop and a closed book, is important. So I'm gratified to see that my discussions with Japan —
Mccann: What took them so long?
Dearlove: What took them so long? The overhang of World War Two. It's as simple as that. Well, let's face it. Japan was forced by the allies to be a pacifist nation after World War Two. I mean, I put it in inverted commas. And its own political choice was a pacifist nation for reasons that are obvious. That's now changing fast because Japan is rearming. And Japan needs the infrastructure of, you know, national security, part of which is an effective intelligence operation. Maybe they'll ring me up, and I'll go and train them.
Mccann: Well, you never know. A lot of truth is said in jest. I'm really pleased to see it.
Dearlove: It's this important. And it's really important in terms of that part of the world because the Japanese have a lot to offer in terms of our understanding of that part of the world. They were not able to contribute in the manner that they should have done.
Mccann: It's fascinating. It's really fascinating stuff. As is our interview today. Should we move on and chat to our guest? Because it's been four months since The US attacked Venezuela and seized President Nicolás Maduro in an overnight military raid. President Trump repeatedly calls that operation a, quote, perfect scenario. But what has realistically changed for Venezuelans since Maduro's ousting? And is Trump's promise for oil actually bearing fruit? Well, to cut through all of that, Raúl Stolk. He's a lawyer turned journalist and managing director for Caracas Chronicles. Stolk has written about Venezuela, his home country, for years, and he keeps up with his sources in Caracas from Miami. Welcome to the podcast, Raúl.
INTERVIEW
Stolk: Thank you, Kate. Hi, Richard. How are you?
Dearlove: I'm well. Thank you.
Mccann: It's great to have you with us. Should we start? Because people may not have been following this in as much detail as I know that you will have been, partly because of Iran and other things. Where are we now? Well, I suppose a couple of months on from what happened.
Stolk: If you ask President Trump, we are right now — where we're standing is in the middle of a great partnership that's working amazingly well. It has been very clear since the beginning, right after the extraction of Maduro. Everything went into looking for a way to stabilize the country and focusing on business. There are like some primary areas that they have been engaging. The oil business is number one. Number two is the electric grid. And number three is opening up to other certain areas like mining and stuff like that. Obviously, there is a certain focus on trying to keep some sort of political stability, because obviously political instability is a big threat for the business. But having said that, political stability from what it seems to be the eyes of The US, it's not necessarily a political transition toward democracy and kind of like the basics that the Venezuelans on the ground are hoping for. Actually, those basics, like, you know, getting free and fair elections in 2026, could actually be a point of political instability.
Mccann: And should we start with the politics? Because all of the oil and the business, I think, is really fascinating. But I suppose for the people of Venezuela, the politics is equally important. How legitimate is the current government in your eyes? And is there any chance at all of any kind of legitimate election?
Stolk: Well, the latest news that we've got is that The United States recognized the government as the legitimate government of Venezuela. For practical purposes, it makes a lot of sense. But the truth is, if you go like into the nitty gritty of Venezuelan constitutional law, Delcy Rodriguez, as president of Venezuela, has like several layers of illegitimacy. The first layer I would say is that Maduro's own rule was not legitimate for many reasons. In 2018, he was reelected, the election wasn't called via the parliament as it should have been done. It was done via a parallel entity that was created sort of like to circumvent the legislature that at that moment was controlled by the Venezuelan opposition. So, you got like one layer of legitimacy there. The second one is that in that 2018 election, the Venezuelan opposition didn't wanna participate because it wasn't called properly. And that spawned into a very complicated episode where the president of the National Assembly was kind of like self-proclaimed as an interim president. And we had like all that stint where over 50 nations recognized the other guy and didn't recognize Maduro, and we were stuck there. Eventually, years went by, 2024, Venezuela faced a new presidential contest and the opposition decides to participate. And well, it's this formidable campaign that we saw because even when, again, Maduro wasn't legitimate and he controlled every instance of the government, including the elections authority and using funds of the state for his campaign and blocking political opponents from participating, as it happened with María Corina Machado, who was the winner of the opposition primary, and she was blocked from participating. With all these twists and traps, the opposition participated and they were able to prove, or at least they had their seats at hand, that the opposition won on a landslide. Maduro didn't present any proof of him winning, and he just simply, you know, forced himself into the government one more time. Delcy Rodriguez was his vice president, and time went by and Maduro is extracted. After the extraction, then we fall in another — okay, what does Venezuelan constitutional law say? Even if to this point, like every single rule of the presidency in the constitution has been broken, we're standing again with, oh, okay, this sort of situation of the president being forcefully removed is not contemplated in the constitution. You got a couple of options there of what happens when the president is absent. You got an option for the temporary absence, and you got an option for the absolute absence, which it's pretty clear what happened. If there's an absolute absence of the president, the government is forced to do a new election. And that hasn't happened. Being pretty obvious what happened to Chávez when he died, elections were held. So the other option is if it's a temporary absence, because I don't know, the president is under some sort of procedure or has a health issue, then the vice president takes a role for up to ninety days. So those ninety days that already expired can be extended for ninety more days. The Venezuelan Supreme Court, which is controlled by the government, they came up with this interpretation that Maduro's wasn't an absolute absence and they cooked a thing to say that it was safe to say that it was a temporary absence, but the term expired. And so now, even when The United States recognized Delcy Rodriguez for practical purposes, which they have very clearly stated, and kind of like everybody assumed that, okay, like if she's gonna be a transitional figure, it's okay. But right now, at this moment, if we take that idea that she's actually legitimate at this moment, by their own Chavista rules, from the Chavista perspective, she's not legitimate because the ninety days expired, there wasn't an extension. We haven't seen that extension yet. An election wasn't called. Right now, even from Chavista constitutional law, she's in a kind of limbo. We're expecting to see something in that regard because what we believe that may be happening right now, and why the legislature hasn't said anything or they haven't addressed it, is because they have to address the elections issue soon because pressure has been mounting. And one thing that could trigger, again, political instability is the idea, or the government communicating, that Delcy is there indefinitely or at least until the end of Maduro's term.
Dearlove: That describes beautifully, which I'm sure most of the listeners don't understand, the constitutional position. And clearly, Delcy Rodriguez is illegitimate technically by whatever perspective you look at the issue. But in terms of, let's say, the exercise of power in Venezuela, is it still the sort of Chavista generals that are legitimizing her? I mean, not constitutionally, but pragmatically. They were the people that kept Maduro in power. So behind the scenes, is it the military that is still calling the shots politically?
Stolk: I would say at this moment, no. Historically, involving the military deeply in politics was the biggest, well, mistake maybe that Chávez did. If you saw the division of powers before the 2024 elections or before the extraction, you could see very clearly that the two or three groups that kind of shared power were groups that had a deep connection to, let's say in a way, guns. Because you had Vladimir Padrino, who was the minister of defense, you had Maduro who's the commander of the armed forces, and also he had directly important military folk, including Padrino, that were loyal to him. And then you had other individuals of a lower connection to the military, like at that moment, Diosdado Cabello. After the elections, Mr. Cabello, who is now the minister of the interior, grew in relevance and he became like the commander of all police, the national police, and the intelligence. Very dangerous because he has like a deep connection to the urban armed groups known as colectivos, but also the people surrounding him, the operatives surrounding him, were not only well trained, but they had like better combat experience. The police had like, in a sense, more combat experience than the military and were better equipped. It was like the 300 Spartans. With 300 of the special tactics police around Cabello, you could like take, you know, 4,000 or 5,000 untrained soldiers in the Venezuelan armed forces. So in that sense, by that moment, power was divided between Maduro, Vladimir Padrino, minister of defense, and then by the police chief, Diosdado Cabello. What happens obviously after January 3 is the Venezuelan military is more than overpowered. They simply froze. Maduro is removed from the equation, Delcy is imposed, who doesn't really have a connection to the military, but guns still rule. She has The United States behind her. So the only person in the military and the intelligence apparatus that was close to her was this guy, Gustavo González López, who was right at that moment appointed to manage her security and who sort of like became a liaison with US intelligence and military. This is a guy that replaces Vladimir Padrino and becomes the new minister of defense. He comes from the military, he has an intelligence background, but from the armed forces perspective, he's seen as an outsider. So you have an outsider at the top of the armed forces, but then they also change the whole high command of the military, including some very powerful individuals, but they changed them with people from within the armed forces. So in a way, this González López actually is like a liaison between The US and the armed forces, and the armed forces aren't like really loyal to Maduro. This allowed them sort of like to have some movement within the mid and high ranks. And the truth is that in our view, they are kind of, they are key for keeping control in the sense that the worst case scenario is the military toppling Delcy Rodriguez, like a coup. But we don't believe that that will happen. But if you talk to the military in Venezuela right now, they're kind of happy with the relationship with The US. They're happy to be back on their side.
Mccann: Should we take that to mean, what we're hearing sort of you describe? Is it that The US is ultimately — I mean, is this a protector, the US government, at this point, of Venezuela?
Stolk: Yes.
Dearlove: That's a great clarification. I mean, I hadn't understood that subtlety. And I think in terms of positioning, as you said, the people with guns, it gives us a much better understanding of the power factor.
Stolk: From the perspective of Delcy Rodriguez, well, she gets her protection from her relationship with The United States. And right now The United States has a direct line with the Venezuelan Armed Forces, which for many years, as you stated, were the biggest obstacle to actually, you know, enforcing the results of a real election.
Mccann: So they are actually allies at this point. So then the next big question, I suppose, is what in your view does The United States really want with Venezuela?
Stolk: I think it has been shifting. I think that at this moment, one of the things that The United States really wants is this to go well, because it's something that they can show that they did well in the foreign policy and in the international space. And as you've seen, they have used Venezuela as an example, or as a template to say that you could delcify some sort of leadership in Iran. But you have also heard a lot, many times, using kind of like the idea of using the template of Venezuela in Cuba, but obviously Venezuela is very different to Cuba, it's very different to Iran. So I don't think that it can be translated to other places. But right now, what I think is that what they want is something to share as a success. Also right now they're realizing that actually it could be good business, but also after what happened with Iran, I think that for them, it has become more clear that, you know, the promise of balancing the global oil market by more Venezuelan input, right now it doesn't make sense. But if you think in terms of like a longer term, they realized that it's key for regional stability. And if you're thinking forward, thinking fifteen years from now, pushing output from Venezuela and actually, you know, pushing out all these elements like Russia, Iran, and counterbalancing the Chinese influence, gives them like a stronger foot on the ground. I think that right now, this is the moment when they're actually realizing how important that it is, because even if they have been talking about this since the beginning, I think that before it was more connected to political promises by the Trump administration and, you know, being able to send migrants back and sort of pettier stuff. But right now, I think that they actually realize the geopolitical importance. But again, it also is a device, like a propaganda device. Venezuela went well. Look what we did.
Dearlove: How long will Machado, as it were, wait in the wings? I mean, is she going to be, you know, excluded for a long time, or will there be pressure from her and from within Venezuela for a proper election? Because, I mean, the probability is if there were an election now, Machado would win it, wouldn't she?
Stolk: Yes. The thing with Machado is that she is like the ultimate weapon in this whole thing. Because one thing that people don't realize, because of her background and looking at it from abroad, you see like, okay, this is a woman that was raised in the elite in Venezuela, and she comes from a prominent wealthy family. And you wouldn't think the connection that she actually has to the people, it's comparable to what Chávez was in '98. The focus of her campaigns has been small towns in rural Venezuela, and her whole campaign was designed to go from the outskirts of the country to the center. And the connection that she made with a majority of the Venezuelan population, who are the ones struggling the most, is very deep and like religious, and it's very interesting. I know that we've seen the crowds that she draws in the diaspora, which is also like a natural connection, and she doesn't have to make a lot of work to do that, but people don't realize what could happen once she actually goes back to Venezuela and not in hiding, like actually campaigning or touring the country. I've said it before, but it's like an atomic bomb for the political status quo. Of course, it's something that Chavismo cannot be underestimated. In the past, they have been very smart in deactivating the political opposition, but the connection that the people have with her is very deep. Throughout this whole thing, we've seen her like playing in the sidelines, waiting for, you know, getting some sort of backing from The US to make her move, but the reality, and that people don't really realize, is that she has her finger on the trigger and she could pull it at any moment. If she decides to boldly go to Venezuela without the backing of The US, without the support of The US, if she boldly goes and decides to go out, you know, that this kind of political stability that has been achieved by what happened on January 3 can be completely, you know, she can actually trump Trump's plans.
Mccann: What do you think would make her do that? What do you think would be the trigger point for her deciding to do that?
Stolk: I think that what could make her do that is actually the passing of time and seeing kind of like her influence, because obviously being abroad could weaken her. How many tricks can she pull being — okay, she did the whole escape and Nobel Prize kind of thing that was very interesting, the whole strategy and the way that that came about, she has been visiting important friends abroad. She's met key leaders across the globe. And she has like certain cities where she can actually draw these huge crowds. So at one point she's gonna run out of these things that she can do abroad. The other thing is that you can see, well, at this moment, Delcy Rodriguez is campaigning in Venezuela, not very successfully, but you know, again, I wouldn't underestimate how Chavismo can actually, you know, do things to stay in control. So the passing of time, I would say, and her feeling like this disconnection with the ground. At this moment, they have been doing a big effort to organize her party in Venezuela, but I think that a big part of the conversation that should be coming up is, okay, elections should happen sometime, at least the latest, I would say, first semester of 2027. The earliest, who knows, maybe actually in December, you know, in 2026.
A NEW ERA IN LATIN AMERICA
Dearlove: Moving slightly away from the domestic perspective, which obviously is sensitive and dynamic. How fundamental now is the change really in Latin American politics? I mean, this one act, the removal of Maduro, the change in the relationship with China, the change in the relationship with Cuba, the impact of this, let's say, in a country like Colombia. I mean, it seems to me actually the reverberations are very significant if you take a medium to long term look. And obviously, you know, we've already done a podcast on the fragility of the Cuban economy and the likelihood of political change in Cuba. It seems to me that we're entering a new era of Latin American politics.
Stolk: Yes, I agree. Absolutely. Well, with January 3, as you said, the impact on Cuba was immediate because Venezuela was basically the lifeline of the Cuban regime. The other thing is that we're starting to see, you know, even for its own allies, Chavismo had become very toxic. You could even say that Lula and Petro would have preferred to have Machado as president than Maduro because, you know, doing business with Maduro, or even thinking of controlling the borders or, you know, pushing back against armed groups with the Maduro regime was basically impossible because business-wise, they have been a terrible partner for everyone. And they have like this terrible relationship with Colombian guerrillas, and also the armed forces weren't prepared. Even if they wanted to control it, as a regional ally, it was terrible. But right now, even when Delcy is not engaging too much with her neighbors beyond Petro — which was interesting that even Petro being like an ideological ally of Maduro, Maduro was completely toxic for Petro. So right now, okay, they can actually sit down and that relationship is moving along. But definitely bringing Venezuela back sort of like to the Western philosophy, it can create a big shift on the influence of the other side of the world in Latin America, because Venezuela was kind of a vessel to affect the region. And, you know, it's no more. So yeah, it's a deep impact in the region.
Mccann: So what is the message then that US adversaries — because, Sir Richard, they mentioned, you know, China. If you're China, if you're Russia, what are you seeing when you look at this situation, and what are they thinking about their involvement or not in Venezuela at the moment?
Stolk: Well, China has other countries where, in a sense, you could say it has its hub, or it has several hubs in Latin America. In Venezuela, China has a lot of commercial interests. The relationship between China and Venezuela, it's not the same as Russia and Venezuela. The relationship with Russia was like, from the commercial perspective, terrible. And it was in a sense very much performative for a long time. With China, Venezuela has a huge debt still, but China's operations in Venezuela are in a sense like more competent. I think that it can become like a piece of conversation between The United States and China, because obviously, Venezuela is not gonna default on their China debt. They have a JV that's up and standing and running. And commercially, you know, you can see like a lot of Chinese cars in Venezuela and a lot of Chinese technology. So I think that they're gonna remain a commercial ally. I think that from a geopolitical standpoint, I've had a sense for a while that the Chinese didn't really like to deal with Chavismo because it didn't really go well for them. I remember I did a lot of work in the oil industry for a while and I had to negotiate with several Chinese companies, oil services contracts with private companies that I worked for. When you negotiate with the Chinese, you have like different levels that you have to break through. You first have the grunts that don't speak English or Spanish, and they carry a contract under the arm, and they are only instructed to say no. But once you break through and you actually sit down with the MBAs and Oxford lawyers and all that, I remember them telling me, I don't understand why we're doing business here. It's gone terribly for us. Like every single contract, you know, where does the money go? We're trying to build this refinery or this plant and the money disappears. They were like, really? So, that's like from the commercial side, but I know that diplomatically they have struggled with how inconsistent Chavismo is in their relationships. For them, it's obviously an interesting commercial partner. And I think that for now, it would be a talking piece between The United States and China.
Dearlove: Can I ask you a technical question? My understanding is that a lot of Venezuelan oil production is very heavy crude. It's not the sort of refined, like Brent crude, so its actual impact on the global market is less in some respects than the US government is saying because of the specific character of Venezuelan production. I mean, is that the correct assessment? And if so, how do you see this very significant shift in, you know, let's say, the Western countries producing oil? What impact is Venezuelan oil actually gonna have on the market? Can you explain that?
Stolk: At one point, a couple of years ago, I remember Donald Trump saying that they weren't interested in Venezuelan crude because it was tar and it was terrible. But he didn't know that Venezuelan crude — that The US refinery complex is made for Venezuelan crude specifically. So, for them, it's even cheaper to process Venezuelan crude than lighter grades. And it's not true that the impact is not relevant. It's relevant for The US, it's relevant for China, it's relevant for India, and particularly for The US. And the other thing is that extraction in Venezuela is very easy. In the Eastern region, you pluck a finger into the ground and crude comes out. So the cost, it is actually cost effective. The United States has always been Venezuela's main client, but also for many years, Venezuela was the main provider for The US. Trying to bring in new partners, that was something that for Chavismo was very hard to understand, but bringing Iran, bringing the Chinese to operate and to sort of like adapt technology to the refineries that were made for US condensate has been a complete mess. So Venezuela and The United States need each other for that.
Dearlove: Well, thanks. That's a really important explanation.
Mccann: Raúl, will the people of Venezuela feel any of the benefits if that does work out the way that you're describing?
Stolk: Well, yes. I think that fairly quickly, because when you are in such a precarious situation, you can feel the impact fairly quickly. Right now, there's a lot of talk on the ground of them having not been able to see the effects of sort of like the opening, but within this year, people will see it and will realize it. A good example — and this should go in parallel with economic policy changes that are fundamental — but a good example is what happened in 2019, just before the pandemic hit and in one of the most terrible years for Venezuela, because Venezuela was coming from 2017 and 2018, which were years of hunger. There were basically no foods on the shelves. It was an economic catastrophe. And that same year, we had the whole thing with not recognizing the president and recognizing the president of the national assembly. There was a four month blackout nationwide — like not in Caracas, but for the rest of the country, it was four months of that. It was a complete mess. Political repression was horrible. By the end of the year, the government disappeared and it was a policy decision. The government disappeared. You didn't even see a lot of police in the streets, but mainly they stopped enforcing the exchange control. So the cash dollars started flowing in the economy. The Venezuelan currency, the Bolívar, basically disappeared. They stopped enforcing price controls. The tax authorities stopped fiscalizing everybody and the country self-regulated. The economic situation started to sort of stabilize. And that went through the whole pandemic. It was a moment of a factual economic growth. The whole world was suffering. Venezuela was getting better at that point. Delcy Rodriguez, who was vice president, had some Ecuadorian consultants working with her, and they sort of like planned to allow the dollar to flow in Venezuela. One of the biggest problems in Venezuela since Chávez has been the exchange control, and this sort of like stabilized that. And that happened very quickly and the people felt it. So I think that at this moment, there's like a better chance of having an even stronger and better economy. But the problem is that to enforce everything that needs to be enforced, even if Delcy has the best disposition and the best attitude toward this, which in a sense, I think that they may have it — they have a big problem regarding talent in terms of quality and quantity. They don't have enough Chavista MBAs or technical people to actually be able to enforce and to put in place everything that needs to happen. So for instance, there's a lot of people that's bullish about Venezuela at this moment, many investors. Obviously there are ones that say, okay, we'll wait for 2027, but let's say that you want to put a $100,000,000 into Venezuela right now. There are certain things, basic things, that the government doesn't have the bandwidth to cover to be able to receive, to take that investment competently. And this is what María Corina Machado is selling — that if you reset the whole government, they will be able to bring all these people, which I believe that she could actually do that. But then you have like the political instability issue. So at some point, Delcy Rodriguez has a very limited pool of people that they can actually work with to implement these changes. And the problem is that even if she wants to bring people laterally from other places, she still has pushback from the government party. And because the truth is that she does control the country, but she doesn't have absolute control, she still has to balance power internally, in the same manner that The United States doesn't completely control the situation in Venezuela because there's the small stuff that they can't actually get into. But if they want this to actually work, she's gonna have to bring people from other places.
Mccann: We've run out of time, sadly, but we do have one more question that we ask all of our guests. And it is always, what is the one decision that you are watching out for this week? And given your area of expertise, I imagine it will be about this particular scenario. But what's the one thing that you have your eye on in the next week or so to watch out for?
Stolk: At this moment, it has been changing a lot. Two weeks ago for me, it was more focused on monetary issues, but they already started addressing that by making changes in the central bank and The United States lifting some sanctions and all that stuff. But right now in the short midterm, I think the decision that is in María Corina Machado's lap on whether to return or stay abroad, it's kind of starting to become the wild card in this whole thing. Because right now we're seeing a lot of pressure starting to build within the country regarding the need for elections. It's starting to appear in protests and stuff like that. I think that The United States is starting to realize that people are gonna get restless and they started by saying elections maybe in twenty-four months, eighteen, fourteen — the time frame has been shortening. And as I said before, Machado is the one that has the finger on the trigger. She actually has leverage because she just can't decide to go to Venezuela without waiting for The US. So what I would be watching is what she's gonna do in regards to that. And I'm guessing that she's gonna start using that to pressure The US to sit down with her and actually say, okay, now you've got to pressure Delcy and to allow me to run in an election or to be protected or something like that. Probably The US is gonna say, oh, okay, but I want you two women to talk, which, you know, already Trump started making some jokes about that. And you know how jokes in the Trump administration sort of become state policy. So yeah, I think that Machado's decision to return is what I would watch for.
Mccann: Well, that's one for us to keep an eye out for too. Raúl, thank you so much. It's been fascinating having you on the podcast with us today.
Stolk: Oh, it's been a pleasure.
ANALYSIS WITH SIR RICHARD DEARLOVE
Mccann: Thank you, Raúl. That's a great explanation of where we stand with Venezuela. I've learned a lot from it. So, Richard, I thought that was a really interesting conversation and partly because when you speak to someone who has such an in-depth knowledge of the country and the situation, you get things that you really didn't know about before. And for me, that element of the conversation where Raúl was telling us about how Chinese businesses, Chinese government really, representatives feel about doing business in Venezuela — I thought that was fascinating.
Dearlove: I think he gave us a fantastic insight into all sorts of things that I've just not read in the media about Venezuela. So when I said at the end, I learned a lot from that. The sort of perspective on the power of people with guns, and this wasn't the military, and his whole explanation of the structure around Delcy Rodriguez and who she was leaning on, the relationship with the States and the way that that had developed. Now, I thought it was really an excellent dive into aspects which I think are very complex, as he said at the beginning. And, you know, he explained the constitutional position, and then we went into all these other subtleties. Really, fantastically good podcast for people who want a deeper insight into what is actually happening. Because I asked him the general question about Latin America because I think it's so important. It is a fundamental shift in the power structures. And that gives you a wonderful lead-in to interpretation.
Mccann: Yeah. I totally agree. And all of that insight into, you know, the situation with oil, because it's often misreported. And, you know, once an idea takes hold about a country or a situation, it can be quite hard to shift that. So I think for people who don't know huge amounts about Venezuela, and I count myself as one of those people, it's really great insight. Hopefully, as our listeners, you felt the same. Well, that's all for this episode. Join us every Thursday for more exciting conversations about world events that, of course, go beyond the usual headlines. That's the point of what we do here. Subscribe to One Decision on YouTube so you never miss out on a conversation putting the global news in context. For more like this with leading decision makers and thinkers, you can find more on onedecision.com where there's extra commentaries, conversations, and explainers. I'm Kate McCann. And, Sir Richard, thanks very much for being with me.
Dearlove: Yeah, great. Very interesting discussion. And thank you for listening as always.
