Venezuela’s Essequibo gamble

  • Themes: Geopolitics, Latin America

Plagued by domestic political and economic difficulties, Venezuelan president Nicolás Maduro has ordered the occupation of the Essequibo territory of Guyana. The threat of war now hangs over the region.

Venezuelan lawmaker Diosdado Cabello, looks at a new map of Venezuela with the Essequibo territory.
Venezuelan lawmaker Diosdado Cabello looks at a new map of Venezuela with the Essequibo territory, 6 December. Credit: Associated Press / Alamy Stock Photo

As political theatre goes, it was dramatic. On 5 December, Nicolás Maduro, Venezuela’s president, stood before a large map of his country, newly expanded to include the Essequibo territory. The Essequibo forms around 60 per cent of the total land area of neighbouring Guyana. Maduro announced its designation as a new state of Venezuela and appointed a general to run it as military governor. He ordered Venezuelan oil and mining companies to start exploiting deposits there and gave multinational oil companies extracting oil in Guyanese waters three months to stop and seek new licences from his government. The Essequibo’s people, he said, would be given Venezuelan identity documents.

With this, Maduro and his authoritarian regime brought the spectre of war to the Americas. ‘What he is doing is creating a direct threat to Guyana and creating instability in the region,’ responded Irfaan Ali, Guyana’s president. ‘We cannot allow the annexation of a territory in this western hemisphere.’ The United States swiftly assured Guyana of its support and began joint aerial patrols. ‘If there’s one thing we don’t want in South America, it’s war,’ said Luiz Inácio Lula da Silva, the president of Brazil, which borders both countries.

Partly at Lula’s urging, Ali and Maduro were due to meet on 14 December in the Caribbean island of St Vincent under the auspices of its prime minister Ralph Gonsalves, a Maduro ally who currently chairs the Community of Latin American and Caribbean states (CELAC). Ali insisted that ‘Guyana’s land border is not up for discussion’ at the talks. The International Court of Justice (ICJ) is considering Venezuela’s claim to the Essequibo. Maduro purports to reject the court’s jurisdiction.

Two days before Maduro’s announcement, his regime had organised a referendum to back the incorporation of the Essequibo into Venezuela. The government claimed that 10.5 million people voted (a higher number than in the last presidential election, held in 2018), and that 95 per cent of them answered yes to all five questions. Yet polling stations were reported to be almost empty across the country and Maduro’s opponents believe the real turnout was small.

The Essequibo dispute dates back to colonial times. Most Venezuelans firmly believe that the territory is rightfully theirs, though it has hardly been a live issue in the country. Why has Maduro chosen to revive it now? Some see the lure of oil, or the chance to benefit by disrupting oil markets. Through mismanagement and corruption, Maduro’s government and that of his predecessor and mentor, Hugo Chávez, have run Venezuela’s once-booming oil industry into the ground, even before the US imposed sanctions against it. Oil output has fallen from over three million barrels a day when Chávez took office in 1999 to around 750,000 now. In 2015 a consortium headed by ExxonMobil discovered Stabroek, a large oil deposit in Guyanese waters. Guyana, with some 800,000 people, is on the verge of an oil boom: production is already at around 400,000 barrels a day and is on course to triple by 2027.

The main explanation for Maduro’s Essequibo gambit is domestic politics. His regime was caught off-guard when the opposition organised a primary in October in which more than 2.3 million people voted, 95 per cent of them for María Corina Machado, an uncompromising foe of Maduro and Chávez before him. She is currently banned from standing by the government.

Maduro’s approval rating is no higher than 15 per cent and his regime is deeply unpopular. According to the UN, 7.7 million Venezuelans have emigrated to escape poverty, crime and repression, from a population of 30 million in 2014. Between then and 2021 the economy shrank to around a quarter of its previous size, amid hyperinflation. To stay in power, Maduro depends on the armed forces and on Cuban intelligence and security support. The opposition has faced years of harassment. At any one time there are around 300 political prisoners in Venezuelan jails, some of whom are tortured. They include several dissident generals.

In 2018 Maduro won a second six-year term in an election with a low turnout and in which the main opposition candidates were barred administratively on spurious grounds. Most governments in Latin America and Europe did not recognise the result. In January 2019 Juan Guaidó, the young speaker of the national assembly, controlled then by the opposition, proclaimed himself the country’s caretaker president. He won the backing of Donald Trump’s administration in the US, which imposed swingeing sanctions on Venezuela’s oil and mining industries and its financial transactions.

Maduro resisted and survived. Guaidó and many other opposition leaders eventually fled into exile, but the government wants sanctions lifted. In October Maduro’s people agreed after parallel talks with the Biden administration and the opposition to some conditions for a fair election in 2024. In return the US suspended most sanctions for six months. That will provide Maduro with additional income: because of the need to evade sanctions Venezuela’s oil sells at a heavy discount. Even so, he knows he would almost certainly lose a reasonably fair election. The Essequibo issue offers a distraction – and an excuse to crack down further on the opposition. After the referendum the government accused a dozen opponents of treason, on the trumped-up allegation that they received money from Exxon. Those arrested included Roberto Abdul, a key organiser for Machado.

What happens now? Maduro wants the rest of the world to recognise Venezuela’s claim. It does have some historical foundation. Spanish missionaries pushed into parts of the Essequibo in the 18th century, but the indigenous inhabitants allied with Dutch colonists. Under the Anglo-Dutch treaty of 1814 the Essequibo was transferred to what became British Guiana. An independent Venezuela inherited the Spanish claim. In 1899 a tribunal composed of two Britons, two Americans and a Russian ruled that the whole of the delta of the Orinoco and the surrounding land belonged to Venezuela, but awarded the Essequibo basin to British Guiana. Accepting the award, Venezuela joined with Britain in demarcating the border.

In 1962 Venezuela revived the dispute, following revelations of British pressure on the tribunal. Under the Geneva Agreement of 1966, as Guyana became independent, the two sides were supposed to set up a mixed body to resolve it. They failed, and at Venezuela’s insistence the dispute was entrusted to the UN Secretary General. He in turn handed it over to the International Court of Justice (ICJ), which in recent years has successfully settled several border disputes in Latin America. Maduro’s rejection of the ICJ’s jurisdiction is bluff: its rulings are binding for all member states of the UN. It is at the court, and not in regional fora, where the issue belongs.

The Essequibo is sparsely inhabited jungle and savannah, with few roads or bridges. In a war, Venezuela, whose armed forces are 350,000 strong and which boasts a squadron of Russian Sukhoi fighter-bombers, could quickly overwhelm Guyana. The Guyana Defence Force has only 4,000 members; one of its four helicopters crashed on exercise this month. That is why the support of the United States is crucial for Guyana’s security. Guyana can also count on the diplomatic backing of Caricom, the 15-member Caribbean community, and, probably, of Brazil, with which it has close ties. Cuba, which stands behind Venezuela, has never pushed the Essequibo issue because of its desire for good relations with Caricom.

Apart from Cuba, Maduro’s chief allies are Russia, Iran and China. His annexation announcement, before the fact, smacked of Putin’s approach in Ukraine. He could choose to launch an asymmetric war, sending inflatable launches to harass Exxon’s oil operations in the manner of Iran’s Revolutionary Guards in the Persian Gulf, but that looks unlikely. China’s National Oil Company is a junior partner in the Exxon-led consortium. And Maduro wants to attract investment from multinationals to revive Venezuela’s oil industry.

The Biden administration must decide by April whether to continue to suspend sanctions. Any substantial moves beyond rhetoric on the Essequibo would surely mean their re-imposition. Maduro’s priority is to prevent a free and fair election while avoiding sanctions. In that, the Essequibo looks like a smokescreen rather than the main objective.


Michael Reid