The Cold War is back in the Caribbean, but this not your father’s Cold War. While many of the actors are the same, the roles and motivations have changed. China has filled the void left by the Soviet Union as the main challenger to U.S. hegemony. Beijing’s goals are defined less in ideological terms and are more economic in nature. Russia is seeking to regain some of its influence and Cuba remains a factor, playing a role in keeping a repressive regime in place in Venezuela as well being a target of renewed U.S. pressure for regime change.
After a long period of quiet disengagement, the U.S. is seeking to reassert its presence in the region, driven by concerns over China’s inroads into a geopolitical zone that had slipped into relative unimportance. Here’s how it can begin doing so in a more effective way.
Brewing tension in Venezuela
Venezuela is the first major flashpoint in the new Cold War in the Caribbean. In 2014, Venezuela, heavily dependent on oil, drifted into a massive multiyear economic contraction when international prices for the commodity collapsed. The situation was compounded by over a decade of policy mismanagement, endemic corruption and a breakdown of law and order. The country’s economic collapse has led to the flight of 3.4 million Venezuelan refugees.
In early 2019, the democratically elected National Assembly of Venezuela declared Maduro’s 2018 election fraudulent and appointed Juan Guaidó, the head of the legislative body, as interim president, effectively giving the country two governments. Venezuela’s place as a geopolitical battleground was thus assured. While China, Russia and Cuba maintained their support for Maduro, the U.S., Europe and most of Latin America recognized Guaidó and have acted accordingly in international forums, seeking to force Maduro from office and form an interim government that will then hold elections.
Venezuela’s status as a new Cold War flashpoint escalated on March 22, 2019, when two Russian aircraft landed in Caracas carrying 100 Russian military personnel, the chief of staff of the ground forces, General Vasily Tonkoshkurov, and an estimated 35 tons of military equipment. It was suggested that the troops were there to repair a Russian-made anti-aircraft defense that was disrupted by a power outage. Nonetheless, the troop deployment followed the dispatch of two long-range Russian bombers to Venezuela in December 2018 and earlier joint war games.
It is questionable that the Putin government will go to the same lengths to back Maduro as it did for the al-Assad regime in Syria. Although Russia has economic interests in Venezuela through its oil company Rosneft, its stake in Venezuela is probably not worth a head-on collision with the United States. However, the show of Russian support bolsters Maduro and perhaps pushes the Chinese to maintain their support for what they probably regard as a deeply flawed ally / investment. Despite Moscow’s posturing, China remains the major external player in Venezuela, not Russia.
The emergence of China
China, formerly a minor player in the old Cold War in the Caribbean, made its presence felt in the Caribbean (and Central America) in the first decade of the 21st century. China came for four reasons: a quest to secure long-term access to strategic resources, like oil and bauxite; to secure its trade route to its largest customer (the United States) by infrastructure investments in Panama and the Bahamas; to reduce the number of countries continuing to recognize Taiwan as a sovereign and independent state; and to poke at the U.S. in what Washington has long taken as a geopolitically secure region. Beijing feels that the U.S. has done this on a regular basis with Taiwan and the South China Sea. China’s economic statecraft brought cheap loans, helped jumpstart long-postposed infrastructure projects and opened new trade possibilities.
By the second decade of the 21st century, China was a well-known presence throughout the Caribbean, with Venezuela the leading recipient of Chinese investment due to the larger size and scale of its oil-based economy. According to various sources, China has loaned Venezuela around $60 billion in a series of oil-for-credit deals in which an estimated $20 billion are still outstanding.
China has maintained its support for Maduro. Unlike Moscow, Beijing has thus far preferred to continue to use economic statecraft over a more potentially explosive military show of force. In February 2019, China as well as Russia vetoed a United Nation Security Council resolution calling for new presidential elections in Venezuela. This was followed in March by China’s cancelation of the Inter-American Development Bank’s annual meeting which was scheduled to be held from March 28 to 31 in Chengdu, China. Beijing’s action came after China excluded the newly appointed board member from Venezuela chosen by the Guaidó government.
Can the U.S. punch back effectively?
The U.S. response to the Caribbean’s changing geopolitical tides has been slow. Although the Obama administration signaled its concerns over rising Chinese engagement in the Caribbean and Latin America, it was not until the Trump administration that a more forceful response was made. In February 2018 former Secretary of State Rex Tillerson invoked the Monroe Doctrine, warning Western Hemisphere governments about Chinese “imperial” ambitions.
Yet the U.S. found itself on its back heels when the Dominican Republic in May and then El Salvador in August 2018 dropped their recognition of Taiwan in favor of China, following the same action by Panama in 2017. In September 2018, Washington recalled its top diplomats from El Salvador, Panama, and Dominican Republic to protest the diplomatic changes.
The Trump administration also hardened its policy vis-à-vis Cuba, with which the U.S. under President Obama had restored diplomatic relations in 2016. Economic relations were tightened with Cuba through 2018, and late in the year National Security Advisor John Bolton called Cuba, Nicaragua and Venezuela a “Troika of Tyranny,” noting, “In Cuba, Venezuela, and Nicaragua, we see the perils of poisonous ideologies left unchecked, and the dangers of dominate and suppression.” Within the Trump administration, Cuba was increasingly linked to Venezuela (which also made it a Chinese ally), especially considering the large numbers of Cubans involved in Venezuela’s internal security. For Cuba, losing Venezuela would be a major blow, both economically and diplomatically.
Where does this leave U.S. policy in the Caribbean? The Trump administration appears to believe that the opportunity exists for it to act as an agent of change, knocking out anti-U.S. and authoritarian socialist regimes in the Americas and replacing them with democratic governments. Cuba, Nicaragua and Venezuela are struggling economically, have few friends in the Americas and Europe, and face difficult socio-political futures. However, the willingness of China (and Russia) to potentially extend lifelines complicates U.S. efforts to orchestrate change, while economic sanctions take time and sometimes do not work (as with Cuba).
In April 2019 U.S. Secretary of State Mike Pompeo made clear who was creating problems in the U.S.’s backyard: “China’s bankrolling of the Maduro regime helped precipitate and prolong the crisis in that country. I think there is a lesson…to be learned for all of us: China and others are being hypocritical calling for non-intervention in Venezuela’s affairs. Their own financial interventions have helped destroy that country.” Pompeo added that Chinese money was used to pay off Maduro’s cronies, crush pro-democracy activists and fund ineffective social programs.
For the Caribbean countries, the new Cold War is problematic. The U.S. is quietly suggesting countries pick a side over Venezuela. For countries like Trinidad and Tobago, which have adopted a cautious non-interventionist approach defined by calls for more dialogue, Venezuela geographically is a lot closer than is the United States. Getting involved in a dispute with Venezuela holds little upside, but considerable downside.
Most Caribbean countries also find the Trump administration difficult to deal with. While Washington has vocalized its displeasure with Caribbean countries ending their diplomatic recognition of Taiwan for China, many in the region regard this as hypocritical, considering that the U.S. recognized China in 1979. Moreover, U.S. assistance to the region has progressively declined over the past decade. In contrast, China is willing to provide loans, construction companies and educational exchanges, much of this offered under the Belt and Road Initiative (BRI). The attractiveness of Beijing’s overtures has been on full display this month, when Jamaica became the latest country to sign up for the BRI, joining Barbados, Guyana, Suriname, and Trinidad and Tobago. Rounding out the picture, the Trump administration is anti-immigration (mainly but not entirely aimed against Central America), with the President allegedly including Haiti in his “shit-hole” list of countries.
In an effort to provide a friendlier approach, President Trump met with the leaders of the Bahamas, the Dominican Republic, Haiti, Jamaica and St. Lucia in late March 2019. The group was notable in that those countries had all either criticized Maduro or recognized Guaidó as Venezuela’s rightful leader. The U.S. promised to provide some help in trade and investment for those countries that attended, though well below what China is willing to offer.
Washington can no longer take the Caribbean for granted. It needs to put its diplomatic skills to use, especially in the area of economic statecraft, which is where China has scored points in the region. This means that U.S. efforts vis-à-vis the Caribbean will have to provide tangible access to some type of financial assistance. One option would be to create a joint U.S.-Caribbean infrastructure fund to help address projects of joint interest to upgrade harbors, airports and roads as well as electric power systems. The U.S. and Caribbean governments should also work closer on trade issues to reduce uncertainty over the rules of the game, especially since the region has a trade deficit with the United States. Additionally, as the U.S. ramps up policy measures against Cuba, more thought needs to be given to the potential negative impact of such actions on other Caribbean countries, some of which have invested in Cuba and have long been U.S. allies.
There is a new Cold War in the Caribbean. Venezuela is the current flashpoint, but Cuba, a country where China has emerged as a major investor and trade partner, is next, especially in the face of a re-assertive U.S. seeking to protect its geostrategic underbelly. This puts the Caribbean once again at the crossroads of international politics. In this there is an overarching ideological clash between authoritarian and democratic forces, but it is not fueled by the call for a Marxist-Leninist revolution to spread like wildfire though the region. Indeed, it is those creaky autocratic Marxist-Leninist regimes that are on the defensive. The support they receive from external powers is bringing back great power jockeying to the Caribbean.
Scott B. MacDonald is a Senior Associate at the Americas Program of the Center for Strategic and International Studies and the chief economist at Smith’s Research & Gradings. He holds a Ph.D. in Political Science from the University of Connecticut.
