The government of Nicolás Maduro claims to have millions of troops, enough military power and an efficient anti-aircraft system to counter a possible armed attack by the United States amid accusations that Venezuela’s political leadership leads a “terrorist” drug trafficking cartel.
But does the Maduro administration have enough money to pay for and endure the consequences of a long-term war with the United States after years of economic crisis? Experts doub it, warning of the outcomes that an armed conflict would have in one of the most troubled economies in the world.
The U.S. State Department has officially designated the “Cartel of the Suns” — a drug-trafficking organization the U.S. claims is run by Venezuela’s leadershio — as a foreign terrorist organization. The White House claims that Maduro leads that alleged cartel and that he is an “illegitimate” ruler.
That classification allows the United States to have “a whole bunch of new options” to confront the alleged cartel, U.S. Secretary of Defense Pete Hegseth.
The Venezuelan Foreign Ministry called that designation a “new and ridiculous hoax” by Secretary of State Marco Rubio and said that the Cartel of the Suns is “non-existent.”
President Donald Trump has since August ordered the deployment of a naval and military force in the Caribbean Sea that includes the aircraft carrier USS Gerald Ford and thousands of troops, and which Caracas interprets as a “threat” of war and an excuse to overthrow Maduro by force.
Both Maduro and his main spokesmen, such as Interior Minister Diosdado Cabello and Defense Minister Vladimir Padrino López, say the United States will fail in its plans, anticipating a popular resistance in favor of the government.
Economic experts warn, however, that Maduro’s government may not have enough resources to withstand a long war with a U.S.-like military after years of acute economic problems.
Venezuela’s economy is “structurally poor” and has accumulated “many distortions and inequalities” since Maduro took power in 2013, said an economist at a consulting firm in Caracas, who asked to remain anonymous for security reasons. State security agents. arrested a group of Venezuelan economists between May and June, amid reports of experts speaking out on the poor course of the economy.
Venezuela has experienced serious economic turbulence in the last 12 years. Between 2017 and 2021, Maduro’s government experienced a cycle of unprecedented hyperinflation and accumulated a drop in gross domestic product of close to 80 points in its first seven years in office.
The South American country has also been in default since 2017 after not being able to pay its foreign debt commitments, unofficially estimated at about $164 billion. Those defaults include private creditors and strategic partners such as Russia and China.
Damaging ‘military shock’
The economist consulted said indicators of the Venezuelan economy remain “flat” this year, but warns that the level of economic damage of a “foreign military shock” will depend on the breadth and duration of the eventual U.S. military operations.
“Venezuela’s economy tends to respond very poorly to external shocks. Even any internal clash generates a chain effect that increases volatility” and could affect the Venezuelan state’s ability to pay for long-term strategic defense, he said.
Venezuela’s government has celebrated what it calls an economic recovery in recent years and said this month that its finances are “unperturbed” in the face of the military deployment in the Caribbean.
The International Monetary Fund and the United Nations Development Program have projected a high rate of inflation for Venezuela this year.
Maduro and his spokesmen blame the crisis in recent years on an “economic war” by his foreign political adversaries, accusing the United States of a “blockade,” with more than 1,000 economic sanctions, including restrictions on its key oil and gas industry.
Jose Guerra, a Venezuelan economist and opposition politician who was elected for Congress in 2015 and who now lives in exile, stressed that Venezuela faces a “complicated” situation because it is not receiving foreign currency for oil, but payments through crypto assets.
Venezuelan oil production is around 1.1 million barrels a day, according to official figures. For comparison, Venezuela was producing 3.2 million barrels a day in 1999, when Hugo Chávez took power.
Crude oil used to be the source of more than 90% of Venezuela’s foreign exchange.
Since last August, Guerra said, there is “strong public spending” in Venezuela for mobilizations of popular support in favor of the government and logistical operations to prepare its armed forces.
“A military fight on land would require a lot of logistical effort and millions of dollars that Venezuela does not have. A war would bleed Venezuela from an economic point of view, because it has nothing to do,” he told the Herald.
Guerra recalled that Venezuela is banned from the military international market and it would need allies like Russia, China, Iran or Turkey to resupply weapons, spare parts and ammunition.
Because of its large foreign debt, “no one is going to lend to Venezuela to buy weapons,” he said.
David vs. Goliath
Venezuela is 50th on a list of 145 countries ranked worldwide according to their armed capabilities, prepared by the security and defense consulting firm Global Fire Power.
The South American country allocates about $4 billion to its security and defense. The United States, which leads the ranking, budgets almost $900 billion for its military.
According to Maduro, Venezuela would exert “the force of David against Goliath” to defend itself from an eventual armed attack by the United States.
Much of his confidence lies in the billions of dollars spent by the previous Chavez administration and his own to buy — and reinforce — dozens of fighter jets, helicopters, tanks, and thousands of rifles and ammunition from Russia, as well as pay for the training of its troops.
There were unconfirmed reports last week of more than a dozen fighter aircrafts, Russian Sukhois-30 among them, flying in formation over the Venezuelan state of Aragua for an upcoming parade in the National Day of the Air Force.
Details about the purchases and operational capability of the Venezuelan armed forces have been kept as a state secret by the governmet for years.
The U.S. military spending figure is “about 10 times greater” than Venezuela’s gross domestic product, according to Central University of Venezuela economist Manuel Sutherland.
“Neither Venezuela nor any country in Latin America has that capacity to face troops that are in almost all the conflicts in the world,” said the expert.
According to firms such as Flobal Fire Power and the International Institute for Strategic Studies, Venezuela has between 109,000 and 123,000 active soldiers, as well as some 200,000 members of “paramilitary groups.”
These reports, as well as reports from Venezuelan organzations such as Control Ciudadano para la Seguridad, la Defensa and the Fuerza Armada Nacional, warn that they are based on estimated figures because no details on these expenses are officially available.
Maduro and his collaborators also place much of their hopes in a militia created years ago by Chávez and which would have some 8.2 million members, according to the Venezuelan leader.
He has also boasted of having 5,000 units of an anti-aircraft system known as Igla-S, but specialists question how deteriorated those units may be and even how effective the training of their operatives is, not to mention the lack of combat experience.
Political settlement?
Among Venezuela’s armed civilian groups are so-called “colectivos”. The Venezuelan opposition has denounced that these supporters of the government have participated in crimes against humanity since 2014 to persecute and violently repress protests by government critics.
Sutherland, who defines himself as a “pacifist” and noted that the Venezuelan people aspire to an organized political transition that respects the popular will expressed in the July 2024 presidential elections, stressed that the allies of Maduro’s government would also have “difficulties” in helping Venezuela in the event of foreign aggression.
“There are lots of debts with the Iranians, the Chinese, the Turks. These allies are most likely in difficulties, they are very far away geographically and do not have the capacity to help the government militarily,” said the economist.
The economic crisis “has not been overcome” in Venezuela despite the significant growth it had “in the form of a rebound” between 2022 and 2024, before the presidential elections, he said.
Sutherland said his country’s economy needs “explosive growth” under better conditions, no longer amid military tensions, popular discontent or “uncertainties”.
Venezuela needs an economic “miracle” and a political transition, not a war, he said.
