Venezuela and Guyana; What’s it all about?

December 7, 2023

Obviously, there is a lot going on in the world today conflict-wise. Israel and Gaza, Russia and Ukraine, let alone the complete messes that are Myanmar, Syria and Yemen. Plus, the fighting in parts of Northwest Africa, East Africa, West Africa, Central Africa…yeah Africa has issues, maybe I should start a series just covering the wars being fought there.

But today I want to look at a potential war, one that holds the possibility of triggering significant state-to-state conflict in South America; Venezuela and Guyana, located on the north Atlantic coast of South America.

In the last few weeks relations between these two countries as taken a rather bad turn, with Venezuela making increasingly loud noises about taking control of the contested region of Essequibo.

This area makes up about two-thirds of Guyana’s territory and gives the country claim to substantial territorial waters; that’s important for reasons I shall come to soon.

Anyway, for context, here comes the history bit.

Obviously, the majority of South America was colonized by the Portuguese in Brazil and the Spanish, who took most of the rest. But on the far north coast, a complete backwater continentally speaking, small colonies were established by the Dutch between the 16th and 18th centuries.

This put them at odds with the Spanish, who claimed pretty much all the area as theirs, and there followed the usual tussles over the centuries between most of the European powers that generally just get glossed over in the histories, just as I am doing now.

As said, the region was a complete backwater.

In 1814 the Dutch ceded a couple of these colonies to the British, who formed the territory of British Guiana from them. Venezuela itself didn’t actually become an independent country until 1830; the mess that is the history of Spanish South America is beyond the scope of this article, but what is important to know is that they continued the Spanish claim to the region of Essequibo.

This situation wasn’t really helped by the fact that this region is largely inaccessible swamp and jungle, and no one had really bothered to set out definite boundaries…until the British did in 1840, and laid claim to what is now Essequibo which, as said, had been notionally claimed by the Spanish and then Venezuela in turn.

The British-drawn border understandably led to problems with the neighbours and in 1895 the Venezuelans made an attempt to reclaim the area, asking the US for their support. This led to a tribunal being convened in Paris in 1898 that found in favour of the British claim on the grounds that they had officially being ceded the territory by the Dutch in 1814, who in turn had been ceded it by the Spanish in 1648.

The Venezuelans technically accepted the ruling, though they accused the British of undermining the whole process, an accusation that there is actually some evidence for. In 1962 they went to the UN stating that the border agreement was null and void because of this.

In 1966 the respective parties agreed to work on figuring out the issue, and three months after this agreement was made Guyana achieved independence, leading to the negotiations basically being between them and Venezuela under the auspices of the UN. And that led to the whole situation going into stalemate for the next sixty years or so.

Basically, the complexities of the respective claims is something people studying international law write their PhD thesis on. But the reality was that Guyana maintained control over Essequibo, and the Venezuelans would make a token complaint when one of their politicians wanted to divert attention from whatever screw up they had made.

Indeed, in 2004 President Chavez of Venezuela said that he considered the dispute resolved, though admittedly this wasn’t an official statement of the Venezuelan government’s position.

To be fair, there didn’t seem a lot of reasons to get too het up over Essequibo. It was, as I’ve repeatedly pointed out, a backwater; hundreds of thousands of square miles of largely swamp and rain forest with a tiny population and only the odd gold mine and the timber industry as the main resources for exploitation.

But as exploration of the area began to take place, it became clear that other resources were to be found in this remote region. Gold, diamonds and natural gas are thought to be located in Essequibo in potentially large quantities.

And then in 2015 things really began to ramp up.

It had long been suspected that the waters of Guyana, principally those off the coast of Essequibo, were full of oil fields, and preliminary surveys seemed extremely promising. In 2015 a licence to drill the offshore fields was granted to Exxon by Guyana, a move that was the start of moving this obscure South American country into being a major player on the international oil market.

Guyana currently has proven reserves of 11 billion barrels of oil, and the speculation is that it could hold up to 50 billion barrels for potential exploitation. If accurate that places Guyana at around number ten globally in available oil reserves, which depending on which expert you talk to means it could have more than the United States currently has left.

Considering that commercial drilling only began in 2019 and oil production is still ramping up, the effect on the Guyanese economy has been radical. In 2020 Guyanese GDP in real terms rose 43.5%, in 2021 it rose another 20% and in 2022 it went up a whooping 62.3%!

Guyana is pretty much the boom capital of the planet currently!

Considering this was a country that was getting its entire wheat supply every year since 1986 from the USA as essentially charity, that is quite a turn around.

And this hasn’t gone down so well with Venezuela, though not for the reasons you might think.

Because though exploitable resources are often a reason for war, in this case these oil fields don’t really add much to what Venezuela currently has. That country holds 300 billion barrels of oil, something like 25% of the world’s reserves.

What Venezuela has a problem with, or rather it’s President, Nicolás Maduro does, is popularity.

Maduro came to power in 2013 in circumstances that have drawn widespread criticism and Venezuela has been a mess ever since. According to the UN an estimated 7.7 million Venezuelans have left the country since Maduro came to power, with his economic policies and dictatorial habits generally attributed for the collapse, which turned Venezuela from a successful nation into a basket case.

This reduction of Venezuela from a South American powerhouse to a country that has seen a substantial section of its population flee to escape crushing poverty and starvation…well, it’s not a great look. And it seems that much of the rhetoric coming out of Caracas concerning Essequibo, is aimed at raising nationalist feeling, particularly amongst the powerful military. This has seen two decades of investment by both Maduro and his predecessor, Hugo Chavez, and essentially is the guarantor of the President’s power despite the terrible economic situation the country has endured.

Now Maduro has mobilised his army to the border with Guyana and issued orders that the state oil company begin issuing licences for extraction in Essequibo. He has also held a referendum to see if the Venezuelan public want to reclaim Essequibo, an affair that resulted in a vote of 95% in favour, though the figures for this vote have been widely questioned by outside observers.

Maduro has also been making frequent public speeches about the issue, as well as displaying a map of Venezuela showing the disputed areas as part of the country. So, it is looking entirely possible that Venezuela is preparing to move in and annex the disputed territory.

And if they do, will anyone be able to stop them? The Guyanese Defence Force consists of one regular and one reserve infantry battalion, as well as an artillery company that has a handful of 122mm howitzers, some mortars and a few heavy machine guns for anti-air defence.

The Venezuelan military by contrast can field six divisions with at least one hundred tanks, around the same number of light tanks, APC’s, IFV’s, several hundred artillery pieces and mortars and advanced anti-aircraft missiles. On top of that they have a modern air force, equipped with Sukhoi Su-30’s and Lockheed F-16s.

Plus on demographics alone, it only goes one way. Guyana has a population of 800,000, while Venezuela has, despite the recent reductions, more than 30 million people.

Needless to say, if the Venezuelans invade, the Guyanans aren’t going to be able to stop them.

What will be critical is how the world reacts.

Guyana has directly appealed to both the UN and the United States for support against what appears to be increasing belligerence from Caracas, and neighbouring Brazil has expressed its dissatisfaction with the situation and support for Guyana by ordering troops to its own borders with both countries.

The international community generally has expressed concern over Venezuela’s actions, though these have generally been fairly muted, probably to allow Maduro room to back off.

Because the big question is whether Maduro really intends to do something, or whether the whole affair is bluster for internal consumption. After all, it would’ve been probably little problem for the much larger and better equipped Venezuelan military to simply swoop in and take what they wanted without fanfare, leaving it up to the international community to decide if they wanted to go through the effort of trying to expel them, which let’s be honest would probably be doubtful.

In fact, all the noise coming from Venezuela has actually made any military action by them far more difficult as they face far more attention and opposition than they would if they had just taken action without warning. Maduro does have an election coming up next year and, though he seems to be quite happy to fudge his way through such affairs to ensure he wins, it might be that he hopes to actually win a mandate legitimately this time, and playing the hard man may be his strategy in this regard.

Though that does raise the concern that his aggressive words may inadvertently mean he paints himself into a corner, forcing him to commit to an invasion just to maintain his image as a strong man.

We shall have to see. But one thing is guaranteed. With so much money involved, and so many international interests at stake, the Essequibo question will not be going away.

Sources/Related:

https://www.independent.co.uk/news/world/europe/guyana-ap-venezuela-nicolas-maduro-anglican-b2455546.html

https://www.forbes.com/sites/arielcohen/2023/11/16/venezuela-vs-guyana-the-battle-for-el-essequibos-oil/?sh=2e0aa4c7cfa4

https://www.theguardian.com/world/2023/dec/04/maduro-venezuela-guyana-essequibo-referendum-vote-turnout

https://www.voanews.com/a/venezuela-s-claims-on-guyana-s-territory-raise-concerns-about-conflict/7384549.html

https://www.jstor.org/stable/25612212

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