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The Hausmann Addendum to the Roosevelt Corollary to the Monroe Doctrine

posted by Mark Weidemaier

Mark Weidemaier & Mitu Gulati

Ricardo Hausmann, Harvard economist and former Venezuelan Planning Minister, has been a thorn in the side of the Maduro administration. His blog posts at Project Syndicate condemning the Maduro administration’s continued payment of bondholders while the people of Venezuela starve may well have deterred new lending to the regime. Among other things, Hausmann-induced opprobrium at Goldman Sachs’s infamous "hunger bond"—now trading at a deep discount--has scared many in the market. For more background, check out Cardiff Garcia’s FT podcast interview with Hausmann.

Hausmann’s latest Project Syndicate post goes well beyond complaining about the ethics of Wall Street bond investors. Hausmann first sets out his view of the political realities, in which Maduro’s manipulation of elections and co-option of the military negate any realistic chance for the political opposition to overthrow the regime, notwithstanding U.S. economic sanctions. Given the severe humanitarian crisis, astonishing depletion of national wealth, rampant inflation, widespread corruption, and other harms inflicted or exacerbated by the Maduro regime, Hausmann advocates military action by the United States and like-minded nations. The other nations presumably include countries like Peru, Colombia, Honduras, Argentina, and Chile, all signatories to the Lima declaration condemning the Maduro regime. 

To quote Hausmann:

As solutions go, why not consider the following one: the National Assembly could impeach Maduro . . . [T]he Assembly could constitutionally appoint a new government, which in turn could request military assistance from a coalition of the willing, including Latin American, North American, and European countries. This force would free Venezuela, in the same way Canadians, Australians, Brits, and Americans liberated Europe in 1944-1945. Closer to home, it would be akin to the US liberating Panama from the oppression of Manuel Noriega, ushering in democracy and the fastest economic growth in Latin America.

Whoa! Article 2(4) of the United Nations Charter prohibits states from using force against the territorial integrity or political independence of other states. It is generally thought that there are only two exceptions to this ban: cases involving Security Council authorization (presumably because of conditions such as genocide) and self-defense. This was, of course, not the case before World War II, when Western nations often intervened militarily in the affairs of other nations. The threat of military intervention was implicit, and at times explicit, in doctrines articulated by U.S. presidents concerning the relationship between the United States and Latin America. But these faux legal-sounding doctrines, such as the Monroe Doctrine and the Roosevelt Corollary, are not part of international law.

Hausmann, presumably, is well aware of these doctrines and regards them with disdain. He seemingly wants to expand—dramatically, in our view—the narrow exception for humanitarian intervention where there has been no Security Council authorizing resolution. Let’s call this the Hausmann Addendum. There is some recent precedent; the U.S. bombed Syria without prior Security Council approval in response to the use of chemical weapons. But it is hard to apply that precedent here. For one thing, it isn’t clear the U.S. acted lawfully. If not, the U.S. cannot unilaterally create an exception to international law by acting contrary to it; exceptions come into being only when a new practice becomes widely accepted. For another thing, the failure to secure Security Council approval in advance conceivably might have been justified by the Assad administration’s clear violation of international law and by the need for an urgent response. It isn’t clear that both conditions obtain in Venezuela.

To justify intervention, Hausmann suggests that the opposition-controlled National Assembly of Venezuela could invite foreign armed intervention. Indeed, some legal advisers see an exception from Article 2(4)’s prohibition on the use of force in cases involving the host government’s consent.  But is an invitation from the opposition enough? Much as we admire Hausmann, and share his distaste for the despotic current government, we think it very hard to justify the legality of his proposal.

Here's John Bellinger, former State Department and National Security Council legal adviser (2001-2009) at Lawfare on the Syria action:

Under the U.N. Charter, the U.S. is prohibited from using force in Syria unless authorized by the Security Council or exercising its right to individual or collective self-defense. The U.S. Government—like most other governments (with the exception of the United Kingdom and Denmark)—has never recognized a right of humanitarian intervention under international law.

This doesn’t mean that international law could not or should not allow more scope for humanitarian intervention. Anyone paying even minimal attention to the genocide of the Rohingya in Myanmar must be frustrated by the international community’s unwillingness to do much of anything about the horrors there. Bellinger quotes Nikki Haley as saying (in the Syria context): “When the United Nations consistently fails in its duty to act collectively, there are times in the life of states that we are compelled to take our own action.”  But, to reiterate, if the intervention in response to the use of chemical weapons on civilians in Syria was a stretch, it is a giant leap to justify armed intervention in Venezuela. For those interested in more, there are interesting discussions on this topic by Milena Sterio and Ryan Goodman, here and here.

Hausmann knows better than we do the fraught and ugly history of foreign (and particularly U.S.) intervention in Latin America. So it is not surprising that even the Maduro administration’s critics were surprised by his proposal. Here’s Bloomberg, and Reuters, reporting opposition to the notion of U.S. intervention, recalling President Trump’s suggestion in August that military intervention might be in the cards. (Trump didn’t bother to ground his threats in international law.) And over at Caracas Chronicles, José González Vargas reminds that it doesn’t always end well to initiate a “long, slow bloodbath of a guerrilla war in an oil country shaped by decades of authoritarian military government.”

And then there is the fact of utter chaos in the current administration in Washington DC. We are more than a teensy bit skeptical that the, ahem, organs of the U.S. executive branch can formulate and execute coherent foreign policy. It is frankly hard to fathom a Trump-led international coalition that both overthrows the Venezuelan government and leaves something other than chaos in its wake. Without question, Maduro has unflinchingly presided over a humanitarian disaster for Venezuelans. But the fundamental question, even putting aside international law constraints, is whether the U.S. can take steps to benefit the Venezuelan people that are both politically feasible and unlikely to spawn the dire collateral consequences that might follow military intervention.

Perhaps we are blinkered by our perspective on sovereign debt. But it seems to us that the U.S. can do the most good and the least harm by taking steps to ensure that a legitimate Venezuelan government has access to an orderly, deep debt restructuring. The current US administration, for all of its flaws, has taken halting steps in that direction. And there is more it can usefully do. For both Venezuela and PDVSA, the most crucial restructuring-related activity will take place in U.S. financial markets and in U.S. courts. The U.S. government can play a role here—options include shielding oil operations in the U.S. from creditor enforcement (as Anna Gelpern has noted) and appearing in court to limit the ability of holdouts to impede a restructuring. Examples of the latter might include supporting the validity of a Venezuelan bankruptcy law enacted for PDVSA. Politically, none of these are easy to justify, but if conditioned on regime change, they might pass muster. As for regime change itself, we hope it comes soon. But we’re also skeptical that the current administration in the U.S. can play a productive role in making it happen.

Comments

Kudos to the authors for this well argued rebuttal of the dangerous path that Mr Hausmann suggested

Yeesh. How easy it is for Prof. Hausmann to sit in a comfy chair in Cambridge and call for bombs to rain on Caracas. Because turning a couple million hungry Venezuelans into a couple million dead Venezuelans makes all the sense in the world.

While the Maduro regime is an undemocratic, kleptocratic mess (albeit not much more so than others we support, ahem, Putin), the real underlying issue in Venezuela is the structural volatility of a petro-state. If the price of oil had stayed high, they would have muddled through. The US has a lousy track record at the superficial aspects of regime change. Is there ANY track record for successfully shifting the structural underpinnings of a national economy through US military intervention?

While new regimes, tied to their ideologies, are often chaotic and cruel (witness post-revolution Iran, El Salvador and Venezuala of late), members of the ancien regime who look backwards through rose-coloured glasses, bring with them a deep-seated conviction that all will not be right until the working classes resume being the subjugated classes, and the anointed ones are returned to the status of god-kings that they once were. Death is no deterrent.

Thank you for the interesting post! I had read a number of articles on the subject but not from the legal perspective. Two follow-up comments: 1) When you speak of options where "the U.S. can do the most good and the least harm" -- how about the legality of banning all imports of Venezuelan crude and the exports of U.S. diluents? 2) In your second paragraph I believe you meant "Colombia", not "Columbia". :)

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