The EconomistAugust 10th 2019 The Americas 37A
fter theaxis of evil comes the “exclu-
sive club of rogue nations”. That at least
is how John Bolton, Donald Trump’s na-
tional security adviser, described Venezue-
la’s place in the world when he spoke on the
sidelines of a conference in Lima, the capi-
tal of Peru, on August 6th. The meeting, at-
tended by representatives of 59 countries,
was called by the Peruvian government to
discuss what to do about the “day after” Ni-
colás Maduro, Venezuela’s president, falls
from power. But it was the United States
that stole the limelight.
On August 5th Mr Trump signed an ex-
ecutive order to, in effect, quarantine Vene-
zuela in economic terms. The order freezes
Venezuelan government assets. It is the
harshest measure to date, aimed at all as-
sets instead of specific companies, such as
the state oil producer, pdvsa, as in the past.
But it also applies secondary measures to
anyone doing business with Venezuela. It
is these sanctions which most threaten Mr
Maduro’s government.
According to Mr Bolton, companies
around the world need to decide whether
they want to receive a “trickle of income”
from Venezuela or trade with the United
States. The measure would allow the Un-
ited States to move against any company,
country or individual trading with Venezu-
ela. America has had similar third-party
sanctions in place against Cuba since the
early 1960s, but they have lacked interna-
tional support. The measures in place
against Venezuela now are more like those
against Iran and North Korea.
American authorities have despaired of
Chinese and Russian companies operating
in Venezuela. They have warned that debt
incurred by what they say is an illegitimate
Venezuelan government would not be re-
cognised by Mr Maduro’s successors, if and
when he falls. In his address to the confer-
ence, Mr Bolton said China and Russia
should not “double down on a bad bet”.
America has been careful to state that
the new measure does not apply to hu-
manitarian aid or telecoms, which would
hurt ordinary Venezuelans. Mr Maduro’s
government called the move “economic
terrorism” and pledged to resist efforts to
remove him from power in favour of Juan
Guaidó, the speaker of the national assem-
bly who is already considered by numerous
countries to be Venezuela’s legitimate
president.
The Maduro regime and Mr Guaidó’s
faction have been talking in Barbados, in
negotiations brokered by Norway, not least
about organising early elections. Mr Madu-
ro began a second term in power in January.
The United States and many Latin Ameri-
can governments oppose holding another
election while he remains in power, claim-
ing he could rig them—as he was accused
of doing last year.
Attendees of the Lima meeting, among
whom were representatives of Mr Guaidó,
recognise the massive task of reconstruc-
tion, starting with the state-owned oilcompany. Venezuela has the world’s largest
proven oil reserves, which made it one of
the richest countries in South America. But
production has crashed to less than 1m bar-
rels a day, around two-thirds lower than in
2000.
The United Nations in June estimated
that more than 4m Venezuelans had fled
the country. Some 850,000 have moved to
Peru, the host of the meeting. The crisis,
said Peru’s foreign minister, Néstor Popoli-
zio, “has turned a country rich in resources
into a disaster.” 7LIMA
America heaps more sanctions on
Venezuela
Sanctions on Venezuela
Feel the pressure
T
hirty minuteswest from Cap-Haï-
tien, a city in the north of Haiti, taw-
ny sand beaches fringed with coconut
palms are blocked by a high barbed-wire
fence. It looks like a prison, except that
inside are a 800-metre zip line, floating
bouncy castles and a line of several hun-
dred jetskis. Steel-drum music pumps
from a 225,000-tonne ship rising 20
storeys from the turquoise sea.
This is Labadee, a beach run by Royal
Caribbean. Its name is a riff on Labadie,
the name of the typically poor Haitian
village next door. Though the resort is
actually on the second-largest island in
the Caribbean, the cruise giant markets it
as a “private destination”. And in a sense
they are not entirely wrong. Since its
inauguration in 1986, passengers who
come ashore have not been subject to
customs or immigration controls. Extras,
such as the signature “Labadoozie” cock-
tail, are paid for in usdollars, never the
Haitian gourde. Haitians not employed
by Royal Caribbean cannot enter.
Caribbean countries striking deals
with firms to open exclusive resorts(with or without customs checks) are “a
growing phenomenon”, says Jim Walker,
a lawyer based in Miami who deals with
cruise liners. In 2015, Carnival opened
the $85m Amber Cove in the Dominican
Republic; this year, Royal Caribbean will
open CocoCay in the Bahamas after a
$250m renovation. A third of the 30m
people who will cruise in 2019 will go to
the Caribbean.
For cruise companies, the benefits are
clear. Customers—and their money—are
kept in one place. And the experience can
be tailored to fit nervous travellers. Dil-
lon Mangs, an expatriate resident of
Labadie whom Royal Caribbean contracts
to run shore excursions, says he tries to
showcase Haiti’s culture without damp-
ening holidaymakers’ spirits by exposing
them to too much reality. One excursion
is to a mock Haitian mountain village,
complete with a Vodou show.
Is it a problem that cruise companies
have such privileges? Some worry that
the deals firms strike with governments
are lopsided. To keep cruisers on side,
Caribbean countries are “basically giving
away parcels of land”, says Ross Klein, of
the Memorial University of Newfound-
land. Governments which demand too
much find the ships go elsewhere.
But for the troubled Haitian govern-
ment, the Royal Caribbean deal does at
least generate some cash. Each pas-
senger, of whom there are over 700,000 a
year, pays the state a $12 surcharge. The
company provides jobs, and has also
contributed to a school. As a boy, Rod-
man Decius, who lives in Labadie, at-
tended the École Nouvelle; now he works
as first mate on a yacht chartered by
Royal Caribbean. He is pleased with the
job and does not mind clueless guests. “If
they ask questions, it’s nice for me to tell
them about my culture,” he says. “But it
doesn’t bother me if they don’t.”Island shopping
Caribbean tourismLABADIE
Cruise-ship companies are expanding across the Caribbean