Should Transition Come Before Recovery in the US plan for Venezuela?

Session: “Venezuela’s Future Economic Outlook”

In a panel on Venezuela’s future at a recent event, four leading experts from Harvard, Columbia, and Oxford challenged a core assumption shaping U.S. policy: that Venezuela’s path should follow a sequence of stabilization → recovery → transition.

Drawing on experience in government, global governance, and energy policy, they argued that this order gets things backwards. Without a real political transition and restoration of rights, there is no durable recovery to be had.

The discussion opened by recalling the dramatic developments of early 2026: Nicolás Maduro and his wife Cilia Flores being taken to the United States to face charges, followed by a swift U.S. pivot toward working with Vice President Delcy Rodríguez to keep Venezuela “stable” and to revive its oil sector, particularly for U.S. firms.

Ricardo, a former Venezuelan Minister of Planning and central bank board member, called the situation “the ultimate case of whiplash.” Maduro’s removal seemed like a breakthrough after years of failed efforts to enforce democratic norms. But the immediate focus on oil, stability, and deal‑making with regime remnants was, in his view, deeply troubling.

He described what passes for stability in Venezuela as “the stability of a cemetery”: around 1,000 political prisoners, severe restrictions on those released, no meaningful freedom of speech or press, and no real personal security. Even the basic constitutional rule that new elections must be called if the president is absent has been ignored.

Beneath this “stability,” he said, lies a criminal organization that has taken over the state, not a legitimate government ready to steward a new economic chapter.

Ricardo’s central claim was stark: Venezuela’s historic economic collapse is a direct result of the destruction of rights.

Against that backdrop, the often‑cited three‑phase sequence promoted in U.S. political circles—stability, then recovery, then transition—looks nonsensical to him. The lack of civil and property rights is not a side issue; it is the core driver of collapse. To imagine an economic “recovery” under the same repressive, legally dubious framework is, in his view, wishful thinking.

Without rights and legitimate institutions, there is no solid basis for investment, repatriation of talent, or genuine growth.

Energy policy expert Jason, Founding Director of Columbia’s Center for Global Energy Policy and former Senior Director for Energy and Climate Change at the U.S. National Security Council, pushed this point into the oil domain.

Venezuelan oil production has plummeted, and Washington is now exploring licenses that would enable U.S. traders and companies to operate more broadly in the country. One emerging idea would route Venezuelan oil sales through the U.S. market into a fund controlled by the U.S. government, nominally “for the benefit of the Venezuelan people.”

Jason noted that the key question is not just how much production rises, but under what political and legal conditions. In a constructive scenario, a transition to a stable, legitimate government, backed by Venezuelan voters, would come first. Only then would a new hydrocarbons law and investor‑friendly framework make sense, allowing oil revenues to support reconstruction credibly.

By contrast, a model in which Washington effectively directs another country’s resource flows and political choices risks looking like a throwback to earlier eras of imperial control. That, he warned, could further erode the already fragile rules‑based international economic order.

From the global governance angle, Nari Woods, founding dean of Oxford’s Blavatnik School of Government, criticized the way international actors engage with Venezuela.

Foreign governments, institutions, and firms tend to cut narrow, functional deals—with the central bank, the finance ministry, the oil sector, or selected business elites—each pursuing its own priority. But in Venezuela’s context, she argued, these fragmented arrangements do not solve the underlying crisis; they entrench it.

Simply stabilizing flows, servicing debts, or increasing oil output in cooperation with the existing power structure locks in the very status quo that caused the collapse, rather than creating space for a broad national consensus and a genuine political transition.

Political economist Jeff Frieden focused on what leverage the United States actually has: sanctions relief, market access, and assistance in designing a transition. The decisive question, he suggested, is whether Washington truly intends to use that leverage to enable a transition, or whether it will settle for a narrower goal—cooperating with entrenched actors to stabilize oil flows while leaving the core political structure largely intact.

Ricardo, for his part, sketched a different agenda for U.S. and international policy:

Once Venezuelans believe “it’s time to go back home,” he argued, recovery will follow, driven by the return of human capital and domestic initiative rather than by externally managed oil schemes.

Across their different disciplines, the panel converged on a common conclusion: the prevailing “stability → recovery → transition” model is upside‑down.

In short, if Venezuela is to have a genuine economic future, the sequence needs to be re‑ordered to stabilization → transition → recovery—with transition, not oil output, at the center of the strategy. For a full text of the 45 minute session. »»