One of the major puzzles in U.S. foreign policy has been the relative indifference with which the United States has dealt with the unprecedented political crisis in Venezuela.   The policy question has been relegated to a second tier, due in part, no doubt, to the distraction of senior U.S. officials after 9/11.  What is the nature of the crisis, and what are the stakes for the United States?   

It is hard to think of a more polarized situation, both politically and socially, in Latin America's recent history.   The country is highly volatile; the risk of widespread, uncontrolled violence is considerable.   Venezuelan politics have been in decline for the last several decades, but the downward spiral accelerated with the beginning of the elected government of Hugo Chavez in February 1999.   Chavez has launched relentless verbal assaults against those sectors associated with the old order, including the media, Church, business and labor associations, and the traditional political parties.  Whatever their responsibility for the present crisis, such actors are vital for governing the country.   Yet, so are the roughly 35 percent that make up Chavez's core support, drawn mainly from the poorest strata.    

Each side has dug in and refused to deal with the other.  The level of bitterness and distrust is unmatched.   The result has been widespread chaos. In such a context, the economy fell by 9 percent in 2002 and is projected to drop by some 15 percent in 2003.    There has been sporadic violence, a botched military coup in April 2002, and an opposition-led general strike in early 2003.   In late May, thanks to the efforts of the Organization of American States, both sides agreed to a referendum as the best way to resolve the dangerous stalemate.  Still, there is considerable doubt that the referendum will in fact take place. The outlook is highly uncertain.  Few are ruling out such scenarios as entrenched authoritarian rule, a military coup and, conceivably, civil war. 

For the United States, Venezuela is not just another Latin American country in turmoil.   It is, after all, the fourth largest oil supplier to the United States, accounting for 15 percent of its oil imports.   Senior US officials point to oil as the overriding interest in Venezuela.   In the wake of US military action in Iraq, and the tremendous uncertainty in the Middle East, one would think that Venezuela would acquire even greater urgency for the United States.   Oil works both ways, however.  Shrewdly, the Chavez government allows the oil to flow precisely to avoid antagonizing foreign operations and, especially, the United States.        

Oil aside, there are other key U.S. interests at play in Venezuela, though these are less widely recognized.    Regional stability and security top the list.   The five countries that make up the Andean region of South America are particularly convulsed.   Continued chaos and escalating violence in Venezuela would not only inflict damage on the country itself, but could well undermine the ability of neighboring countries to achieve and maintain social peace.    

In this regard, Colombia deserves special mention.    The United States has long sought to bolster the Colombian government's efforts to extend state authority and control.   Since 1999, Colombia has received some $2.5 billion in security aid from the United States, making it the largest beneficiary outside of the Middle East.   Yet, there has been increasing violence on the Colombia/Venezuela border involving Colombian guerrilla and paramilitary forces - and even Venezuela's armed forces.   Should the Venezuelan crisis become a military conflagration, the resulting instability would be detrimental to longstanding US policy objectives.   The conditions are combustible, and the risks are growing.    

More fundamentally, Venezuela under Chavez potentially poses a challenge to U.S. policy objectives, leadership, and core values in this hemisphere.  Chavez has sought to build a counterweight to the United States on a range of key questions.   For example, he explicitly opposes US efforts to pursue a Free Trade Area of the Americas, an important goal for many of the hemisphere's elected governments.   Venezuela, under Chavez, has enhanced its relationship with Cuba, hardly a friend of the United States.   And the Venezuelan government has maneuvered to counter the US position on the Inter-American Commission on Human Rights, a critical body of the Organization of American States.    

In its actions at the OAS and elsewhere, the Chavez government's conception of democracy and human rights has differed markedly from the one adopted by the United States and other hemispheric governments.   Chavez, a former paratrooper who led a failed coup attempt in 1992, has consistently shown disdain for the institutions of representative democracy, for a system of checks and balances and the rule of law.  

What is Chavez up to and what does he mean for the United States?  The ambiguity reflected in his actions and words is itself disquieting.   It is unclear whether the Venezuelan president is an old-fashioned strongman, determined to cling to power but likely to fall of his own weight.  Or he may in fact have a more sinister plan and become more repressive.  If that were the case, he would then pose a serious problem for the United States. 

Such conjecture should in and of itself be enough to warrant the highest level of U.S. attention and concern.    In this regard, American indifference has been especially surprising.    To be sure, it is not clear what options and instruments the U.S. government has available to become more constructively and vigorously engaged in shaping the situation in Venezuela.   U.S. leverage is limited.   The bilateral relationship, mainly centered on oil, has long been mutually beneficial. 

Still, the United States could, and should, call on high-level political resources, first to consult widely and systematically with other Latin American partners, and then to increase pressure on both sides in Venezuela to insure that the referendum is held and all guarantees are provided.  The referendum is the best way to resolve the crisis.   It is not, however, self-executing, and it is only a first step in a long process.  To move towards reconciliation, long-term, external support, strongly backed by the United States, will be critical.   High-level public concern about any violations of press freedom in Venezuela should also be a top U.S. government priority.   

It is tempting to step back and let the Venezuelan crisis play out, hoping for a peaceful outcome.    Yet, such an approach is myopic, based on wishful thinking, and fails to take into account the fundamental nature of the crisis, the deep wounds that divide the country.  The problems are unlikely to take care of themselves.   Already, the United States has paid a heavy price for such a mindset.  The missteps committed in reaction to the April 2002 coup (for which U.S. officials expressed tacit approval) -- and again in response to the general strike in late 2002 (in which the U.S. appeared to explicitly side with opposition forces) -- are a product of inadequate attention from Washington.    Having been burned in trying to respond to such critical moments in the Venezuelan drama, the United States has been even less inclined to take risks, and has been consigned to the sidelines.    

How the Venezuelan crisis will turn out is anyone's guess.    Though the United States is right to hope for a peaceful, democratic outcome, it is hardly prepared to deal with a plausible, though less desirable result-a Venezuela that continues to deteriorate, and that poses a serious problem for the region and the United States, for years to come.     

Michael Shifter is vice president for policy at the Inter-American Dialogue (www.thedialogue.org) and adjunct professor at Georgetown University's School of Foreign Service.