Venezuela, the IMF and Trump’s ‘Monroe doctrine 2.0’
•
Article summary
- Majority of IMF Board must recognise Venezuelan government in order to release country’s SDRs from 2021 general allocation.
- Ongoing concerns among CSOs that these crucial funds will not reach people who need them most.
The fate of Venezuela, a country with the world’s largest proven oil reserves, is an illustration of the significant role that the IMF plays in geopolitics. While the institution has traditionally denied that it plays an explicitly political role – a claim that is belied by academic and civil society research (see Inside the Institutions, What are the main criticisms of the World Bank and the IMF?) – it can influence states’ national politics, inter alia, through granting or withholding access to Special Drawing Rights (SDRs; see Inside the Institutions, What are Special Drawing Rights(SDRs)?). The Fund also has a long history of support for authoritarian regimes, neoliberalism and extractivism in Central and South America (see Observer Summer 2025). Its position is particularly significant in the context of US President Donald Trump’s ‘Monroe doctrine 2.0, which dispenses with international law and the UN charter to achieve US hegemony in the Western hemisphere, and has so far led to a military operation against Venezuela and contributed to a deepening humanitarian crisis in neighbouring Cuba.
Will the IMF’s re-entry alleviate the economic suffering of the Venezuelan people?
For a country to access its SDRs, its government must first be ‘recognised’ by a majority of the IMF Board. Venezuela has been prevented from accessing $4.6 billion of its SDRs – the country’s share of the Fund’s $650 billion allocation in 2021, which would have made it one of the largest beneficiaries in terms of percentage of GDP – as countries with a majority voting share within the IMF refused to recognise the government of Nicolás Maduro. This raises questions of hypocrisy given that the institution has had ongoing relationships with states that violate international law, including the apartheid regime in South Africa. Calls for the IMF to release the SDRs, which are crucial to alleviating the economic suffering of the Venezuelan people, now hinge upon the IMF Board’s recognition of the new Delcy Rodríguez administration.
The US has indicated that it would be willing to convert Venezuela’s SDRs into US dollars at the same time as the country’s strategically important oil industry has been opened up to privatisation, reversing reforms made under the late President Hugo Chavez. While the IMF board is debating recognition of the state authorities, its most recent analysis stressed concerns with the country’s external debt, which it estimated at 180 per cent of GDP as of February 2026. This could set the ground for neoliberal reforms being touted as necessary by some analysts, or could be used to justify further oil and gas asset development, potentially under an IMF loan – meaning thatexternal creditors would be paid while funds from oil sales flow into US-controlled accounts.
Daniela Berdeja Ruiz of the Latin American Network for Economic and Social Justice (Latindadd) explained: “Decisions on the allocation and use of international financial resources should not be subject to political considerations that disadvantage countries with less voice and influence. Therefore, SDRs should be allocated to all IMF members directly and immediately, without any impediments or conditions, and their use should remain entirely sovereign, in accordance with national needs and priorities. The failure to uphold these principles, as is the case with Venezuela, highlights the urgency of real governance reform at the Fund.”
