Satellite
images of Puerto Cabello, Venezuela's main port of entry for imported goods,
show just how far the country has fallen into economic disrepair. Reliable
economic statistics are difficult to come by, so comparing imagery taken years
apart can provide some insight that the government does not, particularly as
legislative elections draw near.
But in 2013, the pace of Venezuela's imports
began to slow. When global oil prices plunged in the latter part of 2014,
Venezuelan imports dropped precipitously, a trend that has continued to this
day. The second image, taken only a few months ago, shows a much different
picture: Container yards are far emptier because the government simply has much
less money to import goods.
Before the economic downturn, Venezuela
faced high inflation and occasional food shortages caused by the inefficient
allocation of financial resources. Currency and price controls, which reduced
the amount of food being produced domestically, only aggravated these problems.
And then the crisis grew even worse. Oil
revenue accounted for nearly 95 percent of Venezuelan exports by value, so the
country was among the hardest hit by the fall of the price of oil. Caracas must
now meet consumer demands for food, health products and goods with less than
half the annual revenue it once had. Consequently, the country has seen
extensive food shortages, long lines at supermarkets and rising instability as
angry citizens occasionally resort to looting. Meanwhile, Venezuela's public
finances have suffered a heavy blow. Though Caracas can plausibly meet its
remaining foreign debt payments for the year, Venezuela's bondholders are concerned
the country could default in 2016.
There is no easy way out of Venezuela's
economic crisis. For years, the government has been unwilling to make the
structural adjustments needed to address the country's economic issues for fear
of losing voters' support. But months of economic pain have eroded the ruling
party’s support anyway. With key legislative elections scheduled for Dec. 6,
the government stands to lose control of the National Assembly to Venezuela's
opposition forces.
Venezuela has thus reached a critical
juncture. Venezuelan President Nicolas Maduro and National Assembly Speaker
Diosdado Cabello, the two leaders responsible for most of the political
decisions in Venezuela, will have to decide how to preserve their positions. So
far, they appear to have banded together to defend their stakes in the
country's political system, but with no end to the crisis in sight, it will be
important to monitor their relationship over the coming months. Maduro risks
being recalled by referendum in 2016, and members of his own party may join in
criticizing him to deflect any threat to their own positions in the long run.
Πηγή: stratfor.com
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