The ongoing political and economic crisis in Venezuela has deteriorated dramatically.
On Monday, electricity rationing for 40 days took effect, with rolling blackouts across Venezuela, except for the heavily populated Greater Caracas area. In the latter case, this is believed to be a stratagem to avoid an outright social and security meltdown.
On Tuesday, President Nicolás Maduro announced that, as of Wednesday and for the next two weeks at least, public sector workers would have a two-day week – working on Mondays and Tuesdays, and only between 7:00 a.m. and 1:00 p.m. – with the aim of cutting back on energy consumption. Schools will also be closed on Fridays, as part of the desperate effort to save energy.
An extended drought has caused water levels at the country’s main provider of hydroelectricity, the Guri dam, to fall precipitously, with the result that the energy supply has been drastically affected. The government has blamed El Niño for the drought but critics and Venezuela-watchers say that mismanagement and corruption are the root cause of the oil-rich country’s energy woes.
The energy crisis is, unsurprisingly, exacerbating the economic situation. Even though full salaries will still be paid for the two-day week, this will be of little consolation to people already reeling from acute shortages of basic necessities, the harsh reality of the black market and an inflation rate estimated by the International Monetary Fund (IMF) to surpass 700% in 2016, up from 275% last year and way beyond the government’s own grim but still grossly underestimated figure of 141.5%.
The IMF is also forecasting an economic contraction of 8% this year, following a decline of 10% last year, with some analysts estimating that the lack of electricity could reduce the country’s GDP by another two percentage points. But the Maduro administration is showing no signs of heeding the IMF’s advice to pursue a path of fiscal adjustment including the elimination of price controls and allowing the exchange rate to be determined by market forces.
The near paralysis of the public service bureaucracy is bound to add to the problems affecting efficiency and productivity in a country already in economic freefall. Indeed, the whole country appears close to total shutdown, with the security situation also worsening and social unrest being reported in western states.
Mr Maduro and his government blame everyone but themselves for this calamitous state of affairs, pointing the finger at everything from climate change and El Niño – the latter, in truth, the cause of high temperatures and drought, but factors with which neighbouring Colombia has been coping adequately enough – to international right-wing conspiracies, a “savage” form of capitalism and an “economic war” being waged by capitalist forces in and outside the country, against the late Hugo Chávez’s ‘socialist revolution’.
Michael Shifter, president of the Inter-American Dialogue, a Washington think-tank, has however issued a damning verdict: “The blackouts are just more evidence of an utterly dysfunctional government. This is a government that is not governing.”
The Venezuelan opposition, meanwhile, has been given more ammunition to argue that Mr Maduro must stand aside or be formally removed from office. But even as it has been ramping up its efforts to force him out by legal means, the government has been mustering all constitutional mechanisms to resist and obstruct.
On Tuesday, the government-controlled Supreme Court ruled that any constitutional amendment to reduce the presidential term could not be applied retroactively, effectively blocking a move by the opposition-dominated National Assembly to reduce the presidential term.
On Wednesday, the National Election Council (CNE in Spanish).finally yielded to opposition pressure by releasing a document that would allow the opposition to request the CNE to supervise the collection of some 200,000 signatures to begin the process of seeking a plebiscite to remove Mr Maduro. If the Council complies or the Supreme Court does not intervene again to stymie the opposition’s strategy, the opposition must then request another petition drive to gather the 4 million signatures required to hold the recall referendum – a big ask but popular discontent is rising.
With the potential for a social explosion growing, it is anybody’s guess what will happen next in Venezuela. The extreme volatility of the situation there, however, should have Guyana and all neighbouring states very concerned indeed about the possible fallout.
