AP Explains: Standoff, dying economy drive Venezuelan crisis
Venezuela is being wracked by an increasingly belligerent standoff between the government and opposition, while many Venezuelans are becoming fed up with a floundering economy marked by long lines for food and the world’s highest inflation. President Nicolas Maduro has declared a state of emergency to let him deal with the economy by decree, but the opposition is vowing to push ahead with its campaign to force a recall referendum seeking his ouster.
The Associated Press explains what’s next:
HOW DID THEY GET HERE?
The opposition scored a stunning landslide victory in legislative elections in December amid growing frustration with socialist President Nicolas Maduro’s handling of the economy. Opposition leaders vowed to seek his ouster through constitutional means within six months but the government-stacked Supreme Court has stopped them at every turn.
The latest attempt to force a recall referendum on cutting short Maduro’s term has also run into obstacles. Many analysts forecast a vote to resolve the political crisis won’t be allowed, if at all, until next year. That would allow Maduro’s vice president to finish his term, depriving the opposition of its hopes of forcing new elections before the current presidential term ends in 2019.
WHAT’S AT STAKE?
The big fear is a repeat of the riots and looting that rocked Caracas in 1989, leaving around 300 people dead. A more recent precedent is the wave of anti-government unrest in 2014 that resulted in more than 40 deaths and dozens of arrests.
Venezuela has one of the world’s highest homicide rates and the huge number of firearms circulating on the streets is a major concern in the event of unrest as are the activities of motorcycle gangs that were once loyal to the government. In the first four months of the year, there were 2,138 protests — around 17 a day — and more than 166 looting incidents, according to the nonprofit Venezuelan Observatory of Social Conflict.
IS THE ECONOMY HEADING TOWARD COLLAPSE?
The economy is forecast to sink 8 percent this year and inflation skyrocket past 700 percent. Foreign currency reserves have tumbled to the point that Venezuela now has less cash on hand than when Hugo Chavez took power in 1999 with oil prices in the single digits.
Oil accounts for 96 percent of Venezuela’s export earnings and the plunge in world oil prices hit the government hard, leaving it owing money across the board, from foreign airlines to oil service companies. Venezuela’s debts to bondholders are also a burden, and some analysts speculate the government will be hard-pressed to meet around $6 billion in bond payments due this year, most of it in the fourth quarter.
WHAT ARE MADURO’S OPTIONS?
While Venezuelans are angry, polls say around a third of them still support Maduro. In crisis-wracked Latin America, that is actually above the support for leaders in Brazil, Chile, Colombia and Peru. More importantly, Maduro still has a tight grip on almost every branch of government and institution, though support within his ruling socialist party is fraying.
The opposition, meanwhile, is divided by some big egos and has a tough time connecting with the poor who still revere the late Hugo Chavez. To oust Maduro in a recall referendum would require 7.6 million votes — just below the opposition’s tally in December’s legislative elections, which it won by a landslide. It’s not clear that it could replicate such an electoral feat.
Rebounding oil prices, which are up around 60 percent this year after dipping to a 13-year low in January, could buy Maduro some time to try to fix the economy. So too could a new loan from China, but that seems unlikely as Venezuela’s biggest creditor has stopped providing new loans.
IS THE MILITARY A FACTOR?
Venezuela’s military historically has been the arbiter of political disputes, which is why some in the opposition are trying to spur them into action to resolve the current impasse. However, Chavez and Maduro have done a skilled job winning over the top brass through patronage and powerful government jobs, and there is no outward sign of disgruntlement even at the junior levels.
One unanswered question is whether the military will be as quick to use heavy force in the event of mass street protests like it did during the anti-government unrest in 2014.