Venezuela in a state of emergency as crisis deepens
The crisis in Venezuela continues to deepen; as it declares a nationwide state of emergency due to the severe economic crisis, the country is expected to default on its international debt. The country is now falling towards popular revolt amid food and power shortages, runaway inflation, protests and political uncertainty, say US Intelligence officials. Its President, Nicholas Maduro has allowed the seizure of factories that have ceased production, warning he will jail their owners, and is preparing military exercises so as to counter any plans for an "armed intervention". As we have been noting, oil-reliant Venezuela has been hit by the global fall in oil prices, an economy that shrank nearly 6% last year with inflation projected to rise to as much as 700% this year, lack of food, and a drought that has forced extreme energy rationing which have all fuelled public anger against the president. As protestors take to the streets pushing for a recall to remove Maduro from power, US intelligence officials suggest that the President's days are numbered.

The Pink Tide seems to be waning. When the Venezuelan President Nicolás Maduro declared emergency last week owing to a severe economic crisis, one of Latin America’s strongest Left holdings suffered a blow—both in ideological and economic terms.

The root of the problem is not hard to find. Venezuela’s socialist model brought in by Hugo Chavez in the late 1990s was entirely based on one factor—high oil prices. When this dropped, the populist spending could not be sustained by his successor and the economy collapsed with inflation hitting triple digits. The country is facing shortages and is likely to default on its international debt.

While the political crisis in Venezuela will play out in the near term, in the medium term, the country will have to find better ways of managing both the administration and the economy. Better relations with the international community and an economy that is not excessively dependent on oil exports is likely to work.