Venezuela close to deep crisis

Venezuela close to deep crisis

Venezuela, where opposition leader Juan Guaido has declared himself interim leader as President Nicolas Maduro comes under increasing criticism, is Latin America's top oil exporter but wracked by a spiraling economic and political crisis. 

As Agence France-Presse writes, Maduro was propelled to power in 2013 following the death of the hugely-popular Hugo Chavez, who had designated his then vice president as his political heir. Chavez, who was first elected in 1999, mixed a larger-than-life personality with a man-of-the-people style, his popularity underpinned by oil-funded social programs.

His were big shoes for Maduro to fill, and he quickly lost favor. Despite leaning on the symbols and rhetoric of Chavism, Maduro lacked the charisma of his predecessor and suffered when a 2014 fall in oil prices sparked a major economic crisis for the oil-dependent nation.

The economic woes provoked anti-government riots that raged for months in 2014, with the authorities reacting with force. Forty-three people were killed. Protests calling for Maduro to step down lasted for four months in 2017, leaving 125 people dead.

Two assemblies

During the elections of December 2015, the opposition won control of the National Assembly by a landslide. Eighteen months later, Maduro moved to create a Constituent Assembly tasked with rewriting Venezuela's constitution. The opposition said the new body, designed to supersede the National Assembly, was a ploy to cling to power.

Elections for the new assembly were held in July 2017 but boycotted by the opposition and marked by massive protests in which 10 people died. The vote packed the new assembly, which has more than 500 seats, with Maduro allies. But it was not recognized by the European Union, nor the United States and several regional countries.

The opposition also boycotted presidential elections in May 2018 in which Maduro claimed victory for a second term. The vote was dismissed fraudulent by the EU, the US and the Organization of American States.

On January 23, National Assembly leader Juan Guaido proclaimed himself "acting president". He was immediately recognized by the US and several countries. But Russia, Cuba, Bolivia, Mexico and Turkey said they still supported Maduro.

All about oil

The Caribbean nation has the largest proven oil reserves in the world, estimated at around 302 billion barrels. It is almost totally dependent on its black gold production, which accounts for 96 percent of exports and half of state revenue.

However, the International Monetary Fund (IMF) said in April 2018 that crude production had dropped by half in the previous 18 months, with a lack of investment in infrastructure blamed for the collapse.

The United States is Venezuela's biggest customer for oil, with about a third of production also going to China and Russia and used to pay off debts.

Economy in free fall

Home to 32 million people, Venezuela's economy has been shrinking since 2014. In the past five years GDP has declined by 45 percent, the IMF said in April 2018, ranking Venezuela's economic collapse as one of the worst in modern history.

The nation also has the world's highest inflation rate, which the IMF says will hit a staggering 10 million percent in 2019. In a bid to stem the decline, the government devalued the bolivar by nearly 100 percent in August 2018. In partial default on its debt, Venezuela also suffers severe shortages of food and medicines. A study by the country's main universities said 87 percent of the population lived in poverty in 2017.

Mass exodus

Some 2.3 million people have fled the country since 2015, the United Nations refugee agency said in November. More than three million Venezuelans now live abroad, it said, making this is the largest exodus in the recent history of Latin America. Colombia has seen the biggest influx, hosting more than one million refugees and migrants from Venezuela.