Venezuela’s economy is in deep trouble, making it a minefield for investors and citizens alike, and its president has no idea how to fix it—despite oil money that pours in from the world’s largest oil reserve.
So say the opponents of President Nicolas Maduro, who has captured headlines with aggressive actions that the opposition says are designed more to win voters in an early December election than to remedy economic problems only made worse by Maduro himself.
When President Hugo Chavez died of cancer in March, Maduro, then his vice president, was his hand-picked successor. But under Maduro, the country’s economy has spiraled even further out of control, with inflation raging at 54% and a scarcity of affordable goods, including such essentials as food and toilet paper.
Those are not the only problems. Under Maduro, and Chavez before him, there was a lack of infrastructure investment as the government used oil money to focus more on spending to reduce malnutrition, poverty, and inequality—areas in which, according to both the World Bank and the UN, it has made progress. But neglect of the country’s infrastructure has led to power cuts and other issues. In September the largest power outage in five years darkened the streets of Caracas, disabling trains, traffic lights, office buildings and ATMs.
The real headline grabber, though, was Maduro’s seizure of a chain of five electronics shops, which he accused of overcharging customers. Their wares were later put up for sale under “official” prices roughly a quarter of what they had been before the seizure. Other store seizures followed, as did reports of looting in a number of areas.
Maduro also issued a declaration that he would set price controls on all consumer goods, not just electronics, if given the authority by the country’s National Assembly. That body granted him those powers through a new law in late November, and he now can take independent action for a year without consulting the country’s congress.