Venezuela‘s Economic Woes Intensify Pressure on maduro Regime
Caracas is facing a resurgence of economic hardship, sparking growing citizen discontent and increasing pressure on the Maduro government.A retiree’s question – “How are we supposed to live like this?” - encapsulates the desperation felt by many venezuelans, recalling the devastating hyperinflation of six digits experienced between 2016 and 2019, which triggered a mass exodus of millions.
economists warn that Venezuela is sliding back towards hyperinflation. José Guerra, a professor of economics at the Universidad Central de Venezuela (UCV), stated the country “certainly appears” to be entering a new hyperinflationary cycle, despite ongoing debate over the precise definition. The International Monetary Fund (IMF) projects annual inflation to exceed 680% next year,a forecast that has prompted the Central Bank to cease publishing inflation figures,hindering transparency.
The Maduro government previously curbed the last bout of hyperinflation through measures including flexible tax policies, price controls, and the unofficial acceptance of the US dollar. However, in the lead-up to the 2024 elections, the Central Bank intervened heavily in the exchange market, reportedly spending billions of dollars in reserves to artificially bolster the bolivar.
Following elections widely considered fraudulent by international observers – with opposition counts indicating over 80% of the vote for candidate Edmundo González – the government scaled back these interventions, accelerating the bolivar’s devaluation. Simultaneously, a crackdown has been underway targeting those reporting on the deteriorating economic conditions. Independent economists, black market exchange rate analysts, and opposition figures have been arrested for disseminating data about the dire state of the economy.
Adding to the internal pressures, Venezuela faces ongoing military tension with the United States. A significant naval deployment, the largest in the region in three decades, has included at least 17 incidents resulting in the deaths of at least 69 people due to the sinking of vessels allegedly involved in drug trafficking. The USS Gerald R. Ford, Washington’s largest aircraft carrier, is en route to the region, and Republican senators recently blocked a measure that would have prohibited military action, leaving the possibility of ground intervention open.
Maduro frames the US deployment as an attempt to overthrow his government and seize Venezuela’s oil reserves, a narrative influenced by US sanctions imposed on Venezuelan oil companies (though Chevron has been granted a license with payment restrictions).
Though, a recent survey reveals a shift in public opinion regarding the source of the crisis. Only 20% of Venezuelans now attribute their economic woes to sanctions, a significant decrease from 33% in September. This growing frustration has led to a sense of hopelessness among citizens, with one market vendor in Caracas expressing a desire for intervention: “If the gringos are going to intervene, let them do it now.”
(Source: Financial Times – https://www.ft.com/content/66785175-96d4-43a1-99a6-20076c88a03c)
