On the brink of default, rien ne va plus in Venezuela

The economy of Venezuela is expected to contract 7 percent in 2015. The economic shock has intensified with the fall in oil prices and record inflation that made US imports inaccessible to even the richest people in Venezuela. According to business circles, the main reason for such chaos has stemmed from the “outdated socialist policies” of the “corrupt and paranoid” government of President Nicolas Maduro. Conversely, Venezuela has been the latest – and alleged priority – target of the evil ambitions of the “imperialist empire” – the USA – whose government sought to overthrow Maduro, the Bolivarian presidency said.

Meanwhile, throwing accusations at each other has not helped ease a situation that has become more and more desperate. In addition to increasing crime rates which were already at record highs before that, the political situation has deteriorated further with the arrest of several opposition figures including Antonio Ledezma, the mayor of Caracas, suspected by the Bolivarian National Intelligence Service (SEBIN) of participating in a US-backed coup that eventually failed. Yet the very source of Venezuela’s difficulties has been the economy all along.

Even MIT Professor Noam Chosmky, a leading critic of US foreign policy and capitalism in general, explained that not only Maduro is not as charismatic and popular as his predecessor Hugo Chavez but indeed “there was no success in moving Venezuela away from a strictly oil-based economy.” Even though the US might have undermined Venezuela’s influence at the OPEC, “there’s plenty of problems internally,” Chomsky said. 2015 could thus be the year of default for Venezuela’s economy. “I don’t see a path out in which they can avert default,” said Deutsche Bank’s Armando Armenta.