Economic Crisis Continues in Venezuela
Via the BBC: Venezuela economy: Nicolas Maduro declares emergency
The Venezuelan government has announced a 60-day economic emergency to deal with the country’s worsening crisis.
President Nicolas Maduro will govern by decree for two months.
The edict includes tax increases and puts emergency measures in place to pay for welfare services and food imports.
The government’s move came as official figures released by the central bank showed that the Venezuelan economy had contracted by 4.5% in the first nine months of 2015.
Venezuela has the world’s biggest known oil reserves but the huge fall in oil prices in the past 18 months has slashed its revenues by 60%.
Annual inflation up to September 2014 is said by the Venezuelan Central Bank to have reached 141%.
Oil exports account for as much as 95% of Venezuela’s revenue.
The most striking part of this entire situation is how man-made it is. Yes, the fall of oil prices was going to have a serious effect on an economy so dependent on oil revenues, but the current state of the economy can very much by blamed on poor policy decisions and gross mismanagement by first Hugo Chávez and then by Nicolás Maduro.
Given the outcomes of the recent legislative elections (a big opposition win) and the ongoing serious problems in the country, we appear to be heading for a serious conflict. The current situation does not seem sustainable.