The presidency of Nicolas Moduro can lead to a Venezuelan tragedy, claims Daniel Lansberg-Rodriguez in the Financial Times article. He cites the fastest inflation rate in the world, economic contraction expected to be 8% this year, power blackouts, food and medicine shortages, rising debt, and dwindling foreign exchange reserves as the reasons.
According to Mr. Lansberg-Rodriguez, Maduro is “loath to reverse unsustainable fiscal and monetary policies he inherited from his mentor [Hugo Chavez] or to accept help from outside.”
In a report posted by My Space, the President is touring other Latin American countries in search of funding. Under his regime, it is unlikely that any aid from the American government would be accepted. After declaring a state of emergency, initially for 60 days, Nicolas Maduro is clinging to power. This may not necessarily benefit the Venezuelan people.
Venezuelan economy is reliant on oil exports to obtain hard currencies. “The prices have risen from under $30 per barrel to around $50, but this isn’t high enough to solve Venezuela’s problems” says expert Diaz Granados.
Indeed, higher oil prices wouldn’t solve its long-term structural problems such as too much dependence on a single hydro-electric plant for energy, overspending, high debt, and most exports coming from a single commodity.