Venezuela’s curse is nearing his end

Venezuelan President Nicolas Maduro is a ticking time bomb. Venezuelans are saying no and taking to the streets in solidarity against his brutal regime. The opposition, with support from around the world, is on its way to breaking down the remains of Maduro and his circle of supporters. 

In a surprise turnaround, Venezuela’s opposition inaugurated in a new leader and “legitimate president” for the country — Juan Guaido. The 35-member Organization of American States, the United States, Canada and other countries have thrown their full support behind Guaido signaling more than a symbolic nod for new leadership in the besieged country.

{mosads}The country faces acute poverty, a mass migration crisis, chronic hyperinflation, decimated health and educational services and cratering oil production. Maduro made grandiose claims to be socialist, but in reality, his regime prioritized rampant disregard for the citizenry. Venezuelans were left to suffer, and those who could, fled in the hopes of finding a better life elsewhere. 

Rebuilding public trust, institutions, infrastructure and the economy will take years but it can happen under new leadership.

Oil has been called the curse of Venezuela, but if the country is going to recover, oil and the revenues generated from it will be critical for recovery. It is not oil that has sowed the seeds of the country’s collapse and led it to this point. 

Not too long ago, Venezuela challenged the connections between oil wealth, poor governance and rampant corruption. It was once a relatively stable democracy and remained so even during the 1960s and 1970s when other Latin American countries were well on their way to becoming increasingly authoritarian.

While the collapse of oil prices in the 1980s and 1990s fueled destabilization that in turn created the opening for a hyper-socialist by the name of Hugo Chavez to become president, it was Chavez and his successor Nicolas Maduro who are responsible for the country’s meltdown — not oil. 

Warped by 14 years of Chavez followed by Maduro, the country is now in ruins due to dismal, non-existent growth rates, endemic and rampant corruption, weak public and social services and large swathes of poverty.

Health and education indicators continue to fall, while disease, malnutrition and crime climb to staggering new levels and inflation rises to over 1 million percent. Migration forecasts predict that another 10 percent or more of the population will leave, on top of the 3.5 to 4 million people who have fled since 2014 when Maduro took over.  

Pain really set in when oil’s price started to decline in 2014, dropping from $100 a barrel into the low $30s by 2017. Over the same period, production fell more than 1 million barrels, hovering below 2 million barrels per day (bpd).

Venezuela has some of the largest oil reserves in the world, with 90 percent of the country’s foreign exchange dependent on oil revenue, but Maduro has made no investment in necessary upgrades and infrastructure.

Now, foreign investors have all but disappeared from the country, in part because Venezuela has the highest political risk indicators in the oil world, and oil production is below 1 million bpd, a 70-year low. The country is deep in debt, with China and Russia being two of its largest creditors. 

Venezuela needs an overhaul of its oil resource management, and Maduro can’t do it. His corrupt leadership has been the curse that’s battered Venezuela and its people. Until now, his bargaining and payoffs to the military have kept him in power, but Guaido has offered immunity to the military; the writing is on the wall for Maduro’s demise.  

This represents the opening required for a dramatic shift in allegiances and a new era for Venezuela. Maduro has survived but the perfect storm has finally hit, and he’s in the middle of it. 

Venezuela faces a long period of rebuilding from the incredible damage Maduro has done. It’s time for him to return to his bus-driving days and cede power to a leader who can turn this country around. 

Carolyn Kissane is the academic director and clinical professor of global affairs at the Center for Global Affairs at NYU School of Professional Studies. She is a non-resident fellow at the Payne Institute for Earth Resources.