Venezuela needs a vision to combat crisis

In his attempt to score a point against the opposition, Venezuelan President Nicolas Maduro has declared a three-month state of emergency to face what he called “threats from abroad”. Lacking charisma of his predecessor Hugo Chavez, Maduro grapples with the economic crisis triggered by the low oil prices, and emboldened foes who are gearing up for a vote to unseat him. Apparently, the new state of emergency decree aims to neutralize and
defeat foreign aggression, which Maduro says is closing in on the country, and resuscitate the ailing economy. He doesn’t want to refer to the internal opposition, but alludes to its pressure to oust him as a foreign agenda.
It is unclear whether the emergency measures will limit civil rights. They broaden the scope of an economic emergency decree in effect since January that was set to expire on Saturday.
The new decree, Maduro said, “is more comprehensive protection for our people. It guarantees peace, stability and will allow us to recover the country’s productive capacity”.
No one is really sure whether such controversial emergency measures would help deal with Venezuela’s out-of-control economic crisis. But looking closely at the economic decree that authorizes the president to take over private business assets in order to guarantee the supply of basic household products to the public, the move seems serious and could trigger backlash.
The Venezuelan president seeks to use force to stop what he calls a sabotage by the business elite aided by foreign powers, a reference to Washington, which is both a trade ally and a political foe. But the opposition says this opens the door to new expropriations.
At the centre of Venezuela’s economic crisis is mismanagement. Instead of using an alternative such as oil to produce power, the country depends on hydraulic power, which is now hard hit by lack of rains. So to deal with the acute power problem, Maduro responded to cut the work week to two days.
Venezuela’s government is trying to combat the crisis. It pledged to cut imports by almost half this year to preserve hard currency even as its citizens struggle with shortages of basic goods and soaring inflation.
It will continue to use international reserves, which hit a new 13-year low of $12.2 billion on Tuesday, to help it meet its commitments. Yet, it is not known how long will this continue as depletion of reserve could bring the country to its knees.
One option is left — friends. China wants to keep supporting Venezuela, and a renewal of a $5 billion loan is likely to be completed in about 60 days.
With increasing lack of amenities, including power-shortages, life-threatening shortages of medicines and commodities, Maduro would face tough challenges if the oil prices remained low.
Maduro must wake up and use the oil in the production of power instead of depending on rains that may not fill rivers to produce the hydraulic power. He has to review his economic plans to address the growing volatility. Knee-jerk measures won’t help. A clear vision is needed to tide over the economic crisis.