Venezuela needs economic overhaul

Venezuela’s crushing economic and political crisis is spiralling out of control. Widespread food and medicine crunch, 700% inflation, abysmal
recession, corruption and crime have put the country on the edge of a virtual collapse. The recall vote to unseat President Nicolas Maduro is also facing bureaucratic bottlenecks. The ruling party has been accused of creating a climate of intimidation and muzzling critics. On Saturday, Venezuelan government sent an opposition leader, who was sick and under house arrest, back to jail. The foreign ministry expelled a group of Ecuadoran lawmakers who had met with the opposition leaders. The ruling party has also threatened to sack civil servants who sign the petition for recall referendum. Such steps are flagrantly undemocratic and unconstitutional.
Organization of American States has vociferously denounced the Venezuelan government for seeking “to maintain its power and deny people the right to make decisions”. European Parliament President Martin Schulz also warned that democracy is in “danger” in Caracas.
To lodge their protest, thousands of Venezuelans, backed by the opposition, will hold nation-wide marches on September 1. The people are apparently frustrated with Maduro’s poor governance and mismanagement of resources, which is hitting the commoners hard. They have to scramble for food in the neighbouring Colombia. The queues in the local hospitals are getting longer as medical supplies are out of stock. Around 90% of hospital emergency services have been affected as a result of which patients are suffering in silence. UN Secretary-General Ban Ki-moon dubbed the situation as a “humanitarian crisis”, but the aid agencies can hardly do anything as the Supreme Court has ruled against accepting humanitarian aid for food and medicine shortages.
People want change. They want to press their demand for a recall referendum, which will pave the way for fresh elections. The petition for recall vote was submitted in May with 1.8 million signatures. The opposition needs another four million signatures on a second petition to force a referendum. The rallies on September 1 will try to goad the officials to accelerate the process.
Venezuela desperately needs a complete economic overhaul, that can be only be carried out by a leader with a clear vision. The country — whose economy is largely dependent on oil — has to go for economic diversification. The wealthy business groups have to be wooed to invest in non-oil ventures which will fetch them long-term dividends. Venezuela has to find ways to check its slumping gold reserves and deepening currency crisis. Besides, it has to gather the funds to meet $928 million in bond payments. That would not be an easy task. Maduro’s government has borrowed a three-year loan of $482.5 million from the Latin American Reserve Fund (FLAR). It is not adequate. Moreover, it is more of a quick-fix solution. A new leader will have to look at a remedy that is sustainable.
The current economic hardships would surely serve as a lesson for the Venezuelans, who will choose the right person when they vote — probably in January 2017. When the new leader is chosen, people have to join in the national dialogues and decision-making process. They should not commit the mistake of staying aloof. It is participatory democracy that will bail them out of the raging crisis.