Venezuelan Capital Breaks Out in Violent Protest as Oil Economy Crumbles

The violence everyone feared would engulf Venezuela is here, as an economic crisis worsened by dismal management and the oil price slump led to crippling inflation, shortages of basic goods and, now, bloody clashes on the streets of the capital Caracas.

Security forces in riot gear violently clashed with thousands of pro-democracy demonstrators on Wednesday, as rumors and speculation run wild about the longevity of the regime of President Nicolas Maduro.

The demonstrators are pressuring the country’s opposition-controlled national assembly to demand a referendum to recall Maduro.

It was the third major protest in a week.

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The situation was exacerbated late last week when Maduro declared an extended state of emergency, and on that power, ordered the seizure of factories.

Alleging a U.S.-backed plot to undermine his authority, Maduro extended the state of emergency for 60 days and ordered the nationalization of factories and “all actions to recover the production apparatus, which is being paralyzed by the bourgeoisie.” He claimed that certain factory owners were “sabotaging the country” by halting production.

Despite ripples of talk through the restive streets of the potential for a coup, Maduro is determined to stay the course.

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Opinion polls show that the majority of the country want to see Maduro gone. That’s not a surprise considering that they overwhelmingly voted for the opposition in December congressional elections—for the national assembly. Then, too, Maduro took a tough stance, ensuring that the assembly remained blocked by state institutions and paralyzing it.

Meanwhile, Venezuela’s hard currency cash reserves have fallen below US$190 million, according to Argus media, and oil revenues are sliding, while crude production is also looking insecure. Argus points to official forecasts of a decline of over 200,000 barrels per day this year due to closures and investment cuts.

While Argus estimates production at around 2.2 million barrels per day, it also notes that the available data is not definitive.

By Charles Kennedy of Oilprice.com

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