Sliding oil prices leave socialist Venezuela on brink of financial collapse

President Nicolas Maduro — the hand-picked successor to the late socialist Hugo Chavez — faces mounting international criticism for jailing opposition figures after months of street protests. (Associated Press)

President Nicolas Maduro under international pressure for jailing opposition figures

By Guy Taylor - The Washington Times - Tuesday, December 23, 2014

The ongoing plunge in global oil prices is pushing Venezuela toward economic collapse just as President Nicolas Maduro — the hand-picked successor to the late socialist Hugo Chavez — faces mounting international criticism for jailing opposition figures after months of street protests.

Where Chavez once drew praise from the world’s leftist elite for using the high price of crude oil during the 2000s to underwrite a socialist revolution, a growing number of analysts in Washington say Mr. Maduro is clinging to power in a country on the edge of becoming a failed state.

Venezuela still boasts some of the world’s largest known crude reserves, but it has continued for too long spending more on government programs than it has collected in oil revenue, analysts say. The average price of oil has dropped from more than $100 a barrel to less than $60 during recent weeks, only adding to Venezuela’s woes.

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Simply put, the “current situation in Venezuela is unsustainable if the price continues to fall,” said Michael Shifter, president of the Inter-American Dialogue, a policy research group in Washington. “You can debate what a failed state is and what it looks like, but Venezuela can’t continue like this.”

Others offer an even more stark assessment. “There are parts of Venezuela where the state is already failed,” said Adam Isacson, a senior associate at the Washington Office on Latin America. He said there is “complete lawlessness” along several Venezuelan border zones, and in certain “Caracas slums where you’ve had shootouts between pro-Chavez militias and police.”

Although national security analysts are debating what the Obama administration might be able to do to positively affect the situation, Mr. Isacson said, Washington should, at a minimum, be wary of the security implications at play for the region and the world.

http://www.washingtontimes.com/news/2014/dec/23/oil-prices-push-venezuela-to-brink-of-economic-col/