Venezuela at risk of unravelling as economic, energy turmoil deepens

A devastating drought has brought Venezuela, already facing economic and energy crises amid simmering political unrest, to the brink and threatens the future of the oil-rich nation.

Violent protests follow decision to ration energy, cut work week for public employees

A devastating drought has brought Venezuela, already facing economic and energy crises amid simmering political unrest, to the brink and threatens the future of the oil-rich nation. 

"Simply put, a natural disaster is making a man-made disaster much worse," said Donald Kingsbury, a professor of political science and Latin American studies at the University of Toronto. 

The "man-made disaster," in this case, is a heavily petroleum-dependent, state-run economy gutted by the precipitous drop in crude oil prices. 

Inflation will reach 720 per cent some time this year, the International Monetary Fund estimates, and the economy will contract another 10 per cent. Food staples and essential medicines are increasingly scarce. The costs of basic goods and services has skyrocketed. Incomes, for those lucky enough to still have one, are stagnant.

Further, crime rates have reached troubling levels. Venezuela now boasts the world's second-highest per capita homicide rate after Honduras. 

A man holds a picture of Venezuela's late president Hugo Chavez, whose time in power still looms large over the country's politics. (Ariana Cubillos/Reuters)

"People are fed up, from all over the political and social spectrum. At this point, it may not take much for things to erupt," said Kingsbury.

The worst drought to hit Venezuela in almost half a century could be the catalyst, he said. 

Rationing energy

This week, for example, more than 1,000 police and military personnel were deployed to the western city of Maracaibo, where locals blocked roads with flaming barricades and looted shops for food. About 100 people were arrested. 

Other protests were held in cities and towns throughout the country — a direct response to the government's controversial measures to ease the ongoing energy crisis, which has been exacerbated by the drought.

The Venezuelan government was forced to hike the price of gas for the first time in more than 20 years in February. The country has been hit hard by the global drop in crude oil prices. (Fernando Llano/Associated Press)

Water levels in the Guri reservoir, which feeds Venezuela's biggest and most critical hydroelectric dam, are dangerously low. Up to 70 per cent of the electricity consumed by the country's 30 million citizens comes from the dam.

Without enough water, the dam is simply unable to satisfy demand. If the water level continues to drop, it is not out of the realm of possibility that vast swathes of the sixth-largest nation in South America could be without power. 

So President Nicolás Maduro's deeply unpopular administration recently started rationing electricity. With a few exceptions, notably Caracas, most areas of the country see daily four-hour blackouts at different times.

'People are very, very angry'

Just days after the rationing program kicked in, the government announced that more than 2.5 million public sector employees will work only two days a week, ostensibly to reduce day-time demand for electricity. 

President Nicolas Maduro's approval ratings are at an all-time low, though his party retains the support of a very loyal core of boosters. (Marco Bello/Reuters)

The moves have been met with suspicion and anger, especially outside of the capital city, says Juan Nagel, a Venezuelan currently teaching economics at Universidad de los Andes in Santiago, Chile, and co-editor of the blog Caracas Chronicles

"The feeling is that they spared Caracas blackouts because they feared a major backlash in the capital. Maduro knew it could backfire in a big way," Nagel said. 

There are scheduled four-hour blackouts across most of the country, though not in the capital, Caracas. About 70 per cent of Venezuela's electricity is generated by a single dam, which is currently producing far less power than usual due to a persistent drought. (Carlos Eduardo/Reuters)

"The rest of the country sees it as unfair, and people are very, very angry. I think they're unsure about how to channel that rage, but surely, it will come out in some way."

​Adding to the tension currently engulfing Venezuela is a nasty and deeply polarizing political battle that could see Maduro recalled and ousted from power. 

'They want to strike'

The hand-picked successor of former president and socialist icon Hugo Chavez, Maduro has struggled to hang on to support, even among Chavistas, as Chavez's supporters are called. He was dealt a crushing blow last December, when a coalition of mostly right-leaning, pro-capitalist political parties won an overwhelming majority in the legislature. 

Venezuelan opposition leader and Miranda state Governor Henrique Capriles signs the form to activate a referendum on cutting Maduro's term short. (Juan Barreto/Getty)

"They know Maduro's approval ratings are in the basement, and they want to strike," said Kingsbury. "[The coalition] only stands to benefit from the situation getting worse before it gets better."

This week, the coalition initiated the Byzantine legal process that could trigger a presidential election. Nagel, however, is skeptical it will be successful since Maduro still commands the loyalty of the country's highest court, which has the power to kibosh attempts to oust him. 

Though Chavez was, and remains, one of the most divisive political figures in recent history, he unquestionably used Venezuela's oil revenue to make "important investments in human welfare that will pay dividends in a generation," according to Kingsbury. 

"Venezuela could now be on the brink of unravelling any of the social progress that was made ... I wish I could be more optimistic about its future than I am."


Lucas Powers

Senior Writer

Lucas Powers is a Toronto-based reporter and writer. He's reported for CBC News from across Canada. Have a story to tell? Email any time.

With files from Reuters