Venezuelan Election Catastrophe: What’s Next?

The war cycles are heating up and are not expected to peak for a few more years.

In fact, outbreaks of civil and social unrest are popping up all around the globe. And the escalating situation in Venezuela might be the worst of the bunch.

I wrote about this a few months ago. The protests against the government have now persisted for four months. Opposition activists have promised to continue the daily protests, which have seen more than 120 deaths since April.

The clashes between soldiers and the opposition will only intensify following this week’s controversial Constitutional Assembly election. The vote resulted in President Nicolas Maduro’s ruling Socialist Party candidates winning all 545 seats.

The move also replaced the opposition-controlled congress, allowing Maduro to potentially rewrite the country’s constitution, locking in his power and the fate of the Venezuelan people.

The U.S., Colombia, Spain, Peru, Canada, the EU, and Argentina have already said they will not recognize the results, which is being boycotted by the country’s opposition parties.

To make matters worse, on Tuesday, Venezuela’s most high-profile opposition figures were seized from their homes by security forces. The move appeared to be a crackdown on officials challenging the government of President Maduro.

Meanwhile, Venezuela’s latest violence and political turmoil will probably deepen its economic and humanitarian crisis: Inflation is soaring because of government price controls that created mass shortages of food and medicine. And Venezuela is burning through their cash reserves at a frightening pace.

In fact, Maduro’s government owes more money than it has in the bank: Venezuela’s foreign reserves are down to a mere $9.9 billion, the lowest level since 1995 and a third of what it was just six years ago. Take a look …

Another problem is debt. Venezuela owes nearly $5 billion in bond payments for the remainder of the year. Plus, it will have to pay billions more to bondholders in the years to come. And that’s not including the money owed to China, Russia, U.S. airlines and energy service providers.

To put it simply: Venezuela is strapped for cash and its humanitarian crisis isn’t going to improve anytime soon. And it will most likely get much worse before it gets better.

To complicate things further, on Monday, the U.S. added Maduro to the growing list of high-ranking Venezuelan officials targeted for sanctions. And that means a freeze on any of Maduro’s assets under U.S. jurisdiction. Plus, it prohibits U.S. citizens from doing business with him.

U.S. National Security Adviser H. R. McMaster told reporters that President Maduro had joined an “exclusive club” of dictators who oppress their own people. This list includes Zimbabwe’s Robert Mugabe, Syria’s Bashar al-Assad, and North Korea’s Kim Jong-un. Not a good list to be on!

Plus, the U.S. is still considering broader sanctions against Venezuela’s oil industry, which could prove to be the “final nail in the coffin” for the country.

Venezuela has the world’s largest proven oil reserves. Crude oil accounts for roughly 95 percent of its export earnings. So, if Maduro does not stand down, the U.S. could very possibly target the country’s oil industry next.

The bottom line: Venezuela is a country hovering on the brink of disaster as President Maduro fights relentlessly to gain more control, at the expense of his citizens’ social and economic freedoms.

Unfortunately, I expect things to get worse for Venezuela before they get better, which aligns perfectly with the war cycles that have been ramping up for years.

Best wishes,

David Dutkewych