IMF Prepares for Maduro's Exit as Cash Shortage Bites
(Bloomberg) -- The International Monetary Fund expects Nicolas Maduro’s government in Venezuela to fall before too long as a result of U.S. sanctions and its exclusion from global oil markets, according to an official familiar with the matter.
The dynamic toward a transition under Juan Guaido, the U.S.-backed leader of Venezuela’s National Assembly, should accelerate as Venezuela’s cash dwindles with India the only remaining buyer for its oil, said the official, who spoke on condition of anonymity.
The staying power and vested interests of the Venezuelan military, which is backing Maduro’s government, remain a barrier to change, the official said.
The U.S. and several dozen of its allies have recognized Guaido, who has mounted a challenge to Maduro’s administration, as Venezuela’s interim president. The Trump administration is considering blocking foreign entities from dealing with Venezuela’s state oil giant Petroleos de Venezuela SA as a potential next step toward choking off Maduro’s power.
Post-Maduro Aid Program
The Fund is already working discreetly to prepare to help with a massive financial aid package that will be required to help get the country back on its feet once the Maduro regime is gone, the official added.
Failing to deliver data since 2016 and facing pressure from abroad, Venezuela’s central bank sent key economic data to the IMF in November hoping to avoid sanctions that included the loss of voting rights or a potential expulsion from the lender. Venezuela has used the fund’s special drawing rights to bolster its international reserves in the past.
Sanctions could further curb imports and deepen the suffering of the population, who already face deep shortages of necessities like antibiotics, first-aid supplies and baby formula. The hard times and a crackdown on dissent have driven almost 3 million Venezuelans to flee the country. In 2017, one aid agency said more than 11 percent of children under age 5 were suffering from moderate to severe malnutrition.
Maduro’s election to a second six-year term was marred by the jailing and disqualification of opposition politicians, coercion of government workers to vote and reports of fraud. The result was dismissed as illegitimate by the U.S., the European Union and the 14-nation Lima Group, formed to help restore democracy to Venezuela.
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