(The Bloomberg View) -- Elections are supposed to enable voters to improve their fortunes. Sadly, that is not the case with this weekend’s vote in Venezuela. Regardless of the outcome, voters can expect no quick exit from their country’s downward spiral.
Officials from the United Nations, the Organization of American States, the European Union, the U.S., and Venezuela’s neighbors have denounced the upcoming vote as flawed beyond redemption. Even if one of President Nicolas Maduro’s three opponents were allowed to win — other more popular candidates have been barred, leading to a broader opposition boycott — he would be hamstrung by Maduro’s allies. They control the military and effectively all branches of government.
Maduro’s tenure has been an economic disaster. Inflation will exceed 13,000 percent this year. Gross domestic product is expected to shrink by 15 percent; it has fallen by almost 50 percent since 2013. Venezuela has the world’s largest oil reserves — but thanks to mismanagement, you’d never know it: By 2020, oil production will be less than half of what it was in 2013. Venezuela has already defaulted on some of its debt, which stands at nearly 120 percent of GDP.
For ordinary Venezuelans, these numbers mean daily misery. Never mind shortages of food, medicine and toilet paper — even water is now in short supply in Caracas. Nearly 3 million of Venezuela's 8 million students have been kept out of school for want of food, electricity, safe water and fuel for transport. Communicable diseases are on the rise, with malaria cases jumping by nearly 70 percent last year — the world’s biggest increase. Many Venezuelans are voting with their feet. If current trends continue, by the end of this year close to 10 percent of the population will have left.
Outside pressure hasn’t worked. Venezuela can’t be made to accept humanitarian aid, and so far it has refused help. Its neighbors are distracted by their own political turmoil, and U.S. sanctions haven’t thrown Maduro off course. With the economy collapsing, he has continued to subsidize oil shipments to Cuba, whose security services have helped keep him in power.
Former U.S. Secretary of State Rex Tillerson has speculated that a military coup might offer one way out. But almost all of Venezuela’s officers have risen through the ranks under Hugo Chavez and Maduro. Some have been implicated in narcotics trafficking and many more in the looting of the economy, which they now dominate. Expect no guaranteed relief from that quarter.
The U.S., the European Union and Venezuela’s democratic neighbors have few new levers to pull. The so-called Lima Group (comprising Canada, Mexico and much of South America) has pledged to ignore commitments — during any debt negotiations, for instance — not approved by the National Assembly, which the opposition controls and Maduro has moved to supplant. As far as possible, though, any further tightening of sanctions should be aimed at the country’s leadership rather than at Venezuela’s people. Adding to their plight would be the main drawback of banning imports of Venezuelan oil, which the Trump administration has been considering.
The end might not be that far away. Creditors are closing in on Venezuela’s national oil company, confiscating assets and threatening to cripple its operations. Even China is reportedly balking at extending the grace period on loan repayments. Foreign companies — most recently, the U.S. food giant Kellogg Co. — continue to flee.
Meanwhile, the U.S. and Europe should do more to help the countries hosting Venezuela’s refugees. And leading members of the International Monetary Fund — including China, which has lent Venezuela more than $60 billion — should be planning how to help Venezuela recover, once a government capable of being helped is in place. Until that happens, outsiders have little choice but to look on in dismay.
©2018 Bloomberg L.P.