Running Out of Time: Dimming Prospects for Reform in Venezuela

The collapse of global oil prices is putting particularly severe pressure on Venezuela, with unpredictable but serious economic and political consequences. The price of Venezuela’s oil has fallen from $97 per barrel to less than $40 in the past year. For a country that imports over 70 percent of all consumer goods (including food) and depends on oil exports for over 95 percent of its foreign exchange, the effects on Venezuelans’ well-being are severe. Gross domestic product contracted by 3 percent in 2014 and inflation exceeded 60 percent. Reports from Venezuela indicate longer lines at markets, shortages across a wider spectrum of goods and occasional outbursts of looting at supermarkets. These problems are even worse in the regions most distant from the national capital, Caracas. More…