Like his predecessor Hugo Chávez, the Venezuelan president Nicolás Maduro is given to angry tirades against the United States. Since coming to power in April in an election widely regarded as fraudulent, Maduro has accused the CIA of assassinating Chávez by "injecting" him with cancer and of committing various acts of "sabotage to disrupt the electricity sector in Venezuela."

However colorful these fantasies, Maduro is quickly discovering that the reality of Venezuela's capsizing economy cannot be indefinitely explained away as an American plot. And therein lies the irony: the same man who trumpets the importance of national independence and a socialist economy continues to push policies that gravely compromise Venezuela's sovereignty.

Rather than enabling Venezuela to become an economic powerhouse in Latin America, [oil] has become the means by which other countries control it.

- Leopoldo Martínez

Venezuela's chief export, which accounts for 95 percent of export earnings and close to 30 percent of its GDP, is oil. Its exports place the country as the 9th largest net exporter of the world, with the total imports from Venezuela by the U.S. representing 9 percent of the total, while Venezuela also sits atop perhaps the largest reserves of oil and natural gas, with 24 percent of the planet’s proven reserves.

So far, so good – at least on paper. In common with some of the other OPEC nations, Venezuela has squandered its oil riches, to the point where the supply of U.S. dollars is undergoing severe strain.

Only the much-maligned United States, which imports about 800,000 barrels of oil per day, pays in cash. Every other revenue stream is transformed into either a barter arrangement or a means of servicing the repayment of Venezuela's enormous external debt, currently totaling close to $75 billion. China, which is emerging as the principal creditor of Venezuela's oil sector, uses Venezuelan oil to pay off Venezuelan debts. Since 2007, the Chinese government through different mechanisms has lent Venezuela $42.5 billion, which means that Beijing receives close to 600,000 barrels of oil per day for repayment of the debt.

Cuba alone, long-established as the regime's favored ideological soulmate, and the country where Chávez received treatment for his cancer, receives nearly $12 billion of heavily subsidized oil each year. The 11 countries that make up the Bolivarian Alliance for the Americas (ALBA,) a grouping which Chávez created in 2004, receive around 300,000 barrels per day from Venezuela in exchange for the provision of foodstuffs and similar services.

Taken together, all of this data reveals an alarming pattern. Rather than enabling Venezuela to become an economic powerhouse in Latin America, this nation's most precious national resource has become the means by which other countries control it. Venezuela either gives its oil away to countries that share the regime's worldview, or uses it to service debt that grows faster than it is paid off. Meanwhile, the stream of cash that comes from the United States cannot be expected to last, not because Washington is minded to sanction Maduro for his inflammatory rhetoric, but because the Americans are well on their way to energy independence.

There are three immediate consequences to the regime's disastrous approach to oil.

Firstly, bartering oil for food from abroad slashes jobs in Venezuela's already ailing agricultural sector, as well as pushing up consumer prices. As a result, ordinary Venezuelans suffer because of the Chavista fixation with giving away oil in the name of a more equitable global order.

Secondly, the lack of cash means that there is chronic underinvestment in developing and improving oil production. Before the era of Chavismo began in 1999, Venezuela exported around 3.5 million barrels per day. Fourteen years later, that figure is down to about 2.2 million, and it continues to fall precipitously. Given that the national oil company, PDVSA, has been purged of its professional management in order to make way for Chavista loyalists, there is no-one left to make the necessary changes even if a cash injection were to miraculously appear.

Thirdly, the Chavistas are no longer in a position to perpetuate the low-impact, high-cost "social programs" which Chávez himself inaugurated as a method to guarantee the political support of Venezuela's most vulnerable. From the beginning, the policy of building homes or providing direct transfers or handouts through the “misiones” in poor neighborhoods was financed by external debt, banking on the oil revenue expected by the country. Currently, declining oil output and a foreign exchange crisis caused by a lack of dollars are forcing Maduro to cut back on Chávez's "good works;" and it is against this fact, rather than his anti-American rants, that Venezuela's poor will judge him.

Indeed, the protests are already growing. Professor Carlos Correa Barros, who heads the independent monitoring group “Espacio Público,” recorded 1,400 separate demonstrations between January and July of this year, all of them focused on unemployment, housing shortages and similar problems. Moreover, public anger is compounded by shortages of basic goods like cooking oil and toilet paper, as well as regular power outages, such as the blackout in September that plunged 70 percent of the country into darkness.

Maduro's response is typically heavy-handed: he is now seeking to pass an Enabling Law that will allow him to rule by decree. Though he claims it is a "matter of life or death" for the "socialist revolution," the move is more properly seen as another example of how the economic crisis is further pushing Venezuela into a conventional dictatorship. As long as Maduro remains in power, Venezuelans can expect to lose the two things they hold most dear: their constitutional democracy and their economic sovereignty.

Leopoldo Martínez is a former Venezuelan congressman currently living in Washington, DC, where he is the CEO of the Center for Democracy and Development in the Americas (CDDA). 

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