While the America media has been busy raging about Trump, the situation in Venezuela has been steadily declining. A number of stories have hit the wires in the last week. For instance, 1,900 of the 2,000 employees of the Banco Central de Venezuela have been sent home:
Venezuela’s central bank has been operating with an emergency team of only about 100 workers since a power outage left its headquarters without running water two weeks ago, according to four people with direct knowledge of the situation.
Most of the bank’s 2,000 employees were sent home when the lights went off in Caracas on March 25 — and haven’t been able to return since, said the people on condition of anonymity. The emergency group has been working from a library with the help of water tanks, focused on vital tasks to keep operations going, such as transactions between local banks and reserves, they added.
The central bank’s situation underscores the disarray inside President Nicolas Maduro’s administration. Bathrooms have no water and the building has no air conditioning as a power crisis exacerbated water shortages in the Venezuelan capital amid a drought. Employees don’t know when they will be able to return to work. A spokesperson for the bank didn’t respond to requests for comment.
The central bank is one of Venezuela’s most important institutions. The staff will all be key regime flunkies and supporters. The fact that employees are being arrested for talking to the opposition and sent home, presumably without food or pay, is a very bad sign for the regime. If central bank employees are going hungry, what other key regime supporters are?
S&P Global Platts March survey shows a gigantic crash in Venezuela’s oil production numbers, as the semi-permanent blackouts cripple PDVSA’s ability to produce oil:
Once OPEC’s third-largest crude producer years ago, Venezuela in March plummeted to 10th, with production falling to 740,000 b/d. That is the lowest in more than 16 years, when a crippling industry strike caused output to fall to 650,000 b/d in January 2003, according to Platts survey archives.
The country experienced at least 10 days of widespread power blackouts, shutting down its extra heavy crude upgraders, and state oil company PDVSA also exhausted its reserves of naphtha diluent by mid-month, according to status reports seen by Platts.
While Venezuela was able to maintain relatively steady crude exports in the month by drawing from storage, survey participants said they see little reason for optimism.
Many of the upgraders are expected to remain offline, the April 28 US sanctions deadline for non-US entities to wind down their transactions with PDVSA is rapidly approaching, and the continued deterioration in the country’s infrastructure has likely led to some permanent loss of production capacity, analysts said.
Estimates about the numbers of Venezuelan refugees fleeing the collapsing state have also gone way up. If Maduro is allowed to remain in power for another year and a half, at current rates, we could see close to ten million refugees by late 2020:
“In June last year we carried out a census and there were 26,000 migrants. Now — less than a year later — we estimate it’s 60,000, and this isn’t going to let up,” said Aldemiro Santo Choles, secretary of the city’s municipal government. He also said there had been a surge in recent weeks due to the massive blackouts that have hit Venezuela, depriving people of basic services.
Some 3m — 10 per cent of the population — have left, over the past three years, escaping the worst economic meltdown in Latin American history. It has become the biggest ongoing exodus on the planet, surpassing even those of the Syrians and Rohingya Muslims in Myanmar.
The pace is also picking up. The Organisation of American States says the figure could rise to 5.75m by the end of this year and 8.2m by late 2020.
Colombia, with serious social and security problems of its own, has borne the brunt of the exodus, taking in 1.2m migrants, almost all of them in the past five years.
Ten million refugees would equate to about one third of the country’s entire population. That many refugees will destabilize the rest of South America and probably trigger economic crises in other countries.
Sergi Lanau, an economist working for the Institute of International Finance, has said they project Venezuela’s economy will shrink another 25% this year and that Venezuela’s collapse exceeds even that of Zimbabwe in the 90’s:
We think Venezuela's economy will shrink 25% this year. Even more if blackouts persist. The cumulative contraction since 2013 is worse than Zimbabwe's in the late 90s, the deepest we could find in modern times. pic.twitter.com/xqgVDY6KXu
— Sergi Lanau (@SergiLanauIIF) April 6, 2019
How much longer can the Maduro regime hold on if he can’t even keep key regime supporters bribed and fed?