Economic and political crisis in Venezuela

A major economic as well as political crisis is being heralding in Venezuela. The plunging prices of crude in international market have resulted in a shortage of goods shortages and hyperinflation. Country is facing shortage of food, medicines and electricity that has caused blackouts across the country. 

President Nicolás Maduro, is struggling to repay the massive external debt it accumulated during the oil boom even as it is forced to cut down on imports of basic necessities to avoid a default.

The focus now is on the fate of the recall referendum, with the opposition claiming it has the required 1.85 million signatures to force one and the government dismissing this as fraudulent, something that a pliant National Electoral Council has endorsed by declaring about a third of the signatures on the petition as invalid. The opposition is led by Henrique Capriles. 

The President has the backing of the armed forces and a government-stacked Supreme Court. Recently, Venezuelan President Nicolas Maduro declared a 60-day state of emergency on 10th June due to what he called plots from within the OPEC country and the United States to topple his leftist government.

Economy

The Venezuelan economy is largely based on the petroleum sector and manufacturing. Revenue from petroleum exports accounts for more than 50% of the country's GDP and roughly 95% of total exports.

In 2015, GDP dropped by 5.7% and it is forecast to decline by 8% in 2016, the biggest contraction of any country in the world, according to the International Monetary Fund (IMF). The inflation rate is officially 180% and the Venezuelan bolívar has lost about 98% of its value since 2013 when Maduro took office.

International mediation with the immediate aim of calming political tempers and dealing with the shortage in food and medicines is required in Venezuela.

On top of the oil price crisis, Venezuela is experiencing the worst drought in 47 years. Water levels at the Guri dam in the south, which produces about 60% of the country's electricity, fell to a record lows. The result has been a brutal electricity and water crisis. Yellow water, power outages and dirty air have led to violent crime and stomach illnesses.