The people of Venezuela find themselves in a very bad place. Theirs is an oil-rich state with a collapsing economy, soaring inflation and burgeoning shortages. But the real danger lies in the social divisions that are deepening along with the country's financial crisis. Socialist President Nicolas Maduro has imposed a state of emergency, asserting that the country is being crippled by external interference and ordering military maneuvers to demonstrate his government's willingness to confront outside influences. There are indeed exterior as well as interior factors in Venezuela's present economic catastrophe, but they wear no helmets and carry no guns. They are invisible. They are called "market forces". Maduro is the political heir of the charismatic late president, Hugo Chavez who, when he was elected in 1998, introduced populist social policies based on doctrinaire socialism. When oil prices were high and the economy booming, these widely-admired political choices appeared sustainable. There was no doubt that Chavez attacked a deep social ill, which had seen wealth and power concentrated in the hands of an elite, while there was widespread poverty and social deprivation. But Chavez, a bull-necked former paratroop sergeant, did not seek balance in his reforms. He demanded extra cash from the state oil company and when it did not provide enough, he fired its leadership and put in his own placemen whose intense loyalty to the president was in no way matched by their understanding of the complexities of running a major oil organization. Chavez's death from cancer three years ago left his deputy Maduro in charge. An election narrowly confirmed his presidency but the economy was already in trouble. The government was spending way beyond its means. Market forces kicked in, driving down the value of the currency, the bolivar and inflation up. Maduro tried pushing water uphill and applied price controls. The result was an almost immediate shortage of goods and a surging black market. The hardest hit were the poor, Maduro's key supporters. Subsidized staples that targeted them became harder and harder to source as the government scrambled for money. When the oil price collapsed, the economy was already close to ruin. Business could no longer afford to import essentials. Manufacturing was hit particularly hard. Factories have been closing and tens of thousands of workers laid off. Now Maduro is threatening to nationalize shuttered businesses and reopen them with government money. The question of course is, what government money? The main result of this move, if fully implemented, will be to crack wide-open the already deep divisions in the country. Opposition forces are using constitutional provisions to try and force a referendum on Maduro's leadership. The tragedy is that the president is having none of it. He rails against imperialist conspiracies and vows to defend the Chavez "Bolivarian Revolution". With each hysterical response to a fresh economic challenge, Maduro is burning bridges behind him and making the chance of compromise ever more unlikely. His die-hard party members are begging core poor supporters not to waver, but the president is losing popular trust. Endless queuing, the lack of basic medicines and food stuffs, the regular cuts to power and water are all combining to destroy the faith they once had in Chavez's far-reaching reforms. Maduro may be an economic illiterate but is he a wise enough politician to recognize when he has failed irredeemably and for the sake of his country, he needs to go?
