Venezuela has set off down a lonely path after a polarizing election that sparked deadly clashes.
President Nicolas Maduro’s government held a vote Sunday that will replace the opposition-controlled National Assembly with an entirely new legislature known as the Constituent Assembly filled with his supporters.
Ten people were killed Sunday in the bloodiest day of protests since March. In all, 125 people have died.
Meanwhile, Venezuela’s latest violence and political turmoil will probably deepen its economic and humanitarian crisis.
“Venezuela will become more isolated,” says Francisco Monaldi, an expert on Latin American energy policy at Rice University.
Many world leaders say the vote eroded any last traces of democracy in the South American nation. The United States, Spain, Mexico, Argentina, Brazil, Peru, Colombia, Canada, Costa Rica and Panama condemned it. Nicaragua and Bolivia praised the vote.
Maduro and many of his supporters say the election will make for a more peaceful country and help revive Venezuela’s economy, which is spiraling out of control. Sunday’s violence suggested the opposite.
One of the top leaders in Maduro’s administration, Diosdado Cabello, said the Constituent Assembly would take power in 72 hours, and that it would establish a “truth commission” to prosecute political opponents.
Police tactics may get heavier, too. On Sunday, police motorcycle brigades fired tear gas, and video surfaced showing law enforcement beating up an unarmed man.
U.S. sanctions loom
President Trump is considering economic sanctions on Venezuela’s oil industry as soon as Monday, two administration officials told CNN. Oil is Venezuela’s only source of revenue.
The U.S. sanctioned 13 Venezuelan leaders last week — a move that was followed by Colombia, Mexico and Panama.
Venezuelans protesting Sunday noted that Trump’s potential sanctions may worsen the country’s severe food shortages if the government has less money to import food. Venezuela grows very little food domestically.
But it’s a risk some are willing to take: deeper scarcities may propel more Venezuelans to try to push the government out.
“The sanctions that will come from the United States — I’m not looking forward to them because that afflicts us as people,” said a 33-year old protester who identified himself only as Victor. “But I want it because I know it can create enough pressure on the government.”
‘A downward spiral’
Venezuelans opposing the new legislative body made their feelings known on July 16 by rejecting it overwhelmingly in an unofficial referendum organized by Maduro’s opponents. More than 7 million people cast ballots.
Several governments recognized the outcome, but Maduro ignored it.
“The majority demand democracy — and we have demonstrated that with 7.6 million people,” Dixson Lynch, a paramedic, said Sunday as blasts fired nearby at a protest.
Venezuela’s national election committee said more than 8 million cast ballots in the vote called by Maduro. The opposition immediately disputed that number.
Experts say Venezuela’s deep polarization could lead to two camps both claiming to be the legitimate government of the country — one with international support, the other with Venezuela’s military behind it.
“The opposition is going to try to set up a parallel government in a bid for international recognition. The government will likely overreact by tossing the leaders in jail. It’s a downward spiral,” says Eric Farnsworth, vice president at the Council of the Americas, a business association.
Food and money in short supply
Meanwhile, Venezuela’s humanitarian crisis isn’t abating. Soaring inflation as a result of government price controls has created mass shortages of food and medicine. Several Venezuelans told CNN this week they have lost weight this year due to food shortages, supporting findings from a national survey.
Cases of malaria, maternal deaths and infant deaths also significantly increased last year, according to government health data released in May.
With or without the new legislature, Maduro’s government owes more money than it has. Venezeula’s foreign reserves are a mere $9.9 billion, the lowest level since 1995.
It owes nearly $5 billion in bond payments for the rest of this year. It will have to pay billions more to bondholders in the years to come, along with money owed to China, Russia, U.S. airlines and energy service providers.
Experts say Venezuela’s chances of default will rise significantly if the U.S. imposes broad sanctions soon.
CNNMoney (Caracas, Venezuela) First published July 31, 2017: 9:34 AM ET