Venezuela Petro-Allies Nervous over Chávez's Death
Venezuela Petro-Allies Nervous over Chávez's Death
AS/COA’s Eric Farnsworth comments on the impact of President Hugo Chávez’s death on his Petrocaribe’s beneficiaries and the withering Venezuelan economy.
Weeks added that Maduro would likely try to maintain the Cuba subsidy as much as possible for symbolic reasons, and many analysts say the island is less dependent on Venezuela than it was on the Soviets.
But Venezuela's economy has problems that Chavez's successor will have to deal with. Inflation is 22 percent, dollars for imports are scarce amid currency control and residents complain about sporadic shortages of basic goods.
"Once Venezuela's budget deficit really begins to bite in a way that can no longer be ignored, then the government will have to make some tough decisions in term of spending," said Eric Farnsworth, an energy specialist with the Council of the Americas. "And one of the quickest ways to cut in any country is foreign aid."
For some Petrocaribe beneficiaries that might simply mean tightening belts. For others it could mean rising discontent or even potential unrest as popular social programs wither.
Nicaragua's Ortega, for example, has used the extra cash to put roofs on homes and finance health care and education in a country where 80 percent of the people live on less than $2 a day. Economist Rene Vallecillo said the country could see a 1 percentage-point drop in GDP growth if Venezuelan aid disappeared.
Haiti has used millions in Venezuelan aid to pay for fuel, renovate power stations and build low-income housing in the earthquake-torn nation....
