People queue to try to buy corn flour and rice, outside a supermarket in Caracas after Venezuela’s socialist government decreed an “economic emergency”. Photograph: Carlos Garcia Rawlins/Reuters
David L. Goldwyn and Cory R. Gill, Atlantic Council: October Surprise? Planning for Venezuela’s Collapse
As the June 23 Brexit referendum demonstrates, governments can take irreversible, momentous, and damaging actions without anticipating the consequences. While reason suggests Venezuela should adjust its fiscal policies, ensure basic human needs, avoid sovereign default, and continue oil production for cash flow, it could easily fail to do all of the above. The ripples of a Venezuelan collapse could stretch from Caracas to Miami. The international community needs to put contingency plans in place to limit the potential damage.
What kind of damage? A humanitarian disaster in Venezuela. A stoppage in oil production and cash flow as Venezuela stops paying its contractors and employees. A cessation of around 37 percent of all heavy crude imports into the US Gulf Coast. A cut off of credit to the Caribbean and Central America, especially Cuba and Haiti. Massive and sudden migration flows from Cuba and Haiti driven by domestic privation. And all in the middle of the US presidential election season.
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WNU Editor: How can you adequately prepare and plan for the possibility that the country neighbouring your own is on the verge of collapse. Unfortunately .... for Venezuela's neighbours .... that possibility is on the verge of becoming very real.