Despotism and default in Venezuela

BACK in July, Nicolás Maduro’s big problem was an opposition-backed rebellion against his plan to replace Venezuela’s elected parliament with a hand-picked constituent assembly. More than 120 people died in mass protests and the armed forces briefly seemed to waver in their support for the government. Now Venezuela’s dictator-president has his new assembly in place and the opposition where he wants it—divided and debilitated. But he has another problem: he is running out of cash.

After years of mismanagement, Venezuela’s all-important oil industry is listing like a shipwrecked tanker. According to data provided by the government to OPEC, oil production in October averaged 1.96m barrels per day (b/d), down 130,000 b/d from September (and 361,000 b/d from October 2016). Subtract oil supplied for almost nothing to Venezuelans and to Cuba, and shipments to repay loans from China and Russia, and only around 750,000 b/d are sold for cash, according to Francisco Monaldi, a Venezuelan energy economist at Rice University in Texas. And although the oil price is up from its low of 2015, it is still a little more than half its level of 2012.