VENEZUELA

Venezuela took yet another turn for the worse in 2017, as President Nicolás Maduro’s government ran the country further into the ground while strengthening its political grip. The opposition has imploded. Prospects for a peaceful restoration of democracy appear ever slimmer. But with the economy in free fall, Maduro faces enormous challenges. Expect the humanitarian crisis to deepen in 2018 as GDP continues to contract.

In late November, Venezuela defaulted on part of its international debt. Sanctions will make debt restructuring nearly impossible. Increasing Russian support is unlikely to suffice, while China appears reluctant to bail Maduro out. A default could provoke the seizure of Venezuelan assets abroad, crippling the oil trade that accounts for 95 percent of the country’s export earnings.

Street demonstrations and clashes that killed over 120 people between April and July subsided after the July election of a National Constituent Assembly composed entirely of government allies. Subsequent polls for state governors and mayors led to major opposition losses amid disputes over whether to participate. But food shortages, a collapsed health system, and spiraling violent crime mean conditions for unrest persist.

 

While opposition politicians look to the presidential vote, due by late 2018, as an opportunity and entry point for foreign engagement, the government is unlikely to permit a credible vote. It might call early polls, catch its opponents unprepared, and deploy the same voter suppression tactics it has used to win local and regional elections. If the opposition begins to show signs of recovery, Maduro might seek to avoid elections altogether by claiming that external threats warrant a state of emergency. A less probable scenario is that the ruling party splits over who will succeed Maduro; without a formal mechanism, the military would be the likely arbiter. Meanwhile, the weak Venezuelan state will continue to provide a haven for criminal networks and opportunities for money laundering, drug trafficking, and people smuggling, further disquieting Venezuela’s neighbors.

 

The prognosis for 2018 is further deterioration, humanitarian emergency, and an increased exodus of Venezuelans. Sustained domestic and international pressure — as well as guarantees of future immunity — will be required to push the government toward credible presidential elections.