Monday, December 02, 2013

Scaling Back Venezuelan Subsidies

Nicolás Maduro has to cut back on oil foreign aid, and so U.S. exports to the Caribbean and Central America are surpassing Petrocaribe. I had made a similar argument (though focused primarily on ALBA) in an article for Americas Quarterly earlier this year. The Bolivian Ambassador to the UN had disagree.

The core issue here--and not exactly earth shattering--is that Maduro has to focus his attentions on domestic problems, especially as he faces a foreign currency crunch. He cannot afford to throw money around the region as much as before. Hugo Chávez spearheaded all sorts of regional agreements and organizations, but without funding they will wither to a husk, existing without really existing.

If the upcoming Venezuelan elections do not provide a resounding victory for Maduro, and it's hard to imagine such a victory, then the combination of economic problems and domestic discontent will accelerate this snipping of foreign aid.


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