Venezuela's economy affects the upcoming election

Venezuela's economy affects the upcoming election
Venezuela's struggling economy stands as a pivotal issue in the upcoming presidential election, with President Nicolás Maduro aiming to persuade voters that the nation has begun to recover after years of turmoil. Recent efforts to reduce living costs have led to a somewhat brighter outlook. In February, Venezuela finally emerged from the grips of rampant hyperinflation, which had seen prices soar by over 400,000% annually in 2019. While annual inflation remains high at around 50%, it is now more manageable. Mr. Maduro has eagerly claimed credit for this decline, asserting that it reflects his "correct policies." However, these policies have largely failed to address the economy's deep-rooted structural issues, particularly its heavy reliance on oil at the expense of other sectors. As noted by the US Council on Foreign Relations think tank, "Since oil was discovered in the country in the 1920s, it has taken Venezuela on an exhilarating but perilous boom-and-bust journey." Opponents of President Maduro are pinning their hopes for economic revival on a leadership change, envisioning a fresh start under his electoral challenger, Edmundo González. "A victory for the opposition would lead to a renewed opening of Venezuela’s trade and financial connections with the global community," explains Jason Tuvey, deputy chief emerging markets economist at Capital Economics. This shift could also signal an end to the US economic sanctions imposed following Mr. Maduro's controversial 2018 election win, which was widely criticized as neither free nor fair. These sanctions have hampered state-run oil company PDVSA's ability to sell crude oil internationally, forcing it into black market transactions at significant discounts. Yet, Mr. Tuvey warns that reversing the economic collapse of the past decade will be an arduous task, given the vast investments required to boost oil production and the approaching peak demand for oil. "Venezuela's economy can never return to where it was 15 to 20 years ago," he tells the BBC. "It will essentially be starting from square one."