The oil price collapse has brought about excited speculation that the end may be near for Putin, Iran and the American oil shale industry. While the oil price downturn will definitely stress these three players, the prime candidate for political collapse is Venezuela – with significant ramifications for the United States.
And it’s likely the Obama administration is not prepared at all.
Venezuela has all three factors present for an imminent political implosion: 1) severe and worsening economic distress, 2) an organized political opposition, and 3) disunity in its security services. Russia and Iran may be in tough economic straits, but the political opposition in both countries is weak and the armed forces and police are clearly under the control of the existing regime.
For over 15 years Hugo Chavez and his successor Nicolas Maduro have pursued absurd socialist economic policies liberally mixed with heavy-handed repression, and an anti-American foreign policy. Private property has been expropriated. Political opponents have been harassed and jailed. The crime rate is soared. Essential items have disappeared from store shelves. Maduro himself flat-out stole the last presidential election (of course the leftist leaders in Latin America just shrugged it off — showing yet again that the left only likes democracy when they win).
Now Venezuela is at the end of its financial rope. Tens of billions of dollars in oil revenue have been wasted away and now that the price of oil has cratered, the country’s fiscal deficit is unsustainable. Maduro is cutting spending, unloading debt at cut-rate prices, and arresting his political opponents. Tension is rising between the armed forces and the Maduro’s Chavista paramilitary thugs.
If there is a place on the planet primed for civil war and collapse, it’s Venezuela. Not that anyone in the mainstream news media or the Obama administration seems to notice.
Such a collapse would be a much bigger deal for the United States than what is happening in Russia or Syria. An economic and humanitarian disaster in Venezuela will have immediate and substantial effects.