Oil-rich Venezuela gripped by economic crisis
SAN CRISTOBAL, VENEZUELA — Every day for the past three months, government-programmed blackouts have meant the lights flicker and go dark in a city that once bustled with commerce. And Fifth Street, with its auto parts stores and car repair shops, has ground to a halt.
“We just stop,” said Jesus Yanis, who paints cars. “We don’t work.”
Neither does the rest of Venezuela, where a punishing, months-old energy crisis and years of state interventions in the economy are taking a brutal toll on private business. The result is that the economy is flickering and going dark, too, challenging Venezuela’s mercurial leader, Hugo Chávez, and his socialist experiment like never before.
No matter that Venezuela is one of the world’s great oil powers — among the top five providers of crude to the United States. Economists say Venezuela is gripped by an economic crisis that has no easy or fast solution, even if sluggish oil production were ramped up and profligate state spending were cut.
“The government is paralyzed, unable to handle the situation — and there are no fiscal plans to deal with the crisis,” said José Guerra, a former Central Bank economist who directs the economics department at Central University in Caracas, the capital. “Our situation is unbelievable, because we have one of the biggest reserves of oil in the world, thermal-electrical and hydroelectric sources.”
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