Venezuela: Stand and deliver

May 1, 2013

A narrow and disputed election win by Nicolás Maduro opens the way for greater changes in Venezuela’s economic management

By Ben Miller

It's the kind of list few incoming leaders would envy. Soaring unemployment. Rampant inflation. Food shortages. Slumping export demand. A yawning budget deficit. Lack of investment. And a weakened political mandate.

But these are just some of the challenges facing Nicolás Maduro, Venezuela's new president. The choices he makes are likely to have far-reaching consequences not only for his party, but for the course the nation charts for the next generation.

However, a brewing power struggle within his party and the imperative to prove his credentials - as heir to the legacy of former president Hugo Chávez - could force Maduro to entrench the populist policies of his predecessor, experts warn.

Venezuela's economic woes are grave. Moody's estimates the country ran a fiscal deficit of 11% in 2012, sharply up from 4% the previous year. That extra spending was the main impetus for an economic expansion of...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management