Bloomberg | Tue, Mar 12, 2019
by Mohamed A. El-Erian
The widespread electricity outages that hit Venezuela on Friday were yet another reminder of an already tragic situation that is getting worse by the day, taking the country ever closer to the line that separates a fragile state from a failed and collapsed one. As the terrible human suffering mounts, and as the political situation gets more polarized, the international community is said to be getting ready to support an orderly transition from the current presidency – and for a simple reason: Venezuela’s protracted misery is not just intense and widespread, but also is spilling over its borders.
The situation in Venezuela is well captured by the following statement by David Lipton, quoted recently in the Financial Times. The first deputy managing director of the International Monetary Fund correctly noted that “Venezuela is experiencing an extremely complex situation, one of the most complex we have ever seen…. It’s a crisis of food and nutrition, of hyperinflation and a destabilized exchange rate, of debilitating human capital and physical productive capacity, and a very complicated debt situation.”