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Venezuela left on the edge of ruin

The weekend vote approving a new constituent assembly in Venezuela did nothing more than highlight the divisions that have left this once prolific oil and gas producer on the edge of ruin.

President Nicolas Maduro’s administration seemed to lose the last trappings of legitimacy by ordering the re-arrest of opposition leaders and, it seems, inflating turnout figures.

Authorities had pressured and intimidated public workers and welfare claimers to vote, in a repeat of the blacklisting strategy used when then-president Hugo Chavez survived a recall vote in 2004, but turnout stayed low amid an opposition boycott.

Critics see the constitutional assembly as an attempt to annul an opposition-led congress and prop up a government that has lost all legitimacy and most of its popular support.

The new assembly will be made up of government supporters, with wide powers to dismiss and appoint officials, and draft and approve constitutional changes.

The US government led the response by imposing sanctions on Maduro for "seizing absolute power".

Venezuela may be edging close to a humanitarian disaster, with food shortages, soaring inflation and rising violence, with 120 killed during four months of anti-government protests.

The wasted potential is there for all to see, with output around the Maracaibo Lake in chronic decline and state oil company PDVSA’s partners on the Carabobo projects sticking to rudimentary early production systems with around 35,000 barrels per day, rather than the two 450,000 bpd upgrader projects that were touted.

There is also great potential for developing offshore gas resources using infrastructure and spare liquefaction capacity on Trinidad & Tobago’s Atlantic LNG project, but it is hard to imagine key players such as Shell and BP engaging with Caracas. Debating such projects seems increasingly irrelevant.

The international community can only hope that some middle ground can be found.

One focal point might have been the principled opposition to the assembly mounted by the country’s chief prosecutor Luisa Ortega, but that would require a courageous move by a significant group of moderate socialists, and there has been little sign of this so far.

Instead, Ortega’s dismissal is likely to be one of the first acts of the new constituent assembly.

More worrying still, Maduro called on the assembly to lift the immunity of legislators and hold them accountable.

Maduro’s game plan now seems to be to simply avoid holding gubernatorial and presidential elections scheduled for 2017 and 2018.

A pragmatic solution through international mediators still offers the best chance of nudging Maduro toward conciliation.

There has been a growing focus on calls for Venezuela to shift to a transitional government focused on stabilising the economy, but this process would need to include reassurances against reprisals and recrimination on both sides.

This is probably the last chance to exert meaningful pressure on Maduro before the lights of democracy finally go out in Venezuela. 

Many long-suffering Venezuelans are willing to endure a period of increased international isolation if the consequence is a return to democracy and the rule of law. 

"This is probably the last chance to exert meaningful pressure on Maduro."