TIME Colombia

Venezuela and Colombia Vow to Cooperate in Border Dispute

Venezuelan soldiers blocked the river crossing on Wednesday morning

(CARTAGENA, Colombia) — The foreign ministers of Colombia and Venezuela promised to increase cooperation Wednesday following talks to ease heightened tensions caused by the closure of a major border crossing and a weeklong crackdown on Colombian migrants and smugglers.

Diplomats left the meeting in this Caribbean coastal resort without announcing a decision to re-open the border crossing or end the deportations from Venezuela, only saying that defense officials from the two countries would talk in the coming days to form a joint plan for border security.

Meanwhile, in the Colombian city of Cucuta, residents complained of long gas lines as Venezuela’s security offensive cuts off trade, legal and otherwise, between the two nations.

Across the border, scores of Colombians packed their belongings into suitcases and prepared for an army escort out of Venezuela, joining the estimated 1,000 of their compatriots who have already been deported.

Donamaris Ramirez, the mayor of Cucuta, says he plans to order gas stations to remain open 24 hours to attend to demand normally met by curbside smugglers who purchase gasoline in Venezuela at less than a penny a gallon and resell it for huge profits in Colombia.

With two main border crossings closed, the underground economy has come to a halt, satisfying Venezuelan officials who have long blamed transnational mafias for widespread shortages but also jeopardizing the livelihood of tens of thousands of poor Colombians who depend on the black market.

On Tuesday, a group of 100 Colombians fled the border town of San Antonio del Tachira by wading across a knee-deep river with their possession, everything from TVs to doors, slung across their backs.

Colombian President Juan Manuel Santos offered to help returning Colombians find work during a visit Wednesday to an emergency shelter in Cucuta overrun with deportees, and promised deported citizens a subsidy of about $80 to help them land on their feet.

Earlier, in a speech in Bogota, he ran through a series of economic and crime statistics, everything from projections Venezuela’s economy will shrink 7 percent this year to widespread shortages comparable to those found in war zones like Syria, in a sharp retort to the aggressive rhetoric coming from Caracas in recent days

“Venezuela’s problems are made in Venezuela, they’re not made in Colombia or other parts of the world,” Santos told a forum of former presidents from around the world.

While some 5 million Colombians live in Venezuela, the security offensive has focused on a few towns near the border where Venezuelan President Nicolas Maduro blames migrant gangs for rampant crime and smuggling that has caused widespread shortages.

The crisis was triggered a week ago when gunmen Maduro claimed were paramilitaries linked to former Colombian President Alvaro Uribe shot and wounded three army officers on an anti-smuggling patrol.

The socialist leader has vowed to keep two normally busy international bridges closed, and possibly extend restrictions to other transit crossings until Colombian authorities help bring order to the porous, 1,400-mile (2,200 kilometer) border. A state of emergency allowing the government to restrict peoples’ movement for up to 60 days has been declared in six cities.

Venezuelan soldiers blocked the river crossing on Wednesday morning, but were helping Colombian residents of a slum that is slated for demolition leave Venezuela via a legal bridge crossing.

A group of about 300 Colombians staged a protest Wednesday in front of Venezuela’s consulate in Bogota.

Maduro has angrily denied the denunciations of mistreatment, saying that Venezuelans are unfairly paying the price for Colombia’s disregard of its poor.

“Santos has the gall today to seek respect for Colombians. Who is treating Colombians with disrespect? Those that expel them from their country, deny them work and housing and don’t provide education?” Maduro said on state TV late Tuesday.

The Colombians who abandoned their cinder block homes Tuesday in a riverside shantytown community known as La Invasion — “the Invasion” — said they were given 72 hours to pack up and leave by Venezuela’s army. Officials say the slum has become a haven for paramilitaries and contraband traffickers.

In recent decades, many Colombians have moved to Venezuela, either fleeing from conflict or seeking better opportunities in an oil rich country that was long the wealthier of the two.

Critics have accused Maduro of trying to distract Venezuelans from soaring inflation and empty supermarket shelves.

Under the state of emergency, constitutional guarantees such as the right to protest, carry weapons or move freely will be restricted for 60 days.

“I’m sorry if this is creating a humanitarian crisis in Cucuta, but we are only responsible for protecting people who are Venezuelan,” National Assembly President Diosdado Cabello said. “Colombia needs to take care of its own problems.”

__

AP writers Fabiola Sanchez contributed from Caracas, Yhoger Contreras from San Antonio del Tachira and Cesar Garcia and Libardo Cardona from Bogota, Colombia

TIME Venezuela

Venezuela Is Running Out of Beer

Venezuela Beer Shortage
Fernando Llano—AP A liquor store worker organizes Polar beer cans in downtown Caracas on July 31, 2015.

Country's largest brewery is slowing production

The largest beer distributor in Venezuela is beginning to shut down some its breweries, causing widespread frustration in an already resource-strapped country.

Cerveceria Polar, which distributes 80% of Venezuela’s beer, says the lack of barley, hops and other ingredients has forced the shutdown. Other beverages like milk and bottled water have been in short supply for months, but the lack of beer is angering some Venezuelans even more, according to merchants. “People are more freaked out about losing beer than water—it shows how distorted our priorities have become here,” Yefferson Ramirez, a worker at a liquor store, told The Guardian.

Imported and artisanal beers are still readily available, but they cost much more than Polar. Heineken, for instance, can cost five times as much as the country’s most popular beer. The fact that Venezeula is in the midst of a heat wave only makes things worse.

Polar has said that it is awaiting approval from the government to import raw materials to increase beer production, but Venezuelan president Nicolas Maduro hasn’t yet commented on the issue.

[The Guardian]

TIME beer shortage

Venezuela’s Next Shortage Could Be Beer

VENEZUELA-POLITICS-ECONOMY
Juan Barreto—AFP/Getty Images A member of the national guard patrols a supermarket in Caracas, Venezuela.

Workers at the brewing company Empresas Polar are on strike

It looks like the citizens of Venezuela have one more thing to worry about: a national beer shortage.

Workers at some of the plants for the brewing company Empresas Polar — which the BBC says makes up to 80% of the country’s beer — are on strike. Last week, workers at the country’s largest private company walked out of two plants and 16 distribution centers, calling for higher wages.

While shelves at Venezuelan stores are not yet reflecting any shortages, Polar says it’s already struggling to get deliveries out to certain parts of Venezuela. On top of the strikes, the company is struggling to deal with shortages of raw materials, such as grain.

On Tuesday, Tarek Willian Saab, Venezuela’s human rights ombudsman, stepped in to mediate the dispute before the production slowdown could have repercussions for beer-drinkers. In Venezuela, beer is the drink of choice, accounting for 76% of alcoholic beverages consumed.

But beer isn’t the only product in Venezuela that consumers have to worry about. In fact, it might be the least of their problems: Milk, medicine, and spare machine parts have all faced shortages recently. In March, Venezuelans had become so concerned about shortages of basic goods that the government moved to install fingerprint scanners in grocery stores in order to crack down on hoarding.

MONEY iPhone

The iPhone 6 Costs $47,000 In This Country

iphone-6-venezuela-inflation
Justin Sullivan—Getty Images

And smartphone theft is on the rise.

Punishing inflation and extremely limited supply have made smartphones extraordinarily rare and expensive in Venezuela, Bloomberg reports.

Only two or three stores in the capital city of Caracas even stock high-end phones because vendors must go through the government to acquire inventory. Meanwhile, the country is suffering from a severe shortage of U.S. dollars—partly because of a drop in the price of crude oil, the country’s main export—and an annual inflation rate in the triple digits.

As a result, smartphone prices have risen even faster than the cost of food and basic necessities. A brand new iPhone 6 on a local Venezuelan e-commerce site costs about 300,000 bolivars—or about $47,250, according to the official exchange rate—while a less sophisticated Samsung model might cost about $3,000.

Because of the limited supply, most Venezuelans who can afford a smartphone are forced to settle for cheaper Chinese models.

Unsurprisingly, thieves are increasingly targeting smartphone users, with hundreds of phone thefts in Chacao reported this past spring.

Read next: The Most Amazing Thing About Apple? It Still Looks Cheap

TIME portfolio

After Chávez, Searching for Venezuela’s Identity

"The cycle of violence is hard to break in the slums"

More than two years after the death of Hugo Chávez—the fiercely loved and despised Venezuelan President, the populist with a booming voice—the country he left behind remains in disarray.

Demonstrations against his successor, Nicolás Maduro, have been fueled by anger and frustration over high inflation, violent crime and shortages of basic goods. That has led the Venezuelan people to question what El Comandante left for them.

Alejandro Cegarra, a 25-year-old photographer who grew up in a relatively privileged middle-class family, in what he called “a good area” of Caracas, the capital city of 2.9 million, is among them. In the wake of Chávez’s death, he began looking at the political, social and economic factors that pushed his country to its current point.

He photographed the empty shelves at markets that have come to represent the economic crisis. “You have a picture from a month ago and then one from a year ago,” Cegarra says, “but it still looks like the same style.” He came across a family being evicted by troops so a highway could be built—though months later there had been no progress—and documented the murals of Chávez around Caracas. “It’s everywhere,” he says of the late leader’s face, comparing the sightings to that of Chávez mentor Fidel Castro. “It’s worse than Cuba.”

Cegarra also turned his lens to insecurity. On Feb. 12, 2014, he found himself covering a largely peaceful demonstration against Maduro’s administration that winded down into a group of protesters who clashed with security forces, during which Bassil Da Costa, a 24-year-old university student, was fatally shot in the head.

“I remember the face of one of the guys who was carrying him,” he says. “It was panic, fear, he was crying.” Cegarra fell at some point during the mayhem, but the students around Da Costa wanted him to capture the scene, to make a record of it. One of them lifted Cegarra up and urged him to get a shot. Da Costa’s death, and that of a Maduro supporter, became a flashpoint in the unrest.

Cegarra couldn’t look at the image for a while, admitting it’s “not a picture I would show and feel especially proud,” despite it being “one of the few moments when I actually saw the power of a picture.”

The photographer also visited El Rodeo prison complex, where deadly violence broke out four years ago. “Normally I’m the target of these guys, so I went there and talked with them face to face,” he says, “trying to understand the bad choices or circumstances of why they are there.” He recalls it was a positive experience, one that enabled him to leave his prejudice at the door, to grow up a bit and understand the city around him. “The cycle of violence is hard to break in the slums, and there are too many factors.”

He went to the jail three times, and later photographed at a funeral for a gang member. “That guy was my age and I was there alive taking pictures, and he was there [in a coffin],” he says. “I have to see the other part of my country—see it, live it and say, well, I grew up in a bubble and my country is this.”

All of that gets back to why Cegarra began this project in the first place. “Venezuela is trapped between its past and future,” Cegarra says, likening the reality of the present-day to an adolescent finding its way between youth to adulthood. “It was something that … was touching me, personally,” he adds, recalling the influence of Chávez. “What his legacy was and what he left for me.”

Alejandro Cegarra is a photographer based in Caracas and featured with Getty Images Reportage. Follow him on Instagram @alecegarra. This series will be exhibited during the Visa pour l’Image festival in Perpignan, France, later this year.

Mikko Takkunen, who edited this photo essay, is an Associate Photo Editor at TIME. Follow him on Twitter @photojournalism.

TIME Venezuela

How Opening Cuba Helped Isolate Venezuela

Nicolas Maduro, Cilia Flores
Fernando Llano—AP Venezuela's President Nicolas Maduro, center, in Caracas, Venezuela, on Feb. 28, 2015.

President Obama’s decision to reopen relations with Cuba is having an interesting side effect: it’s helping isolate Latin America’s other hard-line leftist regime in Venezuela.

On Monday, Obama signed an Executive Order freezing the U.S. assets of seven midlevel Venezuelan officials over their handling of protests last year. In years past, many Latin American officials would have viewed it as more of the same from America, whose policy of punishing Cuba with sanctions was widely seen as anachronistic at best.

Now, thanks to the ongoing rapprochement between the U.S. and Cuba, Washington is less easy to ignore, especially on matters of morality and fair play. So it was that Monday’s executive order naming Venezuelan security officials turned out to be aiming what U.S. officials called “a spotlight” onto a government that other Latin American nations are also watching with concern.

“Until very recently, most countries in the region were reluctant to say anything about Venezuela,” says Daniel Wilkinson, managing director of the Americas division at Human Rights Watch. “If this is just U.S. sanctions, and the U.S. is doing it on its own, then it’s much easier for Venezuela to play the victim card. That’s why it’s really important for the U.S. government to be working with other democratic governments in the region to make this more of a collective.”

On Friday, the President of Colombia publicly despaired over Venezuela, even though he has staked his legacy on peace talks being hosted by Maduro’s strongest ally in the region, Havana. “It interests, hurts and worries us, all what’s going on in Venezuela,” President Manuel Santos said in a speech.

What’s going on in Venezuela is a mess. The collapse in oil prices last autumn sent the economy into free fall, 95% of its export revenue flowing from petroleum sales. President Nicolás Maduro, who was elected after his mentor Hugo Chávez died in office two years ago, is struggling to remain in control amid economic chaos and shortages of heavily subsidized staples. The cascade of indignities includes a shortage of necessaries that led the government to take over a toilet-paper factory — and the Prime Minister of Trinidad and Tobago to offer an oil-for-toilet-tissue deal.

Maduro, in what economists call a strategy of diversion, blames the U.S. for waging “economic war” on the country. He has ordered most U.S. diplomats out of the country — the ambassador was expelled five years ago — and abruptly required visiting Americans to obtain visas. None of which was lost on the White House, which took pains to emphasize that the new sanctions were aimed at individual officials, and not “the people or the economy of Venezuela.”

“The point of these sanctions or policies is really to shine a light,” a senior Obama Administration official said Monday, speaking in a not-for-attribution conference call shortly after the Executive Order was released. Obama’s actions went beyond the law passed by Congress, the Venezuela Defense of Human Rights and Civil Society Act of 2014, to draw attention to the abuses of Venezuelan officials who authorized surveillance of opposition leaders, “hundreds of forced entries and extrajudicial detentions,” and the use of excessive force, including sexual assault and using live ammunition, against protesters and journalists. Prosecutor Katherine Nayarith Haringhton Padron is named for charging a former lawmaker and the mayor of Caracas with conspiracy “based on implausible — and in some cases fabricated — information.”

“You go back a year ago, when there was this wave or protests that was met with very aggressive and violent response by the government,” says Wilkinson, who was expelled by Venezuelan authorities in 2008. “This was a sustained process over more than a month of nonviolent protesters being severely beaten, in some cases tortured, being shot point-blank range with rubber pellets … Protesters would be held for two days without access to a lawyer, then summoned to a hearing in the middle of the night, with a lawyer having five minutes to prepare.”

Whether the sanctions will work remains to be seen. Under the Executive Order, U.S. financial institutions have 10 days to report any holdings controlled by the seven officials, and longer still to see if freezing them alters the behavior in what Transparency International calls the most corrupt country in the western hemisphere. But in diplomatic terms, the effects might be felt sooner. Before Obama and Cuban President Raúl Castro announced their plans to reconcile, the Summit of the Americas, set to convene April 10 in Panama City, was sizing up as an awkward occasion for the U.S. leader. Instead, it may be Maduro who draws the sideways glances.

TIME Foreign Policy

White House Places Sanctions on 7 Officials in Venezuela

Nicolas Maduro, Cilia Flores
Fernando Llano—AP Venezuela's President Nicolas Maduro, center, in Caracas, Venezuela, on Feb. 28, 2015.

President Obama ordered the Treasury Department to freeze assets and property of seven government officials

The White House is further cracking down on Venezuelan President Nicolás Maduro’s administration for its handling of protests last year, issuing sanctions against seven officials over human-rights violations.

The sanctions come via an Executive Order signed by President Obama on Monday that expands on a law passed last year to allow the U.S. to place sanctions on Venezuelan government officials who they accused of violating protesters’ rights during months of unrest over the nation’s economy and crime. The White House stresses that the new sanctions are not meant to target the Latin American country’s government or people, but target specific individuals from entering the U.S. and freeze any of their property or financial interests here.

The move comes as the U.S. works to improve relations across Latin America, including Cuba. But Maduro has taken an anti-American line since succeeding late President Hugo Chávez in 2013. “It is unfortunate that during a time when we have opened up engagement with every nation in the Americas, Venezuela has opted to go in the opposite direction,” White House spokesman Josh Earnest said.

Under the order, those who have committed “actions that prohibit, limit, or penalize the exercise of freedom of expression or peaceful assembly” and public officials it deems corrupt could be subject to sanctions. The order further targets those who have cracked down on citizens, often through violence and arbitrary detention, who have been involved in countrywide protests that sprung up in February 2014.

During the protests, which raged from February through May, at least 43 people were killed and thousands were arrested. Global anticorruption coalition Transparency International says Venezuela has consistently had one of the “highest levels of perceived corruption in the world.” Earnest also called for the release of all political prisoners in Venezuela.

The seven officials specifically identified for sanctions are:

  • Antonio José Benavides Torres, a commander in Venezuela’s Bolivarian National Armed Forces and former leader of the Bolivarian National Guard, which the White House says has “engaged in significant acts of violence or conduct that constitutes a serious abuse or violation of human rights”
  • Gustavo Enrique González López, the director general of Venezuela’s Bolivarian National Intelligence Service, which the U.S. says has “committed hundreds of forced entries and extrajudicial detentions in Venezuela” and spied on opposition leaders
  • Justo José Noguera Pietri, the former general commander of Venezuela’s Bolivarian National Guard
  • Katherine Nayarith Haringhton Padron, a national-level prosecutor
  • Manuel Eduardo Pérez Urdaneta, the director of Venezuela’s Bolivarian National Police
  • Manuel Gregorio Bernal Martínez, a former director general of Venezuela’s Bolivarian National Intelligence Service
  • Miguel Alcides Vivas Landino, the inspector general of Venezuela’s Bolivarian National Armed Forces

Senior Administration officials said Monday they don’t yet know how the sanctions will impact the individuals, but the point of the sanctions is to “shine a light on the abuse of human rights or public corruption” of government officials. They’re hoping the sanctions will send a signal to Venezuelan officials as the country prepares to host a national election later this year.

“We hope to shine a light on practice, not just the individual property that may be in the U.S.,” an official said Monday.

For his part, Maduro has also issued sanctions against the U.S. — calling for a reduced presence of U.S. officials in the country, accusing the U.S. government of attempting a coup, requiring visitors to obtain visas before entering the country and barring former President George W. Bush and former Vice President Dick Cheney. He also called the original law that authorized the sanctions “stupid.”

TIME Venezuela

Venezuela Is Slowly Coming Apart—and President Nicolas Maduro May Pay the Price

A boy with blood on his chest kneels in front of police after 14-year-old student Kluiver Roa died during a protest in San Cristobal, Venezuela, Feb. 24, 2015.
Carlos Eduardo Ramirez—Reuters A boy with blood on his chest kneels in front of police after 14-year-old student Kluiver Roa died during a protest in San Cristobal, Venezuela, Feb. 24, 2015.

Hyperinflation and shortages of basic goods have Venezuelans angry—and looking for new leadership

CARACAS – Amid the death of a 14-year-old boy killed by a policeman during anti-government unrest, the arrest of a key opposition mayor by armed government intelligence agents and talk of a coup plot against the government spearheaded by Washington, this last week also saw another another turn in Venezuela’s growing crisis. At DolarToday, a website little known outside of Venezuela that has become a key indicator of the country’s black market exchange rate, the bolívar local currency passed the psychological barrier of 200 per greenback. Four years ago, the dollar cost eight bolívares per dollar; five months ago it was 100; now it is already at 221 and counting. This rapid deterioration in the value of the local currency, 61% drop against the dollar over the last year, is one of the best indicators of just how much trouble Venezuela—and President Nicolas Maduro—is in.

While many in Venezuela have little direct engagement with the dollar—the country’s foreign exchange is strictly controlled—the currency crisis pervades everyday life. It means many doctors and engineers earn the equivalent of just a dollar a day and prefer instead to drive taxis or smuggle pasta or gas across the border to Colombia. It means that those who want to buy basic goods for their families must line up for hours every day due to shortages, and hoping all the time that shelves won’t be empty. It means that stealing is more valuable than working, fueling one of the world’s highest crime rates and the murder of one police officer nearly every day.

It means that people like Yormina Alguilera, a street cleaner earning the same as the minimum wage of doctor or engineer, are giving up. “We’re in crisis,” she said, taking a break from the sun at a fruit stall in the square at Caracas’ 23 de enero barrio, as murals of Che Guevara and Hugo Chávez loom over. Alguilera voted for Maduro and his predecessor Chávez, “but never again,” she said. “At least under Chávez I could get things. It’s a mess with Maduro and there’s no end in sight. Things are getting worse every day.”

Maduro, who was elected after the death of Chávez in 2013, is in serious trouble. His approval ratings are in the low twenties, according to Datanálisis, a respected local pollster. This time last year, the president faced down Venezuela’s biggest anti-government protests in more than a decade, and now they appear to be starting up again. In San Cristóbal, on the country’s border with Colombia and where unrest was sparked last February by similar though less severe economic problems, 14-year-old Kluiberth Roa was killed with a rubber bullet by police. That tragedy has only sparked further public anger.

Supermarket lines often run into the hundreds if not thousands due to shortages of the most basic goods, from shampoo to condoms. Inflation last year was near 70%. The economy, which has long been propped up by high crude prices, is crumbling as oil has tumbled over the last few months. (A barrel of Venezuela oil sells for half what it did a year ago; the country obtains 96% of foreign currency from oil.) Maduro has blamed this on an “economic war” being waged by the opposition with a hand from the United States, but many ordinary Venezuelans don’t believe that. “They talk about an economic war but we’re certainly not winning it,” said Aida Guedez Álvarez, a 61-year-old housewife buying a watermelon in 23 de enero. “I voted for Maduro but I’ve been deceived, like everybody else.”

Maduro’s government faces tough legislative elections later this year. “The government isn’t necessarily falling but it is weak and losing its leadership,” said Reinaldo Manrique, 24, an accounting student and student leader who was one of the very first detained for protesting in San Cristóbal, last year, sparking nationwide unrest. “But you know what? The leaders of the opposition are even more weak.”

Though former Chavistas are much angrier than they were a year ago, they do not see the opposition, led loosely by two-time presidential candidate Henrique Capriles, as a viable alternative. “Of course I’d never vote for Capriles,” said Alguilera, the street cleaner. “I give up. No one will change things.” Rather than protest, students are talking of finishing their studies and leaving the country. Many who took to the streets last year have left. “I’m studying to become a primary teacher,” said Leonardo Díaz, 25, in Caracas’ Plaza Altamira, a bastion of protest. “But as soon as I graduate, I’ll leave. All my friends at university are the same.”

Capriles, who stood against both Chávez and Maduro in presidential elections, is the more moderate face of the opposition. He continues to govern the state of Miranda and at least on paper lead the opposition. The government has cracked down on its more hardline critics. Leopoldo López, a major opposition heavyweight, has remained behind bars for more than a year for his role in inciting last year’s protests. “The government is working in a barbaric way to steal from public funds, destroy the country, rob the country’s oil while it says it’s constructing a homeland!” López’s father, also called Leopoldo, told TIME. Antonio Ledezma, Caracas’ mayor, was arrested and charged earlier this month in a conspiracy to overthrow Maduro.

María Corina Machado, another more radical leader, was charged in December with involvement in a plot to assassinate Maduro. “With Maduro there is more persecution than ever,” she told TIME. Next on the government’s list appears to be Julio Borges, an opposition party coordinator. The government requested a probe into his alleged conspiracies against Maduro this week. “Every year there are elections but this is the first time the government is up with a political crisis of this magnitude,” Borges told TIME. “In Venezuela everyone is scared—including the government.”

Maduro has remained tough. “Every fascist has his day,” the president said on Ledezma’s arrest. And he still has some support. As he completed a crossword on a park bench in the wealthy La Castellana area of Caracas, Emilio Neumann backed the government’s stance. “Lopez and Ledezma are exactly where they deserve to be, behind bars,” said the 69-year-old public administrator. “After calling so many people to the streets and committing who knows how many murders.”

President Maduro must hope, if he is to see out the next couple of years, that he can persuade people like Neumann to stay on side. To do this he must turn the country’s economy around, though with three official exchange rates as well as a black market on the dollar — with a spread between the highest and lowest of them of some 3,400 per cent — it is becoming increasingly difficult to do so. Pragmatic moves such as consolidating those exchange rates or raising the price of gas, currently the world’s lowest at just a few cents per tank, are politically dangerous especially when Chavistas are turning away from Maduro.

TIME energy

Paranoia and Purges For Venezuela As Oil Misery Continues

A man waves a Venezuelan flag during a protest against the government of President Nicolas Maduro in San Cristobal, Venezuela, on Feb. 22, 2014.
Luis Robayo—Getty Images A man waves a Venezuelan flag during a protest against the government of President Nicolas Maduro in San Cristobal, Venezuela, on Feb. 22, 2014.

Rather than using its earnings to develop more fields, the state-owned PDVSA has been diverting money for political and social projects

As the finances of Venezuela continue to deteriorate under the collapse of crude oil prices, the government of President Nicolas Maduro is becoming more paranoid and vindictive.

Venezuela derives the vast majority of its export earnings from sending oil overseas. With the largest endowment of crude oil reserves in the world, the oil-driven economy worked well for the late Hugo Chavez: he provided generous support for the poor, and built allies in the western hemisphere by dispensing cash and cheap oil in exchange for political allegiance.

But state-owned PDVSA has struggled to keep production up. Rather than using its earnings to develop more fields, much of its earnings have been diverted for political and social projects. Chavez also purged PDVSA of thousands of experienced workers, leaving the company short of well-trained staff.

Chavez could paper over the decay of PDVSA’s production base because oil prices were so high in his final years. And for the first year or so of Maduro’s tenure, while the economy began showing worse signs of stress, he too didn’t feel any urgency to solve PDVSA’s problems.

Read more: Oil Price Crash: Top 5 At-Risk Countries

However, the utter bust in oil markets pulled the rug out from beneath the Venezuelan economy. Inflation is running at an annual rate of 68 percent. Shortages of food and medical supplies are common. Shoppers at grocery stores need to submit finger prints to ensure they are not purchasing more than their allotted amount of basic goods. A confusing set of varying exchange rates and currency controls are doing very little to slow capital flight.

Maduro is cracking down on political opponents as the country deals with the economic crisis. Antonio Ledezma, the Mayor of Caracas, was arrested on Feb. 20 on charges of conspiracy and working with the U.S. to stage a coup, touching off a wave of protest. Last year, in the wake of the unprecedented riots facing the “Bolivarian” regime, Leopoldo Lopez was also tossed in jail. Dozens of other perceived political enemies remain locked up. A teenager was shot and killed at an anti-government rally on Feb. 24. Maduro’s government was quick to blame the police officer – as if security forces have not been encouraged from above to take a hard line with opposition protests over the last few years.

Maduro’s pronouncements have become more paranoid as the economy has worsened. He has accused Vice President Joe Biden of being the mastermind behind a plot to oust him from power, and questioned whether President Obama was aware of that fact. On Feb. 2 President Maduro had the head of a major retail chain arrested for conspiring against the state by creating long lines at store locations that Maduro said was “irritating the people.”

Read more: Could Venezuela Become World’s Next Energy Giant?

Maduro continues to rely on assertions that food shortages, economic hardships, and even violence are the result of American plots, a claim that has worked in the past but is becoming an increasingly tired line of argument for many Venezuelans.

The only hope for Maduro is a dramatic rise in oil prices, which could provide a reprieve from the economic crisis he finds himself in. He has pled with Saudi Arabia and other OPEC members to slash production to boost prices, but to no avail. He even went hat in hand to China for financial assistance, with only modest pledges from Chinese President Xi Jingping.

The economic situation may only grow worse. The government’s budget breaks even with oil prices at an estimated $117.50 per barrel. Inflation could rise to an eye-popping 100 percent in 2015, and GDP could fall by as much as 7 percent. The government will likely see a shortage of foreign exchange of at least $7 to $8 billion this year. Gauging the credit default swap market, investors are betting that the chances of a default over the next five years are a near certainty.

With no imminent rebound in sight for oil prices, Maduro is resorting to state-sponsored repression to quell growing opposition.

This article originally appeared on Oilprice.com.

More from Oilprice.com:

TIME

Here Are the Absurd Prices of 9 Items That Help Explain the Venezuela Crisis

People line up outside a state-run Bicentenario supermarket in Caracas, Jan. 9, 2015.
Jorge Silva—Reuters People line up outside a state-run Bicentenario supermarket in Caracas, Jan. 9, 2015.

From $800 sneakers to $31 Value Meals, here's a compilation of some of the most exorbitant prices.

Nowhere else has the collapse of oil prices has taken a higher toll than on Venezuela, where crude provides 95 percent of the country’s export revenue. Already facing recession, Venezuela is on the brink of economic collapse.

As that revenue dried up, the country has been thrown deeper into economic turmoil under President Nicolas Maduro. The economy is expected to contract by 7 percent this year, inflation soared to 69 percent—the highest in the world—and shortages of goods have forced shoppers to line up for hours at supermarkets to buy basic foods and products. The situation descended into the surreal earlier this week when the Prime Minister of neighboring Trinidad & Tobago proposed exchanging Venezuelan oil for Trinidadian tissue paper.

Meanwhile, the confluence of short supplies and government currency restrictions has distorted prices so much that some items are entirely inaccessible for Venezuelans who don’t have access to dollars—which is most of the country. Earlier this month, Bloomberg News reported that a 36-pack of Trojan condoms was available for 4,700 bolivars on the auction website, MercadoLibre, used by Venezuelans to obtain scarce good. According to the official exchange rate, that would amount to roughly $755. (According to the black-market rate for people with dollars, it would be closer to $25, Bloomberg reported.)

To check up on prices, TIME scanned the MercadoLibre auction site and and the crowd-sourced website Expatistan.com, which lists costs of various goods in stores. Here’s a compilation of some of the most exorbitant prices when converted into dollars according to the official exchange rate:

iPhone 5, in original box: $11,433

Rawlings Baseball Glove: $1,809

Nike Free: $796

Dog Food (3 KG): $288

Levi’s 501 Jeans: $405

Nescafe (170 grams): $232

Fast Food Combo Meal: $31

Laundry Detergent (100 Ounces): $31

12 Eggs: $10

Your browser is out of date. Please update your browser at http://update.microsoft.com