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AQ’s Christopher Sabatini interviewed on CNN International

When

December 2, 2014

Details

View an interview with AQ’s Christopher Sabatini below.

Christopher Sabatini, senior director of policy at Americas Society/Council of the Americas and founder and editor-in-chief of Americas Quarterly, was interviewed on CNN International this Tuesday about the effect of cheap global oil prices on Venezuela’s already fragile economy.

The interview, moderated by CNN reporter Maggie Lake, focused on the further deteriorating economic situation in Venezuela as a result the downturn in oil prices following OPEC’s decision last week not to alter its production ceiling as well as possible implications for state policy and President Nicolas Maduro’s political future.  

“This is a disaster for Venezuela,” said Sabatini in his opening remarks. “First of all, it needs, according to the IMF’s own estimates, the price of oil to be at $120 per barrel for it to be able to meet its own fiscal deficit, which is running at about 20 percent of GDP. Now they are looking at oil at about $65 per barrel.”

Sabatini explains that Venezuela will have to reconsider its popular national oil subsidization program to offset its mounting fiscal deficit: “A gallon of gasoline in Venezuela costs about $0.18 but that represents about $15 billion per year of government spending," Sabatini said. "They’re going to have to make some very serious decision to cut that, and Venezuelans are very accustomed to cheap gas […] and social welfare programs.”

Citing recent public opinion polls that give Maduro an 80 percent disapproval rating, Sabatini indicated that Maduro has his back against the ropes and that his governing party is already showing signs of internal divisions. Furthermore, Sabatini said, “The issue is that according to the Constitution, Maduro’s terms extends until 2018, so what’s going to happen in the short-term is unclear. But we’ve already seen in the last year a series of very public and very aggressive demonstrations against the economic conditions [...] and this is only going to get worse.”

Watch the full interview here.




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