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For Venezuela, There's a Little Light at the End of the Tunnel

Jan 25, 2018 | 14:55 GMT
A collective in a hilltop shantytown in Caracas created its own currency, the panal, to fight chronic shortages of cash in inflation-ridden Venezuela.

Stacks of bills of a new local community currency, the panal, launched in a working-class neighborhood in Caracas, sit at the BanPanal communal bank during December 2017.

(FEDERICO PARRA/AFP/Getty Images)

After the turn of the millennium, Venezuela enjoyed a windfall thanks to high oil prices that bankrolled massive public spending. Fast-forward a decade, however, and the situation is bleak: An insolvent central government and high inflation are impoverishing a whole generation of Venezuelans. The current situation will likely force any new administration to attempt major structural reforms to stabilize the economy over the next decade, beyond the current stopgap measures of slashing imports and printing more bolivars. In the short term, the overriding political question centers on whether embattled President Nicolas Maduro will step aside to allow others to begin addressing the crisis. But even after any immediate solution to Venezuela's political impasse, the country's leaders will face the difficult task of fixing a broken economy. Venezuela's leaders may succeed in taming inflation within the decade, but they are likely to bequeath a country that is deprived of much of its...

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