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Abu Dhabi, UAESaturday 23 June 2018

Venezuela faces international isolation after Maduro win

US threatens more sanctions over 'sham' election as other major American countries plan to recall ambassadors

A Venezuelan newspaper carries a front-page report on the re-election of President Nicolas Maduro on May 21, 2018. Luis Robayo / AFP
A Venezuelan newspaper carries a front-page report on the re-election of President Nicolas Maduro on May 21, 2018. Luis Robayo / AFP

Venezuela faced growing international isolation and a deepening economic crisis following President Nicolas Maduro's contested re-election, as the United States threatened punitive measures against his regime over the "sham" vote.

The stern reaction from Washington ratcheted up the pressure on the leftist Mr Maduro after the Lima Group's 14 members, including Argentina, Brazil and Canada, moved to recall their ambassadors in protest at the opposition-boycotted vote.

Addressing cheering supporters outside Miraflores Palace in Caracas on Monday, Mr Maduro celebrated his election to another six-year term as a "historic record", after officials credited him with 68 per cent of the votes cast, far ahead of the 21 per cent for his nearest rival, former army officer Henri Falcon.

But with Venezuela's long-suffering population enduring an economic crisis marked by food and medicine shortages, violent unrest and a mass exodus of hundreds of thousands, Sunday's vote was marred by a historic 52 per cent abstention, and boycotted by the Democratic Unity Roundtable (MUD) opposition coalition, branding it a "farce".

Washington echoed that assessment, with Vice President Mike Pence denouncing the vote as a "sham" and "illegitimate", and brandished the threat of new sanctions.

"The United States stands with democratic nations in support of the Venezuelan people and will take swift economic and diplomatic actions to support the restoration of their democracy," US Secretary of State Mike Pompeo said.

"Until the Maduro regime restores a democratic path in Venezuela through free, fair and transparent elections, the government faces isolation from the international community."

Mr Falcon, a loyalist of the late leftist firebrand leader Hugo Chavez who was neck-and-neck with Mr Maduro in pre-election polls, says the vote lacked "legitimacy" and accused the government of vote buying.

"It is obvious that [Maduro] has no popular support and has lost legitimacy," said opposition deputy Jose Manuel Olivares.

Mr Maduro may have won, but the near future appears bleak as the country faces economic ruin. The IMF estimates that Venezuela's GDP will continue to shrink this year, with the inflation rate expected to reach 13,800 per cent.

Venezuela has always relied on its oil, but production has dropped to its lowest level in 30 years, despite a recent rise in prices.

"The upcoming scenario is clear: political tension and radicalisation, repression, massive international rejection, a sharpening of sanctions, and a climax to the economic crisis," said analyst Luis Vicente Leon.

Mr Maduro, a former bus driver, union leader, foreign minister and Mr Chavez's hand-picked political heir, has presided over an implosion of the once-wealthy oil producer's economy since taking office in 2013.

The socialist leader insists Venezuela is the victim of an "economic war" waged by the conservative opposition and external powers, including the US, aimed at toppling him.

In his victory speech he vowed to "dedicate myself entirely towards economic recovery".

But Washington was poised to up the economic and diplomatic pressure on Mr Maduro's regime - having previously slapped sanctions on the president and his senior aides, and banned US entities from buying any more debt from Caracas or state oil company PDVSA.

Mr Pence warned the US "will not sit idly by as Venezuela crumbles and the misery of their brave people continues".

And Mr Pompeo slammed the vote as "choreographed by a regime too unpopular and afraid of its own people to risk free elections and open competition".

"It stacked the Venezuelan courts and National Electoral Council with biased members aligned with the regime. It silenced dissenting voices. It banned major opposition parties and leaders from participating," he said.

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The US market is crucial, as the destination of one-third of Venezuelan oil exports. But Washington has threatened to stop buying Venezuelan oil.

The country's crippled oil industry lacks investment and its assets are increasingly prey to debt settlements as the country defaults.

Mr Maduro's win "paves the way for an escalation of US sanctions - possibly on the oil sector - and a messy sovereign debt default and restructuring", said London-based Capital Economics.

Mr Maduro is placing his trust in allies China and Russia.

Russian President Vladimir Putin congratulated Mr Maduro on his win, but hoped for "national dialogue in the interests of the entire Venezuelan people", the Kremlin said.

In Beijing, the foreign ministry said the parties should "respect the choices made by the people of Venezuela".

At his victory rally, Mr Maduro called for a "national dialogue", even though the opposition said it would step up pressure for "legitimate elections" later in the year.

But the opposition is deeply divided, with Mr Falcon stirring up a hornet's nest when he left the coalition to run for president.

As for Mr Maduro, his biggest risk is an "implosion" if government officials are cornered and pressed by the international sanctions, Mr Leon said.