By Juan Nagel, Transitions blog @ ForeignPolicy.com, May 16, 2013

[....] The consensus is that Venezuela needs high oil prices just to stay afloat. But if the fracking oil boom results in low oil prices, what does the future hold for the South American country?

Sadly, Venezuelans have nothing else to fall back on. Its private industry is a shambles, and the country is even importing toilet paper. Years of populism have left the state crippled and heavily in debt. The public deficit reached a whopping 15 percent of GDP last year, even in the context of high oil prices. Most of the spending came in the form of entitlements and subsidies that will not be easily eliminated. Furthermore, the country's current power clique seems particularly inept in dealing with the complicated economic and political conditions it has inherited. [.....]

A long period of low oil prices spells doom for Venezuela's political sustainability. Without high oil revenues, basic services would practically disappear, and the potential for instability would be enormous. Already the country is stuck in a state of undeclared in civil war, and there are claims that drug smuggling has permeated the higher echelons of the government. [.....]

Also see:

Chávez propagandist in leaked recording: 'We are in a sea of shit, my friend'
of May 20, 2013

and:

Venezuela’s economy is a tangled mess
of May 10, 2013