Venezuela, once South America's richest country, continues to spiral

Every weekday morning, a line of several dozen forlorn people forms outside the dingy headquarters of SAIME, Venezuela's passport agency. As shortages and violence have made life in the country less bearable, more people are applying for passports so they can go somewhere else. Most will be turned away.

The government ran out of plastic for laminating new passports in September.

"I've just been told I might need to wait eight months!" says Martín, a frustrated applicant. A $250 bribe would shorten the wait.

As desperation rises, so does the intransigence of Venezuela's "Bolivarian" regime, whose policies have ruined the economy and sabotaged democracy. The economy shrank by 18.6 percent last year, according to an estimate by the central bank, leaked this month to Reuters. Inflation was 800 percent.

These are provisional figures, subject to revision. They may never be published (the central bank stopped reporting complete economic data more than a year ago). The inflation estimate is close to that of the IMF, which expects consumer prices to rise by 2,200 percent this year. The Economist Intelligence Unit, a sister company of the Economist, puts last year's economic contraction at 13.7 percent. That is still much sharper than the decline in Greece's output at the height of the euro crisis. In 2001, Venezuela was the richest country in South America; it is now among the poorest.

Venezuela's salsa-loving president, Nicolas Maduro, has responded to bad news with bluster (he blames foreign and domestic "mafias") and denial. Soon after the leak of the central bank's estimates he fired its president, Nelson Merentes. Maduro may have held him responsible for the leak. Or he may have punished him for a botched attempt by the government in December to introduce new bank notes.

A currency swap makes sense. The 100-bolívar note, long the highest denomination, is worth less than 3 cents on the black market. Shopkeepers sometimes weigh them instead of counting them. They are to be replaced with a new set of notes worth up to 20,000 bolívares.

The government's stated reason for making the switch — to punish hoarders — made no sense. Who would store up the world's fastest depreciating currency? Its execution was tragicomic. After Venezuelans had lined up for days to return to banks bills about to lose their value (sometimes in exchange for notes with even smaller denominations) the replacements failed to show up. Chaos ensued as Venezuelans returned to the banks to withdraw 100-bolívar notes. Their demonetization is now scheduled for Feb. 20.

The change at the top of the central bank does not portend better policies. Ricardo Sanguino, the new president, is a Marxist former university professor who has spent 15 years as a loyal parliamentarian from the ruling socialist party. He will have less influence than Ramón Lobo, the newly appointed economy czar, an economist with little high-level experience.

They are unlikely to deal with the causes of Venezuela's penury. These include controls on foreign exchange and prices of basic goods, which lead to shortages and corruption; unrestrained public spending; the expropriation of private industry; and the plundering of PDVSA, the state oil company, which provides nearly all of Venezuela's export revenue.

Ordinary Venezuelans have lost faith in the regime, if not in chavismo, the pro-poor populism espoused by the late Hugo Chávez, who ruled from 1999 until 2013. Maduro, his successor, has an approval rating of 24 percent. In December 2015, Venezuelans elected a parliament dominated by the opposition.

Maduro's response has been to cling on to power more tightly. The electoral commission, controlled by the regime, has blocked a referendum to recall him from office. The supreme court, manned by government loyalists, has blocked almost everything the national assembly has tried to do. On Jan. 15, Maduro delivered his annual state-of-the-nation address not to the legislature, as the constitution requires, but before the court.

The regime said it wants dialogue with the opposition but has done little to enable it. Talks mediated by the Vatican and by Unasur, a regional body, broke down in December after the opposition accused the government of reneging on promises, including to release political prisoners and restore powers to parliament.

Maduro's recent appointment of a new vice president suggests that the regime is moving further away from dialogue and reform. He replaced Aristóbulo Istúriz, a moderate by chavista standards, with Tareck El Aissami, a hard-liner. One of El Aissami's first acts was to announce the arrest of Gilber Caro, an opposition politician. He had an assault rifle and explosives in his car, the government claims; his party says the weapons were planted.

Maduro appears to be making two bets. The first is on disarray among the opposition. Divisions within the Democratic Unity alliance, a grouping of many parties, are widening as their efforts to defeat chavismo falter. It lacks a leader who can appeal to poor Venezuelans who feel betrayed by the regime's empty promises.

Maduro's second hope is that oil prices will bounce back. They have already recovered from $21 a barrel in 2016 to $45. But PDVSA has been so badly managed and starved of investment that it will struggle to reap the benefits.