Cautionary tale for Eskom as Venezuela goes dark – The Wall Street Journal

DUBLIN — As South Africans face more load shedding and details of corruption at Eskom emerge, the sorry state of Venezuela may serve as an important cautionary tale for policymakers. Venezuela has been experiencing a massive, unplanned, nationwide power outage that has left hospital patients dead and food rotting in stores. Although the situation in Venezuela is much worse than SA, there are some striking parallels. Venezuela is an oil-rich state, much as SA is coal-rich – both countries should theoretically have an ample supply of energy raw materials. However, in both countries, corruption, mismanagement, and a lack of investment in public infrastructure have meant that a once world-class power system has fallen into decay. Like SA, Venezuela has been dealing with intermittent power outages for several years as the combined effects of bad policy have accumulated. The situation in Venezuela has deteriorated well beyond that in SA. A political crisis is now exacerbating the economic one, and society is close to melting down. SA is not anywhere near as fragile. Nevertheless, politicians in SA should pay close attention to the Venezuelan collapse and its causes, including blind adherence to harmful economic policies, endemic corruption, and political mismanagement. The suffering of ordinary Venezuelans is heartbreaking, and rebuilding the country will take many decades, assuming it ever begins. SA is lucky to have many politicians who recognise the danger and are working to make sure SA doesn't head down the same path. Hopefully, that, combined with SA's active and vibrant democratic processes, will help build a bright future. – Felicity Duncan.Massive Power Outages Turn Deadly in Venezuela.By Ryan Dube and Maolis Castro.CARACAS, Venezuela – At least 15 people have died as a result of a massive electricity outage that has crippled Venezuela, as doctors struggled to assist patients, telecommunications networks were wiped out and the sale of basic goods was paralysed amid rising political turmoil..___STEADY_PAYWALL___.Power returned sporadically to parts of the country after electricity first went out on Thursday afternoon. But another massive outage on Saturday plunged the capital, Caracas, back into darkness and sparked at least one looting attempt at a food market..Failure to restore power could put hundreds of patients who require medical equipment such as dialysis machines, incubators and artificial ventilation in critical condition, said doctors and health-advocacy organisations. Meanwhile, the food supply is at risk of collapsing, raising concerns of widespread hunger and looting.."What we're seeing is a really severe breakdown in Venezuelan society and especially the state infrastructure," said David Smilde, a Venezuela expert at Tulane University. "If this continues on, which it could, this could be extraordinarily serious. It could be a real humanitarian crisis of the dimensions we haven't seen so far in Venezuela.".Francisco Valencia, director of Caracas-based health-sector watchdog Codevida, said 15 dialysis patients have died as a result of the blackout and some 10,000 more were at risk if they continue without treatment. Some patients, who require three treatments a week, will have gone five days without dialysis, dangerously increasing the level of toxins in their body.."[Monday] will be a key day, depending on what happens with the electricity [on Sunday]," he said, concerned there would be more deaths. "The only person responsible for this catastrophe is the dictator Maduro.".The government suspended business activity and school on Monday, Communications Minister Jorge Rodríguez said..Opposition congressman Jose Manuel Olivares said another 18 people have died at hospitals in relation to the power outage. The Wall Street Journal couldn't independently verify the opposition's figures..Venezuelans say the past few days are the most difficult they remember. Point-of-sale terminals for debit cards, which are crucial for the most basic transactions, aren't working in a country hammered by hyperinflation and lack of hard cash..Food is rotting as restaurants and supermarkets have shut their doors. Police prevented a looting attempt at a food market in eastern Caracas on Saturday. Residents of the upscale Chacao municipality blocked streets on Sunday in an antigovernment protest. Lines at the few gas stations that were open extended for blocks..The country's infrastructure is also falling apart. Venezuela's power grid, once a regional dynamo, has decayed over the past decade because of what economists and former officials say is mismanagement, corruption and Latin America's deepest economic crisis on record, leading the government to virtually abandon public investment..Telecommunication networks also collapsed, with internet-usage tracker Netblocks saying 80% of the country had no internet access on Sunday. Residents in wheelchairs are stuck in their apartments as elevators don't work. Water shortages are widespread because pumps need electricity to work. At night, Caracas, one of the most violent cities in the world, is nearly completely dark..Brazil's northernmost state of Roraima, population 450,000, which gets all its power from neighbouring Venezuela, since Friday has turned to small local thermoelectric plants after the Venezuelan supply became iffy, a federal government spokeswoman said..Electricity outages are common in Venezuela, exacerbating social unrest as the economy has contracted by more than half in the past six years. But this blackout was unprecedented as it hit the entire country at once. The length and breadth of the current outage likely reflects serious damage, experts said..Guillermo Ovalles, a former president of state electricity company Elecentro, said the blackout likely occurred because of a fire at high-voltage transmission lines from the massive El Guri hydroelectric dam in the east that extend to population centres further west. The fire was likely triggered by the growth of vegetation, he said, a result of years of government neglect..Embattled President Nicolás Maduro and his allies blame the outage, without providing evidence, on sabotage by local opponents and the US as part of their bid to oust him.."We are facing the most serious aggression that the republic has suffered in 200 years," Mr. Maduro said at a rally on Saturday. "Together we'll move forward because here the Venezuelan people govern.".Mr. Ovalles said power could be restored for about 60% of the country by early Monday, but added that authorities would have to ration electricity going forward, and that further power outages are likely unless there is a complete overhaul of the system. He estimated that would require investing at least $50 billion in the grid, money the Maduro regime doesn't have.."The system is on the floor," he said. "The equipment is completely obsolete at the national level.".Ricardo Heredia, 20 years old, who sells chicken in Caracas, has been trying to preserve the poultry at his business with ice as sales have collapsed. He said he cooked all of his perishables at home before they went bad.."The situation here is fatal," he said. "We've lost a lot of merchandise…My main concern is the food at home and if my work gets looted.".Some markets were selling food at half price before it spoils, said Maria Fernanda Sosa, a Caracas resident who said she saw people running to stock up on what they could.."It's like a doomsday or something," said Ms. Sosa, who is relying on canned tuna and bread. "These have been the most trying days I can remember.".On the WhatsApp messaging app, Venezuelans shared information on how to preserve food, including turning spoiled milk into yogurt and using lemon juice to preserve fish..Venezuelans outside of the country – some of the 3.4m people that have fled Latin America's worst humanitarian crisis – frantically tried to call their loved ones back home..Alfonzo Luna, a 57-year-old in Peru's capital Lima, briefly got through to his wife and three daughters in the northern state of Falcon on Sunday after trying for three days. He said his family was in survival mode as their food was going bad.."They are in a complete emergency," said Mr. Luna, whose family was able to communicate thanks to a backup generator at a hotel. "Honestly, I'm not sure what's going to happen.".Thousands of Venezuelans took to the streets on Saturday to protest Mr. Maduro, who is facing the biggest challenge yet to his hold on power as more than 50 countries, including the US, recognise opposition leader Juan Guaidó as the legitimate president. Mr. Maduro's authoritarian government has retained power thanks to support from military leadership..White House national security adviser John Bolton on Sunday said the momentum was on Mr. Guaidó's side. He said the Maduro government, which has jailed other opposition politicians, hadn't sought to arrest Mr. Guaidó for fear the order wouldn't be obeyed. He said legislators and members of the military are holding "countless conversations" about how the military could move to support the opposition..Venezuelan officials have said in the past that security forces are loyal to Mr. Maduro and that they didn't want to turn Mr. Guaidó into a hero by jailing him..Write to Ryan Dube at ryan.dube@dowjones.com

Cautionary tale for Eskom as Venezuela goes dark – The Wall Street Journal

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