Is Corbyn right on Venezuela?

George Galloway defends the Labour leader

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What's going on in Venezuela?

By Diane Cooke

Venezuela has the biggest oil reserves in the world and persistently elects a left wing president.

Former London Mayor Ken Livingstone has blamed the crisis in Venezuela on the regime's failure to 'kill all the oligarchs'.

The former London Mayor said the country's political turmoil and economic collapse has been stoked by a group of wealthy individuals plotting the downfall of the socialistic regime.

George Galloway alleged on TalkRadio that America has been trying to overthrow the Venezuelan regime for years for one reason only "O.I.L".

Venezuelan president Nicolas Maduro (pictured) has faced international condemnation for a political crackdown which has seen opponents locked up in midnight raids and 100 protesters killed in violent clashes.

The country's economy is teetering on the brink of collapse with inflation running at up to 1,000 per cent and shortages of basic food and medicine.

The crisis entered a new chapter this month as President Maduro's plans to rewrite the constitution faced a pivotal vote.

Last month, 545 seats in the new Constituent Assembly were decided. The winners replaced the current National Assembly, which was controlled by Maduro opponents - who had called for a boycott of the vote.

For months, opponents have taken to the streets to voice their frustration with Maduro's government.

Venezuela’s opposition announced plans at the beginning of the month to block the inauguration of the contentious constituent assembly whose election was clouded by allegations of ballot fraud.

The opposition coalition called for mass protests “against the installation of the constituent fraud” to prevent the new assembly – made up entirely by the ruling Socialist party and its political allies – from beginning its sessions.

As many as 40 countries have said they would not recognise the new assembly, which critics say is a thinly veiled attempt by Nicolás Maduro to consolidate power. The body will have the ability to dissolve state institutions and rewrite the constitution.

Maduro has said his aim is to bring peace to the sharply split country caught up in political crisis and economic meltdown.

But the president and his closest allies have also vowed to use the assembly to jail key opposition leaders, remove the country’s outspoken chief prosecutor from her post and strip opposition legislators of their constitutional immunity.

So what has gone wrong in Venezuela? Oil is an overriding factor and its revenue fuelled the country's economy under former President Hugo Chavez. When oil was $100 a barrel, billions flowed through the state-owned petroleum company and were siphoned off for social programs and food subsidies. But when oil prices fell dramatically, those massive subsidies became unsustainable.

Crashing oil prices also left the government with less foreign currency to buy goods from other countries. Venezuela's imports are down 50% from a year ago, according to Ecoanalitica, a national research firm. Now there are critical shortages of essential imports, including vital medicines..

Under Chavez, the prices of key items were slashed so that everyone could afford them. The official price for a bag of cornflour, used in the national dish arepas, is 639 bolivares. That's affordable for many people - but the price of flour is below the cost of production. Domestic producers have stopped making cornflour.

Venezuela has less than $10 billion in foreign reserves, according to data from the Central Bank of Venezuela published in July. CNNMoney reported earlier this year that the country had just $10.5 billion left. For the rest of the year, it will owe roughly $5 billion in outstanding debt payments.

The financial clock is ticking.

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