The crisis in Venezuela will deteriorate further unless a political solution is agreed upon between the parties. That would demand that the parties enter into a dialogue as suggested by the European Union. But I am not sure that is still possible.
The political solution will have to include urgent economic measures that will allow economic activities to resume. The present political crisis is the result of the collapse of the economy and the social fabric; see http://carloselbirt.com/2013/03/10/chavez-and-after-some-brief-comments/. The actions of the US and other countries explain only marginally the deep economic crisis that has affected the country for some time. Nevertheless, it is inexcusable that the US and other countries by their actions contributed to bring Venezuela to the brink of a civil war.
Suppose that the conflicting parties agree in creating a transitional government to stabilize the political situation, its economy, and to call for democratic elections, under international supervision. Such an agreement would require that no foreign country intervenes directly in the political process, otherwise the process would lose legitimacy. What measures will a transitional government need to take to stabilize the situation, allow productive activities to be resumed and alleviate the situation of the population?
* In the first place, the Venezuelan currency has ceased to be a suitable instrument of payment. I believe that the country has no choice but to adopt the dollar or the Euro as its currency. It is a measure that I would not recommend in a more normal situation. Perhaps in the future Venezuela will be able to reintroduce its own currency, when the situation has stabilized itself, the financial system works and the economy grows again. That may take several years.
* PDVSA, the oil company, will have to make all the necessary adjustments to improve its efficiency and increase its production. PDVSA’s production reached more than 3 million barrels per day in 2000 http://don.geddis.org/bets/peakoil/eia-doe-1960-2006.html. The current production is around 1.5 million barrels per day. So it was halved. Also prices fell from more than US$ 100 a barrel in 2008 to less than US$ 60 today. Venezuela depends more than ever on oil revenues. I think this will continue for many years to come. Therefore, PDVSA will have to speed up agreements with countries and international organizations to finance the necessary investments.
* Venezuela has no choice but to totally liberate its foreign trade, eliminating all taxes in this respect. This would allow dollar holders to import products that the domestic market does not produce (which are almost all of them at the moment). It would channel dollars into the market and increase the availability of goods. It will be necessary to allow and even facilitate the opening of businesses and industries to accompany the increase in commercial activities associated with the liberation of foreign trade. There can be no price controls in the present circumstances.
* The state should finance only its highly priority activities, using the taxes provided by PDVSA. For the time being, it will be difficult for other activities to provide significant revenues to the Treasury.
* Nationalized companies should be reopened. The government should allow qualified persons/companies to manage such companies under specific agreements. Arrangements could also be made to facilitate investments in non-oil state-owned enterprises, not excluding their privatization.
* To meet urgent needs, NGOs will be able to receive and provide food, medicines and other type of humanitarian assistance. Efforts should be made to avoid the politicization of such aid or the exclusion of individuals or families because of their political activities.
I am sure that the suggested measures are not exhaustive. Moreover, they are not the measures that I would recommend under different circumstances. But I think that the present moment demands a lot of pragmatism to resolve the most urgent problems.