The Venezuelan President is facing growing international isolation as he starts his second term in power, writes Scott Smith

President Nicolas Maduro celebrated the start to a second term as Venezuela's leader yesterday, but his world just got smaller as countries seized upon the inauguration to cut diplomatic ties, reject his legitimacy and label him a dictator.

Once among Latin America's wealthiest countries, Venezuela is enduring a historic crisis following two decades of socialist rule, with residents struggling to afford basic goods as inflation soars, driving mass migration.

Maduro's second six-year term extends the country's socialist revolution amid widespread complaints that he has stripped the country of its last vestiges of democracy.

Seventeen Latin American countries, the United States and Canada denounced Maduro's Government as illegitimate in a measure adopted yesterday.

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Maduro rejected the accusation, vowing to continue the legacy of the late President Hugo Chavez and accused the US of trying to ignite unrest through its increasing economic sanctions.

"Venezuela is the centre of a world war led by the North American imperialists and its allies," he declared in a speech after his swearing-in. "They have tried to convert a normal inauguration into a world war."

Maduro, a 56-year-old former bus driver and Chavez's hand-picked successor, took the helm of government after narrowly winning election following Chavez's 2013 death. He denies that he's a dictator and often blames US President Donald Trump for leading an economic war against Venezuela that's destroying the country.

In May, he declared victory following an election that his political opponents and many foreign nations consider illegitimate because popular opponents were banned from running and the largest anti-government parties boycotted the race.

Yesterday, the Organisation of American States voted not to recognise the legitimacy of Maduro's second term, adopting a resolution presented by Colombia, Argentina, Brazil, Chile, Costa Rica, the US, Paraguay and Peru. Venezuela's ambassador to the OAS, Samuel Moncada, denounced the move as "a hostile act ... against the will of our nation". Paraguay went a step further, cutting diplomatic ties. Peru also withdrew its diplomats from Caracas in protest and banned 100 members of Maduro's Administration from entering the country.

US Secretary of State Mike Pompeo said in a statement that the US would keep up pressure in support of the Venezuelan people.

"It is time for Venezuelan leaders to make a choice," Pompeo said. "Now is the time to convince the Maduro dictatorship that the moment has arrived for democracy to return to Venezuela."

Argentina's President Mauricio Macri also denounced Maduro, saying he lacks the authenticity won through honest elections despite the elaborate inauguration ceremony.

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"Nicolas Maduro today is making a mockery of democracy," Macri said on Twitter. "Venezuelans know it, the world knows it. Venezuela lives under a dictatorship."

Most countries from Europe and Latin American didn't send representatives to the swearing-in.

Cuba's President Miguel Diaz-Canel, Bolivian President Evo Morales and President Anatoli Bibilov of a breakaway province of Georgia were among the few foreign leaders who attended the ceremony at the country's Supreme Court.

Venezuela, which sits atop the world's largest oil reserves, produced 3.5 million barrels of crude daily when Chavez took power. Output has plummeted to less than a third of that. Critics blame years of rampant corruption and mismanagement of the state-run oil company PDVSA.

The economic collapse has thrown the nation of 30 million into turmoil.

The economy in 2019 will continue to contract and inflation will skyrocket at a staggering 23 million per cent, forecasts Francisco Rodriguez, a former Venezuelan official who is now chief economist at New York-based Torino Capital.

An estimated 2.3 million Venezuelans have fled, according to the United Nations. Those remaining live on a monthly minimum wage equal to less than US$5 ($7.40) and falling daily.

Venezuela's splintered opposition movement has failed to counter the socialist party's dominance as Maduro's Government has jailed or driven into exile its most popular leaders.

The opposition-led Congress opened its session for the year, led by 35-year-old Juan Guaido, who accused Maduro of "usurping the presidency". "Today there is no head of state. Today there is no commander-in-chief," Guaido said.

The Trump Administration has increased pressure on Maduro through financial sanctions, targeting dozens in Maduro's Government. US banks are also banned from doing business with Venezuela, putting a financial strangle-hold on the cash-strapped country.

David Smilde, a Tulane University professor and expert on Venezuela, said that sanctions weren't likely to create change. Ultimately, Maduro's Government wasn't worried about its international reputation, he said.

"He still has control of the institutions," Smilde said. "He has the guns. He has the money."

While Maduro's popularity has plunged amid scarcities, hyperinflation and rising authoritarianism that have sparked a mass exodus, supporters who receive government subsidies in shantytowns continue to back him.

"It's not the President's fault," said Frances Velazquez, a 43-year-old mother of two who survives with the help of government-subsidised boxes of rice, flour and cooking oil. Velazquez blamed opportunists who drive up the prices of scarce items for making life difficult for families like hers.

Others, like 52-year-old construction worker Ramon Bermudez, have lost hope of escaping Maduro's rule.

He pointed out the irony of living in a nation with the world's most abundant oil reserves yet having to wait in line overnight to fill three small canisters of natural gas to cook at home.

"All that's left to do is raise your hand to heaven and ask God to help us," said Bermudez, camped out on a Caracas sidewalk with hundreds of others waiting for gas. "There's nothing more."

A country in crisis

What's wrong with the economy?

Venezuela has the world's largest underground oil reserves, but crude production continues to crash. Its natural wealth made it once one of Latin America's wealthiest countries. Oil has been Venezuela's prime source of hard cash, and leaders historically haven't developed other sectors of the economy. Output now has plummeted to less than a third of its historic high, and critics blame that on years of rampant corruption and mismanagement of the state-run oil firm PDVSA.

What's happening with inflation?
The economy in 2019 will continue to contract and inflation will skyrocket at a staggering 23 million per cent, forecasts Francisco Rodriguez, a former Venezuelan official who is chief economist at the New York-based Torino Capital. That is a result of low oil prices compounded by the declining production, Venezuela's growing financial isolation, years of price and currency controls and heavy government spending in the collapsing local currency. Many Venezuelans struggle to afford food and basic goods. The minimum wage is less than US$5 ($7.40) a month - and shrinking.

What's the political backdrop?
Maduro has successfully maintained power, opposed by a fractured opposition. The hand-picked successor of Chavez, he won a second term in a May election that opponents and many in the international community reject as a sham. Maduro's Government has jailed or driven into exile its most popular opposition leaders.

Internationally, the United States and a coalition of a dozen Latin American countries reject Maduro's Government. However, leftist allies such as Cuba and Bolivia maintain their support, while Maduro has deepened economic and political ties with Russia, China and Turkey.

How are Venezuelans responding?
An estimated 2.3 million people have fled hyperinflation, and food and medical shortages over the past two years, according to the United Nations, most going to nearby Colombia, Brazil, Peru and Ecuador. Leaders in those countries say they struggle to handle the influx. Many of the migrants arrive sick and hungry, needing medical care.

- AP