T HREE YEARS ago Ricardo Hausmann of Harvard University began work on what he calls the “morning-after plan”, a blueprint to rehabilitate Venezuela’s economy after President Nicolás Maduro’s hoped-for fall. Back then, he thought that new dawn would break quickly. Now, after a long delay, it again looks tantalisingly close.

The intervening years have allowed his plan to marinate and Venezuela’s economy to rot. In December a group of opposition politicians, union leaders, businesspeople, academics and church leaders reached consensus on a broad-brush document that draws on Mr Hausmann’s work. Entitled “National Plan: the Day After”, it points out that Venezuela’s “productive apparatus” has been hammered. Its health services have collapsed and inflation is rampant. In the past five years of Mr Maduro’s rule, GDP has roughly halved. The collapse is worse than Spain suffered during its civil war, says Mr Hausmann.

What should a new government fix first? Mr Hausmann’s team have identified two “binding” constraints that must be loosened before any other reforms can help. The first includes price controls and the threat of expropriation, which together are an “attack on the invisible hand”. The government has seized assets in many industries, from coffee-processing to banking. This has destroyed incentives for entrepreneurs to invest and increase production in response to shortages.

The second constraint is the lack of dollars. The export earnings of PDVSA , the state oil monopoly, have shrunk. And government cronies snaffle up much of the hard currency that remains. That deprives entrepreneurs of the means to buy vital imported inputs, such as spare parts.

Many of Venezuela’s other problems, including hyperinflation, are consequences of these deeper troubles, Mr Hausmann argues. Opponents of Mr Maduro thus plan to revive the invisible hand, by restoring property rights and relaxing price and exchange controls. This would be coupled with direct forms of help for the poor.

What about the lack of foreign exchange? That, Venezuela cannot solve alone. It will need an infusion of dollars from outside and reassurance that its future export earnings and overseas assets will not be seized by its foreign creditors. The face value of their claims on the state exceeded $135bn last year, according to Torino Capital, an investment bank. The queue includes China (over $13bn) and Russia ($3bn), which have, in effect, pre-paid for barrels of oil with past loans. Also jockeying for position are the holders of sovereign bonds ($24bn) and PDVSA paper ($28bn). Other claimants include expropriated firms and unpaid suppliers.

A tempting strategy for any individual creditor is to let other lenders take a haircut, wait for Venezuela to recover, then insist on full repayment. But if every creditor pursues that course, Venezuela will never recover, and without debt restructuring, the IMF may not be willing to lend. Lee Buchheit, a lawyer who advised Iraq, among other countries, and Mitu Gulati of Duke University argue that Venezuela may need America’s president to issue an executive order giving it the same sort of protection from creditors as Iraq enjoyed in its restructuring after 2003.

Debt relief would limit the flow of dollars out of the country. On top of that, the IMF and others will have to pour more dollars into it. Mr Hausmann envisages a loan in excess of $60bn over three years. Rather than printing bolívares to cover its fiscal deficit, the government would buy local currency with the IMF ’s dollars. This, in turn, would put dollars in the hands of entrepreneurs, who could spend them on the imports needed to revive their businesses.

This mix of monetary restraint and output recovery should stem inflation. But the speed at which prices stabilise also depends on public expectations. To succeed quickly, the state must first convince the public that it will do so. To add credibility, the plan’s sponsors favour an independent central bank and an “anchor” to discipline its policies.

The choice of anchor is important. The stricter the regime, the faster it can cure hyperinflation. A currency board (which would allow the central bank to create bolívares only when it has added the equivalent amount of dollars to its reserves) offers the best chance of immediate stability, but might prove too rigid in the long run. An exchange-rate peg would change inflation expectations more slowly, but would be more suitable for the economy over time. Mr Hausmann favours a peg over the stricter alternatives. But, he says, given the dangers of currency speculation, he is reluctant to discuss the details in public.

After its economy has stabilised, Venezuela will have to revive its oil industry. The reformers have drafted a hydrocarbons law that will retain current royalty and tax rates, and allow foreign firms to own their ventures outright. Experienced Venezuelans are working in the global industry, including at Norway’s Equinor and BP . The country’s exports would benefit from re-importing some of this expertise.