Venezuela’s story is sad: in a few years, it has gone from being one of South America’s richest countries – it has the world’s largest proven oil reserves – to a place where medication is not readily available, and many people have fled the country to avoid poverty.
As a result of sanctions and the economic turmoil, most international firms have shut down their operations in the country. This report is the result of a series of one-on-one calls with four treasurers who still operate there: it was not possible to muster a quorum for one of our usual calls.
At the same time, 29 million people still live in the country, so some form of economic activity continues, and some people who left have now returned. Unsurprisingly, a lot of this activity uses parallel routes and channels – as one participant put it, HQ does not interact with the local team, who are insulated from the rest of the group.
- The activities which remain are either for products which are exempted from sanctions, such as medicine, or local activities which do not require imports.
- Funding: some companies have local activities which generate cash surpluses (leading to trapped cash), while others are running down offshore bank accounts: this can be done without violating sanctions. No-one is replenishing these offshore accounts as they run down.
- For the non sanctioned activities, cash can be received in USD in these offshore accounts. In one case, the company only makes delivery after receipt of the cash.
Please sign or set up free registration
to read the rest of this commentary on Venezuela and get access to all CXC commentaries together with occasional free reports. (if you receive our updates, use your email to re-set your password)
Please log in, or create a free account, to read the whole report summary.
To access this report:
Access to the full report is available to Premium Subscribers. Please log in
to access the download.
Please contact us
to find out about our subscription packages.