Venezuela remains suspended between hope and uncertainty, writes The Economist in an in-depth report that takes into account the most recent changes.
After the US special forces raid that captured Nicolás Maduro on January 3, the country seems to have breathed a sigh of relief. The opposition celebrates, investors sense opportunities, and Donald Trump talks about great prospects.
Yet, beneath the surface, power has passed to Vice President Delcy Rodríguez with Washington’s approval, and the path toward democracy and a healthy economy remains anything but straightforward.
Joy after years of fear
For the first time, notes the British weekly, supporters of María Corina Machado, Nobel Peace Prize winner, find themselves no longer having to hide. Those who until recently were imprisoned or in hiding now inflate balloons and laugh.
It is a radical change: repression has eased and people are breathing easier. Juan Díaz, one of the Nobel laureate’s supporters, says it clearly: “We are no longer afraid.”
Economic tremors from Caracas to Wall Street
In Caracas, enthusiasm is palpable, emphasizes The Economist. At the Country Club, investors toast by the pool and private companies have gained 20% in value in a few weeks. American bankers and consultants talk of a “re-emerged Atlantis.”
Rodrigo Naranjo of VIPCapital and Charles Myers of Signum Global Advisors describe rapid reforms pushed by Delcy Rodríguez.
Trump, for his part, sees only dollars: oil, billions in investments, and easy profits.
More words than money
But the reality is different, stresses The Economist. The only companies really moving are Venezuelan ones preparing for competition.
Major international groups remain cautious: they remember all too well the expropriations of the past. There are some preliminary contracts – Shell on gas, Chevron on some fields – but no one has yet paid a cent.
In total, about twenty expressions of interest have been counted, almost all in oil, gas, and mining. For now, zero money on the table.
Oil: the great promise and its obstacles
Trump is betting everything on oil. Venezuela has the largest reserves in the world, but production has collapsed from 4 million barrels a day to just over 1 million. To recover, $183 billion in investments and devastated infrastructure would be needed.
Payments are blocked between the US Treasury, residual sanctions, and bureaucracy. Exemptions for the majors are slow to obtain, and new rules on royalties and taxes remain vague.
Without fiscal clarity and real guarantees, no one invests seriously.
Inflation and bolívar in free fall
For ordinary people, change is still invisible. Inflation hit 618% in February, the highest on the planet. The dollar rises every day and the government continues to print bolívars to cover expenses.
Economists like Asdrúbal Oliveros predict a drop to about 150% by year-end and GDP growth around 12%. It would already be a miracle, but a fragile one.
Amnesties, prisoners, and a precarious future
Delcy Rodríguez has freed 700 political prisoners, a number never seen before, and tolerates demonstrations.
Yet 480 detainees remain, half the government is still Maduro’s people, and the new defense minister has a very heavy past.
Amnesty exists on paper but excludes those who requested foreign interventions and is managed by the same judicial system as before.
María Corina Machado wants to return to Caracas and mobilize the streets, while Trump asks her to wait. Rodríguez says elections will come, but only after a “political agreement” that sounds very much like a delay.
Who will really be in charge?
The Economist concludes its analysis describing an opposition convinced that “this is the moment” and a Machado determined not to step aside. But the regime seems to want to buy time to get the economy moving a bit, spend populistically, and present itself at the polls with some results in hand.
