Venezuela's economy may be on the mend after the US capture of former President Nicolás Maduro at the start of the year. Many Venezuelans both believe and hope that his fall will benefit the country. According to AFP, several analysts also believe that the potential for economic growth is better without Maduro.
Vice President Delcy Rodríguez, who is now acting president, says Venezuela is not subject to US orders. But she says she is willing to negotiate with US President Donald Trump over oil. Galloping inflation in Venezuela has made life difficult for low-wage earners.
Uncertainty and low confidence in currency policy caused prices to rise during the week. The Venezuelan currency fell more than 50 percent to around 800 bolivars. Before the US capture of Maduro, relations between the US and Venezuela had reached a low point. US sanctions and the seizure of oil tankers have strained Venezuela's economy to the breaking point.
- An agreement to ease sanctions could restore oil exports and ensure cash flows to the hard-hit economy, says Alejandro Grisanti, director of the analysis and consulting firm Ecoanalítica.
The state oil company PDVSA is negotiating with the US to sell crude oil. It is done under the same agreement as the oil company Chevron, which is not subject to restrictions.
Trump is encouraging US companies to invest in Venezuelan oil in an attempt to rebuild the country's infrastructure. According to The Guardian and the BBC, however, he is threatening to exclude the oil company ExxonMobil. He is doing so after the company's CEO, Darren Woods, called Venezuela an "uninvestable" country during a meeting at the White House.
- I'll probably have to exclude Exxon. They're playing too smart. You're trading directly with us, not with Venezuela. We don't want you to trade with Venezuela, Trump said after the meeting.
Analysts: Acting President Can Attract Necessary Investments
Analysts estimate that Acting President Rodríguez can attract necessary investments if she is ready to negotiate with Trump.
- Venezuela needs stable income. Oil sales can guarantee that, independent Venezuelan economist Carlos Rangel told AFP.
Oil sales account for 87 percent of Venezuela's foreign exchange earnings. Investors say the economy is already improving after Maduro's exit.
According to José Manuel Puente, a professor at the University of Oxford, fewer sanctions could attract both American and international investment.
- It risks having the consequence for Venezuela that it is the United States that decides, he says.
He adds that the oil industry needs about $100 billion annually to get going again. That is 642 billion kroner. Progress depends on negotiations.
- The year began with an unprecedented shift in Venezuelan politics. Never before have politics and the economy been so closely linked, he says.
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