The Scoop
As President Donald Trump takes an increasingly aggressive approach toward regime change in Venezuela, international investment giants are already eyeing potential benefits that Nicolás Maduro’s ouster would create.
During last month’s IMF-World Bank meetings in Washington, Barclays organized a private meeting to talk investment opportunities with Venezuelan opposition leader María Corina Machado, two sources familiar with the meeting told Semafor.
The meeting was widely attended by investment firms, hedge funds, and others interested in future business in Venezuela, said Rafael de la Cruz, the director of the US office of Machado and Edmundo González Urritia, who is recognized by the US as the winner of the last Venezuelan election. The opposition leader’s team has also held “informal conversations” with the World Bank, IMF, and Inter-American Development Bank about Venezuela’s future, de la Cruz said.
“We have been in touch with several companies that are showing more and more interest in the possibility of opening up Venezuela for business,” he said in an interview.
In addition, UBS’s chief investment office put together an eight-page memo last month that focuses on “visualizing the day after tomorrow” in Venezuela. The research document highlighted the Trump administration’s “hawkish approach” towards Caracas and noted that “Venezuela’s transition away from Chavismo could unlock major opportunities,” in part because of its oil reserves and “severely underutilized economy.”
The uptick in intrigue comes as the Trump administration continues to amass military assets in the region and develop potential plans for further action in Venezuela. While administration officials have avoided overtly saying their goal is regime change — Trump has focused his public remarks on fighting drug cartels — the ultimate goal of democratizing Venezuela, and the resulting investment benefits, are front and center in investors’ minds.
Venezuelans currently operate in a cash economy, with its oil production affected by US sanctions that Trump tightened, and the country lacks everything from independent newspapers to Amazon and Starbucks. In addition to its oil reserves, UBS cited Venezuela’s “fertile soil” and notes it occupies a prime location “to develop as a transportation hub for the Americas and Europe.”
The possibility of Maduro’s fall in Venezuela is more realistic now than ever; Trump talked tough toward the socialist leader during his first term but has taken far more confrontational steps lately.
And despite some analysts’ warnings of a chaotic aftermath should Maduro be ousted, a flood of foreign and private money could spare the US from having to finance the rebuilding of the Venezuelan government and economy.
“Certainly the possibilities of change in Venezuela are now clearer to the business community than before, that’s for sure,” de la Cruz told Semafor.
Hawkish Republican lawmakers are cheering on the Trump administration’s efforts against Venezuela. While a few have expressed reservations about the ever-expanding US military role in the region — including Trump’s continued deadly air strikes against alleged drug boats — most see little upside in pushing back.
“The nice thing is, they’ve got plenty of natural resources,” Sen. Rick Scott, R-Fla., told Semafor, referring to post-Maduro investment opportunities in Venezuela. “In a democracy in Venezuela, their resources are massive, so there’ll be a lot of people who want to invest.”
UBS, Barclays, World Bank, IMF, and the Inter-American Development Bank did not comment for this story.
Know More
The UBS memo described Venezuela’s future as “a land of opportunity,” adding: “The point is that there is a blank slate. Venezuela has room for everything because there is currently so little.”
The Venezuelan opposition team is becoming more open about its vision to rebuild. At a Fortune event at the end of October, Machado spoke virtually about what she described as a $1.7 trillion economic opportunity in the country.
The opposition team told Semafor it even presented its ideas for Venezuela investment to the Trump administration (as it did to the Biden administration), though it’s not clear how formal those presentations were. Republican lawmakers made clear that they don’t expect the US government to use taxpayer money to rebuild the country.
“There’s going to be American companies they’re going to invest, but our federal taxpayer won’t have to,” Scott said.
“We don’t need to rebuild Venezuela. We need to free Venezuela from drug cartels that prohibit growth — by a crooked dictator who’s an indicted drug dealer,” Sen. Lindsey Graham, R-S.C., told Semafor. “There’ll be a lot of business going to Venezuela, I think, if you had a better business environment.”
A potential new Venezuelan government would have to undo a number of Maduro’s practices to make investors comfortable, like restoring property rights and negotiating with the US to ease sanctions — points made during the meeting organized by Barclays weeks ago.
“On the campaign trail, President Trump promised to take on the cartels — and he has taken unprecedented action to stop the scourge of narcoterrorism that has resulted in the needless deaths of innocent Americans,” White House spokeswoman Anna Kelly said. “The president has been clear in his message to Maduro: stop sending drugs and criminals to our country.”
Room for Disagreement
In addition to the business possibilities that a post-Maduro Venezuela would offer, there are multiple hurdles and possible outcomes, said Dr. Evan Ellis, a senior non-resident associate with the nonpartisan think tank CSIS.
Ellis described three “likely” scenarios to come in Venezuela: One in which military leaders in Venezuela take matters into their own hands, deposing Maduro; a second where the Trump administration conducts a “major operation” to dislodge him; and a third option revolving around a deal to leave “some elements” of the current regime in power with a promise to transition toward democratization.
“I think each of those three paths takes you toward a different outlook for the investment environment,” Ellis said.
Shelby and Burgess’ View
The fact that investors are openly considering Venezuela signals how seriously the Trump administration’s posturing against the country is being taken. It helps, of course, that Machado won the Nobel Peace Prize this year — adding new momentum to the anti-Maduro push.
Which makes it even more unusual that Trump himself hasn’t weighed in on the potential for US companies to make deals in Venezuela. The president, after all, months ago proposed turning Gaza into the “Riviera of the Middle East.”
Notable
- Trump told CBS News’ “60 Minutes” that Maduro’s days as regime leader are numbered, as The New York Times notes; he also said he doesn’t think the US is going to war against Venezuela.
- US intelligence has found that, despite the professed goal of stopping illegal drug trafficking, “little to none of the fentanyl trafficked to the United States is being produced in Venezuela,” Drop Site News recently reported.
- Investors have also taken interest in a potential post-nuclear Iran, as Semafor previously reported.
Liz Hoffman contributed.