Implications of Venezuela’s Imminent Implosion

Americans should watch the situation in ‪#‎Venezuela‬ carefully. As one US intelligence officer noted this week, “You can hear the ice cracking.” The political and economic situation is deteriorating rapidly, potentially leading to massive demonstrations, riots, and either government change or government crackdown. US companies have significant exposure to Venezuela, and the situation will impact them – and America in general. US companies already have lost billions because of Venezuela’s currency manipulation, and the country is on the brink of even greater disaster. Oil is an obviously important area, but it extends far beyond that – about 40 US companies, including General Motors and Merck, own more than $11 billion in assets in Venezuela. They also have large US personnel in-country to support operations.

So what does the fact that the country is collapsing under its own weight mean to the US? Can ‪#‎Maduro‬ survive and, if so, will he implement an even greater choke hold in his desperation to hang on? Will the corrupt generals step in and potentially declare martial law? Or is there a silver lining that a free market democracy will emerge after the chaos calms? Where are the risks and opportunities, and how should American companies proceed?

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