Last week, Pablo Gonzalez, Director of Latin America Research, and Alejandro Valerio, Senior Analyst, were featured in the Harvard Business Review for their article titled, When Should Multinationals Move Back into Venezuela?
The crisis in Venezuela has been escalating over the last few years as product shortages, social unrest, and political clashes have grown more severe. However, the country’s crisis is unlikely to become top of mind for Latin America regional executives and corporate centers, at least from a business standpoint. This is because most multinationals have fled the Venezuelan market over the last three years, amid growing difficulties to repatriate profits; import raw materials and finished goods into the market; get paid by local partners and the Venezuelan government, and more recently due to full-fledged expropriations and factory confiscations — all problems stemming from the abrupt reduction of U.S. dollars in the Venezuelan economy since oil prices started to plunge in April 2014.
So when will be the right time for companies to reallocate corporate resources to Venezuela? We are advising our clients to consider different political and economic scenarios.
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