Why Venezuela remains a high-risk market for business

For global companies and investors watching Venezuela closely, the capture of President Nicolás Maduro may appear to signal a long-awaited opportunity to reenter the country. But political change alone does not equate to a viable business environment, cautions Jerry Haar, clinical professor of international business at FIU Business.

“Curb your enthusiasm,” said Haar, warning that expectations of a rapid economic or institutional turnaround are misplaced.

Haar stressed that a leadership change should not be confused with a regime transformation. Decades of corruption, weak rule of law, failing infrastructure and capital flight have left Venezuela structurally ill-equipped to absorb meaningful foreign investment in the near term, he said. The country ranks 178 out of 180 nations on Transparency International’s Corruption Perceptions Index, a signal Haar described as “radioactive” for foreign direct investment.

Venezuela’s economic concentration further limits opportunity. Oil has accounted for at least 80% of export revenue for the past 70 years, yet the country produces only about 1% of global oil supply. Much of that output is heavy crude, which is costly to refine. With global oil prices low and Venezuela's infrastructure in severe disrepair, Haar said few firms are positioned to invest.

“Other than Chevron, one of the very few foreign companies licensed to operate there, it’s difficult to see who would commit capital to Venezuela’s oil sector today,” he said.

For businesses evaluating market entry, labor and infrastructure constraints present barriers. Roughly 88% of the population lives in poverty, unemployment is near 32% and much of the country’s skilled workforce has emigrated. Infrastructure, from transportation and power to healthcare and sanitation, is undercapitalized and inefficient, Haar said.

In a post-conflict scenario, Haar added, the sectors most likely to recover first are energy, construction, agrifood and services such as logistics, retail and healthcare. Still, he emphasized that any recovery would be gradual. Venezuela’s total exports declined from $112 billion in 2010 to $13.6 billion in 2024, underscoring the scale of economic collapse and the long-term risks businesses must weigh carefully.

Haar’s assessment aligns with themes explored in his recently published book, “Winning in the New Global Business Landscape,” which examines how technology, infrastructure, geopolitics and talent shape competitiveness in today’s global economy. The book argues that businesses must shift their focus from pure profit optimization to resilience and effectiveness when evaluating global expansion and emerging-market opportunities.