Venezuela: rig and repress

The declaration that incumbent Nicolás Maduro won Venezuela’s presidential election has been met with protests and international pressure for a full account of the results. But our sense at this stage is that the most likely scenario is that Maduro clings to power and represses the opposition. The key economic impact hinges on whether this compels the US to tighten sanctions on Venezuela’s oil sector.

Meanwhile, the international response to the vote shines the light on some nuances on Latin American countries’ geopolitical alignment. Although Chile has close economic ties to China, the government’s denouncement of the election suggests that, on matters political, it aligns more closely with the US. In contrast, Colombia and Mexico - traditionally US allies - appear less inclined to follow the US's lead.

We will discuss our latest EM Financial Risk Monitor in a Drop-In next Thursday. Register here for the 20-minute online briefing.