Venezuela's Political Illegitimacy and Infrastructure Deter Foreign Investment

Key Quotes

"My relationship with Ricardo Hausmann of Harvard goes back at least 18 years. Quite frankly, it may be a full two decades. He is definitive on South America. His academics is profound, including with Barry Eichengreen of Berkeley, and the phrase original sin. But far more, Ricardo Hausmann is a voice of the collapse of Venezuela."

Tom Keene highlights his long-standing professional relationship with Ricardo Hausmann, emphasizing Hausmann's expertise on South America and his significant academic contributions. Keene specifically mentions Hausmann's work on "original sin" and his role as a prominent voice on the collapse of Venezuela.

"Ricardo Hausmann on a delusional President Trump. If he thinks that right now he's going to recover oil production because he's going to tell US major companies to go out and part with billions of dollars in Venezuela, in the context of an illegitimate government, because Maduro stole an election, but this woman who's now president of Venezuela, she didn't even win, pretend to win an election. She was appointed by a guy who stole an election."

Tom Keene presents Ricardo Hausmann's critical assessment of President Trump's approach to Venezuela's oil production. Hausmann argues that Trump's strategy is delusional, as it relies on US companies investing billions in Venezuela under an illegitimate government that came to power through electoral theft.

"A great student of this, arguably the student of it, is Shannon O'Neil. She's created a cottage industry at the Council on Foreign Relations of study of so much of what I ignore in Latin America."

Tom Keene introduces Shannon O'Neil as a leading expert on Latin America, suggesting she is the foremost authority on the region. Keene notes that O'Neil has developed a specialized area of study at the Council on Foreign Relations, focusing on aspects of Latin America that he himself tends to overlook.

"I think there's sort of two scenarios. One is that, as you say, not a lot changes. We have a new leadership head, but not a regime change. Lots of the other pieces stay in in place as they are. Um, now, you know, oil and others, you know, there may be US players who come in, though it's still kind of a shaky market and the infrastructure is very weak after years and years of sort of degradation."

Shannon O'Neil outlines a scenario where a change in leadership in Venezuela does not result in a regime change, leading to continued stability with existing structures. O'Neil points out that while US companies might enter the market, the overall market remains shaky, and infrastructure is severely degraded from years of neglect.

"The other is that, you know, the current president, uh, Delcy Rodríguez, she isn't able to keep all of these forces, right? The various different groups with guns together. And we get sort of a fragmentation, disintegration."

Shannon O'Neil describes an alternative scenario for Venezuela, where the current president, Delcy Rodríguez, fails to maintain control over various armed factions. O'Neil suggests this could lead to fragmentation and disintegration within the country.

"But far more, the work, our team in Latin America, particularly out of Brasilia, out of Mexico City, have done tireless work the last three days to provide context on this unfolding drama."

Tom Keene emphasizes Bloomberg's commitment to providing in-depth context beyond just the news. Keene highlights the extensive efforts of their Latin America team, based in Brasilia and Mexico City, in delivering crucial background information on the unfolding events in Venezuela over the preceding three days.