Photo: Jorge Silva/NewscomIt's become nearly impossible to exchange bolivars for dollars.
Navigating Venezuela' uncertain economic environment
Venezuela’s economy had been deteriorating for years when falling oil prices in 2015 and 2016 accelerated the decline of its currency. Currency controls make it nearly impossible to exchange Venezuelan bolivars for hard currency, and the government has set price controls on anything it considers a necessity. As a result, companies don’t have the money to import much of anything, residents can’t afford basic necessities, and food and medicine are in short supply. Many foreign firms cannot repatriate their earnings. International airlines, for instance, have about $3.8 billion trapped in Venezuela.
Public relations and public affairs firm Burson-Marsteller created a Venezuela specialty team to help clients in Venezuela. Florida Trend spoke with Miami-based Lucas Silva Wood, Burson-Marsteller’s group director for public affairs and Florida, and Andrés Avila, a public affairs associate at the firm who is a native Venezuelan and formerly worked in its Caracas office.
FT: What do you tell companies that want to stay in the country?
Avila: We believe that there are opportunities for companies to stay in Venezuela, especially understanding what it means to have a presence in a country that is strategically placed at the north of South America and has access to the Caribbean. (But) it’s also hard for companies to decide to launch a new product or an expansion because the country is so involved in the economic crisis it’s hard for a company to get in the middle of that and get that space in the media.
FT: What do you share with your clients that they can’t get from other reports?
Wood: We have a realistic view of the situation, so we can help our clients with intelligence — not just with what the media is publishing, but more information about the temperature in the country, what’s going on with different stakeholders.
FT: What’s the most important thing you tell your clients about doing business in Venezuela?
Avila: You have to know your processes and protocols in order to handle a crisis. You need to have your training. You need to have your messaging straight to get everyone in the company in touch with how the company can handle a corporate crisis and how the company can handle a reputational crisis.
Uncertainty cannot become an obstacle for companies to operate. It has to become a particularity of the environment, and you have to find a way to work with that uncertainty. Companies can also find their strengths here in the uncertainty.
FT: Will Burson-Marsteller continue to operate in a country that many other firms have left?
Wood: We have this operation, and this means that we believe that there are opportunities.