The death of Venezuelan president Hugo Chavez in March will not result in a significant change in the country’s investment climate, say experts.

In his 14 years as president, Mr Chavez introduced price controls on consumer goods and nationalised domestic as well as international companies. With the exception of some African economies, Venezuela is considered to have the worst business climate in the world. But, as it prepares for a presidential election on April 14, investors are hoping that this might change.

The election will be a battle between interim president Nicolas Maduro, who has vowed to follow the policies of his former mentor, Mr Chavez, and the opposition candidate Henrique Capriles Radonski, who was the main contender against Mr Chavez in

the country’s closely fought 2012 presidential election in October.
Mr Maduro is currently leading the polls and riding on a wave of public sympathy after being appointed vice-president in October. He has outlined a seven-year economic plan that favours socialism rather than capitalism.  

However, the forthcoming elections are not expected to solve Venezuela’s underlying political and economic issues. “If Mr Maduro becomes president, he will not wish to reverse Chavista policies towards the private sector until or unless he has consolidated his position as the undisputed leader of Chavismo,” said Victor Bulmer-Thomas, former director of independent think tank Chatham House.

On the other hand, if Mr Capriles wins the election “he would have to deal with a pro-Chavez congress that would make it almost impossible to introduce the changes needed for the country to open up again to foreign investors”, said Gina Sanchez, Latin America industry analyst at global market analysis firm Frost & Sullivan.

Ms Sanchez said that investors need to remain aware of the country’s unappealing factors, such as inflation, currency black markets, food scarcity and a lack of security. “With Mr Maduro as president, regional and global trading relationships are not likely to change. For companies wishing to invest, the ghost of expropriation is looming in the background,” said Ms Sanchez.

Despite political insecurities, some sectors are gaining appeal among foreign investors. “The energy sector is urgently needing new foreign investment,” said Mr Bulmer-Thomas. Venezuela is one
of the largest oil and natural gas resource holders in the world, and is the world’s 10th biggest exporter of oil, mainly to the US.