ESW Webcast No 2: April 19, 2024 Interview

Below is the AI-generated full transcript of the hour and a half plus interview with Andres Villarroel of VenezuelaInsider.com--you can find him on X @Andresevd. It has been edited by our ESW Virtual Assistant for clarity and final edited by yours truly. Any grammatical errors in the formatting are mine not those of our guest, Andres. The picture of a beautiful Venezuelan beauty queen used for the YouTube/Rumble streams is AI-generated.

Andres newsletter comes out twice a week and is just $5/month. We highly recommend it for anyone contemplating a lengthy vacation in Venezuela or seeking residency there.

Unlike the vast majority of our show transcripts, this one will be outside the paywall. The rest will be published for our ESW Patreon subscribers, at $8/month.

-- James Smith

Editor-in-Chief and Publisher, ExitStrategy.World

April 26, 2024

Introductions and U.S.-Venezuela Sanctions Discussion

Andres Villarroel: Okay, yeah, give me a second. I'm gonna try to do this here. All right.

James Smith: Okay, let's start. Okay. So, I have as my guest today, Andres Villarroel of Venezuela Insider. And he's going to be talking to us today about the Bolivarian Republic of Venezuela and what motivated him to start the Venezuela Insider consultancy.

Andres Villarroel: Okay.

James Smith: Yeah, I just turned off the YouTube [live link], because there was an echo there. So, how are you doing today, Andres?

Andres Villarroel: Very good, very good. Thank you for having me.

James Smith: Thank you for joining us today. So, yeah, regarding Venezuela Insider, how do you see the developments this week in the news? I mean, I know you've mentioned on your X/Twitter feed that Washington made the decision not to enhance the sanctions against Venezuela or to leave them as is. So how do you evaluate those [sanctions decisions by the Biden Administration Treasury Dept/OFAC]?

Andres Villarroel: Well, first is you have to see it from both ends. First, the political circus that you always have with this kind of thing, and also the macroeconomic aspect. And regarding the political message, is that the sanctions were, well, first, let's start a little bit how the sanctions started.

The sanctions against individual members of the Venezuelan government started in 2015. Several of them are sanctioned, unable to do business in the United States and travel to the US unless it's for a diplomatic reason. Also, their assets have been frozen over there in the States. Okay? However, the sanctions against the Venezuelan industries…these were mostly against the government and as a whole. Regarding oil, the oil industry and other major [Venezuelan] industries like mining, financing, and that kind of stuff. That was during the Trump administration.

And from what you can see is those sanctions are looking for, I mean, with the angle of the, at the moment the administration, that was with Donald Trump, they were trying to push some sort of a regime change. Or at least make Venezuela more ‘democratic’, as you want to call it. But that didn't work. And of course, if you look at history, sanctions don't work in order to pressure regime change, regardless of the place. You saw that right now with Russia, with Putin. Russia is the most sanctioned nation [on the planet and still going strong]. Same thing in Iran. Same thing at that moment in Iraq, when Saddam Hussein was in power [from 1991 to 2003]. And it doesn't work like that.

Now, then in 2022, when already you have Biden, the Democrats on the White House, you saw that they wanted, they're a little bit more flexible [toward Venezuela] compared to the Trump administration. They tried putting this license, the license 44, in order to allow companies to further invest in the country, like Chevron, the Big Oil multinational, this particular company, of course, being a US [California-based] multinational, received a special license. They already had…Chevron already had a significant presence within the Venezuelan oil industry.

And thanks to that concession, in 2022, they further [expanded] their investments, the oil investments here in this country. And also that give a leeway for other companies, multinationals, in order to either start investing in the Venezuelan oil industry with, of course, with certain limitations or just further their investments. Now, right now, what we have, that was part of a political deal between both the Venezuelan government, the political opposition, and the US government.

They signed a couple of deals. Apparently, well, they're accusing each side, accusing the other of not fulfilling their, you know, not keeping their end of the bargain. And what happened is right now, is that now when it comes to the political message, the US is quote unquote ‘punishing’ the Venezuelan government for not fulfilling their end of the bargain. And because, of course, of the politics and the election year [2024] and that kind of thing, we have elections both on the U.S. and Venezuela this year. And the Venezuelan government is saying, of course, they're going to start blaming [the Yankees] that the sanctions are not going to let, you know, further economic development [move forward] here in the country. But when you read the actual document of the sanctions, what it says is that the license, the special license used by the, that was issued by the Treasury Department, the OFAC, the Office of Foreign Assets [Control] of the US Treasury Department, basically allowed until a certain range, operations and investment, oil investment in the Venezuelan industry, but with limitations regarding the Venezuelan government.

So basically you, I mean, I'm just trying to give a reader's digest [version of the controversy], is that you… basically can do business and investing, and sell the [Venezuelan] oil, that kind of stuff, but with a lot of limitations regarding the revenue that the Venezuelan government was going to get in the first place. But still you know it's good for the Venezuelan economy, because you have to invest in these people have to force him investing in supplies and human capital that kind of stuff now the this particular license, that's what it says. So what actually happened this week is that this license by the US Treasury Department was replaced by the License 44a, and it's pretty much the same thing, so the multinationals that have a presence in Venezuela can keep operating in the company, sorry [they can keep] operating in the country. And also other companies can join and get licenses of their own.

And meanwhile, the, you know, what happened really is that these companies can still operate, especially a company like Chevron, that is a US company, but also another companies in Europe, like Repsol. And they can still keep further operating. So the main issue is regarding Venezuela, the only issue right now with the new regime of sanctions, the new scheme of sanctions, is that the companies abroad cannot make big deals with the Venezuelan government, when the Venezuelan government has a 50% of the stake on such investments. And also Russian companies operating in Venezuela. These companies that are getting the license cannot do business with Russian institutions, companies, entities within Venezuela.

Venezuela Insider’s Take on Caracas Together with Colombia Joining the BRICS+ in 2025

James Smith: Andres, I wanted to thank you for that very thorough answer, because while I was muted myself, I had forgotten to start the Rumble live stream as well. So now we are also streaming to Rumble as well as X/Twitter aka ‘Equis’, and Twitch. And I believe we're also streaming to Vimeo, the ExitStrategy.World Vimeo channel. So we are streaming now to five, cinco channels, and I'm very happy about that. And I thank you for the very thorough answer to our question. I know you had done a YouTube video on this topic of sanctions two weeks ago, I think it was, and hardly anything had really changed with the OFAC list. I mean, I'm sure that they'll probably end up trying to slap the Russian companies around for doing business with the Russian companies back in their motherland from Venezuela.

But it's really a pleasure to have you on the show, to have somebody who is so knowledgeable about what's really going on in Venezuela, because the American people, we get overwhelming negativity [in our US news media] when it comes to Venezuela. And I felt like it was necessary for our audience to get a more fair and balanced picture, as they say, to hear some of the, let's say, green shoots of economic recovery that are starting to happen in Venezuela, despite the fact that what a lot of people, frankly, the American people see on the street with some of the [impoverished] Venezuelans who have come as part of the [7 million people since 2021] migrant influx.

Although these [Venezuelan migrants] may be an overall small percentage [of the influx], from the huge number of people that the Biden Administration has allowed to come into this country [as purported asylum seekers or illegally] through the wide-open border, it still adds to the negative impression that Americans get from Fox News and other channels, and even the so-called liberal media channels [such as NPR, MSNBC and CNN].

So I thought it was very important to get a more balanced view. And one of the other things we're going to talk about besides the sanctions relief, which I wanted to lead off with because you've already done a video on that topic, is the question of BRICS and BRICS+ membership for Venezuela, that President Nicolas Maduro recently announced is a done deal. Finally, after he'd [Maduro had] been talking about it for over a year.

And now, this week, we also saw the headline news that President [Luiz Inácio] Lula of Brazil has affirmed in a joint statement of the Brazilian and Colombian foreign ministries with [Colombian] President Gustavo Petro that Colombia, which is Venezuela's second, I believe, most important trading partner in South America after Brazil, is also going to join BRICS+.

So could you talk about the impact of potentially Venezuela and Colombia being admitted to BRICS+ together at this October's BRICS Summit in Kazan, Russia? Thank you.

Andres Villarroel: Okay, well, first I love to talk about BRICS, so let's talk BRICS. And yes, well, I'm going to start answering if it's a joint admission to BRICS, both for Colombia and Venezuela. Well, it might happen. We saw last year's BRICS summit that they were admitted, mostly Middle Eastern nations. There are the new BRICS members, the Emirates, Saudi Arabia, and Iran, both at the same time. So that was kind of interesting, and also Egypt. Now the new members of the BRICS group might be South American, could be both Colombia and Venezuela, hoping is that the case. Now, I wouldn't say it's a done deal at the moment. I have to wait to what happens in Kazan later in the year. And I don't see, it could go either way. But what I can say on the behalf of the Venezuelan government, they have done every diplomatic move in order to be approved.

They have great relationships with most of the BRIC nations, both the founding members and also the new members. They have, of course, good friends. They're in good grace with Brazil, also with Russia, with India. Not as much, I mean, but it's kind of a neutral tilting good relationship, but it's not excellent. It's not bad yet. China, a little bit with Chinese authorities, Xi Jinping government is a little bit cautious with Venezuela, but they [China and Venezuela] still have great relationship. And South Africa, I don't see how South Africa can hinder that. The approval now with Colombia on board, so it could be a package deal of Venezuela and Colombia--that will be very interesting [to the rest of the BRICS]. And now if I put the shoes on of the BRICS nations, especially the big ones like Russia and China, and of course India as well. But first we have to analyze who are the BRICS nations in the first place?

And these people, let's be honest, they are not concerned about democracy or human rights or that kind of [State Department boosted] stuff, but they are concerned about execution and actually being effective on their own [trade] agendas. Putting aside the politics, all of these economies, these emerging economies have been providing excellent results. Russia, even with the sanctions and the special military operation in Ukraine, they have provided positive GDP growth [to their people]. China, of course, we know what they have been able to pull off [fastest economic growth in human history over the past 40 years]. India is also growing rapidly as well. South Africa, well, kind of over there, probably the best sub-Saharan African economy. And also you have Brazil that, of course, is the largest GDP in the whole Latin America.

What Venezuela can provide for BRICS, of course, is the largest oil reserves in the world. That's the elephant in the room. Oil against everything that we have been fed [about Venezuela’s economic problems].

On Whether Venezuela Could Become a Cuban Missile Crisis 2.0 Russian or Chinese Missile Base (The Answer is NO)

James Smith: Sorry, go ahead. I didn't mean to…I was trying to put you in solo layout [in Streamyard] but it didn't work. But that's okay, just please continue with your very thorough answers and I do appreciate these because my first conversation for those in the audience, with my initial guest on the initial podcast that is webcast we had for ExitStrategy.World was more of a, let's say freewheeling informal back and forth.

This is a more journalistic style interview. And I really do appreciate, like I said, the erudition of your responses and how you break it down for the audience in very clear language regarding the BRICS+. Plus, that's kind of been. I think for the U.S., you know, for let's say the US hard right, there's, you know, so-called hard right. But in reality, just kind of the neocon interventionist fake right [of John Bolton and others].

They have kind of demonized Venezuela as part of this, you know, Axis of Evil or whatever that is aligned with Iran. Or it's [Venezuela’s government is] like a way for Russia and China to project power into the Western Hemisphere, you know, in some way that is somehow threatening to the Monroe Doctrine, this idea of the U.S. that no hostile power would ever intervene in the Western Hemisphere.

I mean, what would you say, Andres? And I don't want to leave this question for last, but this is sort of a worst-case scenario question. If the, let's say, the hot second Cold War we're now in, and it's obvious we're in one, between the United States and China, but one with Russia allied, closely allied with China, and now the U.S. is accusing China…if before they [extended and] pretended [in Washington] like maybe China was abiding by the [American, UK and EU] sanctions threats, or not seriously arming or helping Russia's war effort, war machine, now they're [the Biden Administration] are saying the opposite. That in fact China is sending [Russia], if not assembled equipment, then certainly parts, computer chips, electrical wiring, circuit boards, all these things, components for the Russian arms industry that is surging into three shifts [running] around the clock, massive production of weaponry to sustain their [special military] operation [expanding into a full-scale war potentially with NATO regular forces] in Ukraine.

You know, what do you think Venezuelans would think about the possibility of, let's say, a Caribbean Crisis II or Cuban Missile Crisis 2.0, where Venezuela is somehow drawn in, becomes a base for, some sort of Russian hypersonic missiles or some kind of major Russian military deployment to the Western Hemisphere of troops or weaponry that the United States could see as threatening in the worst case scenario? Because we already have had, for example, this week, you know could it happen [a major deployment of troops or missiles to Venezuela] even on the part of the Chinese, which is extremely unlikely but… this week, we had the United States developing an exercise in The Philippines with the first deployment of the intermediate range missiles. Because the US tore up the [1987] INF Treaty, I believe that was done during the Trump years. But Biden has moved forward apparently with at least a symbolic deployment of [ground launched intermediate-range cruise] missiles to the Philippines to test the Chinese response.

Could we see either Chinese or Russian forces deployed [for exercises with the Venezuelan military] or in some extreme case scenario, [intermediate range] missiles deployed to Venezuela pointed at the United States in response to, if the U.S provocatively deploys those [previously INF Treaty covered] weapons to Japan or into you know say, Poland? Some country where the flight time of a hypersonic strike weapon to Moscow or to Beijing is minimal?

Andres Villarroel: Well, first, what I have to say is, well, I'm not a military expert. I can talk about macroeconomics and geopolitics. Regarding military, I mean, Venezuela is not a war country. We haven't had a war here in Venezuela for centuries now.

James Smith: Since your independence from Spain, I believe that you haven't really had any wars with your neighbors. I mean, there have been let's say guerrilla warfare with the FARC and problems with the border of Colombia [with the cocaine cartels in the 1980s and early 1990s] maybe. But there's really been no nation state warfare, major wars for Venezuela since its independence, if I'm not mistaken.

Andres Villarroel: Yeah, well, the thing is also, I know the world is in turmoil right now, there are a bunch of war zones, a lot of conflicts. Right now, I just recently heard about something about Bosnia and Serbia coming back again on the Balkans…[Respublika Srpska wanting to secede from Bosnia and Herzegovina].

James Smith: Right.

Andres Villarroel: We have, of course, the issue in Ukraine [between Russia and NATO], the issue with Israel and Gaza, and now with Iran [striking Israel directly for the first time using missiles and drones].

James Smith: Yeah.

Andres Villarroel:...And now with the Houthis in Yemen, and a couple of wars across the Sahel in Africa. So we have a bunch of military conflicts.

James Smith: Yeah, Sudan. There's a civil war in Sudan with Russia, Ukraine, and France [all involved], and also the [Russian advisors entering the] former French colonies. Yes, exactly.

Andres Villarroel: So, there are a bunch of hot zones [worldwide], and many people are worried that Venezuela is going to become one of them. But you can rest assured that it's not going to happen. Venezuela is not a war country, regardless of who is in charge. Really, Venezuelans don't have this [belligerent] mentality. You know, my dad used to say all the time that Venezuelans are not revolutionaries because, I mean, they can bitch and moan and protest and yell [about the government and the inflation], whatever they want. But, you know, at six o'clock [in the evening], they have to go to the liquor store and get a beer. And that's why we are not good revolutionaries.

On Venezuela Being ‘Scary’ to Foreign Investors Like Russia Was in 1999 or Colombia Were in the Mid-2000s

James Smith: Yeah. Maduro doesn't strike me as a young Fidel Castro advised by Che Guevara, you know, who obviously met his sticky end in Bolivia. You know, we all know what happened to Che Guevara [captured and killed by a CIA-backed death squad]. So I think I totally agree with you. I just wanted to kind of get that [Cuban Missile Crisis 2.0] scenario out of the way, midway through the show, so that we could get down to the discussion of business and, life for people, for expats potentially looking at Venezuela as a country that, they could sort of get in on early.

Because I see Venezuela…and I think I mentioned this in the show notes I emailed to you last night, that it's like…it very much reminds me of where Colombia was at, in maybe the mid-2000s, when gringos were still scared [of the narcos and the guerrillas] to go there [and now the airports are packed with visiting Americans, especially men].

A lot of expats were still scared to go there because of the FARC situation and you know they were still like negotiating an end to the to the [decades] long civil war there. And obviously the role of the drug trade complicated those negotiations, because the FARC and everybody was profiting from it in one way or the other. Both the government aligned factions and the guerrillas [profited from cocaine trafficking]. And you could also compare it to--and I lived in Moscow from 2009 to 2010--you could compare it to like where Russia was at in the very late 1990s or early 2000s, when people still thought oh it's very scary to go there. If you make a major investment [in Russia], the government's going to expropriate your investment. Or if you buy real estate [in Moscow or St Petersburg] you know somehow, you'll get squeezed out of it, you'll lose it, that is your investment. But I see Venezuela in a very similar light.

On Comparing Real Estate Prices in Venezuela to Egypt and Other Emerging Markets

I mean, you're talking about real estate prices in Venezuela, even in some of the, very nice resort areas on the Caribbean coast that are comparable to what you would see in, let's say, a much poorer per capita income country like, say, Egypt. I mean, I was just doing a post about some of the real estate price ranges in the New Cairo area of Egypt. And some of the, let's say, smaller apartments would start from about, you know, $8,500 to $12,000. By the time you factor in the closing costs and paying the attorney and, for let's say a townhome, it might be something like $20,000 to $30,000.

And even in these resort areas of Venezuela, there are people talking on X about how they could snap up a nice, like beach house close to walking distance to the beach for, $40,000. I mean, it's incredible. I mean, that's why I had to hear from an American perspective, because our [wildly overpriced US] real estate is going nuts. And in Europe and the UK, they have similar problems with unaffordable housing, especially in Canada, as you've [no doubt] heard.

Talk about the real estate opportunity right now in Venezuela, because this seems to be one of the biggest opportunities for foreign investors.

On Real Estate for Foreign Investors in Venezuela and the Country’s Climate Advantages

Andres Villarroel: Okay. Well, first I want to personally address the geopolitics about Venezuela, in order to give you a fair assessment.

James Smith: Sure.

Andres Villarroel: Well, Venezuela is risky. I'm not going to say it isn't, but it's way less risky than most people think. And that's an opportunity by itself [for smart investors].

James Smith: Right.

Andres Villarroel: And the other thing that you have to understand is that the economy, actually, I'm very bullish on the personal economy after an 80% GDP collapse [after the 2009 oil price crash]. But the funny thing about Venezuela is that with all of the problems, all of the issues, Venezuela is an awesome country. The main issue, of course, there are a lot of frictions, what in Twitter/X they call the Latin Hammer [of bureaucracy]. And I have to be responsible also addressing both the good and bad things [about Venezuela and Latin America more broadly]. And the other thing is regarding politics.

I mean, don't worry that much about [Venezuelan] politics. Remember, these guys [around Maduro] are just politicians, politicians are just like CEOs. They just make business decisions for their interest, not for our interest. And just you have to deal it like that.

James Smith: Right

Andres Villarroel: And on the next five, ten years, and this is how I see it, this is why I'm bullish in Venezuela, is because it's not on the politicians, the ones that do have power here, it's not on their interest to hinder the Venezuelans [economic development]. They need a good development of the Venezuelan economy, both on the inside because you know sustaining a government is you know it's having it's like having a business…so you have to you know make the payroll and all that kind of stuff and so you have to fit the bill in that regard. And the second deal is, that you need to show competence to your international partners that in this case could be just in a few months, the BRICS nations also regional allies like Colombia and Brazil.

So what do you need in Venezuela? Venezuela, it's a great country. And I want to explain briefly why. But it's such a hell of a country. I mean, because it's not just all the oil, it’s everything. I mean, it's how everything is integrated. You have great human capital. You have a very decent infrastructure for the I mean, for Latin American standards, of course.

James Smith: You have [in Venezuela] fertile soil and a climate where you can grow things year-round. Wonderful.

Andres Villarroel: Exactly.

James Smith: You can have bananas and coconuts in the back [yard of your house in the countryside]. It's year-round tropical climate because you're on the Caribbean. There is enough [cool air from the] mountains [even in the hot and dry season].

Andres Villarroel: No, but you have every climate, [I mean] yeah, but you have every climate in the world.

James Smith: Yeah.

Andres Villarroel: Of course, most [of Venezuela] is a Caribbean tropical climate, but we have every kind of climate, every kind of weather, every kind of flora and fauna. I mean, naturally, if you're an eco [friendly] guy, you're going to love Venezuela. But also, it's how everything works together. That's the true value of Venezuela, not just the oil or not just the beaches or anything like that.

James Smith: Yeah.

On Differential Development and Geographic Glass Ceilings for Economic Growth

Andres Villarroel: It's how everything works. So Venezuela, being close to the bottom is still, I mean, of course, it's hard to be, you know, to make ends meet in Venezuela. But after that, it's still awesome being in Venezuela. Meanwhile, many countries that supposedly are driving, they reach their glass ceiling very quickly, for instance, like Chile. I mean, I don't hate Chile, but it doesn't have the same thing [in terms of high growth potential]. It's something intangible that you have to do the assessment by yourself, boots on the ground. And I've done it in Chile and Argentina, as well as in places in Europe.

James Smith: Yeah.

Andres Villarroel: It's far, it's very far from that ceiling. And this is something that we might see in the next 10 years, 20 years, five years. I see a bullish trend on the next five to 10 years. But afterwards, I mean, we're way far from that ceiling that I see most countries already they're hitting, especially the OECD nations.

James Smith: I agree with that, too. I mean, you look at what's happening this week in Dubai, and in fairness and full disclosure, we have a back office in Dubai where we can offer the residency services in the UAE and business formation, bank account formation, all of those services. Dubai is an amazing place to do business and Andrew Tate said it best: This might be the greatest city in the world. Or at least, the greatest new city in the world. It doesn't have any old-world charm. It's completely new [Dubai or Abu Dhabi or Sharjah] in terms of how it's been constructed in the last 35 years. But that being said, there is a limit to how far you can go in, let's say, a desert climate. it's still in a [hot Arabian Peninsula] desert. And as they found out with the cloud seeding, there's a lot of controversy about that.

It ties into the whole debate between so-called conspiracy theorists and mainline scientists about the geoengineering, how far it's gone, what they're spraying in the atmosphere [using airliners and research aircraft], who knows, but I don't want to get off into that tangent, but I do want to mention, you brought up a very important point, which is both about the geographic carrying capacity that Chile has and is restricted with. It is a sad fact for Chileans that they are restricted by their geography, they lost the war with…I want to say with Argentina and with Paraguay maybe? Well to a lesser extent I think it was Paraguay lost a big war [in the 19th century] but uh they [the Chileans] lost the war to Argentina the Chileans did, so they have the one of the world's longest and narrowest countries [running from north to south of the South American continent]. But that kind of restricted geography means that there are some certain limits on how the country can develop.

It's all going to be in that narrow strip between the Pacific coast and the mountains, that predominantly is where the population is going to be, so you have a sort of built-in, let's say, limitation in terms of how far your real estate market can develop. It's either going to go north or south [of Santiago de Chile and the most temperate climate zones in the country]. It can't really expand [urban sprawl] much east-west. And you have, let's say, limitations from the perspective of the shipping. For example, one of the points the Paraguay bros bring up on X, I don't know if you've seen a lot of promotion of [Plan B and other] Paraguay [migration service agencies] lately…

Andres Villarroel: Yes, I have.

James Smith: The territorial taxation country for gringos, even though there is, unfortunately, still no direct flight from Miami to Asunción like there is to, I don't know if there is to Caracas, but there's definitely [a non-stop flight from Miami] to Bogota where you can make an easy connection to Caracas from Bogota or Medellín, whichever [is more convenient].

Andres Villarroel: There are other options [for flying into Caracas], but you can sort it out.

James Smith: Yeah, exactly. But what I'm saying is geography is still a factor. It can't be just waved away. No matter how sophisticated we say we are in the 21st century and you can work from anywhere [thanks to the Internet], geography matters and climate [still] matters.

Andres Villarroel: Yeah.

James Smith: It's hard to be outside in Dubai when it's 120 degrees Fahrenheit [48.8 C], in the shade.

Andres Villarroel: Yeah.

James Smith: Like, that's a big factor for people [in choosing a country to expatriate to].

Andres Villarroel: Yeah. The glass ceiling of Dubai is you have to play God in order to, to further keep growing [do massive desalinization to make the desert bloom].

James Smith: Or it's reached a point where you have to have money to get there, to make money. Like you can't go there with like a lower amount, the lower end on the [financial] resources scale. You cannot be lower middle-class in Dubai anymore. Right. Similar to Toronto or Hong Kong. [The math] it just doesn't work.

Andres Villarroel: Yes, I agree with that. Actually, it's a book, a very famous book called Prisoners of Geography and explains basically how the big superpowers are the way they are just because of geography. Like Russia, USA, China kind of stuff. And I will say Venezuela on a lesser degree, it's kind of the same. So, there's a lot of value. The main point is there's a lot of value, but you have to take it with a grain of salt, because right now what I'm doing is just on the process of informing, educating, because we are having a long way to go. From what I'm seeing right now in the West, they have very terrible information [in the news media] about Venezuela.

James Smith: Correct.

Andres Villarroel: Historically and now current data, the information that most Westerners have is what happened in 2017 that was awful. That was awful [the hyperinflation and human suffering].

James Smith: Yeah.

Andres Villarroel: I mean, even I was, [I thought] I'm done with Venezuela back then. But I cool it off, like a year afterwards, and I saw the potential. And what I'm seeing right now is that, of course, it's tricky. It's not going to be easy. A lot of bureaucracy. I will say the worst things, one of the worst things, especially if you are from abroad, about Venezuela is the bureaucracy is horrendous. In Latin America is bad, but here in Venezuela it’s horrendous. So be aware of that. However, if you can visit the country and just take a trip, do so, you're gonna be safe and do some boots on the ground investigating and reach your own conclusion. And that's what I will suggest to anybody.

On Getting in Early While the Real Estate Getting is Good

James Smith: Right, and that's why I used the Colombia in mid-2005 example, or let's say, [investing into] Colombia circa or around the 2009-year range analogy. Or the analogy of coming to Moscow or St. Petersburg in 1999. Because it's like you're buying at almost the [economic] floor, right? You're not buying at the top [of an overpriced, overheated real estate market]. You're buying almost the floor in terms of dollar value or euro value designation of the properties, that it's not going to get any cheaper than it is now [in 2024], for all practical purposes especially if you know the dollar itself and euro begin to lose [their] value, as we're all aware is going to happen [it] is a matter of [mathematical] certainty.

Andres Villarroel: It is happening already.

James Smith: it's just happening in double digits instead of like triple digits yet, but we have already double-digit inflation here in the United States where the government says maybe inflation is you know, seven to eight percent [annualized] and in reality, of course, for anybody who goes to the grocery store, it's more like 20 to 25 percent annual inflation markups. Including for things like, even things that people don't think about [normally paying bills], for example, [renting] storage units.

You know, I have a storage unit [I rent here in the U.S.] and it's constantly going up like every quarter. They raise the price of the storage unit by another twenty-five dollars [in rent] a month, whatever. Just to give you a simple example of things that are constantly going up.

So, one of the reasons that, you see this trend of more people getting into the internationalization and offshoring space, into the consultancy space, is precisely because they realize that there's going to be a big wave of gringo retirees or people who just want to work remotely from their North American jobs or businesses washing into Latin America. Because unlike [being an expat in] Asia, you don't have a huge time zone difference [with the U.S. and Canada]. You can have the Zooms with the clients at normal hours. And so forth. But also, the Latin American culture and picking up Spanish is much easier than learning a Southeast Asian language. It's much easier than learning Russian or Chinese or any of those [Eurasian] languages.

Briefly About the Venezolanas…

And also, finally, let's be frank, and we'll get to this before the end of the show: The Latinas! The Venezuelan women are very beautiful. Particularly for the single middle-aged guys, the divorced guys, you know, who've got some means, they've got some stature, they've got some status as you, as you put it in one of your videos about dating in Venezuela, status is very important [to single Venezuelan women].

Andres Villarroel: Yes.

James Smith: Don't come here as a, don't come to Caracas as a brokie for sure. And do, do take care of yourself, of your appearance. You make sure you're groomed [as a male], that you work out. Don't come to Caracas if you're a fat slob and you don't have money, for sure.

But if you're a guy who takes care of himself, is in good shape, and you've got obvious signs that you've got things going on as a man, as a business owner [and entrepreneur], you’re going to have good prospects in Caracas as a man.

Andres Villarroel: Sure. In every city [of Venezuela] you can see it.

James Smith: In pretty much all of Latin America, but especially Caracas in this [present] day. There's going to be some gorgeous women who would like to meet you, who would be interested in talking to you [if you’re a successful and reasonably attractive man].

On Developmental Economics and Venezuela Being Far From the Ceiling

James Smith: We'll talk about that in a little more detail, but I did want to circle back to this topic of geography and glass ceilings of development because this is something, and it sounds to me like you are a classically trained economist in development economics, which is a very popular topic in Latin America and has been for decades, why certain countries in Latin America, let's say, hit the ceiling and then, declined most infamously, probably would be the example of Argentina, right? Where it was one of the richest economies ever on the planet, certainly one of the fastest-growing in the early 20th century, along with the United States, along with the then [early 1900s] Russian Empire. Right?

This was [Tsarist] Russia before the [1917] revolution. I like to tell people Russia was the Hercules in the cradle, that was strangled in the cradle because it was getting too strong. Even Russia’s allies and this is the hidden cause of World War 1 the British especially were frightened of where the Russians were going, not only the Germans, who had a border with them [the Russian Empire] at that time, but also the British Empire [feared the Russians’ rising military and industrial might].

So this topic of geography and glass ceilings, it's really fascinating to me [both in the present and historically], because like I was mentioning earlier, the Paraguay bros…they're bullish on Paraguay. Because despite the fact that it's landlocked, Asunción is roughly a thousand miles from both the Atlantic ports and the Pacific ports, on the Peru side with ports in southern Peru I think and on the Uruguay side. And obviously they have the big rivers too for all the shipping, which is very convenient for them. And abundant fresh water, abundant food, and even abundant hydro power for the Bitcoin bros to mine Bitcoin.

Bitcoin is Legal and There Has Been Some Crypto Adoption in Venezuela—Just No BTC Mining

James Smith: By the way, I did want to ask you, that brings up another topic. What is the legal status of Bitcoin in Venezuela? Are you allowed to own it? Are you allowed to trade it? Or can you, most importantly, is mining, Bitcoin mining allowed legal in Venezuela?

Andres Villarroel: Okay, well, the relationship between the government and Bitcoin has been, hot and cold. The Venezuelan government issued their own currency a few years ago, the Petro, but it has been phased out the past year.

James Smith: You mean this was a CBDC, the [oil backed Venezuelan cryptocurrency] Petro?

Andres Villarroel: No, no, it was not a CBDC, it was a bona fide crypto.

James Smith: Okay.

Andres Villarroel: Now, it started with a lot of issues with the sanctions. They cannot trade on the famous exchanges like Binance and that kind of [problem]. So, it was the third-tier exchanges, that is where the Petro worked, and also with a card that you have [issued] here.

Anyway, one faction of the Venezuelan government was very bullish on crypto, and we still have actually an agency regarding crypto [SUNACRIP]. And actually, that was one way that they move around [and bypass] the sanctions, using crypto in order to receive the payment for oil shipments for a few years, of course, at a [significant] discount [compared to getting paid for oil in dollars]. Well, what happened is, this faction of the government got taken down, and most of them were the crypto bros of the Venezuelan government.

James Smith: So, all of those Venezuelan crypto bros are now in Miami, let's say? They're not in Venezuela anymore?

Andres Villarroel: No, no, we have a bunch of crypto bros here [in Venezuela], trust me. Okay, now, right now, the position of the Venezuelan government regarding crypto is they are agnostic. That's it. They are not trying to regulate it or anything like that. Crypto mining for a couple of years was a big deal here [when the bolivar was getting hyperinflated], so people actually made quite decent money because the electricity was very cheap and you could plug a bunch of, you know plug many of these mine units in. However since we’ve had a bunch of energy issues, electricity issues [with outages or brownouts]…

James Smith: Yeah.

Andres Villarroel: The Venezuelan government started cracking down on the miners because you can tell easily on the electricity bill [for an apartment bloc or neighborhood] when you have a very particular energy use on a random home, that is associated with mining.

James Smith: Right. You can't really hide a Bitcoin mining [operation], any significant mining operation. You can kind of do it a little bit on the down low, but once you add enough miners, you can't hide it.

Andres Villarroel: Exactly. Well, what happened was a crackdown. You have to register with this particular agency, SUNACRIP, the crypto government agency. But since, over the past year and a half, something like that, they are not issuing the license in order to allow you to do crypto mining here.

So, I mean, crypto mining here in Venezuela is basically dead at the moment, or is at least in intensive care unit [ICU] right now. But for the rest, you can use crypto. I mean, it’s not a big deal. The government doesn't ban crypto, or doesn't want the capital gains of owning a crypto [like the SEC and US government which have seized Bitcoin in accounts] or anything like that. So, you can do your crypto things here very freely. Right now, the only thing that you cannot do is the mining.

James Smith: So, it's not exactly like, say, El Salvador?

Andres Villarroel: No.

James Smith: in terms of the government fully embraced it [in El Salvador], but it's also not banned or suppressed in any way either [for Venezuelans who want to own Bitcoin].

Andres Villarroel: I heard even Milei wants to regulate it [the exchanges] in Argentina. And they never said anything about regulating Bitcoin [during the campaign].

James Smith: Right, right. It's just not really a concern. It hasn't reached, say, a critical mass in terms of adoption that the government really gives a crap [in Caracas].

Andres Villarroel: There's a lot of adoption here. There's a lot of adoption [of BTC by Venezuelans].

James Smith: There is an adoption, certainly in Caracas. Are there places in Caracas where you can pay with a Lightning wallet, like a Bitcoin wallet, like you can in El Salvador? Like you go in [to a café], you can pay for a coffee with, yeah, on the Lightning network.

Andres Villarroel: Yeah. Depends on the place. Depends on the place. But yeah, you...every now and then, you can pay with your Binance account, something of that nature. Yeah, it can be done.

Who is Venezuela Insider’s Ideal Consulting Client and Canadian Difficulties Getting Venezuelan Visas

James Smith: Yeah, because that brings me to sort of my next question, which is about the type of entrepreneur who's going to be attracted to Venezuela, the type of person who's going to be looking for your services.

Every entrepreneur has what they call a client or a customer avatar, right? You've heard this term before, I'm sure, of who is the person who's going to be seeking out Andres Villarroel's services, right? As coming to Venezuela for the first time and second time, or they just, they need some guidance in terms of to save time, referrals to obviously, maybe some legal help for the residency. How easy is it for an American citizen? Let's start with that.

And we can talk about the Canadians and the LatAm bros saying, hey, flee Canada! It's time to get the hell out of Trudeau's Canada at a moment’s notice. But how easy is it for a gringo American citizen to get a Venezuelan residency, temporary to permanent? How does it work, Andres, the basics there?

Andres Villarroel: Well, first, well, let's talk about, you know, Venezuelan migration law 101.

James Smith: Sure.

Andres Villarroel: And let's start by the tourism, how, who can enter, who cannot. The rule of thumb is that the 100 richest nations on GDP per capita terms, they can enter Venezuela visa-free, and the second tier ones, they cannot.

Out of the first 100 countries, a couple of these nations, we have a visa reciprocity policy that goes for Chileans, Peruvians, and people from Panama, since they require a tourist visa in order for Venezuelans to visit those countries. The Venezuelan government also requires a tourist visa for them.

James Smith: So just to be clear, Venezuela is not a part of Mercosur, but it does have...

Andres Villarroel: It is, it is. No, it is, it is [in the Mercosur trade and migration zone].

James Smith: It is, okay. I wanted to make sure.

Andres Villarroel: It is, but it's in a limbo because it is, for instance, I was able to get a residence in Argentina. Because I'm using the Mercosur treatment, that if you go to Argentina, you want to be a Mercosur citizen. And I was treated in Argentina like a Mercosur citizen.

James Smith: Right

Andres Villarroel: So, the legality, actually, I'm very pleased with the Argentinian authorities. And also, with Brazil, it also depends on the situation at the moment.

Well, now going with the U.S. and Canadians [in Venezuela], since, the very [difficult] diplomatic relationship, the feud with the local governments over there [in Ottawa] and here, the Venezuelan government, you do require a tourist visa. In case of Canadians, it's even worse because at least Americans, they don't have a Venezuelan Embassy within the States, so they have to go to Mexico City or other places. And the Canadians are in a catch-22. It's more complicated [to come here] for Canadians, actually.

James Smith: Why is it more complicated for Canadians? Could you repeat that [reason why]?

Andres Villarroel: Because they are on a hold regarding the, you know, the bureaucracy, because indeed we have a Venezuelan Embassy in Ottawa, but it's not operating as you like. And hopefully you will have to go to another country, but you need a legal presence in another country [to apply for a Venezuelan visa as a Canadian citizen]. So, it's very tricky dealing with Canadians. With Americans, it's way easier, actually. It's easier than most people think.

James Smith: Sorry, I muted myself. They were vacuuming in the hallway here of my building, so I didn't want you [or the listeners] to hear the background noise.

Andres Villarroel: No worries.

On Foreigners Obtaining Residency in Venezuela

James Smith: So, it's pretty easy for Americans, would you say, to get residency [in Venezuela]?

Andres Villarroel: No, it's not easy, but it's easier than most people think.

James Smith: Okay, easier than most people think. So, would you recommend, if an American wants to get their temporary residency hiring…if let's say they're living in Caracas, just a simplified example, they're renting an apartment there. Would you need, would a landlord ask for your proof of temporary residency to sign a lease, let's say longer than 90 days? You know, that wouldn't just be like a vacation rental for cash or for cash dollars.

Would they [the landlord] ask for that, or do you think that that's less common? Maybe? Or do you just do…do the gringos typically just make those border runs to Colombia or something, and then they just re-enter [Venezuela] on a tourist visa? How does that work?

Andres Villarroel: Depends on the case. Depends on the case. Well, regarding renting and leasing, the most important is the proof of income and that kind of stuff. So, it can be arranged with the owner of the property. In that particular regard, and afterwards, stay for the long term. First, you need a tourist visa in order to enter Venezuela as a U.S. citizen.

James Smith: Yeah.

Andres Villarroel: Unless you have a second passport, that kind of stuff. Even a[nother LatAm] residency might help, depending on which residency.

James Smith: You mean in a second country, like if an American had a residency in, let's say, El Salvador?

Andres Villarroel: Well, El Salvador is not going to help as much. Not in Mercosur.

James Smith: But let's say they had Colombian residency [a Mercosur country]. Okay, that's a country that has a border with Venezuela. Okay?

Andres Villarroel: Okay. Well, depending on your particular interest in Venezuela, but there are legal ways in order for you…to actually stay legally. You have to stay [here] legally. Please do so. And you can stay months, years, of course, but you need a legal reason that you can show [the government migration service] and depending on the particular mechanism, in order to actually come to Venezuela and stay long term and get residency.

James Smith: Yeah, and just so you're aware, Andres, we're coming up on the 4 o'clock hour there in Caracas. Do you have 15 more minutes of overdrive before 4:30 p.m. Caracas time? Okay, that's when we'll cut off because especially for those viewing on Rumble, either live or on the playback of Rumble, I started this video about three to four minutes into it. So, I just want to make sure we get the full length of the video.

Yeah, these are all very, very relevant questions. Obviously, I'm not asking for a play-by-play or to break it down into minute detail, but just the generalities. So, the audience has the expectations set before they contact you, before they reach out in DMs or, however the best way to contact you is.

I'm sure you get a lot of people reaching out to you via X or Twitter DMs, but also through your website, which I wanted to repeat for the audience. I should have said it at the outset is Venezuela Insider DOT com, is that correct?

Andres Villarroel: Yes.

Subscribe to Andres’ Newsletter at www.VenezuelaInsider.com or on Patreon

James Smith: And you're also on Patreon at Venezuela Insider, where you have a subscription newsletter that comes out, how many times? Three or four times a month?

Andres Villarroel: No, no, it's two times per week.

James Smith: Okay, twice a week. So, eight times a month. Okay, that's very good. Yeah, we also have our Patreon, where we have a lot of, as people can see, free content linked up. But also, we have our subscription content, which includes exclusively for the $8 a month subscriber, the transcriptions of these programs we do. Some people don't like to watch, they just prefer to scroll through and read [these shows through the transcript]. We have the AI, heavily edited by myself [and our overseas virtual assistant], transcripts of these conversations over there. And of course, all the guests receive that transcript as well. Which we email to them…

So that being said, Andres, we've got about 15 minutes left [for today’s show]. What would be, let's say, the most important thing for people to understand before they come to Venezuela to get temporary or permanent residency? What is the most important thing for the average American, let's say, age 35 to 55, who's coming to Venezuela to live as a digital nomad?

Let’s say they've got some kind of business, online business, they've got proof of income, sources of income. What is the most important thing for them to understand before they come to Venezuela and seeking temporary or permanent residence?

Budgeting and Price Discovery in Venezuela Can Be Tricky

Andres Villarroel: Well, the first thing is logistics and budget. In Venezuela, I explain this on my content a lot of times, is that doing price discovery is very difficult in Venezuela. It's not as intuitive as in the United States, well, before the [recent] inflation. Well, the point is that if you take care of both of these things, your experience can be more enjoyable. Because many people try to cut corners on one thing and then have to overspend in other things. Especially if you're a digital nomad, you need great Internet connection and that can be tricky. The other thing of course, is having your paperwork and logistics and your budget. And it's gonna cost you cents on the dollar if you do things right, because if you don't, you're gonna have to pay a premium in order to fix an issue, if you didn't have everything [in order] so not everything, but the most important things [in your paperwork and budgeting] sorted out at the first place.

That's why for instance I…when you get consulting with me, I try to do the play-by-play of everything you're gonna need…depending of course, where is your particular occupation and what is your purpose in the country. But most of the time, many people don't actually think it's a good expense to hire me as a consultant. And in the end, they always end up overpaying.

James Smith: Exactly. What type of, just as an aside, what are the type of clients you're seeing right now? I mean, who are the type of people that are asking for your services?

Is there any industry that stands out? Is it like, I don't know, lawyers or maybe certain types of consultants [in energy] who are coming to Venezuela? What are you seeing in terms of maybe even, I don't know, probably not, I'm guessing not petroleum engineers [from Houston], too many of those, because of the way PDVSA [Petroleos de Venezuela the state owned oil company] works? As I understand it…

Andres Villarroel: No but we have international companies, multinationals and we have a bunch of expats that work for the multinationals, but these are not typically my usual clients, because usually the company itself…

James Smith: Right.

Andres Villarroel: …does well, not as good as I do it, but they do it for their own employees and they don't basically…they have their way, their corporate babysitter [in place], so [these type of foreigners], they're good to go.

James Smith: But I mean, in terms of like, say, an independent real estate investor who's looking at Venezuela from, as I mentioned to earlier, that it's never going to be a better time to buy than now in terms of acquiring, let's say, beachfront property or Caracas prime real estate, then it's only going to go up from here. Let's say a real estate investor comes to Venezuela.

Andres Villarroel: I have a handful of them.

Inflation and the Property Market in Venezuela for Residential and Commercial Real Estate

James Smith: Yeah. Yeah. And they want to buy properties for dollars, paying in cash. You have realtors you work with and real estate or lawyers who know the real estate law in Venezuela who can advise those type of people, the investors.

Andres Villarroel: Yes. Well, but the issue is that bureaucracy is dreadful. It's something that they [the foreign investor] have to understand, depending on their nationality, and what they're trying to accomplish here in the country. So, bureaucracy is going to be dreadful. The other thing is, Venezuela is not cheap. Another thing that you have to know if you're from abroad, Venezuela, if you're trying to look for a bargain, Venezuela is not going to be it. I mean, it's not [sky high prices] like Dubai or Switzerland, anything like that, or Singapore [and Hong Kong]. But it's not going to be dirt cheap.

James Smith: Yeah, certainly not in the prime neighborhoods of Caracas where, you know, people are quite affluent…

Andres Villarroel: Also, of course, depends on the on the structure of your particular basket of goods and services. Energy is cheaper. A couple of things are cheaper, but consumer spending is going to be more expensive than most people think.

James Smith: Because of the cost of imports, like in Argentina, for example, where, you know, the food was cheaper before the [Argentine peso] devaluation, but now that all the wages are going up since Milei has implemented the shock therapy, suddenly you see on X/Twitter that people are saying that Buenos Aires was one of the, let's say the cheapest capitals in the world. I mean, in terms of beautiful capitals, I'm not talking about places [in Africa] that are in civil war or something like that, but I'm just saying in terms of you know, developed countries, Argentina was one of the cheapest places, but now overnight, seemingly it's become one of the more expensive places to be [in the world]. But that’s if you aspire to what we would call an upper middle class to semi-affluent American lifestyle, right? Where you have a lot of imported goods, then of course, Argentina is quite expensive right now. And then it would be similar in Caracas is what you're saying. Like if you want a certain standard of living that you had say in Manhattan or in Los Angeles, you and you come to Caracas and you want that similar lifestyle, it's going to cost you.

Andres Villarroel: Yes. Now, there are nice areas outside of Caracas, that it's going to cost you cents on the dollar [compared to the priciest luxury Caracas real estate costs]. The east side of town, the nicest areas of Caracas, these are going to be the most expensive places to live here in the country. But if you want something near the beach [in the Caribbean], there are options cents on the dollar compared to Caracas.

Now, something I want to talk about the real estate is that we have indeed cheap properties, but they're not as cheap [as they used to be a few years ago]. And the nice properties in the nice areas that you want to invest, because, I mean, if you're investing in real estate, you want to invest in the best areas [in the country].

James Smith: Of course.

Andres Villarroel: They're not going to be cheap. I mean, there are properties that go for $50,000, $100,000, half a million, two million dollars. Actually, there's a property that is like $10 million. There's a $10 million property here. It's in Caracas, in Caracas. But it's, of course, it is something spectacular, no?

James Smith: Yeah, it's like a hacienda. It's like a full spread [of several acres].

Andres Villarroel: Yeah, very well located.

James Smith: Like if you were buying a home in the Hollywood Hills, you know, it would be the same thing [overlooking the city].

Andres Villarroel: Yeah, something of that nature. So, what I will suggest, if you're truly investing, get a nice property on a nice area, depending if it's commercial or residential. And if you're speculating, well, that's another thing. And always do it with money that you are not counting to lose. But the other thing is that always, if you get a decent area, Let's say you cannot liquidate on the next few years your investing, your position, but at least you can cash flow such property. That's the good thing about getting a good location.

James Smith: Yeah, exactly. You can get good cash flow. You can get command decent rents or, you know, that almost cover or more than cover property. The basic upkeep and mortgage, whatever. Now, I do have to ask this. As in the rest of Latin America, is it pretty much straight up a cash property market? Or is there any kind of mortgage structure, at least for commercial properties, that you can demonstrate certain, at least from the prior ownership, had cash flow, had tenants, businesses operating there?

Like, say, if you wanted to buy, I don't know, a Caracas strip mall, for example. You know, where there are a number of small businesses, there are some restaurants, whatever. You have tenants, you have customer traffic. Maybe there's a gym, you know, something like that. What would that look like? That would probably be a bit more complicated, I would imagine, than just buying a residential property, a condo or a townhouse for cash. Right. But how does that look, you think, in Caracas? Do you know people who deal in CRE, who deal in those type of properties in Caracas?

Andres Villarroel: Well, first, I have to say there is the mortgage market in Venezuela is pretty much non-existent. And if you are [an] international [investor], you're not going to have access to those. And there is some financing that is very short, like six months or a couple of years and with a high interest rate. So, I wouldn't recommend it.

James Smith: Yeah, it's obviously going to be very high interest just to deal with the inflation factor.

Andres Villarroel: No, no, but it's not for inflation. It's because there is not any liquidity in the credit market. The credit market overall for the whole economy is 2% of GDP. So, don't count on getting financing. That's one thing. The other thing is that depending commercial or residential, that's up to you. But the very good, what I consider good commercial real estate is going to be expensive. In the east side of Caracas, it's very, very expensive. Thousands of dollars per square meter.

James Smith: Yeah, yeah, of course. Any real estate, commercial real estate that's in a high traffic, affluent area is going to be very expensive, as it would be in any developed country.

Okay. Well, let's get to, let's say, the fun topic. Well, I did have one more question I wanted to get to, which is regarding payments, how people get paid. Is it still Venezuela, like Argentina, like most of Latin America, still appears to be primarily a cash economy country? You have a significant, very high percentage of the population that is unbanked. Right. I don't know.

I've seen the statistics even in Mexico, which has a border with the United States. Obviously, American banks have been active there for decades. My understanding is something like 45 to 50 percent of the Mexican population, almost half the population is unbanked. Would it be similar to Venezuela, even more so because of the economic crisis that was so severe as recently, as you said, in twenty seventeen, where you personally thought about emigrating out of the country for better opportunities?

Andres Villarroel: Well, first regarding banking, actually in Venezuela, the average Venezuelan is way ahead of the curve compared to the average Latin American citizen. The percentage of people that own bank accounts and the kind of stuff actually is very high by Latin American standards.

James Smith: Because you have a state sponsored bank, basically, sort of like in Russia, they have Sberbank, which is, I think, state owned and a couple other state-owned banks [like VTB and Bank Rossiya]. Is that that issue everybody a card if they want one, basically, is that?

Payments Are Usually Painless in Venezuela if You Have Zelle and USD in Small Bills

Andres Villarroel: Not exactly. The Venezuelan government have a few banks. And yes, they are juggernauts. The big one is Banco de Venezuela. And yes, basically something like that. But we have a bunch of private banks. I mean, that's not an issue here [people being unbanked]. And the other issue is that regarding payments, I mean, if you come from abroad, don't sweat it.

Bring your check card, debit card, Visa, MasterCard, that kind of stuff. Sometimes they work, sometimes they don't. But most of the time, I believe they're going to work.

James Smith: You can get dollars out of the ATMs, in other words, right?

Andres Villarroel: No, you cannot do that. [Only Bolivars are issued from ATMs].

James Smith: You can only get Bolivars, but I'm saying...

Andres Villarroel: No, even the bolivar is a little bit tricky. You can get [bolivars], but it's a little bit tricky [inaudible] ….But don't worry. Every time you go to a restaurant or a [store]…

James Smith: I mean, you can pay with MasterCard and Visa in restaurants in nice places, but I'm just saying when you get out into the countryside, you want to have cash, like small denomination dollars are accepted. Like if you go to a fruit stand like in El Salvador, they take small bills, right? Maybe fives, tens?

Andres Villarroel: Yes, they can do it. Of course, even for bigger [denomination] bills they also can take. Venezuelans are very flexible in that regard, regarding the payment methods trying to bring cash especially low denomination bills. Bring a handful of you know check cards and credit cards and in some cases you're going to be able to pay using crypto. If you're an American--and this is going to be a lifesaver and it's going to make your life easy here--if you have Zelle, you know, Zelle the banking application, right? If you're an American or you have a U.S. bank account and try to activate Zelle because it's very useful here in this country.

James Smith: Oh, you're talking about activating your [Venezuelan] SIM card [for payment using your smartphone purposes]?

Andres Villarroel: I mean. Zelle is a banking application for U.S. banking.

James Smith: Oh, Zelle, I'm sorry, Z-E-L-L-E.

Andres Villarroel: Yes.

James Smith: It works in Venezuela, too. You can send Zelle payments to people?

Andres Villarroel: It works excellent.

James Smith: That's great to hear. That's convenient for Americans, obviously. Wells Fargo or with any of the major banks [JP Morgan Chase, Bank of America], pretty much all the major banks use Zelle in the United States, so you can send to people in Venezuela, for, say, to pay your, I don't know, your housekeeper, your maid, whoever, you can pay [them via Zelle]. If they have a Venezuelan bank account, they can receive Zelle payments?

Andres Villarroel: And the other thing is, for instance, the housekeeper is not going to have Zelle, most likely.

James Smith: Most likely [you’ll pay them in] cash, yes.

Andres Villarroel: but a lot of people who do have Zelle they're going to help you in order to exchange and give you the [dollar bills] money and that kind of stuff, so I mean it's going to be very handy if you come from abroad now if you come from Europe and you bring a bunch of euros and a couple of cash [envelopes], you're gonna be…you should be fine. But with Zelle as you know, it's very convenient [not having to carry large sums of dollars in cash when you come to Venezuela].

Will Russians and Chinese Be Coming to Venezuela in Greater Numbers Post BRICS+ Membership?

James Smith: I see. That's very good and convenient to hear for banking and payments, because that's one of the things that people [ask about to begin with]. Do you think with Venezuela, and this is one of the next to last question I'll ask, do you think that Venezuela is, if it does indeed enter the BRICS Plus with Colombia, that you could see more maybe Yandex Pay or WePay, some of these Russian or Chinese platforms, maybe even Yandex Taxi, I don't know, could make its debut in Venezuela?

Obviously, we've been mainly talking about the gringo market and people from the United States or Canada coming to Venezuela needing your services. But we do have to say that if there's already visa-free, I believe, travel between Venezuela and Russia, if I'm not mistaken, and probably China will be next, if that's not already in place [visa free travel between China and Venezuela], that you could see more Russian and Chinese businessmen coming to Venezuela…

Andres Villarroel: They [Russians and Chinese] already are here [in Venezuela].

James Smith: Yeah, they're already here. I mean, in greater numbers, even particularly in getting more active in the real estate market, Russians buying properties, for example, seeing a lot of Venezuelan real estate is at least slightly off the beaten path of Caracas and the most luxurious beach resorts as bargains that they could snatch up.

Do you think that we will start to see some of those Russian or Chinese platforms [get adopted by Venezuelans]? I don't know, WeChat's probably not very popular in Latin America at all, I would imagine, but possibly WePay [payments via the TenCent app] or Yandex Pay would be?

Could Chinese or Russian Apps Such as AliPay and YandexPay/Yandex Taxi Succeed in Venezuela?

Andres Villarroel: I don't know because it depends on the adoption of the Venezuelans. And Venezuelans love the USD. And I don't see at this moment how they can trust a platform like Yandex or WeChat using both...

James Smith: Or even Alipay, for AliExpress [China’s Amazon.com]?

Andres Villarroel: Exactly. Regarding Venezuelans using Renminbi or the Ruble, I don't see that happening. I see a lot of Chinese, both Chinese and Russian... adoption here, but not on the currency level, that's you know that's only for the [governments], that's sacred for the average Venezuelan…

James Smith: Yeah, I mean Venezuelans are going to keep their savings in dollars, until the dollar [dies], Or maybe euros if they have to switch from dollars to euros, in case the dollar keeps going down maybe they will most likely probably given the… liquidity and probably the presence of Spanish banks like Santander, they have some presence in [upscale areas of] Caracas I imagine…

Andres Villarroel: Actually, the adoption here is way more for the dollar rather than the euro. So, I don't see, unless something [bad]…I'm talking hyperinflation [happens] in the United States, something of that [worst case monetary] scenario. If that doesn't happen, I see the Venezuelans still using the dollars regardless.

Does the U.S. Need Venezuela Now That It’s Semi-Banned Russian Crude Oil?

James Smith: Yeah, and let me ask you just one more [geoeconomics] question, and then we'll get to the final question[s in a moment]. Regarding the upcoming elections in the United States, I mean, it seems like as we opened the program with this note that, despite the sanctions that were implemented in 2015, that was during the Obama years, even before Trump took office, that there's basically been a kind of quiet U.S.-Venezuela détente going on between Caracas and Washington, regardless of administration[s], because number one, because the U.S. needs the heavy sour crude [oil], because the Canadian production [in Alberta] is going down. And the alternative is importing oil from Russia or, you know, by way of India from the middlemen in India who are refining the Russian crude oil for the European market.

But it seems like there's this detente that's going on and things are getting a little bit better between Washington and Caracas and you expect that trend to continue regardless of who wins the election, whether it's Biden or Trump. It seems likely, given that Trump's a more pragmatic businessman. And in general, I see, let's say, the green shoots in the Republican Party in particular, a greater not only sensitivity, obviously desire to woo the Latino vote, because that's the only way the GOP can remain a national party and not become a regional party, but also more broadly, maybe you know, the open admiration for President Nayib Bukele in El Salvador and seeing him as, a real champion of freedom in the hemisphere.

And now with Javier Milei in Argentina, that do you think that this idea of a Latin American renaissance of, you know, maybe Republicans becoming more just overall friendly with Latin America and more knowledgeable about it, could benefit Venezuela in in the future that that we could see maybe even you know probably not a president trump coming to Caracas obviously but that we could see a continuation of this thought even if trump gets in right that the relationship can continue to improve and you could see you know more trump supporting type businessmen going down the Caracas obviously some of them single uh in the future in the near future that this trend will continue

Andres Villarroel: OK, well, with the Trump administration is going to be on the political side of the speech, but we see on the news is going to be more harsh, of course, between it's going to be a back and forth the first few months and the sanctions are going to be kept in place. However, Trump on the Trump administration, hypothetical Trump administration in the future. will most likely on the background do some deals, cut some licenses to Chevron, maybe other U.S. multinationals, maybe some European multinationals. And that's pretty much what I see with Trump in Latin America. And I'm talking in Venezuela. Now regarding this, right, let's say libertarian movement around I mean I wouldn't say I wouldn't call it libertarian because I don't know how much libertarian Bukele is and Milei is not acting as libertarian as I thought…

On Javier Milei and Nayib Bukele from Andres’ Perspective

James Smith: It's more traditional shock therapy, but he's just taking it to the next level in terms of the speed with which he's doing it, right?

Andres Villarroel: Yes but I mean a few things that I don't like about I that I don't like about Milei, so I don't, I mean, of course, [he’s] better than the Peronistas. No, I have to say that. But I don't trust that much Milei, especially for the people that surround, because he calls La Casta, you know, the big guys, you know, the elites of Argentina, but he's also playing ball with them and the economy minister is this particular man that was already the economy minister during Macri's administration, Caputo.

Now, of course, Milei is de facto the economy minister of Argentina and Caputo is just, the place holder. But still, there are a few things about harmonies with Argentina. I don't see how much it's going to work.

Of course, people like Milei and Bukele, more than being libertarian or right-wing, they are results-driven. Because here's the issue about the right-wing conservatives in Latin America. I'm talking about the politicians here.

James Smith: Yes.

Andres Villarroel: They act, they are populist as well, and they act to the same degree. They don't do squat, and the only thing is they are more friends with the United States or [alternatively] the left-leaning governments [in Venezuela, Colombia, and Nicaragua]. But afterwards, they still [leave behind] high taxes, corruption, bureaucracy, and these kinds of [failures]s. So, the right-wing, quote-unquote, politicians, before Milei and Bukele, have been proven [highly] unsuccessful [in reforming LatAm economies and societies]. People like [Miguel Juan Sebastian] Piñera in Chile or [Mauricio] Macri in Argentina or [Ivan] Duque [Marquez] in Colombia. I mean, guys that are just or Peña Nieto in Mexico. These guys, I mean, they are pretty much a nothing-burger. And now you have these people like Bukele and Milei who are...

James Smith: Right. There's been this pattern in Latin America, not to interrupt, but of just kind of [a pendulum of elections] swinging back and forth from the Right to the Left and sort of not establishing, let's say, an equilibrium [for the middle class] because the Right shock therapy fails [in Argentina or other Latin American countries], and then the Left comes in and promises...

Andres Villarroel: Sometimes they don't even try it. They don't even try the shock therapy…

James Smith: Right.

On Latin America Escaping Populist/Shock Therapy Pendulum Swings to the Left and Bureaucratic Inertia Development Traps

Andres Villarroel: They are just populists that, they say they are Latin American right-wing conservatives and so they usually have a better relationship with the United States, and that's it. But in practice, you still [suffer under] high taxes. I mean, the same economic model that the Left. So...

James Smith: Right. They don't do enough to clear out the bureaucracy. The bureaucracy just kind of outlasts them [the reformist politicians], which is very similar to has some loose similarities as the United States’ politically, I would argue, becomes more Latin American-style, because we have higher inequality here. We have more [dollar] inflation [making our people poorer].

We have more, let's say, you don't call them no-go zones, but we have more, let's say, bad [crime-ridden] areas that are not areas or the part[s] of the country you necessarily want to be in [inner city Philadelphia or Los Angeles with their large homeless populations], not the safest places and so forth. So you get more Latin American-style populism and more Latin American-style politics [of inflation-fueled inequality and middle class decline].

And the best way I think to understand Trump, you know, the crazy left calls him Trump/Hitler and all this nonsense, because he's basically a typical Latin American politician. That is the best way, I think to interpret Trump in that, he’s very much populist. It's very much, what was the first thing Trump did when he came in? He rolled out the big tax cuts, the Tax Cuts Jobs Act, whatever, which had some good points, but it also had a lot of, not so good points. Overall, it was kind of a wash.

But the main point I wanted to make was the similarity between Trump and many of these Latin American populist right-wing leaders. And that so-called ‘right wing’ is well, number one, they have extremely good or close relations with Israel, which Milei does have by Latin American standards [considering the Middle East is far away and LatAm is not directly involved in arming Israel], exceptionally close and also…that the [Washington or LatAm capital-entrenched] bureaucracy tries to outlast them, the so-called deep state, if you will, kind of just overwhelms [the Trump Administration or a second Trump White House if it ever comes to pass].

And Trump, it seemed like his administration, even from day one [in January 2017], was literally under siege from the so-called deep state. They got rid of his top national security advisor, General [Michael] Flynn. They created a scandal over his [General Flynn’s phone] conversation with a Russian ambassador that was totally recorded by FBI, CIA, whoever NSA. Everybody was listening who needed to listen to it! And they tried to create a scandal out of it, like it was some kind of treasonous act to have a [legitimate] conversation as an incoming national security adviser with a Russian ambassador. [It was a] completely nonsensical scandal. And yet, Milei is similarly, he's moving so fast in Argentina, I think partially number one, because he's anticipating a lot of backlash from the bureaucrats and from all the, let's say entrenched [government-constituency] groups. But also there, there is that, that American factor in the background, in terms of not only is he getting closer to, SouthCom to the Pentagon [in addition to the Israelis], you know, the U.S. command for South America.

Like he just invited the, the lady general who's the commander of the SouthCom, U.S. Southern Command to Argentina and he's talking about kicking the Chinese out of this so-called base they have, which isn't [for Chinese soldiers]. Really it's hard to say if it's really a Chinese military base or is this some sort of so-called scientific research station [for visiting Chinese scientists] where they've got [HAARP] antennas or something you know, [more] nefarious is supposedly going on there [with signals intelligence gathering for the People’s Liberation Army in the Southern Cone]. But also the gas--the energy angle of Argentina is very important right?

James Smith: That's coming on because you have this enormous shale gas resource in the Vaca de Muerte, but you don't have any pipelines to get it out. [The natural gas] it's kind of stuck, if you will, right? And you also have on the green energy side, you know, Millei is meeting with Elon Musk and he's, you know, trying to, maybe there's talk of setting up a Tesla factory for South America, right? Because the mothe load of lithium is the giant lithium resource, it’s right there in Bolivia across the border. So just your thoughts on that, I guess.

Where does Venezuela fit into this sort of, let's say, Rightward libertarian trend in Latin America? And is maybe a like I said, positive. Let's say positive changes from Washington's perspective are those possible in Venezuela?

Be Careful About Being Outspokenly Libertarian as a Foreigner Coming to Venezuela

Andres Villarroel: Well, first and foremost, I have to say that recently the Venezuelan government signed a bill in Congress that is an anti-fascist law. So basically, you are being man of talking about libertarian and Right-wing politics.

James Smith: It's not a good idea to come to Venezuela preaching that [under this Maduro government].

Andres Villarroel: Exactly.

James Smith: Even as a gringo, you might just be shown to the airport and sent on your way.

Andres Villarroel: Well, if you're lucky. I mean, it's not to get scared. It's just some scare tactic against the [Venezuelan] opposition leaders that can stop. It's not for the average citizen, but still, you know, be a little bit careful [about political activism]. You know, I'm going to mention something, and this is going to be very practical for Venezuela. These are the things that are going to get you in trouble in Venezuela, starting with the paperwork…

James Smith: Please don't [do these things if you go to Venezuela, folks].

Don’t Do Drugs Kids

Andres Villarroel: Have your paperwork. Please no drugs. It's not going to get you anywhere, any place in the world.

James Smith: Well, yeah. Be drug-free, yeah.

Andres Villarroel: Yes, because Venezuela is not like Europe [Amsterdam] or some places in Latin America or some places in North America, where you see high consumption of drugs. Venezuelans are kind of conservative in that regard, regarding drugs.

James Smith: I mean, it makes sense. You [Venezuelans] have a border with Colombia, right? Peru and Colombia are the two top cocaine growers in the world, yeah.

Andres Villarroel: Yes, but they are not consumers.

James Smith: Exactly. They [the Mexican drug cartels] don't get high on their own supply.

Andres Villarroel: Okay, but the main issue is trying [drugs], because something that can get you in trouble, you know, try to avoid, and if you are a consumer [of recreational substances], I don't judge you, but something that can get you in trouble, by the way.

So, I will discourage you to do it here in the country. Also, politics, something that, I mean, I'm talking, you can talk about your local politician, or if you're Canadian, you can talk crap about Trudeau or something like that.

James Smith: Nobody [in LatAm] cares if you hate your own government [back home]!

Andres Villarroel: Yeah, nobody will care. It's just trying to, you know, people will talk crap.

James Smith: Not a great idea to proselytize libertarianism on the ground in Venezuela. Yes. Not a good idea under this government.

Andres Villarroel: Now, something I have to say is the Venezuelan government has become more pragmatic over the past six years since 2018, loosely. I mean, on politics, they are far Leftist. And that's it.

James Smith: Yeah.

Andres Villarroel: But in economics, they have been acting more center-Left.

On How Libertarians React to Red China Getting Stuff Done While the U.S. Declines

James Smith: Maybe they read that famous phrase by the Little Helmsman, Deng Xiaoping, right? That's the funny thing about China, right? It's still the largest communist party in the world [the Communist Party of China or Chinese Communist Party with almost 100 million party members], but yet, you know, the idol is not so much Mao, as Deng. [Deng famously said] “It doesn't matter what color the cat is, if it's black or white, as long as it catches the mice.” And, you know, I quoted that to some Chinese I was talking to once, some Chinese think tankers [in Beijing], and they said, yes, yes, that's the quote.

And maybe Venezuela is starting to and this is, by the way, a certain contradiction for the libertarians [in LatAm], because they're all about being anti-statist and all this stuff. But they realize that the Chinese just get shit done. They get shit built. This is something that – it creates a certain – how do I put it? Cognitive dissonance in the libertarian mind when they look at China [although Javier Milei in Argentina may be the exception].

And then they [the rest of the world] look[s] at the state of American [Democrat-run] cities where we have supposedly all this freedom. And then Tucker Carlson, as you may be aware, went to Moscow. And he showed the beautiful Moscow Metro, which was built, obviously, by the Soviet Union, although it's been expanded since Russian independence [in 1991]. And [former Daily Show host] Jon Stewart could only reply, well, all the filth and homeless people and schizophrenics running around and people occasionally knifing each other, attacking each other on the New York subway…this is the…plus all the, you know, the rats and the water overflowing [into the stations] and everything.

That's the price we Americans pay for freedom! You know, that's the price of freedom, is the disorder and the filth. And so, what you're having right now in the whole libertarian Right, I would say, is this sort of clash [in thinking] between order and freedom, the desire for freedom and the desire for order. Right?

And I think what you're seeing in Venezuela, probably with the joining the BRICS+ is, you know, are the Chinese going to come in and start really, you know, building out infrastructure? I mean, I saw a video the other day from Nigeria, Lagos, the capital right?

Nigeria is not a rich country per capita, right? But certainly, one with enormous, like Venezuela, enormous oil resources and very capable entrepreneurial people? And in this video, there was a beautiful brand-new Chinese built tram, you know, totally clean and running on time. You know, nobody was, there weren't any vendors, you know, blocking the tram tracks like you see in some African countries where they're like literally right next to the [commuter] railroad tracks.

So, it was do you think we're going to see that in Venezuela? We're going to see the Chinese come in and start building out the infrastructure. And that's going to, in turn, attract the more green go investor because they're going to say, well, you know, the BRICS+ are getting shit done. And here in the US, in terms of infrastructure, you know, we're stagnant. We're going to spend one hundred billion dollars to build one high speed rail line, you know, maybe by 2040 in California. Right.

On a Potential Resurgence of Chinese FDI in Venezuela After Caracas Joins BRICS+

Andres Villarroel: Well, first, Venezuela is not foreign to Chinese investing. And that happened, almost 20 years ago it’s been since they started. There were lackluster results and some corruption and mismanagement.

James Smith: And that happened in Nicaragua, too. Some Chinese company got the concession to build the Nicaragua Canal [through Lake Nicaragua in the mid-2000s and never built it].

Andres Villarroel: No, but we have a bunch of joint ventures. Yeah, but we have a lot of joint ventures here between the Chinese and Venezuelan [governments]. Since the past six, seven years, Chinese authorities have been a little bit discouraged to invest in Venezuela, but they are kind of building a bond yet again since last year. And now the good thing about the BRICS is something that I would like, one of the reasons why I would like to see Venezuela join the BRICS, is because these superpowers from the east side [Eurasian axis], let's say, the [Eastern Hemi]sphere, and you're going to see, because they don't care about politics, they care about results. Russia, China, Brazil.

And they would say like, “Okay, regarding politics, do whatever you want. But we need results. We need effectiveness.” And that's what they are trying. I mean, it's hard for the Venezuelan government to do so. They are kind of getting there. But I think we're going to see good results in that particular regard over the next five, ten years.

Why Are Venezuelan Women So Beautiful?

James Smith: that's a great answer Andres and I appreciate you bearing with me because I didn't mean to go off on tangents like I did in the very first ExitStrategy[.world] webcast, because you your answers have been very I would say thorough but also concise. And this this is the last question, so I wanted to ask you the final question which I saved for last…which is, what do you think is in the water that makes the Venezuelan women so beautiful? Out of all the women in Latin America, why do they stand out? Why have you had seven Venezuelan Miss Universe [beauty pageant] winners?

Andres Villarroel: Well, three things. The first thing, we have a true melting pot here. Unlike the US, I mean, you see New York City and you say that's a melting pot. But however, in the United States, I mean, I'm not saying in the United States everyone lives by themselves, but usually, you know, the WASP, the white Caucasian guys for one hand, and the Latinos for other hand, and the Asians for the other place.

James Smith: That’s true.

Andres Villarroel: Meanwhile, the Venezuelan society always, this is historically has been more integrated. They have mingled a lot and combined good genetics [from Spanish settlers plus Italian and Lebanese immigrants plus indigenous peoples] and that's why they have good genetics. That's one thing and the second thing is how people blend with one another, and the third thing is probably the most important thing is--that Venezuelan little girls, they grow up you know watching the beauty pageants, like it's the Super Bowl. And ssince they're very young, they go into fashion and modeling and makeup and that kind of [feminine] stuff. The things that you need to know in order to become [a beauty pageant contestant or model].

James Smith: So, they cultivate a culture of beauty.

Andres Villarroel: Yeah.

James Smith: And this was before Instagram and TikTok kind of made some Western women kind of obsessed with it. You know, all the self-care routines and everything. And they take good care of themselves physically and in terms of their skin care routine and everything.

Andres Villarroel: Yeah, and the makeup, they're excellent on [applying] that. Now, the rest of the world is starting to catch up. I remember 10, 15 years ago when I used to, you know, travel outside Venezuela, you know, I saw the level drop significantly regarding the makeup and the [beauty of] average women and that kind of stuff. Something that you took for granted here in the country.

James Smith: Yeah. Well, we are coming up on [finishing] time. Andres, final points about...well, first of all, let me plug the website one more time. It's www.VenezuelaInsider.com. Is that correct?

Andres Villarroel: Correct.

www.VenezuelaInsider.com Newsletter is Just $5/month

James Smith: And that's where they can contact you on your contact form. And also, the Patreon, don't forget to subscribe to Andres' Patreon if you're serious about visiting Venezuela in the near future or investing there, especially if you want to invest there. Follow Andres' Patreon, subscribe, sign up. I think it's $8 a month or $10?

Andres Villarroel: No, the newsletter is just $5 a month.

James Smith: Okay, $5 a month. Yeah, thank you. $5 a month for the Venezuela Insider newsletter. You get it twice a week in your inbox. So that's pertinent, really timely information about what's really going on in the Bolivarian Republic of Venezuela, and in Venezuelan society and economy so everything you need to know as a newcomer or as somebody who would be coming there to live to invest as a digital nomad.

Closing Thoughts and Invitation to Come Back to the Program in Late Autumn 2024

James Smith: Andres it's been great to have you on the program, wanted to thank you again for your time. Thank you for going on overdrive [past an hour and fifteen minutes recording time]. Like I said, we had the delayed start on the Rumble side of this YouTube stream, and we've been streaming to five platforms, YouTube, Twitch, which is a gaming platform, believe it or not, X, and the Rumble and the Vimeo account for the first time today. We're using our Vimeo account for [the ESW] program.

James Smith: So thank you very much for your time, Andres.

Andres Villarroel: Thank you.

James Smith: We'll hopefully have you back on in a few months and talk about what's changing in your country, because there's so many things that are going on, particularly with the BRICS+. I'd like to have you back on maybe this Fall [2024] when it's confirmed. And I think that will be a very exciting time for your countrymen and for the future of Venezuela. So, thank you very much, Andres.

Andres Villarroel: Thank you for having me.

James Smith: All right. Bye-bye now.