Potential Hot Spots: Chinese Republic of Venezuela
4th December 2018
Government control in Venezuelan is collapsing along with the economy and much else. At the end of 2018 GDP is down to about a third of what it was in 2013. It cannot fall much further because Chinese cash and technical assistance is keeping some oil production going. This is done because over 90 percent of oil produced goes to China or Russia to repay debts that were specifically made to be repaid with Venezuelan oil. China could take all of the oil production (Venezuela is currently several million barrels behind in repaying this debt) but China is aware that Venezuela requires some income so that the key government employees and security forces can be fed and otherwise compensated for their loyalty and service and encouraged to remain where they are.
Venezuela is literally falling apart. Many areas are being depopulated because, so far, over ten percent of the 2014 population has left and opinion surveys indicate over two-thirds of Venezuelans want to leave. Many more would leave if they had the means to reach the border. Those Venezuelans with education, skills and a little money have largely gone. The middle class and entrepreneurs were the first to go because they could. For most Venezuelans that is not an option and is even less so with the economic decline and the collapse of everything, including public transit, especially in rural areas.