Colombia has contacted international lending agencies about devising a financial rescue plan worth up to $60 billion for neighbouring Venezuela if President Nicholas Maduro leaves power, Colombia’s finance minister said in an interview on Friday.
Hyperinflation and severe recession in oil-rich Venezuela are prompting Venezuelans to flee over the border to Colombia, now about 2,000 a day, Colombian Finance Minister Mauricio Cardenas said.
Officials the International Monetary Fund, Inter-American Development Bank and World Bank are just beginning to understand the impact of the exodus, he said.
“What happens when Maduro falls? We should not improvise. There should be a plan because Venezuela will require financial support,” Cardenas said. He estimated Venezuela would need about $60 billion in loans under a new government and economic policies.
Colombia wants to participate in international lending to Venezuela and take a more direct role in providing financing to help Venezuela rebuild its economy.
“We as a government in Colombia are willing to be part, not just of that conversation and of that plan, but also to provide financing for that transition,” Cardenas said.
Colombia would benefit from a recovery in exports to Venezuela, he said. Cardenas said cross-border trade a decade ago was close to $7 billion a year.
Days are numbered
As the number of Venezuelans crossing the border increases, including unattended children who get free vaccinations and education, Colombia estimates it will need $30 million to build an assistance centre to give the migrants a temporary place to stay before deciding their next move.
Venezuela’s economy is suffering from hyperinflation, shortages in basic food and medicine and increasing lawlessness.
US economic sanctions on Venezuela could expand. Currently they cover individual members of Maduro’s government and a ban on buying new Venezuelan debt. Washington is considering restrictions on imports of Venezuelan crude oil and exports of US refined products to Venezuela.
The sanctions are meant to pressure Maduro over his restrictions on political opposition.
“We think the days of Maduro are numbered. The implosion of Venezuela’s economy is accelerating,” Cardenas said, reports Reuters.
Maduro, whose approval ratings are low, is seeking re-election in a vote that must be held by the end of April. US Secretary of State Rex Tillerson earlier this month raised the prospect that Venezuela's military could oust Maduro.