Last week, we discussed Venezuela’s economic and political situations. Part II begins with a discussion on migration with a focus on emigrant flows. We include an analysis of the problems caused by migration followed by an examination of the possible end to this crisis and the broader geopolitical issues. As always, we will conclude with potential market ramifications.
The total number of Venezuelans that live abroad is estimated to be between 4.0 and 4.5 million, roughly 13.5% of the country’s total population, suggesting that Venezuela has seen steady outflows due to the turmoil that Chavez’s revolution brought to the economy and political system. Since 2015, the International Organization for Migration estimates that 2.3 million Venezuelans have migrated, representing about 7% of the population. Surveys suggest that 54% of remaining upper income Venezuelans want to leave, while 43% of lower income citizens have the same goal.
In 2015, about 700,000 Venezuelans migrated, of which 73% arrived in the U.S., Canada or Europe. Their destinations would suggest these were probably upper income emigrants. Last year, 1.64 million migrated, with 53% staying in South America.
Currently, the largest contingent is in Colombia, which is holding about 870,000 Venezuelan citizens. This number represents about 1.7% of Colombia’s population. This jump is a significant shock for Colombia. In 2010, a mere 100,000 foreigners lived in the country. The current influx is the largest inward migration in the country’s history and the massive migration is straining Colombia’s resources. In response, the U.S. has deployed the USNS Comfort to Colombia to assist in managing the refugees.
Brazil has also seen a massive inflow of immigrants. It is estimated that up to 50,000 Venezuelans have moved to Brazil. To deal with the inflows, President Temer of Brazil has declared a “state of vulnerability” in the border region of Rofaima and has increased border protection.
Peru has also seen inflows. In 2015, the country had a mere 433 requests for refugee status; over the following two years, the numbers jumped to around 34,000. This year, the average is 14,000 per month. At the end of August, Peruvian authorities calculated that 400,000 Venezuelans are now living in the country.
Ecuador has become a transit state for Venezuelans fleeing their country. Year to date, through August, authorities there indicated that about 641,000 Venezuelans have entered Ecuador. Of that cohort, about 526,000 have left for other places, while roughly 115,000 remain. Ecuador has concluded it doesn’t have the resources to cope with this influx. For Venezuelans with economic resources, the government will allow them to stay for up to two years. There are reports the government has organized bus trips for Venezuelan migrants that deposit them on the Peruvian frontier.