weighted score 2.6 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Venezuela
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Venezuela as a sourcing destination.
Labour cost competitiveness
7
Nominal wages extremely low in dollar terms. However, skilled labour has emigrated (8M displaced). Remaining workforce faces malnutrition and healthcare collapse. Productivity severely impaired.
Supply base depth
3
World's largest oil reserves but production collapsed to ~1M bpd. Mineral resources under illegal mining control. Manufacturing base effectively non-existent. Agricultural sector collapsed.
Logistics & infrastructure
2
Ports severely degraded. Power grid unreliable — endemic blackouts since 2019. Road network deteriorating. Telecommunications unreliable. Infrastructure incompatible with manufacturing.
Workforce skills
4
Brain drain has removed most skilled professionals. University system collapsed. Healthcare system non-functional affects worker capability. Education system degraded.
Scalability
3
No functioning manufacturing base to scale. Oil production requires billions in infrastructure investment. Power grid cannot support industrial operations. Institutional collapse prevents any scaling.
Ease of doing business
1
TI CPI 10/100. GDP contracted 80%. Property rights non-functional. Expropriation risk extreme. No rule of law. Sanctions prohibit most commercial engagement. 475% inflation.
Trade access & tariffs
1
Suspended from Mercosur. US/EU sanctions active. No functioning FTA framework. Banking system disconnected from international finance. Trade access effectively zero.
Sustainability baseline
1
Extensive oil industry environmental damage. Deforestation in Arco Minero mining areas. No environmental enforcement capacity. No ESG reporting framework. Humanitarian crisis dominates.
Innovation & IP
2
University system collapsed. No R&D capacity. INTEVEP (PdVSA research) non-functional. IP protection non-existent in practice. Technology base decades behind.
Quality standards
2
SENCAMER non-functional. No credible quality certification. Product quality impossible to verify institutionally. No functioning industrial standards framework.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage dynamics
- Nominal wages extremely low in dollar terms due to hyperinflation (475% in 2025). However, skilled labour has emigrated — 8 million citizens displaced. Remaining workforce lacks training and nutrition-related productivity losses are documented.
- Labour availability
- Population ~28M (down from ~30M). Working-age population severely depleted by emigration. Healthcare system collapse affects worker health and productivity. Education system degraded.
- Currency instability
- Bolivar effectively worthless. Dollarisation widespread but informal. No stable currency framework for commercial contracts. 475% inflation makes cost planning impossible.
- Practical access
- Sanctions and institutional collapse make labour cost irrelevant — no functioning commercial framework exists for most sourcing relationships.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Oil infrastructure
- PdVSA controls world's largest proven oil reserves (~300 billion barrels) but infrastructure in critical disrepair. Production collapsed from 3M+ bpd to ~1M bpd. Refineries operating at fraction of capacity. Heavy sour crude requires specialised processing.
- Mining sector
- Gold, diamonds, coltan, bauxite, and iron ore in Arco Minero region. Operations dominated by illegal artisanal mining controlled by criminal organisations and armed groups. No credible industrial-scale mining with governance standards.
- Port infrastructure
- Puerto Cabello and Maracaibo ports severely degraded. Container handling capacity diminished. Power outages affect port operations. Road network deteriorating without maintenance.
- Power grid
- Nationwide blackouts endemic since 2019. Guri Dam hydroelectric plant operating below capacity. Thermal generation insufficient. Power reliability incompatible with manufacturing operations.
Trade Access & Business Environment
Trade Access & Business Environment
- Mercosur status
- Venezuela suspended from Mercosur since 2017 for violation of democratic clause. No functioning regional trade agreement access. CAN (Andean Community) membership withdrawn in 2006.
- Sanctions barrier
- US OFAC sanctions on PdVSA, government officials, gold sector, and financial transactions. EU sanctions on individuals and arms. All sanctions remain in force. Selective US oil purchases under military operation framework.
- Business environment
- TI CPI 2025: 10/100 — near lowest globally. GDP contracted 80% since 2013. Property rights non-functional. Expropriation risk extreme. Judiciary non-independent. No rule of law for commercial disputes.
- Financial access
- Banking system disconnected from international finance. Correspondent banking relationships severed. Currency controls and hyperinflation prevent normal transactions. Dollarisation informal and unregulated.
Innovation, IP & Quality
Innovation, IP & Quality
- R&D capacity
- University system collapsed — faculty emigrated, equipment unmaintained, funding non-existent. No meaningful R&D capacity remains. PDVSA's in-house research capability (INTEVEP) non-functional.
- Technology access
- Technology imports constrained by sanctions and lack of foreign exchange. Equipment maintenance impossible — spare parts unavailable. Industrial technology base decades behind current standards.
- IP environment
- IP protection framework exists on paper but enforcement non-functional. No credible patent or trademark protection. Judicial system incapable of adjudicating IP disputes.
- Quality standards
- SENCAMER (national standards body) non-functional. No credible quality certification framework operating. Product quality impossible to verify through institutional channels.