The Crisis No One is Talking About

September 2020 – 9 min read
The migration patterns stemming from Venezuela’s economic collapse provide key ESG insights, especially for Colombia and other neighboring countries, and particularly when compared to the case of Syrian refugees in Turkey.

Facts

  • From 2015 to the end of 2019, 4.6 million Venezuelans—or 16% of the population—fled the country, and according to some estimates that number could reach 6.5 million by December 2020. For comparison, 4.8 million Syrians left their country in 2015 and 5.5 million—or 25% of the population—fled between 2011 and 2019.
  • The international community has spent $605 million to support Venezuelan refugees and internally displaced people. This translates to $131 per Venezuelan refugee, far less than the $3,400 spent per Syrian refugee.
  • Approximately 2 million Venezuelans are living in other South American countries as immigrants without refugee status or asylum claims.
  • Most refugees exit through Paraguachon—a city on the border that has been described as chaotic and uncontrolled, with reports of smugglers exploiting forced migrants daily. Refugees with the direst needs are protected in the Maicao UNHCR camp, while many others go to squatter camps by the border.

The current refugee crisis in Venezuela is unique in that it is not a result of conventional war or conflict. Rather, it has been driven by worsening economic conditions. Since 2013, the Venezuelan economy has contracted by 65%, deterioration many believe was avoidable. In roughly the same period, the undernourishment rate has quadrupled and the U.N. estimates that approximately 300,000 people’s lives have been put at risk due to limited access to medical treatment. The country has also been plagued by water and electricity shortages, while violence has skyrocketed. These severe humanitarian impacts have led droves of Venezuelans to flee.
 

Role of Neighboring Countries

Venezuela’s neighboring countries—namely in Latin and South America as well as the Caribbean—have taken in the majority of these refugees. The Colombian government hosts the largest number, with over 1.6 million living there in 2019, making up 3% of Colombia’s total population. The country has launched over $230 million in credit lines for infrastructure and private investment in areas with high refugee density. Peru, Ecuador and Chile have also taken in refugees—with Peru taking in 860,000 and both Ecuador and Chile taking in more than 370,000 each. However, these three countries imposed visa restrictions on Venezuelans in 2019, leading to an increase in undocumented migration and more migrants fleeing to Colombia.

Want to read the full article?

View PDF

Any forecasts in this material are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Investment involves risk. The value of any investments and any income generated may go down as well as up and is not guaranteed by Barings or any other person. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Any investment results, portfolio compositions and or examples set forth in this material are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this material No representation is made that an investment will be profitable or will not incur losses. Where appropriate, changes in the currency exchange rates may affect the value of investments. Prospective investors should read the offering documents, if applicable, for the details and specific risk factors of any Fund/Strategy discussed in this material.

Barings is the brand name for the worldwide asset management and associated businesses of Barings LLC and its global affiliates. Barings Securities LLC, Barings (U.K.) Limited, Barings Global Advisers Limited, Barings Australia Pty Ltd, Barings Japan Limited, Baring Asset Management Limited, Baring International Investment Limited, Baring Fund Managers Limited, Baring International Fund Managers (Ireland) Limited, Baring Asset Management (Asia) Limited, Baring SICE (Taiwan) Limited, Baring Asset Management Switzerland Sarl, and Baring Asset Management Korea Limited each are affiliated financial service companies owned by Barings LLC (each, individually, an “Affiliate”).

NO OFFER: The material is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service in any jurisdiction. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This material is not, and must not be treated as, investment advice, an investment recommendation, investment research, or a recommendation about the suitability or appropriateness of any security, commodity, investment, or particular investment strategy, and must not be construed as a projection or prediction.

Unless otherwise mentioned, the views contained in this material are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Individual portfolio management teams may hold different views than the views expressed herein and may make different investment decisions for different clients. Parts of this material may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this material is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information.

Any service, security, investment or product outlined in this material may not be suitable for a prospective investor or available in their jurisdiction. Copyright in this material is owned by Barings. Information in this material may be used for your own personal use, but may not be altered, reproduced or distributed without Barings’ consent.