High Oil Revenues Don't Make Venezuela Low-Risk Country

Investors are rather losing confidence in Venezuela despite unprecedented high oil prices, which secures enough revenues to encourage economic growth.

The country risk, the benchmark measuring the difference between the yield of a US Treasury bond and Venezuelan debt titles ended at 4.40 percent last November 8. The index is significantly higher than that in Mexico (1.32 percent), Peru (1.69 percent), Colombia (1.90 percent), Brazil (2.05 percent) and Argentina (3.88 percent).

A low country risk perception is quite meaningful for developing countries, in order to get cheaper loans and attract foreign investments, which in turn is vital to create jobs and encourage strong economic growth.