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Venezuela development finance impact project – digital artifact 09 dec2015-


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In this digital artifact the current situation in Venezuela including economic factors as well as how the near future would looks like is enclosed. The content is based on on statistics, web-information and the author own view, trying to disclose the economic relation of a country though to be reach due to its oil reserves (world number 1) but discovered to be poor because of the investment plan for a sustainable development and other factors. The content is for the general public and for those with particular interested in current Venezuelan situation, as a representative example in the Latin-American region.

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Venezuela development finance impact project – digital artifact 09 dec2015-

  1. 1. Bolivarian Republic of Venezuela - Present and Uncertainties - Luis Rodriguez -09Dec2015- Donotcopyorreproducewithoutauthorpermission
  2. 2. Agenda - Venezuela - Domestic Public/Private Finance Public: Oil, Gasoline, taxes, future oil prices Private: Venezuelan Privatizations and impact - International Public Finance ODA investment and is declining - Conclusions and Comments Donotcopyorreproducewithoutauthorpermission
  3. 3. Some facts: *Atlantic Ocean *Close to Panama Channel, Pacific Ocean *Area: 916,445 km^2 *People: 33 Million *Official Language: Spanish *Main product: oil/gas Bolivarian Republic of Venezuela Donotcopyorreproducewithoutauthorpermission
  4. 4. Domestic Public/Private Finance Domestic Resource Mobilization (DRM) Donotcopyorreproducewithoutauthorpermission
  5. 5. Without any doubt Venezuelan proven reserves are #1 worldwide, representing 20.09% of the world reserves, more than all Non-OPEC reserves together and followed by #2 Saudi Arabia PDVSA ( is the Venezuelan state-owned corporation responsible for the exploration, production, refining, transport and commerce of hydrocarbons. World Oil Proven Reserves Donotcopyorreproducewithoutauthorpermission
  6. 6. In Venezuela, with 1Bs you can get 14.26Lts of gasoline! Point is to know that, there is a fix exchange rate (1*) of Official: 1Bs = 1/52 USD, this situation has created a No-official market for 1Bs = 1/700 USD (added here just for reference) Gasoline prices and the exchange rate regulation creates a huge fiscal hole in the taxation system, loosing important component to the Domestic Resource Mobilization (DMR) and affecting directly the Tax/GPD relationship. Back in 1961, the relation was 1USD = 3.35Bs (2*) (1*) (2*) The note: Gasoline prices in Venezuela 1Bs = 14.26Lt (March/2015) Donotcopyorreproducewithoutauthorpermission
  7. 7. Oil prices - Oil prices have dropped 60% from Jun/2014 and seems to have the longest term recovery - Impact to Venezuelan budgeting based upon approx. 2.5 Million barrels/day Donotcopyorreproducewithoutauthorpermission
  8. 8. Venezuelan Nationalization of Private Sectors Around 12 years ago Venezuela started a Nationalization program, reducing the private ownership industry. As a result: -Private sector has been reduced (Private Resource Mobilization) and preventing new companies to settle down in Venezuela -Food and services shortages: there is not clear example of a successful experience like the one in Venezuela Donotcopyorreproducewithoutauthorpermission
  9. 9. International Public Finance Official Development Assistance (ODA) Donotcopyorreproducewithoutauthorpermission
  10. 10. Components of ODA - ODA disbursements are clearly dropping since its peak of approx. 80M USD in 2007 to a 35.1M USD in 2013 - Bilateral has been historically the main contributors Donotcopyorreproducewithoutauthorpermission
  11. 11. - ODA disbursements has been allocated to social sectors and Education in more than 50%, with very small contribution to infrastructure. - Without strong investment in infrastructure, long term productive employment is not guarantee, communications, commerce, activities are impacted - This distribution will prevent new investments to arrive the country Donotcopyorreproducewithoutauthorpermission
  12. 12. Conclusions and comments - With the current Venezuelan internal politics and administration, the DRM hardly will contribute to the development of the country - Private sector is under stress and without clear motivation signal to invest in the country - Without DRM, the ODA and any other financial instruments will continue to decline making the long term recovery and development a real challenge for next generations - Inflation (of double digit year on year) needs to be controlled ( %2CPCPIPCH&grp=0&a=&pr1.x=55&pr1.y=) - Step by step deregulation of gasoline price and exchange rate needs to be done - Clear rules for private and foreign investments are necessary Donotcopyorreproducewithoutauthorpermission