2. • venezuela, country located in
northern south of America.
• it occupies a roughly area
Location
3. • Venezuela have five cities with
over a million inhabitants .
• The largest is the capital caracas
with 5.3 million followed by
Maracaibo with 2.5 million and
Valencia with 2.0 million people.
• Area :912,050km (352,143sq.mi)
population and area
4. • The principal resources is
petroleum and natural gas.
• Other mineral reserves include
iron,bauxite , gold and diamonds.
• Industries include steel,
chemicals,textiles and oil refining.
• Agricultural products include
notably
sugar,coffee,corn,bananas amd
cacao
Resources
5.
6. Economy System
• The economy in venezuela is mainly based on petroleum exploitation and
manufacturing.
• Petroleum alone makes up more than 50% of country’s total GDP.
• The most common products from the manufacturing sector include
aluminum,cement,steel,electronics,automobiles,and food and drinks.
• Agriculture which is 3%of the economy,focuses on cultivation of rice
,corn,fruit,beef,and pork.
7. Indicator 2016-2017 2017-2018 2018-2019 2019-2020 Comments
GDP $315billioon $271billion $96.2billion $43.79 billion data from the International
Monetary Fund (IMF)
Unemployme
nt rate
7.7% 11.2% 18% 6.41% data from the International
Labor Organization (ILO)
Inflation
rate
254.95% 274.4% 130,060,20% 2,959,80%
https://www.worlddata.info/a
merica/venezuela/inflation-
rates.php
Budget N/A
revenue:$30 million
(2017 est)
expenditure:$76million
N/A N/A
BOT
trade difficult
$11.8billion
trade difficult
$501billion
trade difficult of
$6.7 billion
N/A
https://take-profit.org/en/statistics/balance-of-
trade/venezuela/#:~:text=What%20is%20trade
%20balance%20of,minimum%20was%20%2
D3154%20USD%20Million.
FDI $2.2billion $249 million $189 million $13million
https://www.lloydsbanktrade.com/en/market-
potential/venezuela/investment
According to data from the United Nations
Conference on Trade and Development
(UNCTAD), Venezuela's Foreign Direct
Investment (FDI)
GCR (GCI)
131 out of 138
countries
127 out of 137
countries
133rd out of
countries
N/A
The Global Competitiveness Index (GCI) is an
annual report produced by the World Economic
Forum that measures the competitiveness of
countries based on various economic indicators.
Doing
8. The Major FDI sectors and FDI Multinationals in The State
Venezuela has a great development capability. It has the largest oil reserves in
the world, an enviable location, infrastructure in place, and high capacity to
continue to grow.
9. Annual FDI inflows averaged some
US$ 700 million between 1989 and
1994.
large FDI having taken.
Large flows from the United States
and the Netherland.During
increases in the investment share of
the Cayman Islands,
the Netherlands and, from a lower
base, Spain.
10. The sectoral pattern was dominated by financial establishments; metal
products and machinery,chemicals; and food products and beverages .
The predominance of financial services(excluding banking and
insurance) in FDI appears to be associated with the large capital inflows
that took place in 1992 into Venworld, the private consortium that
controls Venezuela's national telephone company This investment, of
more than US$1 billion, appears to have been channelled through
financial holding companies, as official statistics show accumulated
investment in the communications sector to be zero.31 Foreign
investment was also important in chemicals,reflecting Venezuela's
comparative advantage in that area. On the other hand, the large
investment in metal
11.
12. Venezuela foreign direct investment for
2021 was $-0.76B, a 66.96%
increase from 2020.
Venezuela foreign direct investment for
2020 was $-0.46B, a 64.32% decline from
2019.
Venezuela foreign direct investment for
2019 was $-1.28B, a 244.24%
decline from 2018.
.Venezuela foreign direct investment for
2018 was $0.89B, a 1402.94%
decline from 2017.
13. What Happened?
Venezuela has been famous of its petroleum source, and is right to be claimed for 90% of the country’s
economy income since decades.
• Venezuela under President Chavez lead its economy through Petroleum and is seen to nationalize the
economy policy.
• After switching from Chavez to Maduro, Venezuela is experiencing a multidimensional crisis rooted in
political instability which then threatens every point of the country’s sovereignty.
• Maduro is anti-imperialist, has made Venezuela the
target of sharp criticism from the world, especially the United States and its allies.
• Maduro era affected the country’s FDI. political tensions have caused divisions and multidimensional
crises in Venezuela.
• FDI is only received from socialist countries, in this case, China
14. International Companies in Venezuela
Big companies are still operating in Venezuela, like the soft drink company Coca
Cola-FEMSA.
Food producers: Nestlé
15. The current strategies and policies of the state concerning the FDI
Development interventionist policies set up by the various governments of the last decades has
resulted in a commercial environment that is not attractive to foreign investors. Therefore,
Venezuela has many obstacles to attracting foreign investors.
Venezuela has adopted Decree 2095 on foreign investment, which is encouraged and protected by
a new legal framework. In addition to this, there is a policy supporting manufacturing that is
potentially good for exports. The government also gives fiscal bonuses, ranging from tax
exemptions to special credit treaties, in order to encourage investment in the so-called "strategic"
sectors, or in order to stimulate the establishment of businesses in the country's five least
developed states.
Article 22 of Venezuela’s Foreign Investment Law may provide Venezuela’s consent to the
International Centre for the Settlement of Investment Disputes (“ICSID”). However, the Venezuelan
Supreme Court, while acknowledging that there is a fundamental right to arbitration, has held that
any state-based companies must still formally consent to ICSID jurisdiction.
In a notable ruling rendered on June 10, 2010, the ICSID issued a jurisdictional decision in Mobil
Corporation and Others v. Bolivarian Republic of Venezuela (ICSID Case No. ARB/07/07/27, June
10, 2010). The ICSID rejected the investors’ argument that Article 22 can be used to establish
ICSID jurisdiction. However, the ICSID ruled that it did have jurisdiction to arbitrate the case under
the Dutch-Venezuelan Bilateral Investment Treaty.
16. The incentives given to the FDI by the state
The Constitutional Law of Productive Foreign Investment is in place since 2017,
this norm aims to regulate everything related to foreign investment in the country
and to promote a productive and diversified contribution of foreign origin that
participates in the development of the existing productive potential in the country.
The announced privatisation of ports and airports, a business opportunity for
foreign investors.
The adoption of production assistance policies has given new impetus to the
agri-food industry (coffee, tropical fruits, rice, tobacco, cocoa, alcoholic
beverages), as well as to the automobile industry and audiovisual production.
17. The Major Challenges and Difficulties That The State is Facing in The FDI
• 90% of country’s economy income from petroleum.
• Hyperinflation
• Economic and political problems
• U.S sanctions
18. There are several suggested solutions to overcome the challenges of
economic development. These include:
1. Increasing government spending on infrastructure and education: Governments could
increase their investments in infrastructure development and education programs to foster
economic growth. This would help create jobs, improve productivity, and increase national
output.
2. Tax incentives and public-private partnerships: Governments could offer tax incentives
to private businesses to encourage investment and job creation. Public-private
partnerships could also be formed to promote joint ventures and private investment in
infrastructure projects.
3. Improving access to finance: The World Bank and other international organizations
recommend that governments improve access to finance for small and medium-sized
enterprises (SMEs). This could be achieved by setting up credit guarantee schemes,
improving bankruptcy laws, and establishing local venture capital firms.
19. 4. Trade liberalization: The IMF recommends that governments promote trade
liberalization by reducing trade barriers, harmonizing regulations, and improving
customs procedures. This would open up new markets for exports and
encourage foreign investment and economic growth.
5. Strengthening institutions: The World Bank recommends that governments
strengthen institutions to promote good governance, transparency, and
accountability. This could be achieved by improving the legal system,
strengthening financial and regulatory institutions, and promoting
decentralization of power.
6. Promoting innovation and entrepreneurship: The World Bank recommends
that governments promote innovation and entrepreneurship through policies that
support research and development, protect intellectual property rights, and
encourage competition.
Overall, the above solutions aim to create an environment that fosters economic
development by attracting investment and promoting job creation, while also
strengthening institutions and promoting innovation and entrepreneurship.
21. Done By:
Shaza Salah El-Deen
Mostafa Salah El-Deen
Ahmed Mohamed El-Sukkary
Nesma Magdy Mostafa
Mohamed Ibrahim Salem
El Motaz Bellah Talaat Ibrahiem
Hoda Hamdi Eltabey
Mahmoud Attia Salama
