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Government policies for Venezuela - may 2016


Published on

- Government Policies
- Banking Sector
- Business and Government Lawsuits
- Canada and Venezuela Trade

Published in: Economy & Finance
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Government policies for Venezuela - may 2016

  1. 1. Government Policies – Venezuela – May 2016 By: Paul Young, CPA, CGA
  2. 2. • This presentation is on perspective when it comes to Venezuela
  3. 3. Paul Young - Presenter Bio • CPA/CGA • 25 years of experience in Academia, Industry and Financial solutions • Youtube Channel -
  4. 4. Agenda - GDP - Government Policies - Banking Sector - Lawsuits - Canada and Venezuela Trade
  5. 5. Venezuela - GDP • The Venezuelan economy is set to experience another difficult year in 2016 due to low commodity prices and structural macroeconomic imbalances. The economy has taken a turn for the worse since President Nicolás Maduro, in an effort to tackle an ongoing energy crisis, ordered the working week for civil servants to be shortened to two days per week and announced daily power cuts. • The measures, which will constrain economic activity even further, have unleashed a wave of looting and rioting across the country. Meanwhile, the political opposition has stepped up their effort to end the president’s term by using all the legal mechanisms at their disposal. The government has responded by imposing numerous hurdles and declaring a state of emergency to thwart any impeachment attempt.
  6. 6. Government Policies • FDI (Foreign Direct Investment) • Despite certain attractive features of the country, such as its large oil reserves, the large size of its domestic market and the richness of its natural resources, FDI inflows into Venezuela have decreased in the last few years, mainly because of the country's unstable legal system. • Venezuela's uncertain business climate born of the 'Bolivarian' reforms (infringement of private property rights, foreign currency controls, increasing regulations, nationalisations, etc.) and the ineffectiveness of the port system are some of the various hindrances to investment. The new Government is combining regional and revolutionary politics, without closing its door to foreign investment, which it needs badly. Still, the 'Bolivarian' socialism pursued by the rather interventionist Government hinders the increase of FDI flows. In 2014, FDI to Venezuela declined by USD 6 billion (-88% compared to 2013), falling to under USD 1 billion. • Inflation rate 500% • Unemployment 17% and predicted to grow to 21% in 2017 • Debt to GDP close to 50% • 70% of the economy relies on oil revenue
  7. 7. Banking Sector/Venezuela • debt/ • Venezeula insolvent?
  8. 8. FDI Issues with Venezuela • venezuela-case-1412879396 • World Bank Orders Venezuela To Pay Crystallex $1.4 Billion For Gold Mine
  9. 9. Canada and Venezuela • In 2009, Canada’s bilateral merchandise trade with Venezuela totalled $1.5 billion, consisting of $629 million in Canadian exports to, and $908 million in imports from, Venezuela. Both exports and imports in 2009 were at about the same level as ten years earlier. • Although Venezuela ranks among Canada’s largest trading partners in Latin America, it is not a significant export destination, and nor is it a major source of imports for Canada. Venezuela was Canada’s fourth- largest export destination in Latin America in 2009, but was Canada’s 29th-largest export destination worldwide. It was Canada’s fifth-largest source of imports in Latin America that year and was the 38th- largest source of imports worldwide.
  10. 10. Sources • Contact: • Other links • Socialism -