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- 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
- 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
- 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