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Geographical
situation
This Latin-American country is composed of about
twenty regions, two federal territories and a
federal district.
There is also about 60 islands under its
jurisdication.
Its total surface is 912,000 sq. kms. (1.7 times
the size of France)
It is situated in the north of the the South
American territories.
It is bordered by Columbia (in the west and the
south-west), Brazil (to the south)
and Guyana (in the east).
The country has a diversified relief and can be
divided into four main parts :
The Venezuelan Gulf and the Maracaïbo Lake (in
the north west) end in a bassin at the foot of
mountain ranges which make up part of the Sierra de
Perija and part of the Cordillera of Merida.
The Sierra de Perija creates a natural boundary
dividing Venezuela from Columbia. The Cordillera of
Merida is constituted mainly of plateaux which look
over the West Indies. This mountain range has a lot
of big towns in it situated at altitudes of 500 and
1000 meters.
In the centre of these mountains are the 'Llanos',
wide plains stretching nearly to the Orenoque River
(which itself goes from the Brazilian border all
the way to the Atlantic Ocean)
A fifth of the total surface of Venezuela is
covered in mountains.
3 - Economy
In 2001 the economic growth suffered from negative
repercussions.
The results were really low, Venezuela had
regressed more than 7%, imports dropped by 3.4%
compared to 1998 and the PIB by 6% compared to
1997.
The economic level is sustained by foreign
investors who show a general
confidence in the future of the South American
countries where the governments continue to open up
the economies.
Venezuela did not get as much capital investment
last year, only 1.2 billion dollars, due to
violence and crisis situations.
1996 was a bad year with a confidence crisis which
disturbed the economy.
The price increase in the production of petrol from
69.2 dollars in 1994 to 74.7 dollars in 1995 per
barrel was not very high, but it was the essential
cause of the slowing down in the economic
growth.
The IMF tried to take measures to reduce the
importance of this deficit by budgetary
restrictions
and the Public Revenue department helped 3 of the
banks which had got into difficulty.
This aid added up to 7 billion dollars, 12% of the
GNP.
The measures taken were very severe as the spending
cuts were considerable and inflation flared over
70% due to a devaluation of 41%
By 1999 this inflation has fallen to 'only'
24.6%.
One of the major reasons for these restrictions was
that the three previous Presidents of the Republic
had been condemned for embezzlement of government
stocks.
In 1994 Venezuela had a global GNP of 56.60 billion
dollars, 2,700$ per inhabitant, by 1997 it had
grown to 87.38 billion, economists class the
country as fairly rich.
In 1999 the global GDP is 106.4 billion dollars,
4,410 dollars per inhabitant.
External trade varies enormously.
Exports
(in billions of dollars):
+23.4 (1996)
+23.4 (1997)
+17.1(1998)
+18.8 (1999)
Imports
(in billions of dollars) :
-9.9 (1996)
-12.3 (1997)
-14.2 (1998)
-10.8 (1999)
Services also evolve irregularly.
Exports
(in billions of dollars)
+1,67 (1995)
+1,56 (1996)
+1,65 (1997)
Imports
(in billions of dollars)
-4.8 (1995)
-4.9 (1996)
-5.25 (1997).
Economy
(in billions of dollars).................1996
..1999 ..2000
Economic growth %....................0.2.....
8.0...... 2.5
Inflation
.......................................103.2.....22.
...24.6
Balance of GDP %
....................7.4........-6.0 .....4.6
Unemployment rate %..............11.8.......na
...... na (but estimated at about 20%)
Gross external debts..................32.9
.....31.8- ....32.5
Trade balance .............................13.6
...... 8.0 ......9.6
Current balance
..........................8.8.........3.4
......4.7
The internal trade with the ANDIN treaty countries
(Columbia, Venezuela, Ecuador, Peru, Bolivia)
increased in 1994 by 21% compared to 1993.
The balance of payments concerning external trade
are also irregular, the balance showed
a deficit for 1992 (-3.36) and 1993 (-2.22), a
surplus in 1994 of 2.45 billion dollars, in 1996
13.6 billion, only 2.9 billion in 1998 and 8
billion in 1999 (with 9.6 expected for 2000).
Venezuela is pursuing its reorganizational
programme in accordance with the IMF.
A vast programme of privatization comprised the
sale of several banks which had been nationalized
in 1994 as well as companies in the sector of
aluminium and steel industries.
The fiscal policy is also being reformed and the
state and the administration are being
reorganized.
Uncertain politics however slow down the investment
decisions, aggravating the recession.
4 - Agriculture
The agricultural sector in Venezuela is going
through a period of big changes.
The government is trying to implement new measures
to encourage it.
There is a balance between the crop and animal
exploitations and also between the production for
the country and the production reserved for
export.
Maize represents 12% of all the crops, coffee 71%
and rice 4%.
Maize production is insufficient, it represents
2,491 kg per inhabitant, the world average is 4,330
kgs per inhabitant.
The country is rated 8th in the world for coffee
production despite a slow progression :
(in millions of tons) :
0.069 (1992)
0.079 (1994)
0.088 (1996)
Venezuela is the 15th biggest producer of bananas,
a production which has tended to fall, it went from
1.24 million tons in 1992 to 0.94 in 1995.
In spite of forests which cover 34% of the surface
of the country, forestry is a bit neglected.
Logging is insufficient and only represents 0.11 m3
per inhabitant (compared with 0.76 m3 in
France).
Stock breeding is an important factor in the
Venezuelan economy. There was 14.2 million head of
cattle in 1995, 14.6 in 1996, that is 90% more than
in France.
Venezuela rates 18th in world production.
Agriculture employs 11% of the working population
and contributes 5% of the GNP.
In 1996 fishing represented catches of 23 kg per
inhabitant compared to 14 kgs in France.
The agricultural balance always presents a large
deficit :
0.81 billion dollars in 1994, that is 1.41% of the
GNP.
5 - Industry
Mining :
The sub-soil is very rich, with large petrol
reserves (8,800 million tons).
It is the 7th biggest producer and the 3rd biggest
exporter in the world with a production of 145
million tons in 1995.
There
are other reserves in Venezuela, in particular
bituminous shale, with 37.7 million tons situated
in the Orenoque region.
Mining
employs 7% of the working population and
contributes 23% of the GNP.
The
main mining production grew slightly in 1995, e.g.
coal (4.6 mllion tons), bauxite (5 million tons)
mined in Psiguaos, and gold (171 tons), Venezuela
is the 7th biggest producer in the
world.
Iron
is also mined (18.5 million tons in
1996).
Venezuela
comes 15th as world producer of natural gas with
26.3 billion m in 1995.
Industry
:
The
industrial sector employs 22% of the working
population and contributes 8% of the
GNP.
It
is a highly diversified sector with a foodstuff
production which represents 21% of the industrial
added value (IAV), chemistry which represents 13%
and transport materials which represent
8%.
There
is a big dam construction programme going on with
the Guri dam in the west and the Vueltosa dam in
the east.
In
the north east, Total, in a partnership with Amoco
have started works to extract large quantities
of light oil at a depth of more than 5,000 m in the
Jusepin zone.
More
drilling is foreseen on the same site.
In
January 1996 the Venezuelan congress adopted a law
authorising foreign companies to explore
and exploit new petrol sites. This had been
impossible during the twenty years of the State
monopoly.
A
merger of private companies with Petroleos (the
Venezuelan company PDVSA) into joint companies,
still gives the control of the sector to the State.
Foreign companies associated to the PDVSA are
continuing in their exploration and
developement.
The dependence of the economy on petrol is
excessive (70% of exports, 50% of government income
and 27% of GDP). The policy of support for the
price of crude oil by reducing production has
slowed down the activity.
The
textile industry increased by 25% in 1995 in spite
of redundancies and the closing down of some
companies because of a lower production during the
previous month of December.
Several
of these companies exported as a stopgap measure
against the drop in the internal market.
The
ATV (Association of textiles in Venezuela) foresaw
a drop in sales of 50% at the beginning of 1996
caused by the drop in purchasing power.
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