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Venezuela Venezuela

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Venezuela

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EconomicPoliticalStructural

Venezuela – Quick View
ECR score42.47 (Mar 2011)
ECR rank93 (Mar 2011)
Economic
GDP 2010USD 237.52 billion
GNI per capita PPPUSD 11,846
FDIUSD -4,939 million
Inflation 2010 (e)29.17%
Central bank assetsUSD 81.23 million
Unemployment rate 20088.6%
Government deficitUSD 3,589,754
Tax revenueUSD 20,891,284.7
Political
Government typeFederal Republic
Recent political crisisNA
Economic freedom score175th
Freedom of information score133rd
Corruption perception index164th
Structural
Birth rate21.27 per ’000
Population balanceUnder 14 – 29.8%
Population balanceOver 60 females – 8.9%
Population balanceOver 60 males – 7.9%
Life expectancy yearsMale 71.22 years
Life expectancy yearsFemale 77.18 years
Mortality rate5 per ‘000
Literacy rate95%
Internet access33%

[Top] Economic Overview

Venezuela is rich in national resources especially in oil reserves. The main exports include petroleum, bauxite, aluminium, steel, chemicals and agricultural 

 

products. Venezuela's economy has been affected by the recession due to its dependence on oil exports.

 

Gross domestic product (GDP)


Venezuela’s GDP at current prices in 2010 was VEB 983.99 billion compared to VEB 700.21 billion in 2009.


                                               Venezuela GDP

                                                            

(Source: Central Bank of Venezuela, IMF)

 

                                                          Venezuela GDP growth rate

(Source: econstats)

The GDP growth in Venezuela in 2005 was 10.32% and has declined since then. In 2009, the GDP growth rate was a negative value of 3.29%

 

GDP per capita

 

The GDP per capita at current prices was VEB 24,473 in 2009 which increased slightly over the previous year when it was VEB 23,814.

 

(Source: Central Bank of Venezuela)

 

Gross national income per capita, PPP

 

Venezuela’s GNI per capita at PPP was USD 11,846 in 2010 compared to USD 10,578 in 2005.

                                                   Venezuela GNI per capita, PPP

(Source: UNDP)

 

Taxation

 

Individual income tax rate

 

The tax rates for individual income are progressive and vary from 6% to 34%

 

Tax slabs (1 TU = 65 VEF)

Tax rate

0 TU - 1,000 TU

6%

1,001 TU - 1,500 TU

9%

1,501 TU - 2,000 TU

12%

2,001 TU - 2,500 TU 

16%

2,501 TU - 3,000 TU

20%

3,001 TU - 4,000 TU 

24%

4,001 TU - 6,000 TU

29%

Over 6,001 TU

34%

 

(Source: tax rates.cc)

 

Corporate tax rates

 

Tax slabs (1 TU = 65 VEF)

Tax rate

0 TU - 2,000 TU

15%

2,001 TU - 3,000 TU

22%

Over 3,000 TU

34%

 

(Source: tax rates.cc)

 

Inflation rate

 

The inflation rate in Venezuela in 2010 was estimated at 29.17% compared to 27.08% in 2009.

 

                                                     Venezuela Inflation rate

 

(Source: IMF)

 

Foreign direct investment

 

FDI in 2009 was USD -4,939 million compared to USD -924 million in 2008.

 

(Source: Central Bank of Venezuela)

 

Portfolio investment

 

The portfolio investment in 2009 amounted to USD 8,931 million compared to USD 3,046 million in 2008.

(Source: Central Bank of Venezuela)

 

Banking sector assets

 

Total assets of banking sector (VEB million)

 

2009

2008

Availability

72,784

65,864

Credit portfolio

152,573

132,278

Investment in securities

70,753

61,234

Interest and commissions receivable

3,591

3,513

Investment in businesses

6,746

2,657

Other assets

30,070

12,724

Total assets

336,518.1

278,271

 

(Source: Central Bank of Venezuela)

[Top] Financial Indicators & Government Financial

Consumer price index

 

                                          Venezuela Consumer Price Index

(Source: CentralBank of Venezuela)

Base, December 2007 = 100

 

The CPI in Venezuela has risen steadily and doubled in the last three years. The index figure for February 2011 was 217.6 compared to 169.1 in February 2010.

 

Interest rates

 

The interest rates of Commercial and Universal Banks inVenezuala are:

 

Interest rates (%)

 

2009

2008

2007

Lending

20.45

23.24

17.33

Savings

15.89

15.68

10.78

 

(Source: Central Bank of Venezuela)

 

Money supply (currency in circulation)

 

                                       Venezuela Money supply

 

 

(Source: Central Bank of Venezuela)

 

Government expenditure

The total expenditure in 2010 increased from VEB 172,691,540,000 in 2008 to VEB 184,161,339,000 in 2009. The expenditure in 2009 was 26.3% of GDP compared to 25.9% in 2008.

Expenditure of Government of Venezuela (VEB thousands)

 

2009

2008

Current

143,752,684

132,262,766

Capital

38,186,968

38,843,994

Extra-budgetary expenditure

2,221,687

1,584,780

Loan granting

2,973,266

1,441,216

Total expenditure

184,161,339

172,691,540

(Source: Central Bank of Venezuela)

Official exchange rate

The VEB per USD was 2,150 in 2009 and has remained constant since 2007.

                                           Venezuela Exchange rate

(Source: Central Bank of Venezuela)

Government finances

 

Fiscal balance

In 2009, Venezuela had a fiscal deficit of VEB 35,609.11 million compared to a deficit of VEB 8,034.47 million in 2008.

                                                  Venezuela Fiscal deficit


(Source: Central Bank of Venezuela)


Total revenue

 

Venezuela's government revenue decreased to VEB 151,525 million in 2009 from VEB 166,000 million. This was primarily due to the decrease in oil revenues. The total revenue was 21.6% of total GDP.

 

Revenues of Government of Venezuela (VEB thousands)

 

2009

2008

Oil

53,230,829

82,432,206

Non-oil

98,294,665

83,666,078

Total

151,525,494

166,098,284

(Source: Central Bank of Venezuela)

Tax revenue

The total tax revenue in 2009 was VEB 86,546,512,000 which was higher than the tax collections in 2008.

Tax revenue (VEB thousands)

 

2009

2008

Income Tax, domestic activities

26,022,205

21,797,872

Value Added Tax

41,611,046

31,396,222

Tax on alcoholic beverages

1,764,659

1,322,500

Tax on tobacco

4,204,548

3,246,492

Income Tax (Oil)

12,944,054

17,834,247

Total

86,546,512

75,597,333

(Source: Central Bank of Venezuela)

Current account balance

The current account balance in 2010 was 7.79% of GDP compared to 2.63% in 2009.

                                           Venezuela Current account balance

(Source: Central Bank of Venezuela)

Balance of payments

The balance of payments deficit in 2010 was USD 8,060 million which decreased from USD -10,262 million in 2009.

Balance of Payments (USD million)

 

2010

2009

Current account

14,378

8,561

Capital account

-211

0

Financial account

-18,588

-14,040

Net errors and omissions

-3,639

-4,783

Overall balance

-8,060

-10,262

(Source: Central Bank of Venezuela)

[Top] Labour Force and Employment Overview

The total workforce n Venezuela in 2009 was 12.96 million of which 11.98 million were employed and 975,000 people were reported as unemployed.

 

 

The unemployment rate in was 7.5% in 2009 which increased from 6.9% in 2008. In 2010, the unemployment rate was estimated to be 8.6%.

 

                                         Venezuela Unemployment rate

(Source: Central Bank of Venezuela, IMF)

 

The unemployment rate in the 15-24 year age group was 16% in 2009 which was highest amongst all age groups.

 

Unemployment rate per age group %

 

2009

2008

15-24

16

13.6

25-44

6.5

6.1

45-64

4.3

3.9

65 and more

5.8

4

 

(Source: Central Bank of Venezuela)

 

Minimum wage

The minimum wage in Venezuela has been VEB 1,223.89 per month since May 1, 2010. (Source: venelogia.com)

Level of unionisation

The main trade unions active in Venezuela include:

 

  • Confederation of Venezuelan Workers (CTV)
  • National Union of Workers (UNT)
  • Venezuelan Confederation of Autonomous Trade Unions (CODESA)
  • General Confederation of Workers (CGT)
  • Union Confederation of the Americas (CSA)

 

(Source: fes.de)

[Top] Political Stability

Venezuela is a federal republic. The president is the head of the government and the chief of state. The cabinet is appointed by the president.

 

Venezuela has a unicameral parliament known as the National Assembly. It is comprised of 165 members, of which 162 are directly elected and three seats are reserved for the country’s indigenous population. The members of parliament are elected for a term of five years.

 

The current president of Venezuela is Hugo Chavez. Hugo Chavez has in past survived a coup, protests, strikes, and a referendum since coming to power in 1998.

 

The main political parties’ active in Venezuela include:

 

·         United Socialist Party of Venezuela (PSUV),

·         Communist Party of Venezuela (PCV)

·         Democratic Action or Accion Democratica (AD)

·         Christian Democrats or Comite Organizador Politico por Elecciones Independientes (COPEI)

·         Homeland for All or Patria Para Todos (PPT)

·         Movement to Socialism or Movimiento al Socialismo (MAS)

·         Radical Cause or La Causa Radical

·         First Justice or Primero Justicia

·         The National Convergence or Convergencia

·         For Social Democracy (Podemos)

·         Un Nuevo Tiempo (UNT)

·         Project Venezuela

 

(Source: state.gov, BBC, IPU)

 

Regulatory environment in Venezuela

 

 

                                                         Venezuela Economic Freedom Indices

(Source:Heritage.org)

 

Venzuela's economic freedom score is 37.6 making its economy the 175th freest in the 2011 Index of Economic Freedom. Venezuela ranks 28th out of 29 regional countries in the Central and South America. Venezuela’s overall score is much lower than the global and regional averages.

 

Corruption perception

 

The Corruption Perceptions Index (CPI) is a survey to measure the perceived level of corruption across countries worldwide. Venezuela was ranked 164th on this list in 2010, which indicates that the corruption levels in the public departments is fairly high.

 

Venezuela has slipped in the CPI rankings since 2009 where it was ranked 162nd with a score of 1.9 which indicates the perceived levels of corruption have increased. (Source:transparency.org)

Freedom of information

 

The media in Venezuela is restricted and the government controls the news channels. The defamation of the president is punishable by 6 to 30 months in prison. There have been cases of journalists from private organisations being harassed, threatened or detained. (Source: freedomhouse.org)

 

Venezuela is ranked 133rd in the world Press Freedom Index 2010 with a score of 47.33 which indicates that media in Venezuela is restricted. (Source: rsf.org)

 

Newspapers

·         El Nacional

·         Ultimas Noticias

·         El Universal

·         El Mundo

·         Panorama

·         El Carabobeno

 (Source: BBC)


Judicial system

 

The courts in Venezuela are part of the federal system. The Supreme Court of Justice is the highest court of appeal in Venezuela. Below the Supreme Court are Superior Courts in each of the 17 judicial districts. Other lower courts in the districts include Courts of Instruction, District Courts, Municipal Courts, and Courts of First Instance.

 

(Source: countrystudies)

  

[Top] Demographic Overview

The total population of Venezuela in 2009 was 28.38 million, increasing at a rate of approximately 1.7% over the previous year.

(Source: World Bank, UN)

 

                                                                                                                Venezuela Population by gender

The gender ratio in Venezuela is balanced i.e. there are approximately 100.8 men for every 100  women.

(Source: UN)

Total deaths recorded in 2008 were 124,062 and the crude death rate in 2009 was 5 (per thousand people).

(Source: National Statistics)

The mortality rate of infants (per 1,000 live births) was registered at 17 deaths between 2005-2010.

The crude birth rate in 2008 was 21.27 births (per thousands) which has declined since 2002 when it was 22.9 births (per thousands). Total live births registered in 2008 was 581,480 which was lower than 615,371 the previous year.

(Source: National Statistics)

The average life expectancy in Venezuela for men is 71.22 years and 77.18 years for women (2010). The total life expectancy of the total population was 74.12 years in 2010.

(Source: National Statistics)

The number of individuals below 14 years of age accounted for 29.8% of the total population (in 2009). In 2009, 8.9% of women and 7.9% of men (% of total population) were above 60 years of age.

The international migrant stock in mid 2010 was recorded at 1,007,400 people. This was approximately 3.5% of the total population.

(Source: UN)

In 2007, 93.1% of the population lived in urban areas. Between 2005-2010, the urban population grew at a rate of 2% and the rural population declined at a rate of 3.4%.

(Source: UN)

Ethnic groups in Venezuela are:

 

·         Spanish

·         Italian

·         Portuguese

·         Arab

·         German

·         African

·         Amerindian

 

(Source: state.gov)

 

Venezuela ranked 75th out of 169 countries on the Human Development Index 2010 conducted by the United Nations. The HDI provides a composite measure of three dimensions of human development: living a long and healthy life (measured by life expectancy), being educated (measured by adult literacy and gross enrolment in education) and having a decent standard of living (measured by purchasing power parity, PPP, income).

 

(Source: UNDP)

[Top] Soft Infrastructure

Education

 

Venezuela's literacy rate between 2003 – 2008 has been estimated at 95%. (Source: UNICEF)

 

The education system in Venzuela is well organised and is provided to all. Education is compulsory from the age of 6 to 15.

 

Health care

 

Basic health care in Venezuela is free but the state run hospitals are inefficient and underfunded. The doctors in these hospitals are also paid poorly which often leads to strikes for salary increases, affecting the overall health care system. In 2003, the government took the initiative to build 8,000 new clinics in places where people are deprived of health care. 

 

(Source: healthofnations.com)

 

The main causes of death of children under 5 years of age is premature delivery which causes (23%) of total deaths, congenital abnormalities (19%), pneumonia (10%), injuries (9%), birth asphyxia (9%), neonatal sepsis (8%) and diarrhoea (7%).

 

 

(Source: WHO)

 

The public expenditure on health is approximately 2.7% of GDP. (Source: UNDP)

[Top] Hard Infrastructure

The transportation system in Venezuela is well developed. Roadways are the primary means of transportation and Venezuela's roadways are amongst the most developed in the Latin American region. Venezuela has a metro system in the major cities. The rapid transit system serves the city commuters.

 

(Source: country data)

 

Ports:  There are 38 ports in Venezuela. The major ports in Venezuela are - La Guaira, Maracaibo, Puerto Cabello and Punta Cardon. (Source:world port source)

 

Airports

 

Venezuela has more than 400 airports. Some of the main airports are listed below:

 

Town

Airport name

Runway length

Cumana

Antonio Jose De Sucre

8,500 ft

El Vigia

Juan Pablo Perez Alfonzo

10,600 ft

La Orchila

La Orchila

9,800 ft

Maiquetia

Simon Bolivar Intl

11,400 ft

Maracaibo

La Chinita Intl

9,800 ft

Maracay

El Libertador Ab

10,400 ft

Margarita

Del Caribe Intl Gen Sant/Mari

10,400 ft

 

(Source: Air charter world)

 

Telecommunications networks

 

Venezuela had 8.8 million internet users in 2009 with an internet penetration of 33%.

 

                                           Venezuela Internet penetration rate

(Source:internetworldstats.com)

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