VENEZUELA

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BUSINESS PROFILE.

Business
Venezuela was a primarily agricultural country until the discovery and extraction of oil began in the 1920s. Oil is now dominant, providing one third of GDP, half of government revenues and 80 per cent of export earnings. The national oil corporation, PDVSA, is one of the world’s largest companies. Venezuela has some of the largest known reserves in the world, so little change in the basic structure of its economy may be expected in the near future. Agriculture’s share of the workforce has now fallen to five per cent of GDP, but the sector remains important by providing a non-oil export income in the form of its dairy and beef produce. Some cash crops mostly rice, sugar and coffee are grown. Most of the other farming activity is devoted to staple crops for domestic consumption. As well as oil, Venezuela has substantial deposits of iron and aluminium ores, plus gas, coal, diamonds, gold, zinc, copper, titanium, lead, silver, phosphates and manganese. The processing of these ores and the country’s agricultural products account for the bulk of the industrial sector, however, over-dependence on oil income has meant that Venezuela’s industries are suffering from an historic failure to modernise.

During 2000, large-scale flooding caused considerable economic damage, especially to agriculture, although this has been partly offset by the rise in oil prices. Venezuela was a prominent founding member of the Organisation of Petroleum Exporting Countries (OPEC) and the current president, Hugo Chavez, has played a leading role in the revival of the organisation’s fortunes since the late 1990s. Venezuela’s recent economic performance has been erratic, not least due to the currency crisis which struck in February 2002, coupled with the aftermath of the attempted coup two months later. The economy is expected to contract by six per cent over the current financial year. Venezuela belongs to the Asociacion Latinoamericana de Integracion (ALADI), which seeks to promote a common market for Latin America, and to the Inter-American Development Bank. The USA, Brazil, Colombia, Germany, Japan, and the UK are Venezuela’s principal trading partners.

Business
English is becoming more widely spoken in business circles, particularly at executive level. Nevertheless, Spanish is essential for most business discussions. Appointments are necessary and a business visitor should be punctual. It is common to exchange visiting cards. Office hours: Mon-Fri 0800-1800, usually with a long midday break.

Commercial Information
The following organisations can offer advice:
CONAPRI, Consejo Nacional de Promoción de Invensiones (National Council for Investment Promotion),
Av. Francisco de Miranda, Centro Empresarial Parque del Este, Piso 12, La Carlota, Caracas 1071 (tel: (212) 237 5486 or 237 5895; fax: (212) 237 6028; e-mail: conapri@conapri.org; website: www.conapri.org); or
FEDECAMARAS, Federación Venezolana de Cámaras y Asociaciones de Comercio y Producción (Federation of Chambers of Commerce and Industry),
Apartado 2568, Edificio Fedecámaras, Pent-House 2, Avenida El Empalme, El Bosque, Caracas (tel: (212) 731 1711; fax: (2) 730 2097; e-mail: sisfedecamaras@telcel.net.ve; website: www.fedecamaras.org.ve).

Conferences/ Conventions
Larger hotels have facilities. For further information, contact the Corporación de Turismo de Venezuela (see our Important Addresses section).