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Venezuela

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Between Columbia and Guyana ~ twice the size of California. Population: 24,287,670 ... In the late 1500's, the Spanish arrived looking for gold and other riches ... – PowerPoint PPT presentation

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Title: Venezuela


1
Venezuela
2
Venezuela
  • Northern South America
  • Bordering Caribbean Sea and North Atlantic
  • Between Columbia and Guyana
  • twice the size of California
  • Population 24,287,670

3
History
  • Original inhabitants Carib, Arawak, and
    Chibcha-speaking
  • In the late 1500s, the Spanish arrived looking
    for gold and other riches
  • Venezuela became a land of plantations worked by
    slave labor from Africa

4
Independence
  • The creole population initiated the drive for
    freedom due to dissatisfaction with local
    politics
  • Independence is celebrated on July 5th based on
    the initial charge for freedom led by Simón
    Bolívar
  • 1821 Simón Bolívar became leader of a Venezuela
    free of Spanish rule
  • 1823 the last Spaniard were forced out after
    their defeat at Maracaibo
  • May 6, 1830 Venezuela seceded from Gran Colombia

5
Independence Chaos
  • Next 100 years caudillos and rule was held by
    various dictators
  • 1958 first elected government
  • 1999 new Constitution and newly elected
    government
  • Since 1999
  • Natural disasters (floods and mud slides)
  • Oil strikes

6
Government
  • Federal Republic
  • 22 States
  • 1 Metropolitan District
  • 11 Federally controlled islands
  • 72 additional islands in the Caribbean (federal
    dependencies)

7
Government
  • Executive power at the state level
  • Elected to four year terms
  • Local government
  • Mayor
  • Municipal Council
  • Parishes
  • Current Chief of State
  • Hugo Chavez
  • Initially elected in 1998
  • Re-elected to a six year term in July, 2000

8
Government
  • Chavez Administration
  • Called for fundamental restructuring
  • New Constitution
  • Appointed National Constituent Assembly
  • Guarantees freedom to create political parties
  • Legislative power is a unicameral National
    Assembly
  • Represented by Deputies from each electoral
    district
  • Creole population guaranteed three Deputies
  • Republican Moral Council job is to observe,
    prevent, investigate and penalize acts against
    the public ethic and administrative moral and
    oversee the legality of the use of public fund.
  • Provides citizen empowerment
  • Includes a Peoples Defender, Public Prosecutor,
    and General Accountant

9
Statistics
10
Statistics
11
Statistics
  • Life expectancy at birth in 1995 was 72.2 years
    (69.3 for men and 75.1 for women).
  • Population growth 1.52 (2002)
  • The Venezuelan population is young
  • 12.6 are under 4 years of age
  • 23.6 are between 5 and 14 years
  • 55.5 are under 25
  • 4.1 of the population is 65 or older.
  • This group is growing faster than that of the
    general population.

12
Statistics
13
Environmental Initiatives
  • Antarctic Treaty
  • Biodiversity
  • Climate Change
  • Desertification
  • Endangered Species
  • Hazardous Wastes
  • Marine Life Conservation
  • Nuclear Test Ban
  • Ozone Layer Protection
  • Ship Pollution
  • Tropical Timber 83
  • Tropical Timber 94
  • Wetlands

14
Statistics
15
Environmental Issues
  • Sewage pollution of Lago de Valencia
  • Oil and urban pollution of Lago de Maracaibo
  • Deforestation
  • Soil degradation
  • Urban and industrial pollution
  • Particularly along the Caribbean coast
  • Rainforest Ecosystem
  • Threat from irresponsible mining operations

16
Environmental Issues
  • Venezuela has a relatively good conservation
    record.
  • 1976 the first Ministry of the Environment in
    Latin America was established.
  • Since then a complex legal framework for
    environmental management has been established.
  • Extensive protected area systems
  • Nearly half of national territory is under some
    kind of protection.

17
Statistics
18
Oil Background
  • Oil exportation began in the early 1920s
  • Oil income was not invested wisely, industry was
    mired in corruption and waste
  • Venezuela is an OPEC member
  • Eighth largest oil producer
  • Oil export is 1/3 of GDP
  • 80 of export earnings come from oil
  • 50 of the governments operating revenue stems
    from oil

19
Oil Background
  • Mid-nineties oil price decline led to
  • Recession and eventual reorganization of
    government
  • Economy is slow to recover because of
  • Weak non-oil sector
  • Capital flight
  • Safety net created to avoid recurrence
  • Macroeconomic Stabilization Investment Fund
  • Deposits come from petroleum revenue

20
Oil Strike
  • November 2001
  • Chavez enacted a new law that makes the
    government the majority partner in any new energy
    venture in Venezuela.
  • December 2, 2002
  • Purpose remove President Hugo Chavez from power.
  • Chavez in turn is looking to eliminate state
    contracts with Venezuelas private sector
    (composed of opposition members).
  • Chavez has repeatedly appointed political allies
    to key positions.
  • Affect on US
  • Has imported up to 15 of oil from Venezuela.
  • Has branded Venezuelan oil supplies as
    unreliable.
  • Venezuelan daily oil production has dropped to
    440,000 compared to 3 million barrels.

21
Trade and FDI
  • US Viewpoint (1999 statistics)
  • Venezuela is USs 24th largest export market.
  • Trade deficit with Venezuela was 5.9 billion.
  • Exports to Venezuela (merchandise) was 5.4
    billion.
  • US imported 11.3 billion
  • Foreign Direct Investment (FDI)
  • 5.7 billion from U.S. in 1998.
  • Investments were predominantly in manufacturing,
    petroleum, and wholesale sectors.

22
Statistics
23
Trade Alliances
  • Latin American Integration Association (ALADI)
  • Free trade agreement with Chile
  • Part of the G3 (the Free Trade Agreement with
    Mexico)
  • Agreement with the Caribbean Common Market
    (CARICOM)
  • Currently negotiating
  • Free trade agreement with MERCOSUR

24
Investor Benefits
  • Low tariffs and competitive tax rates.
  • New legislation designed to draw in foreign
    investment.
  • No capital repatriation limitation.
  • No profit transfer limitation.
  • No prior authorization requirement for investment.

25
Currency Information
  • Early 2002 exchange rate system changed from
    pegged to free-floating.
  • Caused the Bolivar to depreciate.
  • Since then, the Planning and Development
    Department have pegged the Bolivar to the US
    Dollar.
  • Pegged at Bs. 1600.00 1596.00
  • Also under investigation, a crawling peg system,
    which would modify the exchange rate weekly.

26
Commercial History
  • Venezuela has attracted the highest per capita
    U.S. investment in South America.
  • Its markets have absorbed up to 1 billion in
    U.S. exports quarterly.
  • In the 80s, Venezuela was one of the hottest
    emerging markets.
  • Early 90s, investor confidence plummeted because
    of two coup attempts on President Perez.

27
Statistics
28
Commercial History Continued
  • Early 1994 a banking crisis led to capital
    flight, currency erosion, and worsened the fiscal
    crisis.
  • Emergency currency and price controls were
    enacted.
  • Recovery was dependent on
  • Revision of labor benefits.
  • Elimination of subsidies.
  • Government withdrawal from industry.
  • Eventually several hotels, banks, and some shares
    of the telephone company were sold.
  • Mid-1995 Landmark decision opened oil sector to
    foreign investment.
  • Eight international groups were selected to
    explore new oil fields.
  • Expectation was that it would increase U.S. oil
    equipment imports by 15 annually.

29
Commercial History Continued
  • 1996 Government initiated a fiscal, monetary,
    and foreign exchange plan. It was intended to
  • Lower inflation.
  • Balance the budget.
  • Restructure and strengthen financial system.
  • Establish a new social security program.
  • Provide resources to most vulnerable sectors.
  • Reform legal institutions.
  • In order to protect foreign investors, Venezuela
    is now a member of
  • Overseas Private Investment Corporation (OPIC)
    protects from political risk.
  • World Banks Multilateral Investment Guarantee
    Agreement (MIGA) provides similar protection.

30
Financial Overview
  • 2000
  • External debt was 34.5 billion
  • Economic growth of 3.2
  • Current account balance was 13.365 billion
  • International reserves totaled 21.647 billion
  • Inflation 13.2
  • 2001
  • Economy contracted by 6.4
  • Inflation 12.3
  • 2002
  • Bonds rose by 17.7 until dropping after the
    strike was initiated.
  • Expectation is that agencies will starting
    downgrading the countrys debt. Credit ratings on
    debt is at junk levels.
  • Foreign debt stock is 20 of 100 billion GDP.
  • International reserves 12.43 billion.
  • Inflation 31

31
Education
  • Originated in Catholic Church in the colonial
    period.
  • Roots can be traced to France.
  • Reserved for the wealthy landowner class.
  • Concept of education for the privileged has
    continued into the modern period.
  • Education system at the university level has
    steered clear of technical and scientific fields.
  • Primary and secondary levels have ignored the
    vocational needs of most of the population.
  • Opened to general public after 1811
  • Free education became an integral part of the
    political landscape.

32
Education Statistics
33
Education Continued
  • In 1958 education began to expand both in quality
    and quantity
  • Primary education became compulsory
  • Alternative methods of educating hard-to-reach
    groups (farming communities) were developed.
  • Universities were opened
  • Education geared primarily toward those seeking
    professional or academic careers.
  • In 1969, the government attempted to address this
    issue by facilitating the entry of students of
    various backgrounds.

34
Education Continued
  • Secondary schooling was not compulsory until
    1980.
  • Existence of a social split
  • Public schools are better funded than private.
  • Private schools more prestigious because of the
    traditional curriculum and the historical
    association.
  • Due to social advantages given by the association
    with a private school, some teachers choose to
    work in both.
  • Since 1958, international organizations have
    promoted natural sciences.
  • Development work in the U.S. has had a strong
    influence on the social sciences.

35
Education Continued
  • Population growth has affected education.
  • Number of universities between 1958 to 1984
    tripled.
  • Overall number of places of higher education grew
    tenfold (to more than 70).
  • Literacy rate in Venezuela is one of the highest
    in Latin America (nearly 90) among those fifteen
    and older.
  • Government strongly influences this by giving
    away training materials to encourage
    dissemination of literacy by the literate.
  • Current educational system requires nine years of
    schooling.
  • Six years of primary and three years of
    secondary.

36
Education Continued
  • Higher Education
  • Can attend two years of senior high school.
  • Can follow that with a variety of colleges,
    universities or technical schools.
  • Labor Force
  • Until the 80s, skilled workers were a premium.
  • Due to economic downturn, the large number of
    skilled workers are no longer needed.
  • Technical education has become less important.

37
Education Today
  • Chavez administration has created the National
    Education Project (PEN).
  • Intended to fix some of the things still
    considered wrong with the educational system
  • Failure of nearly 10 to complete primary school.
  • Failure of nearly 20 to complete secondary
    school.
  • Illiteracy still nearly 7 among males and 7.6
    among females 15 and older.
  • Plan also railsagainst the evils of
    globalisation and privatisation and is led by
    former revolutionaries.
  • Teachers groups and the church leaders claim it
    is a Cuban-style indoctrination of youth.

38
Educational Data
  • Annual census in all public and private
    educational institutions.
  • Investigating ways to improve data collection in
    order to break data down into smaller
    geographical units.
  • Evaluating causes of class repetition and causes
    of dropouts.

39
Summary
  • All available information points at a country
    that could go either way.
  • Oil resources give Venezuela both benefits and
    problems of an easy source of revenue.
  • Actions have been taken to counteract the
    cyclical revenue streams.
  • Alternatives to oil revenue carry with them their
    own burden.
  • Difficult to see past the problems of leadership
    to determine where fate will carry the country
    next.
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