World Country Guide

Business Profile

Economy
Venezuela was a primarily agricultural country until the discovery and extraction of oil began in the 1920s. Oil is now dominant, providing one-quarter of GDP, one-third 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. There are long-term plans to introduce greater diversity into the economy but little change in its basic structure may be expected in the near future.
Agriculture’s share of the workforce has now fallen to 5 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 a historic failure to modernise.
Venezuela was a prominent founding member of the Organisation of Petroleum Exporting Countries (OPEC) and the current president, Hugo Chvez, has played a leading role in the revival of the organisation’s fortunes since the late 1990s. Since the beginning of 2002, Venezuela’s recent economic performance has been severely affected by the turbulent political situation. After the currency crisis of February 2002 came an attempted coup. Then in December large parts of the economy – including the all-important oil industry – were affected by a two-month-long strike. This had a devastating impact: the economy is believed to have contracted by around 10 per cent during 2003. In 2004, this is estimated to have improved slightly, but is still forecasted as an annual contraction of 8 per cent.
Venezuela belongs to the Asociacin Latinoamericana de Integracin (ALADI), which seeks to promote a common market for Latin America, and to the Inter-American Development Bank. The USA accounts for 40 per cent of Venezuela’s trade; Brazil and Colombia are its other key 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 with a long midday break.

Commercial Information
The following organisations can offer advice: CONAPRI, Consejo Nacional de Promocin de Invensiones (National Council for Investment Promotion), Edificio Forum, Local LC-A (planta baja), Calle Guaicaipuro, El Rosal, Caracas 1060 (tel: (212) 951 6507 or 3692 or 953 4732; fax: (212) 953 3915; e-mail: conapri@conapri.org; website: www.conapri.org); or FEDECAMARAS, Federacin Venezolana de Cmaras y Asociaciones de Comercio y Produccin (Federation of Chambers of Commerce and Industry), Apartado 2568, Edificio Fedecmaras, Pent-House 2, Avenida El Empalme, El Bosque, Caracas (tel: (212) 731 1711; fax: (2) 730 2097; e-mail: secgeneral@fedecamaras.org.ve; website: www.fedecamaras.org.ve).

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