Transcript Venezuela
Venezuela Jeff C. Chang Venezuela Statistics Recent political development Social programs Trade unions Effect on Nationalization on FDI Hero or Villian Venezuela Statistics (as of end of 2005) Population: 26.5 million GDP: $140.2 billion 80% of export revenue and 25% of GDP comes from crude oil 67.6% of exports goes to U.S. and 32% of imports from U.S. Venezuela Corporate Tax rate 34% for non-oil companies and 50% for oil companies 30% of oil royalty rate for oil extraction 14% taxes on goods and services Venezuela Recent political development Minimum 51% state own entity on all oil extraction joint venture (Petroleos de Venezuela SA) Raised royalties and taxes on the joint venture Reduce drilling acreage Seize oil field for those FDI companies that didn’t comply Total, and Eni SpA Venezuela Recent political development (cont.) Selling of F-16 to Iran Plan purchase of Russian jet fighters to replace F-16 Just agreed to spend 2.7 billion on arms and additional funds to purchase replacement fighter jets Voted twice to support Iran’s nuclear ambitions Threaten to stop supplying U.S. with oil Rewrote new documents to enable President Chavez to gain control of all branches of government and allow re-election more than two terms of six years. Venezuela Recent political development (cont.) Tightening international relationship with Bolivia Encourage nationalization of Bolivia’s natural resources Bolivia have South America’s second-biggest natural gas reserves Pledge to provide 200,000 barrel of crude oil a month Purchase 200,000 tons of soybean a year 5,000 scholarships and 1,000 advanced intern ships to Bolivians to study in Venezuela Help to develop a new iron-ore deposit in El Mutun Venezuela Social Programs National healthcare 14 million now have access to national healthcare* Education/Literacy program 1 million children in poorest area of Venezuela received free education* 1.2 million illiterate adults learns to read and write* 250,000 children received secondary schooling – was excluded before due to social-economic condition* *Ambassador Bernardo Alvarez Herrera, Envoy to the U.S. washingtonpost.com January 18, 2006 Wednesday 12:00 PM Venezuela Trade Unions Union of South American Nations (Unasur) Minersur A joint Bolivian-Venezuelan mining venture South Atlantic Treaty Organization To rival NATO Venezuela Effect of Nationalization of Industries on FDI Surprisingly most foreign companies stayed Discovery of Orinoco tar belt with potential of 270 billion barrels of reserves Firms that didn’t stay ExxonMobil – will be compensated for their investments Venezuela Hero or Villian? Hugo Chura, a Bolivian Official “Previous governments here never cared about you, but the new President does. And he has friends like Fidel Castro and the Venezuelans who cares about you, too.”* Election is in early July Where President Morales’s approval rating is over 80%. Where he wants to elect new assembly to rewrite the constitution.* *Wall Street Journal, May 25th 2006 by Jose De Cordoba and David Luhnow Venezuela Conclusion/Questions