A

GLOBAL COUNTRY REPORT

ON

Submitted to

L.J. Institute of Management Studies

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In

Gujarat Technological University

UNDER THE GUIDANCE OF Prof. Himani Sheth Submitted by Section A [Batch: 2010-12] MBA SEMESTER III L. J. Institute Of Management Studies Affiliated to Gujarat Technological University Ahmedabad December, 2011

Declaration
We, L.J.I.M.S Section A, hereby declare that the report for Global / Country study Report entitled Economic & Cultural Aspects in VENEZUELA is a result of own work and our indebtedness to other work publication, references, if any, have been duly acknowledged.

Place: - Ahmedabad

(Signature)

Date :-

(name of student)

Institutes Certificate
Certified that this Global /Country Study and Report Titled Economic and Culture is the bonafide work of Prof. Himani Sheth.

Preface
Country Report is an integral part of our academic curriculum. During the Report a student gets an opportunity to set the practical aspects of theory. Theory makes the concept clear. We feel great pleasure in submitting this piece of work as our report. We hope that this work will provide fruitful result in the eyes of the reader. It is hence expected that creating of this shall benefit the reader in all aspects. The Report deals with nearly all the aspects of VENEZUELA. We have tried our best to cover nearly all the aspects related to VENEZUELA. It is done in a very cordial manner. This research is an attempt to present a report on account of little practical knowledge. In our opinion, the readers will be satisfied with the Report in all ways. We guarantee the original work and authenticity of this.

Acknowledgement
A journey is easier when we travel together. Interdependence is certainly more important than independence. It will always be us pleasures to thank those who have helped us in making this project a lifetime experience for us. It is our privilege to thank Dr. P. K. Mehta, Director of L. J. Institute of Management Studies to give us an opportunity to make our Global Report with this institute. It is our privilege to thank Prof. Himani Sheth whose guidance has made us learn and understand the finer and complicated aspects of VENEZUELA. The greatest credit goes to the blessings bestowed upon us by Almighty God without whose desire we could not have even moved a step forward and to our parents who are always a constant source of inspiration in all our endeavors.

Contents
1] Economic overview of Venezuela10 1.1 History.12 1.2 Total population & its distribution15 1.3 Economic statistics and activity18 1.4 Comparison of GDP-Per capita income19 1.5 Socio-Economic indicator.21 2] Country Resources.23 3] Investments & International Relationships37 4] Science & technology 4.1 Reforms.50 4.2 sectors51 4.3 Major Heads of Science & Technology53 5] Retailing.71 5.1 Food Retailing..72 5.2 Import & export Agents..82 5.3 Warehousing.84 6] Media.87 6.1 Overview..88 6.2 Media Coverage..96 6.3 Censorship97 7] International relationship101 7.1 Domestic Economy102 7.2 Political activities between Venezuela & India103
6

7.3 Exports & Imports with India..104 8] Country Profile..114 8.1 History.115 8.2 Independence116 8.3 Caudillo Rule..118 8.4 The Restoration of Democracy119 8.5 Chavez Presidency121 8.6 Timeline of History.122 8.7 Geography123 9] Political System131 9.1 Constitution..132 9.2 Political Structure..134 9.3 Tax Structure134 9.4 Sources of revenue & expenditure..135 9.5 Governmental Institutions & Primary Legal Sources138 9.6 Business Customs & Practices..140 9.7 Social organizations..142 9.8 Education..148 10] Religion & Aesthetics.150 10.1 Religion152 10.2 Powerful or Influential Cults..155 10.3 Aesthetics.155 10.4 Sculpture..158 10.5 Music..160

List Of Tables
SR NO. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 PARTICULARS Comparison of GDP Personal income Distribution Percentage of people & household below poverty line Employment & Unemployment Export Trend Import Trend Current account balance Employment & Unemployment MERCAL in numbers Retail outlets Major Retailers Import Export Procedure of building a warehouse Newspapers annexures Pharmaceutical Imports TABLE NO. 1 1.1 1.2 2 3.1 3.2 3.3 4 5 5.1 5.2 5.3 5.4 5.5 6 7 PAGE NOS. 19 21 22 28 41 43 44 67 73 75 76 82 83 85 93 108

List Of Graphs
SR NO. 1 2 3 4 5 6 PARTICULARS Unemployment Rate Export Trend Import Trend Current account balance Venezuelian oil reserves Building Warehouses GRAPH NO. 2.1 3.1 3.2 3.3 4.1 5.1 PAGE NOS. 30 41 43 45 60 84

CH: 1 Economic Overview of Venezuela

10

INTRODUCTION ABOUT THE ECONOMY

The economy of Venezuela is largely based on the petroleum sector, which accounts for roughly a third of the country's GDP, around 80% of total exports, and more than half of the government operating revenues. Venezuela is the fifth largest member of OPEC by oil production. From the 1950s to the early 1980s the Venezuelan economy experienced a steady growth that attracted many immigrants. During the collapse of oil prices in the 1980s the economy contracted. With high oil prices and rising government expenditures, Venezuela's economy grew by 9% in 2007 but is expected to have shrunk by 2.9% in 2009 and further in 2010. Venezuela has one of the highest inflation rates in the world averaging 29.1% in 2010, according to the CIA world fact book. According to Central Bank of Venezuela, the government received from 1998 to 2008 around 325 billion USD through oil production and export and according to the International Energy Agency, to June 2010 has production of 2.2 million of barrels per day, 800,000 of which go to the United States of America. In January, 2010, Venezuelan president Hugo Chavez announced a fixed dual exchange rate system for the bolivars. The system offers 2.6 bolivars per USD rate for imports of essential items such as food, medicine, and industrial machinery, and a 4.3 bolivars per USD rate for imports of other products, including cars and telephones. CADIVI, the government body which administers currency exchange, will continue as the only administrator of the foreign currencies and executor of this devaluation. Currently Venezuela imports almost all of its clothing, food, cars and electronic items. The International Energy Agency shows how Venezuela's oil production has fallen in the last years, producing only 2,300,000 barrels (370,000 m 3) daily, down from 3.5 million in 1998, but with the recent currency devaluation the oil incomes will double its value in local currency, allowing the government to spend more. A 2010 International Monetary Fund (IMF) study qualified as "delayed and weak" the economic recovery of Venezuela in comparison with other countries
11

of the region that had emerged from the world economic crisis "comparatively 2 well" and were now recovering to a "strong rhythm". According to figures from the Venezuelan Central Bank, the economy showed signs of improvement in the first quarter of 2011 when GDP rose between 3% and 4%.

1.1: HISTORY
1922 - 1964 When oil was discovered at the Maracaibo strike in 1922, Venezuela's dictator, Juan Vicente Gmez, allowed US oil companies to write Venezuela's petroleum law. But oil history was made in 1943 when Standard Oil of New Jersey accepted a new agreement in Venezuela based on the 50-50 principle, "a landmark event." Terms even more favorable to Venezuela were negotiated in 1945, after a coup brought to power a left-leaning government that included Juan Pablo Prez Alfonzo. From the 1950s to the early 1980s the Venezuelan economy was the strongest in South America. The continuous growth during that period attracted many immigrants. In 1958 a new government again included Prez Alfonso, who devised a plan for the international oil cartel that would become OPEC. In 1973 Venezuela voted to nationalize its oil industry outright, effective 1 January 1976, with Petrleos de Venezuela (PDVSA) taking over and presiding over a number of holding companies; in subsequent years, Venezuela built a vast refining and marketing system in the US and Europe. During Prez Jimenez' dictatorship from 1952 to 1958, Venezuela enjoyed remarkably high GDP growth, so that in the late 1950s Venezuela's real GDP per capita almost reached West Germany's. However, from 1958/1959 onward, Romulo Betancourt (president from 1959 to 1964) inherited an enormous internal and external debt caused by rampant public spending

12

during the dictatorship. Nevertheless, he managed to balance Venezuela's public budget and initiate a unsuccessful agrarian reform. 1960s - 1990s Buoyed by a strong oil sector in the 1960s and 1970s, Venezuela's governments were able to maintain social harmony by spending fairly large amounts on public programs including health care, education, transport, and food subsidies. "Great strides were made in literacy and welfare programs." Because of the oil wealth, Venezuelan workers "enjoyed the highest wages in Latin America." This situation was reversed when oil prices collapsed during the 1980s. The economy contracted, and the number of people living in poverty rose from 36% in 1984 to 66% in 1995. The country suffered a severe banking crisis (Venezuelan banking crisis of 1994). As the economy contracted in the 1980s, inflation levels (consumer price inflation) fell, remaining between 6 and 12% from 1982 to 1986. In the late 80s and early 90s inflation rose to around 30 - 40% annually, with a 1989 peak of 84%. The mid 1990s saw annual rates of 50-60% (1993 to 1997) with an exceptional peak in 1996 at 99.88%. Subsequently inflation has remained in a range of around 15% to 30%. By 1998, the economic crisis had grown even worse. Per capita GDP was at the same level as 1963, down a third from its 1978 peak; and the purchasing power of the average salary was a third of its 1978 level. 1999 Hugo Chvez was elected president in December 1998 and took office in February 1999. His economic policies have been more socialistic than those of his predecessors. In the first four years of the Chvez presidency, the economy grew at first (1999 - 2001), then contracted from 2001 - 2003 to GDP levels similar to 1997, at first because of low oil prices, then because of the turmoil caused by the 2002 coup attempt and the 2002-2003 business strike. Other factors in the decline were an exodus of capital from the country,
13

and a sudden reluctance of foreign capitalists to invest there. Gross Domestic Product was 50.0 trillion bolivars in 1998. At the bottom of the recession, 2003, it was 42.4 trillion bolivars (in constant 1998 bolivars). However, with a calmer political situation in 2004, GDP rebounded 50.1 trillion bolivars, and has risen strongly since, to 66.1 trillion bolivars in 2007 (both in constant 1998 bolivars). Particularly important in the recovery was the defeat of the oppositionist management at PDVSA after the 2002-2003 lockout/strike, which gave the government, for the first time, actual control of the state oil company and allowed the pursuit of a unified economic policy. In response to the low oil prices at the end of the 1990s, Chavez played a leading role within OPEC to reinvigorate that organization and obtain members' adherence to lower production quotas designed to drive up the oil price. Venezuelan oil minister Al Rodrguez Araque's announcement in 1999 that his country would respect OPEC production quotas marked "a historic turnaround from the nation's traditional pro-US oil policy." Rising petroleum prices in 2000 took some pressure off the budget and currency. However, with the president's economic cabinet attempting to reconcile a wide range of views, the country's economic reform program had largely stalled. Reforms that were undertaken included the reduction or abolition of education, healthcare and nutrition fees to millions of Venezuelans. The government sought international assistance to finance reconstruction after massive flooding and landslides in December 1999 caused an estimated US$15 billion to $20 billion in damage. The hardest hit sectors in the worst recession years 20022003 were construction (-55.9%), petroleum (-26.5%), commerce (-23.6%) and manufacturing (-22.5%). The drop in the petroleum sector was caused by adherence to the OPEC quota established in 2002 and the virtual cessation of exports during the PdVSA-led Venezuelan general strike of 2002-2003. The non - petroleum sector of the economy contracted by 6.5% in 2002. The

14

bolivar, which has been suffering from serious inflation and devaluation relative to international standards since the late 1980s, continued to weaken. The inflation rate, as measured by consumer price index, was 35.8% in 1998, falling to a low of 12.5% in 2001 and rising to 31.1% in 2003. Historically, the highest yearly inflation was 99.9% in 1996. On 23 January 2003, in an attempt to support the bolivar and bolster the government's declining level of international reserves, as well as to mitigate the adverse impact from the oil industry work stoppage on the financial system, the Ministry of Finance and the central bank suspended foreign exchange trading. On 6 February, the government created CADIVI, a currency control board charged with handling foreign exchange procedures. The board set the US dollar exchange rate at 1,596 bolivars to the dollar for purchases and 1,600 to the dollar for sales. The Venezuelan economy shrank 5.8% in the first three months of 2010 compared to the same period last year and now has the highest inflation rate in Latin America30.5%. President Hugo Chavez has expressed optimism that Venezuela will soon emerge from recession, despite the International Monetary Fund forecasts showing that Venezuela will be the only country in the region to remain in recession this year.

1.2: Total Population and its Distribution

TOTAL POPULATION
Total Population of Venezuela - 27,635,743 (July 2011 estimate) Country comparison to the world: 45

1) Population growth rate 1.493% (2011 estimate) Country comparison to the world: 79
15

2) Life expectancy at birth Total population: 73.93 years Country comparison to the world: 110 Male: 70.84 years Female: 77.17 years (2011 estimate)

3) Birth rate 20.1 births/1,000 population (2011 estimate) Country comparison to the world: 88

4) Death rate 5.17 deaths/1,000 population (July 2011 estimate) Country comparison to the world: 180

5) Maternal mortality rate 68 deaths/100,000 live births (2008) Country comparison to the world: 86 6) Infant mortality rate Total: 20.62 deaths/1,000 live births Country comparison to the world: 95 Male: 24.12 deaths/1,000 live births Female: 16.95 deaths/1,000 live births (2011 estimate)

16

DISTRIBUTION OF POPULATION
1) Age
a) Age structure

0-14 years: 29.5% (male 4,149,781/female 4,002,931) 15-64 years: 65.1% (male 8,846,945/female 9,130,561) 65 years and over: 5.4% (male 665,436/female 840,089) (2011 estimate)

b) Median age

Total: 26.1 years Male: 25.4 years Female: 26.8 years (2011 estimate)

2) Sex
a) Sex ratio

At birth: 1.05 male(s)/female Under 15 years: 1.03 male(s)/female 15-64 years: 0.97 male(s)/female 65 years and over: 0.79 male(s)/female Total population: 0.98 male(s)/female (2011 estimate) 3) Geographic areas
a) Urbanization

Urban population: 93% of total population (2010) Rate of urbanization: 1.7% annual rate of change (201015 estimate)
17

b) Major cities - population

CARACAS million;

(capital)

3.051

million;

Maracaibo

2.153 1.159

Valencia

1.738

million;

Barquisimeto

million; Maracay 1.04 million (2009)

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c) Migration rates and patterns Net migration rate : 0 migrant(s)/1,000 population (2011 estimate) Country comparison to the world: 111 d) Ethnic groups Ethnic groups : Spanish, Italian, Portuguese, Arab,

German, African, indigenous people

e) Religions

Nominally Roman Catholic 96%, Protestant 2%, other 2%

1.3: ECONOMIC STATISTICS AND ACTIVITY

GDP (purchasing power parity) $345.2 billion (2010 estimate) Country comparison to the world: 35 $351.9 billion (2009 estimate) $363.9 billion (2008 estimate) Note: data are in 2010 US dollars

GDP (official exchange rate) $290.7 billion (2010 estimate)

19

GDP - real growth rate -1.9% (2010 estimate) Country comparison to the world: 205 -3.3% (2009 estimate) 4.8% (2008 estimate)

GDP - per capita (PPP) $12,700 (2010 estimate) Country comparison to the world: 92 $13,100 (2009 estimate) $13,800 (2008 estimate) Note: data are in 2010 US dollars

1.4: COMPARISON OF GDP PER CAPITA IN RESPECTIVE YEARS FROM 1999 TO 2010 (FIG. IN US DOLLARS)

TABLE NO. 1 Country Venezuela 1999 8,000 2000 6,200 2001 6,100 2002 5,500 2003 4,800 2004 5,800

20

Country Venezuela

2005 6,400

2006 7,200

2007 12,800

2008 13,500

2009 13,000

2010 12,700

GDP - composition by sector Agriculture: 4% Industry: 36% Services: 60% (2010 estimate) LABOR FORCE Labor force of Venezuela - 13.11 million (2010 estimate) Country comparison to the world: 40 Labor force - by occupation Agriculture: 13% Industry: 23% Services: 64% (1997 estimate) Unemployment rate 8.5% (2010 estimate) Country comparison to the world: 100 7.9% (2009 estimate)

Unemployment, youth ages 15-24 Total: 13.59% Country comparison to the world: 215 Male: 12.33% Female: 15.94% (2008) Population below poverty line 37.9% (2005 estimate) Household income or consumption by percentage share
21

Lowest 10%: 1.7% Highest 10%: 32.7% (2006) Distribution of family income - Gini index : 41 (2009) Country comparison to the world: 55 Distribution of family income - Gini index : 49.5 (1998)

1.5: SOCIO ECONOMIC INDICATORS

Like most Latin American countries, Venezuela has an unequal distribution of wealth. The rich tend to be very rich and the poor very poor. In 1970, the poorest fifth of the population had 3% of national income, while the wealthiest fifth had 54%. For comparison the UK 1973 figures were 6.3% and 38.8%, and the US in 1972, 4.5% and 42.8%. The more recent income distribution data available is for distribution per capita, not per household. The two are not strictly comparable because poor households tend to have more members than rich households; thus, the per household data tends to show less inequality than the per capita data. The table below shows the available per capita data for recent years from the World Bank. PERSONAL INCOME DISTRIBUTION TABLE NO. 1.1 Share of personal income (%) received by:

22

Year 1987 1995 1996 2000

Poorest 2nd fifth 4.7 4.3 3.7 4.7 fifth 9.2 8.8 8.4 9.4

3rd fifth 4th fifth 14.0 13.8 13.6 14.5 21.5 21.3 21.2 22.1

Wealthiest Wealthiest fifth 50.6 51.8 53.1 45.4 10% 34.2 35.6 37.0 29.9

GINI index 46.8 48.8 42

Note that personal (per capita) income distribution, given in this table, is not exactly comparable with household income distribution, given in the previous table, because poor households tend to have more members.
Sources: 1987 1995 1996 2000 data: data: data: data: 1991 1998 2000/2001 2006 World World World World Development Development Development Report, Report, Report, Table Table Table 30, 5, pp 2.8, pp Table p 2623. 70. 2823. 2.8.

Development

Indicators,

All of the above publications are by the World Bank.

Poverty in Venezuela increased during the 1980s and 1990s but has decreased during the Chvez presidency, with the exception of the troubled years 2002 and 2003. The table below shows the percentage of people, and the percentage of households, whose income is below a poverty line which is equal to the price of a market basket of necessities such as food.[47] Note that as an income-based measure of poverty, this omits the effect of some other factors that may affect economic wellbeing, such as the availability of free health care and education.

POVERTY TABLE NO. 1.2 Percentage of people and households with income below national poverty line

23

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006 36.3 30.6

Year

H o u s e h o ld s 48.1 42.0 40.4 48.6 55.1 47.0 28.5 33.6 43.9 39.0 37.9

People 54.5 50.4 48.7 46.3 45.4 55.4 62.1 31.3 53.9 43.7

Sources: World Bank, 1997 World Development Indicators, p 52; Weisbrot et al., Poverty Rates in Venezuela (CEPR, 2006)

Ch: 2 Country Resources

24

2007

1989

25

MINERALS
PDVSAcontrols Venezuelas petroleum sector. Government companies also control the electricity sector and important parts of the telecommunications and media sectors. During 2009, the Government had nationalized assets in the banking, chemicals, and crude oil industries. The nationalization process, high inflation, and foreign exchange controls had led to reduced private investment. In 2010, Venezuelas leading mineral resources included, in order of value, petroleum, natural gas, coal, iron ore, gold, nickel, diamond, and bauxite. Petroleum exports accounted for 18% of Venezuelas GDP; the manufacturing sector accounted for 16%; construction, 7%; and mining, 1%. Venezuelas economy has benefited from its mineral industry owing to the significant contributions the petroleum sector has made to its trade balance. In 2010, Venezuelas mineral exports amounted to $65.8 billion and included, in order of value, petroleum ($62.3 billion), and bauxite and aluminum, steel, cement, chemical products, iron ore, and other products ($3.5 billion). The countrys leading export partners were the United States (27.3%), China (12.8%), Colombia (11.4%), Brazil (8.8%), and others (39.7%). Venezuelas imports amounted to $38.6 billion of consumer goods, machinery and transport equipment, manufactured goods, and construction materials. Venezuelas leading suppliers were the United States (20.6%), Colombia (17.8%), China (12.8%), Mexico (8.7%), Brazil (4.7%), and others (35.4%).

Petroleum
In 2010, Venezuelas crude oil production amounted to about 986 million 42gallon barrels, and its gross natural gas production amounted to 28 billion cubic meters. Venezuela consumed about 279 million barrels of petroleum in 2010. PDVSAcontrolled the countrys petroleum sector through its wholly owned subsidiary CVP. According to BP and the U.S. Energy Information Administration, Venezuela has proven reserves of about 211 billion barrels (Gbbl) of crude oil (the largest in the Western Hemisphere). To increase crude
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oil refinery capacity in Venezuela, PDVSA planned to build new refineries by investing $18 billion to construct the Cabruta refinery, which would have a capacity to produce 400,000 bbl/d of extra-heavy crude; the Batalla de Santa Ines refinery (50,000 bbl/d of petroleum); and the Caripito refinery (50,000 bbl/d of asphalt). With these three new refineries online and improvements made to the countrys existing refineries, PDVSAs processing capacity in Venezuela would be increased to 700,000 bbl/d by 2012. Aconsortium led by Repsol YPF S.A. of Spain had secured the Carabobo 1 project, and a consortium led by Chevron had secured the Carabobo 3 project. The second project, Carabobo 2, went unawarded. In December 2010, PDVSAsigned direct bilateral agreements for the development of several oil blocks in the Orinoco Belt, including an agreement with China National Offshore Oil Corp. (CNOOC), which was a leading Chinese Government-owned oil company and an offshore oil and gas producer in China. PDVSAannounced a memorandum of understanding with CNOOC to develop the Boyaca Block 3. Other bilateral agreements for the joint exploration of the Orinoco heavy-oil belt included agreements with National Oil and Gas Corporation of Vietnam (Petrovietnam) for the Junin-2 Block; China National Petroleum Corp. (CNPC) for the Junin-4 Block; Italys Eni for the Junin-5 Block; and a consortium of Russia companies for the Junin-6 Block. The Ministerio del Poder Popular para la Energa y Petrleo indicated that Venezuela had 1.28 Mbbl/d of crude oil refining capacity in 2010, all operated by PDVSA. The major facilities included the Paraguana refining center (940,000 bbl/d), the Puerto de la Cruz refinery (195,000 bbl/d), and El Palito refinery (127,000 bbl/d). Venezuelas CITGO Petroleum Corp., through PDVSA, also controlled significant refining capacity outside of the country. According to BP, and in line with the Venezuelan Governments initiative, all exploration and production projects that were operated by privately owned companies under service agreements were incorporated into joint ventures. PDVSAs CVP held the majority share in each joint venture. BP Venezuela subsequently became a shareholder in two of these joint ventures (Petroperij and Petrleos de Boquern). BP also became a partner in the

27

110,000-bbl/d Petromonagas joint-venture project, which had gross reserves estimated to be 1.2 Gbbl of equivalent oil.

Gold
Most of the gold activities in Venezuela took place in the State of Bolivar. Canadian-Russian Rusoro Mining Ltd. (RML.V) was engaged in the acquisition, exploration, development, and operation of gold properties in Venezuela and operated as a joint venture with CVG Minerven. RML.V held a 95% interest in the Choco gold mine and a 50% interest in the Isidora gold mine, and CVG Minerven owned the remaining shares of each; both mines are located in the State of Bolivar. RML.V was interested in Las Cristinas gold project after the Government withdrew a permit for Crystallex International Corp. to develop the project, which is located at Kilometro 88 in Bolivar State. As of December 31, 2009, Las Cristinas had proven and probable reserves of 464.4 million metric tons (Mt) grading 1.13 grams per metric ton (g/t) gold containing 16,862,000 troy ounces, or the equivalent of 524.5 metric tons (t) of gold. In addition, Las Cristinas had measured and indicated resources of 165 Mt grading 0.73 g/t gold containing 3,899,000 troy ounces, or the equivalent of 121.3 t of gold.

Coal
CarbonesdelGuasare (CdG) used the truck-shovel system to access about 175 Mt of coal reserves in the Guasare coal basin. CdG owned and operated the Paso Diablo coal mine, which is located in the State of Zulia in northern Venezuela and which produced about 7.5 million metric tons per year (Mt/yr) of thermal and metallurgical pulverized coal injection (PCI) coal. CdG was a joint venture of Carbozulia, S.A. (a 49% Government-owned company); Anglo Coal, which was a subsidiary of Anglo American (25.5%); and Peabody Energy Corp. of the United States (25.5%). Peabody marketed its share of the mines production to customers seeking high-Btu, low-sulfur thermal coal for electricity generation and PCI coal to be used in the steel industry. The Mina Norte coal mine, which is located at El Brillante in the municipality of Paez, State of Zulia, was operated by the joint venture of Carbomar Corp. (64%)
28

and Carbozulia (36%). The Government continued to express an interest in developing a coal-powered electricity-generating plant to supplement the national electricity grid, much of which was supplied by hydroelectric plants.

Natural Gas
In 2010, natural gas production and consumption remained at about the same level as that of 2009 (28,000 million cubic meters and 29,500 million cubic meters, respectively); the difference between production and consumption appears to have been imported from Colombia. Most natural gas output was associated with petroleum production. According to BP p.l.c. and the U.S. Energy Information Administration, Venezuela has the second largest natural gas reserves (about 5.1 trillion cubic meters) in the Western Hemisphere behind the United States (6.1 trillion cubic meters). The petroleum sector consumed more than 65% of Venezuelas natural gas production in the form of reinjection to produce crude oil. Venezuelas most important natural gas projects included the Barrancas and Yucal Placer Blocks. Since early 2008, the Antonio Ricaurte 224-kilometer gas pipeline, which connects western Venezuela to Colombias Punta Ballenas area, had delivered between 2,700 and 4,300 million cubic meters per day of natural gas from Colombia to Venezuela; the flow of gas was to be reversed by no later than 2012 when Venezuela was to begin exporting more than 3,960 million cubic meters per day to Colombia, and that contracted volume was reportedly the pipelines average flow in 2010.

Uranium
Venezuela planned to produce uranium eventually from deposits located in the States of Amazonas and Bolivar, which supposedly contain about 50,000 t of uranium reserves. Russia and Venezuela signed cooperation agreements in the fields of crude oil exploration and nuclear energy and were planning to sign a 25-year intergovernmental cooperation agreement for crude oil and natural gas production and nuclear power generation.

Labor Market
29

Venezuelan workers face a substantially better labor market than a decade ago, as shown in Table. There are now 2.9 million more jobs than in 1998, which represents a one-third increase. The unemployment rate has dropped from 11.3 percent to 7.8 percent; it rose to 19.2 percent in 2003, but has fallen by over half since that time. There has also been a significant increase in job quality, as measured by formal sector employment. Over half of the labor force 51.8 percent is now employed in the formal sector, up from 45.4 percent in 1998. Most of the job growth has been in the private sector, but both sectors have outpaced the growth in the labor force: the decade has seen a 47.2 percent increase in public-sector jobs and a 30.6 percent increase in private-sector jobs. Also, the rate of employment (employed as a percentage of the labor force) has increased enormously during the current expansion, from 80.8 percent to 92.2 percent. Measured from 1999 it is much less but still substantial, increasing from 88.7 percent. In sum, the labor market indicators, by any comparison, all show substantial improvement during the Chvez administration. These are consistent with the reduction in poverty as measured by cash income.

TABLE 2: Employment and Unemployment, 1998 2008

30

199 199 8 9 Labor Force 969 102 9.3 Total Employed By Sector: Public Private By Economy: Formal Informal 440 425 3.9 3.7 414 443 7.4 5.0 59. 2 860 869 5.1 1.4

200 0 101 63. 9 868 2.7

200 1 105 76. 0 912 3.5

200 2 113 69. 0 961 1.7

200 3 117 93. 5 952 4.8

200 4 120 36. 3 100 35. 7

200 5 119 36. 5 103 44. 1 163 3.6 871 0.6

200 6 120 56. 5 107 83. 2 180 4.8 897 8.4

200 7 122 11. 8 110 92. 1 193 0.0 916 2.1

200 8 124 33. 9 114 69. 6 206 4.5 940 5.1

140 134 2.6 8.2 720 734 2.5 3.3

135 2.8 732 9.9*

137 8.4 774 5.1

136 4.8 824 6.9

137 1.3 815 3.4

149 1.7 854 4.0

411 0.9 456 5.7 100 85. 4 13. 3 72. 1 14. 6 100

449 1.9 463 0.1 100 86. 3 13. 0 73. 2 13. 7 99. 9

475 2.5 485 6.1 100 84. 5 12. 0 72. 5 15. 5 100

452 8.8 498 8.4 100 80. 8 11. 6 69. 1 19. 2 99. 9

492 3.2 510 8.8 100 83. 4 12. 4 71. 0 16. 6 100

538 7.1 492 4.2 100 86. 7 13. 7 73. 0 13. 3 100

585 3.4 492 9.7 100 89. 4 15. 0 74. 5 10. 6 100

622 2.7 486 9.4 100 90. 8 15. 8 75. 0 9.2 100

644 5.9 502 3.7 100 92. 2 16. 6 75. 6 7.8 100

Labor Force 100 100 Total 88. 84. Employed By Sector Public Private Unemploym ent Total By Economy Formal Informal 45. 4 42. 8 41. 5 43. 2 7 14. 5 74. 3 11. 7 13. 1 71. 6 15.

3 3 100 100

40. 4 44. 9

42. 5 43. 8

41. 8 42. 7

38. 4 42. 3

40. 9 42. 4

45. 1 41. 3

48. 6 40. 9

51. 0 39. 9

51. 8 40. 4

31

Source: Instituto Nacional de Estadstica (INE), 2009; Repblica Bolivariana de Venezuela, 2009.

(Graph: 2)

Reason For decrease unemployment rate: Unemployment rates in Venezuela have dropped substantially to 8.3% as of June 2007, its lowest level in more than a decade, as compared to 15% in June 1999 and 18.4% in June 2003. Formal employment has also increased substantially since 1998, from 44.5% to 49.4% of the labor force. More importantly, employment in the formal sector has increased to 6.06 million (2006), from 4.41 million in 1998 and 4.72 million in 2003. As a percentage of the labor force, formal employment has increased significantly since 1998, from 44.5% to 49.4%. About 1.9 million jobs have been created in the private sector and 478 thousand in the public sector since 1998. Employment as a percentage of the labor force has increased 1.5% since 1998. Private employment was a slightly larger percentage of the labor force (75.2%) in 2006 as compared to 1998 (74.9%). However, both of these indicators understate the improvement in the labor market since the number of people who were out of the labor force for education as access to education was increasing rose by 3.4%, relative to the labor force during in the same period.
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The private sector has grown faster than the public sector over the last eight years, and therefore the private sector has a bigger share of the economy in 2007 before President Chvez took office in 1998. The fastest growing sectors between 2003 and 2007 have been finance and insurance companies (240%), trade and repair services (127.5%), communications (99.5%), transport and storage (87%), and manufacturing 91%. These rates demonstrate a move towards a diversification away from the dependence on oil. Even the recent nationalizations of the electric and telecommunications sectors should not be looked as a desire from the Venezuelan government to constrain the private sector rather, they are aimed at making basic services more widely available to all citizens. For example the decision to nationalize the telecommunications company CANTV5 , was based on eliminating the monopoly on land lines and expanding access to the Internet. In Venezuela, Internet access remains below average for the region, with 125 users per 1000 people, as compared to 156 per 1000 for Latin America. Similarly with respect to the nationalization of the oil fields, Venezuela is one of the only major oil-producing states in the development world that allows foreign investment in oil production even U.S. allies such as Mexico and Saudi Arabia do not allow foreign investment in such sector. Agricultural workers = Female Compensation of employees = % of expense Economic activity = Men aged 65 plus Female decision makers Female economic activity growth force with tertiary education = % of total force, total Industrial workers = Male Labor force = By occupation 2% 15.93% 46.92 24% 14% 15.50% 12,853,710 29%

33

Agriculture 13%, Industry 23%, Services 64% Parental leave = Paid maternity leave Regulation Regulation = Employment Conditions Rigidity of employment index Total work time = Males Unemployment, female = % of female labor force Unemployment, male = % of male labor force Unemployment, total = % of total labor force 18 weeks 75 88 76 416 minutes 20.30% 14.40% 16.80% paid

Vacation = Minimum vacation time around the world = legally 15 required days

Workers' remittances and compensation of employees, paid = 211,000,000 US$ Workers' remittances, receipts = BoP, current US$ $ 128,000,000 BoP $

SOURCES: ILO (International Labour Organization). 2002. Key Indicators of the Labour Market 2001-2002. February 2002

34

TRANSPORTATION AND TELECOMMUNICATIONS

TRANSPORTATION SYSTEM Railways Total: 806km Standard gauge: 806 km 1.435-m gauge (41 km electrified) (2010) Roadways Total: 96,155km Paved: 32,308km Unpaved: 63,847 km (2002) Waterways 7,100 km (the Orinoco River (400 km) and Lake de Maracaibo are navigable by oceangoing vessels) (2010) Pipelines Extra heavy crude 980 km; gas 5,347 km; oil 6,694 km; refined products 1,620 km (2010) Ports and terminals La Guaira, Maracaibo, Puerto Cabello, Punta Cardon Oil terminals: Jose terminal Merchant marine Total: 59 By type: bulk carrier 5, cargo 15, chemical tanker 5, liquefied gas 5, passenger 1, passenger/cargo 12, petroleum tanker 16
35

Foreign-owned: 10 (Denmark 1, Estonia 1, Germany 1, Greece 4, Mexico 1, Norway 1, Spain 1) Registered in other countries: 9 (Panama 8, Saint Vincent and the Grenadines 1) (2010) Airports 409 (2010) Airports - with paved runways Total: 129 over 3,047 m: 5 2,438 to 3,047 m: 10 1,524 to 2,437 m: 34 914 to 1,523 m: 63 Under 914 m: 17 (2010) Airports - with unpaved runways Total: 280 2,438 to 3,047 m: 1 1,524 to 2,437 m: 16 914 to 1,523 m: 91 Under 914 m: 172 Heliports 4 (2010)

Transportation - note
The International Maritime Bureau reports the territorial and offshore waters in the Caribbean Sea as a significant risk for piracy and armed robbery against ships; numerous vessels, including commercial shipping and pleasure craft, have been attacked and hijacked both at anchor and while underway; crews have been robbed and stores or cargoes stolen.
36

COMMUNICATION SYSTEM

37

Telephones - main lines in use : 6.867 million (2009) Country comparison to the world: 28 Telephones - mobile cellular : 28.124 million (2009) Country comparison to the world: 32 Telephone system : General assessment: modern and expanding Domestic: domestic satellite system with 3 earth stations; recent substantial improvement in telephone service in rural areas; substantial increase in digitalization of exchanges and trunk lines; installation of a national interurban fiber-optic network capable of digital multimedia services; combined fixed and mobile-cellular telephone subscribership 130 per 100 persons International: country code - 58; submarine cable systems provide connectivity to the Caribbean, Central and South America, and US; satellite earth stations - 1 Intelsat (Atlantic Ocean) and 1 PanAmSat; participating with Colombia, Ecuador, Peru, and Bolivia in the construction of an international fiberoptic network; constructing submarine cable to provide connectivity to Cuba with an estimated date of completion in late 2011 (2010) Broadcast media : government supervises a mixture of state-run and private

broadcast media; 1 state-run television network, 4 privatelyowned TV networks, a privately-owned news channel with limited national coverage, and a government-backed pan-American channel; state-run radio network includes 65 news stations and roughly another 30 stations targeted at specific audiences; statesponsored community broadcasters include 244 radio stations and 36 television stations; the number of private broadcast radio stations has been declining, but a large number remain in operation (2010) Internet country code : .ve
38

Ch: 3 Investments & International Relationships

39

40

Foreign Investment
Background:Venezuela remains highly dependent on oil revenues, which account for roughly 90% of export earnings, about 50% of the federal budget revenues, and around 30% of GDP. A nationwide strike between December 2002 and February 2003 had far-reaching economic consequences - real GDP declined by around 9% in 2002 and 8% in 2003 - but economic output since then has recovered strongly. Fueled by high oil prices, record government spending helped to boost GDP by about 10% in 2006, 8% in 2007, and nearly 5% in 2008, before the world recession caused a contraction in 2009. This spending, combined with recent minimum wage hikes and improved access to domestic credit, has created a consumption boom but has come at the cost of higher inflation - roughly 20% in 2007 and more than 30% in 2008. Imports also jumped significantly before the recession of 2009. Declining oil prices in the latter part of 2008 are undermining the government's ability to continue the high rate of spending. President Hugo CHAVEZ in 2008-09 continued efforts to increase the government's control of the economy by nationalizing firms in the agribusiness, banking, tourism, oil, cement, and steel sectors. In 2007, he nationalized firms in the petroleum, communications, and electricity sectors
Opportunities (major in oil & gas sectors):-

Ports and airports are being privatized and important markets should develop in these sectors. The oil sector is very dynamic, prospecting and exploitation remains attractive, even if the government has made the conditions of exploitation more difficult. Numerous markets remain unexploited in the country, mainly those concerning the production of finished products which are mostly imported. The technological sector has developed

41

very little. In the recent years, a policy of aid to production has given a new impetus to the agro-food industry: coffee, tropical fruits, rice, tobacco, cacao, alcoholic drinks, as well as to the car industry and audiovisual production. On the contrary, with the largest oil reserves in the Western Hemisphere, Venezuela might appear like a natural candidate to attract major Direct Foreign Investment funds. But, as a direct result of Mr. Chvezs policy of marginalizing private sector capital, Foreign Direct Investment flows actually slammed into reverse in 2009. Venezuela continues to experience a net outflow of foreign direct investment to the tune of $3.1 billion a year. Investors thinking of doing business in Venezuela should be aware that they are likely to lose money in the process.

Venezuela: Net Foreign Direct Investment Inflows by Target Sector (Millions Of dollar):Such startling figures are driven largely by the Chvez governments

nationalization drive, since compensation for expropriated businesses is counted as negative Foreign Direct Investment. What does this tell us? Rather than seek out new foreign investors, the Venezuelan government is busily buying out those who stopped by in the past. With investments flowing out of Venezuela at a record pace, new foreign investors find themselves between a rock and a hard place in Chvez land. In addition, with next to none or few new investments coming into Venezuela outside the extractive sector, domestic firms arent enjoying any of the positive spillover effects from foreign investments whether it is the most advanced technology, added dynamism, or cutting-edge management practices.

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Year

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Petroleum Finance Others -

1026 590 2905

2016 430 1264

532 526 -276

-25 197 1868

-529 646 1366

1021 492 1076

-1958 369 999

-180 673 153

-230 469 110

0 -354 -2751

International Trade Statistics

Major Exports:$65.79 billion (2010 est.), $57.6 billion (2009 est.)

Country comparison to the world:- 47

Commodities:Petroleum, bauxite and aluminum, minerals, chemicals, agricultural products, basic manufactures

Partners:US 38.7%, China 7.7%, India 4.8%, Cuba 4.1% (2010)

Export Subsidies:Exporters of selected agricultural products cocoa, some fruits, and certain seafood products are eligible to receive a tax credit equal to 10 percent of the exports value. The level of direct payments for export subsidies has generally been fairly small and limited to agricultural products. Venezuela notified its export subsidies to the WTO in the past, with the last notification occurring in

43

June 2001, for the export year 1998. subsidies at that time was $5.5 million.

The total value of export

3.1 Export Trend (US million $)

Country 2002 2003 28.6 2004 25.86 2005 35.84 2006 52.73 2007 69.23 2008 93.54 2009 57.6 2010 65.79

Venezuel a

29.5

(Source: http://www.indexmundi.com/g/)

3.1 Export Trend (US million $)

Exports Trend
100 90 80 70 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010

Exports

Major Imports:$38.61 billion (2010 est.), $38.44 billion (2009 est.)

Country comparison to the world:- 55

44

 Import Policies:ANDEAN COMMUNITY The Andean Community (Comunidad Andina, CAN) is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement in 1969. Its headquarters are located in Lima, Peru. Venezuela, led by anti-US firebrand Hugo Chavez, said in 2006 it would leave the Andean trade group because of a disagreement over free-trade agreements with the United States signed by pact members Peru and Colombia Venezuela officially withdrew from the Andean Community (AC) in April 2006. President Chavez stated publicly that the reason for the withdrawal was the entry of other AC member countries into free trade agreements or negotiations with the United States, which, according to the Venezuelan government, changed the essence of the pact. Under AC rules, following a members formal withdrawal, only tariff-related decisions and resolutions remain in force, expiring after a period of five years from the date of withdrawal. All of Venezuelas obligations under the AC tariff liberalization regime should remain in place until the end of April 2011. Over the years, AC norms, which cover a wide range of disciplines, have been incorporated into the Venezuelan legal framework. Although the Venezuelan government has yet to clarify officially the legal impact of leaving the AC, to date Venezuela has continued to follow AC norms. In November 2006, Venezuelas Supreme Court accepted a petition requesting an interpretation of the current validity of AC norms. As of January 2011, the court had not issued a ruling on the matter.

45

Commodities:Agricultural products, raw materials, machinery and equipment, transport equipment, construction materials.

Partners:US 26.6%, Colombia 11.4%, Brazil 9.6%, China 9.1% (2010) 3.2 Import Trend (US million $)
Country 2002 2003 2004 18.4 18.8 2005 2006 2007 2008 2009 2010

Venezuela

10.71 14.98 24.63 28.81 48.1

38.44 38.61

(Source: http://www.indexmundi.com/g/)

3.2 Import Trend (US million $)

Imports Trend
60 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010
Imports

The Venezuelan government is the main importer of basic foodstuffs and has created a large food distribution network to serve low and middle income classes. The Corporacion Venezolana de Alimentos (CVAL) and the Corporacin de Abastecimiento y Servicios Agrcolas (CASA) are the leading state trading entities. At the same time, Mercado de Alimentos, C.A. (MERCAL) and Productora Distribuidora Venezolana de Alimentos (PDVAL), a division of Venezuelas state-owned oil company Petroleos de Venezuela (PDVSA), also import for their own food marketing chains, offering products at
46

prices that are at or below government-fixed prices. Two supermarket chains, Corporacion de ercados Socialistas (COMERSO) and Abastos Bicentenarios have been recently created to increase the governments market presence, and to compete with the private sector. Venezuelas food program is focused on providing a government-subsidized basic basket of products, including dry milk, precooked corn flour, black beans, rice, vegetable oils, sardines, pasta, sugar, bologna, margarine, deviled ham, eggs, mayonnaise, and sauces. Government entities have an advantage in purchasing abroad because they have guaranteed access to official dollars, import licenses and permits, and import products without custom duties.

Balance of Payment:This entry records a country's net trade in goods and services, plus net earnings from rents, interest, profits, and dividends, and net transfer payments (such as pension funds and worker remittances) to and from the rest of the world during the period specified. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms 3.3 Current Account Balance (US million $)
Country 2004 2005 25.36 2006 31.82 2007 20.00 2008 39.2 2009 8.561 2010 14.38

Venezuela 14.59

(Source: http://www.indexmundi.com/g/)

47

3.3 Current Account Balance (US million $)

Exchange Rates:In January, 2010, CHAVEZ announced a dual exchange rate system

for the fixed rate bolivar. The system offers a 2.6 bolivar per dollar rate for imports of essentials, including food, medicine, and industrial machinery, and a 4.3 bolivar per dollar rate for imports of other products, including cars and telephones. The two exchange rate adjustments over the past 12 months are intended to diversify Venezuelas economy, which is dominated by the oil sector and dependent on imports. The measures are expected to stimulate domestic production by making imports more expensive and facilitating investments through the simplification of transactions and legal regulation of the financial system. The adjustments also increase government revenue and a bond yield at a time when the government has pledged to maintain its high spending on social programs such as health care, housing, food access, and education and has taken control of approximately 30% of the banking sector in order to direct investments toward domestic production. Bolivars (VEB) per US dollar 48

4.3039 (2010) 2,147 (2007)

2.147 (2009) 2,147 (2006)

2.147 (2008)

Trade Restrictions:Trade Summary: The U.S. goods trade deficit with Venezuela was $22.1 billion in 2010, up $3.4 billion from 2009. U.S. goods exports in 2010 were $10.7 billion, up 14.4 percent from the previous year. Corresponding U.S. imports from Venezuela were $32.8 billion, up 16.8 percent. Venezuela is currently the 25th largest export market for U.S. goods. U.S. exports of private commercial services (i.e., excluding military and government) to Venezuela were $5.0 billion in 2009 (latest data available), and U.S. imports were $788 million. Sales of services in Venezuela by majority U.S.-owned affiliates were $4.1 billion in 2008 (latest data available), while sales of services in the United States by majority Venezuela-owned firms were $1.9 billion. The stock of U.S. foreign direct investment (FDI) in Venezuela was $14.5 billion in 2009 (latest data available), up from $13.5 billion in 2008. U.S. FDI in Venezuela is primarily concentrated in the nonbank holding companies and manufacturing sectors. Trade involves several restrictive processes and heavy

documentation. Moreover, foreign exchange is not available in the nation freely. This implies that all trading transactions need to be administered by a bank managing the documentation process, in collaboration with the nations government agency, commission de administration de divas. The agency has complete discretion to permit or refuse a bank foreign exchange to trade.

Embargoes:It is the policy of the United States to deny licenses and other approvals for exports and imports of defense articles and defense services, destined for or originating in certain countries including Venezuela.
49

The Secretary of State determined that Venezuela, are not cooperating fully with anti- terrorism efforts.

Quotas:Venezuela's President Hugo Chavez urged the OPEC producer group on Friday to raise its quota for the South American nation given its vast reserves in the Orinoco heavy crude belt

(Oil workers work at a petroleum area operated by Venezuelan state oil company PDVSA in Morichal July 28, 2011.) Venezuela's quota is around 3 million barrels per day, but it aspires to produce far more than that in the coming years through ambitious joint venture projects in the Orinoco.OPEC recently said Venezuela leapfrogged Saudi Arabia to become the world's No. 1 holder of crude reserves, with more than 296.5 billion barrels, albeit much of that tar-like extra heavy oil."It has to come in a progressive manner, of course, a reformatting of the quotas so that Venezuela receives bigger quotas," Chavez said during a meeting with ministers shown live on state TV. "That of course will be part of discussions and decisions by OPEC, but that will be the case." Venezuela's output in 2010 was 2.97 million bpd.Chavez said that if OPEC lifts Venezuela's quota, the country could produce between 8-9 million bpd by 2031.The projects in the Orinoco belt are slated eventually to add 2.1 million bpd of production and to bring in some $80 billion in investment.

50

Venezuela maintains the authority to impose tariff-rate quotas (TRQs) on up to 62 Harmonized System code headings at the 6-digit level. Currently, the government is applying TRQs to oilseeds, corn, wheat, milk and dairy, and sugar. The issuance of import licenses for such TRQs is neither transparent nor automatic and has negatively affected trade in basic agricultural commodities as well as processed products. Import licenses and sanitary permits are restricted for products for which the government is trying to increase domestic output, such as raw materials for processing. The Venezuelan government has denied import licenses for both inquota and over-quota quantities, even though importers are often willing to pay the over-quota tariff for additional quantities of some products. Licenses for over-quota quantities are not automatically issued. Furthermore, the Venezuelan government has not published regulations establishing the TRQ mechanism for certain eligible products and has refused to activate the TRQ for others, such as pork.

Import Taxes:Since January 2003, the Venezuelan government has waived import

duties for staple products. Initially, the import duty waiver was granted for a six month period. Since then, some products have been added or removed from the initial list, and there have been certain periods when this policy lapsed. On January 18, 2008, the government of Venezuela created a new list of tariff-exempt goods, which included products that had been on the previous list as well as new products. The list was last updated in October 2008, with customs duties for live cattle imports waived in order to allow more cattle into the country for processing.

Tariffs:-

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In December 2005, Venezuela signed a framework agreement to join the Southern Cone Common Market (MERCOSUR). MERCOSUR membership is contingent upon approval by the legislatures of all MERCOSUR countries. The last hurdle to Venezuelas full membership in MERCOSUR is obtaining Paraguays formal approval. In early 2010, Paraguayan President Lugo withdrew the petition for approval from the Paraguayan Congress; it was re-introduced on November 24, 2010, and has been withdrawn again. Under the terms of its accession, Venezuela will have four years from its date of accession to adopt the MERCOSUR Common External Tariff (CET) and to provide duty-free treatment to its four MERCOSUR partners on all goods, with sensitive products allowed a two year extension. According to the WTO, Venezuela applied a simple average tariff of 15 percent on agricultural goods and 12.1 percent on non-agricultural goods. .

Licensing & Custom Duties:Imports in Venezuela are subject to customs duty, which is levied on the

basis of the Andean Pact. The Andean Pact is a regional trade agreement between Venezuela, Bolivia, Columbia, Ecuador and Peru to setup a common external trade tariff structure. Transit duties are also applicable on certain goods, which include coffee, coco and cotton. Additionally, the government of Venezuela has complete authority to levy export duties if it deems fit

52

Ch: 4 Science and Technology: (History)

53

The National Council of Scientific and Technological Research (founded in 1967) and the State Ministry for Science and Technology direct and coordinate research activities. Among the principal research institutes, academies and learned societies are the National Academy of Medicine (1904), the Academy of Physical, Mathematical, and Natural Sciences (1917), and the Venezuelan Association for the Advancement of Science (1950). Major research institutes include the Institute of Experimental Medicine (1940), the Venezuelan Scientific Research Institute (1959), and the Centre for Investigation of Petroleum Technology (1979). All of these societies and institutes are located in Caracas. Venezuela has 20 universities and colleges that offer courses in basic and applied sciences. In 198797, science and engineering students accounted for 26% of college and university enrolments. In 198797, research and development expenditures amounted to 0.5% of GNP; 32 technicians and 209 scientists and engineers per million people were engaged in research and development.

4.1: REFORMS:

Infrastructure: Venezuela has an extensive road system. The capital Caracas has a modern subway system over 31.6 mi (51 km) long. Maracaibo and Valencia (third city) has recently inaugurated a metro system. The Maracaibo (second city) metro
54

system is still unfinished. Rail transport in Venezuela has been practically non-existent since the 1950s (with only one line operating), but the IAFE is currently working on several lines, hopefully connecting most of Venezuela via railway by 2020, which, if achieved, would lead to a significant improvement in the countries' transport infrastructure. At the beginning of August 2008, Venezuelan president Hugo Chavez and his colleagues from Argentina and Brazil spoke about Latin American integration and Chavez threw an ambitious idea out: a train that would connect Venezuela's capital (Caracas) with Argentina's (Buenos Aires), and cities in between. The Chavez government has launched a National Railway Development Plan designed to create 15 railway lines across the country, with 8,500 miles (13,700 km) of track by 2030. The network is being built in cooperation with China Railways, which is also cooperating with Venezuela to create factories for tracks, railway cars and eventually locomotives.

4.2: Sectors:
Petroleum and other resources Venezuela is a major producer of petroleum products, which remain the keystone of the Venezuelan economy. A range of other natural resources, including iron ore, coal, bauxite, gold, nickel, and diamonds, are in various stages of development and production. Venezuela utilizes vast hydropower resources to supply power to the nation's industries. The government is proceeding with plans to privatize the various state-owned electricity systems under a different scheme than previously envisioned. National Science and Technology Council (CONICIT) deal in organising the scientific and technology policy on agriculture, oceanography, ecology, environmental diseases, metallurgy, nutrition, petro chemistry, energy, food, telecommunications and urban development. Venezuelan government has democratized access to new technologies and that access to indispensable services; including land- and mobile-lines and
55

Internet have been extended to far-away areas. Venezuela launched Simn Bolvar satellite, an initiative to strengthen technological services and boost access to communication and tele-medicine services throughout the country.

56

Canaima Program A technological achievement that has had a great impact in education is the Canaima Plan, a program that offers laptops for children of public elementary schools to strengthen their science and technology curricula.

4.3:

The Major

heads

under

the

science

and

technology and infrastructure can be studied in details as follows:

(A) Current Technology in Venezuela (B) Technical skills in Labour and General Population (C) Percentage of GNP invested in R&D

57

SCIENCE AND TECHNOLOGY (Current Technology used in Venezuela) Hardware and Software Development Overview
Hardware: there is virtually no hardware manufacturing in Venezuela. Some PCs are assembled in Venezuela under no registered brand, these computers are called "clones" and are low cost machines that lack of warranty in most of the cases. However, many well-known hardware resellers have subsidiaries or joint-companies in Venezuela. Software: Companies are still finding the greatest sales opportunities in the telecommunications sector, banking industry and petroleum industry. Venezuela's and Latin Americas largest software developer INTESA. Hardware Manufacturing Venezuelan Information Technology Market (Millions of Dollars) consists of millions of dollars and has a good scope due to innovative development in the technology sector. Lot of new technologies have been imported with the assistance of Western countries as well as China. Transition to Free Software The Venezuelan government is in the process of developing technological infrastructure based on open-source software with the goal of achieving technological sovereignty. The National Central Foundation of Development and Investigation in Free Technologies (CENDITEL) has proposed developing a platform that offers the necessary services for the development of free software across the nation. CENDITEL, with the participation of diverse free software development communities in the country, is working to develop and establish
58

standards and best practices for the development of free software. For that purpose, it is using a platform composed of tools that integrate services and automate processes related to software development. The following criteria are being used to develop this platform: Component-Based: This will permit the platform to adapt to any project and to the needs of various work groups, since they will be able to incorporate other tools according to the needs of the user. Flexible: It cannot be a platform that restricts work groups to one particular structure; neither can it be a platform that only allows you to work in one fixed way. The platform would allow you to organize the work according to the needs of the users, while applying improvements step by step, and best practices in an environment that fosters contribution. Scalable: The platform would be capable of evolving with the time, according to technological advances. Simn Bolvar Satellite/Venesat-1 Program

Venesat-1, also known as Simn Bolvar, is the first Venezuelan satellite. It was designed, built, launched, controlled and monitored by the CGWIC subsidiary of the China Aerospace Science and Technology Corporation. It is a communications satellite, which will be operated from a geosynchronous orbit. It was launched on a Chinese Long March 3B carrier rocket, from LA-2 at the Xichang Satellite Launch Centre, on 29 October 2008.
59

Venesat-1 will be operated by Venezuela's Ministry of Science and Technology. It carries 12 G-band (IEEE's C band) and 14 J-band (IEEE Ku) transponders. It has a mass of 5,100 kilograms (11,000 lb), and an expected service life of 15 years. It is based on the DFH-4 satellite bus. The satellite occupies an orbital slot, 78-West, designated for Uruguay and ceded to Venezuela by mutual accord. On October 29, 2008 Venezuelan launched its first satellite into orbit. Called Simn Bolvar, the satellite was launched from China. The Ministry of Peoples Power for Science and Technology, Bolivarian Agency for Space Activities (ABAE) and the state telecommunications agency, CANTV, which are responsible for the satellites operation and use. The Simn Bolvar satellite was created as part of the VENESAT-1 project that began in 2004. In November 2005, the Bolivarian Republic of Venezuela and the Popular Republic of China signed an agreement for the construction of the satellite. Among other reasons, the project was developed with China because they accepted an important condition for Venezuela the transfer of technology. With this provision in place, Venezuelan technicians were trained to maintain the satellite, develop its software and manage its use. Venezuela now expects to be able to produce satellite technology in the future and to manage the launch of satellites from the Venezuelan soil. On March 14, 2006 Venezuela and Uruguay signed an agreement allowing the satellite to use Uruguayan airspace and for Uruguay to use up to 10% of the satellites spectral operating capacity.

The Simn Bolvar satellite has an ambitious regional objective: To contribute to Latin American integration through the

development of telecommunications services. In the national environment, its objective is: To positively impact the implementation and development of policies and social programs
60

Projects in the areas of rural phone systems, tele-medicine, tele-

education, security as well as defense. The satellite and its use are composed of the following network of components: The Simn Bolvar satellite. Two earth-based control stations responsible for the operation of the satellite. The principal station is located in the State of Guarico, while the backup station is located in the State of Bolivar. A teleport responsible for the transportation capacities of the satellite and of the broadcast of the telecommunications services. It is located in the State of Guarico. The construction of the satellite required the development of human capacity in space technology, which was facilitated through the cooperation agreement with China. Ninety Venezuelans professionals and technicians were involved in the following capacities: 30 university professionals that will receive doctoral degrees in China in diverse space-related areas linked to the production of satellite platforms and 60 professionals and technicians that will work on orbit and traffic control.

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Telecommunications (Developments in R & D) The telecommunications infrastructure is modern and expanding. It consists of: A domestic satellite system with 3 earth stations Recent substantial improvement in telephone service in rural areas Substantial increase in digitalization of exchanges and trunk lines Installation of a national inter-urban fibre-optic network capable of digital multimedia services international 3 submarine coaxial cables Satellite earth stations - 1 Intelsat (Atlantic Ocean) and 1 PanAmSat. Additionally, Venezuela is participating with Colombia, Ecuador, Peru, and Bolivia in the construction of an international fibre-optic network. The digitalization of fixed line is another notable factor in this analysis. Venezuelas fixed-line infrastructure continues to expand, though it has slowed down considerably due to the recession. In rural areas, substantial improvements since 2006 have made service availability relatively high for Latin America. CANTV controls about 87% of Venezuelas fixed lines in service. Competing companies in local and long-distance telephony are seeing their operations and market share steadily shrink. Fixed Line - The companies dealing in science and technology in the various fields are: CANTV (Compaa Annima Nacional Telefonos Venezuela) Infonet ELCA
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Corporacin Digital (Digitel) Genesis Telecom

Cable and satellite SuperCable Omnivision Multicanal Cabletel Cablevision Sky Latin America

Value-Added/Data/Multimedia CANTV Servicios Telecel

Equipment Manufacturers Three major manufacturers are: Alcatel Venezuela Ericsson SA Siemens SA

E-commerce The growing importance of Internet and E-commerce has not gone unnoticed in Venezuela. However, Venezuela represents around 6 percent of the Latin American Web purchasing market, the same as Colombia. In 1999, ecommerce revenues totalled $ 820million in Venezuela-$800 million from B2B transactions, and $20 million from B2C transactions. The obstacles that exist to the growth of e-commerce in this country are:culture; insecure banking system and unreliable delivery services. Figures from Venezuela's electronic-commerce chamber, Cavecom-e, are more optimistic and suggest that by March 2010 about 5.2 million Venezuelans will have access at least once a month to the Internet--about 24% of the population of the users. Of these web-surfers, 1,035,000 are

63

subscribers to ISPs, but only around 392,000 made purchases over the Internet. On average, clients spent $30-50 per Internet purchase. Venezuela's New Focus on Heavy Oil Venezuela is home to several large heavy oil fields (Figure 2). The western part of the country, around Lake Maracaibo, holds large reserves of heavy oil. The API gravity of the crude oil in the Maracaibo region ranges from 9 to 33 (Dusseault 2008a).But the largest accumulation of extra heavy oil in the world is found in a zone in central Venezuela known as the Faja Petrolifera del Orinoco (often shortened to Faja del Orinoco or just Faja). Dusseault et al. (2008) note that the Faja is estimated to hold almost 1.3 trillion barrels of oil in place. The extra heavy crude oil here has a typical API gravity of 7 to 10. However, unlike many other low API-gravity crudes, the viscosity of Faja crude is somewhat lower, thereby allowing the crude to be partially produced without thermal techniques. Later technology advances have allowed greater production of the Faja. There is no place else like the Faja, Venezuela's heavy oil belt that runs east to west, half way across the country along the lush Orinoco River valley. The Faja holds more than one trillion barrels of oil. Developing the resource is making the region a focus for new technology and turning Venezuela into the world's largest producer of heavy oil.

Outside the Faja, Venezuela has 80 billion barrels of proven crude reserves, and currently estimates that producers in the Faja can extract at least 237
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billion barrels of the extra heavy crude with existing technology. With nearly 320 billion barrels of recoverable oil, Venezuela will become the world's largest holder of petroleum reserves. The Faja's crude is what producers call extra-heavy. Oil from this tar belt averages about 8.5 API gravity, which means that it is heavier than water and oozes rather than flows. This type of oil is difficult to produce and transport, and few refineries in the world will take it. But producers in Venezuela have plenty of experience with heavy oil, and their success so far has been worldclass. In the 1990s, the Faja was divided into four major regions, each being developed through joint ventures with major international oil companies and PDVSA. A fifth major project includes Chinas national oil company, CNPC, in a joint venture that converts some of Venezuela's heavy crude into a patented oil-water emulsion that can be used as burner fuel for power generation. The fuel, called Orimulsion, is produced from a recently expanded plant in eastern Venezuela.

Most of the crude from the Faja is upgraded in Venezuela to anywhere from 16 to 32 API gravity. PDVSA owns enough capacity to refine 1 million barrels of oil a day in the United States, and 3.2 million barrels worldwide.

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Performance of cold production Until now, nearly all of the Faja production has been through "cold heavy oil production with sand" (CHOPS). None of the major development projects use heat, although some inject a readily available dilatants to thin the high viscosity oil. Using CHOPS alone, Venezuela now produces about 625,000 barrels a day from the Faja, and the economics are good. The lifting costs of heavy oil production have dropped 70 percent since 1991, to just under one dollar per barrel today. The average well produces about 850 barrels a day on cold production, which is remarkable considering that at room temperature, the oil is as thick as peanut butter. While economical, cold production alone recovers less than 10 percent of the oil in place. The government of Venezuela has now set recovery targets of more than 20 percent for all new heavy oil projects, which means that producers will be moving quickly to deploy current and emerging technology in a region rich in extra heavy oil. The first step is to determine just how much oil is there, and where it is concentrated. In November 2005, Venezuela divided its original four major oil regions of the Faja into 27 blocks and began Magna Reserva, a project to quantify and certify its reserves to the international community. Geologic studies are underway now to identify the best places for new development. Many oil companies worldwide are participating in this quantification and certification process, most with the understanding that they will be given a opportunity to share in the development from the regions they evaluate. Changes in the Faja development plan have opened the door for new players. Many of these new faces belong to other National Oil Companies. These include ONGC from India, The Iranian PetroPars,Gazprom and Lukoil from Russia. There is also increased presence from current energy partners; Petrobras, Repsol and CNPC.

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Testing new technology PDVSA's goal is to boost its Faja production to 1.2 million barrels a day, and the country's total production to 5.8 million barrels a day by 2012. To reach that goal, producers are focusing on a range of new technologies, particularly in the Faja. Since most cold production wells cannot handle thermal production, most of the advanced technology will be deployed in new development projects, after the current quantification and certification process is complete. The Faja may possibly overshadow Canada to become the world's center of excellence for heavy oil production. Technology will be developed specifically for the Faja that is not available today. Such as: Improved seismic interpretation of the Faja sands More efficient well placement techniques through better thermal Increased reliability of artificial lift methodologies Process to upgrade the heavy oil down hole

simulation

In-situ processing would be much less expensive than transporting the heavy crude itself to upgrades or refineries These are just a few of the future areas of focus for Faja technology development. Many observers believe that, given the excellent results from the Faja using cold production alone, the addition of thermal recovery and a host of new technologies will create the next big leap in Venezuelas bright energy future.

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New technologies reducing environmental impacts of coalfired plants

Coal-fired power plants play an important role in providing energy at low prices. The reality is that coal is abundant, efficient, and less expensive than most other energy options and will remain an important part of energy future. Coal accounts for about 50 per cent of electricity production in the world it remains the lowest cost energy source for South-American residences. However, coal-fired plants do emit carbon dioxide (CO2), a greenhouse gas. 'Clean coal technology' describes a new generation of energy processes, some currently available and others being developed, which have the ability to sharply reduce air emissions and other pollutants. These new technological breakthroughs make it possible for new and older coal-burning power plants to produce power in an economical and environmentally responsible manner. Among the key options under development for use alone or in combination are: Optimizing existing plants so they reduce emissions and increase the amount of electricity produced with the same amount of coal. Continuing to develop and refine best-available combustion technology, including Circulating Fluidized-Bed (CFB) technology, which includes supercritical and ultra supercritical combustion. This option may also include burning biomass as a fuel, thus reducing the level of CO2 emissions, and oxy-combustion for collecting CO2-rich flue gas. Gasification - turning coal into a gas and removing impurities from the coal gas before it is combusted. Carbon Capture and Storage (CCS) - capturing the carbon dioxide from the flue gas and storing it underground or reusing it.

68

Most recently, recognizing that carbon Sequestration and Storage (CCS) technologies hold enormous potential to reduce GHG emissions from coalfired power plants. DOE has begun funding projects that use CCS technologies and/or beneficial reuse of carbon dioxide. Technological infrastructure the social and economic institutions that contribute directly to a nation's ability to develop, produce, and market new technology. Indicators include the existence of a system for the protection of intellectual property rights, the extent to which R&D activities relate to industrial application, competency in high-technology manufacturing, and the capability to produce qualified scientists and engineers. Productive capacity the physical and human resources devoted to manufacturing products and the efficiency with which those resources are used. Indicators include the current level of high-technology production, the quality and productivity of the labor force including the presence of skilled lobor and the existence of innovative management practices.

69

A)

TECHNICAL SKILLS IN THE LABOUR AND GENERAL

POPULATION
Labor Market: Venezuelan workers face a substantially better labour market than a decade ago, as shown in Table. There are now 2.9 million more jobs than in 1998, which represent a one third increase. The unemployment rate has dropped from 11.3 percent to 7.8 percent; it rose to 19.2 percent in 2003, but has fallen by over half since that time. There has also been a significant increase in job quality, as measured by formal sector employment. Over half of the labour force - 51.8 percent - is now employed in the formal sector, up from 45.4 percent in 1998. Most of the job growth has been in the private sector, but both sectors have outpaced the growth in the labour force: the decade has seen a 47.2 percent increase in public sector jobs and a 30.6 percent increase in private sector jobs. Also, the rate of employment (employed as a percentage of the labour force) has increased enormously during the current expansion, from 80.8 percent to 92.2 percent. Measured from 1999 it is much less but still substantial, increasing from 88.7 percent. In sum, the labour market indicators, by any comparison, all show substantial improvement during the Chvez administration. These are consistent with the reduction in poverty as measured by cash income.

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The Superintendence of Foreign Investments (SIEX), an agency of the Finance Ministry, is responsible for the registration and supervision of foreign investments, technology import contracts, the use of trademarks, patents, licenses and royalties, and external credit for all sectors of the economy except banking, insurance and reinsurance, energy and mining, petrochemicals, coal and other minerals, hydrocarbons and related activities such as technical support for exploration, operation of oil fields, extraction, manufacturing or refining. All of these sectors are regulated by specialized agencies. Other government agencies also exert authority over specific areas relating to foreign investment, technology licenses or specific foreign companies established in Venezuela. The most important of these is the Industry and Trade Ministrys Industrial and Technological Division (which controls new industrial projects and can prescribe broad technology models for certain sectors) and the Central Bank (which controls monetary policy, exchange rates and access to internal credit for foreign companies). These agencies also administer the regulations of Andean Pact Decision 291, and any functions which affect foreign investment are coordinated with the SIEX and
71

other agencies directly responsible for administering foreign investment legislation. Technical Skills in Labour and General Population: Like its population, Venezuelas labour force is predominantly young. Partly for that reason, the laws stipulate a variety of rules for workplace accident prevention, conditions, and environment, and require occupational training and other fringe benefits relating to housing, transportation, food and family welfare. The labour force has been very mobile in recent years, with a high turnover rate reflecting improving skills and qualifications. As a result of the demand for skilled and unskilled labor and the large number of immigrants in Venezuela, a considerable portion of the labor force is of foreign origin. There are special programs which seek to ensure that potential immigrants have occupations for which personnel are not generally available in the country, but there is no restriction on bringing high-level executives or other technically trained personnel into the country, especially by companies with foreign capital or technology licenses. There are training institutes especially the vocational and technical where the labor as well as the people from the general population can acquire skills in order to learn these necessary skills for their living as well as contribute towards the development of Venezuela. The country has demand for huge technical skilled as well as unskilled working population. As the Venezuelan economy consists of agriculture (4%), manufacturing (35%) and rest of them in the service and financial sectors, the skilled labour has to fill these lacunae. There is a huge exodus of foreign immigrants chiefly because of the lack of skilled local population. The Venezuela population has 90% literacy and has to acquire the required technical and functional skills to perform well as the country is getting well in the telecommunications, software industry, energy sector, oil sector and other sectors too.

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(C) PERCENTAGE OF GNP (GROSS NATIONAL PRODUCT) INVESTED IN R&D

Total GNP (Gross National Product), 2005:127.8 billion dollars (Rank- 38) GNP per capita, 2005:4807 dollars

The GNP of Venezuela is estimated to be $105.3 billion. The total population of Venezuela is estimated to be 26,023,528. The approximate per capita Gross National Income of Venezuela is $ 4,030. The economy of Venezuela is very strong and well developed. The Gross Domestic Product of Venezuela is $ 186.3 billion while GDP per capita is $7,200. The GDP of Venezuela recorded a growth rate of about 10.3%. Oil Industry is the most important industry of Venezuela and also accounts for almost 1/3 rd of the GDP. Venezuela also earns nearly i50% revenue from the Oil Industry. This industry also accounts for 90% of the total export earnings of Venezuela. There is a slight improvement compared to the past in case of investment done by the government in Research and Technology Development programs in Venezuela. In the past, Venezuela used to invest only 0.5% of their GNP in this segment but now that has a marginal increase. (with 32 technicians and 209 scientists) Today, Venezuela invests slight over 1% of their GNI in research and development. There are very few foreign investments in Venezuela but their GNI is $12600. In spite of that it is considered as a poor investment in this sector. The following report of NSF gives the details about it.

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NSF (National Science Foundation) Report on Science and Technology in Venezuela: Venezuela lags far behind with little hope of catching up with other South American countries such as Brazil, Argentina and others as stated by the NSF report: [Venezuela] suffered because it was considered the riskiest or least attractive site for foreign investment. Since foreign investment in Venezuela has steadily declined there is little hope of significant investment in science in technology or its transfer to economically profitable products for the domestic or international market. The Venezuelan Ministry of Science and Technology have now mandated that companies above a specific income level will have to pay a certain percentage "tax" that will be used for science and technology development. While at first this may seem a good idea there are a couple of potential problems with it:1) The "taxed" money could be used by the company to invest in its own technology development improving its own efficiency and productivity instead it is going to the government. 2) Government officials will be responsible for allocating money for technology and science development, this increases the probability of corruption, misallocation of funds, and funding non-economic profitable technology. However, if administered correctly this "tax" may help S&E technology development, but so far the Venezuelan government has shown little capability of running things efficiently or effectively. The government is also making other plans to increase their investment in the research and technology especially in the telecommunications, software industry as well as oil industry. It is also planning to set up several research and technology institutes as they have a 90% literacy level in Venezuela. Foreign collaboration can be beneficial but still it has a scar of socialist country.

74

Ch: 5 RETAILING

75

5.1: FOOD RETAILING

MERCAL: Created in April, 2003, MERCAL or Mercado de Alimentos C.A., markets food products at very lower prices. The program is focused on a governmentsubsided basic basket of products to the poor economic classes, referred to as D and E under Venezuelas statistical system. Products include: dry milk, precooked corn flour, black beans, rice, vegetable oil, sardines, pasta, sugar, bologna, margarine, deviled ham, eggs, and mayonnaise and sauces. Mercals food distribution web has expanded to 15743 point of sales that includes mostly small stores (see table 1). Food purchases are carried out directly by a government entity called CASA, or Corporation de Abastecimiento y Servicios Agricolas, which was originally created in August 1989. The prices at MERCAL are lower than the controlled-priced products sold by supermarkets. There are different formats of MERCAL: MERCAL type 1: These stores are owned and run by the government (154 square meters and larger). MERCAL type 2: These stores belong either to the government or the private sector. Prices are the same that in those stores Type 1. Supermercal: These are the biggest stores (440 square meters and more), managed either by the government or the private sector. Mercalitos: Small mom & pops. These stores are privately owned (franchised) and can directly purchase CASAs food products. Moviles: Trucks selling MERCAL products to different poor areas.

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Table 5: MERCAL in Numbers Formats MERCAL 1 MERCAL 2 SUPERMERCAL MERCALITO (Mom & pops) MOVILES DISTRIBUTION CENTERS TOTAL Number of Venues 210 1008 35 13978 394 118 15743

(Source- GAIN Report, published in December, 2008) Retail food stores are classified into seven categories, food specialists, independent grocers, convenience stores, discounters, supermarkets, hypermarkets and others. Food Specialists: This category refers to retail outlets specializing in the sale of single food categories such as bread and flour confectioneries (bakers), meat and meat products (butchers), fish and seafood (fishmonger), etc. In 1999 food specialists held 27.24 percent of food sales; however, their share dropped to 12.27 percent by 2005. Independent Grocers: This category includes retail outlets selling a wide range of predominantly food products. Owned by an entrepreneur who owns and operates between one and ten retail outlets. Similar to food specialists, independent grocers lost market share between 1999 and 2005. In 1999, they had 32.28 percent of the food market but by 2005 their market share was only 9.33 percent.

Convenience Stores:
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This category sells a wide range of groceries in stores with less than 400 m2 of selling area. They differentiate themselves from other food stores by: opening for extended hours; locating in residential neighborhoods; selling or renting videos; selling take-away food and other non-food items. Gas stations often have convenience stores attached to them. Convenience stores have a very small share of the food market. They held a market share of 0.46 percent in 1999 falling to 0.11 percent by 2005. Discounters: This category is often divided into two types "hard discounters" and "soft discounters. Hard discounters are retail outlets with 300 - 900 m 2 of selling area, and fewer than 1,000 product lines. Products are normally private-label or budget brands. Soft discounters are usually larger in size and stock between 1,000 and 4,000 product lines including some leading brands at discounted prices. This category does not include mass merchandisers or warehouse clubs. Sales data time series for discounters begin in 2003 when they held 22.79 percent of the food market. By 2005, they held a market share of 53.07 percent. Supermarkets: These are retail outlets selling groceries in a selling area of between 400 and 2,500 m2. Sales consist of at least 70 percent of food products and everyday commodities. In 1999, supermarkets were the most important market channel with 34.27 percent share of the food market. By 2005, their market share had shrunk to 21.48 percent and discounters were the most important channel. Hypermarkets: These retail outlets sell groceries and non-food merchandise and have a retail sales area over 2,500 m2. They are frequently located out-of-town or constitute the anchor store in a shopping centre. The food market share of hypermarkets increased from 3.18 percent in 1999 reaching a peak of 4.93 percent in 2002. After 2002 hypermarkets began to lose market share reaching 2.20 percent by 2005.

78

Other: This refers to other retailers selling predominantly food, beverages and tobacco or any combination of these. Other food sellers have increased market share from 3.80 percent in 1999 to 6.00 percent in 2003.

There are 1210 retail stores in Venezuela selling food and beverages, a figure that only includes supermarkets (chain and independents). It is estimated that there are 98353 traditional abastos or bodegas (mom & pops), that are located on practically every block in Venezuelas cities and towns, especially in middle-and low-income neighborhoods (see table 3). U.S. exporters normally ship their product to distributors that import, stock and deliver to the retailers distribution center or individual stores. Makro, Exito, CADA, and Central Madeirense are all capable of direct purchasing and may deal directly deal with foreign suppliers. However, even the largest retailers depend heavily on local distributors for imported products. The smaller supermarkets, local chains and independent supermarkets purchase through distributors and specialized importers. Table 5.1: Retail Outlets in Venezuela (self service) TYPE OF STORE Supermarkets(independent) Supermarkets(chain) Drugstores Liquor stores Hypermarket cash & carry Traditional (not self service) including Abastos (mom & pops) Total NUMBER OF STORES 1015 195 650 205 42 98353 100460

(Source- GAIN Report, published in December, 2008)

Table 5.2: Major Retailers in Venezuela

79

RETAILER NAME CENTRAL MADEIRENSE CADA UNICASA SAN DIEGO PLAZAS COMERCIAL REYES EXCELSIOR GAMA MAKRO EXITO

OUTLET TYPE SUPERMARKET SUPERMARKET SUPERMARKET SUPERMARKET SUPERMARKET SUPERMARKET SUPERMARKET HYPERMARKET HYPERMARKET

NUMBER STORES 45 41 29 12 11 10 10 22 7

OF

(Source- GAIN Report, published in December, 2008) (Above table shows major retailers in Venezuela, to know other retailers in Venezuela please see annexure)
I.

PETROLEUM & GASOLINE

Petrleos de Venezuela, S.A. (PDVSA), the national oil company (NOC) of Venezuela, is a major energy producer. Vertically integrated, the company conducts large-scale domestic exploration and production activities in both oil and natural gas, operates domestic and international refining facilities, and sells gasoline products to consumers both at home and abroad. The Petroleum Intelligence Weekly reports that PDVSA is the worlds fourth largest energy company and third largest NOC. In 1986, PDVSA purchased CITGO, providing a distribution channel for gasoline products in the United States; by 1999, the company had 13,000 CITGO gas stations and controlled more than 10% of the U.S. market. PDVSA has a substantial international and domestic distribution network. PDVSA also owns several domestic refineries, refining a combined 1.303 million barrels per day in 2005 (PDVSA 2007c, 20). Among these refineries is the companys single largest facility at Paraguan, which refined 940 million barrels per day in 2005 (PDVSA 2007c, 20). Today, PDVSA is one of the most important oil producers in the world, but the precise figures are uncertain due to the lingering effect of post-strike declines and some methodological questions over production figures. For 2005, BP
80

estimates that Venezuela produced 3.007 million barrels per day (BP 2006) whereas the Energy Information Administration reports a significantly lower figure of 2.8-2.9 million barrels per day (EIA 2006b, 5); PDVSAs official production statistics put the total implausibly high at nearly 3.250 million b/d (PDVSA 2007h, 6). PDVSA itself produces around 60% of total Venezuelan production, or probably around 1.6 million barrels per day (EIA 2006b, 5); PDVSA again overestimates the figure at 2.330 million barrels per day (PDVSA 2007h, 6). Differing production figures significantly affect Venezuelas standing relative to other countries; depending on the estimate, Venezuela is one of the top ten-to-fifteen producers in the world (derived from BP 2006). Through CITGO, PDVSA maintains a reliable market for selling much of its production overseas. CITGO sells fuel, asphalt, wax, and various petrochemicals and oil (CITGO 2007a). PDVSA is the most important supplier of oil to CITGO, and CITGOs refineries maintain long-term contracts for PDVSA crude (PDVSA 2007b, 25). PDVSA also has an extensive domestic distribution network, although it sells most products domestically at an enormous loss. Several private foreign and local companies entered Venezuela's fuel retail business in early 1998 as PDVSA's monopoly was ended by the previous regime. The first private permit to distribute fuels through service stations was granted in Feb. 1998 to the local firm Trebol Gas, which used brand names other than those of PDVSA. Trebol then said its aim was to capture a 14% share of the market. Shell was the first multinational to return to Venezuela's gasoline retail business after almost 25 years of absence from this market by foreign oil companies. It opened its first station in March 1998 and spent almost $100m through the rest of the year on 100 retail outlets. Mobil (now ExxonMobil) was the second multinational to return as it opened its first retail business in late March 1998 in Valencia. It was to have 200 gasoline stations over a five-year period and to develop a 20% market share. Texaco (now ChevronTexaco) followed after it received a permit in March 1998 and announced plans to spend $150m over five years to develop a gasoline
81

network in Venezuela for a market share of 17%. BP was next, as it received a permit in April 1998 and was to spend up to $350m over five years to capture a market share of 20%. Venezuela's gasoline consumption - 12.8m cubic meters/year in 1997/98 made the country the second largest mogas market in South America, after Brazil, and the 15th largest in the world. At the same time, it had one of the lowest market penetrations, by early 1998 with only 1,600 petrol stations compared to 4,500 in Argentina which had the same consumption volume. The majors were poised to control the Venezuelan fuel market and - together with Venezuelan retailers and other players - were squeezing PDVSA's retail units out of most of this business. On Aug. 18, 1999, Caracas announced a new gas law approved by Congress which paved the way for the development. The law allows private foreign and domestic investors to explore for, produce, process, transport and market locally and abroad, and industrialize both associated and non-associated natural gas. To prevent monopolies, no company was to be allowed to carry out all these activities in a single area. But of 11 gas E&P blocks auctioned in late June 2001, only six were taken up (see Gas Market Trends of this week). Of the total investments made to improve the local market infrastructure, over 50 bn bolivars have been spent on NGV and 30 bn bolivars on improving the gas distribution network. Setting up NGV has involved nationwide construction of more than 200 delivery points for CNG as a start. Now there are over 250 CNG outlets located mainly in Caracas, Valencia, Puerto La Cruz, Puerto Ordaz, Barcelona, Barquisimeto, Guatire, Guarenas, Charallave, La Encrucijada, Cagua, Turmero, Maracay and the east coast of Lake Maracaibo. II. MINING

Venezuela entered the 1990s poised to become a leading international producer of coal, iron, steel, aluminum, gold, and other minerals. The state historically played a prominent role in mineral policy and production.
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Beginning in the 1970s, the government obtained or established scores of mining enterprises in its pursuit of heavy industrial development. By the 1980s, however, the huge debts incurred by these ventures contributed to the government's decisions to reconsider restrictive foreign investment policies and to liberalize mining laws in an effort to expand private-sector participation in mining. The CVG, the country's most prominent regional development corporation and the major player in mining, increasingly entered into joint ventures with foreign companies by the 1990s, when for the first time the CVG agreed to accept a minority share in some ventures. In addition to its role as planner and coordinator of most of the country's mining, the CVG was one of Latin America's largest industrial groups, with 30 subsidiaries and 41,000 workers in 1989. According to government sources, the CVG and its affiliates accrued US$1.3 billion in profits from 1985 to 1989 and generated US$3.3 billion in foreign exchange. The bauxite and aluminum industry, traditionally smaller in size than iron and steel, installed significant new capacity in both mining and processing during the 1980s. As a result, aluminum became the country's second leading foreign exchange earner. By 1990 Venezuela boasted the largest installed capacity in aluminum in all of Latin America. Moreover, the country was believed to be world's most economical producer of aluminum because of its vast high-quality bauxite reserves, its abundant and cheap energy, and its well-developed infrastructure. Proven bauxite reserves stood at 500 million tons in 1990, with probable reserves as high as 5 billion tons. Overall, the country's smelters, including as many as 1,500 small foundries, produced approximately 443,000 tons of primary aluminum in 1988. About 60 percent of production, or nearly US$1 billion by value, was exported. Commercial bauxite production, begun in 1987, reached 1 million tons in 1988 and was expected to reach 4.5 million tons in 1991. Opened in 1983, Interalumina produced 1.3 million tons of aluminum in 1988 from its plant's annual capacity of 2 million tons. Jointly owned by the CVG and a Swiss company, Alusuisse, Interalumina also controlled 50 percent of the Belgian Aleurope Aluminum Company, 40 percent of the Costa Rican firm Alunasa,
83

and 20 percent of the United States Company Wells Aluminum, thus providing it with worldwide marketing outlets. Alcasa, the country's first aluminum processing plant, contained plants in Ciudad Guayana and Guacara in Carabobo by the 1980s. In 1990 Alcasa had a 120,000-ton annual capacity for manufacturing primary aluminum. The country's other major smelter, the Industria Venezolana de Aluminio C.A. (Venalum), was also undergoing rapid growth in capacity. Although the CVG enjoyed majority ownership of Venalum, a consortium of Japanese industrial interests held a considerable minority stake. The iron and steel industries represented the core of the mining sector before aluminum's rapid growth in the 1980s. With the creation of the CVG in 1960, the state gained a greater role in the country's only major steel plant, which at that time produced mainly seamless pipes for the oil industry. One of the landmarks of the government's expanding role in the economy during the 1970s was the nationalization of the Orinoco Steelworks (Siderrgica Del Orinoco--Sidor) steel mill on January 1, 1975. Funding from the Venezuelan Investment Fund (Fondo de Juversiones de Venezuela--FIV) made possible a smooth settlement with the American steel companies. After years of delays, technical bottlenecks, and government

mismanagement, Sidor's expansion made the country self-sufficient in steel by 1982. By 1985 steel exports exceeded steel imports five-fold. High initial capital investment, however, made the Venezuelan industry unprofitable, and Sidor accrued a huge debt estimated at US$5 billion to US$10 billion, a substantial portion of Venezuela's debt burden in the early 1980s. Not until 1986 did Sidor show its first profit, US$70 million, but this fell to US$26 million in 1987. In 1990 the government reportedly was considering privatizing Sidor. Although the state dominated the industry, some private steel milling went on in 1990. Sivensa, the country's only private steel mill, was generally profitable. In addition, the CVG operated as a minority shareholder in a steel plant called Metalmeg, which manufactured carbon steel products for the petroleum industry. Iron production fell sharply after its peak year of 1974, but was on
84

the rise again by the late 1980s. Iron ore production was 18.9 million tons in 1988. Coal production also expanded rapidly during the 1980s. As with iron and bauxite, the country enjoyed large reserves of highly pure coal. The state of Zulia alone, for example, contained 900 million tons of proven coal deposits, with probable reserves as high as 2 billion tons. This made Zulia the largest underdeveloped coal field in the Americas. Besides Zulia's coal deposits, the country also possessed significant coking coal to fuel the newer steel mills, coal for thermal electricity generation, and various deposits of clean-burning "hard coal." Most coal deposits were found in the west near the border with Colombia or in the Orinoco Basin. Three major coal mines accounted for most coal output in the late 1980s. Although not yet fully operational in 1990, the Carbones de Zulia (Carbozulia) mine was already the nation's largest. PDVSA owned roughly half of Carbozulia; a consortium of United States, Italian, and private Venezuelan companies accounted for the balance. The mine produced 822,000 tons of coal in 1988, and plans called for 6.5 million tons-per-year capacity by the mid-1990s. By contrast, the entire country produced only 62,000 tons in 1987. The second major mine was the Minas Carbn at Lobatera in Tchira near the Colombian border, with reserves estimated at as much as 60 million tons. The third-leading producer, in Naricual in Anzotegui, boasted reserves of approximately 50 million tons. In addition to these operational mines, Venezuela had several other key coal zones that remained untapped in the 1980s. Gold, known to exist since colonial times, did not become a major commercial endeavor until the 1980s. Miners long ignored the country's gold wealth because of its oil. The government acquired the El Callao gold mine in the state of Bolvar in 1974 to better regulate gold prospecting and sales. The state succeeded in raising official gold production threefold from 1984 to 1989.Unofficial production remained as high as 70 percent of total output during the period. In 1986 the CVG, in a joint partnership with a Bermudabased company, formed Monarch Resources Limited to mine gold in the El
85

Callao region. Private Venezuelan entrepreneurs also exploited the nation's gold reserves. Venezuela also possessed varying amounts of other metals and minerals. For example, the country was a major producer of industrial diamonds, although diamond output fell steadily throughout the 1980s. The country also contained deposits of copper, nickel, zinc, lead, uranium, titanium, palladium, silicon, manganese, and chrome. Quarrying for industrial minerals such as feldspar, gypsum, hydrated lime, salt, nitrogen, phosphate rocks, gravel, barite, pyrophyllite, asbestos, bentonite, and magnesite was also common.

5.2: IMPORT/ EXPORT AGENTS

IMPORTS (Table 5.3): Venezuela remains the Unites States 3rd equipment, agricultural commodities, and auto parts. largest

export market in Latin America, purchasing U.S. machinery, transportation

YEAR

IMPORT PARTNERS

IMPORT COMMODITIES

Raw materials, machinery & 2009 equipment, transport US-28.8%, Colombia-7%, equipment, Brazil-6.6%, Mexico-4.3% materials construction

Agriculture US-26.6%, 11.4%, 2010 china-9.1% Colombia- &

commodities, transport

raw materials, machinery equipment, brazil-9.6%, equipment, materials construction

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EXPORTS (Table 5.4): The United States traditionally has been Venezuelas principal market for oil exports. In 2002 the United States absorbed 59 % of Venezuelas exports. YEAR 2009 EXPORT PARTNERS EXPORT

COMMODITIES US-52.9%, Netherlands petroleum, bauxite and Antilles- 5%, Dominican aluminum, Republic 3% chemicals, products, steel, agricultural basic &

2010

US-38.7%,

manufactures India-4.8%, Petroleum, Bauxite Aluminum, Chemicals, products, manufactures.

China-7.7%, Cuba-4.1%

Minerals, Agricultural basic

5.3: WAREHOUSING
There are a variety of moving companies with storage and warehousing capabilities to be found in Venezuela, along with more traditional storage or self-storage firms. A reputable storage company in Venezuela will require some insurance coverage for the goods. Some may offer liability in the rental or term charge, but rates may vary! Be wise and make sure that you accept coverage that covers the entire value of your goods. The majority of storage companies in Venezuela, as with anywhere else in Northern South America, bordering the Caribbean Sea and North Atlantic Ocean, between Colombia and Guyana will not allow you to store the some kinds of items that a mover
87

will not transport. Such items may include flammable or corrosive items, perishable goods, plants, and high value times like antiques or pieces, ask them for their list of restricted items and compare it with your goods. Overview of the steps for building a Warehouse in Venezuela, R.B. It requires 11 procedures, takes 395 days, and costs 227.66 % GNI per capita to build a warehouse in Venezuela, R.B...(Graph 5.1)

(Source- Doingbusiness.org) (Table 5.5: Procedure of building warehouse) TIME TO COST TO COMPLETE NO. PROCEDURE (DAYS) COMPLETE

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Request obtain basic 1 development * Pay corresponding 2

and the urban 150 the VEF 24,386 VEF 2

assignment of the variables for land

fees at the bank 1 * Request and obtain a certificate of compliance with basic variables urban for 42 and

buildings *Request from and Construction Division

No charge

obtain a certificate the Zoning Road

4 Request of with variables certificate construction startup 5 and obtain a certificate compliance urban and a of

126

VEF 22,956

42

No charge

89

Request receive 6 inspection Receive inspection completion certificate 7 *Request supply 8 *Request 9 a

and fire 1 final and VEF 385

obtain construction

14 and and 187 connect to water sewage service and connect to electric power service 187 * Request and connect to a 30 the at the regular telephone

No charge

No charge

VEF 22

10

line *Register building Subordinate

VEF 250

Registry (Registro Subalterno) 11 14 VEF 8300

* Takes place simultaneously with another procedure

90

Ch: 6 Venezuela media:

91

6.1: OVERVIEW OF MEDIA:

Some of Venezuela's mass media are privately operated and derive most of their revenues from advertising, subscriptions, and sale or distribution of copyrighted materials. A substantial proportion of the Venezuelan television, newspaper, and radio markets is controlled by stateowned outlets. The government has its own news agency,Agencia Bolivariana de Noticias. The main private television networks are RCTV: Televen Venevision: Globvision. State televisions include Venezolana de Television, TVES VIVES (Cultral Network) and teleSUR (Caracas-based pan-Latin American channel sponsored by seven Latin American states). There are also local communityrun television stations such as Televisora Comunitaria del Oeste de Caracas (CatiaTVe). The Venezuelan government also provides funding to Avila TV, Buena TV and Asamblea Nacional TV (ANTV). The major Venezuelan newspapers are El Nacional, ltimas Noticias and El Universal; all of which are private companies and based in Caracas. There are also many regional newspapers. HISTORY: Venezuela was the ninth country in the world to have television, introduced in 1952 by Marcos Prez Jimnez. By 1963 a quarter of Venezuelan households had television; a figure rising to 45% by 1969 and 85% by 1982. During the period when the political system was dominated by Accion Democratica (AD) and COPEI (19581998), after the closure of Accion Democratica's La Republica in 1969, none of the major newspapers or broadcasters were affiliated with a political party. However because of the importance of the two main parties, most newspapers had regular columnists or editorialists presenting the views of AD and COPEI on the issues of the day. During this period, both parties promised Congressional seats to publishers in exchange for favourable coverage. In 1983, a deal with Jaime
92

Lusinchi's presidential campaign resulted in four representatives of the Bloque DeArmas publishing group being elected to Congress on AD slates. A similar deal had been struck by COPEI in 1968 on behalf of Rafael Caldera, promising Miguel Angel Capriles a Senate seat and the right to designate eleven Congressional candidates. POST 1998: After the 1998 election of Hugo Chavez, the Venezuelan press "failed miserably in their duty to provide information that their fellow citizens needed to navigate the storms of Venezuelan politics under Chavez. Instead, media owners and their editors used the news - print and broadcast - to spearhead an opposition movement against Chavez." The programme ofBolivarian Missions was (until 2005) "virtually invisible in the mainstream press". Encouraged by verbal attacks by Chavez and other officials, editors "began routinely winking at copy containing unfounded speculation, rumor, and unchecked facts." This contributed to a polarization such that for a time reporters were regularly attacked in the street by Chavez supporters with bottles and sticks. According to a political reporter for El Nacional speaking in 2005, "the common attitude has been that we can leave aside ethics and the rules of journalism". Alonso Moleiro said that "Reporters bought the argument that you have to put journalistic standards aside, that if we don't get rid of Chavez, we will have communism and Fidelismo." The head of the Institute for Press and Society in Venezuela said that "here you had the convergence in the media of two things: grave journalistic errors - to the extreme of silencing information on the most important news events - and taking political positions to the extreme of advocating a nondemocratic, insurrectional path." After the 2002 Venezuelan coup d'tat attempt, in which the media played a significant role, there was a change in editorial policy of the major newspapers, with a wider mix of opposition, pro-Chavez and independent commentators. The generally non-partisan ltimas Noticias gained circulation at the expense of El Nacional and El Universal, which remained more associated with the opposition. Television networks also moderated their tone, with several of the opposition talk shows with the most extreme rhetoric, including talk of violence against Chavez and his followers, taken off the air.
93

In 2009 the government reviewed the broadcast licences of hundreds of radio and television stations, and declared many to have been operating without a licence or without having paid the appropriate regulatory fees. As a result over 60 radio stations were closed. The government said the frequencies would be reallocated to community media, and passed a law limiting ownership of radio and television licences to three per private owner. This was aimed at tackling what it called "media latifundios", with 27 families controlling a third of radio and television. In 2010 declassified US State Department documents showed over $4m of funding (in the previous 3 years) to Venezuelan journalists and private media opposed to the Bolivarian Revolution, part of a larger $40m funding for opposition groups.

94

Media is broadly categorized into mainly two streams: Broadcasting media and Print media. Print media includes News papers and Magazines.

Certain details about the Print Media in Venezuela

o From early on, Caracas was the undisputed center of influence and the home base of the most significant newspapers. Maracaibo was a strong center for publication of newspapers, but their circulation and impact were still regional in scope. o Whether in Caracas, Maracaibo, or the provinces,

newspapers depended heavily on direct and indirect government and/or partisan subsidies. o Government advertising represented a substantial part of the papers' income.
o Only a few families owned and controlled the largest dailies, perhaps

the most prominent of these families were the Capriles, who owned a chain of morning and afternoon dailies, in addition to magazines and radio and television interests. o Organized labor, business, and other major political and economic groups all traditionally produced their own weekly or monthly publications. o Most observers agreed that the Venezuelan media were

often sensationalist, and that they exhibited a healthy dose of skepticism toward grandiose government plans. Newspapers and journalists assiduously pursued corruption stories and exposed cases of unbridled nepotism, corruption, and incompetence. o Venezuela's press was subject to censorship in times of emergency but was otherwise among the freest in Latin America. About the only consistent taboo was the publication of cartoons or other graphics that denigrated the national hero, Simn Bolvar Palacios. o The major Caracas newspapers in 1990 included ltimas Noticias, an independent newspaper with
95

daily

run

of

320,000

copies; Meridiano, with 300,000 copies; and El Mundo, El Nacional, and Diario 2001, all independent dailies with a circulation of approximately 150,000.El Universal, which used to be among the top Caracas dailies, had fallen to a circulation of 140,000 by 1990. Still influential, though of Crtica of much smaller and El circulation, Diario de were Panorama and La Maracaibo

Caracas. The Daily Journal, an Englishlanguage newspaper in Caracas, had a print run of about 20,000 copies. o Venezuela had no domestic news agency, but several

foreign agencies maintained offices in Caracas, among them the Italian News Agency (ANSA), Associated Press (AP) and United Press International from the United States, Reuters from Britain, and TASS from the Soviet Union.

NATIONAL NEWS PAPER:

96

REGIONAL NEWS PAPER: 85 Newspapers total (in Annexures) (Table 6) ECONOMIC NEWS PAPER:

SPORTS NEWS PAPER:

CATHOLIC OR RELIGIONED THEMED NEWS PAPER:

ETHICAL MINORITIES NEWS PAPER:

OTHER LANGUAGE NEWS PAPERS:

97

WEEKLY NEWSPAPERS:

Magazines

Descifrado Petrleo Revista Econmica

Venezolana

Veneconoma PC world (Computer

and internet)

Revista Producto

(Marketing)

Rutas 4 wd(Travel) Letralia (Literature) La Red (Society) Tendencia (Society) La guia Del Motor

98

Certain details about the Radio and Television in Venezuela

o The country had 6.7 million radio receivers in 1986 and approximately 2.8 million television sets. o Both government and commercial companies operated television stations. The Venezuelan government took advantage of this extensive radio and media network to inform its people, particularly those who lived far away from major urban centers, on educational, agricultural, and civic matters. Stations were concentrated in Caracas, but transmitter were found throughout the country.
o

The country had five television stations: two owned by the

government, two commercial, and one directed by the Roman Catholic Church. Telecasts began in 1953 on the governmentowned Televisora Nacional. o All had excellent facilities and generally broadcast programs of high quality. Television continued to be extremely popular at all social levels and to represent a status symbol for the rural and urban poor.

Venezuelan News Agency News Agencies The largest news agency in Venezuela is Venpres. Created in May 1977 in order to serve the Ministry of Information and Tourism, they collect, develop and distribute news from among the many government ministries to the various media. In 1990, Venpres was advanced to the level of a full government agency, the Agency of National and International News reporting to the Central Information Office. The agency maintains 70 reporters and correspondents spread among the principal cities of the nation and charged with projecting the "true image" of Venezuela throughout the world. The

services of the agency include daily news summaries, periodic complete news stories, an official newsmagazine, and periodic special features. Other Media

Aporrea.org Venezuelanalysis.com

6.2: COVERAGE OF VARIOUS MEDIA

Official Country Name: Region (Map name): Population: Language(s): Literacy rate: Area: GDP: Number of Television Sets: Television Sets per 1,000: Number of Cable Subscribers: Cable Subscribers per 1,000: Number of Radio Receivers: Radio Receivers per 1,000: Number of Individuals with Computers: Computers per 1,000: Number of Individuals with Internet Access: Internet Access per 1,000: Republic of Venezuela South America 23,916,810 Spanish 91.1% 912,050 sq km 120,484 (US$ millions) 4,100,000 171.4 972,840 40.2 10,750,000 449.5 1,100,000 46.0 950,000 39.7

6.3: CENSORSHIP IN VENEZUELA:

Censorship in Venezuela is ranked at 114th out of 169 countries according to Reporters without Borders. The Law on Social Responsibility of Radio and Television (Ley de Responsabilidad de Radio y Television in Spanish) has stimulated debates on freedom of expression and journalism in the country. It was enforced in 2003 by the government regulating body, CONATEL (National Commission of Radio and Television) and involves a wide range of television and radio censorship on violent and sexual content. However, the law contains other articles that have been subject to deep political controversy. Government opposition claims that the Venezuelan government is attempting to enlarge its role in the control of broadcasts content through the bill, and accuse it of being curbing international freedom of expression standards, generating a chilling effect on media and self-censorship. According to the law, television or radio stations could be penalized for showing news coverage of internal conflicts and wars before 20.00hrs, "making it necessary for them to present a sanitized version of the news during the day".Furthermore, "insult laws" as Human Rights Watch labels articles 115, 121 and 125 of the bill could result in open political censorship to freedom of speech. Blaming President Chavez or the Venezuelan government for the current bitter divisions in Venezuelan society, the bad economy, a sudden poverty growth and deaths in opposition demonstrations could result in an infraction of the law and therefore in strong penalizations (if the offense is "interpreted" or considered disrespectful towards legitimate institutions and authorities). In May 2007, controversies on press freedom were further exacerbated when RCTV (Radio Caracas Television)'s terrestrial broadcast licence expired, with the government declining to renew it. An article by Reporters Without Borders stated that "Reporters Without Borders condemns the decision of the Venezuela Supreme Court to rule an appeal by Radio Caracas Televisin (RCTV) against the loss of its license as "inadmissible". The appeal, lodged on 9

February 2007, was rejected on 18 May, putting a stop to any further debate. President Hugo Chvez said on 28 December 2006 that he would oppose renewal of the group's broadcast license, accusing the channel of having supported the 11 April 2002 coup attempt in which he was briefly removed from office. According to the government the license expired on 27 May 2007, a date contested by RCTV, which insists its license is valid until 2022. Without waiting for the 27 May or the Supreme Court's decision, Hugo Chvez on 11 May awarded RCTV's channel 2 frequency by decree to a new public service channel, Televisora Venezolana Social (TVes)". This government action fueled student demonstrations and contentious forms of political demonstrations. After the closure of the TV station on 2007, the station launched a new channel named RCTV International that was broadcast on cable/satellite TV. Following its move to cable, RCTV relaunched itself as RCTV International, in an attempt to escape the regulation of the Venezuelan media law. In mid2009 the Venezuelan media regulator CONATEL declared that cable broadcasters would be subject to the new media law if 70% or more of their content and operations were domestic. In January 2010 CONATEL concluded that RCTV met that criterion (being more than 90% domestic according to CONATEL), and reclassified it as a domestic media source, and therefore subject to the requirements to broadcast state announcements, known as cadenas. Along with several other cable providers, RCTV refused to do so and was sanctioned with temporary closure. In order to resume broadcasting it will need to register as a domestic media provider and respect the Venezuelan media law. Other sanctioned channels include the American Network, America TV and TV Chile. TV Chile, an international channel of Chilean state television, had failed to respond to a January 14 deadline for clarifying the nature of its content. Cable network providers have been encouraged by the Venezuelan government to remove those channels that are found to be in violation of existing media regulations.

INTERNET SENSORSHIP:

UNDER SURVEILLANCE:
Countries in this category are on the RWB Under Surveillance list, but are not individually classified by or are classified as no evidence in all four areas (political, social, conflict/security, and Internet tools) by ONI. In December 2010, the government of Venezuela led by Hugo

Chavez passed a law for the regulation of Internet content. The National Assembly, which is controlled by a pro-Chavez majority, approved a law named "Social Responsibility in Radio, Television and Electronic Media" (Ley de Responsabilidad Social en Radio, Televisin y Medios Electrnicos). The law is intended to exercise control over content that could "entice felonies", "create social distress", or "question the legitimate constituted authority". The law indicates that the website's owners will be responsible for any information and contents published, and that they will have to create mechanisms that could restrict without delay the distribution of content that could go against the aforementioned restrictions. The fines for individuals who break the law will be of the 10% of the person's last year's income. The law was received with criticism from the opposition on the grounds that it is a violation of freedom of speech protections

stipulated in the Venezuelan constitution, and that it encourages censorship and selfcensorship.

Ch: 7 Venezuela: International Relationship

7.1: Domestic Economy

Venezuelas real GDP growth slowed down to an estimated 4.9% in 2008

as compared to 8.4% in the previous year, primarily owing to weaker private investments and oil prices. In absolute terms, GDP stood higher at an estimated US$ 316.7 bn in 2008 as compared to US$ 228.1 billion in 2007. GDP per capita stood at US$ 11,433.2 in 2007. Consumer price inflation, which was 18.7% in 2007, increased sharply to 30.4% in 2007, mainly due to higher import prices prevailed during the first half of 2008. In 2007 (as per latest available data), services sector accounted for 54.1% of GDP, while the shares of industry and agriculture stood at 41.9% and 4.0%, respectively.

Trade and External Sector

In 2008, the export earnings of Venezuela increased by 43.4% to an estimated US$ 99.2 bn from US$ 69.2 bn in 2007, mainly as result of high international oil prices. In 2008, import of Venezuela also increased by 2.9% to an estimated US$ 46.8 bn from US$ 45.5 bn in the previous year, due to high international prices during the first half of 2008.

Thus, Venezuelas trade surplus increased by 121.1% from US$ 23.7 bn in 2006-07 to US$ 52.4 bn in 2007-08.

The major export destinations in 2006 (as per latest available data) were the US (53.5% of total exports), the Netherlands Antilles (8.8%), China (3.7%) and Spain (3.0%). The principal origins of imports in 2006 (as per latest available data) were the US (29.2% of total imports), Colombia (9.6%), Brazil (7.9%) and Mexico (6.1%). Petroleum is the major export item of Venezuela, accounting for 90.5% of total exports in 2007-08. As regards imports, intermediate goods accounted for 44.5% of total imports, followed by capital goods (31.0%) and consumer goods (24.5%). The current account surplus increased to an estimated US$ 46.8 bn in 2008, as compared to US$ 20 bn in the previous year, reflecting higher surplus in trade account.

Venezuela-India

7.2: Political activities between India and Venezuela

India and Venezuela have been maintaining long cordial relations. The 50th Anniversary of the establishment of diplomatic relations was celebrated in 2009. Resident Embassies have been in existence in Caracas and New Delhi for over three decades and considerable mutual goodwill and cordiality between the two countries is most apparent in multilateral fore.

There is coincidence of views on major international, political and economic issues between India and Venezuela. The leadership and people of Venezuela have great regard for India, its policies, culture and traditions and the role India has played in international affairs since independence.

Venezuela has been generally supporting India in international organizations.

President Chavez made a State visit to India on 4-7 March, 2005.

7.3: Export & Import with India

Indias exports to Venezuela (TABLES ARE BELOW FOR REFERENCE) Pharmaceuticals Chemicals. Calcined Petroleum Coke (CPC). Textiles. Engineering products such as scooters, equipment and machinery. imports from Venezuela (TABLES ARE BELOW FOR

Indias

REFERENCE) Crude oil Iron pellets Electrical cables.

Venezuela's entry
Out of India's total crude oil imports of 163.6 million tonnes (mt) in FY11, around 10.3 mt was sourced from Venezuela, all of it by Reliance. Venezuela accounted for more than 16 per cent of Reliance's total crude oil imports of 63.5 mt during the fiscal. India's crude oil imports from Africa, especially Nigeria, have also been increasing significantly. As much as 15.8 mt was imported from Nigeria during FY 11, the bulk of it (around 12.3 mt) by PSU refining major Indian Oil. The increasing contribution of Venezuela and Nigeria notwithstanding, West Asia still accounted for the bulk (almost 65 per cent) of the crude oil sourced by India during the fiscal 2011. Saudi Arabia maintained its pole position and supplied around 27.4 mt last year. It is interesting that despite losing customers, Iran was still the second largest supplier of crude oil (18.5 mt) to India. Other key West Asian producers such as Iraq and UAE increased their crude oil sales to India in fiscal 2011, supplying 17.2 mt and 14.7 mt respectively. Bilateral trade The main items of Indias exports are pharmaceuticals, chemicals, calcinated petroleum coke, textiles and engineering products such as scooters, equipment and machinery. Indian pharma industry has already made a mark and a number of reputed companies, such as Ranbaxy, Dr. Reddys Labs, Aurobindo Pharma, Cipla, Core Health Care, Ipca Laboratories Ltd., Sun Pharma, Claris Lifesinces Ltd. are operating in Venezuela. The main items of Indias imports from Venezuela are crude oil, iron pellets and electrical cables. Several Indian companies have been selling chemicals, engineering goods, vehicles etc. through agents although market uncertainties have prevented major expansion. Tata Motors entered the market with its first consignment of

1000 Indica and Indigo cars in 2007. Private sector Indian IT company, Mann India, has been operational in Venezuela, bagging software development projects in private banks and government bodies.

Education The Embassy was instrumental in starting a Cathedra Libre (India Chair/Study Centers) in the in the Central University of Venezuela (UCV) in Caracas in 2007.

Catedra Libre-India at the UCV was officially inaugurated on April 7, 2010 in the presence of Ambassador Shri Lal Dingliana. The Cathedra Libre in ULA is particularly active in organizing seminars, symposia, etc. on Gandhiji and India related subjects on a regular basis. It has set up a permanent course on the Thoughts of Mahatma Gandhi.

Gandhijis autobiography has also been published in Spanish by the Embassy in collaboration with the University. The Universidad Central de Venezuela (UCV), the largest university in Venezuela, started a Catedra Libre India (A study Circle on India) in 2008, which was formally launched on April 7, 2010 in which Ambassador was invited to make a statement.

With the active support of the Embassy, the Catedra intends to encourage the studies of Indian history, culture and polity etc within the University campus through seminars, talks etc.

Cultural Performances of Indian dance and music troupes have been regularly sponsored through ICCR.

 Festivals of India, Indian Food Festivals and Indian Film Festivals are organized regularly by the Embassy in collaboration with Venezuelan authorities. Venezuelan electronic and print media have been screening/publishing documentaries/programmes and stories on India. There are several centres in Venezuela of Indian spiritual groups like Sai Baba, Brahma Kumaris, Radha Swami etc. There are also ISKON temples and several yoga centres all over the country. There are a large number of Sai Baba devotees in Venezuela, many of whom visit India on a regular basis. Ayurveda is becoming popular here and has been recognized as an alternative system of medical treatment in a Health regulation by the Government of Venezuela in February, 2001. The 7th Food and Cultural Festival of India in Caracas was held successfully at Hotel Marriott from 18-30 October, 2010. Other Sectors: -Venezuela has expressed interest in cooperation with India for import of relevant technologies and machinery for various development projects in the country such as agro processing. -There is also interest in collaboration with India in the health sector, biotechnology, remote sensing, IT and other areas. -Agreements are being negotiated between India and Venezuela in health, education, housing and I.T.sectors.

TABLE 7:
Pharmaceutical imports to Venezuela from India

Period

Trade Flow

NetWei Reporter Partner Commodity Trade Value ght (kg) India Pharmaceutical products [HS as reported code 30] Pharmaceutical products [HS as reported code 30] Pharmaceutical products [HS as reported code 30] Pharmaceutical products [HS as reported code 30] Pharmaceutical products [HS as reported code 30] Wadding, gauze, bandages and $14,264,499 N/A No Quantity Unit

Trade Quantit Flag y N/A 0

2006

Import Venezuela

2007 2008

Import Venezuela Import Venezuela

India India

$23,222,378 $39,425,125

N/A No Quantity N/A No Quantity

N/A N/A

0 0

2009 2010

Import Venezuela Import Venezuela

India India

$46,959,209 $69,614,779

N/A No Quantity N/A No Quantity

N/A N/A

0 0

2006

Import Venezuela

India

similar articles [HS as reported code 3005] Wadding, gauze, bandages and

$154,088

43,290

Weight in kilograms

43,290

2007

Import Venezuela

India

similar articles [HS as reported code 3005] Wadding, gauze, bandages and

$275,840

58,700

Weight in kilograms

58,700

2008

Import Venezuela

India

similar articles [HS as reported code 3005] Wadding, gauze, bandages and

$620,322 122,110

Weight in kilograms

122,110

2009

Import Venezuela

India

similar articles [HS as reported code 3005] Wadding, gauze, bandages and

$779,800 132,130

Weight in kilograms

132,130

2010

Import Venezuela

India

similar articles [HS as reported code 3005] Pharmaceutical goods specified in

$722,320 114,490

Weight in kilograms

114,490

2006

Import Venezuela

India

Note 4 to this Chapter. [HS as reported code 3006] Pharmaceutical goods specified in

$68,827

5,556

Weight in kilograms

5,556

2007

Import Venezuela

India

Note 4 to this Chapter. [HS as reported code 3006] Pharmaceutical goods specified in

$92,616

1,156

Weight in kilograms

1,156

2008

Import Venezuela

India

Note 4 to this Chapter. [HS as reported code 3006] Pharmaceutical goods specified in

$26,752

1,142

Weight in kilograms

1,142

2009

Import Venezuela

India

Note 4 to this Chapter. [HS as reported code 3006] Pharmaceutical goods specified in

$31,220

225

Weight in kilograms

225

2010

Import Venezuela

India

Note 4 to this Chapter. [HS as reported code 3006] Hygienic or pharmaceutical articles

$87,041

1,030

Weight in kilograms

1,030

2006

Import Venezuela

India

(including teats), of vulcanised rubber ... [HS as reported code 4014] Hygienic or pharmaceutical articles (including teats), of vulcanised

$59,165

13,780

Weight in kilograms

13,780

2007

Import Venezuela

India

$196,378

26,082

Weight in

26,082

Chemicals import to Venezuela from India

Trad e Flow Trade Unit Quanti ty

Perio d

Report Partn Commodit er er y Organic

Trade Value

NetWeig ht (kg)

Fla g

2006

Impo Venezu rt ela

chemicals India [HS as reported code 29] Organic

$4,868,54 1

No N/A Quantit y N/A 0

2007

Impo Venezu rt ela

chemicals India [HS as reported code 29] Organic

$4,131,73 4

No N/A Quantit y N/A 0

2008

Impo Venezu rt ela

chemicals India [HS as reported code 29] Organic

$11,706,1 24

No N/A Quantit y N/A 0

2009

Impo Venezu rt ela

chemicals India [HS as reported code 29] Organic

$11,673,9 57

No N/A Quantit y N/A 0

2010

Impo Venezu rt ela

chemicals India [HS as reported code 29] Miscellaneo us chemical

$15,376,9 85

No N/A Quantit y N/A 0

2006

Impo Venezu rt ela

India

products [HS as reported code 38]

No $743,156 N/A Quantit y N/A 0

2007 Impo Venezu India rt ela

Miscellaneo us chemical

$1,683,93 5

N/A No Quantit

N/A

products [HS as reported code 38] Miscellaneo us chemical 2008 Impo Venezu rt ela India products [HS as reported code 38] Miscellaneo us chemical 2009 Impo Venezu rt ela India products [HS as reported code 38] Miscellaneo us chemical 2010 Impo Venezu rt ela India products [HS as reported code 38] Industrial monocarbox 2007 Impo Venezu rt ela ylic fatty India acids [HS as reported code 3823] Industrial monocarbox 2008 Impo Venezu rt ela ylic fatty India acids [HS as reported code 3823] 2009 Impo Venezu India rt ela Industrial monocarbox ylic fatty $38,538 26,000 Weight in kilogra 26,000 0 $126,549 62,000 Weight in kilogra ms 62,000 0 $50,388 14,500 Weight in kilogra ms 14,500 0 $12,492,9 51 No N/A Quantit y N/A 0 $8,686,83 1 No N/A Quantit y N/A 0 $2,658,58 9 No N/A Quantit y N/A 0 y

acids [HS as reported code 3823] Industrial monocarbox 2010 Impo Venezu rt ela ylic fatty India acids [HS as reported code 3823] $105,352 56,750 Weight in kilogra ms 56,750 0 ms

Ch 8: Country Profile

8.1: EARLY HISTORY

On his third voyage to the New World in 1498, Christopher Columbus discovered Venezuela, which Alonso de Ojeda and Amerigo Vespucci explored the next year. The early explorers named the country Venezuela (Spanish for little Venice) because they found inhabitants living in stilt houses in lakes. Venezuelas original inhabitants were the Carib and Arawak Amerindian peoples. Spanish explorers founded the settlements of Valencia in 1555 and Santiago de Len de Caracas in 1567. Colonial Venezuela's primary value to Spain was geographic. During its annual journey between Portobelo, in present-day Panama, and Cuba, the Spanish bullion fleet depended on Venezuelas long Caribbean coastline for security from foreign enemies and pirates. For the first two and a half centuries of colonial rule, Venezuela lacked political unity, in part because it was of no economic importance to Spanish officials.

A palafito like the ones seen by Amerigo Vespucci [1] (Source: http://www.pbase.com/mr2c280/image/7572039soulja)

By the late sixteenth century, agriculture had become Venezuelas chief economic activity. The colonial economy became centralized around the city of Caracas as a result of developments such as the growth of the cocoa trade, the Spanish crowns granting in 1728 of exclusive trading rights in Venezuela to the Basque-run Caracas Company, and Spains suppression of the 1749 revolt. In recognition of this growth, Caracas was given politicalmilitary authority as the seat of the Captaincy General of Venezuela in 1777, marking the first instance of recognition of Venezuela as a political entity. Nine years later, its designation was changed to the Audiencia de Venezuela, thus granting Venezuela judicial and administrative authority as well.

8.2: Independence
Periods of political instability, dictatorial rule, and revolutionary turbulence characterized much of Venezuelas nineteenth-century history. In the first decade, after almost three centuries on the periphery of the Spanish American empire, Venezuela found itself at the center of the independence movement sweeping Latin America. Led initially by Francisco de Miranda, the best known of the precursors of the Spanish American revolution, the colony rebelled against Spain in 1810. However, the rebellion collapsed as a result of a combination of factors, including local and personal rivalries encountered by Miranda; an earthquake that almost completely destroyed Caracas and other key cities on March 26, 1812; and Mirandas subsequent arrest and death in a Spanish jail. Simn Bolvar Palacios, Venezuelas national hero, native son, and later president, assumed leadership of the struggle for independence. After his victory at Carabobo, Bolvar made a triumphal entry into Caracas in June 1821. Venezuela joined with what are now Colombia, Panama, and Ecuador to form the short-lived Repblica de Gran Colombia (Republic of Greater Colombia), but withdrew in 1830 and became a sovereign state.

Simn Bolvar, liberator of not only Venezuela, but also Colombia, Panama, Ecuador, Bolivia, and Peru [2] (source:http://www.flickr.com/photos/historiasenconstruccion/1110885695/)

Francisco de Miranda [3]

(source: http://irandefence.net/showthread.php?p=597376

8.3: Caudillo Rule After Bolvars death in December 1830, civilian and military leaders called for the restoration of legitimate authority. The century of the caudillo (or caudillismo, the system of rule by a strongman who exercises dictatorial powers), featuring a series of changes in power from one commander to another, started auspiciously with 16 relatively peaceful and prosperous years under the authority of General Juan Aguerrevere (Jos Antonio) Pez (president, 183031, 1837, 183843, 184647, 186163) and several other caudillos. Regarded as second only to Bolvar as a national hero, Pez was twice elected president under the 1830 constitution. A mestizo, he established the pattern of dictatorial rule, ruling with the support of the criollo elite as long as coffee prices remained high. In the 1840s, coffee prices plunged, and the elite divided into two factions: those who remained with Pez called themselves Conservatives, and his rivals called themselves Liberals. Between 1858 and 1863, local caudillos engaged in a chaotic power struggle known as the Federal War because the Liberals favored federalism. In 1870 Antonio Guzmn Blanco (president, 187077, 187984, and 188687) finally restored central government authority and ruled for 18 years.

For most of the first half of the twentieth century, until 1958, a series of military dictators who promoted the oil industry and allowed for some social reforms ruled Venezuela. During the regime of General Juan Vicente Gmez (president, 190810, 192229, 193135), oil was discovered in the Maracaibo Basin, and Venezuela changed from a poor, largely agrarian country into one of the richest nations in Latin America. A military coup led by General Marcos Prez Jimnez (president, 195258) overthrew President Rmulo Gallegos Freire, Venezuela's first democratically elected president, on November 24, 1948, after only 10 months in office, ending a brief three-year experiment in democracy known as the trienio, or triennium (194548)

Jos Antonio Pez[4] (source:http://irandefence.net/showthread.php? p=597376)

8.4: The Restoration Of Democracy

In 1958 a coalition of political groups ousted Prez Jimnez and restored democracy. Historians have often pointed to the second inauguration of Rmulo Betancourt (president, 194548, 195964) as the pivotal point in four centuries of Venezuelan history. After nearly a century and a half as perhaps the most extreme example of Latin America's post-independence affliction of caudillismo and military rule, the event, augmented with the adoption of a new constitution in 1961, clearly marked a new era for the country. Venezuela's political life since 1959 has been defined by uninterrupted civilian constitutional rule. After becoming the first president to have served a full term of office, Betancourt was succeeded in 1964 by Ral Leoni (president, 1964 69) and in 1969 by Rafael Caldera Rodrguez (president, 196974). Caldera Rodrguez did much to create economic and political stability, although the latter was marred by terrorist abductions and assassinations.

Rmulo Betancourt (President 1945-1948/19591964), one of the major democracy activists of Venezuela. [5] (source: http://en.wikipedia.org/wiki/File:R %C3%B3mulo_Betancourt_1961.jpg)

Prez Jimnez[6] (source: http://www.yorari.blogspot.com)

Stability increased in 1974, after the election of Carlos Andrs Prez (president, 197479, 198993) of the Democratic Action Party (Accin DemocrticaAD). However, Prezs first term coincided with a fourfold rise in oil prices in late 1973, and by 1979 the Venezuelan economy had stalled and corruption was widespread. At the end of 1989, the so-called Caracazo riots, in which more than 200 people were killed, was a response to an economic austerity program launched by then-President Prez. In February 1992, a group of army lieutenant colonels led by Lieutenant Colonel Hugo Chvez Fras, an outspoken paratroop commander, mounted an unsuccessful coup attempt, claiming that the events of 1989 showed that the political system no longer served the interests of the people. A year later, Congress impeached Prez on corruption charges. In 1994 public disaffection with the political system compelled President Rafael Caldera (president, 196974, 199498) to pardon Chvez, who had attained folk-hero status while in prison.

Hugo Chvez, President since 1999 [7]

8.5: The Chavez Presidency

Until the elections of December 1998, the president had always been a representative of one of the two so-called traditional partiesthe AD, which is social democratic; and the Social Christian Party (Comit de Organizacin Poltica Electoral IndependienteCOPEI), which is Christian Democratic. However, by 1998 the AD and COPEI had become largely discredited because of their association with corrupt and inept governments. Exploiting the popular desire for new leadership, Chvez ran for president in the December 1998 elections as the candidate of Patriotic Pole (Polo Patritico PP), an alliance of his own Fifth Republic Movement (Movimiento Quinta RepblicaMVR) and two other leftist parties, Homeland for All (Patria Para TodosPPT) and Movement Toward Socialism (Movimiento al Socialismo MAS). He won a landslide victory, garnering more votes than any candidate in Venezuelas history. Part of his program of radical change was a complete rewriting of the 1961 constitution by a specially elected Constituent Assembly, as approved by a referendum held in April 1999. In a national referendum held in December 1999, 72 percent of the population ratified the new constitution. On July 30, 2000, Chvez was reelected president with 60 percent of the vote for a six-year term.

In 2001 many middle-class Venezuelans became disenchanted with the Chvez governments failure to deliver on promises to improve personal security, create jobs, and generate economic growth. Chvezs flouting of

constitutional procedures in favor of cronyism alienated many Venezuelans, including some top military officers who viewed his politically motivated, highlevel military promotions as a replacement of professionalism with cronyism. A broad-based opposition front, the Democratic Coordinator (Coordinadora DemocrticaCD), with the support of the conservative business chambers, unions, and Venezuelan Petroleum, staged two national strikes in 20023. In the first antigovernment protest in March 2002, the military briefly deposed Chvez, but loyal army elements restored him to the presidency two days later. Moreover, the opposition failed to oust Chvez in a national referendum on August 15, 2004. Judged by outside observers as a free and fair vote, the referendum confirmed Chvezs rule until January 2007, when his presidential mandate is scheduled to end. In the absence of a more popular challenger, however, Chvez could be reelected to a second six-year term.

8.6: Time line of history of Venezuela

1498 - Christopher Columbus discovered Venezuela. 1555 - Spanish explorers founded the settlements of Valencia. 1728 - the Spanish crowns granting of exclusive trading rights in Venezuela. 1777 - marking the first instance of recognition of Venezuela as a political entity. 1810 - Spanish American revolution, the colony rebelled against Spain. 1812 - an earthquake that almost completely destroyed Caracas and other key cities. 1821 - Bolvar made a triumphal entry into CaracaS. 1830- Bolvars death in December. 1948 - Venezuela's first democratically elected president, on November 24, 1948. 1958 - most of the first half of the twentieth century, until 1958, a series of military dictators who promoted the oil industry and allowed for some social reforms ruled Venezuela. 1959 - Venezuela's political life has been defined by uninterrupted civilian constitutional rule. 1964 - Betancourt was succeeded by Ral Leoni (president, 196469)

1969- by Rafael Caldera Rodrguez (president, 196974). 1974 - Stability increased , after the election of Carlos Andrs Prez (president, 197479, 198993) of the Democratic Action Party (Accin DemocrticaAD). 1979- the Venezuelan economy had stalled and corruption was widespread. A 1989, the so-called Caracazo riots, in which more than 200 people were killed, was a response to an economic austerity program launched by thenPresident Prez. 1994 - public disaffection with the political system compelled President Rafael Caldera (president, 196974, 199498) to pardon Chvez, who had attained folk-hero status while in prison. 1998 - the AD and COPEI had become largely discredited because of their association with corrupt and inept governments. Exploiting the popular desire for new leadership, a national referendum held in December 1999, 72 percent of the population ratified the new constitution. On July 30, 2000, Chvez was reelected president with 60 percent of the vote for a six-year term. 2001- Many middle-class Venezuelans became disenchanted with the Chvez governments failure to deliver on promises to improve personal security, create jobs, and generate economic growth. 2002-03 - with the support of the conservative business chambers, unions, and Venezuelan Petroleum, staged two national strikes. 2004 - opposition failed to oust Chvez in a national referendum. 2007 - Judged by outside observers as a free and fair vote, the referendum confirmed Chvezs rule

8.7: Geography

Location
Located in northern South America,

Venezuela is bordered to the north by the

Caribbean Sea and the North Atlantic Ocean, to the east by Guyana, to the south by Brazil, and to the west by Colombia. Size Venezuela has a total area of 912,050 square kilometers (land: 882,050 square kilometers; water: 30,000 square kilometers), or more than twice the size of California.
Map of Venezuela (8) (http://en.wikipedia.org/wiki/File:Vemap.png)

Land Boundaries

Venezuelas borders total 4,993 kilometers, of which 2,200 kilometers adjoin Brazil; 2,050 kilometers, Colombia; and 743 kilometers, Guyana.

Disputed Territory Venezuela has territorial disputes with both its western and eastern South American neighbors. Colombia and Venezuela dispute substantial maritime territory lying off the Guajira Peninsula and in the Golfo de Venezuela (Gulf of Venezuela). Although this dispute is being resolved through bilateral negotiations, elements of national prestige have made it a national issue in both countries in recent decades. Venezuela claims two-thirds of Guyana, or all of the 146,000-square-kilometer area lying west of the Essequibo, Guyanas longest river, which runs north to the Atlantic Ocean and provides a natural dividing line through the small, English-speaking enclave. This claim precludes any discussion of a maritime boundary with Guyana. In October 1999, in response to Guyanas granting of oil and mineral contracts to foreign companies to operate in the Essequibo region, Venezuelas legislature voided the 1899 Tribunal of Arbitration Treaty that determined boundaries between the two countries. Venezuela also has a territorial dispute with Dominica and its Eastern Caribbean neighborsSaint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadinesover Aves (Bird) Island, which is located 568 kilometers

north of Venezuela and 113 kilometers west of Dominica. France, the Netherlands, and the United States recognize Venezuelas claim that the 0.35-square-kilometer isle sustains human habitation and therefore creates a Venezuelan exclusive economic zone/continental shelf extending over a large portion of the Caribbean Sea.

Length of Coastline
Venezuelas coastline totals 2,800 kilometers.

Martime Claims
Venezuela claims a 200-nautical mile exclusive economic zone, a 12-nautical mile territorial sea, a 15-nautical mile contiguous zone, and jurisdiction over the continental shelf to a 200-meter depth or to the depth of resource exploitation.

Topography
The Orinoco and various mountain ranges divide the country into four distinct regions, with different climates: the dry, windless, and hot Maracaibo Lowlands in the far northwest; the northwestern Andean mountains and highlands stretching from southwest of the Maracaibo Basin across Northern Venezuela and including Pico Bolvar (La Columna), which is the highest point at 5,007 meters above sea level; the vast central Orinoco plains (llanos), located between the Merida Range and the Orinoco to the south and covering one-third of the country, much of it less than 50 meters in elevation; and the tropical Guiana Highlands in the southeast, with elevations of up to 3,500 meters. The world's highest waterfall, Angel Falls, is located in Venezuelas Guiana Highlands, which comprise more than half of the area of the country. The wild and largely unexplored Guiana Highlands are rich in mineral resources and in developed and undeveloped hydroelectric power.

Topography Map of Venezuela (9) (source:http://www.islamargarita.com/v Principle rivers enezuela-map.htm)

The Orinoco is by far the most important of the more than 1,000 rivers in the country. At between 2,140 and 2,500 kilometers, the Orinoco is the third-longest river in South America, after the Paran (4,000 to 4,700 kilometers) and the Amazon (6,296 to 6,516 kilometers). The Orinoco originates in Venezuelas remote southern Amazonas territory, at an elevation of 1,074 meters, and receives more than 2,000 tributariesincluding the Apure, Arauca, Caron, Caura, Guaviare, Meta, and Ventuariduring its northeastern course to the Atlantic, creating the Orinoco Delta region. The Orinoco has the third-largest drainage basin (1,086 square kilometers) in South America and, at 28,000 cubic meters per second, the fourth-highest water discharge in the world (after the Amazons 180,000; the Congos 42,000; and the Yangtzes 35,000). Downstream from its headwaters, the Orinoco divides in two; one-third of its flow passes through the Brazo Casiquiare (Casiquiare Channel) into a tributary of the Amazon, and the remainder passes into the main Orinoco channel. Most of the rivers rising in the northern mountains flow southeastward to the Apure, which crosses the llanos in a generally eastward direction. The fast-flowing Caron originates in the Guiana Highlands and flows northward into the Orinoco upstream from Ciudad Guyana.

River Map of Venezuela [10] Source: http://www.geoalba.com/Article.mvc/Detail/117/2

Ports of venezuela
The Major Ports of Venezuela are as below;

LGA La Guaira, Venezuela Location: La Guaira is the principal port of Venezuela and the port for the capital Caracas, which is 27nm away. General overview: The port area extends from Rio Uchire to Rio Maya including a number of islands between. Container, bulk and general cargo are handled through the port. There are 2 special berths for Ro-Ro vessels. Port facilities are situated between Punta Maiquetia and Punta Santa Barbara. The main exports are cocoa, coffee and hides; imports include manufactured products and provisions.

MAR Maracaibo, Venezuela

Location: Maracaibo is situated on the NW shore of Lake Maracaibo. General Overview: It is a natural port and a port of entry for all terminals located on the W and E shores. A total of 12 berths are available, 8 of which are operational, primarily for general cargoesand bulk grain. The coal terminal has a Floating Storage Transfer Station (FSTS) Bulkwayuu which is permanently moored by means of chains lines in the "La Calsada" area, 1,321,000t of cargo. 1043.5'N 07133.5'W. Traffic figures: Approx 750 vessels visit the port annually, handling approx

GTA Guanta, Venezuela

Location: Guanta is located approx 5nm E of Puerto La Cruz. General overview: Vessels bound for Guanta must enter Bhia Pozuelos as they must first call at Puerto La Cruz to embark a pilot. The port is well protected with calm waters.The port handles general cargo and containers. Traffic figures: Approx 3,000,000t of cargo handled and 500 vessels visit the port annually.

PBL Puerto Cabello, Venezuela

Location: Puerto Cabello is situated on the NW coast of Venezuela, approx 120km W of Caracas. General overview: One of the major ports on the Venezuelan coast providing facilities for the handling of general cargoes, containers, bulk cargoes and chemicals. Lagoven Oil Terminal and Puerto Borburata are both outside the main harbour but are under the jurisdiction of Puerto Cabello. Venterminales Pier is a private terminal, see separate entry.

Exports: Hardwood, coffee, cocoa, indigo, hides, sugar and asbestos fibre. Imports: General cargo, machinery, copra and sesame seed. Traffic figures: Approx 9,375,000t of general and bulk cargo and 2,340 vessels
are handed annually.

ETV El Tabalzo, Venezuela Location: El Tablazo is situated near the entrance on the E shore of Lake
Maracaibo.

General overview: The port offers six berths handling mainly

petrochemical products. It comprises of a bulk pier, connected by conveyor with the complex, a liquids pier SE of it and a small salt pier SE of the liquids pier. Two dolphins stand off the head of the liquids pier and are joined to it and others by a catwalk. Traffic figures: Approx 60 vessels visit the port annually.

Climate
Located entirely within the tropics, Venezuela has a climate that is tropical, hot, and humid. The country has two distinct seasons: rainy (JuneOctober) and dry (NovemberMay). The rainy season is called invierno (winter), and the dry season, verano (summer). The wettest months are AugustOctober, with an average rainfall of 145 millimeters; the driest months are January April, with an average rainfall of 8 millimeters. The hottest months are May September, averaging 18 C to 32 C; the coldest month is January, averaging 2 C to 13 C. However, temperatures vary according to elevation. Coastal and lowland areas are hot year-round; t he highlands have a more moderate climate. With an elevation of about 1,000 meters above sea level, Caracas, situated in the vila Mountains, has an average temperature of 22 C, with little seasonal variation, but daytime highs can reach about 32 C.

Natural Resorces

Venezuelas hydropower and mineral resources, including bauxite, coal, diamonds, gold, iron ore, natural gas, and petroleum, are vast. Its huge oil reserves, the largest in South America and the sixth largest in the world, ensure that the country will remain a major oil producer for at least the next 100 years. Venezuela has billions of barrels of extra-heavy crude oil and bitumen deposits, most of which are situated in the Orinoco Belt, located in Central Venezuela (estimates of recoverable reserves range from 100 to 270 billion barrels). The countrys largely untapped natural gas reserves, totaling 148 trillion cubic feet, are the second largest in the Western Hemisphere (behind the United States) and the eighth largest in the world. Venezuela also has vast forest reserves, although they are dwindling rapidly as a result of the constant expansion of cattle-grazing land.

Land usage
Arable land constitutes 2.95 percent of the countrys area; permanent crops, 0.92 percent; and other, 96.13 percent. In 1998 an estimated total of 540 square kilometers were irrigated; 16.5 percent of cropland was irrigated in 1999. Approximately 10 million hectares of forest have been allocated for timber production.

Environment factors
Venezuela is subject to earthquakes, floods, rockslides, mudslides, and periodic droughts. It ranks among the top 10 of the worlds most ecologically diverse countries. However, it has suffered great environmental degradation. Venezuela has the third-highest deforestation rate in South America at 1.1 percent. The Guri dam, one of the worlds largest, flooded a massive forested area and is now being filled with silt deposited by runoff from deforested areas. Environmental issues include sewage pollution into Lago de Valencia, located not far to the west of Caracas; oil and urban pollution of Lago de Maracaibo, located in northwestern Zulia State; deforestation; soil degradation; and urban and industrial pollution, especially along the Caribbean coast. Current concerns also include irresponsible mining operations that endanger the rain-forest ecosystem and indigenous peoples. Successive governments have attempted to develop environmental regulations. However, only 35 percent to 40 percent of Venezuela's land is regulated thus far, 29 percent as part of about 100 national parks.

Time zones
Venezuela Standard Time is four hours behind Greenwich Mean Time (GMT4).

Ch: 9 POLITICAL SYSTEM

Political system: The political system of Venezuela is a typical federal republic adopted and followed since the achievement of independence on July 5th 1811. Accordingly, the President is regarded as the head of the state and the present government and is elected for a term of 6 years. Here you will know about the constitutional set up of Venezuela, the tiers of government functioning and the parties - the three integral parts of the political system of Venezuela. The political system of Venezuela is a typical federal republic adopted and followed since the achievement of independence on July 5th 1811. Accordingly, the President is regarded as the head of the state and the present government and is elected for a term of 6 years. Here you will know about the constitutional set up of Venezuela, the tiers of government functioning and the parties - the three integral parts of the political system of Venezuela.

9.1: Constitution of Venezuela

When Hugo Chavez was first elected as the President of Venezuela, he initiated a reform so as to bring about a radical change which would enhance the social, economic and political development of the country. The current constitution was drafted on 1999 by and passed by a popular referendum, replacing the earlier constitution "Repblica Bolivariana which de de was made to in 1961. Subsequently, the name was changed from Venezuela" Venezuela". "Repblica recent This

constitutional changes emphasize on human rights, development of free education and upholding the inherent Venezuelan traditions, cultures and beliefs.

Functioning of Venezuelan Government The political system of Venezuela is divided into three groups as Executive, Legislative and Judicial branches. The executive branch of the government is presided over by the President, who also looks into the appointment of higher posts like the Vice-President, members of the Cabinet and important other members of the National Assembly. He is also the decision maker regarding the size and arrangement of the ministers in the cabinet. It's important to note that the legislature of Venezuela is a bicameral legislative assembly, uniformly named as the National Assembly or Asamblea Nacional having 167 seats. The sitting members of the house are elected by a popular referendum for a period of 5 year which can be extended to a 2 year term if required. The seats of this legislative assembly is divided and reserved according to the provisions of law. Unlike other governments, the judicial system of Venezuela is headed by the Supreme Tribunal of Justice, which in official terms is regarded as the highest law court in the country. The magistrates of this court are appointed for a period of 12 year term, though there are lower courts, district courts and municipal courts located at every district. Present Political system of Venezuela The present political system of Venezuela has undergone significant changes as a result of political turmoil and economic backlashes. It's only the under the able leadership of Hugo Chavez that there has been lot of development activities carried out in the last few years which has made the country prosperous in every sense of the term. Principal Government Officials President--Hugo CHAVEZ Frias Vice President--Elias JAUA Milano Minister of Foreign Affairs--Nicolas MADURO Moro Minister of Defense--Carlos Jose MATA Figueroa Ambassador to the United States--vacant Ambassador to the Organization of American States--Roy CHADERTON Matos Ambassador to the United Nations--Jorge VALERO Bricen

9.2: POLITICAL STRUCTURE:

Type: Federal Republic (A state in which the powers of the central government are restricted and in which the component parts (states, colonies, or provinces) retain a degree of self-government; ultimate sovereign power rests with the voters who chose their governmental representatives.) Independence: July 5, 1811. Constitution: December 20, 1999. Branches:

Executive--President ( Head of government and chief of state; 6-year term) Council of Ministers (Cabinet, appointed by president). Legislative--unicameral National Assembly (5-year term). Judicial--32-member Supreme Court (elected by National Assembly; 12-year term). Electoral--National Electoral Council (elected by National Assembly; 7year term) Citizen Power--Prosecutor General, Public Defender, Comptroller General (elected by National Assembly: 7-year Term). Subdivisions: 23 states

1 federal district (Caracas) and 1 federal dependency (72 islands).

9.3: TAX STRUCTURE

Almost all forms of taxation are the responsibility of the federal government; it apportions federal tax revenue to the states, which, in turn, allocate a portion to the municipalities. Cities may levy taxes on such items as water and other municipal services and the exploitation of community lands. Corporate income is taxed according to a schedule with three brackets15%, 22% and 34%except for that derived from the hydrocarbons industry. The basic personal income tax schedule is progressive and contains eight brackets ranging from 6% to 34%. On payments due to nonresidents, technical aid is taxed at 10.2%, technical services at 17% and professional services at 30.6%. Salaries, premiums, and other sources of income for

nonresidents are taxed at 34%. There are also inheritance and gift taxes, and a real estate tax. A value-added tax (VAT) became effective in 1993 and since September 2002 has been levied at a standard rate of 16%. There are also entertainment and advertising taxes (in the Federal District), and minor excise taxes on Liquor, Tobacco, Cigarettes and Petroleum Products. INDIVIDUAL TAXATION Nonresidents are taxed only on their Venezuelan-sourced income. Married couples are required to file joint income tax return but the wives can opt for separate taxation on employment or professional income. The tax administration is the Servicio Nacional Integrado de Administracin Aduanera y Tributaria (SENIAT). Tax Administration The Integrated National Service of Customs and Tax Administration (SENIAT, in Spanish), a service attached to the Ministry of People's Power for Planning and Finance (MPPPF, in Spanish), is the entity responsible for collecting the Central Governments taxes, including those that by nature are of customs. SENIAT is a self-managed, non-incorporated service with functional, technical and financial self-sufficiency. The Telecommunications Tax is collected by the National Telecommunications Commission (CONATEL, in Spanish).

9.4: SOURCES OF REVENUE AND EXPENDITURE OF COUNTRY

The economy of Venezuela is widely based on its rich natural deposits and resources. The varied oil reserves situated at different parts of the country and the accumulation of it through expansion has contributed in its economic growth over the last few decades. In fact, the land of Venezuela is regarded as one of the largest oil producers of the world. From time to time, different economic policies were adopted by the successive governments which have invariably helped the country to achieve rapid progress through balanced

industrialization. Due to certain impressive economic reforms initiated during the phase of 1950 to 1980, the Venezuelan economic system was established, as one of the dominant economic markets among the South American countries. Trade and Business Services in Venezuela Statistics indicate that 3/4th of the country's earning come from the export of oil and petroleum. Until 1970, Venezuela was regarded as the largest exporter of petroleum in the world, primarily to U.S.A. However, modernization and diversification of the various economic resources has given a great boost recently with world class manufacturing units set up at different parts of the country. Industries and Natural Resources of Venezuela Other than petroleum and oil, industries such as food processing units, textiles, aluminum and steel enterprises have flourished as never before and also contributed to the rise of small manufacturing industries in the last few decades. special emphasis is laid on the cultivation and production of rice, sugarcane, coffee, vegetables and poultry. Furthermore, the economy of Venezuela received an impetus with economic collaboration from its trading partners like U.S.A, Brazil, Colombia, Mexico and other European countries. Thus, the rapid pace of industrialization has made Venezuela a flourishing trade economy in the recent years. Exports

Petroleum Aluminum Steel Chemical Products Iron Ore Cigarettes Plastics Fish

Cement Paper Products

Major markets

U.S. The Netherlands Mexico Colombia

Consumer Goods

Machinery And Transport Equipment Manufactured Goods Construction Materials.

Majorsuppliers

U.S. Colombia China Brazil

9.5: AN INTRODUCTION TO VENEZUELAN GOVERNMENTAL INSTITUTIONS AND PRIMARY LEGAL SOURCES I. Venezuelas Form and Branches of Government
The Bolivarian Republic of Venezuela is a Federal republic comprising 23 states, two federal territories, one federal district, and 72 federal dependencies. Since Venezuela adopts the Representative, Republican and Federal form of democratic government, it is governed by representatives of the people, who are elected through direct vote. The country embraces a system made up of governmental powers (mainly an Executive Power, a Legislative Power, and a Judicial Power), and also has a written Constitution. It is one of the four federal republics in Latin America; the individual state governments keep their self-rule but must respond to a common government (the National government) and comply with the laws and Constitution of the Republic. Since the Constitution confers upon the states a significant number of governmental powers and administrative functions , each state has its own constitution which establishes its administration of justice and municipal autonomy, and the scope and content of its institutional, political, administrative and financial systems. As a result of the federative scheme, each state counts with an independently elected executive power (headed by a Governor) and a legislative assembly. Each state also elects its own authorities and other state officers. They dictate their regional legislation through local institutions. Brief descriptions of the five branches of government follow. 1. Executive Power The Executive power dominates the other branches of government and is vested in the President, the Vice-President, and the Council of Ministers. 2. Legislative Power National Assembly - The 167-member National Assembly is unicameral, consisting solely of the Chamber of Deputies, presided by one its members. It

replaced the bicameral Congress (including a Senate) abolished by the new constitution. Deputies serve 5-year terms, and may be re-elected for only one additional term. These legislative agents are elected by direct, universal and secret vote through a combination of party list and single member constituencies. Three seats are reserved for the indigenous peoples of Venezuela. A. Legislative Process The law-making process is comprised of seven steps: initiative, debate, voting, passing, sanction, enactment, and publication. B. Types of Legislation The hierarchy of Venezuelan norms is fairly typical of civil law jurisdictions. The supreme set of norms is the Constitution. Under this scheme, the Assembly should pass the laws or statutes (Leyes), with an internal hierarchy: Most statutes are ordinary acts or ordinary laws. These are common laws, in the essential meaning of the word, originating from the Assembly, in the exercise of its primary legislating function. They deal with all subjects, except those which will be specifically dealt with by other categories of laws. Approval requires the vote of a simple majority, and sanction by the President of the Republic. Of equal hierarchy are the enabling laws from which decrees with the rank and force of law or delegated laws emerge. At a higher level are organic acts or charter or organic laws. 3. Judicial Power The Supreme Tribunal of Justice (http://www.tsj.gov.ve/) is at the apex of the Venezuelan court system. Its 32 justices (magistrados) are elected by the National Assembly for a single 12-year term. Appointments are made following recommendations from the Committee for Judicial Postulations, which consults with organizations dealing with legal issues and the organs of the citizen power. The Supreme Tribunal is the court of last resort and may meet either in plenary sessions or in groups forming specialized chambers. These chambers or divisions are six: Constitutional, Political Administrative, Electoral, Civil Appeals, Criminal Appeals, and Social (mainly agrarian and labor) Issues Appeals. The Supreme Tribunal is empowered to invalidate any laws, regulations or other acts of the other governmental branches conflicting with the constitution.

The lower court system is somewhat complex. There are courts with special jurisdiction in the following areas: civil, commercial, criminal, labor, tax, custom, administrative, juvenile, military, and agrarian. 4. Citizen Power Besides the traditional branches, the 1999 Constitution creates two additional branches of the Federal government--the citizen and electoral branches. They are embodied by the Republican Moral Council and the National Electoral Council respectively. The Office of the Prosecutor General, the Office of the Defender of the People, and the Office of the Comptroller General are the three entities comprising the Citizen Power. They have a crucial role to play vis--vis adherence to the rule of law by governmental officials at all levels and, for that purpose, are charged with preventing, investigating, and punishing administrative irregularities. The three officers heading these institutions are elected by Congress for a 7-year term. 5. Electoral Power The "Electoral Power", otherwise known as the National Electoral Council, is responsible for organizing elections at all levels. Its members are also elected to 7-year terms by the National Assembly. The electoral power is exercised by the National Electoral Council as the governing body, and its subordinate entities: the National Board of Elections, the Civil Status and Voter Registration Commission, and the Commission on Political Participation and Financing.

9.6: BUSINESS, CUSTOMS AND PRACTICES

There are many types of business entity defined in the legal systems of various countries. These include corporations, cooperatives, partnerships, sole traders, Limited Liability Company and other specialized types of organization. Some of these types are listed below, by country. Depending on which type of business entity you choose will also influence the legal structure.[1] The legal structure will also be influenced by the type of business entity you choose. Employment of local work force and expatriates. Venezuela's workforce is one of the key assets the country offers to potential

investors. The workforce reflects the population makeup: young with large numbers of well-educated, internationally trained managers. There are no prohibitions on bringing in skilled management or technical personnel from abroad, provided the percentage of foreigners on the payroll does not exceed the legal limits:

Companies of more than 10 people are prohibited from having more than 10% of the workforce made up of foreigners. Salaries of foreigners cannot exceed 20% of a company's entire payroll.

There are no legal restrictions regarding the nationality or country of residence of company directors or management personnel. A work visa is required for foreign employees working in Venezuela to be obtained from the Immigration Office of the Department of Labor. A business visa is also available on a yearly basis and authorizes a foreign national to make unlimited entries to Venezuela on business. Venezuelan labor law does not restrict the number of foreign employees working on a company's payroll and there is no nationality requirement of managers or directors, except for those companies operating in reserved sectors.

What Type of Companies may be registered by Foreign Firms in Venezuela?

According to the Commercial Code, firms domiciled abroad are considered as foreign companies, whether the main object of their exploitation, commerce or industry is in Venezuela or not. These companies may adopt the following forms of incorporation:

A company with its own juristic nature, independent from the parent company A subsidiary company A branch A representation Technological transfer agreements and licenses over patents and brands

Basic Economy: That Venezuela was until 1970 the largest oil exporter in the world positively differentiated its economy from other South American nations. Since the 1940s oil revenues were consistently used to diversify Venezuela's national industry. This national trend has most significantly affected a strong mineral export policy and the development of hydroelectric energy. Major Industries: More than half of Venezuela's labor force is incorporated into the service sector of the economy, while less than 40 percent of the population is dedicated either to agricultural or industrial production. Venezuela has quite a diversified industrial sector, largely due to its reinvestment of oil resources. The first type of industry are the oil refineries and petrochemical plants themselves. The second largest industry is the production of consumer goods. Import substitution strategies have been established for goods such as textiles, leather, paper, tires, tobacco, light engineering products, and modern appliances. The auto industry has also attempted, albeit less successfully, to establish its own assembly industry. The third type of industry is the production of heavy industrial materials such as iron, steel, and aluminum. Trade: Venezuela's most lucrative export item is oil. Its main trading partner is the United States, with which it has been able to maintain favorable trade balances. Venezuela imports machinery, transportation equipment, pharmaceuticals, food products, tobacco, and beverages from the United States in exchange for its oil. Venezuela's other major trading partners are the Netherlands, Japan, Germany, France, Italy, Brazil, and Colombia.

9.7: SOCIAL ORGANIZATIONS:

Ethnic Relations: The four main cultural groups are very much regionally oriented: whites and pardos are mostly city dwellers; Indians live in the Amazon as region; and blacks along the Caribbean coast. These groups have maintained a surprisingly small amount of modern ethnic friction considering

the predominantly white control of the country. This Europanist trend has also significantly impacted Venezuela's large immigrant population. In the 1840s and again during the early 1900s Venezuela consistently attempted to entice Europeans to migrate to the country. Both of these campaigns proved unsuccessful, with Spanish, Italian and Portuguese immigrants flocking to Venezuela only after World War II. These constant attempts to bring in skilled workers and to "whiten" the national population were further supported by congressional proposals in the late 1800s to prohibit the immigration of Asians and black. By far the largest immigrant group in the country, however, is Colombians, followed very closely by other South AmericansEcuadorians and Chileans and Caribbeans, mainly Dominicans and people from the Lesser Antilles. Since the 1960s, largely due to the oil boom, official immigrant restrictions on nonwhite populations have ended. By then, however, social power was solidly entrenched among the white elite.

SOCIAL STRATIFICATION
Classes and Castes: Venezuela does not recognize an official caste system although it does participate in a strongly defined class structure that is not without its strong caste implications. The class system places most of the political and economic power in the hands of a very small group (less than 10 percent of the population). The elite is composed of the traditional white population; this also provides white (European) immigrants greater opportunity for participating in Venezuela's economic wealth. Meanwhile this color/racial division is most dramatically felt by Latin American immigrants of African and Indian ancestry, who are forced to form the lowest ranks of Venezuelan society. Venezuela also developed a large middle class in the twentieth century mainly as a result of the oil revenues. The middle class, and in particular the large lower-middle class, was significantly affected by the social crisis of the 1990s which led to large-scale riots that caused thousand of deaths and the collapse of President Carlos Andrs Perez's government.

Symbols of Social Stratification Media images of physical beauty and fashion are the most salient symbols of social stratification. How one looks, what one wears, one's profession, and one's wealth are the greatest markers of social status. GENDER ROLE AND STATUS Division of Labor by Gender: Men overwhelmingly occupy the most important political, economic, social, and religious positions in Venezuela. The traditional sexist Western gender division of labor is present in Venezuela, with men occupying the most physical demanding jobs while women are traditionally relegated to household or domestic service jobs. In the rural areas, however, women and men both partake in demanding physical labor, and Western roles are somewhat blurred. Cattle herding, however, is still a predominantly male occupation. Meanwhile, the beauty pageant industry and the preparation of females for international competitions seems to both sustain and subvert traditional Western notions of female and male occupations. In this manner females are still highly regarded as beauty objects but more and more men are also raised to similar standards of sexual objectification. The Relative Status of Women and Men: Venezuela is a very patriarchal society expressing its own distinct national brand of machismo. Although men and women are legally equal, there are still great differences in terms of actual wage earnings, sexual freedom, and social expectations. In daily life, men are still expected to work outside the home, support the household, and prove their virility with many heterosexual liaisons. SOCIALIZATION Child Rearing and Education: Children are traditionally cared for by their parents, although the extended kin may also play a major role in the upbringing. In terms of child rearing the national culture espouses Western ideals of good behavior, education, and competitiveness. On top of this an enormous amount of friendliness, generosity, and overall good nature is expected of children as they grow up.

Venezuela provides free and compulsory education through grade twelve for all its population. In 1995 literacy was estimated at over 90 percent. SOCIAL STRUCTURE: Before the oil era began in the mid-1920s, about 70 percent of the Venezuelan population was rural, illiterate, and poor. Over the next fifty years, the ratios were reversed so that over 88 percent of the population became urban and literate. No group has escaped the impact of this modernization process. Even the most isolated peasants and tribal Indians felt some effects of this economic growth, which opened up access to the elite stature, expanded opportunities for large numbers of immigrants, increased the size, power, and cohesiveness of the middle class, and created a sector of organized workers within the lower class. THE ELITE In general, those who considered themselves the Venezuelan elite, and were thus considered by their fellow citizens, thought of themselves as the upholders of superior values. Most claimed at least one postsecondary degree, possibly with a further specialization abroad. Concentrated in business and the professions, the Venezuelan upper class tended to disdain manual work and to patronize (in both senses of the word) members of the lower classes. In this particular sense, Venezuela was one of the very few countries in Latin America where a number of elite-supported scholarly and community welfare foundations provided support for an imaginative variety of programs and scholarships. These foundations often carried the names of elite families who prided themselves on their sense of civic duty. MIDDLE CLASS Consisting of small businessmen, industrialists, teachers, government workers, professionals, and managerial and technical personnel, this class was almost entirely urban. Some professions, such as teaching and government service, were traditionally associated with middle-class status, whereas newer technical professions have expanded the options and enhanced mobility within this class. Improved educational and job

opportunities since the establishment of democratic government in 1958 have enabled more women to enter the labor force, thus either helping themselves and/or their families to attain middle-class status. Not surprisingly, those who passed from the lower to the middle class in Venezuela often attributed their changed status to their education, and, accordingly, many struggled to send their children to private schools so that they could move still farther up the social ladder. WORKERS AND THE URBAN LOWER CLASS Massive rural-to-urban migration has resulted in the emergence of a burgeoning urban lower class, the most successful members of which have become urban workers. In the Venezuelan social view, the lower class consisted of those in low-status occupations (usually manual), the illiterate, and recent immigrants from the countryside. For many, the transition was traumatic and stressful, as epitomized by the presence of innumerable abandoned children in the streets of the capital city. Nonetheless, several studies indicated that most migrants felt that they had made the right move in spite of the hardships and disappointments. Most were confident that the urban environment would help ensure greater prosperity and opportunity for their children. ETHNIC GROUP Even they, however, lost many of their number to diseases brought by the white men, diseases that were airborne or waterborne and therefore did not require direct contact to spread infection. By the end of the first century of Spanish rule, some twenty tribes out of forty or fifty had become extinct. Also during the colonial period, racial mixture proceeded apace. The earliest conquerors brought no Spanish women with them, and many formed common-law relationships with Indian women. It was not uncommon for the offspring of these unions to be recognized and legitimated by the fathers. African slavery was instituted in Venezuela to meet the growing labor demands of an emerging agricultural economy. Many of the slaves came to Venezuela not directly from Africa, but from other colonies, especially the Antilles (West Indies). Again, racial mixture was common. The offspring of

master and slave often was freed and might even have received some education and been named a beneficiary in the father's will.

FAMILY OF VENEZUELA
Venezuela is well-known for spreading the "macho" culture around the world. Men rule the house in Venezuela. Women cook, clean, and even do ridiculous little things for their husbands - like ironing their shirts or packing their suitcases for trips. However, this mindset is slowly shifting as women's rights move forward. Marriage:- Venezuelans practice open-ended marriages, meaning there are few legal restrictions as long as the person marries someone of the opposite sex and of legal age. In actuality, however, there are several concerns regarding whom one should get involved with, particularly in terms of class and racial distinctions. It is expected and predominant that people marry others of their same or higher social class standingincluding racial status as well. Domestic Unit:- In Venezuelan society the family and the role played by the mother are essential in the maintenance of the social fabric. Most people tend to live in nuclear families (parents and siblings), although extended kin (grandparents, aunts, uncles, and cousins) traditionally live close by. When migration has produced a break in the family, the ties are closely maintained through letters, phone calls, and e-mail. In this manner it is not surprising that children (both male and female) live with their parents until their mid-twenties or until they marry and can move out on their own. Inheritance :- Inheritance rules are legally prescribed and there is no major distinction in terms of gender, class, or race. The higher status one holds, however, the more successful one is in maneuvering Venezuela's complex legal and social system.

9.8: EDUCATION IN VENEZUELA:

Education in Venezuela is regulated by the Venezuelan Ministry of Education. The Venezuelan Ministry of Education is the federal-level organ responsible for organizing the education system of Venezuela. In 2010, Venezuela ranked 59th of 128 countries on UNESCO's Education for all Development Index. Nine years of education are compulsory. The school year extends from September to June-July.

Literacy: Of Venezuelans aged 15 and older, 95.2% can read and write, one of the highest literacy rates in the region. The literacy rate in 2007 was estimated to be 95.4% for males and 94.9% for females. enrolment was around 93%. Education: Many children under five attend a preschool. A nursery school is a school for children between the ages of three and five years, staffed by qualified teachers and other professionals who encourage and supervise educational play rather than simply providing childcare. Children are required to attend school from the age of six. They attend primary school until they are eleven. They are then promoted to the second level of basic education, where they stay until they are 14 or 15. Although education is mandatory for children, some poor children do not attend school because they must work to support their families. Venezuelan education starts at the preschool level, and can be roughly divided into Nursery (ages below 4) and Kindergarten (ages 46). Students in Nursery are usually referred to as "yellow shirts", after the color of uniform they must wear according to the Uniform Law, while students in Kindergarten are called "red shirts". In 2007 primary education

English is taught at a basic level throughout Basic education. Students are referred to as "white shirts". Upon completing Basic education, students are given a Basic Education Certificate. Once a student ends 9th grade, they enter Diversified education, so called because the student must choose between studying either humanities or the sciences for the next two years. This choice usually determines what majors they can opt for at the college level. Students are referred to as "beige shirts". Upon completing Diversified education (11th grade), students are given the title of Bachiller en Ciencias (literally, Bachelor of the Sciences) or Bachiller en Humanidades. Higher Education: Venezuela has more than 90 institutions of higher education, with 860,000 students in 2002. Higher education remains free under the 1999 constitution and was receiving 35% of the education budget, even though it accounted for only 11% of the student population. More than 70% of university students come from the wealthiest quintile of the population. Autonomous public universities have had their operational budgets frozen by the state since 2004, and staff salaries frozen since 2008 despite inflation of 20-30% annually. Higher education institutions are traditionally divided into Technical Schools and Universities. Technical schools award the student with the tile ofTcnico Superior Universitario (literally, University Higher Technician, to distinguish from Technicians of the Sciences) or Licenciado (literally, Licentiate) after completing a three-year programme. Universities award the student with the title of Ingeniero (literally, Engineer) after completing a five-year programme. Some higher education institutions may award Diplomados (literally, Diplom) but the time necessary to obtain one varies. Post-graduate education follows conventions of the United States (being named "Master's" and "Doctorate" after the programs there).

Ch: 10 Religion & Aesthetics

The Venezuelan people have a rich cultural heritage. From the original American Indians to the Spanish and Africans who arrived after the Spanish conquest, the twentieth century waves of immigration brought many Italians, Portuguese, Arabs, Germans, Moroccan Jews, and others from the bordering countries of South America. About 93% of Venezuelans live in urban areas in the northern part of the country. More than 96% of the population call themselves Catholic. The rest belong to other churches, mainly the Protestant church. Venezuela's heritage, art, and culture have been heavily influenced by the Caribbean context. Venezuelan culture has been shaped by indigenous, Spanish and African influences. Original culture was subsequently assimilated by Spaniards; over the years, the hybrid culture had diversified by region.

Marriage: Venezuelans practice open-ended marriages,

meaning there are few legal restrictions as long as the person marries someone of the opposite sex and of legal age. In actuality, however, there are several concerns regarding whom one should get involved with, particularly in terms of class and racial distinctions. It is expected and predominant that people marry others of their same or higher social class standing including racial status as well. The idea is generally to marry somebody whiter or at least of the same racial status; the opposite, although not completely rare, is seen as going against the norm.

Domestic Unit: In Venezuelan society the family and the

role played by the mother are essential in the maintenance of the social fabric. Most people tend to live in nuclear families (parents and siblings), although extended kin (grandparents, aunts, uncles, and cousins) traditionally live close by. In this

manner it is not surprising that children live with their parents until their mid-twenties or until they marry and can move out on their own. Inheritance: Inheritance rules are legally prescribed and there is

no major distinction in terms of gender, class or race. The higher status one holds, however, the more successful one is in maneuvering Venezuelas complex legal and social system. Child rearing and education: Children are traditionally cared for

by their parents, although the extended kin may also play a major role in the upbringing. An enormous amount of friendliness, generosity, and overall good nature is expected of children as they grow up. Venezuela provides free and compulsory education through grade twelve for all its population. Higher Education: In general only 20-30 percent of Venezuelas

population goes on to obtain a university degree. Since the 1950s there has been an increasing proliferation of private universities although by far the ones with the best reputations are public ones. There are a series of masters level graduate programs but doctorates at the Ph.D. level are quite rare.

10.1: RELIGION
Most Venezuelans- at least 90 percent of the population are catholic. Since the 1980s, protestant religions have been attracting more followers, especially evangelists and Adventists, and to a lesser degree. There are also significant Jewish communities in Caracas and Maracaibo; these communities are traditionally grouped under the banners of the Israeli Venezuelan Association. Venezuela also has a smaller number of Islamic practitioners.

Rituals and Holy Places: the Catholicism practiced in

Venezuela very much follows the guidelines of the Roman hierarchy. Masses are held every day but attendance is

obligatory on Sunday. Since the second Vatican Council masses are no longer said in Latin but in Spanish, and the priest now faces the public as opposed to celebrating the ritual with his back to them. There are Catholic churches throughout Venezuela with most impressive cathedrals located in carcass and other major cities. In smaller towns, however, there are also churches with a grand colonial architecture style.

Death and the afterlife: Venezuelans belief in the afterlife

follows Roman Catholic belief in hell, purgatory (for those who still need to penance for their sins), and heaven. Even the practices of Maria Lonza and San Greforio are inrerwined with this Catholic understanding of death and the afterworld. In the practice of Maria Lonza and San Gregorio, however, both also express the possibility of communicating with dead spirits and deities. These beliefs in establishing an actual connection with the world beyond death are closer to the beliefs of Africanbased religions such as voodoo than to those of Christianity.

Prominent religions in Venezuela: Roman Catholicism is

by far the dominant religion in Venezuela, and has been adopted by most indigenous people only those living in isolated regions still practice their ancient tribal beliefs. The Protestant church has a significant presence, and recently has been gaining some ground, attracting adherents from the Catholic Church. An unusual and obscure pantheistic sect, known as the Cult of Mari Lionza, exists in the northwest and combines pre Hispanic indigenous creeds, African voodoo and Christian religious practices. Spanish is spoken by almost all Venezuelans, though some 25 indigenous tongues are spoken by remote tribes.

Membership of each religion: Venezuela, like most

South American nations, is a predominantly Catholic nation. The influence of the Catholic Church was introduced in its colonization by Spain. According to government estimates, 92 percent of the population is at least nominally Roman Catholic, and the remaining 8 percent Protestant, a member of another religion, or atheist. The Venezuelan Evangelical Council estimates that evangelical Protestants constitute 10 percent of the population. Orthodox structure of Catholic Church in Venezuela

The Pope: At the head of the college of bishops and called

the whole church of Christ is the successor of peter, the Bishop of Rome, the Pope. The Pope is the Vicar of Christ on earth. He stands in Christs place, on Christs behalf, to shepherd Christs flock.

The college of Bishops: Successor of the Apostles, the

Bishops of the particular churches throughout the world form the college of Bishops. Individual bishops have charge of a particular diocese.

The Laity: The lay faithful are those baptized faithful not

called by god to ordained ministry within the Church.

The College of Cardinals: The primary role of the College

of Cardinals is to act as special advisors to the Pope and to come together on the death of a Pope to vote for his successor.

Episcopal

Conferences

(National

Conference

of

Bishops): The Episcopal Conferences are not part of the Magisterial of the Church. They have no authority to teach in and of themselves. Their interpretations of doctrine and

pronouncements on them are only binding insofar as your own bishop has lent his name to the interpretation or pronouncement.

The Synod of Bishops: The Synod of Bishops is a formal

body within the Church. It is an advisory body to the Pope that meets in Rome on set occasions. It is largely a creature of the Second Vatican Council and many considered it to be a continuation of the Council: the Bishops coming to Rome to consider important issues and develop Church teaching.

Brothers and Nuns: This may take many forms, including

nuns (consecrated virgins), hermits, monks and friars. These faithful live in community with each other according to the rules established for the community and approved by Rome.

10.2: Powerful or Influential cults

There are small but Muslim living in Nueva

influential Muslim and Jewish communities. The persons of Lebanese and Syrian descent

community of more than 100,000 is concentrated among Esparta State, Punto Fijo and the Caracas area. The Jewish community numbers approximately 13,000 and is mainly concentrated in Caracas. Venezuela is also notable for its significant synergetic religious traditions, most notably those revolving around the figures of Maria Lionza and Jose Gregorio Hernandez.

10.3: Aesthetics
Visual arts in Venezuela The first pieces of Venezuelan art existed long before the Spaniards came to the continent of South America. The preColumbian period included works of indigenous people like cave

paintings

and

petroglyphs.

The

colonial

period

was

characterized by religious art style influenced by Spanish art. The first famous painter that appeared in the beginning of the 19th century was Juan Lovera. The late 19th century was the time when Venezuelan painting blossomed. Many important Venezuelan painters appeared on the scene during this period. The best-known was Martn Tovar y Tovar who remained the country's most famous painter of all time. Painter Armando Revern is usually connected with the beginning of modern painting in Venezuela

Petroglyphs: Mysterious stone petroglyphs, which are

images created by removing a part of rock surface by abrading and carving, are scattered throughout Carabobo state. The largest group of petroglyphs was found at the site Piedra Pintada that is located northeast of Valencia. That place was a ritual center for pre-Hispanic communities. The exact age of these carvings, which show intriguing images, is still unknown. Piedra Pintada is another location where massive carved stones were found placed in practically inaccessible place.

Pre-Columbian period: Before the Spanish invaders

anchored at the coast of Venezuela in the beginning of the 16th century, native nations that had been settled throughout that territory had already left a significant mark in art. Much of preColumbian work didn't survive the time, but some fine examples of indigenous art were found at about 200 locations throughout Venezuela. Indigenous people had a rich tradition of art. They left cave paintings in Bolvar and Amazonas states and collections of petroglyphs near Valencia in Parque Arqueolgico Piedra Pintada and on a 50 meter high cliff Piedra Pintada near Puerto Ayacucho.

The colonial period: The dominant characteristic of the

colonization period in Venezuelan art was the use of religious motives. Local artists of that time were very active but they were working under the influence of Spanish artists. When the War of Independece started artists took inspiration from it so their work began showing the historical events. Juan Lovera was first painter that started to use motives taken from the national history. He is one of the most famous Venezuelan artists whose paintings can be seen in the Caracas' museum Capilla de Santa Rosa de Lima. The movement towards heroic historical representations was lead by Martn Tovar y Tovar in the late 19th century. One of his famous works of art is the painting depicting battle of Carabobo done in 1888. Tovar y Tovar contemporaries Arturo Michelena and Emilio Boggio were also well-known Venezuelan painters of the 19th century.

La Cueva (The Cave) Revern

1920, Armando

The 20th century: Expressionist Armando Revern and

transitional painter Carlos Otero are often connected with the beginning of modern Venezuelan painting. In recent years, a proliferation of different schools, trends and techniques has become the main characteristic of Venezuelan art. A painter Hctor Poleo was one of the most notable exemplars of these new directions with his works that spanned from realism to surrealism. Equally impressive was Jacobo Borges'

expressionist painting. In his works of art, Borges was turning human figures into caricatures by deforming them.

Contemporary art Venezuelan present-day artists are very creatively active. Carlos Zerpa is an interesting painter, Miguel von Dangel works include emblematic paintings, collages and sculptures, and Jos Antonio Hernndez Dez is into photography, video and installations. The Museo de Arte Contemporneo de Caracas is place where you can see works of art of these artists and many others.

10.4: Sculpture
According to many, Venezuela's most innovative modern sculptor is Francisco Narvez. He was born on Isla de Margarita where large collection of his experimental and diverse works is kept in Porlamar's Museo de Arte Contemporneo Francisco Narvez. Venezuela's top contemporary artist was Jess Soto. Soto was internationally famous as a leading representative of kinetic art. Kinetic art is term used for art that either contains moving parts or depends on motion for its effect. The largest collection of Soto's work is kept in Ciudad Bolvar's museum which is dedicated to him. His works can also be seen adorning many buildings and plazas in Venezuela and abroad, including important cities like New York, Paris and Toronto.

Graphics
The constant contact with highly sophisticated design objects and absolute indifference to the visual chaos of the urban environment in which it operates, characterizes the essence of Venezuela. Graphic design has become the tool

most used by those who have promoted their studies to that area, who are self-taught and those who matter in any way try to communicate their priority needs, it is inevitable to study the roots of design in Venezuela, its promoters, and how they have influenced this new era of graphics and design for outdoor use, all are linked in a single order and left legacies that some continue with them and others into believing a new technology have left the main techniques and formulas of a good graphic designer. For this reason the study is deep and perhaps confusing, but is to strengthen the foundations of new designers who served in the near future with great visual communicators. Features of Graphic Design in Venezuela The poster, like magazines, brochures and others, are the starting point of development of Graphic Design in Venezuela, based on excellent graphics forming criteria , as are the number of elements that have never been lacking in the designs Venezuelans: Simplicity: good signs must be essentially simple, because

the observer does not have time to analyze it in detail. Adequate: Care must be taken to define the term and

purpose, thus avoiding disappointment sink psychologies that the purpose of the poster. Text: the text should be brief. Should be used short, trying

to convey to the reader the sense of what we advertise. Attractive: welcome signs are effective, even when the

topic is not pleasant, be sure the drawing, and color points are well distributed and well done Design and Color: good composition, color and technique

are key elements in preparing effective posters.

Graphic Design in the Crafts Craft production in Venezuela has an interesting variety, mainly in terms of inputs to the sector. Here we work: wood, textiles, pottery, basketry and leatherwork. With cactus wood, cedar, mahogany, saman vera, our craftsmen carpenters and carvers make walking sticks, trunks, chairs, kitchen utensils, furniture, toys, doors, musical instruments, among others. Cotton fiber, sisal and even synthetic fibers, our textile artisans are: fishing nets, ropes, cords, clothing, ponchos, ponchos, blankets, carpets. Molding, shaping and turning the clay in our soils our potters do: pots, plates, bowls, jugs, vases, jars, cups, sacred objects, trays. Fiber extracted from palm, stems, vines, bark, grasses and roots our weavers are artisans, mats, rugs, baskets, containers, hats, ropes, fans. With tanned skins of animals (birds, lizards and mammals) our craftsmen saddlers make wallets, belts, pants, jackets, shoes, musical instruments, furniture, gloves, chaires. All this without the interrelations of raw materials to produce articles composed of materials of different origin, such as drums, chairs (wood) umbrella (straw and wood) or the use of other unorthodox materials such as seeds, nuts coconut horns, animal horns, hair, feathers, shells, gourds. Or the direct work with metals, glass, stones and plastic.

10.5: Music of Venezuela

The music of Venezuela is an expression of the Venezuelan culture, which contains diverse Music genres, traditional and moderns according with the features of each geographic region; although it is frequent to find different musical styles in the same region. The diversity in musical expressions found in Venezuela can be seen as the result of a mixture of African, native

Indigenous, European (especially Spanish) influences, as well as more modern American and Caribbean musical forms, such as Trinidadian and Cuban.

Venezuelan Joropo. Drawing by Eloy Palacios (1912)

Several styles, of the traditional music of Venezuela, such as salsa and merengue, are common to its Caribbean neighbors. Perhaps the most typical Venezuelan music is joropo, a rural form which originated in the llanos, or plains. This musica llanera was developed by creative artists such as Juan Vicente Torrealba, Ignacio Figueredo and Angel Custodio Loyola, who helped to popularize the music throughout the country. Since then a slick, contemporary form of pop-llanera has developed which has earned the scorn of some purists who perceive it as stale and watered-down. Some singers, such as Simon Diaz and Reynaldo Armas have maintained a huge following over the years. In a similar vein, there is also neo-folklore, which takes traditional music and arranges it in an electronic style, for awesome instrument. Folk: Another very popular music in Venezuela is the Gaita Zuliana. This genre originated from the region of Zulia State and is very popular during the Christmas season. The gaita united to the Aguinaldo, conforms the national representation of the Venezuelan Christmas. In the east, the malaguea, punto and galern accompanies the velorios de cruz de mayo, (religious tradition, that is celebrated on May 3 in honor to the Christian cross). In the Venezuelan Andes, the Venezuelan bambuco is a local variation of the bambuco. Other forms include polo and the Venezuelan waltz. Other forms

of Venezuelan folk music are tensively recorded and researched due to the work of Caracas-based Fundacin Bigott. The Joropo: As the national dance of Venezuela it is performed throughout the country. Lively, merry and syncopated, it is Spanish in origin and Venezuelan in feeling. It is a dance for couples and has as many as thirty-six variants of the basic steps. The musical accompaniment is provided by the cuatro, maracas and counter pointed by a harp.

Red Devils of Yare: The red dancing devils of Yare begin their traditional battle against the forces of righteousness on Corpus Christi day, and it is one of the most unique and colorful ceremonies of the Christian World. The outcome of the battle is also traditional, virtue will triumph but not until after a full day of strenuous opposition on the part of Satans henchmen.

Caribbean:

Another which has

imported produced

genre several

is Cubandomestic

American salsa,

superstars, including Oscar D'Leon. Dominican merengue and Latin pop acts such as Billo's Caracas Boys, the Porfi Jimnez Orchestra and Los Meldicos.

Aldemaro Romero directing the Municipal Symphony Orchestra of Caracas, at the celebration of the 50th anniversary of Dinner in Caracas

Pop and Rock: Pop and rock music are very popular too, Venezuelan pop musicians such as Ricardo

and several bands have had considerable success over the years. Montaner, Jos Luis Rodrguez "El Puma", Franco DeVita, and Ilan Chester have gained popularity in other Latin American countries. Douglas Vale (Alternative pop) has also become the only Venezuelan to gain success internationally starting at his early teens.

Los Amigos Invisibles

Classical music: Venezuela has also produced classical

composers such as: Antonio Lauro, Moiss Moleiro, Teresa Carreo (who was also a world-renowned pianist), Gustavo Dudamel and Eduardo Marturet (who are primarily international conductors),Antonio Estvez, Federico Ruiz and Vicente Emilio Sojo (known for his contributions to Venezuelan musicology and music education). Roberto Ruscitti followed in their footsteps.

Symbols: The national symbols of Venezuela are the flag, the coat of arms, and the national anthem. Since Venezuela's diversity of flora and fauna is remarkable, the government also officially declared these national symbols. Many regions have well-known symbolic icons which personify their cultural roots. Most significant are the andinos, the hardy mountain folk; the guayans, the tough frontiersman following a dream; the llanero, the cowboy of the Llanos and the maracucho, the energetic entrepreneur of the Maracaibo area.

The national flower is the orchid. This kind of orchid is also

known as Flor de Mayo. The national tree is the araguaney it can be found mostly Called aravanei by in regions with

the caribes,

temperate weather. It can reach a height between 6 and 12 m. The national bird is the turpial .Fully coloured with yellow-

orange tones except in the head and the wings, which are black with a few tones in white; also has a blue spot surrounding the eyes. Performance Arts arts include word, circus performers,

Performing

the dance, music, opera, theatre, magic, Spoken arts in front of an audience are called

arts and musical theatre. Artists who participate in performing including actors, comedians, dancers, magicians, musicians, and singers. Performing arts are also supported by workers in related fields, such as songwriting and stagecraft. Performers often adapt their appearance, such as with costumes and stage makeup, etc.There is also a specialized form of fine art in which the artists perform their work live to an audience. This is called performance art. Most performance art also involves

some form of plastic art, perhaps in the creation of props. Dance was often referred to as a plastic art during the Modern dance era.

The

world

of

dance

was

with

the

style

of Venezuelan folkloric ballet.

In music, Venezuela has produced one of the world's leading salsa bands in the person of Oscar D'Leon whose music has become emblematic of this genre's tradition even in Puerto Rico and New York City (the original sources of salsa music). World pop diva Mariah Carey is the daughter of an Afro-Venezuelan man.