...Venezuela is one of the countries with the largest oil reserves in the world. Three decades ago it was considered one of the countries with the highest living standards. Today, after seventeen years of revolution its economy is suffering a severe crisis. The question is, how this country that has larger oil reserves than Saudi Arabia, cannot fin basic good in shops? The crisis is a consequence of an economic mismanagement and the authoritarian Chavista Government. When Hugo Chavez came to power, his goal was to reduce inequality and provide a fair distribution of wealth among the population but, his failure was to diversify Venezuela’s economy. The financial health of the country was in excellent condition when the price of a barrel of crude oil was 100 dollars, between 2013 and 2014. The revenues of the oil industry were designated to fund social programs to reduce poverty, creating a socialist government. Instead of investing...
Words: 667 - Pages: 3
...of the Spaniards. The Political analysis will be explained as much detailed as possible due to its specifics characteristics in the recent decades with the Hugo Chavez’s government. He report draws special attention in the Social analysis is one of the main issues to be reviewed due to its importance at the time of making any decision. The economic aspect of course will be in consideration with both: the Official’s figures and the international observer’s ones, the graphics will be analyzed. It will be also mentioned the Business environments and the principal sectors to invest or that could be interesting to sell. To support all the information in the report before any conclusion, it will be used THE SWOT tool to demonstrate why Venezuela is an interesting place to import, especially in the last 5 years. It is not just a country of striking natural beauty, which ranges from the snow-capped Andean peaks in the west, through the Amazonian jungles in the south, to the beaches of the north, Venezuela is among the most highly urbanized countries in Latin America with the 4th GDP per capita in Latin America. It is the 4th largest oil exporting country in the world with the largest reserves of heavy crude oil at an estimated 99.4 billion barrels (1.580×1010 m3) as of 2010 and more than 3 million barrels of crude oil per day....
Words: 6774 - Pages: 28
...Question 1: Under Chavez’s leadership, what kind of economic system is being put in place in Venezuela? How would you characterize the political system? (3 points) Under Hugo Chavez’s leadership, a democratic socialist system was formed. Chaves was a huge advocator for global capitalism beginning when he ran for office. Chavez’s first step toward holding power over the government was when he took over the distribution of resources around Venezuela. In 2005, he announced an increase in the royalties the government would collect from oil sales. He also seized control over the court system when he fired Supreme Court justices. Chavez also extended government control over the media as well. Lastly, Hugo Chavez took various enterprises into state ownership and required that other enterprises be restructured as “workers’ cooperatives” in return for government loans. Question 2: How do you think that Chavez’s unilateral changes to contracts with foreign oil companies will impact upon future investment by foreigners in Venezuela? Discuss each concept and element of the question within the framework of an actual and specific example. (5 points) Chavez’s unilateral changes with foreign oil companies will likely forestall foreign oil companies from growing or even wanting to do business with Venezuela. Venezuela’s economy is the worst it has ever been with a 56% inflation rate, which is the highest anywhere in the world. The Central Bank in...
Words: 1166 - Pages: 5
...hydraulic pumps used in oil producing industry, likes to investigate the possibility of starting a new subsidiary in Venezuela, and asked you to make a country analysis and country risk report. The facts, key indicators and back ground information of Venezuela you found after research are presented in the Appendix. Use that information to answer the following questions: Moderate poverty and inequality have decreased from 1998 onwards due to the program called ‘Missiones’ according to the World bank (see appendix). 1. Use the fact sheet Venezuela whether this can be confirmed with figures. Assess: a. Level of development b. Income inequality 2. Assess Venezuela’s export structure. What is it based on? Use GDP and expenditure components for Q 3 and Q4 to assess Venezuela’s attractiveness from the table: 3. How can you see 2014 and 2015 are forecasts? 4. Characterize the phase of business cycle Venezuela has faced in 2013 and 2014 (Explain which key indicator(s) are used to answer the question) 5. Make a ‘first level analysis’ of the aggregate components of GDP to explain the economic (GDP) growth during 2013. 6. Explain the influence of imports on GDP in 2013. 7. Make a ‘second level’ analysis of the aggregate components of GDP to find some reason(s) for the movement of the various components. ‘The decrease in revenues from exports, mainly oil is consistent with lower oil production’ According...
Words: 2111 - Pages: 9
...when the opposition attempted to force the resignation of Chavez. Venezuela suffered a catastrophic recession in 2002, “According to the Central Bank, in 2002 the variation of the GDP compared with the previous year register -8.9% and in 2003 it was -7.8%. For the oil industry, the variation registered was -14.8% for 2002 and -1.9% for 2003. In 2003 the unemployment rate reached 18.9% and by 2004 it had decreased only to 15.1%” (Lopez Maya, pg 222).The leadership of Hugo Chávez in 1998 marked the rise of the left in Latin America and especially the rise of the Bolivarian forces. The leadership of Hugo Chávez in 1998 marked the rise of the left in Latin America and especially the rise of the Bolivarian forces. After this devastating downfall for Venezuela's economy and political regime the government seeked an effective way to productively confront the political and economic impact that was created. Leading to the creation of the Endogenous Development Nuclei. This reform was created on the basis to offer solutions to the principles of participatory democracy for important social problems. This was used to strengthen the social economy as well as to gain social unity. The Bolivarian economy began to strengthen as the oil prices boomed and their international policy strongly promoted the multipolar international system. Controversy arose as Venezuela created more links with Cuba, Chavez wanted to make himself heard and known in the international system, verbally emphasizing his...
Words: 1214 - Pages: 5
...Venezuela also has 25 languages associated with indigenous natives. Venezuela’s population are culturally and regionally oriented, which consists mainly of four groups: Mestizos or pardos, (mixed European and Indian ancestry), comprising 67 percent of the population; white (European decent, mainly Spanish Italian, and Portuguese), 21 percent; black (African and Caribbean decent), 10 percent and Indian (Native Americans), 2 percent...
Words: 1582 - Pages: 7
...One of the most conclusive verdicts on the leadership of Hugo Chavez in Venezuela came out of a physician who became famous for ensuring that he had inner knowing that cancer will eventually kill the president of Venezuela. It was widely covered by the media of opponents, communication eager to fill the void left by the lack of official information on the health status of Chavez statements. Beyond truth diagnosis doctor Jose Rafael Marquina, a Venezuelan who resides in Florida, USA, also transcended his criticism of the style of government of the now deceased leader. In an interview with the local newspaper Tal Cual in December 2012, he said: "Chavez dealt with his illness in the same way it did with the country in an improvised way." From...
Words: 1344 - Pages: 6
...a solid background of information will typically end unsuccessfully. Brazil and Venezuela are two countries that are a great example because they are geographically close but they are very distant economically. Over the course of the last fifty years, Brazil has had three main objectives for their economy and those goals were to keep inflation under control, to maintain a high rate of economic growth, and to redistribute wealth to the poorest people of Brazil. Venezuela’s economy has undergone some drastic changes as well over the last fifty years with the biggest difference being the shift in their main export. Venezuela used to always be an economy based around coffee and cocoa as their biggest contributor to national GDP, and now the biggest export of Venezuela is oil. Oil was the main source of GDP growth in Venezuela when the economy started to stagnate. Not all of Venezuela’s economic change came from oil however; the country still is undergoing heavy change as a result of politics and the current president Hugo Chavez. Brazil’s large economy is one that overshadows many of the smaller South American economies, with a population of 194 million people and a GDP per capita of $11,239. Not only is this economy growing, the population is as well at a rate of .86%. Brazil has always been characterized with high-income inequality, but it has been decreasing over the past twelve years with a Gini index rating in 2012 of 51.9 and ranking just 16th among the world’s most unequally...
Words: 1083 - Pages: 5
...Running Head: VENEZUELAN OIL MARKET 1 Analysis of the Venezuelan Oil Market BINT 6311 – International Business Management University of the Incarnate Word VENEZUELAN OIL MARKET 2 Table of Contents Abstract ............................................................................................................................................3 Review of Venezuela .......................................................................................................................4 Geographic Location ....................................................................................................................4 Demographics ...............................................................................................................................5 Economic Indicators .....................................................................................................................5 Politics and Economic Freedom ...................................................................................................6 Analysis of Entry Modes .................................................................................................................7 Government’s Role ......................................................................................................................8 Joint Ventures ...............................................................................................................................8 Recent Events in Entry ....
Words: 4170 - Pages: 17
...Restate Thesis Located on the northern coast of South America, Venezuela covers 353,800 square miles and has a population of approximately 29,000,000 people. Its biological diversity is greater than any other country in the world. Venezuela was colonized by Spain in 1522 and declared its independence in 1811. Democratic government won the popularity of the people in 1958. Hugo Chaves was elected president in 1998 and began the Bolivian Revolution. After the death of Hugo Chavez in 2013, the people elected Nicolas Maduro president. Because oil is the main resource and export of Venezuela, fluctuations in the oil market have caused great economic crisis. In 1995, the poverty rate reached 66%, and the inflation rate reached 100% the following...
Words: 2129 - Pages: 9
...Edberg Espinoza Writing Studies II Lindsey Wilson College 5/1/2015 Socialism in Cuba and Venezuela The Socialist ideology policy that titles those philosophies and political actions that protect an economic and political system founded on the organization of production systems and social control by an organized bottom-up workers' state, economic and political sectors to evade that a minority of citizens owning the means of to exercise the abuse of a majority that does not possess the means of production is enforced to sell their labor in exchange for a salary. This socialist ideology has been enforced in two countries for several years; Cuba and Venezuela, but this has not been solved yet, and it’s a topic that everybody should knew something. I will start with Cuba and then Venezuela, and then I will compare them so the reader can know the similarities between them. The first intentions to implement socialism in Cuba come with Fidel Castro and Ernesto "Che" Guevara and his attempts to overthrow the dictatorship of then-President Fulgencio Batista, the dictatorial president was unconditional ally of the United States . They had already had approaches with communist leaders especially from Mexico, there was brewing a plan for the dissemination of communist ideas and policies, especially at the head of Leon Trotsky. In the Cuban revolution that culminated in Batista fled and the establishment of Fidel Castro in power in 1959, who in four years as the island proclaimed socialist...
Words: 2790 - Pages: 12
...Economy of Venezuela Contents *Executive Summary 2 1 Venezuela Profiles 3 1.1 Geography 3 1.2 Population 4 1.3 Political System 4 1.4 Economic System 4 1.5 Market Spotlight 5 1.6 Trade Agreements 6 2 Doing business in Venezuela (Compare with China) 6 2.1 Starting a business 7 2.2 Dealing with construction permits 8 2.3 Employing workers 8 2.4 Registering property 9 2.5 Getting credit 9 2.6 Protecting investors 10 2.7 Paying taxes 11 2.8 Trading across borders 12 2.9 Enforcing contracts 12 2.10 Closing a business 13 2.11 The ranks trend of 10 Factors from 2007 to 2010 in Venezuela 13 2.12 The ranks trend of 10 Factors from 2007 to 2010 in China 14 3 Global Competitiveness Index 15 3.1 The comparison (Score) of GCI with Venezuela and China in 2010 16 3.2 The comparison (Rank) of GCI with Venezuela and China in 2010 16 3.3 The trend of GCI (Rank) 2 countries from 2002 to 2010 17 3.4 The trend of GCI (Score) 2 countries from 2005 to 2010 18 4 Conclusion 18 4.1 Market Challenges in Venezuela 18 4.2 Market Opportunities in Venezuela 19 4.3 Experience from China 19 4.4 Recommendation of Strategy 20 4.5 Venezuela Economy: Impact of Nationalization 20 *Executive Summary My selected country Venezuela is the worst rank, in order to evaluate the business environment, first, I do some research for Venezuela profiles, which include basic information...
Words: 3694 - Pages: 15
...IMPORTANT NOTICE: The information in this PDF file is subject to Business Monitor International’s full copyright and entitlements as defined and protected by international law. The contents of the file are for the sole use of the addressee. All content in this file is owned and operated by Business Monitor International, and the copying or distribution of this file, internally or externally, is strictly prohibited without the prior written permission and consent of Business Monitor International Ltd. If you wish to distribute the file, please email the Subscriptions Department at subs@businessmonitor.com, providing details of your subscription and the number of recipients you wish to forward or distribute this information to. DISCLAIMER All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Business Monitor International makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained. ISSN 1474-5615 Vol 29 Issue 3 March 2012 Andean Business Monitor International’s...
Words: 8831 - Pages: 36
... Investments in a historical perspective Building a Bond Portfolio Vitalij Aleksandrov Gerard Haughey CONTENTS ➢ PART 1 ❖ What are bonds? ❖ What types of bonds exist ❖ Tools of analysis ➢ PART 2 ❖ Characteristics of a good bond portfolio ❖ Choosing a portfolio strategy ❖ Management of a bond portfolio ➢ PART 3 ❖ Creation of our portfolio ❖ Selection of bonds ▪ Analysis of issuer ▪ Technical analysis ▪ Expectations (including risks) ▪ Investment decision ❖ Investment summary ❖ Performance analysis ❖ Effects of crisis on the bonds chosen ➢ BIBLIOGRAPHY PART 1 What are bonds? In the same way that people borrow money, companies and governments also need to borrow money. A company needs to fund its expansion, conduct market research, develop new products etc., and the problem large corporations encounter is that they need more money than any single bank can provide. This is particularly the case with governments who need to fund everything from infrastructural projects to securing bank loans. Because they can’t borrow large sums from banks they must turn to the public market and raise money by issuing bonds. A bond is a fixed income security or a loan given by the bondholders (individual investors) to the issuer (a company...
Words: 9379 - Pages: 38
...The following text is the second chapter of ―L‘Essai sur l‘oeconomie‖ by Pierre Calame, published at Editions Charles-Léopold Mayer in 2009. Translated from French by Michael C. Behrent. Chapter 2. Globalization in Question 1. “Pro” vs. “Anti” Globalization: The New Divide For a number of years, the question of economic globalization—i.e., the interdependence of national systems of production and exchange and the ―financialization‖ of the world (revealed by the American subprime crisis in 2007)—has polarized public opinion. The problems stemming from economic globalization dominate the news: the outsourcing production in search of cheaper labor costs; the decreasing efficiency of national juridical and fiscal regulation; the waning of the very idea of sovereignty; the growing constraints within which politicians can act; the emergence of a small class of the immensely rich alongside the billions of poor; the rise of new financial actors—pension funds, hedge funds, and sovereign wealth funds—capable of destabilizing or seizing control of entire realms of the economy; and the emergence of China and India as new global economic actors, as their companies storm the industrial bastions of the United States and Europe. Should one be for or against globalization? Can we turn our backs on globalization, and return to national or regional systems of production and exchange that are autonomous, even autarkic? Is the large cosmopolitan corporation the new leviathan—a monster that...
Words: 12272 - Pages: 50
