In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
Despite the attractiveness of the country due to its godsend oil, the large size of its domestic market and the richness of its natural resources, the inflows of FDI in Venezuela have been smaller in the last few years. The economic and political crisis set off by the international financial crisis of 2008-2009 has provoked a significant back-flow of FDI between 2009 and 2011. The uncertain climate born from the "Bolivarian" reforms (infringement of private property rights, foreign currency control, increasing regulations, nationalizations, etc.), Chavez's anti-American speech and the ineffectiveness of the port system are some of the many hindrances to investment.
Venezuela is combining regional and revolutionary politics, without closing its doors to foreign investment, which it needs badly. Still, the "Bolivian" socialism pursued by very interventionist the government hinders the increase of FDI flows. Nevertheless, FDI reached over 3,2 billion USD in 2013.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Venezuela||Latin America & Caribbean||United States||Germany|
|Index of Transaction Transparency*||3.0||4.0||7.0||5.0|
|Index of Manager’s Responsibility**||2.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||2.3||5.0||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||3,778||3,216||7,040|
|FDI Stock (million USD)||44,576||49,079||55,766|
|Performance Index*, Ranking on 181 Economies||148||-||-|
|Potential Index**, Ranking on 177 Economies||41||-||-|
|Number of Greenfield Investments***||9||12||25|
|FDI Inwards (in % of GFCF****)||6.7||4.2||9.5|
|FDI Stock (in % of GDP)||14.1||12.8||14.9|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
The country's agency promoting foreign investment provides information about the permits necessary to business establishment.
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Last Updates: October 2014