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Venezuelan investment plummets 15 percent in the last three years
[El Universal] After decades of misfortune, oil exporting countries have learnt that if they are to expand production capacity, they need both to save a part of their revenues and to diversify exports, which requires investments in machinery, equipment, and tools. According to data issued by the Central Bank of Venezuela (BCV), after a period of recovery, following a lockout in 2002, investment has tumbled in the last three years, for an accumulated 15-percent decrease between 2007 and 2010. In 2009, investment fell 4.8 percent and the only positive sign was an increase in public sector's investment in the second half of the year thanks to the purchase of plants and equipment to deal with electricity shortage. Declining investment endangers future growth and the possibility that the economy creates enough jobs in the formal sector of the economy. In an environment of controls and frequent seizures of companies, a decline in private investment can be expected, but in the case of Venezuela, the fall began some decades ago. Between 1950 and 1980, Venezuela steadily increased its production capacity and even exceeded its actual needs, but the collapse of the rent-seeking model set a ceiling on the economy. Meanwhile, ...back at the ranch... between 2004 and 2008, Latin America received USD 91.56 billion in foreign direct investment -an unprecedented amount, but Venezuela only received USD 5.84 billion. Posted by: Fred 2011-01-11 |
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