Venezuela development finance impact project – digital artifact 09 dec2015-

Venezuela development finance impact project – digital artifact 09 dec2015-

• 1.
  Bolivarian Republic ofVenezuela - Present and Uncertainties - Luis Rodriguez -09Dec2015- Donotcopyorreproducewithoutauthorpermission
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  Agenda - Venezuela - DomesticPublic/Private Finance Public: Oil, Gasoline, taxes, future oil prices Private: Venezuelan Privatizations and impact - International Public Finance ODA investment and is declining - Conclusions and Comments Donotcopyorreproducewithoutauthorpermission
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  Some facts: *Atlantic Ocean *Closeto Panama Channel, Pacific Ocean *Area: 916,445 km^2 *People: 33 Million *Official Language: Spanish *Main product: oil/gas Bolivarian Republic of Venezuela https://www.google.co.jp/maps/ Donotcopyorreproducewithoutauthorpermission
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  Domestic Public/Private Finance DomesticResource Mobilization (DRM) Donotcopyorreproducewithoutauthorpermission
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  http://www.opec.org/opec_web/en/data_graphs/330.htm Without any doubtVenezuelan proven reserves are #1 worldwide, representing 20.09% of the world reserves, more than all Non-OPEC reserves together and followed by #2 Saudi Arabia PDVSA (http://www.pdvsa.com/) is the Venezuelan state-owned corporation responsible for the exploration, production, refining, transport and commerce of hydrocarbons. World Oil Proven Reserves Donotcopyorreproducewithoutauthorpermission
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  In Venezuela, with1Bs you can get 14.26Lts of gasoline! Point is to know that, there is a fix exchange rate (1*) of Official: 1Bs = 1/52 USD, this situation has created a No-official market for 1Bs = 1/700 USD (added here just for reference) Gasoline prices and the exchange rate regulation creates a huge fiscal hole in the taxation system, loosing important component to the Domestic Resource Mobilization (DMR) and affecting directly the Tax/GPD relationship. Back in 1961, the relation was 1USD = 3.35Bs (2*) (1*) http://www.bcv.org.ve/cuadros/2/212a.asp?id=64 (2*) http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2002/07/19/000178830_98101903574779/Rendered/PDF/multi0page.pdf The note: Gasoline prices in Venezuela 1Bs = 14.26Lt (March/2015) Donotcopyorreproducewithoutauthorpermission
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  Oil prices - Oilprices have dropped 60% from Jun/2014 and seems to have the longest term recovery - Impact to Venezuelan budgeting based upon approx. 2.5 Million barrels/day https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=D Donotcopyorreproducewithoutauthorpermission
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  Venezuelan Nationalization of PrivateSectors Around 12 years ago Venezuela started a Nationalization program, reducing the private ownership industry. As a result: -Private sector has been reduced (Private Resource Mobilization) and preventing new companies to settle down in Venezuela -Food and services shortages: there is not clear example of a successful experience like the one in Venezuela http://venezuelanalysis.com/tag/nationalization Donotcopyorreproducewithoutauthorpermission
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  International Public Finance OfficialDevelopment Assistance (ODA) http://www.aidflows.org/ Donotcopyorreproducewithoutauthorpermission
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  Components of ODA -ODA disbursements are clearly dropping since its peak of approx. 80M USD in 2007 to a 35.1M USD in 2013 - Bilateral has been historically the main contributors Donotcopyorreproducewithoutauthorpermission
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  - ODA disbursementshas been allocated to social sectors and Education in more than 50%, with very small contribution to infrastructure. - Without strong investment in infrastructure, long term productive employment is not guarantee, communications, commerce, activities are impacted - This distribution will prevent new investments to arrive the country Donotcopyorreproducewithoutauthorpermission
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  Conclusions and comments -With the current Venezuelan internal politics and administration, the DRM hardly will contribute to the development of the country - Private sector is under stress and without clear motivation signal to invest in the country - Without DRM, the ODA and any other financial instruments will continue to decline making the long term recovery and development a real challenge for next generations - Inflation (of double digit year on year) needs to be controlled (http://www.imf.org/external/pubs/ft/weo/2009/01/weodata/weorept.aspx?sy=1980&ey=2014&scsm=1&ssd=1&sort=country&ds=.&br=1&c=299&s=PCPI %2CPCPIPCH&grp=0&a=&pr1.x=55&pr1.y=) - Step by step deregulation of gasoline price and exchange rate needs to be done - Clear rules for private and foreign investments are necessary Donotcopyorreproducewithoutauthorpermission