The fears that Venezuela would have a closed economy, contrary to the inflow of private foreign capital and to national private capital, are gone. The 2004 World Investment Report elaborated by the UN Conference of Trade and Development (Unctad) shows the contrary. Direct foreign investment in the country recovered 79% last year to reach 2.5 billion U$.

For the director of the National Council for the Promotion of Investments(Conapri), Mercedes Briceño, this behavior was mainly due to restrictions on the delivery of profits by the transnational companies, as a result of the currency exchange control.

“In consequence, this capital was reinvested in Venezuela, thus increasing the amount of direct foreign investment”, says the report by her institution.

Briceño admits that the recovery of international reserves, and of the world economy in general played an determining role in the investing companies’ decision making.

She explained that 58% of the foreign investments flowing into the country during the first three quarters of 2003, were loans from the companies’ headquarters for their subsidiaries in Venezuela.

She estimates that the country should take advantage of this situation to display the existing opportunities for new investments and to attract foreign capitals in key sectors like the manufacturing industry, telecommunications, gas, petrochemicals, mining, and tourism, apart from the fact that investments in the oil industry traditionally appeal to transnational companies.

Published in Quantum No.34

Ana Teresa Peña