The government decided to allocate 3.8 trillion bolívares (2 billion dollars), product of the oil price rise, directly to the conformation of Petróleos de Venezuela’s (Pdvsa’s) Fund for Social and Endogenous Development, under the administration of Bandes (Bank for Social Development).

According to the Minister of Energy and Mining, Rafael Ramírez, these resources will be destined to infrastructure projects, agricultural and farming development, and to raise the budget of the different social missions like Barrio Adentro (medical assistance for the destitute), Robinson (alphabetization), Ribas (high school instruction), and Sucre (access to university education).

In the area of construction, two trillion bolívares (Bs.) were assigned for driveway construction and housing projects.

The item for housing is 1.2 trillion Bs. for the construction of 43,372 housing units. And a total of 700 billion Bs. will be allocated to the completion of two sections of the Eastern Venezuela highway. Additionally, driveways in agricultural areas will be restored with an investment of 50 billion Bs.

With resources from oil production, the Ministry of Infrastructure expects to carry out the construction projects in two years. For this second semester, only 30% of the total resources will be laid out.

Ulises Urdaneta, president of the National Housing Council, said that there are 512 projects, already agreed on and approved, to be executed between 2004 and 2006 with oil income financing.

These plans will be carried out by all the housing institutions in the public sector, Inavi, Fondur, Fundabarrios, and Savir, as well as by different agencies in the state governments and in mayorships. Approximately 67.28% of the construction projects will be carried out in regions outside the capital area.

In total, the government expects to have completed 87,372 housing units, 42,372 with funds from Pdvsa, 25,000 that have not been completely built since the 2001-2002 period, 9,000 out of the new budget, and 11,000 that are to be financed through a new debt.

Sector in recovery
The president of the Venezuelan Construction Chamber, Alvaro Sucre, revealed that this activity grew by 30% this year’s first semester, after a 54.7% drop in the same period last year that accounts for the 37.4% total contraction in 2003.

According to Sucre, the recovery between January and June is due to the increase in public spending on infrastructure projects and to the effect investments have had after a year 2003 with a strike, a reduction in oil income, and the suspension of several projects due to lack of resources.

Nevertheless, he explains, this positive result does not offset the contraction that the construction sector has been dragging on since 2002. He says that, for instance, the 1992 cement consumption per capita was 268 kilos (6.3 sacks), and that since then, it has decreased to 120 kilos per capita (2.8 sacks), a 55% drop in 11 years. With the increase in the first semester, cement sales barely reached 154 kilos.
Sucre considers that the government has the key to the recovery of the infrastructure activity in its hands, but points out that it is holding back an important amount of resources for several reasons.

A trillion Bs. in a period of 6 to 9 months could generate 450,000 jobs and thus reduce the 550,000 unemployment figure.

He stated that these resources, that are available through the Intergovernmental Fund for Decentralization (Fides) and the Law of Special Economic Allocations (Laae), will help generate continuous growth. There are also 500 billion dollars from the Venezuelan Petroleum Corporation (CVP) for the sector.

As for the trillion Bs., Sucre proposes two programs:

 The first one, a reactivation program, would generate 475,000 direct and indirect jobs throughout the country. It would consist mainly of contracts for cleaning and maintenance of roads, aqueducts, drainage and sewage systems; restoration of public areas, including treatment of green areas(natural spaces within cities); city ornamentation, park maintenance; minor repairs, and waterproofing and painting in public buildings, such as schools, hospitals, markets, and electric and sanitary installations.

 The other program is investing 30%, out of 500 billion $ from the Venezuelan Petroleum Corporation (CVP) Fund, in direct subsidies to the demand, for homeless families with monthly incomes below 40 tax units (988,000 Bs.), and who have fulfilled the requirements of the National Housing Council selection process.

“We propose these programs because we believe that 90% of the families that require housing assistance, can not have access to the formal housing markets by their own means, since they don’t have the buying power to do so, i.e., the housing demand that these families generate is not a real, effective demand” stressed the president of the National Construction Chamber.

Another 30% of these resources should be allocated to the completion; through contracts, agreements, and other innovative mechanisms agreed with the private sector, of 54,000 homes that are yet to be finished.

As for the remaining 40%, Alvaro Sucre proposed starting a program of macro-urbanism and land plot development with basic services that facilitate urbanized land offer at a faster rate than that at which the informal sector can invade these lands.