Embassy of Bolivarian Republic of Venezuela en Abu Dhabi.


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- Economy      
  - Foreign direct investment  
  - Trade  

The Bolivarian Republic of Venezuela, as it is officially known, is located in the northern part of South America, a spot to which it owes its triple identity as an Andean, Amazonian and Caribbean country. Strategically located, the country has access to both the Caribbean Sea and the Atlantic Ocean along its 2,813 km (1,749 miles) of northern and eastern coastlines. Covering an area of 916,445 square kilometers (353,841 square miles), Venezuela shares borders with Colombia to the west and south, Brazil to the south and Guyana to the east.

 This federal republic is divided into 23 states, a Capital District (that includes the city of Caracas), 72 federal territories (islands, islets and keys, most uninhabited) and Guayana Esequiba. Venezuela has been claiming this latter 167,830 square kilometer area from Guyana for the past 150 years. The governments of both countries are still working on a settlement to the territorial dispute.

 Located in the tropics, Venezuela benefits from a warm, rainy climate, with variations depending on location, topography, prevailing winds and proximity to the sea. Because of its two mountain chains, the Andes and the Coastal chain, it has more moderate temperatures that vary depending on the altitude.

 Close to 80% of the population lives in urban areas in the northern part of the country, while the half of the country located south of the Orinoco River is home to the other 20%. Most Venezuelans are descendents of Spaniards, native Indians and Africans from the colonial era; these groups were later joined by immigrants of German, Croatian, Italian, Spanish, Portuguese, Syrian, and Lebanese origin, as well as a great many Latin Americans, during the 20th century.

 Although the official language is Spanish, there are also some thirty native languages that are officially used in the respective communities, among others guajiro, warao, pemón and kariña. English is the second language for most professionals, scholars and middle- and upper-class Venezuelan. Many people in the large immigrant communities (Arabs, Portuguese and Italian, mainly) continue to speak their native tongue.

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#  Economy :

 The country is home to vast mineral resources, although it is best known for its hydrocarbons, and rightly so given that it ranks fifth in the world in oil reserves and seventh in natural gas, according to BP’s World Energy Statistics Report (June 2005). Thanks to this, Venezuela plays a key role in the world market for these commodities

 From 1984 to 2004 extraction of oil and gas and refining accounted for 24% of the country’s gross domestic product (GDP). Most activities in the non-oil economy are in the services sector, which accounts for 46% of the non-oil GDP, with trade and real estate standing out above the rest. In the case of production of goods, manufacturing holds first place, contributing 15%, followed by construction with 6% and agriculture with 5%.

 Venezuela is also very rich in minerals such as iron, bauxite, coal, gold and diamonds, especially in the Guayana region. The state holds a large interest in the basic industries and in the oil sector, since both are considered of strategic importance for the nation.

 There is a strong fishing industry all along the sea coast, while the country’s forestry resources and farmlands are located in the area known as Los Llanos (The Plains) and in the Andean region.

 Insofar as tourism is concerned, the Venezuelan coast draws people from all over the world. The country’s main points of interest are: Angel Falls, the highest waterfall in the world; Lake Maracaibo, the largest in South America; the Orinoco River, the third largest in the world; the Mérida cable car, again, the world’s longest and highest; plus 43 national parks and 21 natural monuments.

 #  Foreign direct investment:

The sectors that have traditionally attracted the most foreign capital are those related with natural resources and, most especially, hydrocarbons. Nevertheless there are a great many opportunities for non-oil activities in the country given that investment in this sector accounts for just 2% of the gross domestic product (GDP), according to figures put out by the Central Bank of Venezuela (BCV) for the 1990-2004 period.

 Over the past fifteen years a number of opening-up programs have attracted flows of foreign currency into Venezuela. The most popular activities have been manufacturing, telecommunications and banking, and the main investor countries have been the United States, Japan, Spain, the Netherlands, France, Italy and Colombia.

 A record of investment in the country is kept by the BCV, as part of its balance-of-payments account. This variable is all-inclusive and covers cash or physical assets used for capital increases, funds contributed by parent companies to their subsidiaries, loans and commercial credit, and profits that are reinvested, even if not capitalized.

 Additionally, the Superintendency of Banks and other Financial Institutions (Sudeban), the Hydrocarbon Industrialization and Technology Department of the Ministry of Energy and Petroleum (MEP), the Ministry of Basic Industry and Mining (Mibam) and the Insurance Superintendency (Sudeseg) keep records of investments in cash or kind, used for capital increases, in their respective areas of endeavor, regardless of the exact moment when the increase is implemented. For the other sectors of the economy the oversight agency is the Superintendency of Foreign Investments (SIEX).

#  Trade :

Venezuela has always played a very active role in the area of integration and foreign trade, and is a member of the Andean Community (CAN), the Southern Common Market (Mercosur), the Association of Caribbean States (ACS) and the Latin American Integration Association (Aladi); in addition, the country has signed free-trade agreements with Mexico and Colombia (G-3) as well as Chile.

 The country has a favorable trade balance with oil exports as its hallmark. Nevertheless, in recent years there has been an increase in non-traditional exports (excluding oil and iron), which have averaged US$ 5.6 billion per year and passed the US$ 6 billion mark in 2003 and 2004. On the other hand, however, imports have also increased, totaling US$15 billion in 2004, according to figures published by Aladi.

 Venezuela’s main trading partners are the United States, Colombia, Mexico and Brazil. The principal exports are metals, minerals, and chemicals, whereas the main imports are electrical, chemical and transportation products as well as foodstuffs.



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