International Trade: Homework Assignment:
Owner: Ali Osman ÖZKAN / 20114021
Economic analysis of the Venezuela:
Introduction:
The economy remains trapped in a hyperinflationary-recessionary
environment, with economic activity plunging nearly 30.0% year-onyear in Q3 according to estimates released by the oppositioncontrolled legislature on 28 November. Meanwhile, media reports
revealed the Central Bank sent preliminary macroeconomic data—
which it stopped publishing in 2016 as the crisis intensified—to the
IMF on 20 November. The move followed warnings of sanctions from
the international lender, potentially including the loss of voting rights
and even expulsion from the institution. Notably, the data showed
that inflation topped 860% while GDP contracted 15.7% in 2017,
highlighting the sheer magnitude of the economic collapse. On a
somewhat more positive note, authorities reached an agreement on
26 November with the Canadian mining company Crystallex to settle
a USD 1.4 billion arbitration award.
Population:
a)
Total population: The current population of the
Bolivarian Republic of Venezuela is 32.580.959 as of Tuesday,
January 1, 2019, based on the latest United Nations estimates.
b)
Growth rate:
The population growth rate in 2018
:1.26% From 1955 to 2018 The population growth rate of
Venezuela is going downward. In 1955 population growth rate is
about :4.28%
c)
Geographic Areas:Venezuela
population
is
equivalent to 0.42% of the total world population. Venezuela
ranks number 44 in the list of countries (and dependencies) by
population. The population density in Venezuela is 37 per Km2
(96 people per mi2). 89.8 % of the population is urban
(29,444,949 people in 2019) About 89.8% of the population live
in urban areas in the northern portion of the country and
currently resides in the urban conglomerations (Caracas,
Maracay, Maracaibo, Valencia, etc.) that are concentrated in
Venezuela's northern coastal mountain strip. Nearly half of
Venezuela's geographic area lies south of the Orinoco River;
however, this region contains only 5% of the Venezuelan
population.
d) Immigration to Venezuela has been significant. After the
Spanish colonization of the Americas brought European
colonists and African slaves, immigration to Venezuela was
significant particularly in the period after World War II, with
large numbers of immigrants from Asia and Europe,
particularly southern Europe. In addition, Venezuela shares a
1000-mile border with Colombia and has long had substantial
numbers of Colombian residents. Since the 1980s, the
Colombian conflict has seen largescale Colombian immigration,
with Venezuela the number one destination for displaced
Colombians: by 2008, there were over 4 million,[1] compared to a
total
Venezuelan
population
of
around
27 million.
Economic statistics and activity
1)GDP:
The Gross Domestic Product (GDP) in Venezuela was worth 482.40
billion US dollars in 2014. The GDP value of Venezuela represents
0.78 percent of the world economy. GDP in Venezuela averaged
98.32 USD Billion from 1960 until 2014, reaching an all time high
of 482.40 USD Billion in 2014 and a record low of 8.61 USD Billion
in 1960.
Rate of Growth:
The Venezuelan economy shrank 16.6 percent in 2017 compared to
2016, the sharpest contraction on record, according to preliminary
data being prepared by Venezuela's central bank, two sources
familiar with the matter said on November 22. In particular,
preliminary data shows that the non-oil sector shrank 15.2 percent
and oil sector declined 11.3 percent. For the first time since 2016, the
bank is preparing to hand over comprehensive economic data for the
International Monetary Fund to avoid sanctions including a possible
expulsion from the lender, but it has not officially approved the
figures. Following a conference call between the bank and IMF last
week, bank technicians began working to deliver new growth and
inflation data to meet a strict November 30 deadline issued by IMF
officials. GDP Annual Growth Rate in Venezuela averaged 1.62
percent from 1998 until 2017, reaching an all time high of 36.10
percent in the first quarter of 2004 and a record low of -26.70 percent
in the first quarter of 2003.
Personal Income Per capita:
The Gross Domestic Product per capita in Venezuela was last
recorded at 13709.04 US dollars in 2014. The GDP per Capita in
Venezuela is equivalent to 109 percent of the world's average. GDP
per capita in Venezuela averaged 13171.53 USD from 1960 until
2014, reaching an all time high of 15557.33 USD in 1977 and a record
low of 9710.31 USD in 2003.
Avarage Family Income :
Wages in Venezuela increased to 3050 VEF/Month in 2012 from 2346
VEF/Month in 2011. Wages in Venezuela averaged 780.44
VEF/Month from 1995 until 2012, reaching an all time high of 3050
VEF/Month in 2012 and a record low of 41.36 VEF/Month in 1995.
Distribution of wealth:
rural economy to a modern, urban one, has also significantly transformed
Venezuelan society. Venezuelans today are more literate (91.1 percent
in 1995 as opposed to 30 percent in the 1920s) and have a longer life
expectancy (73.07 years in 2000 as opposed to 43 years in 1940). Still,
in 1997, 67 percent of the population lived below the poverty line, and
poverty appears to be increasing due to inflation and the 70 percent
decrease in real wages since the 1980s. Venezuela has made great
strides in meeting the basic needs of its citizens since the 1950s, but
economic problems since the 1980s have eroded these early successes
c) International trade statistics:
Venezuela recorded a trade deficit of 782 USD Million in the third
quarter of 2015. Balance of Trade in Venezuela averaged 4520.58
USD Million from 1990 until 2015, reaching an all time high of 17732
USD Million in the third quarter of 2008 and a record low of -2015
USD Million in the fourth quarter of 2008.
d) Major exports to the world and Turkey :
Venezuela is the world´s tenth biggest exporter and the thirteenth
largest producer of oil. Shipments of oil account for 96 percent of total
exports. Main export partners are: United States (40 percent of total
exports), China (11 percent) and India (6 percent). Others include:
Cuba, Colombia and Brazil. This page provides - Venezuela Exports actual values, historical data, forecast, chart, statistics, economic
calendar and news. Venezuela Exports - actual data, historical chart
and calendar of releases - was last updated on January of 2019.
Exports to turkey:
Venezuela Exports to Turkey was US$33.14
Million during 2013, according to the United Nations COMTRADE
database on international trade.
Trends: Venezuela mainly exports to Turkey Iron and Steel. It
is about $29.24M in 2013. Other products are has low share.
e) Major imports from the world and Turkey:
Imports in Venezuela increased to 9576 USD Million in the third
quarter of 2015 from 8778 USD Million in the second quarter of 2015.
Imports in Venezuela averaged 6811.13 USD Million from 1992 until
2015, reaching an all time high of 17841.00 USD Million in the fourth
quarter of 2012 and a record low of 1970.00 USD Million in the third
quarter of 1994.
Imports from Turkey:
Venezuela Imports from Turkey was US$170.57 Million during 2013,
according to the United Nations COMTRADE database on
international trade.
Trends Turkey:
Venezuela Imports from Turkey of Furniture, lighting signs,
prefabricated buildings was US$84.97 Million during 2013, according
to the United Nations COMTRADE database on international trade.
Trends to world:
Venezuela main imports are: electronics (32 percent of total imports),
chemical products (18 percent), agricultural products and livestock
(11 percent), base metals (8 percent) and food, beverages and tobacco
(6 percent). Main import partners are: United States (26 percent of
total imports), China (15 percent) and Brazil (9 percent). Others
include: Colombia, Argentina and Mexico. This page provides Venezuela Imports - actual values, historical data, forecast, chart,
statistics, economic calendar and news. Venezuela Imports - actual
data, historical chart and calendar of releases - was last updated on
January of 2019.
Balance-of-payments situation:
Venezuela has enjoyed an enviable balance-of-payments position for
many years. Although the country was forced to import goods to
satisfy the demand for many industrial, construction, and household
items, its income from exports has more than equaled its
expenditures for imports. Venezuela balance-of-payment situation
bringusdeficit.
Exchange Rate:
The USDVEB traded at 248,520.9000 on Friday December 28.
Historically, the Venezuelan Bolivar reached an all time high of
248520.90 in August of 2018 and a record low of 0.05 in January of
1989 Venezuela has had a complex multi-layered exchange rate
system that offered different exchange rates. The first exchange rate
offered has been the official exchange rate intended for importing food
and medicine. The second exchange rate for priority sectors was
supposedly auction-based, and was called the Ancillary Foreign
Currency Administration System I or SICAD I. Another rate, SICAD
II, was introduced in March 2014.
The last exchange rate before the introduction of the DICOM was the
SIMADI. The rate was reserved for the purchase and sale of foreign
currency to individuals and businesses. The government controls all
of the rates. Outside the government setting, however, is the bitter
reality—the black market. In 2016, the black market exchange rate
was around 900 bolivars to the US dollar.
Trade restrictions:
Some products, such as cigarette paper, bank notes, weapons, and
certain explosives can be imported only by government agencies;
however, the government can also delegate authority to import on its
behalf, placing orders for such products with the local sales agents of
the foreign manufacturers. he last update about eligibility for exports
to Venezuela was in March 24, 2015. Pork from most countries is
unofficially banned, but in 2016 significant volumes of pork products
(25,039 T) were imported from Portugal and Brazil to meet
heightened holiday demand. Officially pork is eligible for import from
the United States. Select bovine products from the U.S., such as beef
and beef products, are officially banned due to antiquated concerns
about Bovine Spongiform Encephalopathy (BSE); however, a U.S. live
cattle trade protocol was signed and some imports have been made in
2017.
Embargoes:
On August 24, 2017, President Donald Trump imposed extensive
sanctions against the government of Venezuela in response to its
persecution of political opposition, human rights abuses and
“rampant” public corruption via Executive Order 13808. This order
broadly prohibits transactions related to the financing of new debts,
securities and certain pre-existing bonds for the Venezuelan
government and the state-owned oil company Petróleos de Venezuela
S.A. (PdVSA).
Quotas:
On December 2, 2016 Venezuela was suspended from the
Southern Common Market (MERCOSUR) after having become the
fifth full member of the bloc in July 2012 summit in Rio de
Janeiro.The decision was based on Venezuela’s failure to fully comply
the entry requirements, including the Asuncion Protocol on Human
Rights, the 2002 Agreement on the Internal Immigration of Citizens
of MERCOSUR, and the Economic Complementation Agreement.
Venezuela had four years from its date of accession to adopt the
MERCOSUR Common External Tariff (CET) and to provide duty-free
treatment to its four partners on all goods, with sensitive products
allowed a two-year extension.
Import Taxes:
The rate may change every year, within the range of 8% to 16.5%.
Currently, the general VAT rate is 12%.
A 15% VAT applies to the sale and imports of luxury products (e.g.
vehicles valued at 40,000 United States dollars [USD] or more,
motorcycles valued at USD 20,000 or more, nickel or token game
machines, aircraft used for recreational or sport purposes, jewellery
valued at TU 2,500 or more).
Tariffs:
Tariff rate, applied, simple mean, manufactured products (%) in
Venezuela was 11.21 as of 2016. Its highest value over the past 24
years was 17.23 in 1992, while its lowest value was 11.04 in 2014.
Definition: Simple mean applied tariff is the unweighted average of
effectively applied rates for all products subject to tariffs calculated
for all traded goods. Data are classified using the Harmonized System
of trade at the six- or eight-digit level. Tariff line data were matched
to Standard International Trade Classification (SITC) revision 3
codes to define commodity groups. Effectively applied tariff rates at
the six- and eight-digit product level are averaged for products in
each commodity group. When the effectively applied rate is
unavailable, the most favored nation rate is used instead. To the
extent possible, specific rates have been converted to their ad valorem
equivalent rates and have been included in the calculation of simple
mean tariffs. Manufactured products are commodities classified in
SITC revision 3 sections 5-8 excluding division 68.
Licensing:
The Venezuelan court system can be slow and non-transparent.
Venezuela has an economy in which many activities are regulated,
not only by laws, but also by presidential decrees or specific
regulations. These, especially regarding labor, have multiplied in
recent years. The bureaucracy and required paperwork add to the
complexity. Consequently, contracting with a reputable local law
firm is essential for any U.S. company wishing to establish a presence
in Venezuela, form joint ventures, register intellectual property, or
enter into any type of extended, formal business relationship.
Local attorneys can provide essential information on labor laws, tax
regulations, real estate purchases, and the drafting of by-laws. A
number of Venezuelan law firms have attorneys who have studied in
the United States and are familiar with matching a U.S. company's
requirements to local law. The U.S. Embassy maintains a reference
list of local attorneys in Venezuela. Inclusion on the list is not an
endorsement by the Department of State.
Customes duties:
Customs duties are levied based on the Andean Pact's common
external tariff (CET), divided among 4 rates: 5%, 10%, 15%, or 20%.
At the government's discretion, export duties may also be levied.
Transit duties are required on certain goods, including hides, cocoa,
coffee, and cotton. The government may also increase duties on items
coming in from certain countries; in addition, it may establish import
quotas or subject imports to licensing to protect domestic industry.
In 1967, Venezuela joined the Latin American Free Trade Association
(LAFTA), which became the Latin American Integration Association
(LAIA) in 1981. The ad valorem duty system was adopted in 1973 to
harmonize Venezuela's tariff structure with that of the other
members of the Andean Pact. The average tariff rate is 10% except
for automobiles, which carry a duty of 35%. Venezuela has three free
trade zones: the Isla de Margarita, the Paraguaná Peninsula
Industrial Zone, and the Port of La Guaira.
Labor force:
Labor force, total in Venezuela was reported at 14.732.929 in 2017,
according to the World Bank collection of development indicators,
compiled from officially recognized sources.
Unemployment Rate:
Employment Rate in Venezuela decreased to 92.67 percent in April
from 92.92 percent in March of 2016. Employment Rate in Venezuela
averaged 89.37 percent from 1999 until 2016, reaching an all time
high of 94.47 percent in December of 2014 and a record low of 79.30
percent in February of 2003.
Inflation rate:
Consumer prices in Venezuela jumped 1,300,000 percent year-on-year
in November of 2018, up from a 833,997 climb in October, according
to estimates from Venezuela's opposition-led congress. Inflation Rate
in Venezuela averaged 3268.55 percent from 1973 until 2018,
reaching an all time high of 833997 percent in October of 2018 and a
record low of 3.22 percent in February of 1973.
https://www.nationsencyclopedia.com
https://www.export.gov
https://tradingeconomics.com
https://www.imf.org
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www.taxsummaries.pwc.com