Economy Contraction in Venezuela

Economic contraction of
Venezuela in 2018
In four areas of the economy:
Food agriculture, Construction, Automotive and Real Estate
Venezue2018
HUAWEI TECHNOLOGIES OF VENEZUELA
January 11, 2019

Economic contraction in Venezuela
In four areas of the economy: Food agriculture, construction, automotive and real estate
Table of Contents
Economic and Political background ................................................................................................ 3

The Government of President Nicolas Maduro .......................................................................... 3
Economic results 2018 ................................................................................................................ 3
Probable causes and consequences of contraction ................................................................... 4
Requirements for a recovery of the production sectors and markets ....................................... 6
Food agriculture .............................................................................................................................. 7
Construction.................................................................................................................................. 13
Automotive ................................................................................................................................... 15
Real Estate..................................................................................................................................... 19
Conclusions ................................................................................................................................... 26
Sources of references ................................................................................................................... 27
[Type text] Page 2 of 27

Economic and Political background
Venezuela entered into an economic crisis after the political conflicts that emerged after the
death of President Hugo Chavez.
The conflict arises from the different ideological positions between groups, the followers of
President Chavez and the Venezuelan opposition. After the death of President Chavez, both
parties could not find a formula that would allow them to establish a government that would
harmoniously develop the country's economy, mainly because the followers of President
Chavez proposes a change of traditional economic policy, attacking the open economy model.
The Government of President Nicolas Maduro
After the elections, that in the year 2013 gave the presidency to Nicolas Maduro conflicts were
accentuated, even within the followers of President Chavez, some of them coming to openly
disagree with the policies of the Maduro’s government and even oppose him.
Nicolas Maduro relies on three sources, the media manipulation and social control of the
population, the participation of the military in the government and the support of the
government of Cuba.
Economic results 2018
After 5 years of conflicts, disagreements and bad economic policies, the economic results have
caused Venezuela to enter the most serious economic crisis that this country has had in all its
history, with one of the highest hyperinflations of the history of the countries. in the world.
One of the elements that indicate the seriousness of the crisis and contraction of the economy
is the reduction of the GDP of the country, which in the last 8 years has accumulated a loss of
65% of its GDP.

GDP per Minimun Extreme

GDP Oil Export GDP YoY Inflation
capita Salary Poverty
USD
Year USD Millions en USD % % USD %
Billions
2010 294,282.00 10,316.00 45.10 -1.50 28.20 130.89 8.64
2011 334,069.00 11,541.00 68.80 4.20 26.10 163.66 7.01
2012 331,457.00 11,287.00 67.70 5.60 21.10 117.47 9.80
2013 234,401.00 7,869.00 66.90 1.30 43.50 46.45 11.50
2014 212,347.00 7,029.00 59.70 -3.90 57.30 28.22 23.60
2015 242,596.00 7,922.00 29.20 -6.20 111.80 11.58 49.90
2016 236,116.00 7,609.00 21.80 -16.50 254.40 7.68 51.51
2017 210,085.00 6,684.00 9.00 -14.00 2616.00 1.83 61.20

2018
(April) 100,845.00 3,168.00 - -15.00 13864.00 - -
TABLE 1: Venezuela Main Economic Figures

Source: Central Bank of Venezuela - Economic Survey of Latin America and the Caribbean ▪ 2018
Probable causes and consequences of contraction
The causes of the crisis are diverse when analyzed from different points of view, although all
converge to an economic model proposed by the Government that is confused with its political
ideological model. All of which has led the country to differences between different political
groups that lead the country and that look irreconcilable.

These groups have assumed political positions that do not allow or accept the others, so the
dialogue, the agreement and even putting these differences before the health of the country
and its population, has not been part of their wills.
But among the most important consequences we can point out the fall of the country's income
due to the high deterioration of its industrial park, especially its oil industry.
The foreign exchange income that Venezuela receives comes in more than 90% of its
production and export of oil and petroleum products. This industry shows a constraint of more
than 70% in its production with which the country does not have the foreign currency to
develop its local industry and guarantee imports of raw materials, improvements, maintenance
and spare parts of its physical plant, as well as training and innovation, among others.
The crisis in the industrial sector is due mainly to:
• Political and legal uncertainty.

• Difficulty accessing raw materials and supplies, purchases abroad.
• Growth of labor costs.
• Problems in import processes.
• Difficulty of access to foreign currency.
• Excessive price control.
• Mobilization and distribution controls.
The central issue, to solve the problem that affects the economy of production and the rest of
the economy, is for the Government to find an economic model that without affecting much its
political ideology can efficiently solve these difficulties
According to a survey of the National Council for the Promotion of Investments, CONAPRI,
made to the main private production companies by asking them about the causes of the loss of
production, the results show the influence of the economic crisis, mainly by the loss of markets
motivated by devaluation of currency and hyperinflation.

With 26% of the results, the main cause is the loss of markets and the low sale. But they also
highlight issues of financing and labor costs, mainly reflecting the demotivation of the
workforce due to the low remuneration that does not seem to compensate the effort to face
the cost of living in a country with such high levels of inflation.
Requirements for a recovery of the production sectors and markets
The recovery of production in Venezuela goes through the improvement of markets and the
stabilization of the economy.
With an adequate cost structure, Venezuela can be attractive to incentivize production

investments for export. However, it must first stabilize its economy, and create a local market
with power to access the goods and services produced in the country, given that the import
would be more expensive for the country.
Now, in the sectors of production of first necessity for the population, such as food,
construction, etc. it is more important to stabilize that local market with which the country can
undertake and develop the other production sectors.
Different issues must be resolved in the economic environment and must be part of a model
and its policies to make investments attractive and accelerate the development of the
economy.

Food agriculture
The economy of Venezuela is based mainly on agriculture since it ensures the feeding of its
inhabitants.
Even though, Venezuela relies on a lot of imported raw material to sustain a food production,
from the last decades, much of its production supplied the national market and produced
surplus for export. Traditionally the production of rice, corn, sugar, meat, chicken, eggs, to
name a few, was enough to supply the local market.
The agricultural production of Venezuela is distributed irregularly, In the states of Aragua and
Carabobo, Venezuela has concentrated production where agriculture is its main reference since
having a perfect environment can grow a variety of products in great variety and quantity.
More than 40 million hectares in Venezuela are suitable for the development of agro-industry,
with 3.8 million hectares for the agricultural system mechanized annual crops (corn, cotton,
soy, rice, sorghum and beans)

The economic crisis in Venezuela is manifested by a significant reduction in the production and
consumption of foods traditionally produced locally in the country for the consumption of all
Venezuelans.
Food Consumption
(Production) Last 4 Years Last 8 Years
Kilograms per Capita 2010 2013 2017 Reduction Reduction
Powder Milk 6.91 5.58 4.94 -11.47% -28.51%
Liquid Milk 14.11 14.4 3.84 -73.33% -72.79%
Cornmeal 27.14 21.68 18.63 -14.07% -31.36%
Wheat flour 17.31 14.42 7.84 -45.63% -54.71%
Spaghetti Pasta 17.05 13.82 8.11 -41.32% -52.43%
Rice 20.47 19.5 14.92 -23.49% -27.11%
Salt 2.32 2.01 0.55 -72.64% -76.29%
Sugar 14.33 13.14 7.06 -46.27% -50.73%
Coffee 3.51 3.54 1.86 -47.46% -47.01%
Canned sardine 2.79 2.62 1.89 -27.86% -32.26%
Chicken Meat 28.5 27.33 15.72 -42.48% -44.84%
Meat 17.68 16.68 13.57 -18.65% -23.25%
Fish 10.88 10.36 9.45 -8.78% -13.14%
As shown in the table above, since the last 8 years the production and consumption of food has
decreased significantly.
The reduction of consumption is the effect of an economic crisis that has prevented the
Government from compensating with imports the lack of production to bring to the usual levels
the consumption of food in the population.
For many years, the Venezuelan food industry had sufficient local production with access to the
necessary raw materials (seeds, nutrients, fertilizers, machinery ...), specialized labor and
motivated to work justly paid and a flexible and efficient chain of distribution that made the
food accessible to the population.

The main products grown in Venezuela and the states where they are produced:
 Potato: Merida, Tachira, Trujillo
 Coffee: Táchira, Mérida, Trujillo, Lara, Portuguesa, Monagas and Sucre
 Sugar cane: Yaracuy, Lara, Aragua, Carabobo, Tachira, Trujillo and Sucre
 Cocoa: Miranda, sucre, high Amacuro, Barinas, Aragua, Apure, Zulia and Merida
 Tobacco: Guárico, Portuguesa, Cojedes, Carabobo, Aragua and Sucre
 Cotton: Anzoátegui, Guárico, Portuguesa, Barinas and Apure
 Sesame: Portuguese the most important state; without forgetting to mention the states:
Barinas, Cojedes, Monagas, Falcón and Guarico where they are also grown.
 Corn: Guárico, Portuguesa, Barinas, Bolívar, Yaracuy and Monagas.
 Rice: Portuguesa, Guárico, Barinas and Cojedes.
Prior to 2004, the production of the main vegetable food items was relatively stable with a
growth trend. h trend.

Even though the harvested surface of the

country experienced a decreasing
tendency, after reaching its historical
maximum in 1988 with 2.4 million
hectares, the increase of the production
was attributed to the technological
improvement of the crop yields, especially
of the crops more important Source:
Abreu and Ablan (2004) the DCH per
capita of plant origin.
After analyzing the values of the

production of Venezuelan crops between
1984 and 2004, 11 products were the
most important and favorable for
Venezuela: corn and rice (cereals); onion,
carrot and paprika (vegetables); potatoes
and cassava (roots and tubers); sugar cane
and oil palm (tropical plantations); white
beans (leguminous beans) and pineapple
(fruits). Source: MAT-FEDEAGRO (1984-2005)

After 2005, the production of food has fallen sharply, as shown by the sugar cane sector,
however, there is evidence of a consumer market and an existing agricultural capacity that has
not been properly exploited.
Sorghum Caraota Production

Sugar Cane
Production
Venezuela maintains its capacity for agricultural and livestock production, showing the graph of
the global results for 2008, represented in its agricultural and livestock production, in tons per
year. Source: FAO 2009 - FEDEAGRO 2009
The cereals constitute the group of crops of greater surface extension in the country, where
corn (white and yellow) is the most important crop with 740,372 Ha in 2007, followed by rice
with 208,825 Ha and sorghum with 165,804 Ha. Source: Agronomía Trop. v.60 n.3 Maracay sep. 2010
The production projections are shown in the graph below the historical areas harvested by the
vegetable agricultural system in the period 1990-2007. These figures show the projections of
the extension to harvest required supplying the nutritional requirements of the Venezuelan
population, up to the planning horizon to 2020

According to the report Agronomía Tropical, published by Scielo, the balance sheet of the
supply or availability of land against demand is positive, given that it has enough capacity and
potential to meet the food needs by 2020, both for the agricultural sector and for the sector
animal, with a demand that varies between 81% and 54%.
Source: Agronomía Tropical http://www.scielo.org.ve/scielo.php?script=sci_arttext&pid=S0002-192X2010000300001
ISSN 0002-192X
One example is the Agroisleña company, which was expropriated by ex-president Hugo Chávez
in 2010, the company Agroisleña supplied 70% of the inputs, fertilizers, herbicides, seeds,
machinery, technical advice; to agricultural producers and provided direct financing to more
than 18,000 farmers, plus a financing plan for 3,000 farmers who were harvesting 800,000 tons
of corn. Now, the new company Agropatria is unable to meet the demand and barely cover
between 10% and 20% of national consumption.
Agroisleña had 8 silos, 60 branches and supplied technology and agrochemicals, contributing
100% of the corn consumption of the industry, around 1,450,000 metric tons of white corn,
50% of the rice and sorghum requirement. With the expropriation, all these production
commitments were assumed by the government, and despite having more than 100 stores in
the country, they show an extreme shortage and with very few results and impact to the
agricultural producers.
The lack of these seeds and agrochemicals in general have been the cause of a 700% overprice
in products such as potatoes, without taking into account the impact of the economic crisis,
devaluation and hyper inflation.

Construction
The construction is a sector directly associated to the financial sector of the country, due to its
high need for investment and credits for the construction and later its commercialization,
besides requiring a wide range of actors and capacities for its development, energizing in turn,
to other sectors. Therefore, it is one of the sectors with the greatest impact on the economic
growth of the countries.
Venezuela has the resources in sufficient quantities and capacities to develop an important
construction industry.
Venezuela has sufficient mineral resources in stone, sand and others to support several cement
processing plants, it has an iron and steel industry with productive capacity of rebar, steel
meshes, iron profiles, and other materials that are required in the construction. Proofs of this
are the important buildings that have been developed in the country.
As an example, the steel and iron industry in Venezuela is one of the largest infrastructures in
Latin America and yet bad management and government policies have made it very
deteriorated.
Sidor as the main Iron and Steel Industry Complex has been reducing its production affecting
the construction sector with the shortage of the main construction materials. After 8 years of
administration of the Government as a socialist production company, the company not only
drastically reduced its production by more than 70%, but increased its payroll by 400% and
losses in its accounting results.

The development of construction for shops and offices has been associated with the oil boom
that the country has had that has facilitated investments by the Government. (See the Real
Estate section in this document)
on the other hand, in the construction of houses, the Government has developed important
initiatives and investments in the construction industry associated with the construction of
houses, for a low income social class. Although, the importance of this initiative is recognized,
from the social and economic point of view it has two disadvantages: First, the Government has
not developed in parallel the services that these housing units require, such as water,
electricity, toilet, transportation, food distribution, telecommunications, etc. And secondly, and
not least, has not sought for the users of these houses a social improvement solution that
allows them to sustain and maintain these homes. The conclusion of all this is the constant
deterioration of physical infrastructures and the collapse of services.
From there, the enormous need that the country has to rebuild and expand the services, with
which the development of construction projects related to these will be very important to
recover the economy of the country.

Automotive
The national vehicle market is represented by a variety of companies, which import, assemble
and trade vehicles.
 Nissan Venezuela  Daewoo Motor de Venezuela

Carabobo / Los Guayos Miranda / Los Teques
 General Motors Venezuela – Assembler  Toyota de Venezuela C.A. -Assembler

Chevrolet Venezuela Sucre / Cumaná
Carabobo / Valencia
 Mack de Venezuela C.A.
 IVECO Venezuela, - Assembler Aragua / Las Tejerias
Assembles trucks and Buses.
Aragua / La Victoria  FCA de Venezuela - Assembler
Fiat Chrysler Automobiles
 ENCAVA - Bus Factory - Assembler Carabobo / Valencia
Assemblage of bus for 42 years
Carabobo / Valencia  Renault Venezuela, C.A.
Carabobo / Valencia
 Mazda from Venezuela C.A.
Carabobo / Valencia  BMW - Bavarian Motors, C.A.
Gran Caracas / Caracas
 Ford Motor Venezuela - Assembler
Carabobo / Valencia  Mercedes Benz (Services)
Carabobo / Valencia
 Jeep Venezuela
Gran Caracas / Caracas  Peugeot Venezuela - PS Auto, S.A.
Carabobo / Valencia
 Mitsubishi Venezuela - MMC
Automotriz S.A. - Assembler  Hyundai Venezuela
Anzoátegui / Barcelona Assembled by MMC Automotriz S.A.
Anzoátegui / Barcelona
 Honda de Venezuela
Gran Caracas / Caracas  Audi de Venezuela

Gran Caracas / La Guaira

 Citroën Venezuela
Nueva Esparta / Porlamar  Civetchi Venezuela
DONGFENG AUTOMOBILE CO.
 Volkswagen Venezuela Carabobo / Valencia
 Peugeot Venezuela
 Dodge Venezuela - Chrysler de Carabobo / Valencia
Venezuela LLC
 Venirauto Industrias, C.A. - Assembler
 Great Wall de Venezuela, C.A. Aragua / Maracay
 Chery Venezuela – Assembler
 Fiat Automóviles de Venezuela Gran Caracas / Caracas
Companies closed or in the process of closure.
Of all these companies, in Venezuela only 7 of them are the traditional vehicle assemblers,
which existed before 2005, with the General Motor being the one with the greatest
participation in the market and production capacity.
Market SHARE
FCA VENEZUELA, LLC 9,59%
FORD MOTOR DE VENEZUELA 19,18%
GENERAL MOTORS VENEZOLANA 25,42%
IVECO VENEZUELA 3,21%
MACK DE VENEZUELA 1,74%
MMC AUTOMOTRIZ 15,62%
TOYOTA DE VENEZUELA 15,11%
These 7 assembly companies added to the capacity of importation of the others and market
demand, kept the Venezuelan market before 2000 above 8 and 9 vehicles per inhabitant. This
figure began to decrease since 2004

Habitants per Auto

12 10.2
10.1 10.6
9.6 9.7 9.6
10 8.8 9.1 9.2 9.3 9.5
8.4 8.6 8.5
8 7.5 7.6
6.8
6.2 5.4
6
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Hab/Auto
More than 50% of the Autos are been sales and used in the main three regions in Venezuela
(Caracas the capital with 26%, Miranda state and Zulia state)
% of Total
Region Autos in 2008
Caracas 26,52%
Miranda 16,54%
Zulia 10,01%
Carabobo 9,07%
Aragua 6,90%
Lara 4,28%
Others 26,67%
However, after 2008, a bonanza began in the economy that facilitated, in the first years after
2008, the import of vehicles affecting assemblers, and later with the economic crisis that
hindered access to foreign currency and therefore to the import, this one was reduced sharply,
but also the assemblers were affected even more, which reduced the production of vehicles
during almost all the years that followed, which caused from year 2017 closing of some of the
assemblers.

Auto YoY
Year Production Reduction
2006 343.351 43,26%
2007 491.899 -44,78%
2008 271.622 -49,74%
2009 136.517 -8,29%
2010 125.202 -3,60%
2011 120.691 8,17%
2012 130.553 -24,26%
2013 98.878 -80,52%
2014 19.258 -22,28%
2015 14.967 -82,33%
2016 2.644 -79,19%
2017 550
Given that Venezuela is a country that produces oil and has traditionally had a very cheap price
for gasoline (even subsidized by public policies), the vehicle market in Venezuela has been very
important and demanded.
Additionally, the lack of other more efficient means of transportation, such as rail, have made
the truck transport the most suitable means to bring goods and products from one region to
another.
In this way, the market is captive and important, but obviously its activation will be affected by
a recovery of the economy and the acquisitive power of its population.

Real Estate
Savings in Venezuela is at its worst. Each sovereign bolivar that remains in an account will lose
its value in a few days; It is the reality of a country with the most devalued currency in the
world.
As expected, the country's economic crisis has had a strong impact on the real estate market.
Given the recent economic conditions, opportunities are opened for those who have the option
to invest.
The sales of luxury and extra-luxury residential spaces showed reductions between 43% and
56% over the replacement cost,
One of them is the office and commercial premises sector that is estimated to be flooded with
an offer of a volume of square meters of primary market of luxury, never seen until now in the
country.
Property costs have decreased by more than 50% for properties class A (Extra luxury) and B
(Luxury), while in the other segments the percentage is even higher, reaching 80% and 90%.
4 businesses that are growing in Venezuela despite the crisis
1. The constructions not only are not devalued, but they can even be revalued.
Some companies, especially the transnational ones, better off the crisis, since they
cannot repatriate their dividends in dollars, which are granted by the government. So
they see how their bolivars depreciate every minute they spend in bank accounts, so
investing in property starts to be an important option.
2. Seek to protect money in local currency in real estate, in offices and departments, and
not lose with devaluations of the currency.
The consequence is that the sale prices per square meter in housing have been reduced
from US $ 2,000 to US $ 500 and for the offices from US $ 7,000 to US $ 2,500.
Now buying is cheaper. You only need to have confidence that the situation will
improve. If it does, the future sale benefit can be large.
3. It is a buyer's market. The price is set by the buyer. The owner or developer tends to
make large discounts.

Luxury apartments costing US $ 500,000 can now be obtained for US $ 100,000. They
are impossible prices for the vast majority of Venezuelans in a crisis context, but there is
a minority that can afford to make that bet
4. The one who buys in crisis wins
It is perhaps an ideal time for those who have money and patience. In the worst case 15
to 20 years Venezuela could recover its economy prospers. Venezuela has potential for
that and more, but in 20 years many property owners will be very old and what they
seek is tranquility in their old age.
Due to hyperinflation, the dollar is losing purchasing power and the real estate sector is
a purchase option.
The city of Caracas concentrates the highest profitability of real estate investments and with
the possibility of higher returns.
An analysis carried out by the Venezuelan Chamber of Commerce at the end of 2018, showed
important results in which the reduction in value for luxury apartments is evidenced over 50%
of the cost of 4 years ago.

Analyzing the real estate history of Venezuela, we must recite that the year 1983 marked the
end of the first Venezuelan oil boom, resulting in a fall in the prices of luxury offices that fell
from $ 7,000 / m2 to $ 1,000 / m2, in 1994 there were cases of office sales at significantly lower
prices, such as the case of the Torre Parque Cristal (the best of Caracas at that time) when they
were sold at $ 500 / m2.
As for offices, 2007 was the time when the highest prices in history were presented (above US $
6,500 / m2 for corporate offices); However, the trend has been downward, due to the country's
economic crisis and the excess supply in the market, reaching prices similar to those of 1986 of
$ 1,000 / m2. In the 1990s,
The second oil boom caused the prices of luxury type offices to recover their value to an
average of $ 2,500 / m2 and, in the case of commercial premises to $ 5,000 / m2, experiencing
a growth of 400% for 2004.

During all that time of crisis and oil boom the transactions of sale have been reduced, as shown
in the following graph.
Volume in m2 of offices sold
According to studies of Fondo de Valores Inmobiliarios (FVI - wwwfvi.com.ve) the great

distortion of the market has been hyper construction. Today, in Chacao and Las Mercedes,
there are 390,000 m2 of offices completed or in the process of being completed, and if we add
other sectors of the metropolitan area of Caracas, we will reach 500,000 m2. This does not
include the East Tower of Central Park that is unoccupied. These 7,000 m2 of annual sales, can
hardly absorb this inventory in the short and medium term. It was built as if it were in a growing
economy of US $ 350 billion of GDP, currently estimated at over US $ 120 billion. The FVI
projects that the prices of luxury offices and commercial premises will be very close to $ 1,000 /
m2 for some years.

The fall in prices is a calamity for many, but certainly also an opportunity for those who have the
desire to invest.
In the case of the office market, the analysis of the effective historical demand determines a
decrease from the year 1994, at which time the largest amount of square meters (259,384 m2) of
this type of product was traded, although subsequently they were presented highs and lows, the
contraction worsened from the year 2008.
In relation to prices, they have behaved in a cyclical way, originated by the circumstances of the
market and the macroeconomic policies of the state, being in 2007 the moment when the highest
prices in history were presented (above US). $ 6,500 / m2 for corporate offices); However, the
trend has been downward, due to the country's economic crisis and the excess supply in the
market, reaching prices similar to those that occurred in 1986.

In reference to the market of commercial premises, in 1997 it was when it reached the highest
effective historical demand, with 229,765 m2, and from that moment the trend has been
recessive. Prices are evolving cyclically, depending on the market and the economic
circumstances of the country; however, from the year 2006, when the highest prices historically
are presented (above US $ 9,500 / m2 for the best locations), a process of deterioration began
until prices lower than the year 1986.
On the other hand, the FVI study determined that currently there are more than 380,000 m2 of
net office space and more than 110,000 m2 of net area of commercial premises under
construction, whose absorption in the market is estimated to be long term. This situation
determines investment opportunities in the sense of opting for office space, at low prices, and
in selective locations that allow competitive advantages of a long-term safe revaluation.
According to these studies, the main areas in Caracas, not the only ones, where having a higher
profitability of real estate investments are located in the east and south-east of the city,
traditionally commercial and housing areas for luxury real estate or AAA They are described in
the following graph.

The areas shown correspond to four sectors:
Sector 1: the urbanizations of Altamira, La Castellana, Campo Alegre and Las Mercedes. Very
appreciated for the development of offices and local places. Particularly in the Mercedes and La
Castellana is where the latest investments in office buildings have been developed,
Sector 2: Includes the urbanization of Sebucan. Currently with a lot of boom for the
construction of luxury apartments.
Sector 3: With the urbanizations of Chuao, Santa Paula, San Luis, Caurimare and El Cafetal,
among others. It is a well-known area for its supply of buildings for the upper and upper middle
classes.
And Sector 4: With the urbanizations, the Tahona, El Hatillo, Lagunita and others more to the
south of the city. Traditionally with an integral development of housing and commercial for
upper and upper middle class.

Conclusions
The model implemented by the government of impulse the local production transforming
private companies in socialist enterprises or socialist production company has failed. The
government has seen the need to open its policies to allow investments, initially of its allied
countries, in the main sectors of economic production under a model of greater participation
and, administration and control by them.
However, the feasibility and feasibility of investing in projects on these sectors of the economy,
in relatively short recovery times, will depend on these changes in government policies and
their economic model. If these policies are maintained, the times of recovery could be greater,
but in both cases very profitable.

Sources of references
 Conindustria
 Central Bank of Venezuela
 E FMI International Monetary Fund,
 World Gold Council, Alexander Guerrero, Economist, PhD London
 Economic Survey of Latin America and the Caribbean ▪ 2018
 Consumption Monitoring (ENSC) of the National Institute of Statistics, 2015
 Surveys on Living Conditions (ENCOVI), Andrés Bello Catholic University, the Central
University of Venezuela and the Simón Bolívar University, 2017
 National Statistics Institute - Institute of Economic and Social Research Universidad
Catolica Andres Bello
 Cesla. https://www.cesla.com/estadisticas-economia-venezuela.php
 An investigation carried out by Transparencia Venezuela on State-Owned Enterprises,
october 2017
 Construcion Chamber of Venezuela, 2018
 Studies of Fondo de Valores Inmobiliarios (FVI - wwwfvi.com.ve) 2018
 opportunities remain in the Venezuelan real estate market?. Banking and Business
@bancaynegocios
 Venezuelan real estate market: opportunity to safeguard savings. Thady Carabaño.
October 19, 2018
 elinformador.com.ve 26-11-2018
 Sell and buy real estate in Caracas: a challenging market. David Esteva. November 22,
2018

Economy Contraction in Venezuela

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HUAWEI TECHNOLOGIES OF VENEZUELA

January 11, 2019

Economic and Political background ................................................................................................ 3

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Economic and Political background

The Government of President Nicolas Maduro

Economic results 2018

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GDP per Minimun Extreme

2010 294,282.00 10,316.00 45.10 -1.50 28.20 130.89 8.64

2011 334,069.00 11,541.00 68.80 4.20 26.10 163.66 7.01

2012 331,457.00 11,287.00 67.70 5.60 21.10 117.47 9.80

2013 234,401.00 7,869.00 66.90 1.30 43.50 46.45 11.50

2014 212,347.00 7,029.00 59.70 -3.90 57.30 28.22 23.60

2015 242,596.00 7,922.00 29.20 -6.20 111.80 11.58 49.90

2016 236,116.00 7,609.00 21.80 -16.50 254.40 7.68 51.51

2017 210,085.00 6,684.00 9.00 -14.00 2616.00 1.83 61.20

TABLE 1: Venezuela Main Economic Figures

Probable causes and consequences of contraction

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The crisis in the industrial sector is due mainly to:

• Political and legal uncertainty.

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Requirements for a recovery of the production sectors and markets

With an adequate cost structure, Venezuela can be attractive to incentivize production

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Even though the harvested surface of the

After analyzing the values of the

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Sorghum Caraota Production

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 Nissan Venezuela  Daewoo Motor de Venezuela

 General Motors Venezuela – Assembler  Toyota de Venezuela C.A. -Assembler

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Gran Caracas / La Guaira

Companies closed or in the process of closure.

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Habitants per Auto

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4 businesses that are growing in Venezuela despite the crisis

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4. The one who buys in crisis wins

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Volume in m2 of offices sold

According to studies of Fondo de Valores Inmobiliarios (FVI - wwwfvi.com.ve) the great

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The areas shown correspond to four sectors:

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