Email this Link Email this Link Print this Snapshot Print Snapshot

Export this Snapshot Export Snapshot to PDF
Country Snapshot - Venezuela  

HighlightsRankingsQuantitative DataLegislationAnalytical WorkProject Portfolio
  • Latin America & Caribbean
  • Upper middle income
  • 28,834,000 (2011)
  • 11,590
Venezuela Flag
Below are select highlights for the data included in the profile.

  1. Venezuela is ranked 172nd out of 183 economies in Doing Business 2011 (DB2011), recording a 2-point decrease from last year. The most drastic decline occurred in the Registering Property Indicator, where the country dropped 5 spots. DB 2011 also reports that made starting a business more difficult by introducing a new procedure for registering a company and abolished the tax on financial transactions.
  2. According to the latest Enterprise Surveys (2006), Inadequately Educated Workforce and Crime Theft & Disorder represent the top constraints to investment in Venezuela.
  3. Among the 14 countries in Latin America and the Caribbean covered by the Investing Across Sectors indicators, Venezuela’s restrictions on foreign equity ownership are relatively stringent. The National Constitution authorizes the government to reserve for itself those industries and services that are in the public interest and of a strategic nature. The most prominent example is the oil and gas sector, in which foreign capital participation is restricted by the Hydrocarbons Organic Law. It takes 19 procedures and 179 days to establish a foreign-owned limited liability company (LLC) that wants to engage in international trade in Venezuela (Caracas). This process is slower than the averages in both Latin America and the Caribbean and the IAB countries globally.
  4. According to the Economist Intelligence Unit, inflation continues to rise in Venezuela, following recent price adjustment to key services. In May annual inflation stood at 22.8%, rising by 2.5% from April, largely on the back of a 33% monthly increase in public transport fares. The price of public transport is controlled by the government, which has announced a second round of upward adjustments for the end of 2011. Although the government maintains its position that inflation will stabilize at around 22% in 2011, continued adjustment of basic products and a likely devaluation of the exchange rate in the second half of the year will maintain upward pressures. We expect inflation to average 27.2% in 2011.
  5. Venezuela’s economic freedom score is 37.6, making its economy the 175th freest in the 2011 Index. Its score remains essentially the same as last year, with a modest gain in trade freedom offset by a drop in labor freedom. Venezuela is ranked 28th out of 29 countries in the South and Central America/Caribbean region, and its overall score is much lower than the world average. Economic freedom in Venezuela has been severely hampered by state interference, and the economy is increasingly stagnant. The public sector is bloated and inefficient. However, the informal economy is growing.