Venezuela continues to be highly dependent on the petroleum sector, accounting for roughly one-third of GDP, around 80% of export earnings, and over half of government operating revenues. Government revenue also has been bolstered by increased tax collection, which has surpassed its 2005 collection goal by almost 50%. Tax revenue is the primary source of non-oil revenue, which accounts for 53% of the 2006 budget. A disastrous two-month national oil strike, from December 2002 to February 2003, temporarily halted economic activity. The economy remained in depression in 2003, declining by 9.2% after an 8.9% fall in 2002. Output recovered strongly in 2004-2005, aided by high oil prices and strong consumption growth.

Foreign Trade

The main exports in Venezuela are oil and its derivatives, which together represented more than 84% of the foreign trade in the year 2000. Other important exports are iron, steel, aluminium, coal, gold, petrochemical products and basic industrial products. In the year 2000, annual exports rose to a total of 20 thousand million dollars. The main imports are machinery, transport equipment, chemical products, food products and manufactured goods. The main commercial partners are the United States of America, Colombia, the United Kingdom, the Dutch Antilles, Japan, Mexico, Italy, Germany, Brazil, Canada, France and Spain. Trade has also increased with the member states of the Andean Group, the Caribbean Common Market and Community (Caricom), the Central-American Common Market (MCCA) and Mercosur (the Southern Common Market).

Industry

From the beginning of the 1960’s the government gave priority to the economic development of the manufacturing industry. The main industrial products are oil derivatives, steel, aluminium, fertilizers, cement, tyres, motor vehicles, processed food, drinks, textiles, clothes, shoes, and wooden and plastic goods. Industry is concentrated in the cities around the capital, Caracas, and in the central regions. In the last decades of the 20th century, various industries became situated more and more towards the Central-West region, Zulia, the Andes, and Guayana regions. Heavy industry became very important in Ciudad Guayana.

Energy More than 70% of Venezuelan electricity is produced by hydroelectric power. The main plant is located in Bolivar state, where the state company, "Corporación Venezolana de Guayana/Electrificación del Caroní" (EDELCA), has built and operates the mega-project Raúl Leoni hydroelectric plant (with a capacity of 10,000 MW) and Macagua I (with a capacity of 360 MW). Of importance as well in the Andean region is the state company "Compania Anónima de Administración y Fomento Eléctrico (CADAFE), which has built the Santo Domingo hydroelectric plant and has authorized the first stage of the Uribante-Caparo hydroelectric complex in the San Agatón power station.

Oil and Mining

Oil is the basis of the Venezuelan economy, generating 84% of the income from exports in the year 2000. There are many options for all types of crude oil and the main export destinations are the United States of America, Europe and other countries in Latin-America. This immense level of oil production is mainly extracted from the Lake Maracaibo basin and the Barinas-Apure and Eastern basins. The Venezuelan government nationalized the oil industry in 1976, which remained in the hands of the company "Petroleos de Venezuela S.A" (PDVSA), whose subsidiary companies of varying sizes operate seven domestic refineries and nine more abroad (in Curazao, the USA, Germany, Sweden and Belgium). A great future for this sector is predicted, since there are estimated reserves of 76 thousand million barrels, including conventional reserves and those of the Orinoco oil belt. Here the processing of ori-emulsion, which is an emulsion of bitumen and water, has already started and is mainly used for energy generating plants. Venezuela is the seventh largest world producer of natural gas, producing liquefied gas, butane gas and propane.

Other minerals exploited for commercial production are iron, bauxite, coal, gold, phosphate and limestone. In the 40’s extensive deposits of iron were discovered in the so-called Imataca iron belt; they were exploited by North-American companies until their nationalization in 1975. From then on they were developed by the state company "Ferrominera del Orinoco", a subsidiary of the "Corporación Venezolana de Guayana". Iron is processed in Ciudad Guayana, in the "Siderúgica del Orinoco" plants, while bauxite is processed by "Interalúmina" in the same city. This company is a subsidiary of the "Corporación Venezolana de Guayana" which satisfies the demands of the aluminium producing companies. The exploitation of coal deposits is carried out in Guasare, in the Zulia state; "Carbosuroeste" in Tachira and Fila Maestra; Naricual in Anzoátegui. There is an abundance of gold, (especially in the Bolívar and Amazonas states), both alluvial and in veins, representing a potential of the 12% of the known world reserves. Venezuela is as well an important limestone and dolomite producer, which provide the raw materials for fifteen cement factories. Other significant mineral developments are the phosphate deposits of Táchira, the manganese deposits in Guayana and nickel deposits in Aragua.

Agriculture and Forestry

Venezuelan agricultural development can be seen in different systems of production ranging from subsistence-level to semi-commercial farming. These are typically traditional allotments, "conucos", and small farms where products are cultivated for domestic consumption (such as caraota, frijoles, cassava and tropical root vegetables), as well as plantations of various kinds, such as the traditional type (today almost completely modernized) dedicated to growing coffee, cocoa, sugar cane and other commercial products. In the last decades, modern mechanical farming methods have multiplied, such as those specializing in the production of corn, rice, sorghum, sesame, peanut (cacahuete), sunflower and cotton, thanks to the irrigation, fertilization and the pest control techniques which have transformed the agricultural landscape of "la mesa de Guanipa" and important stretches of the central and western Llanos (the plains). Recently we have seen the introduction of innovative systems of commercial fruit growing, viticulture, horticulture and flower-harvesting in the Andean states of Zulia, Lara, Guárico, Aragua, among others.

Production of tropical cereals, maize, rice and sorghum, has become increasingly important, led by sustained exploitation of the plains. Coconut, palm oil, raw cotton, sisal oil, sunflower and sesame are produced. Amongst the leguminous plants the production of root vegetables and tubers, cassava, potatoes, taro and yam is particularly important. The most important commercial crops are coffee, sugar cane, cocoa, and tobacco. Fruit production is centred on the banana or "cambur", plantains, oranges, pineapples and mango.

There have been considerable advances in the development of livestock resources with improvements in the yield from different types of cattle.

The changing landscapes created by modern livestock production can be observed in the lowlands of the southeast of the Lake Maracaibo basin, in Perijá, Bobures, Monay, Bajo Motatán, Carora, in the south of Falcón and in Los Llanos, where a prosperous region of intensive meat and milk production has been established.

Forestry and Fishing

Despite large areas of Venezuela being covered with forests and jungle, the wood industry has experienced only moderate growth due to the inaccessibility of the natural forest areas. From1973 until now, massive plantations of Caribbean pine trees for commercial purposes have been established in the south of the Monagas and Anzoategui states, along the banks of the Orinoco. Wood is used in the construction industry and for the production of furniture and paper.

Venezuela’s extensive fishing resources consist of a wide variety of marine life. The most important commercial catch is shrimp, followed by tuna, sardine, dogfish, red snapper, bass and squid. Along the Caribbean coast marine shrimp-farms have been introduced; in Mérida and Táchira there is trout breeding in fish farms and in Los Llanos, Zulia and Guayana river aquiculture.

Currency and Banking

The Venezuelan Central Bank was founded in 1940 and it is the government’s banking department as well as being the only issuer of currency and the commercial banks’ exchange centre. The country’s main stock exchange is located in Caracas. You can find out the current exchange rate of the Venezuelan currency, (Bolívar), against any international currency by accessing the following Link.

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