Venezuelan industry output down 10% as against 2008

Viewed as a whole, Venezuelan economic recession is a thing of the past due to massive funding provided by the Venezuelan Government, yet the industry, key sector to create formal jobs and diversify exports, remains at rock bottom.

By the first half of the year, both public and private domestic industry output stood 10% below the figures recorded during the same term in 2008. In other words, it has not come out of the 2009-2010 economic recession.

Entrepreneurs report that restrictions in foreign currency supply, price control policies that do not allow to meet production costs, an overvalued domestic currency that bolsters imports, fear for land seizure, and failure in the management of government-run enterprises are accountable for the poor development of the industry. 

Pablo Baraybar, president of Venezuelan Chamber of the Food Industry down 9.4% in the second quarter of the year, let on early this month that "costs continue rising to impressive levels while prices have been frozen without doing anything about it because if we increase prices without being duly authorized we will lose the companies; there is no utility; we are losing money especially in those categories under regulation."

An oil rentier model in a country facing desindustrialization and virtually exports barrels of oil that yield petrodollars so as to massively import what is not produced at home, remains the same, as evident in the change of the economic structure and the poor level of non-oil exports.  

Figures recorded by the Central Bank of Venezuela (BCV) reveal that the domestic industry went down from 18%  to 14% of the GDP. Meanwhile, oil yields USD 96 out of every USD 100 earned by the country.

Translated by Jhean Cabrera