Venezuela's position in the global economy

摘要

An oppressive political and policy environment and a deteriorating macroeconomic climate continue to keep foreign-capital inflows into Venezuela well below potential. The country presents a long list of hindrances to foreign investment. The energy sector, whose oil exports prop up the economy and the government, is in severe decline, hampered by low global oil prices, sanctions by the US and rules mandating majority participation by state-run Petroleos de Venezuela in most activities-even as production and export of hydrocarbons decrease. This decline has affected the rest of the economy, which cannot fill the gap because of constraints imposed by the government, namely a volatile regulatory climate that limits business profits, enforces price controls and facilitates expropriation; a severely mismanaged foreign-exchange regime that has led to hyperinflation and a dearth of hard currency; and a relative lack of interest in combating rampant corruption and violent crime that discourage commerce for foreigners and nationals. The government's counterproductive policy measures for the outbreak of the coronavirus (Covid-19) pandemic have further reduced economic activity. Overall, continuing isolation from international commercial norms and activity further deters investors from doing business in the country.