Friday, 27 November 2020

Half Capacity of the Venezuelan Industry Is Idle

An automobile assembly plant in Venezuela. Photo archives
An automobile assembly plant in Venezuela. Photo archives

TODAY VENEZUELA – Eduardo Garmendia, the president of the Venezuelan Confederation of Industries (Conindustria), has asked the Venezuelan government to put an end to the siege, which, in his view, has been laid on enterprises. At the same time, the sector continues requiring outspoken dialogue so as to contribute to national development in the long run.

Until 1998, there were 450,000 direct jobs in the manufacturing sector. Today, the payroll is much shorter. In addition, through 2013, the number of manufacturing sites had dropped from 11,117 to 7,093. Nonetheless, while 48%-49% of the installed capacity had been used until the third quarter of 2014, it could rebound and even double if raw materials produced by state-run companies and foreign currency are available.

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For almost 15 years, Conindustria has not been invited to the usual meetings in previous governments to discuss and make decisions of their concern.

Enterprises are ready to make investments, and there is always the chance of incorporating new companies. However, Garmendia complains about the seizure of 1,400 companies under the government of late President Hugo Chávez and now of President Nicolás Maduro. The senior officer estimates that the manufacturing sector faces a technology lag of 15 years.

While the relationship with the government has not been easy, Garmendia vows to continue seeking dialogue. He recognized, however, that the manufacturing sector is very restrained in view of the president’s stance. “We were waiting for announcements that enabled us to schedule the activities of the manufacturing sector throughout 2015. In fact, we need to make plans well in advance and decisions should not be drastic,” he reasoned.

As far as Garmendia is concerned, restricted allocation of foreign currency at the official exchange rate as a result of plummeting oil prices is the only thing for certain.

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Enhanced talks

Eduardo Garmendia advocates outspoken dialogue with the government. In his view, the government has an obligation to convene the productive sectors, particularly industries. “We need to face troubles together. Not all of them will be solved, but at least some of them,” he advised.

“The government has granted a privilege to the import of finished goods, to the detriment of domestic production. Time has come to speak. We can supply most of the imports and solve part of the problems with foreign currency and consumers’ access to manufactures,” he recommended.

In general, Garmendia added, the manufacturing sector is always investing, buying machines and equipment. While they are not huge investments, all of them are significant in the aggregate, particularly for small and medium-sized enterprises. As for big enterprises, they often make strong investments.

“The industry is prepared to invest. However, we need to be given the assurances of respect for private property. If there is the need to expropriate, that should be done by legal means.”


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