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National Association of Manufacturers August, 2000

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Confederación Venezolana de Industriales. National Association of Manufacturers August, 2000. La Estrategia de Venezuela es la Industria. CONINDUSTRIA’s Vision

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slide1

Confederación Venezolana de Industriales

National Association of Manufacturers August, 2000

La Estrategia de Venezuela es la Industria

slide2

CONINDUSTRIA’s Vision

CONINDUSTRIA aims to be a highly coordinated and strong organization in its sector, to be competitive and seek export opportunities, to be an engine for development and a generator of wealth and general well-being, whose status in the local market has earned it a positive and highly favorable image.

Venezuela’s Strategy is its Industry

slide3

Our Mission

CONINDUSTRIA

A business services organization that supports the competitiveness of Venezuelan industry, especially that of small and medium enterprises (SME).

Venezuela’s Strategy is its Industry

slide4

CONINDUSTRIA

A business services Organization

  • Maximum representation of the industrial sector
  • National and international agreements
  • Represents 84% of the manufacturing sector’s production
  • 90% of non-traditional Venezuelan exports
  • Gathers 80% of SME’s

Venezuela’s Strategy is its Industry

slide5

Economic highlights

1999

  • Inflation = 20,1%.
  • Oil price increases ($15/barrel)
  • Increase in currency reserves- $15.000 MM
  • Decrease in Government budget deficit
  • Economy geared to the oil sector
  • Currency estabilization to curb inflation
  • GDP loss of 7,2%

La Estrategia de Venezuela es la Industria

slide6

Manufacturing sector in VENEZUELA: 1999

  • GDP loss of 10%
  • Closing of > 350 establishments
  • Loss of > 50.000 jobs– (19%)
  • Idle capacity > 40%
  • Non-traditional exports fell > 25%
  • Interest rates > 30%
  • Bolívar overvalued > 40%

La Estrategia de Venezuela es la Industria

slide8

Industry today

¿How do you rate the venezuelan manufacturing sector today( april 2000)?

MM = Muy mala

M = Mala

RHM = Regular hacia Mala

RHB = Regular hacia buena

B = Buena

MB = Muy buena

Coyuntura Industrial, Primer Trimestre de 2000

Campo y procesamiento elaborado por: Datanálisis

La Estrategia de Venezuela es la Industria

slide9

Capacity utilization

¿What was the capacity utilization during the first quarter 2000?

Coyuntura Industrial, Primer Trimestre de 2000

Campo y procesamiento elaborado por: Datanálisis

La Estrategia de Venezuela es la Industria

slide10

(Base 1997 = 100)

Fuente: Banco Central de Venezuela

La Estrategia de Venezuela es la Industria

slide11

Employment

Number of employed workers in manufacturing sector

+5,29%

-0,71%

+6,86%

+13,8%

+7,90%

-5,53%

-0,62%

-6,77%

-4,47%

+2,72%

+0,96%

-25,28%

-4,43%

-21,02%

-24,8%

-10,8%

Coyuntura Industrial, Primer Trimestre de 2000

Coyuntura Industrial, Primer Trimestre de 2000

Campo y procesamiento elaborado por: Datanálisis

La Estrategia de Venezuela es la Industria

slide14

Fuente: BCV y cálculos pripios. Elaborado por la Unidad de Análisis Económico e Industrial.

La Estrategia de Venezuela es la Industria

slide15

Inflation and Interest rates

October 1997- June 2000

(%)

Fuente: BCV y cálculos pripios. Elaborado por la Unidad de Análisis Económico e Industrial.

La Estrategia de Venezuela es la Industria

slide16

Exchange rateSeptember 1998-May 2000

Bs./US$

Nota: cifras correspondientes al último día hábil de cada mes.

Fuente: BCV y cálculos propios. Elaborado por la Unidad de Análisis Económico e Industrial.

La Estrategia de Venezuela es la Industria

slide17

Inflation & Devaluation in Venezuela

  • December 1991- December 1999
  • (%)

Fuente: BCV y cálculos propios. Elaborado por la Unidad de Análisis Económico e Industrial.

La Estrategia de Venezuela es la Industria

slide18

INFLATION, DEVALUATION Y COMPETITIVENESSBrasil, Colombia, Chile, México, Perú y VenezuelaDecember 1996-February 2000(%)

  • Fuente: Banco Central del Brasil, Instituto Brasileño de Geografía y Estadística, Banco de la República de Colombia, DANE, BCV, Banco Central de la Reserva de Perú, Banco Central de Chile, Banco Central de México y cálculos propios. Elaborado por la Unidad de Análisis Económico e Industrial. CONINDUSTRIA.

La Estrategia de Venezuela es la Industria

slide19

Exports: Venezuela > Colombia

Imports: Colombia > Venezuela 1996-2000 (million dollars)

(*) Emero-Abril 2000Fuente: Comunidad Andina. Elaborado por la Unidad de Análisis Económico e Industrial.

La Estrategia de Venezuela es la Industria

slide20

PRIVATE SECTOR EXPORTS & IMPORTS 1989-1999(millon dollars)

Fuente: OCEI. Elaborado por la Unidad de Análisis Económico e Industrial

La Estrategia de Venezuela es la Industria

slide21

Jobs Imported and Exported

La Estrategia de Venezuela es la Industria

slide22

Proposals to estimulate the Industrial Sector

  • 1. INCREASE SALES:
    • Government Purchase’s Law
    • Modernize Customs Controls
    • Temporary Verification of imports
    • Temporary control of third country imports
    • Increase/update “draw back” repayment
    • Control of illegal imports.

La Estrategia de Venezuela es la Industria

slide23

Proposals to estimulate the Industrial Sector

2. REACTIVATE INDUSTRIES:

  • Repeal Asset Tax.
  • Reduce exemptions to Value Added Tax.
  • Establish competitive pricing for government services and products.
  • Provide medium term financing with insurance guarantees
  • Improve competitiveness of labor.
  • Political and judicial estability

La Estrategia de Venezuela es la Industria

slide24

Proposals to estimulate the Industrial Sector

  • 3. COMPENSATE CURRENCY OVERVALUATION:
  • New currency-exchange policy
  • Flexible currency bands
  • - Competitive currency rates to allow strong internal market
  • - Export- development policies competitive with neighbors .

La Estrategia de Venezuela es la Industria

slide25

Achievements/Comitments

  • v Improvement of employment /production index
  • v Continuous improvement: competitiveness / productivity.
  • v Increase in export capacity.
  • v Increased investments.
  • Support/ growth of S.M.E.
  • Economic growth through manufacturing.

La Estrategia de Venezuela es la Industria

slide26

Global Trends:

  • Fewer large companies and more SME’s
  • Emergence of outsourcing
  • SME’s displaying characteristics of larger companies
  • Transition from family-run SME’s to professional firms
  • SME’s without boundaries

Venezuela’s Strategy is its Industry

slide27

SME: Issues to be addressed

  • Resistance to cultural change: Move from family-run
  • to more business-oriented companies
  • High production costs and resistance to
  • technological innovation.
  • Lack of supply chains among different-sized
  • companies.
  • Traditional and inflexible management approaches.
  • Little development of marketing strategies.
  • Inadequate disbursement of financing toward SME’s
  • Incentives for internationalization

Venezuela’s Strategy is its Industry

slide28

An Example of support for SME

Coninpyme Program:

A CONINDUSTRIA - Interamerican

Development Bank (IDB) Joint Initiative

with the Objective of Strengthening the Competitiveness and Productivity of Venezuelan Small and Medium Enterprise

Venezuela’s Strategy is its Industry

slide29

A comprehensive approach to assistance for SME

a) Comprehensive Assessment

Alliances

and

Synergy

b) ImprovementPlan

c) Implementation

. Technology

. Training

. Financing

. Internationalization

Venezuela’s Strategy is its Industry

slide30

Conclussions

  • Time for a concerted effort
  • Switch from planning to execution
  • Achieve a real and competitive exchange rate
  • Devaluation without a fiscal adjustment plan not feasible
  • Achieving confidence is our challenge:
  • Changing the mind-set of Venezuelans
  • work = well -being
  • We have to change an economy based on oil revenues to become a productive and exporting country.................!

La Estrategia de Venezuela es la Industria

slide31

Confederación Venezolana de Industriales

National Association of ManufacturersAugust, 2000

La Estrategia de Venezuela es la Industria

slide32

Inflación Trimestral AnualizadaOctubre 1997 - Junio 2000(en porcentaje)

Fuente: BCV y cálculos pripios. Elaborado por la Unidad de Análisis Económico e Industrial.

La Estrategia de Venezuela es la Industria

slide33

Pagarés, Tasa Activa, Depósitos a 30 días, Ahorrosy la Inflación AcumuladaEnero 1999 - Mayo 2000(en porcentaje)

Nota. Todas las tasas de interes en promedios ponderados mensuales.Fuente: BCV y cálculos propios. Elaborado por la Unidad de Análisis Económico e Industrial.

La Estrategia de Venezuela es la Industria

slide34

Una Experiencia de apoyo a la PYME

Programa Coninpyme:

Iniciativa de CONINDUSTRIA y el

Banco Interamericano de Desarrollo -BID-

para el Fortalecimiento de la Capacidad Competitiva de las Pequeñas y Medianas Empresas venezolanas

La Estrategia de Venezuela es la Industria

slide35

Enfoque integral de asistencia a la PYME

a) Diagnóstico Integral

Alianzas

y

Sinergias

b) Plan de Mejoras

c) Implantación

. Tecnología

. Formación

. Financiamiento

. Internacionalización

La Estrategia de Venezuela es la Industria