Driving forces of the economy SUHELIS TEJERO PUNTES | EL UNIVERSAL
Saturday January 25, 2014 12:00 AM
President Nicolás Maduro promised that government efforts would now center on a series of production activities set to become the driving forces of the economy. The numbers show, however, that all efforts devoted to those areas seem to fall short in boosting an economy troubled by currency shortages.
According to the nation's top officer, this new approach will cover more ground and focus on oil, petrochemicals, construction, industry, farming, agricultural industry, tourism, textiles, mining, communications and high technology. In so doing, claimed the president in his address before the National Assembly, a proprietary production model will develop.
"With those 11 driving forces we will launch an offensive comprising investment, employment, associations and mixed-investment enterprises," stressed Maduro on that same day.
Dissected sectors
Ambivalent and lacking support. Little else can be said of the performance of the oil sector in recent years, especially in 2013 when its second-half result led to a subtle rise in the Gross Domestic Product (GDP) from petroleum of 1.3%, as reported by the Central Bank of Venezuela.
In the meantime, construction fared negatively throughout 2013, at least as of the third quarter (latest update). But the past has not been much better at all. Even though two years ago positive results were generated, those trends were due to a persistent public-sector rebound.
Manufacturing has shown slightly more consistency but, since last year, it has suffered the effects of currency shortages, which have led to intermittent production as a result of unavailability of supplies, and price controls ailing industries producing basic commodities.
Mining continues to spiral downward. During the first nine months of last year, the sector backtracked over 20%, evidencing a deep recession for a sector that has been waiting for clear policies for over a decade.
In textiles, according to data supplied by the central bank, results are nothing short of vertiginous. Within a single quarter, this industry is capable of growing by 16.2%, as it did last January-March quarter, yet six months later it fell 15.4%. It seems that those results reflect what happens from within, as clothing manufacturers are also showing variable short-term results.
Communications is the only sector showing signs of being worthy of becoming a driving force in the economy even though it is not big enough to drag it along on its own. In the past year, this activity has grown at a rate of 6%, which fails to match the growth of up to 20% that took place only six years ago.
The central bank has yet to publish detailed data on the petrochemical, farming, agro-industrial and tourism sectors.
Revving up more engines
Less than two years ago, Planning Minister Jorge Giordani adamantly claimed that Venezuela's economic development was guaranteed if only more investment was directed toward three driving forces of the economy, namely, those bearing greater influence over the GDP: hydrocarbons, manufacturing and construction.
At present, investment needs to cover greater ground in a year in which, based on government forecasts, growth is expected to reach 4% despite organizations like the International Monetary Fund predicting growth of approximately 2.3%.