ESPACIO PUBLICITARIO
CARACAS, Wednesday December 05, 2012 | Update
 
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ECONOMY

Competitive forex rate needed to boost industries

The Venezuelan Confederation of Industries (Conindustria) suggested a foreign exchange rate at VEB 7.8 per US dollar to stabilize the domestic industrial sector

The Venezuelan currency has been overvalued with respect to other currencies since 2003 upon the implementation of foreign exchange controls (File photo)
ENDER MARCANO |  EL UNIVERSAL
Wednesday December 05, 2012  03:53 PM
The weight of the industrial sector in Venezuelan economy has shrunk. Data from the Venezuela's National Statistics Institute (INE) indicates that industries slipped from 11,000 in 1998 to 7,000 in 2012. Meanwhile, some 185,000 jobs have been shed in recent years. A non-competitive foreign exchange rate vis-à-vis trade partners has been a factor pushing the industrial sector down.

The Venezuelan currency has been overvalued with respect to other currencies since 2003 upon the implementation of foreign exchange controls. Overvaluation is attributed to the gap between the country's inflation and price fluctuation in other nations.

Overvaluation is said to hamper the industrial sector as imports turn out to be cheaper than domestic products. Carlos Larrazábal, the president of the Venezuelan Confederation of Industries (Conindustria), said that bringing the fixed foreign exchange rate up to VEB 7.68 per US dollar would help reverse the loss of competitiveness.

Translated by Jhean Cabrera
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A shipment of over 30,000 tons of phosphate arrived at Puerto Cabello port in late July on board the Shi Long Ling, a Chinese-flagged vessel that began its long journey in northern Africa. The cargo boat docked on July 26 after traveling more than 3,200 nautical miles. Undoubtedly, this would just be considered one in many cargo ships crisscrossing the oceans if it were not for the fact that Venezuela has denounced Western Sahara occupation by Morocco and yet purchases the territory's natural resource products from the occupying power.

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