Venezuela’s Business Climate to Worsen in 2015


6th January 2015

Latin Trade spoke with IHS’s Diego Moya Ocampos about the business climate in Venezuela amid a declining global oil price.
By Mark Keller
In what came as little surprise to those familiar with Latin America’s business environment, Venezuela ranked last of any country in the western hemisphere in the World Bank’s latest edition of Ease of Doing Business. In the ranking, which looks at laws and business climate in 189 economies, the Bolivarian Republic came in 182nd place – outdone only by warzones such as Afghanistan, the Democratic Republic of the Congo, South Sudan, and Libya.
However, a recent analysis by Diego Moya Ocampos, a Senior Analyst at IHS Global Insights, says the country’s business climate should worsen still in 2015, citing 28 new laws passed in November that will increase scrutiny on private enterprise. This, coupled with the country’s deteriorating political, economic, and social environment will worsen the country’s business climate, he says. The country could be set for social and political unrest as the economy implodes and scarcity increases.
The new measures introduced by Venezuelan President Nicolás Maduro in November aimed at increasing the country’s tax collection amid falling government revenues due to a declining global oil price. Oil accounts for 95% of Venezuela’s export earnings, and government spending accounts for more than 50% of GDP. As the oil price has halved since June of 2014 – currently $50.06/barrel – the Venezuelan government has …

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