Correo del Caroní

Multiple barriers hamper industrial productivity
Monday, September 15, 2008

In an economic context marked by an anchor currency in force for more than four years, inflation unchecked, a fence law that minimizes the productivity of enterprises and a constant negative talk about the private entrepreneurship, it is frightening to grow and invest it.

Maria Ramirez Hair
mramirez@...
Photo John M. Carvajal


Goyenechea said that during next week will present their considerations before Conindustria

The arguments that underpin the harsh sentence issued by the president of the Chamber of Industry and Mining of Guyana, Fernando Goyenechea, who assured that "the private domestic industry is predestined to disappear," are valid, alive and increasingly vigorous for the sector Venezuelan industry.

And that is in an economic context marked by an anchor currency in force for more than four years, inflation unchecked, a fence law that minimizes the productivity of enterprises and a constant negative talk about the private entrepreneurship, it is risky to grow and invest for it.

It was not always so. When Guiana, the so-called "land of grace", was opened to investors and potential were awake in a privileged position, hydraulic power and raw metal and non-metallic too. These comparative advantages were considered very soon. Hence Goyenechea emphasizes that "over the past 50 years have sought to empower them, but in the past 10 years have receded in turn benefits the sector competitive."

Since then, the alarms have been lit and figures have served to do so, because since 2000 the private industrial park has decreased by 50%, which has led to a contraction in supply and hence an increase in prices And a diminishing competition in the sector.

"This result, discussed with its cascading effect and following the productive chains, has become one of the most important inputs in inflation industrial severely impacts on the costs," the document refers conducted by the guild, entitled "Regional Vision industry ".

The fence increasingly closed to the industry has generated uncertainty and fear when investing. The report states that the creation of a permanent job, formal and self-sustaining requires an investment of 21500 to 27950 bolivares strong, and stresses that although the industry knows that to increase their workforce, increase production, the truth is that " A high percentage of financing plans for investment in small and medium industry has not been executed and industry, not growing. "

On the other hand, prefer to invest in maintenance and security.

Anchoring Exchange
Another factor that hampers the industrial productive capacity is the exchange rate regime, because "for some 66 months (February 2003-August 2008) the exchange rate has moved only 34.4% over the past 41 months, almost four years has remained fixed at Bs.F. 2.15 per dollar. "

This situation not only favors imports to undermine the domestic industry, but makes exports are uncompetitive. "The most devastating effect of this is that in addition to nullify the competitiveness of exporters, destroys the incentive to invest nationally, it is much more profitable and relatively less complicated to import and sell in this area, which produce in the country" .

Goyenechea contrasted addition, the disparity between the increase in exchange rate (34.4%) and the sharp rise in inflation (168.1%), labour (239.6%) and transport (200%) in the past 66 months, according to the Central Bank of Venezuela (BCV).

Insecurity and legal citizen
Similarly, legal uncertainty has limited the establishment of new investment because the sector generates concern "with the lightness that are decided expropriation of fixed assets and products, alluding to sovereign interests", as well as the contradiction between the decisions Judiciary and the actions of the executive branch.

"The taxpayer, meanwhile, remains at the mercy of that confrontation deaf, but once again at the expense of subjective interpretation under bureaucrat who administers ... Further, the criteria used by public bodies that constitute administrators and regents have violated any possibility of equity between those who administered and managed. "

Also, the union stresses the negative impact on the cost structure for the work that every entrepreneur should take to ensure their personal safety because Goyenechea explained that "every investor who wants to get into an activity to generate wealth is exposed to insecurity and kidnappings. "

Services deficient
The constant power failures and shortcomings in other utilities also are detrimental to productivity, since according to the report of the Chamber of Industry and Mining de Guayana, "to review the national infrastructure, the first trial expenditures deteriorating gradual his state and his subsequent delivery, which impacts on industrial operations and costs. "

However, the costs of services have grown, not its quality. Goyenechea explained that electricity has a strong 251.1%, while natural gas 122.8%, "becoming mainstays of inflation and declining production."

Nutr bureaucracy
For the factors mentioned above, joins the bureaucracy "most monstrous of the republican history" that seems to characterize all institutions and that is evident in the repeated paperwork initially IVSS, Inces, Banavih, municipal taxes, and Sencamer SENIAT and, recent years, the Locti, ONA; Sencamer, Cadivi, Mibam and Milco, "demands and controls, dense and punitive."

Despite the hikes of primary inputs, the employer can not escape the work and commitment repeated claims of a worker on improvements, due to the deterioration of purchasing power.

Hence the union insists on raising their voices heard and be required to "resume the path of productivity, efficiency and competition frank", whereas according to the National Institute of Statistics, by the end of May 2008 The private sector employed 81.5% of the Venezuelan workforce.

Petitions punctual

In addition to a solution to all problems afflicting the sector, the guild calls for a review of the rate of 75% that taxpayers must make special SENIAT, as it is "confiscation", whereas those who maintain relations with taxpayers special majority "have their balance sheets in a tax credit that very few times and after extensive work is compensated. "

Also considered a priority to establish a single ticket that covers various efforts related Milco, the labour office, Cadivi, Sencamer, among others. This certainly expedite efforts.

The Chamber of Industry and Mining of Guyana calls also provide a solution to the insolvency of the Corporation Venezolana de Guayana and its subsidiaries with small and medium enterprises, said that situation is beginning to position themselves in Sidor.

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