Regardless of their size, industry, or nation, thousands of entrepreneurs will never forget the year 2020. It was a year full of potential for growth and unanticipated events, change, transformation, and anxiety in many situations. In the case of Venezuela, the COVID-19 epidemic struck when the country was experiencing its seventh straight year of economic contraction and a cumulative decline of more than 70% in its Gross Domestic Product (GDP). However, the magnitude of the decline has diminished in recent years, and some predict that the GDP will increase between 2021 and 2022. Venezuela is a young nation with a distinct economy and a smaller economy. Despite the difficulties, development is occurring.
Reduction in reliance on petroleum as the primary source
The world’s most valuable commodity, petroleum, which had been Venezuela’s principal source of wealth for the previous 30 years, is no longer needed. Although the government has mentioned the possibility of getting foreign investment in this industry, it is no longer such a major source. Different factors, such as the decline in global pricing, the decline in Venezuelan output, or the implementation of a restriction regime by the USA, may cause petroleum to be replaced. The “Government of Venezuela”, as well as the Specially Designated Nationals and Blocked Persons List, are the targets of these restrictions. The restrictions, however, do not amount to a complete ban on conducting business in or with Venezuela.
Economic expansion resulting from a surplus of natural resources
In this circumstance, some goods and industries have inherent advantages for domestic production; goods like rum, cocoa, and various foods have even profited from the designation of origin, while other goods and industries have benefited from imports.
The expansion of online shopping
Along with delivery services, electronic commerce has increased in the nation during the pandemic. The Venezuelan Chamber of Electronic Commerce has seen a growth in electronic trade of more than 2000%. This could be caused, among other things, by the almost complete deregulation of Internet commerce and the outdatedness of the laws governing commerce.
Increased company acquisition
When the original owners of businesses decide to sell them for various reasons, the acquisition of those businesses that are already well-established in the Venezuelan market has emerged as another economic opportunity. As a result, additional capital, both domestic and foreign, is received.
Every crisis creates possibilities, and in the case of Venezuela, a unique opportunity has been created for the purchase of assets with investments that will enable a stable position in the market once the crisis has passed. Over the past few years, acquisitions have been a consistent factor, and in recent months, international and domestic investments have increased.
Human rights and business
The 1999 Venezuelan Constitution offers a thorough framework to ensure the respect of human rights and incorporates several illustrations of global best practices. Venezuela is a signatory to numerous other human rights accords as well as the major UN human rights conventions. Concern regarding the breakdown of democratic institutions and the weakening of the rule of law has been voiced by the UN High Commissioner for Human Rights. There are good reasons to assume that Venezuelan security personnel and authorities have engaged in atrocities against humanity, including arbitrary detentions, forced disappearances, the use of torture, and extrajudicial executions, according to the UN Fact-Finding Mission on Venezuela in 2019. According to a 2020 World Food Programme assessment, 7.9% of Venezuela’s population, or 2.3 million people, suffer from extreme food insecurity. Another 24.4 percent, or 7 million people, experience moderate food insecurity. The quality of Venezuela’s healthcare system has drastically declined as a result of shortages of medicines and supplies, disruptions to essential utilities at medical institutions, and the migration of healthcare professionals.
In 2014, manufacturing made up 12 percent of the GDP. Amid charges of poor management, a lack of investment, and other problems, the manufacturing sector is having a very difficult time. Steel, aluminum, transportation equipment, textiles, clothing, alcoholic beverages, and food products are all produced and exported by Venezuela. For both domestic and international markets, it assembles cars and makes cement, tires, paper, fertilizer, and paper. After 65 years of service, General Motors Venezolana stopped producing cars in 2014 due to a shortage of supplies. At the same time, the Central Bank of Venezuela reported a 100% shortage of new cars. Only 10 vehicles were produced daily in Venezuela by the first half of 2016, a decline of 86% in output. According to estimations, Venezuela’s industrial production decreased by roughly 2% in 2017.
Agriculture in Venezuela makes up at least a quarter of the country’s land area, 10% of the labor force, and roughly 3% of the country’s GDP. Rice, grain, fish, tropical fruit, coffee, beef, and pigs are all exported from Venezuela. In the majority of agricultural sectors, the nation is not self-sufficient. Approximately two-thirds of Venezuela’s food needs are imported.