Public Disclosure Authorized Economic Memorandum On Venezuela · ALCASA Aluminio del Caroni, S.A. (Caroni Aluminum Company) BANDAGRO Banco de Desarrollo Agropecuario (Agricultural

Report No. 5016-E

Economic Memorandum On Venezuela

July 15, 1985

Latin America and the Cafibbean Regional Office

FOR OFFICIAL USE ONLY

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CURRENCY EQUIVALENTS

Currency Unit: Venezuelan Bolivar (Bs)

Exchange Rate as of March 6, 1984

US$1 = Bs 7.501/Bs 1 = US$0.1333

Average Exchange Rate

1977-1982 1983US$1 - Bs 4.2925 US$1 = Bs 4.2 975Z/Bs I = US$0.2330 Bs 1 = US$0.2327

Weights and Measures

Metric System

Government of Venezuela Fiscal Year

January 1 - December 31

1/ Official rate. Certain transactions are conducted at rates of Bs 4.3and Bs 6.0 per US$. In addition, there is a legal "free market" rate,transactions on this market approximately Bs 13 per US$ in mid 1984.

2/ Official rate. Certain transactions were conducted at rates of Bs 6.0per US$, legal "free market" rates ranged between Bs 8 and Bs 17 perUS$.

FOR OMCIAL USE ONLY

ACRONYMS

ALCASA Aluminio del Caroni, S.A.(Caroni Aluminum Company)

BANDAGRO Banco de Desarrollo Agropecuario(Agricultural Development Bank)

BAP Banco Agricola y Pecuario(Agricultural and Livestock Bank)

BAUXIVEN Bauxita de Venezuela(Venezuelan Bauxite Company)

BCV Banco Central de Venezuela(Central Bank of Venezuela)

CADAFE Compania Anonima de Administracion de FomentoElectrico (Electricity Company)

CGV Corporacion Venezolana de Guayana(Venezuelan Guayana Corporation)

CMA Corporacion de Mercadeo Agricola(Agricultural Marketing Corporation)

CORDIPLAN Oficina Central de Coordinacion y Planificacion de laPresidencia de la Republica (Central Coordinating andPlanning Office of the President)

CVF Corporacion Venezolana de Fomento(Venezuelan Development Corporation)

EDELCA Electrificacion del Caroni, C.A.(Caroni Electric Company)

ELECAR C.A. La Electricidad de Caracas(Caracas Electric Company)

ENELBAR C.A. Energia Electrica de Barquisimeto(Barquisimeto Electric Company)

ENELVEN C.A. Energia Electrica de Venezuela(Venezuelan Electric Company)

FCA Fondo de Credito Agropecuario(Fund for Agricultural and Livestock Credit)

FERROMINERA CVG-Ferrominera del Orinoco(CVG-Iron Ore Company)

This documnt has a resictd distribution and may be used by recipients oly in the pefamnae of |the officid duel Its contents may not otherwi be dicosed without World DBank authoration.

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FIV Fondo de Inversiones de Venezuela(Venezuelan Investment Fund)

FONAIAP Fondo Nacional de Investigaciones Agropecuarias(National Fund for Agricultural and Livestock Research)

FONDUR Fondo para el Desarrollo Urbano(Urban Development Fund)

IAN Instituto Agrario Nacional(National Agrarian Institute)

ICAP Instituto de Credito Agropecuario(Institute for Agricultural and Livestock Credit)

IMF Fondo Monetario Internacional(International Monetary Fund)

INAVI Instituto Nacional de Vivienda(National Housing Institute)

INTERALUMINA Interamericana de Aluninio, C.A.(Inter-American Aluminum Company)

MAC Ministerio de Agricultura y Cria(Ministry of Agriculture)

MINERVEN Mineria de Venezuela(Venezuelan Mining Company)

MINORCA Mineria del Orinoco, C.A.(Orinoco Mining Company)

OCEI Oficina Central de Estadistica y Informatica(Central Office of Statistics and Information)

PDVSA Petroleos de Venezuela, S.A.(National Petroleum Company)

RECADI Regimen de Cambios Diferenciales

SIDOR Siderurgica del Orinoco, C.A.(Orinoco Steel Company)

VENALUM Venezolana de Aluminio(Venezuelan Aluminum Company)

VENORCA Venezolana de Oro, C.A.(Venezuelan Gold Company)

ABSTRACT

This report is an analysis of the economic policies andperformance of the Government of Venezuela during the 1979-84 period. Itdiscusses the evolution of the economy during the 1970's with particularfocus on the manner in which the Government responded to the oil price risein 1973-74, the subsequent stagnation of earnings in 1977-78, the secondoil price rise in 1980, the subsequent fall in 1981-82, and the response tothe international debt crisis of 1982-83.

The Government which took power in early 1979 inherited aseriously overheated economy in need of significant adjustment, and adiminished outlook for resources. It initiated a stabilization andadjustment program which did not meet expectations because: a) petroleumprices rose in 1980 eliminating the perceived necessity for adjustment,b) the program was not comprehensive, c) the private sector reactednegatively and invested its resources abroad, d) the Government was notsuccessful in maintaining the public sector discipline necessary for theprogram, and e) the international commercial banks were eager to lend thusundermining what little discipline the central Government tried to apply;this led to the buildup of what proved to be an unmanageable debt burden.

The report also examines the key productive sectors: petroleum,aluminum, steel, and agriculture. The heavy resource-based industries havesuffered from overly ambitious investment programs and from the financialburdens of the associated cost overruns, but are basically soundinvestments. Agriculture has suffered from distortionaryr pricing and fromthe burden of subsidizing urban consumers. Petroleum, which was the onlysector able to carry out a coherent investment program during 1979-84, hasnow a solid base for production and refining for the foreseeable future.

The report, which proposes a number of policy actions forstabilization and adjustment, was written in 1983 and presented to thenewly elected Government of Venezuela in early 1984. It was updated inmid-1984 to reflect the policies of the new Government, and is beingreleased, without further updating, for general information.

This report is based on the findings of a mission which visitedVenezuela under the IBRD technical assistance program during April/Hay 1983and again in July, 1984 to review the current economic situation andprospect of Venezuela. The mission consisted of Mr. Nicholas G. Carter(Chief of Mission), Mr. Carlos Elbirt (Economist), Ms. Constance Bernard(Loan Officer), Hr. Jose Antonio Guerra (Consultant), Mr. John Loyer(Consultant for the aluminum sector) Mr. C.P. Roger (Consultant for thesteel sector), Mr. Lawrence Witt (Consultant for the agricultural sector),Mr. Ricardo Halperin and Mr. Hernan Garcia (Economist and Power Analyst forthe power sector), and Ms. Joan N. Ahern (Statistician). Ms. M. Louise Fox(Consultant) contributed to the report, in particular the sections onincome distribution and social services, subsequent to the mission's returnto Washington, D.C.

The report was delivered to the Government of VenezueLa in 1984,and partially updated at that time to reflect the policies of the newgovernment. It is being released in 1985 for general information withoutfurther updating.

ECONOMIC MEMORANDUM ON VENEZUELA

Table of Contents

PageCOUNTRY DATA

SUMMARY AND CONCLUSIONS ............................ ........ i-vii

1. ECONOMIC DEVELOPMENT IN THE LAST DECADE ...............e........ 1

A. The First Half: 1974-1978 ................................ 1B. The Second Half: 1979-1983 ............................... 4C. Recent Economic Developments ............... 0............... 11

II. SECTORAL REVIEW AND ISSUES ............. 14

A. The Petroleum Sectrr 14B. The Steel Industry ........................................ 18C. The Aluminum Industry ............................ -.... 20D. The Mining Sector ...... 24E. The Power Sector ........ 27F. Agriculture ......... 35G. Social Services ........... 43H. Employment and Income Distribution ........................ 48

III. THE OUTLOOK FOR THE VENEZUELAN ECONOMY ..................... 55

A. Development Policy Issues ...................... - .**.*.*--- 55B. Macroeconomic Outlook .. *.....59

STATISTICAL APPENDIX ................... 61

MAP

COUNYR DATA - VENEZUELA Page I of 2

AREA POPULKf(N DENSITY

912.050 eq.ku. (total) 15.1 million (mld-1983) 16.6 per uq.km.307,692 .q.km. (arable) Rate of growthb 2.9X (from 1975 to 1983) 49.1 per sq.km. of arabia land

POIULATOI CHA3CrERISTIC (1980) IlENALT (1980)Cruds birth rat. (per 1,000) 35 Population per physician 833Crude death rate (per 1,000) 6 Population per hompital bed 333Infant mortalty (per 1,000 live births) 32

INE DISTRIBTIOK (1982) DISIPTRJUTON OF LAND OWMNEIIP (1971)Z of household labor incom, highest quint$le 41.4 S ownd by top 3.1Z of awoerr 76.5

lowet quintile 7.0 X owmed by smllest 42.9W of owner. 1.0

ACCrSS TO SAFE WATER (1981) ACESS TO ELECIRICITY (1981)Z of population - urban 96.5 Z of hIumcholds 84.5

- rural 66.8- total 89.5

NtTRITION EDUCATION (1981)

Caloric intake - Z of requirements (1971-74) 98 Adult Literacy rate 84.2Per capita protein intake (gram per day)(1972-74) 63 Primry chool enrollmnt ratio 93.7

CUP PER CAPITA IN 1981 1/ U$4,220

GRDuS NATIONAL PRODUCT IN 1983 2/ AMUL RATE OF CROlH (Z,Constant Prices)

Z 1970-75 1975-80 1983GNP at Market Prices 64,153 100.0 5.8 2.2 -6.3Crowe Domestic Inveatmnt 9,998 15.6 6.7 -6.2 -44.2Gross National Saving 13,704 21.4 16.7 0.8 4.2Ourrent Account Balance 3,707 5.8Exports of Grwds, NFS 17,557 27.4 -8.8 -1.7 2.8mortm of Goods, MIS 19,634 30.6 14.5 6.8 -52.7

O1UTIW. LAUCR FORCE ANDPRO-C- IVm IN 1983

Value Added Labor Farce V.A. Per WorkerUSS Min. S Th. X UsS z

Agriculture 4,118 5.9 655 13.8 6.217 42.7Industry 28,359 40.6 1,393 29.3 20,358 1318.3Other 37 432 53.5 2 701 56.9 13,559 94.1

Total Weighted Averae IISI i 4f 5 14,721 10[0.

GVERNMI FIANCEAPublic Sector Central Governent

(J) Z of GDP (Ba) Z of GDP1982 182 1976-1980 1982 1982 1976-1980

Current Revenur 151,6b8 52.1 52.3 74,567 25.6 24.8Current Expenditure 112,789 38.7 33.8 54,440 18.7 15.6Current Account Surplus 38,898 13.4 18.4 20,127 6.9 I.1Capital Expenditure 68,914 23.7 21.6 27,438 9.4 10.2External Borrowing (net) 11,793 4.0 3.8

1/ The per capita GNP estimte In calculated by the conversion technique in the World B3ak Atlas.Other conversion to dollars in this table are at the average exchange rate prevaling during the period covered.

2/ Prelimnary.Not applicable.Not available.

Pap 2 of 2OUNT OM - vM_A

MONEY. C!!lT and Mta:s 1977 1978 1979 1380 1981 1982 1983

(5llom. of Be otstandn and oi period)

money StW QU1i mmy 74.7 87.3 94.8 115.9 136.8 146.6 170.6Bait Credit to the Public Srctor -22.4 -20.3 -23.9 -23.1 -21.0 -24.6 -25.6Bank CediLt to th Private Sector .70.7 86.1 99.9 125.1 141.9 162.1 167.4

(Perc_ntes or index nmbers)

Monry ad wi5 IMony a of CDP 48.0 51.6 45.6 45.6 46.0 50.3 39.6Consumer Price Index (Deceber 1968 -100) 1/ 160.7 172.2 193.4 235.1 273.1 300.2 316.1

Anuml pectap chdups In:Consumer Price l1de 7.8 7.2 12.3 21.6 16.2 9.9 6.0mome a Qul t M"y 28.1 16.9 6.6 22.3 18.0 7.2 16.4BDnk Credtt to the Public Sector 14.9 9.4 -17.8 3.2 9.2 -17.1 .4.1Bank credt to thi Prvate Sector 23.5 23.5 13.3 25.3 13.4 14.2 3.3

BALAJCE OF PAVIWS (Million USS) MOISICD COMMS (AVU 19-2)

1979 19E0 1981 1982 1983 in VS S

Exporta of Goods, NFS 14,959 19,968 20,938 17,557 15,944 Crud Petrolam 10.109 63.6Juprts of Goods, NFS 14 025 15 062 17 054 19.634 9 817 Petrolemi Derivatives 4,961 31.3Rmource Cop (Deficit - -) 934 T,88T 4,0" :7 Jll Othr Ooe d U1 5.1

Total 13.90 100.0Factor Servic Income (ne) -177 261 525 -1,530 -2.226

RAcIpte (1,346) (2,264) (3,581) (2,565) (1.400)Psyeetm (1,523) (1,983) (3,056) (4,095) (3.626)

Not Transfers -365 -407 -369 f60 -194Balance on Current ccost 372 4.700 4,040 -4,213 3.;70

CTEUAL DOT, DKlUR 31, 1952

Direct Foreign Investnt a8 55 184 253 92 MOn "laNot LSX 3orreAg 1,646 2.152 499 2,832 630

Di*buramnt 3.895 4.530 2,625 4,439 1.476 Public Debt, lcludig 12.122Amtizeatlo 2,247 2.378 2,126 1,607 846 guarantee

Capital ne.i. (not) -998 -6 974 -2 252 -1 592 -3 662 Prlvate DebtIncrease ln laserves (-) 3/ -1,110 17 i.7i <72 i 4I!Y Tota l tetndIr 4 Disbueed 12.122

Grow Rarve (ed year) 4/ 7,770 7,062 8,641 10,044 11,152Net Rome ve (end year) _/ 7.740 7,025 6.619 10,039 11.149

PUBlLIC DIUTe KU KRTOFoR 19612 SI z

Amortizacon 7.9Interest 7.7Total 15.6

RATE OF EKWHAE IBURDIDA DDIC.tDecasbr 31, 19E2) (lillion ISS)

Deember 31, 1982BURD IDA

USS1.00 - Be 4.2925Be 1.00 - USSO.2330 Outstanditg and DIsbursed 87

Undlebured _Decer 31, 1983 Outstanding lcludiag Undisbursd 87UiSl.00 - Ss 4.2975Be 1.00 - US$0.2327

1/ Co_r Prlce Index refers to Caraca metropolitan area only.2/ Net lOX BorrowlU for public aor only; private sector (net) Included In Capital n.e.i./ af the Blanig System.

4/ Of the Ctral Bak.5/ attlo of Public Debt Service to Exports of Goods and all Servies.

Not available.

SUMMARY AND CONCLUSIONS

i. Over the last decade Venezuela has experienced the enormousdifficulties of managing an economy overwhelmingly dependent on the produc-tion and export of a single product, petroleum, the performance of whichdetermines the behavior of the balance of payments, government revenues andthe levol of the country's national lncome. In the short period of adecade the country registered, In the early years, enormous increases innational lncome, foreign exchange earnings and international reserves, aswell as in public sector financial resources, all of which stimulatedgeneral economic activity--both production and investment, public andprivate--resulting ln a large expansion of productive employment and risingliving standards. The last five years have wltnessed economic stagnation,a decline ln investment, rising unemployment and accumulation of anexternal debt that places a heavy burden on the country's public financesand balance of payments.

Ii. In the early years of the decade the efforts of the Governmentwere largely successful, particularly with regard to controlling inflationdespite the enormous !-crease of resources. The rate of inflation stayedaround 8Z annually. This was achieved by setting aside a large portion ofthe additional oil revenues In the newly-established Venezuelan InvestmentFund--thus preventing its monetization; allowing a large expansion ofImports and subsidizing the Importation of basic food products. A publicInvestment program was launched largely concentrated In projects designedto develop basic industries--mainly steel and aluminum and electric powerfor all of which the country has an excellent resource base. Institutionaldevelopment included the nationalizatlon of the Central Bank--witn broaderpowers for monetary and credit management--the creation of the petroleumstate company (PDVSA), and the Fondo de Inversiones de Venezuela, an wellas maknog important changes In the banking legislation. The Industrialstrategy of the Venezuelan Government concentrating in developing basicmetal Industries, for which the country has an excellent resource base ofrich and abundant mineral deposits and cheap power, and on which furtherdevelopment of lndustrial and manufacturing productlon could be based was,without questlon, correct. But the course of events has proven that theprogram was much too ambitlous, both In terms of the financial resourcesrequired and, more importantly, of the technical and managerial demandsthey placed on the available human resources. The most basic problems andcostly inefficiencies burdening the large projects In steel and aluminumare described and discussed ln the body of this report.

iii. Despite the relative success of government policies in theinitial years of the perlod, it was soon apparent that serious problems layahead. Petroleum earnings stabilized from 1975 onwards and governmentrevenues also ceased to increase. Expenditures, however, continuedexpanding at a fast rate and thus the Central Government current surplusfell sharply. Investment expenditures continued at a high level, and therewere substantial overall fiscal deficits in 1977 and i978 compared to largesurpluses in the preceeding four years. The balance of payments alsoregistered large deficits on current account and though reserves losses

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were smeil in 1977, they were substantlal in the following year. However,since Venezuela enjoyed an excellent credit standing in external financialmarkets-based on its large foreign exchange reserves and its petroleum

export capacity-the authorities opted for maintaining a higher thanwarranted level of economic activity through external borrowing on a largescale. However, the delays and serious problems of lmplementation of thelarge projects were increasingly becoming a significant drain of theGovernment's financial resources. In fact, their difficulties are largelyresponsible for the accumulation of a substantial external debt, mostlycontracced on short term and high interest rates.

iv. ln 1978, petroleum exports values fell by some Bs 2.2 billion,government petroleum revenues dropped by nearly Bs 4 billion, and thoughtotal resources stayed about the same there was a large overall deficit.The balance of payments registered a large deficit on current account andthere was Also a significant loss of reserves. The new Government thattook office early in 1979 adopted a set of policies designed to cool offthe econoiy and to reduce the distortions that previous policies over mnnyyears had created. Real public sector capital outlays fell sharply, creditexpansion, especially to the private sector, was curtailed and interestrates were Increased. At the same time, domestic prices (other than forpublic sector goods such as petroleum products and electricity) werelargely freed from controls and customs duties on imports substantiallyreduced--though even so they remained quite high. These measures had astrong deflationary effect on economic activity, hut the liberalization ofprices resulted in a surge of inflation which had been repressed byprevious policies, and wholesale prices rose by 20Z. This led to pressureson wages, and an average 25% increase was granted in late 1979, partly onthe assumption that the new OPEC price increase would enable the country toafford such wages. The combination of the wage increases, the removal of asignificant amount of protection from imports, high interest rates abroadand the excess capacity created by the economic contraction resulted in afal' of private domestic. investment and in capital outflows. Privateinvestment, which had amounted to 25% of GDP In 1978, fell to 20Z in 1979,132 In 1980, and by 1982 had dropped to 10% of GDP. The doubling of oilprices in 1979-80 greatly increased governmetnt revenues, and public sectoragencies, which had been constrained since 1977, rapidly increased theirexpenditure, but the nature of the main projects in which investment wasincreased was such that this failed to reactivate the economy, and realnon-oll GDP was stagnant between 1978 and 1981. Real consumption, on theother hand, increased by about 72 in total over the same period.

v. The failure to reactivate general economic activity despite thelarge increase in oil revenues led the authorities In mid-1982 to abandontheir previous course, cancelling most of the early liberalization program,reestablishing and increasing price controls and import restrictions andallowing a substantial expansion of credit by the commercial banks. This

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latcer measure had the effect of accelerating private capital outflows,which reached alarming proportions in 1981 and 1982. In this latter yearpetroleum export earnings fell by about 222, the balance of payments oncurrent account registered a deficit of USS3.5 billion and the capitalaccount--including errors and omissions--a deficit of US$7.5 billion. Itwas then evident that the country was facing a serious external financialdisequilibrium which required severe and urgent corrective measures.

vi. The problems created by the continuing fall of investment and theoutflow of capital were compounded all through this period by the rapidgrowth of the external debt. Venezuela had begun using its capacity forborrowing abroad in 1976, when petroleum revenues had ceased to grow. Bythe end of 1978 the publicly guaranteed external debt was five times thelevel of 1975 and debt service had incressed by 392; the debt serviceratio, however, was still only 8.3X. By 1982, the publicly guaranteed debtwas double the level of 1978 and the debt service ratio had risen to 182.Average international interest rates had also more than doubled and theaverage maturity of Venezuela's loans had dropped from 9.8 years to 8.2years. These later averages, however, mask the very large proportion ofthe debt incurred by the state enterprises that was of short maturity.Although legislation to curb the practice of short term external borrowingby the public sector was put in place in August 1981, the Government wasunable to restructure the debt.

vii. In such circumstances, the drop in petroleum export earnings in1982 and again In 1983, triggered a financial and foreign exchangeemergency which the Government first attempted to stem by taking control ofthe reserves of PDVSA in late 1982 and then, in February 1983, after theJanuary 1983 drop in OPEC prices; through: (a) the partial devaluation ofthe bolivar, (b) the prohibition of all foreign exchange transactions whilethe exchange control machinery was put in place, (c) a total freeze onprices, and (d) a moratorium on the amortization of external debt. The ex-change rate adjustment established three different rates. The old rate ofBo 4.3 to the U.S. dollar applied to the service of the public debt, to thesale ot petroleum export proceeds to the Central Bank, to a list of importItems of popular consumption that were considered essential, and totuition and living expenses required by Venezuelan studentq. A second rateof Bs 6.0 to the dollar was to apply to non-essential imports--those notincluded in the preferential list--and to the service of registered privatecapital brought into the country. All other purchases of foreign exchangehad to be made in the free market. The policy was carried out through theestablishment of an institution, RECADI, to control all foreign exchangetransactions other than those on Che free market; through an Intensifiedprice control mechanism which required extensive documentation and longwaiting periods for any price change; through a freeze on wages andfinally, by the payment only of interest falling due on public externaldebt. The effect was to paralyze imports and force the country to use upits large inventories; imports had been some US$13 billion In 1982, in 1983they fell to US$6.8 billion and gross external reserves rose by

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US$0.7 billion. Economic stagnation was, however, accentuated with GDPfalling by 4.8%, and unemployment, which had been cushioned by the returnto Colombia of migrant workers, began to have a significant impact onVenezuelans. The free market exchange rate, which the authorities hadhoped to keep at about Bs 8/US$ and which is established by a market on theCaracas stock exchange, rose quickly above Bs 10, peaked at Bs 17 atmidyear and then fell back to Bs 13 (3 times the old rate) by the end of1983. At the same time basic foods were, and continue to be, imported atthe old Bs 4.3 rate thus reducing both the adjustment burden on the workingclass as well as some of the pressure on wages. Throughout the year, whichsaw a general election in December 1983, the issue of a permanentsettlement with the foreign commercial banks and the possibility of an IMFagreement was put off for the new Government.

viii. The Government that took office in February of 1984 adoptedimmediately a new set of measures modifying or complementing those of thepreceeding administration. These measures are as follows:

(a) Exchange rate. Essential food and pharmaceuticals are stillto be imported at the old Bs 4.3 rate. Private debt and theinterest accumulated on or before January 1, 1984 will berepaid at the Bs 4.3 rate with terms of seven years, twoyears grace. Scholarships for students abroad beforeJanuary 24, 1984 will also have access to the Bs 4.3 rate.Exports of PDVSA and FERROMINERA will have to be convertedinto bolivars at a rate of Bs 6. The fundamental rate ofexchange for Venezuela will now be Bs 7.5/US$. However, allimporters who wish to use this rate must go through RECADI.Finally, the free market rate (which in the first quarter of1984 has been about Bs 13/US$) will still be available forall other transactions.

(b) Income policy measures. All private firms with 10 employeesor more are required to increase employment by 10% over theJanuary 31 level over the first half of 1984, and tomaintain such employment levels for at least two years. Allfirms not having canteens for employees must establish them,(though not necessarily free of cost to the employees). Allwages below Bs 3000/month must be increased by Bs 100,primarily to offset assumed increases in transport costs.On the other hand, government employment is to be frozen andgovernment salaries above Bs 16,000 per month will be cut by10%.

(c) Measures concerning energy. The prices of gasoline andother oil products were increased. Premium gasoline wentfrom Bs 1/liter to Bs 1.2 and regular from Bs 0.3 toBs 0.8/liter. These prices are considerably higher than

before and eliminate a significant amount of the relativeprice difference between the two grades. However, at theopportunity cost of petroleum products to PDVSA these pricesare lower than the previous prices at the old exchangerate. The prices of the other oil derivatives were alsoincreased, but still they remain well below internationalprices.

(d) Interest rate and price policy measures. Interest rateswere lowered to 8J% for agriculture and to 14Z for low andmoderate income housing. Savings deposit rates were loweredto 8% (most rates were previously around 15%). Inflation isexpected (by the Government) at 20% in 1984 and pricecontrols will be maintained in their current form.

ix. These measures should facilitate relationships with the foreigncommercial banks with whom the issue of the private sector debt is stilloutstanding. In addition to the above measures in March 1984 the Congressempowered the President of tte Republic to take actions for (a) reducingthe 1984 public sector current expenditures by not less than 10%;(b) cancelling by compensation all public sector inter-agency debts, theCentral Government absorbing the net balance; (c) restructuring the publi'csector by selling, merging or eliminating agencies; (d) closing down sevencommercial. banks at present under government stewardship, the CerntralGovernment absorbing any net losses; (e) establishing bank depositsinsurance schemes; (f) increasing alcoholic beverages and stamp taxes;(g) regulating retirement pensions for public sector employees and(h) facilitating the refinancing of farmers' debts in terms to be decidedby the Government but subject to a grace period of not less than threeyears.

x. The Government 's avowed purpose was to carry out during 1984 anadjustment program designed to prevent a further deterioration of theeconomy and to set the basis for reassumming some modest growth in 1985.Concerning public finances, the program included reducing public sectorcurrent expenditures by 10% and increasing the taxes in addition to the tax-ncrease on gasoline and other petroleum products already made. Theauthorities expect that the combination of these measures plus the exchangeprofit accruing to the Government from the devaluation, will Ne sufficientto wipe out the public sector deficit by the end of the year. An importantfeature of the program with regard to the public sector is a retitructuringaimed at reducing the number of autonomous agencies and public enterprisesthrough sales, mergers and, in several instances, their outrightliquidation. On the balance of payments side, the authorities expect thatthe new, more realistic exchange rate and the continuing control of importswill result in a US$1.5 billion current account surplus by year-end. Byquickly achieving both domestic and external equilibrium, the governmentexpects to restore private sector confidence and stimulate a revival ofprivate investment, albeit modest.

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xi. The major macroeconomic task of Venezuela in the medium term willbe to establish and maintain a program of economic diversification, and toavoid the balance of payments and external debt crises of the previous sixyears. This requires (a) some type of debt rescheduling of the currentshort- and medium-term debt over an extended period and (b) growth, incomeand expenditure policies necessary to insure that the balance of paymentsremains viable over the period of debt repayment. The degrees of freedomassociated with Venezuela's long-term growth strategy will be primarilydetermined by the international petroleum market, as petroleum remains themost important determinant of Venezuela's terms of trade and balance ofpayments position as well as fiscal revenues. Given the terms of a debtrescheduling and a long-term petroleum forecast, the balance of paymentsperformance will be essentially the result of the rate of economic growthand of expenditure patterns, which determine the level of imports. Thus,the question for Venezuela today is: What macroeconomic growth and incomespolicies are compatible with a sustainable balance of payments andreasonable debt servicing given certain levels of petroleum revenues?

xii. To address this question, an accounting projection model of theVenezuela economy was utilized to illustrate the dimensions of economicactivity over the next decade compatible with the constraints on thebalance of payments. The central assumptions are as follows:

(a) a program of repayment of all debt under a ten-yearamortization to begin in 1985;

(b) external borrowing in amounts not exceeding debt repaymentsby the country as a whole, so that the overall level ofexternal debt is reduced in absolute terms;

(c) continued constraints on imports of consumer goods and onnon-factor service outflows; and

(d) appropriate domestic pricing of petroleum products.

xiii. In the immediate future, the period which is most crucial for therecovery of the Venezuelan economy, the international petroleum market doesnot have a bright outlook. It is likely that the OPEC average price willfall slightly in nominal terms in 1984 and would probably not recover tothe 1982 average until 1987 or after. In real terms this means thatVenezuela cannot expect the return from a barrel of petroleum to go back tothe 1980-82 levels until after 1990. Thus the only sources of realincreases in export earnings available to the country earlier are non-traditional exports and increases in the volume of petroleum. Although theformer can with appropriate policies be expected to increase, it accountsfor less than 10% of export earnings, faces difficult markets (steel,aluminum) and will under the most favorable conditions take some time to bea significant source of overall growth in real export earnings. Anincrease in petroleum volume could be a strong factor in the balance ofpayments over the rest of the 1980's. Current production levels are about1.8 million barrels per day while the country has a sustainable capacity of2.5 mb/d, which would represent an increase of nearly 40%. However, theOPEC agreement places limits on production rather than exports and in view

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of current market conditions it is unlikely that Venezuela will be able toproduce any more than 1.8 mb/d during 1984. We have assumed that after1984 the country will increase its production by about 2% per annum. Therestriction, as mentioned above, is on production; Venezuela can increaseexport earnings by consuming less at home. In 1976 the country consumedabout 250,000 b/d; by 1982 this had climbed to 410,000 b/d; this increasecost the country some US$2 billion of foreign exchange in that year. Thedomestic price increases on products in 1982 are estimated to have reducedconsumption to about 350,000 b/d and it is assumed that appropriate priceincreases (such as occurred in early 1984) will keep the increases indomestic use of petroleum to about a 2% annual growth rate.

xiv. The results of the projection indicate that in order to be con-sistent with the balance of payments constraints above, the economy ofVenezuela, having declined in 1983, will not be able to grow more than 0.5%in 1984 nor more than slightly over 3% per annum in real terms over thelong run.

xv. The overriding problem for the balance of payments, and thus forthe economy during the rest of the 1980's is the external debt. At roughlyUS$35 billion, it is twice the amount of export earnings. Almost 30% ofexport earnings are currently devoted to interest on this debt. Venezuelawill have to be a net exporter of capital for some years to come in orderto get the debt down to manageable levels. If a consistent policy of debtmanagement is followed and if domestic policies conducive to theestablishment and maintainence of efficiency are adopted and maintained,the country could be considered creditworthy for limited amounts of netadditional borrowing, particularly if such borrowing is directed at highlyproductive projects and accompanied by policies to encourage efficiency.

xvi. The projection has assumed that the private capital flows remainneutral over the projection period, exhibiting neither the massive exodusof 1979-82 nor a significant inflow. If however, development and economicmanagement policies conducive to efficiency and to the encouragement of theprivate sector were set in place and maintained, a significant reflow ofsome of the capital that left the country might be possible. TheGovernment which took office in early 1984 has thus far given strongindication that it intends to pursue such a course. Under suchcircumstances, both investment and growth could be considerably higher thanis currently foreseen, and real consumption could be allowed to return tothe levels of the early 1980's albeit with some caution and restraint onthe import of consumer goods.

I. ECONOMIC DEVELOPMENT IN THE LAST DECADE

A. The First Half: 1974-1978

1. The direct effect on the Venezuelan economy of the huge increasein the value of petroleum exports was on income, as Gross National Incomeincreased roughly 50% between 1973 and 1974. Some of this income accruedto households, in the form of a terms of trade effect and subsidizedpetroleum product prices, but for the most part, the income was receiveddirectly by the Government, as income tax and royalties from oil companiesincreased Central Government revenues by 265Z in 1974. This suddenaffluence of fiscal and foreign exchange resources of the Governmentgreatly increased the role of Venezuela's public sector. The responsi-bility for maximizing Venezuelan development possibilities as well asimproving the social welfare of the population was placed squarely in itshands. The task of the Government was to manage the tradeoff betweenpublic consumption and investment, directing the inevitable pressures toaccelerate both.

2. The most important structural development of the period was therapid growth of the public sector. Through the nationalization of thepetroleum and iron ore operations, the development of the aluminum andsteel sectors, the expansion of infrastructure investments and the growthin social programs, the ratio of public sector expenditures to GDPincreased from one-third to well over one-half over the period. Most ofthis growth occured in public sector investment, which increased 2.5 timesfaster than GDP as a result of the new role of the Government in theindustrialization of Venezuela. The importance of petroleum revenues infinancing that industrialization compared to previous periods required thecharacter of the government sector to change from an administrative one toa more entreprenuerial one. For Venezuela, this transition has not beeneasy. The very magnitude of the public sector investment program was muchtoo ambitious for any government; delays and cost overruns wereinevitable. In Venezuela, the rate of growth of the program as well as itsnew character pushed existing systems and capacities beyond theirresources, placing a premium on managerial and administrative skills andpersonnel within the government as it attempted to fulfill its new role.

3. The Central Government's response to the large increase in incomewas, at first, somewhat prudent. Recognizing the importance of this trade-off, as well as the potentially destabilizing effects of completelymonetizing the windfall in the first years, in 1974 the Government setaside 35% of petroleum revenues to be used for public sector investment inthe future. This was done through the instrumentality of the Fondo deInversiones de Venezuela (FIV), a new agency created to manage theinvestment of the oil revenues accruing to the Government. Nevertheless,despite this measure, the pressures to accelerate development programs werestrong and Central Government current expenditures increased 50% while itsinvestment expenditures increased 126%. In the next year, the Governmentagain transferred substantial resources to the FIV, and current and capitalexpenditures increased about 25%. However, petroleum production was

declining because of conservation measures and imminent nationalization,and consequently oil revenues were not increasing. By 1976, the publicsector had expanded to the point that it could absorb all the currentyear's oil revenue as well as the slowly increasing non-petroleum revenue.In that year no revenue was transferred to the FIV. In 1977, although some10% of oil revenue was transferred to the FIV, Central Government currentand capital outlays had swollen to such a high level that the overallpublic sector deficit was almost 4% of GDP. In 1978, the fiscal situationworsened: oil revenues amounted to two thirds of the 1974 level, petroleumprices were falling and the rest of the public sector failed to generateexpected income. The total public sector debt reached 10% of GDP.

Table 1: ANNUAL GROWTH RATES, 1973-1978

(current prices unless noted)

1973 1974 1975 1976 1977 1978

Average Price, FOB,Venezuelan Crude 48.7 222.2 10.1 2.1 11.9 1.3

Total MerchandiseExport Earnings 50.0 135.1 -20.4 4.1 3.4 -5.0

National Income 2.0 61.4 6.6 14.8 14.3 9.1Public Sector Income 42.5 90.8 6.9 32.2 17.6 17.9Gross Domestic Product 5.9 2.3 1.2 5.8 5.4 2.3

(1978 Prices)

Central Government Finances:

Current Revenues 31.7 165.2 -3.9 -6.8 6.2 -0.9Current Expenditures 13.0 52.3 25.4 2.4 23.7 12.8Capital Expenditures 9.6 29.5 32.7 12.3 40.1 -0.8

Source: Statistical Appendix.

4. The stimulus of the increasing levels of government expenditurewas swiftly transmitted throughout the economy. Real non-petroleum GDPgrew at an average annual rate of 9.5% between 1974 and 1977, withvirtually every sector of the non-petroleum GDP sharing in the boom exceptagriculture, which experienced poor weather conditions in 1976. Privateinvestment rates were high, stimulating an average 15% per annum growth inthe construction sector. Incomes grew significantly, and by 1978 realprivate per capita consumption stood some 57% higher than it had been fiveyears previously.

5. Despite strong economic growth, aggregate demand outstrippedaggregate supply throughout the period and the demand surge spilled overinto imports, especially in the public sector, where the high importcontent of large investment projects caused the value of public sectorimports to grow at an average rate of 80% during 1975-77. Although import

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growth slowed in 1978, the combination of high import demand and fallingexport revenues resulted in mounting current account deficits, whichreached US$5.3 billion in 1978, compared to a surplus of US$5.8 billion in1974. Net capital inflows were sufficient to finance the US$3 billion 1977deficit but not the larger 1978 deficit, and reserves, which had beenincreasing in the surplus years, began to flow out in mid-1978. This trendwas exacerbated by the failure of the Venezuelan authorities to raiseinterest rates to the rapidly rising international levels. Debt servicepayments were also escalating, posing an additional threat to futurebalance of payments stability. The high levels of expenditure in both thepublic and private sector, in the face of little growth in domesticsavings, brought about a need to seek foreign financing. The bulk of thisfinancing was secured by the private sector. Total domestic liabilitiesabroad are estimated to have increased by US$16 billion and 60% of this wasowned by the private sector. However, in 1977-78, as the public investmentprogram encountered cost oierrun- and profits from state owned-enterprisesfailed to materialize, the public sector increasingly resorted toshort-term external borrowing, which was easily obtainable because ofVenezuela'senhanced creditworthiness after the oil windfall.

6. The sharp expansion in domestic demand, as well as rising importprices, resulted in some inflation over the period, despite a generallycontractionary monetary policy. In late 1973, wholesale and retail pricesbegan to climb. For an economy which had experienced an average inflationrate of only 1.8% for the previous fourteen years, monthly retail priceincreases of 1-3Z, continuing for nine months, were intolerable. TheGovernment responded by imposing in late 1974 a system of price controlswhich affected in varying degrees almost 80% of the consumer basket.Prices of basic foodstuffs, gasoline, public utility services, housingrents and other basic needs commodities were fixed in absolute terms withsubsidized imports used to meet excess demand in the case of food. Otherprices were administered by the Government. The price control system wassuccessful in holding down the inflation rate to an average of 7% over theperiod, which can be viewed as moderate given the potentially inflationaryimpact of the large inflows of foreign exchange during those years.

7. The social policy of the Government concentrated on raisingincomes. Concerned with improving the living standards of large segmentsof the Venezuelan population who were unemployed, underemployed, or employ-ed at very low wages, the Government adopted several major pieces of laborlegislation in 1974. The first was the raising of the minimum wage. Thesecond was a progressive public sector salary increase, which adjustedwages by 25% at the bottom of the scale tapering off to 5% at the top ofthe scale. The public sector wage legislation carried with it the sugges-tion that the private sector implement increases at the same level, whichfor the most part followed. Severance benefits were also increased, andnew legislation provided double indemnity in cases where a worker wasdischarged without proven cause. The results of this legislation, as wellas high rates of economic growth and price controls on basic foodstuffs,were significant increases in employment and real wages over the period.

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B. The Second Half: 1979-1983

8. The Government of Luis Herrera Campins, which took office inMarch 1979, focused initially on the short-term management of the economicsituation. The stagnation of petroleum prices in 1977 and 1978 and theincreasing tendency to spend more than was being earned made it generallyfelt that the public sector had been spending too much too rapidly and thata slowdown of significant proportions throughout the economy wasnecessary. In order to cool the economy and increase its efficiency, thenew Government's 1979 policy package had three main components: (a) a cutin real public sector expenditures, (b) liberalization of the price system,and (c) an increase in interest rates. Expenditures were curtailed sharplyon the inauguration of the new administration, and public sector realexpenditure fell by almost 10% in 1979; current expenditures showing nogrowth and capital expenditures falling by over 15%. Non-petroleum realpublic sector capital investment actually fell by even more, since 1979 wasa year of buildup of investment by PDVSA. In response to the strong andcontinued rise in international interest rates, domestic interest rateswere increased in late 1979; and, despite the fact that the previousGovernment had raised rates sharply in the previous January, still remainedlower than international rates. On the price side, the Government wasconvinced that the system of price controls that had been in place since1974 was creating significant distortions in the economy, and in August1979, some 47 items covering 36% of the market basket were moved from fixedprices to controlled prices, while the number of items in the lattercategory was cut by half, so that whereas almost 80% of the market baskethad been either fixed or controlled, after the new policy had beenintroduced, only one third of the basket was still controlled, and no itemswere in the fixed price category. In addition, the Corporacion de MercadeoAgricola (CMA) which had been responsible for buying and selling domesticand imported products and thus for extending subsidies to the consumer, hadits powers sharply curtailed. This change meant that fewer items would besubsidized, that shortfalls in domestic production that occurred would becovered by direct imports of the private sector, and that the subsidiesthat the Government wished to extend to consumers would be the directresponsibility of the Government--not the CMA. In order to complement theprice liberalization program and increase the competitiveness of theeconomy, in August 1979 the Government sharply reduced the import duties ofsome 400 tariff items the domestic prices of which had previously beencontrolled; subsequently in November, it reduced duties on some 600 otheritems. The effect of this policy was that duties, which had ranged as highas 300X previously were reduced to a maximum of 100%.

9. The impact of these policies on the economy was dramatic. Thepublic expenditure cuts had a strong deflationary effect. The totalcontraction in aggregate demand in real terms in i979 was four percent.The non-oil economy slowed down and private investment, which had begunto fall in 1978, fell 16% in 1979. Private capital flows abroadaccelerated rapidly. Several factors were responsible for the sharp dropin private investment; two important ones were the downturn in the economyand the attractiveness of investments with higher interest rates abroad.An equally important factor, however, was the constant concern on the partof the private sector about the policies of the Government. The import

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liberalization program with the lowering of import duties, designed to makethe economy more competitive, was Interpreted by Venezuelan entrepreneursas a threat to their comfortable, highly protected situation and was anadditional reason for sending capital abroad.

10. The liberalization of the price system brought about a burst ofinflation which, during the fall of 1979, proceeded at an annual rate ofover 30%, which could probably have levelled off at a substantially lowerlevel by the middle of 1980. However, the acceleration of prices set offpolitical pressure to have general wage increases to compensate. Althoughthe Governmnt had previously announced as part of Its expenditure cuttingprogram that there would be no general wage increases in 1979 and felt thatsuch an increase was not warranted, Congress--by that time also aware ofthe windfall that would result from the late 1979 OPEC price increase--passed a sweeping wage law which took effect in January 1980 that mandatedincreases for all workers, and doubled the minimum wage. It is estimatedthat the average increase across the economy was 25%; in the public sectorthe increases were tapered from 3OZ to 5% according to wage level. Theoverall effect of these increases on prices was probably in excess of 10%,but added to the effects of the price liberalization, inflation during 1980averaged 20%, and during the year neaked at an annual rate of over 40%.

11. By mid-1980 there were strong autonomous forces which compelledsignificant increases in the growth of public spending. The wage lawenacted in the closing days of 1979 increased the wage bill of the publicsector by over 30% in nominal terms. In addition, a buildup of debt by thepublic sector, coupled with the sharp rise of international interest rates,increased the interest bill by some 60% in that year. Given the latest oilprice increase and the consequent improvement in the current account of thebalance of payments, as well as the continued stagnation of the economythroughout the first half of 1980, the authorities eased the fiscalrestrictions in the middle of 1980. Additional appropriations amounting tomore than 35% of the original budget were approved, and for the year as awhole current expenditures grew by 7.8% in real terms while non-petroleumexpenditures increased by 10.4%.

12. Although public sector spending accelerated, the slump in theeconomy continued unabated. Private investment fell an additional 36% in1980, and despite lowered inflation and signs of recovery in the non-oileconomy in 1981, fell again by 16% in 1981. Moreover, the cash-flow short-ages and overall deficits of state-owned enterprises had begun to pushexternaL debt to alarming levels. Even though the balance of trade washighly positive and increased oil revenues had once again eliminatedCentral Government deficits, the economy was still in crisis in mid-1981because of the continued fall in private Investment and its counterpart,outflow of capital, and the high levels and difficult term structure ofpublic sector debt.

13. The problems created by the continuing fall of investment and theoutflow of capital were compounded all through this period by the rapidgrowth of the external debt. Venezuela had begun using its capacity forborrowing abroad in 1976, when petroleum revenues had ceased to grow. Bythe end of 1978 the publicly guaranteed external debt was five times the

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level of 1975 and debt service had increased by 39%; the debt serviceratio, however, was still only 8.3%. By 1982, the publicly guaranteed debtWas double the level of 1978 and the debt service ratio had risen to 18%.Average international interest rates had also more than doubled and theaverage maturity of Venezuela's loans had dropped from 9.8 years to 8.2years. These later averages, however, mask the very large proportion ofthe debt incurred by the state enterprises that was of short maturity. Al-though legislation to curb the practice of short term external borrowing bythe public sector was put in place in August 1981, the Government was un-able to restructure the debt. The problem was that these enterprises en-countered continual cost overruns and escalating current expenditures,which were due not only to over-optimism on their part, but also to theirdelays and failures that prevented them from generating the funds pro-grammed for the complete financing of the projects. Delays in the execu-tion of an investment, coupled often with a political commitment to employnew labor, led to escalating deficits. Moreover, in 1976, in an attempt toensure that the entire process was controlled by the FIV, Congress passed apublic credit law requiring that all medium- and long-term foreign debt (ofmore than two years' maturity) which was incurred, had to have the approvalof Congress, or in a few minor instances, the approval of the Council ofMinisters. Given that throughout the Herrera Government Congress was con-trolled by the opposition party, public agencies and enterprises werereluctant to try to negotiate medium- or long-term financing, fearing thatthe Congress would veto it. This meant that the mounting deficits of thestate enterprises which FIV did not finance had to be financed byshort-term borrowing--often cash overdrafts--in the expectation that theCentral Government or the FIV could be persuaded to cover the losses. Thisexpectation was understandable since the state enterprises were generallyallowed to continue their programs of expenditure. For enterprises suchas SIDOR and the aluminum compaaies, their failure to generate operatingsurpluses and the resulting overhang of unpaid debt incurred to cover thedeficits of 1977-82, are the most important factors in their poor financialposition.

Table 2: NON-FINCIIAL STE EN1 SES a;(Bs million)

1976 1977 1978 1979 198D 1981 Oxautive 76-81

Opezatiag Surpis 88 -726 -1069 -2901 -6250 -6150 -17008Net Trarfer from Govt. 600 956 1108 1061 1544 1549 6818QOrrent Acosmt Splus 688 230 39 -1840 -4706 -601 -10]90Capital Expenditure 7416 18151 18205 16689 2Z233 1588) 98544Capital Revenues & Transf. 6564 8723 7513 1122 4332 25780b/ S4034Overall Surplus -164 -9198 -10653 -17407 -22577 +5299 -54700

Sbo=t Tera 2762 -1274 3308 12260 9103 -7839 1832Dbtez nal Long Tam -735 -258 126 4656 1798 1671 7258

Dbmestlc IDq Tern 3218 7681 2766 590 3237 -3543 13949Otber -5081 3049 4453 -99 8439 4412 15173

a/ Excludirg DJSA.b/ Including Bpjradimtely Bs 10 blllion ewh from the FIV and tbe barking system.

14. The Government's response to the crisis on the debt front wastwo-fold. First, the external debt law was amended so as to forbid thecontracting of short term external debt by all but 15 Government agencies.The 15 agencies were chosen because of their proven responsibility, buteven these 15 had to obtain executive and congressional approval. Second,the Government instructed the Ministry of Finance to undertake negotiationswith foreign lenders to refinance the entire short-term debt--which at thattime was unknown but estimated at US$10 billion--into long term instrumentsover a five-year period.

15. With the problem of the short-term external debt apparently inthe process of being solved, the Government yet faced the problems of astill sluggish economy and large capital outflows which were weakening thebalance of payments. In addition, the Government was concerned aboutcontinuing price increases for basic need goods which were not warranted bycost increases but rather reflected, it felt, an undue concentration ofeconomic power.

16. The key event which upset the Government's plans for theremainder of its term in office was the weakening of the oil market inearly 1982. The international oil market had begun to show signs ofstrain during the latter half of 1981 and by early 1982 it had becomeobvious that it would be impossible to hold to the then current levels ofprices and production. This meant that Venezuela's earnings from petroleumwould fall short of the US$19 billion forecast for 1981 and 1982. This inturn meant that the balance of payments and the domestic fiscal situationwould not be as favorable as in 1981. Anticipating difficulties, theprivate sector began a run on the Bolivar, and managed to move abroad someUS$10 billion by the end of the year and to increase imports by almost US$1billion. The Government made no move to stem this flow, and in factabetted it by easing credit in the hopes of stimulating the domesticeconomy. In March of 1982 OPEC met and decided to keep the Saudi marker'price at US$34 per barrel (this mea-nt just under US$30 for the heavier andhigher sulphur Venezuelan crudes), but to limit production to 18 millionbarrels per day of which Venezuela's production share would be 1.5 mbd forthe rest of 1982, an annual rate some 30% below that of 1981. Subsequentnegotiations increased the Venezuelan average production to 1.9 mbd for theyear, but the realized price received by the country fell to an average ofUS$27.50. Thus final earnings from petroleum exports were some US$15.6billion, 17.5% below those of 1981; in 1983 continued weakness in themarket reduced such earnings to below US$14 billion.

17. The impact of the weakening of the petroleum market in 1982 onthe fiscal situation was significant. With revenues to the Government frompetroleum falling by 30%, the Central Government had to constrain expendi-tures and did so by cutting real wage payments in the public sector by 10%(nominal payments fell by 2%), by cutting transfer payments, and by halvingthe payment to the FIV. Even so, the Central Government overall deficitamounted to 2.6% of GDP, having been almost 2% in surplus in 1981. Thisdeficit was financed almost entirely by running down cash balances.

18. As was to be expected, the cut in public sector expenditures didnot help the continuing recession. Private fixed investment fell again in1982, this time 23% in real terms, and the non-petroleum economy in 1982

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managed to grow by only 1.4X in real terms on the strength of improvedconditions in agriculture, and in manufacturing. However, as real fixedinvestment fell by 3.7Z and real consumption only increased by 2.2%, it lsclear that a significant part of the increase in manufacturing consisted inthe buildup of inventories. As interest payments on external debtescalated while external reserves dropped, factor payments movedsignificantly negative resulting in a 6.3Z drop in real GNP in 1982.

Table 3: FAC2XRS LNFLJENCI1G QRDWIH, 1976-1982

1976 1977 1978 1979 1980 1981 1982Real Interest Rate (2) a/ -0.2 -3.1 0.0 1.7 -5.9 0.2 4.5

Inflation Rate (WPI) (Z) 7.2 10.4 7.5 9.2 20.0 13.8 8.1

Growth of ReaL PrivateFind InvesBrmec 16.4 33.4 -1.6 -20.3 -23.5 -19.8 -23.6

Growth of Real Non-l XU (Z 9.8 7.8 2.5 0.8 -1.5 0.0 1.4

Growth or Real PublicExpenditure (X) 20.0 18.0 8.7 1.0 10.6 8.3 -8.0

of which: Crrent (23.9) (9.5) (7.1) (11.9) (11.1) (5-2) (-7-3)Capital Non-oil (25.3) (73.9) (-1.5) (-21.6) (7.0) (21.0) (-2.4)oil (-6.5) (72.0) (67.8) (36.7) (8.1) (37.9) (344)

Ratio of M to GDP .201 .218 .231 .2)4 .198 .193 .199

Ra Eiwn Rate b/Tmnei (1970 - 100) 101.7 105.7 105.3 102.2 107.8 112.2 118.8

a/ Year end.b/ With respect to US; ccparison with wholesale prie imndics.

Source: IFS, BCV.

19. Meanwhile, Venezuela was making very little progress onrefinancing the public sector debt. A commission had been set up in August1981 which designed a program for 1982 to refinance about US$4.6 billion(about half) of the short-term debt. The plan was to have a series ofsyndicated loans of US$500 - US$600 million and a jumbo loan of US$2.5billion. In April 1982 a loan in the amount of US$600 million wasarranged, but after many months of negotiation, agreement could not bereached on the terms of the jumbo loan and by mid-year the market hadbecome very tight. Part of the problem was that following the weakening ofthe oil markets Venezuela's current balance was turning negative. Finally,the crisis in the Mexican balance of payments in July of 1982 had a highlydetrimental impact on all Latin American borrowing. For the remainder ofthe year Venezuela managed to borrow US$500 million for electricity andUS$390 million for short term restructuring. In both cases the maturitieswere shorter and the spread of LIBOR significantly higher than had been thecase early in the year. Thus the country ended 1982 with a stillsignificant overhang of short-term debt.

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20. The balance of payments deteriorated rapidly during 1982. AUS$3.4 billion fall in exports of petroleum combined with a US$1 billionincrease In imports and a US$600 million (25%) jump in travel produced ashift in the resource balance of over US$5 billion. In an attempt to slowdown imports the Government reversed its previous liberalization programand raised tariff levels for over 500 items at midyear. In November theimport of some 200 industrial and agricultural products were prohibitedoutright. The rapidly increasing debt and falling reserves produced aUS$2.1 billion increase in the negative factor income balance so that thecurrent account of the balance of payments ended the year $4.2 billion indeficit whereas it had been US$4 billion in 6urplus in 1981. This wasfinanced by a net US$2.8 billion in public medium- and long-term borrowingand some US$4.3 billion in short-term borrowing which was offset by US$4.2billion of private short-term outflow as a result of the lack of capitalcontrols--even after the situation had clearly reached a dangerous point.Errors and omissions removed another US$2.4 billion which had to befinanced by drawing down US$2.7 billion in reserves. The reserves ended1981 at close to US$20 billion, over half of which was held by the FIV andPDVSA; by the end of 1982 they had fallen to US$14 billion, US$3 billion ofwhich was obtained by revaluing gold reserves from the 1971 value ofUS$42.22 per ounce to a near market value of US$300 per ounce. Moreover,in order to alleviate a real shortage of foreign exchange in the CentralBank, the reserves of PDVSA were "centralized" by the Government. Had thisnot been done, the Central Bank would have run out of foreign exchangereserves by March 1983.

TMble 4: BALANCE CF PAIS ENDIES RFIECIIBI; RIVArESSCYGt FIDWS 1975-1982

(US$ million)

Difference79-82 andl

1975 1976 1977 1978 1979 198) 1981 1982 75-78 a/

Tourism E endixtures Abroad -383 -567 -979 -1545 -1657 -188D -2255 -2814 -5132Net Current Transfers -143 -169 -230 -407 -407 -439 -409 -639 -945Net Direct F=reIgn Ivtstmrz 418 -88 -3 -67 88 55 184 253 987Net Private >udi3n and Loig Term Capital 283 515 910 1507 658 656 419 -38 -1520Net Private Short Tema Capital -244 -768 -144 -341 -256 -1369 -2651 -4121 -6900Errors and Ouissions 408 2146 2253 1525 514 -1211 -2139 -2385 -11553Other Capital Flows (Net) -425 -102 -125 -235 -181 -854 430 693 975

lYJIAL -86 166 1682 571 -1241 -5042 -6621 -9051 -24088

a/ Sum of flows in 1979 to 1982 less sm of flows in 1975 to 197&

Source: Appendix Table 3.1.

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21. In February, 1983, the Government finally took action on thedeteriorating balance of payments siauatlon. All foreign exchange opera-tions of the financial institutions, including the Central Bank, weresuspended between February 20 and March 5. A multiple exchange rate systemwas established, and an advisory committee for the administration of thesystem (RECADI), composed of the Minlsters of Finance, Development,CORDIPLAN and Agriculture, and the President of the Central Bank and of theFIV, was formed. Three exchange markets were set up:

(a) the market of RH 4.30 per U.S. dollar, (the previousexchange rate) for all foreign exchange brought in thecountry by the petroleum and iron ore sectors and the FIV,all foreign exchange expenditures by the Government and theprivate sector for interest and amortization of existingforeign currency debt, and by the Government and PDVSA forcurrent expenditures, and all foreign exchange expendlturesfor imports of selected essential goods and services (food,raw materials, pharmaceuticals);

(b) the market of Bs 6.00 per U.S. dollar, for all exportearningsof goods and servlces other than those of thepetroleum and iron ore sectors (surrender of these earningswas mandatory if the exporter was to receive exportsubsidies), and for private sector imports of non-luxuryitems approved by RECADI; and

(c) the free market rate, for earnings from private sectorexports of goods if the exporter was willing to forego theexport subsidy, and imports of goods and services not speci-fied in the lists for Bs 4.30 and Bs 6.00 (subject toapproval by RECADI), and for interventions in the foreignexchange market by the Central Bank.

In addition, in late March some 800 tariff items, primarily luxury goodsand apparel items, were permitted to be imported only by the public sectoror not at all. At the same time it was announced that irrespective of anydebt rescheduling obtained, RECADI would only authorize payment of amorti-zation for one third of principal, starting in 1984 and subject to theavailability of foreign exchange.

22. Initially, a free foreign exchange narket was established throughthe Caracas Stock Exchange, and the Central Bank provided foreign exchangefor this market. From March to May, the Central Bank supplied reserves tothe free market in an attempt to keep the free rate at about Bs 8/USS1, butthis tactic was abandoned in early May as it became clear tiat this foreignexchange was simply funding capital flight and speculation. The freenarket rate was then allowed to rise; it reached over Bs 17/US$l inaid-summer and then drifted down to the present level of about Bs 13AJSS1.The high free market rates were successful In stemming the outflow offoreign capital and the long administrative procedures of RECADI put anextreme drag on imports. Consequently, by the end of 1983 the balance ofpayments was in a slight surplus position and net reserve levels had risensubstantially.

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23. The economy continued to libp along in 1983. The system of ad-ministered prices remained in effect after a 60 day price freeze institutedin March as part of the new exchange regime to prevent speculative pricemovements. Restrictive fiscal measures continued in 1983, as CentralGovernment expenditures were reduced another 6.4% below the previous yearlevel. Real economic growth was negative again, as petroleum productiondeclined substantially, the non-oil economy contracted slightly, and stockswere run down. Unemployment, traditionally very low in Venezuela, reached12% by the close of 1983. The provision of necessities at subsidized orcontrolled prices has, however, eased the extent of the adjustment for thepoorest segments of the population.

24. The seeds of the current crisis are found in the over-ambitiousgoals of the previous administration and the lack of discipline in thepublic sector. By 1977, the oil boom economy was slipping out of controland Venezuela was living beyond her means. The debt crisis had alreadybegun with the massive borrowing of 1977-78. This fact was recognized inVenezuela, and the Government of President Herrera attempted to bring theeconomy and society back into balance. However, the jump in petroleumearnings in 1980 appeared to signal an end to the need to act with dis-cipline, and the program of restraint was abandoned. This made the problemof once again coming to terms with resource limitations in 1982 and 1983very much more difficult.

25. Since private savings were unavailable to finance the massivedeficits of the state-owned enterprises, they too sought the services ofthe international capital market. indeed, had the capital account beenclosed to both borrowers and lenders in Venezuela, the current debt crisiswould probably not exist. But the Government allowed the state enterprisesto continue their expenditures and invest-ent programs. This inability onthe part of the Government to enforce discipline on the various parts ofGovernment, combined with the failure to stem the outflow of privatesavings, were large contributing factors both in the build-up of pressuresleading to the crisis as well as in the Government's inability to handlethe crisis until it was too late.

C. Recent Economic Developments

26. The opposition party Accion Democratica won the elections held inDecember, 1983, and a new government, headed by President Jaime Lusinchi,took office in February, 1984. Immediately after its inaguration the newGovernment adopted several measures concerning the rate of exchange of thebolivar, domestic interest rates, gasoline and other oil products pricesand salaries and employment in the private sector. It also announced thatother actions would follow concerning budgetary cuts, increases in sometaxes and measures designed to improve the efficiency of the public sectoroperations and structure.

Exchange Rate and Rates of Interest

27. A rate of Bs 7.5 per U.S. dollar now applies to all imports ofgoods and services except to essential foods of popular consumption andpharmaceutical products, for which the old rate of Bs 4.3 will be

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maintained. All imports still require authorization by RECADI. Themission was told that imports at this preferential rate will be limited toUS$1.8 billion or about 20% of all imports, but no regulation to thateffect has been issued as yet. The preferential rate has also beenmaintained for expenditures of students abroad registered with RECADI as ofFebruary 24, 1984, and for the payment-in seven years, including twoyears' grace-of private debt and the interest accumulated to February 24,1984. All foreign exchange operations of PDVSA and FERROMINERA will be atthe rate of Bs 6.0. The rate of Bs 7.5 is considered the fundamental rate,i.e. the eventual unified target rate; at present, the average rate inforce is estimated at Bs 7.0.

28. These new exchange rate regulations are clearly intended to serveseveral purposes. The Bs 4.3 rate for private debts and accumulatedinterest is clearly intended to facilitate the debt reschedulingnegotiations with Venezuela's foreign creditors. With regard to the newrate for non-preferential imports of goods and services, the authoritiesfelt that the 1983 devaluation was not sufficient to fully correct theovervaluation of the bolivar and that the new Bs 7.5 rate-equivalent to atotal devaluation of 74% of the old Bs 4.3 rate-is closer to anequilibrium rate. They believe the new rate is, in itself, adequate forrestraining non-essential imports and that, after a period of adaptation ofVenezuelan producers, it will be possible-perhaps in 1985-to end RECADI'scontrol of imports and prices, which are still being maintained. The rateof Bs 6.0 to the U.S. dollar for PDVSA and FERROMINERA-both for exportsand imports-seems to be primarily designed to assist the finances ofPDVSA, which now has to surrender all its foreign exchange earnings to theCentral Bank virtually on a daily basis, and also to provide some stimulusfor expanding iron ore exports. Allowing the existence of a free exchangemarket rate will provide a strong stimulus for expanding nontraditionalexports. Agricultural exports are not likely to be responsive in the shortrun, but aluminum exports are already substantial. Foreign currencyearnings of nontraditional exports have to be sold to the Central Bank atthe free markeL rate and though the Central Bank will not apply the marketrate to the imported inputs of such exports, still the incentive providedby the devaluation will be substantial. It probably will make it possiblefor the Government to eliminate the existing export subsidy and still leaveproducers a higher margin than before.

29. With the purpose to assist the reactivation of the economy andprovide special incentives to agriculture and the construction industry-particularly low-cost housing-simultaneously with the adjustment of theexchange rate, the Central Bank acted to lower the maximum rates ofinterest that commercial banks, mortgage banks and other financialintermediaries may charge for their loans. For commercial banks the newmaximum is 14.5%, compared to the previous 16.3%, except that foragricultural loans the maximum is now 8.5% and the rediscount rate 6.5%.For the mortgage banks the maximum was lowered from 17% to 14% for housingconstruction in general and to 12% for low-cost housing and from 15.7% to12% for purchases of houses already built. For the -SociedadesFinancieras the maximum was raised rather than lowered; it now stands at23% compared to the previous 21.5%. The Central Bank regulations make itclear that no surcharges, commissions, or other charges are permitted to beadded to these rates; they also, in fact, prohibit the practice ofrequiring the borrower to maintain a given level of deposits in the lendinginstitution.

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Employment and Income

30. Five years of eccomic stagnation or negative growth, coupledwith inflation, have significantly reduced real wages, while simultaneouslyunemployment had been increasing; this situation made the risk of excessivedemands from labor very real. Aware of this, the new Governmentimmediately took the following measures:

(a) All firms with ten or more employees are required toincrease employment by 10% over the January 31, 1984 levelover the next six months and maintain such employment Levelsfor at least two years.

(b) All firms not having canteens for employees must establishthem (not necessarily free of charge to the employees);

(c) All wages below Bs 3,000 per month must be increased byBs 100, allegedly to compensate assumed increased transportcosts.

Fiscal and Other Public Sector Measures

31. The prices of gasoline and other petroleum products were raised.Premium gasoline went from Bs 1 per liter to Bs 1.2 and regular from Bs 0.3to Bs 0.8 per liter. These prices are considerably higher than before andreduce significantly the price difference between the two grades. However,at the opportunity cost of petroleum products to PDVSA, they are lower thanthe previous prices at the old exchange rate. The prices of other oilderivatives were also increased, but they still remain well belowinternational prices.

32. Other important measures already taken by the Government are:(a) a reduction of OZ in current expenditures of the whole public sector;(b) freezing government salaries below Bs 16,000 per month, and reducing by10% the salaries above that level; (c) cancelling (by compensation) allpublic agencies debts with each other, the Government absorbing the netbalances; (d) restructuring the public sector by reducing the number ofagencies through sales, mergers or outright liquidation of several ofthem, as well as closing down the seven commercial banks at present undergovernment stewardship. Liquidation procedures have already started forCHA, CVF, and Inversionista de Transportes, S.A. (Caracas bus companies).Other institutional measures in the program are the establishment ofretirement schemes for public employees and of bank deposit insuranceschemes.

33. Though some of the measures already taken, such as the gasolineand other oil products price increases, are clearly insufficient for theirpurpose, and others, such as those concerning private employment andsalaries, open up more questions than they answer, the government programas a whole represents a coherent effort to address the most importantissues facing the Venezuelan economy in the short term. The cut in publiccurrent expenditures, the strict enforcement of future foreign borrowingand the substantial overhauling and improvement of the operations of publicagencies, particularly the large public enterprises, are essential and

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urgent in themselves and also for achieving the objective of restoringconfidence in the country's private sector and in Venezuela's foreigncreditors. Some of the institutional measures contemplated, though not ofan immediate effect, are essential for a future, more efficient functioningof the public sector, as for example the creation of a retirement systemfor public employees. Establishment of depositors' insurance schemes, ifcoupled with more strict monitoring of the financial conditions andoperations of commercial banks and other financial intermediaries, will goa long way in strengthening Venezuela's financial structure.

II. SECTORAL REVIEW AND ISSUES

34. The events of the past decade have demonstrated the overwhelmingdependence of the entire economy on the petroleum industry. In the pastfew years, due to the successful programs carried out by PDVSA in explora-tion and refinery modification, the production outlook for petroleum hasimproved substantially. In the medium run, however, the oil market is sub-ject to large supply and demand fluctuations and petroleum revenues areuncertain. The economy needs to be broadened both in production andexports for reasons of fiscal soundness, economic stability, and long-runviability. To this end, key sectors of the economy are analyzed in thischapter with a view to their growth prospects in the medium-term,identifying government policies which would make them more efficient and,where possible, competitive in world markets.

35. In recent years, much concern has been exhibited in Venezuelaregarding the living standards of various sectors of the population. AsVenezuela's per capita income has increased, so have demands from allgroups of the population for a share in the benefits of this income--for abetter life. In this context, the Government has increasingly emphasizedpolicies to improve access to social services and the real income of largesections of the population which remain (by Venezuelan standards), under-priviledged. This chapter concludes with an examination of past policiesand results in this area, identifying some key issues for future develop-ment policy.

A. The Petroleum Sector

36. Petroleum has in modern times been the leading sector in theVenezuelan economy. Accounting directly for over one quarter of GDP andover 95% of exports, this sector, even under the most optimistic ofscenarios for diversification, will continue to dominate the economy wellinto the next century. The fortunes of the country have followed those ofoil, and the present crisis is no exception. Although there are manyfactors which have contributed to the present economic situation, the twomost important have been the sluggish market and consequent OPEC imposedcut of 25% in Venezuelan petroleum production, and a 17% fall in theaverage realized price of exports. Thus export earnings in 1983 were about

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US$14 billion while extrapolation of the trends of a few years before hadled to an expectation that earnings would be as high as US$25 billion.This difference, equivalent to roughly 15% of GDP, has had a dramaticimpact on the Venezuelan economy.

37. Three decades ago Venezuela was producing about 1.7 millionbarrels a day of crude oil and had known reserves of some 10 billionbarrels; about 16 years' worth. In 1983, production may be about 1.7million barrels a day from reserves of roughly 24 billion barrels (40years' worth), the country having produced in the intervening period over30 billion barrels. From 1953 to 1960 intensive investment in the industrytook place with, on the average each year, over 1,000 wells being drilledand almost 2 billion barrels being added to reserves. After 1960, whenreserves stood at over 17 billion barrels, the pace slowed, with the aver-age number of wells drilled falling below 500 per year and the reservesfalling below 14 billion barrels by the early 1970s. At the same time, theindustry, largely owned by foreign interests, had increased the rate ofproduction, reaching an all-time peak of 3.7 million barrels a day in1970. The production acceleration and drilling slowdown of the late 1960sand early 1970's seems in part to have been motivated by the clear prospectof nationalization, a move undertaken by the Government in 1976, by whichtime the exhaustion of wellsl/ and the lack of maintenance investments hadled to a fall of production to just over 2 million barrels a day where itstayed until the collapse of the world market in 1982.

38. The nationalization was undertaken by forming Petroleos deVenezuela, S.A. (PDVSA) which is a holding company, whose chairman hasCabinet rank, controlling the four nationalized companies as well as threeexisting state companies. At the time of nationalization known reserves ofpetroleum were less than 20 years. Investment in the industry had fallento a low level and manpower, which had been some 45,000 people, had beenreduced by attrition to 24,000. Domestic refinery capacity of 1.5 mb/d wasskewed towards the production of heavy fractions, particularly high sulphurresidual fuel oils, and had no capacity to change or improve the input orproduct mix. Thus PDVSA developed a program a) to explore carefully thetraditional oil belt; b) to probe the potential of the vast Orinoco area;c) to continue exploration of the marine areas; d) to upgrade therefineries; and e) to bring the manpower of the industry back to strengthboth in terms of quality as well as quantity. During 1977-82 the companyinvested some Bs 53 billion (roughly one quarter of all public sectorinvestment in the period) most of which was concentrated in 1979-82.

39. The results of this program, which now has been slowed anddirected primarily towards maintenance, have been to increase the provenreserves by one-third to 24 billion barrels, from which a production levelof 2.5 mb/d can be maintained for the foreseeable future, with thepotential of pumping as much as 3 mb/d if necessary. In addition, therefineries have now been upgraded and converted so as to accept more heavycrudes and to produce more -white products," while the manpower of PDVSAhas reached a level of 44,000.

1/ An increase in reserves of 5.8 billion barrels in 1974 resulted fromworld prices making certain deposits economically extractable bysecondary recovery techniques.

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Table 5: REFINERY CHARACTERISTICS(Percent)

1975 1983

Inputs (Crudes)Light/Medium 89 60Heavy 11 40

OutputsNaphtha 20 35Distillates 20 24Residuals 60 41

40. The marine exploration program has ascertained the existence of avast area of natural gas stretching along the coast from the boundary withTrinidad to the Gulf of Venezuela. As there is sufficient associatednatural gas in the main, onshore, oil belt, for the country's presentneeds, the marine gas will not be exploited in the near future. Finally,the investment in the Orinoco belt (a vast area lying south and east of theriver) has indicated that there are approximately one trillion barrels ofvery heavy crude in place at relatively shallow depths ranging from 50 to3,000 feet. Of this crude, approximately 40 billion barrels are recover-able with existing technology: it had previously been believed that thisoil was mostly in solid form and thus would have to be extracted withcostly liquification or solid mining techniques, it now appears as thoughmost of the oil is in the form of hot, heavy liquid which will require atmost steam injection to extract, and heated pipelines and/or diluents totransport. Alternately, the establishment of refineries at the oil fieldswith subsequent transport of the products is being considered. The invest-ment in proving up the Orinoco field was undertaken out of a concern thatthe traditional oil belt had been exhausted. Now that this has proven notto be the case, the Orinoco field will be left for the time being with asmall amount of production, possibly as little as 300 thousand b/d, beingreached by the end of the 1980s. In any instance, however, if one assumesa production rate of 2.5 mb/d, Venezuela's known reserves will last 70years; at the 1983 level of production the reserves are available for overa century.

41. When looking at the future, therefore, the production outlookseems to be bright. Moreovcr, for the longer term there is generalagreement that real international energy prices will rise fairlysignificantly before the end of the century. Thus Venezuela's potentialfor continued, meaningful export earnings seems to be significant. Thereare, however, two issues of concern. The first is the question of domesticpricing of products and its effect on domest'c demand and the second is theissue of the independence and autonomy of PDVSA. Domestic demand forpetroleum products has grown from less than 100,000 b/d in 1953 to over400,000 in 1982. Given natural production limitations and the more recentmarket limits expressed as production constraints, every barrel that isconsumed locally has a foregone foreign exchange cost, and equallyimportant, in view of the still significant subsidies, a fiscal cost.Uatil May of 1982 gasoline sold domestically for 13 U.S. cents per gallonregular and 31 U.S. cents premium. Not only did this encourage a very

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rapid growth of consumption, but at 1981 prices, a loss of over Bs 80 tothe Government for each barrel sold in the domestic market, a total ofBs 20 billion just for gasoline sales. Since that time prices have beenset at 27 U.S. cents for regular and 88 U.S. cents for premium. While thelatter price, taking distribution margins into consideration, is onlyslightly less than the price obtainable for exports, the former is clearlyonly a small fraction. The large differential has caused a massive shiftby consumers from premium to regular resulting in an average retail pricethat does not even cover the costs of extraction, refining anddistribution. Gasoline sales are roughly half of domestic demand, otherimportant products such as LPG, diesel, and residual also have similarpricing problems. In the case of residual fuel, it is cheaper for someelectricity entities to purchase fuel oil from PDVSA than it is to purchaseelectric power from the Guri dam. More important than the fiscal cost oflow petroleum prices is the volume of consumption. In 1982 some 150million barrels of oil, worth US$4 billion, were consumed locally. Atrecent rates of growth, domestic demand in 20 years will be equal to thepresent entire production capacity of the country. This is clearly anunsatisfactory situation, not only for the long run, but also in thepresent when OPEC quotas are set on production, not exports, and thus everybarrel consumed at home means lost foreign exchange.

42. A rational energy policy could keep the volume of domestic demandfor petroleum below 400 mb/d regardless of the pace of expansion of theeconomy. This policy would include the pricing of all liquid fuels at theopportunity cost, the utilization of alternate energy sources such as theabundant natural gas and the large quantities of low cost power from theGuri dam wherever possible, and the introduction of energy conservationmeasures.

43. The other issue of importance in the petroleum sector concernsPDVSA. The Government, upon nationalization of the foreign oil companies,had the foresight to give the company a high degree of autonomy and toallow it financial independence. PDVSA was thus permitted to run as anenclave but staffed by Venezuelans. Payments to the nation were madethrough taxes and profits were retained by the company for futureinvestment. This enabled the company to undertake the necessary investmentin new oil reserves and to operate with a fairly high degree ofefficiency. This arrangement, however, was changed in the fall of 1982when the Government, in need of foreign exchange, took control of most ofthe foreign exchange reserves, leaving it with enough for current operatingneeds. The new Government that took office last February, established asystem whereby PDVSA a) must sell to the Central Bank all foreign exchangeearnings on a monthly basis, but at a rate of Bs 6.0 per U.S. dollarinstead of the previous Bs 4.3; b) could keep an agreed amount (probablyabout US$200 million) to cover its foreign exchange expenses (and thatcould be invested abroad), this amount being in the nature of a revolvingfund to be replenished each year as needed up to the agreed limit; and c)its imports are also paid for at the same rate of Bs 6.0 to the U.S.dollar.

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B. The Steel Industry

44. Encouraged by abundant natural resources (iron, energy) andrapidly expanding domestic demand, the Government in 1974 selected steel asan area for industrial development requiring significant public sectorcapital investment. A major expansion plan was developed to be funded byset aside oil revenues. Although the main focus of the investment programwas the domestic market, the steel sector was also identified as a vehiclefor export diversification. Unfortunately, slack world demand resulting inworldwide excess steel capacity, declining domestic demand because of therecession of the past three years, and severe technical difficulties in theprojects leave the Government's expected return on this investment as yethighly uncertain.

45. The major steel company in Venezuela, supplying over 85Z ofdomestically manufactured steel in 1982 and virtually 100% of domesticallyproduced flat steel products is Siderurgica del Orinoco (SIDOR), a publicenterprise wholly owned by the FIV and Corporacion Venezolana de Guayana(CGV), the government agency in charge of the development of the Guayanaregion. In 1982, SIDOR's three steel plants produced an estimated1,991 thousand metric tons of steel, a doubling of production since 1975,when the major expansion program began. However, actual production in 1982was only 55% of forecast production at the time of the expansion, andcurrent projections suggest that the previous production target for 1982will not be realized by SIDOR until the end of the decade because of lowdomestic demand and technological and management problems which haveaffected the expansion program from its inception. The combination of lowproduction and technical bottlenecks and high financial charges has led toinefficiencies and consequent high unit costs, resulting in substantial netlosses for the company in three out of the past four years. A devaluatedbolivar has allowed the company to register an improved profit and lossstatement for 1983 through increased exports. Nevertheless, previousyears' losses, which have had to be financed, combined with the inadequatefinancing of the new equipment over the expansion phase, place SIDOR in anextremely critical financial situation. At the close of 1982, short-termdebt amounted to Bs 5.5 billion, long term debt Bs 4.9 billion, and workingcapital was negative by about Bs 4.8 billion. In order to avoid furtherlosses and restore the company to a more viable financial position,financial restructuring and improved management need to be undertaken atSIDOR without delay.

46. In general, most of SIDOR's problems can be characterized as onesof indigestion rather than fatal disorders, although some of the latterexist as well. SIDOR's 1975 expansion plan was far too ambitious, giventhe following constraints.

(a) The technology employed of direct reduction steel pro-cesses was, at the time of the plan, virtually untested onthe scale at which it was implemented in Venezuela.

(b) The expansion occurred in a remote area of the country,where skilled labor was in short supply and incentives forhigh labor turnover on the supply side were great.Furthermore, SIDOR did not have the management capacity to

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both continue current operations and launch the expansion;thus current operations suffered in the first years of theexpansion.

(c) The existing operations at the time of the expansion wereopen hearth processes, which were inefficient and obsoleteby that time, and remain so to date, compounding rather thancounterbalancing the start-up inefficiencies of the newplant.

47. In the short run, the technical problems associated with SIDOR'snewer plants can be solved or accommodated with better engineering. Forefficient operations in the future, however, substantial management pro-blems related to high wastage, poor maintenance and low labor productivitymust be resolved in order for existing capital to produce near its capacityat an efficiency level at all comparable to similiar operations in othercountries. SIDOR seems willing to address these problems, through improvedadministration and production control techniques, and steps to lower laborturnover. Technical assistance in the form of management consulting shouldbe sought by SIDOR to aid It in expeditiously implementing these managementimprovements. In addition, SIDOR needs to examine closely again--as it hasdone in the past--all operations with the view of eliminating thoseproducts for which demand is limited and production is not profitable atthis point.

48. Even when SIDOR solves its technical and productivity problems inthe modern plants, however, long run profitability requires furtherrationalization of operations. This rationalization would entail:(a) restructuring the finances of the company to reduce the heavy chargesassociated with the current short-term debt structure, and (b) the closureof the older open hearth operations which are technologicallyinefficient.2/ Unfortunately, the latter step would also entail asubstantial reduction of the labor force and thus is only politicallyfeasible when the economy has recovered from its current slump.

49. As operations expand towards capacity in the newer plants, SIDORwill also have to find export markets for its products. SIDOR forecasts ofdomestic demand have consistently been above actual demand, not only be-cause of the sluggish economy but also because of the high income elasti-city of steel which the projections assume.3/ Only if Venezuela's futureeconomic growth continues to be heavily steel-intensive (i.e. construction,both private and public), could the growth in domestic demand projected bySIDOR be realized. Already SIDOR is exporting some surplus steel; in 1982

2/ During 1983, the availability of imported materials at a subsidizedexchange rate with the ability to export at the free market rate,combined with frozen wage rates made the open hearth operations moreprofitable. In the long run, however, such conditions will not persistand these older plants will have to be phased out.

3/ SIDOR edtimates that for a 1% increase in GDP, steel demand would haveto increase by 1.4%, ceteris paribus. In most European countries, thiselasticity is substantially less than 1.

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export sales were 14% of the volume of production. As production in-creases, SIDOR will have to continue to look for export markets to sell itsproduct. These export markets can only be reached by SIDOR at a lossunless the company becomes internationally competitive. Given the naturalresources (energy and iron) of Venezuela, the vertical integration of theseindustries which allows SIDOR to buy the inputs at less than market prices,and the modern technology in the newer plants, internationalcompetitiveness is not out of the question for SIDOR. But it can onlyoccur if SIDOR streamlines its operations and achieves financial viabilitythrough debt restructuring.

C. The Aluminum Industry

50. As part of the Government industrial plan, a major investmentprogram in aluminum began in 1974. Designed to utilize surplus electricityfrom the massive Guri hydroelectric project in the eastern part of Venezulathe program involved vertical integration of the existing aluminum fabrica-tion industry through the establishment of a bauxite processing plant andby increasing Venezuela's capacity to smelt alumina. The goal was aninternationally competitive aluminum industry for export and import sub-stitution. Although the expansion plans were carefully studied and deemedtechnically feasible, in retrospect, the projects experienced both techni-cal and financial problems which delayed execution by almost two years. Atpresent, all state enterprises in the aluminum sector are in a financiallyweak position, and will require both cash injections and debt restructuringin order to achieve the original goal.

Industry Structure

51. The Venezuelan aluminum industry consists of two smelters--Venezolana de Aluminio (VENALUM) and Aluminio del Caroni, S.A. (ALCASA)--with a combined capacity of 400,000 metric tons per year (MTPY) and onealumina refinery rated at 1 million MTPY, all three essentially governmentowned with minority foreign stockholders, coupled with a very diversefabricating segment mostly owned by private investors. 4 / One additionalproject in the aluminum sector has been approved in principle by thegovernment; a 3 million MTPY bauxite mining facility. A 65,000 MPTY alloyrolling mill has also been proposed but not as yet approved. The totalexisting investment in the subsector is of the order of US$2.8 billion,with annual revenues of US$845 million. The two new projects would addabout US$1.0 billion of investment but only US$160 million to total sectorrevenues. However the proposed projects would reduce imports by anadditional US$300 million.

52. Aluminum demand has grown rapidly since 1970. In 1974 theGovernment undertook a large expansion program, both for domesticconsumption and for export. The program consisted of:

4/ Except for some semi-fabricated products produced by one of thegovernment-owned smelters.

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a) increasing the capacity of ALCASA--a joint venture withReynolds International which had started production in1968--from 50,000 to 120,000 MTPY;

b) building a new 280,000 MTPY capacity smelter--VENALUM--mainlyintended for export; and

c) building an alumina plant of 1,000,000 MTPY to supply theneeds of the smelters, thus replacing imports.

53. The smaller 120,000 MTPY ALCASA smelter started operations in1968 at a low level, using older technology, and was expanded to itspresent size between 1974 and 1979. The cost of the expanslon was US$250million, compared to an estimated cost of US$147 million. The start-up wascompleted in August 1979, 22 months behind schedule. Two major problemswere encounted during that expansion phase. Technically, the expansion ofone of the plant's shops (the anode mill) was not designed properly, adeficiency which plagued the plant until mid-1983. The expansion's fundingnever materialized, thus the company had to borrow on short term to meetits overall deficit and consequently has been strapped financially eversince. The company owns, besides its smelter, a small 20,000 MTPY rollingmill located within the smelter and a 6,000 MTPY foil mill located innorthern Venezuela which is presently being expanded.

54. The large 280,000 MTPY VENALUM smelter was erected between 1975and 1981. Its start-up began in 1978 and is not yet completed because of amajor accident; without it, the start-up would have been completed in April1981. The total cost was US$773 million, compared to an estimated cost ofUS$441 million. Three major events occurred in 1980-1982: the appointmentof a new president; a major accident which curtailed the plant capacity by40Z in 1981; a second accident--a fire-- which impaired one of the majorshops and interfered further with capacity in 1982. The plant has, atpresent a number of technical problems an excessive number of employees,and some managerial deficiencies. The financial situation Is not criticalin spite of the poor market conditions of the past two years; the companycould be quite competitive when full production is reached if reasonableefforts are made to manage it properly.

55. The alumina refinery, Interamericana de Aluminio, C.A.(INTERALUMINA), was built from 1977 to 1983 and started production byFebruary 1983; it will be completed before the end of 1984. The projectcost will be slightly less than US$1.3 billion, compared to a 1977 estimateof US$631 million; completion will be achieved about 26 months behind theoriginal schedule. The plant's start-up went extremely well and the ratedcapacity of the first of its two production lines was reached in six weeks,compared to a norm of six months. Technically, the plant is well designed;it is also well run by highly qualified expatriates and the only criticalareas at present are maintenance and the hiring of skilled workers.Administratively, the quality of personnel is low and much improvement isnecessary to bring this aspect of operations to an acceptable standard.

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The company is financially weak and in the current depressed alumina marketits competitiveness is not favorable.

Management and Labor Quality

56. The most crucial and general issue facing the Venezuelan aluminumindustry is the urgent need to make a significant improvement in itsmanagement, both at company and plant levels. Without attacking theserious current deficiencies with the utmost determination and achievingsubstantial and sustained progress in this matter, It would not be possibleto address and overcome other important problems affecting the industry.

57. Serious deficiencies (though in different degrees amongcompanies) exist at all levels of management. These deficiencies run fromtop-level management decision6 concerning production plans, budgets,financing and definition of responsibilities, through the whole gamut ofsales, accounting methods, procurement, Inventory control and maintenance.Of the whole range of activities involving the operations of the companiesand their production units, the most crucial ones, deserving the highestpriorities are the accounting systems--including unit cost accounting--inventory control and maintenance. It is obvious that adequate andup-to-date accounting is nct only indispensable for determining the overallfinancial position of the enterprise at any given time, but an essentialinstrument for identifying and correcting flaws in the productionprocesses, reducing waste and ensuring smooth running of the plants, thusincreasing productivity and lowering production costs. In the aluminumindustry, the margins for specific errors and failures are particularlynarrow and delays in correcting them quickly become very costly. Propermaintenance at all times is therefore essential and availability of spareparts through efficient inventory control and procurement practicescrucial. Upgrading the proficiency and experience of the labor force, andstimulating workers interest in their jobs through adequate rewarding ofperformance, as well as enforcing worker discipline, complete theimprovements that are needed from the human factor side for running theindustry efficiently.

Sub-Sector Integration

58. The existing segments of the industry-the two smelters and thealumina plant-were created independently of each other, and so will be athird stage-bauxite production--if the Bauxita de Venezuela (BAUXIVEN)project is actually carried our. As they exist now, the three componentsof the industry are completely independent entities, though they all arefinancially controlled by the VIF as majority stockholder. This situation,which reflects the historical evolution of the industry, is not undesirablein itself. Although a possible merger of the two smelters has been dis-cussed several times, the two plants are too different in design and tech-nological processes to make economies of scale possible. The real issue isnot the existence of two different companies, but the absence of coordina-tion in some of their activities, which results in inefficiencies and un-necesary waste of resources. There is no decisive valid reason for the twocompanies having not only different, but in fact incompatible accountingsystems--including unit cost controls--as well as controls of inventories

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and data processing equipment. The present situation makes it impossibleto compare and interchange data and experiences, as well as to assist oneanother In cases of need, as with spare parts, for instance. Significantsavings can be made by carrying out joint activities such as purchases ofraw materials and spare parts and utilization of the same transportationfacilities. Unification of these functions could be easily accomplished bysetting up a jointly-owned subsidiary to carry them out. Such a rubsidiarycould be staffed with the most experienced personnel from the correspondingdepartments of the two companies, thus avoiding hiring new personnel.

Devaluation, Subsidies and Transfer Prices

59. ALCASA and VENALUM have been operating with a unit cost of elec-tric power much lower than is normally charged in Venezuela to industrialenterprises; a sltuation that can be mntained because the power supplier,Electrificacion del Caroni, C.A. (EDELCA), is fully owned by the VenezuelanGovernment, which covers EDELCA's losses. In addition to this advantage,which is quite important given the hlgh consumption of electricity inaluminum production, the smelters enjoy a straight cash subsidy amountingto 11 of their exports sales values. From the 1981 and 1982 profit andloss statements of the companies, it is evident that the recent devaluationof the bolivar is quite beneficial to them, since their export earnings interms of domestic currency have risen by at least 50%, at the currentexchange rate of Bs 7.5 to the U.S. dollar. Provided that increases indomestic costs, particularly alumina, labor and administration, are keptwithin narrow limits, the smelters, operating under normal conditions,could continue to turn out a significant profit. This prospect isparticularly strong, for which reason the maintenance of the currentsubsidy would no longer seem justified.

60. In the preceeding paragraph mention was made of the Governmenttransfers to the aluminum industry via the lower-than-cost price at whichit gets electric power from EDELCA and that is in fact borne by theGovernment. This issue of transfer prices is likely to arise aga.n withrespect to the prices at which the smelters will get the alumina fromINTERALUMINA, whose cost of production will be higher than that of importedalumina on which the smelters have been operating up to the present. Thesame issue Is likely to arise again if the BAUXIVEN project is Implementedand INTERALUMINA will operate with domestically-produced bauxite. li'ely tube more costly than imported bauxite. Transfer prices among GovernmexTt-owned enterprises may be thought not to be a problem except as they arereflected In the Government 'inances. In fact, transfer prices in excessof what would be the normal :.arket price of the different products docreate a very real and serioua problem both at the level of the aluminumfabricators that have to sell their products at the domestic market pricesand, much more important and serious, at the level of the smelters, since alarge proportion of their output has to be sold in the competitive inter-national export markets. This issue is particularly serious for VENALUM,which exports almost the whole of its output. The Government will do welto realize the nature of the problem, abandon any possible misconceptionthat transfer prices are not important and undertake an in-depth study ofthe problem. The study should cover the aluminum industry as a whole andeach one of its different segments, and its aim should be how to minimize

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the negative effects of the possible chain reaction of high productioncosts on the overall operation of the aluminum industry, the Governmentfinances and the country's economy.

D. The Mining Sector

61. In addition to petroleum and bauxlte, the Venezuela mining sectoralso includes iron ore, gold, diamond and coal mining. The largest sub-sector is iron ore, which had gross sales of US$223.34 million in 1982.Although iron ore has a potential for export development, and at one timewas the country's most important non-petroleum export, even under the mostoptimistic projections, the total export of the mining sector by 1987 wouldbe less than 2% of 1982 petroleum exports.

Iron

62. Iron ore mining on an artisanal scale can be traced back to 1743,when capt inon was produced close to the present mine of El Pao. Modernmining was initiated in 1950 when a subsidiary of Bethlehem Steel (U.S.)began operations at El Pao, followed by the startup of a subsidiary ofU.S. Steel (U.S.) at Cerro Bolivar in 1954. Both companies werenationalized on January 1, 1975; their assets became the property of thepresent operating Company, CVG - Ferrominera del Orinoco (FERROMINERA).

63. Total proven iron ore reserves, at 55% Fe or more as ofJanuary 1, 1983, were 2132 million metric tons. The El Pao mfine is about2 km long by 1 km wide, and the massive hemotitic ore grades 60% to 70XFe. The Cerro Bolivar mine is 6.4 km long by 1.2 ko wide, the mixture ofsoft hematite and limonite grades 58% Fe. The Cerro Altamira mlne issimilar to Cerro Bolivar. All mining Is done by open pit using 15 meterhigh banks on the hillsides; overburden is removed after blasting; oreblasting is also necessary. The broken ore from Cerro Bolivar And AltamiraIs shipped by rail to Puerto Ordaz. At the older El Pao mine, the ore ispassed through a crushing station and Is then shipped by rail to Palua onthe Orinoco. Stripping ratios vary from very light to moderate: the 1981values were .05 to 1 at Cerro Bolivar, .15 to 1 at Altamira an? 1.2 to 1 atEl Pao.

64. Processlng and beneficiation is carried out on both ores. TheCerro Bolivar/Altamira ore is crushed In Puerto Ordaz, dried, screened andblended, then either sent by railroad car to the nearby SIDOR plant orloaded into vessels for ocean shipment. The El Pao ore is beneficiated bywashing to reduce the alumina content, crushed, screened and dewatered atthe Palua plant prior to ship loading for export. The overall capacity ofthe mines and plants is 20 million MTPY.

65. A High Iron Briquette (HIB) plant is located on the FERROMINERAproperty in Puerto Ordaz and operated by Mineria del Orinoco, C.A.(MINORCA, a joint venture of FERROMINERA and U.S. Steel) to produce up to600,000 MTPY of enriched ore grading 86Z Fe.

66. Except for the MINORCA HIB plant, the mines and plants areope-ated by FERROMINERA which is, in turn, a wholly owned subsidiary ofthe CVG. The company employs about 3200 persons and operates the majorinfrastructure it owns in the mining zones.

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67. Since 1980, FERROMINERA has operated roughly at the breakevenpoint. High operating costs combined with ur -.Lally poor iron ore marketconditions have caused export sales and totai profits to fall steadilysince 1975. Although some of the loss on the export markets in recentyears has been offset by a surge in domestic sales, FERROMINERA willcontinue to operate well below capacity unless the export market expandssubstantially. Some recovery in export sales can be expected in 1984.

68. The financial position of FERROMINERA is heavily burdened by thepoor returns from the jointly owned MINORCA briquette plant which had salesin 1981 of 83,000 tons, less than 152 of the plant's capacity of 600,000per year; 1980 sales had been almost 3 times higher with 226,000 tons intotal. The resulting losses of US$10 million in 1980 and US$12 million in1981 have each exceeded twice this company's equity and the definitiveshutdown of this plant, which has never turned a profit and has neveroperated satisfactorily, is being considered.

69. FERROMINERA, in essence an export-oriented company, seem to besurviving rather well under trying circumstances. It cannot be reallyprofitable in the medium term, being too dependent upon the extremelycompetitive and depressed world market; there is little hope that thedomestic demand will grow wuch during the next few years. This is likelyto mean in turn that the high volumes (say 20 million MTPY or more) neededto yield satisfactory returns will not be achieved soon.

70. However, the company is technically well equipped-althoughmaintenance is a problem--and operacing coerficients and utilizationfactors for heavy equipment are high. Cost control information isroutinely used by operating managers.

71. The company will, if its present cost cutting efforts aremaintained, continue to mark time without heavy losses or really seriousfinancial deterioration and, in the meantime, contribute significantly tothe balance of payments, with "normal' earnings which should be on theorder of US$150 million per year.

Other Minerals

72. Coal is found in three general areas: the western basin (Zuliadeposits), its southern extension (Tachira deposits) and the eastern basin(Naricual and Tagaug). Venezuela's coals are geologically very young andtheir primary importance is as metallurgical coal. Total coal productionin 1982 was only 43,100 metric tons. The sector is very small and itsprospects are not good.

73. Gold production dated back to Spanish conquest, but most ofVenezuela's gold deposits were extracted by the end of the nineteenthcentury. Currently, 96% of production originates in the El Callao region.Total production in 1982 was 902 kilograms.

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74. Alluvial gold is extracted by semi-artisanal methods, includingsluicing, dredging, hookah diving and suction dredging; lode gold is mined,generally from quartzites, by chambers or stopes at 100-foot level inter-vals. Two state owned corporations are now involved in the gold sub-sector: Venezolana de Oro, C.A. (VENORCA) and Mineria de Venezuela, C.A.(MINERVEN). VENORCA operates a small 300 ton per day cyanuration plantbuilt in the 1930's and somewhat reconditioned; it processes the ores ofthe local miners. MINERVEN is the last owner (in a long series) of 12small gold properties in the El Callao region which were shut down severaltimes and resuscitated in 1953 when the Ministry of Energy and Mines re-opened them under the name Mocca. Large losses forced a shutdown in 1966,but in 1970 MINERVEN, created by the state owned Corporacion Venezolana deFomento (CVF), took the properties over, then sold them to FIV in 1975.The Fund developed a project for the mining of 2 million tons of ore at 18grams per ton (according to the studies) in 4 deposits (Colombia, SosaMendez, Union, America), and the related erection of a 700 MT/day moderncyanuration plant with a projected production of 4.5 tons of gold per yearduring 9 years; first production was planned for 1978. The constructionbudget, prepared in 1976, reached US$53 million.

75. The cost accumulated in mid 1981 (the most recent informationmade available to the mission), was US$98 million and the project was farfrom complete. The highest yearly production reached in 1982 was 380 kg or8%Xof the initially planned production; a partial technical report preparedin 1982 projects the 1985 production at about 2.5 tons. The project isplagued with problems, technical and managerial; an attempt to support itsmanagement with resident Bechtel (US) consultants does not seem to haveworked out, and progress in the mine development is years behind schedule.The average ore grade is now estimated at 10 grams per ton and maximumproduction at 210,000 tons per year.

76. It is difficult to be optimistic about prospects for the goldsubsector which, except for the two periods of glory in the nineteeth andearly twentieth centuries, has a long history of failures and disappoint-ments. If the present MINERVEN production plans are met, the 1985 sub-sector output would reach 2.6 tons, with a market value (at US$350 per troyounce before refining) of US$30 million; the MINERVEN revenue would beUS$24 million. However, MINERVEN projections should be viewed withcaution.

77. Diamonds. According to the records of the Ministry of Energy andMines, the first diamonds were found in 1913 in the vicinity of the CaroniRiver, in the area now covered by the reservoir of the Guri dam. Theplacers of the Gran Sabana were discovered in 1930; the largest diamondrecovered in Venezuela to date (the 155 carat 'Libertador") was found in1942, which triggered a rush of diamond mining by nationals and, illegally,by Brazilians and Guyanese; the placers were exhausted by the latefifties. The discovery (or rediscovery) of the San Salvador de Paulplacers in 1968 (25 km south of the confluent of the Caroni and CauraRivers) rekindled the activity which reached the record production of 1.25million carats in 1974, then decreased regularly to the present level ofhalf a million carats per year, in spite of the 1970 discovery of theGuanimo placers, (from which about 75% of the present productionoriginates), because of the exhaustion of the San Salvador de Paul area.

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78. Production in 1982 was 435 thousand metric carats, about half ofaverage production in the years 1975-1980. Almost all production comesfrom the "free supply" component of the sector; in 1980, the last year forwhich records are available, about 1.8 thousand carats came from legal con-cessions and the balance of 664 thousand carats was recovered by smallminers without concessions. Tnis practice has been illegal since 1977, butthe legislation has not had any practical effect except to increase theamount of smuggling: the data since 1977 are even less reliable than thoseof earlier years and it is certain that the actual production drop sincethat year is less marked than the data above indicate, as a large propor-tion of the production is now escaping measurement.

79. The subsector's position in the world market is not significant;in the total world production estimated at 70 to 80 million carats yearly,the controlled Venezuelan share represents substantially less than 1%. Nostatistics relating to the value of the output are available and estimatesare not practical, considering the large variations of diamond prices withquality, but it is clear that the subsector is of very minor economicimportance.

E. The Power Sector

80. The past twelve years in Venezuela have seen enormous growth inelectrical production stimulated by large increases in demand, both indus-trial and residential. During the period 1971-1980, public service elec-tricity production expanded at an average yearly rate of 13.1%. Today,Venezuela has the highest per capita electricity consumption in LatinAmerica (in 1982: 2700 kwh). Accompanying this growth were importantchanges in the structure of the power sector--most notably, increasedgovernment ownership and involvement in the sector. Unfortunately, thisrapid growth has created a number of sector organizational, legal, andfinancial problems which, owing to the extent of government involvement inthe sector, have become somewhat policitized. The current difficulteconomic situation of the country renders the search for solutions all themore critical for the long-term viability of the sector.

Sector Operations

81. Power facilities are concentrated in the northern part of thecountry which consumes about 99% of the country's electricity production.In 1982, total installed capacity in the country amounted to 10,536 MW, ofwhich 93% provide public services; the rest supply only the needs of auto-producers (oil companies, cement plants, sugar mills, forestry and otherindustries). Generating capacity is 75% thermal (43% fuel oil, 28% gas and3% diesel oil) and the remaining 25% is hydro. Industrial consumption isthe largest share of sales (48% in 1982). The country is divided, foroperational purposes, into four regions: Oriental, Central, Occidental, andZulia. It is mainly served through a fairly well developed interconnectedsystem, which leaves less than 1% of the public installed capacity inisolated systems. The interconnected system has, nevertheless, trans-mission bottlenecks which preclude adequate energy transfers from the

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Central region to the Occidental region and between the Occidental regionand the Zulia region, thus ne ' allowing the optimization of systemsoperations.

82. The sector is served by four state-owned power companies whichtogether account for 78% of electricity sales and seven privately-ownedutilities which account for the rest. The largest state owned company isthe Compania Anonima de Administracion y Fomento Electrico (CADAFE), whichwas organized in 1959 through the merger of various small utilities spreadthroughout the country. Its shareholders are the FIV (72%) and CVF (28%).CADAFE accounts for about one third of Venezuela's installed generatingcapacity and serves over one half of the total customers of the sector.The second largest company is EDELCA, which was organized in 1963 with themain purpose of developing the hydropotential of the Caroni River, on whichthe Guri project is located. Its shareholders are the FIV (71%) and theCVG (29%). EDELCA presently accounts for close to 30% of the installedcapacity in all power utilities, and it sells its energy in bulk to CADAFEand to large industrial consumers. C.A. Energia Electrica de Venezuela(ENELVEN), which operates in the western part of the country, was formed bythe purchase from a Canadian firm of several utilities in the area and isnow fully owned by the FIV. It accounts for about 11% of the installedcapacity and sales by all power companies. C.A. Energia Electrica deBarguisimeta (ENELBAR), the smallest state-owned company, has a mrketaccounting for about 2% of all power sales. The largest private company isC.A. La Flectricidad de Caracas (ELECAR), which serves most of Caracas.

83. In 1969, CADAFE, EDELCA and ELECAR associated to create a Centerfor Operating the Interconnected System (OPSIS). In 1981 ENELVEN was link-ed to the interconnected system, and now ENELVEN is also entering into theOPSIS agreement. In 1982 these four utilities generated 89% of the totalpublic service electricity in the country (35,400 GWh), thus the importanceof coordinating their operations is evident. OPSIS has been provided withadequate infrastructure and has succeeded in managing the inter-utilityinterconnection contracts and in performing operational planning, which islimited to improving the reliability of supply. It has not, however,assumed any role in economic optimization of system operations, and doesnot have the infrastructure, nor is it prepared to accomplish this role,which would be beyond its current purposes. Reliability of supplypresently is the major concern in coordinating system operations. Theenergy costs which are used for deciding energy transfers are accountingcosts, as measured by each utility, which, owing to the subsidization ofpetroleum and natural gas prices are a very poor proxy for economic costs.The accounting cost criteria could conceivably lead to economic aberrationsfrom a national point of view, i.e., to produce thermal energy while theGuri hydroelectric facilitv may be spilling water. If system optimizationbecomes a policy objective of system operations (as it should be), OPSISshould provide the system with an operations coordination center. Thiswould require major modifications in the agreements between the utilities,under the supervision of the regulatory agency.

84. Even though the need for power expansion planning at a nationallevel has been recognized since the 50's, expansion programs are stilldefined by each utility based on its own needs and using its own planningmethods and criteria. The CVF prepared successive national expansion

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programs in 1956 and 1958; both only partially implemented. A specialcommission created in 1971 (Comision para la Elaboracion de un PlanNacional de Energia) prepared a new plan, also never implemented. In thelast 20 years CORDIPLAN has also prepared five global national developmentprograms, each having a chapter on the power sector, which have been viewedmore as expressions of political intent and never seriously considered bythe utilities. OPSIS has a "Planning Committee" composed by the planningheads of CADAFE, ELECAR, EDELCA and, recently, ENELVEN which, on paper, hasthe role of coordinating the utilities' planning. In practice the OPSISPlanning Committee receives, as input, the generation and transmissionplanning decisions from the four utilites and coordinates the systemoperations in the framework of the interconnection agreements.

85. As a result of the lack of coordination inside the power sector,huge investments have been committed, almost at the same time, for thecountry's public utilities. The largest generating plant under construc-tion is EDELCA's expansion of Guri which will add to the interconnectedsystem capacities about 250 MW in 1983, 1,680 MW in 1984, 2,470 MW in 1985and 3,350 MW in 1986 for a total of 7,750 MW.5/ CADAFE is finishing theexpansion6/ of Planta Centro with 2,000 MW of thermal capacity and hasunder construction the Uribante Caparo hydro complex, which has a firststage capacity of 300 MW. ELECAR recently completed the expansion of itsTacoa thermal plant in which it added, from 1978, three units of about 400MW each.

86. In addition to the above-mentioned large generation expansionprogram, the utilities are considering the construction of other powerplants. CADAFE has scheduled stages 2 and 3 of the Uribante Caparo complex(about 1,020 MW), ENELVEN is considering the construction of two coal-firedthermal plants of 250 MW each, and EDELCA would like to implementMacagua II in the low Caroni (2,400 MW). The country's recent economicsituation has, nevertheless, reduced the expectation of obtaining FIV'sapproval for the corresponding investments.

87. The generation capacity expansion plan, as compared to the latestdemand forecast--prepared for FIV by consultants-is shown in Table 6. Adetailed evaluation of the demand/supply balance of the interconnectedsystem is beyond the scope of this report as it would require taking intoaccount the seasonal availability of hydro energy and the globalreliability of the system. However, a very simple analysis, restricted toevaluating the difference between installed capacity and demand (reservemargin), shows that there will be an excess of installed capacity duringthe next few years. Assuming that capacity additions (Guri and the firststage of Uribante Caparo) will be put in operation as scheduled, and thatthere will not be transmission bottlenecks between regions, the reservemargin will grow to 112% by 1986 and, assuming that no new powerinstallations or major retirements take place since, it will decrease toabout 31% by 1996.

5/ The original capacity of Guri was 1,820 MW. The final installedcapacity will be 9,570 MW.

6/ Four units of 400 MW each.

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Table 6: PROJECTED ENERGY DEMAND AND INSTALLED CAPACITY BALANCE,INTERCONNECTED SYSTEM, 1980-1996

Demand ReserveYear Installed Energy Load MW

Capacity 3/ GWX kW 1/ -_~ _-_

1981 32,250 5,4141982 9,700 2/ 35,696 5,992 4,286 721983 10,500 39,089 6,562 3,938 601984 12,330 42,482 7,131 5,199 731985 14,830 45,875 7,701 7,129 931986 18,330 3/ 49,268 8,271 10,059 1221987 52,661 8,841 9,489 1071988 56,054 9,410 8,920 951989 59,447 9,980 8,350 841990 62,840 10,549 7,781 741991 66,233 11,119 7,211 651992 69,626 11,689 6,641 571993 73,019 12,258 6,072 501994 76,412 12,828 5,502 431995 79,805 13,397 4,933 371996 83,198 13,970 4,360 31

1/ Assuming 68% annual load factor.f/ The total installed capacity of the public utilities was about 9,790 MW

at the end of 1982. About 1% of this capacity, installed in isolatedsystems, has been deducted for purposes of estimating the balance forthe interconnected system.

31 Additions considered are: 1983: Planta Centrol 400 MW, Ramon Laguna150 MW, Guri 250 MW; 1984: Ramon Laguna 150 MW; Guri 1180 MW; 1985:Uribante Caparo 230 MW, Guri 2279 MW; and 1986: uribante Caparo 150 MW,Guri 3350 MW. After Guri comes on line, part of the oldest small sizethermal generators will be retired. The total retired capacity may beon the order of 400 MW, and has not been considered in this balance.

88. The reserve margin which would result from an optimum expansionpiogram--accepting adequate levels of reliability-may be, for a mixedsystem like the Venezuelan, oa the order of 30%. The preliminary analysis,based on the FIV demand fore:asts, shows that no additional capacity wouldbe needed until 1997. With the slowdown in the economy, a lower rate ofpower demand growth should be assumed, and thus additional capacityprobably will not be required until an even later date.

89. Looking back, reasons may be found for the commitment of excessinstalled capacity: the expansion of Guri suffered long delays, which ledCADAFE to install additional thermal capacity. ELECAR did not have enoughconfidence in the reliability of supply from CADAFE. ENELVEN does nottrust CADAFE to supply ENELVEN's future needs from CADAFE's Occidentalzone. However, it is obvious that consistent central power planning couldhave avoided such a large and evident departure from a least-costexpansion. Before committing itself to any new expansion, it is advisable

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for the sector to evaluate its needs and prepare a sound long-term invest-ment plan. In this context, an assessment of the actual possibilities andthe cost implications of suspending the construction of Uribante Caparowas made by the Bank. The analysis concludes that stages 2 and 3 of theproject could be postponed to the year 2000 with interconnectionreinforcement.

90. The large amounts of hydraulic energy that could be produced inGuri cannot be fully utilized unless sizeable investments in transmissionlines are made. Two 800 kV transmission lines from Guri to the CentralZone are being constructed but a third circuit is needed to use theremaining available power. The main transmission bottleneck, nevertheless,is between the Central zone and the West. To linkup the West atransmission system has been programmed by CADAFE. CADAFE claims that, asresponsible for providing power to the West, it should be in charge ofthese works. EDELCA claims that the system will transfer Guri's energy andit already has experience in extra high voltage transmission andconsequently it should be in charge of such project. In the middle of thisdispute, ENELVEN believes that the transmission lines may not be ready intime to meet the energy requirements of the Maracaibo zone and would preferdeveloping its own generation (the Zulia coal-fired thermal plant).

91. Another problem which may affect the utilization of Guri's energyis pricing. The country's largest consumption center, known as "GreaterCaracas," is served by ELECAR mainly with thermal generation from its ownplants and from CADAFE's. The system's operation optimization wouldevidently require that hydroenergy be fully utilized before any thermalgeneration takes place. This would mean that CADAFE and ELECAR's thermalplants should either be shut down for periods of time or kept on stand-by.We do not foresee problems in this regard with CADAFE's power plants.However, ELECAR would have to purchase energy from EDELCA, and since thefuel oil for ELECAR is highly subsidized it is likely that the ELECAR'soperating costs generating its own energy would be lower than the cost ofpurchasing hydro energy from EDELCA. Thus there is little incentive tomotivate ELECAR. to use hydro energy instead of burning fuel. Anappropriate policy at this time would be to price domestic sales of fueloil at international levels.

The Institutional Setting

92. At present, Venezuelan institutional arrangements do not providean adequate framework for the sound development of the power sector.Venezuela does not have an electricity law and the activities carried outby the public power companies are governed by general legislation, specificlegislation applicable to all public sector entities, and a mosaic of adhoc provisions which have been developed through time in response to speci-fic needs. The lack of a coherent framework to a large degree reflects theTRnezuelan political environment; however the improvement and modernizationof the institutional framework in which the power sector operates is cri-tical to the efficient operation of the sector.

93. Control over the sector is shared by the FIV, which funds thelargest part of the Government-owned companies' investment programs,CORDIPLAN (which sets investment programs for the sector in the context offive-year national plans), Congress (which, through law, sets limits to theamounts of long-term borrowings the companies may seek), the Ministry of

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Energy and Mines (which has general supervisory responsibilities over thesector), and the Ministry of Development (which approves tariffs). TheGovernment-owned enterprises enjoy a substantial degree of independence,but through the VIF, which is their largest shareholder, the Government isbeginning to exercise some control over their operations. Control over theprivate utilities is very limited.

94. Conflicts between the Government-owned companies as to who shoulddo what (especially over the construction of the proposed transmissionlines) have also led to the idea of creating a power sector holding companyfrom which the four Government-owned companies would operate. This wouldbe a reasonable way of addressing some of the coordination problems thatthe sector faces, provided that the holding company has well defined re-sponsibilities, strong leverage and capable technical staff.

95. There seems to be a consensus within the companies and Governmentofficials that some comprehensive power sector legislation would be desira-ble. Such legislation should: (a) define the system of concessions, andthe rights and obligations of the concessionaires, (b) provide for theassignment of regulatory functions and tariff decisions to appropriateagencies within the Government, (c) allow a centralization of systemplanning, (d) define the criteria and set financial standards, under whichelectricity tariffs are to be set, (e) establish a framework for companyfinancial policies, to ensure their soundness, and (f) establish generalguidelines for the operation of the interconnected system, to ensure thatsuch operation is consistent with national economic objectives.

96. The currently proposed electricity law, however, seems a weakcompromise between the present state of affairs and an ideal situation. Itis a step forward in that it proposes to centralize in the Ministry ofEnergy all policy making and control functions, including the setting oftariffs. It does not address, however, the definition of criteria fortariff setting (except in the broadest terms) and does not provide themeans for addressing the financial problems that the sector currentlyfaces. The draft discusses in some detail the framework under which con-cessions are to be granted and the rights and obligations of theconcessionary companies. However, it indicates that the term of suchconcessions may not be longer than 30 years, at the end of which they maybe renewed or not. In the latter case, the concessionaries' assets wouldbe transferred to the Government in the terms set forth in the concessioncontract. This approach is likely to be a source of conflict between thestate and the private companies and may politize the issue of power companyownership in an undesirable direction.

97. An issue which is not addressed in the draft law nor in the hold-ing company proposal is how the activities of the privately owned companieswill be coordinated and controlled. To the extent that price signalsare--as at present-very distorted, such coordination becomes essential.

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Electricity Pricing

98. Electricity tariffs in Venezuela are insufficient to meet operat-ing costs, pay debt service and provide a reasonable contribution toinvestment. Inadequate tariffs reflect, among other things, the high levelof operating costs (in spite of the highly subsidized fuel costs) which iscaused by system inefficiencies, and also the high debt-service burdenoccasioned by both the large investments made in recent years and cohmit-ments arising from ongoing projects.

99. By international standards average tariff levels seem somewhatlow, but any comparison is very difficult due to the circumstances now pre-vailing in thte economies of all Latin American countries and to exchangerate uncertainties. In 1983 the average price of electricity to a residen-tial consumer ranged between Bs 0.135 for a very large (5,000 kWh) consumerof ENELVEN and Bs 0.290 for a snall (100 kWh) consumer served by CADAFE.Proposals for tariff increases for CADAFE and ENLVEN have been recentlysubmitted to the Ministry of Development (Ministerio de Fomento).

100. Compared to long-run marginal costs, which provide a standard for"correct' pricing for resource allocation purposes, tariffs of the finalconsumer may be somewhat low now, but may be, on the average, high whencompared to long run marginal cost projected to 1985-1995. It should berecognized, however, that in the case of Venezuela marginal cost studiesmay be distorted by the huge size and influence of the Guri expansionproject. The analysis based on long-run marginal costs is affected by thesignificant investments so far made in the Guri project, which are regardedas sunk costs in a forward-looking analysis. A study recently completedunder the auspices of the IDB7/ shows that the ratio between marginalenergy costs based on 1980-1985 and marginal energy costs based on1986-1995 would be close to 3:1.

101. A review of the overall legal, institutional, and organizationalaspects of the sector is warranted as well as an update of the study thattakes into account revised demand forecasts, investment programs and unitcosts. Howcver, until such update is completed, revision of the tariffschedules to take into account the =-in findings would be an importantfirst step. Such revision will lead to a simplification of the schedulesand should result in a more efficient use of energy by the finalconsumers. Tariff issues are particularly complex to address, however, forthe following reasons: (i) each company has a different rate schedule(i.e.: not only are unit prices to the same consumer categories different,but the classification of consumers into categories and the nature of thecharges applied differ from one company to another); and (ii) ft '. pricesare heavily subsidized, so that the price of fuel relative to electricityis low, thus providing incentives for autogeneration, and any increase inelectricity tariffs not accompanied by an offsetting increase in fuelprices would worsen this problem.

7/ F. Lecaros, 'El sistema electrico interconectado de Venezuela' inAbouy (ed.), Analisis de Costos Marginales y Dise o de Tarifas deElectricidad y Agua, (Washington, D.C.; Interamerican DevelopmentBank, 1983).

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Sector Finances

102. The power sector is presently facing serious financialdifflculties. Until one or two years ago the economic prosperity enjoyedby Venezuela had created expectations of continued high growth and thiscaused the sector to embark on an ambitious investment program, enabled byeasy access to financing. The reduction in world oil prices, worldwiderecession, and deteriorated confidence in the creditworthiness of LatinAmerican countries has significantly affected the Venezuelan economy andproven the expectations of the past to have been unduly optimistic. As aresult, Venezuela now has excess installed capacity in electricitygeneration; and the power sector has incurred in further investmentcommitments which it will have to meet, in conjunction with the heavy debtservice requirements arising from the investments of the past, at a timewhen the capacity of the sector to generate funds from its operations iseroded by lower demand growth, collection difficulties and rising costs.The problems faced by the sector are further compounded by constraints toaccess to external credit and by FIV's own budget constraints, which makeit unlikely that FIV will be able to provide fresh capital and/or equitycontributions in the amounts required by the sector to finance itsinvestment programs.

103. The company in the worst financial situation is CADAFE. For thepast three years, CADAFE's self-financing ratio has been very low, and thecompany has been carrying out a very sizeable investment program financedby the FIV, long-term borrowings from other sources and significantreliance on short-term borrowings-including non-payment of accountspayable. CADAFE's tariffs are much too low, and should be increased by atleast 50%. The company is neither collecting from, nor paying to thepublic sector, which consequently affects the finances of EDELCA, CADAFE'sbulk provider of energy. EDELCA itself is suffering from a working capitalshortage since other large customers besides CADAFE are delaying billpayments, resources from FIV are now limited, and external borrowing hasbecome increasingly difficult. Even if the non-paying accounts receivablebegin paying, EDELCA requires significant tariff increases in the nearfuture, as well as fresh borrowing or equity contributions to enable it tocomplete the Guri project in 1986. In contrast, ENELVEN has followedfairly conservative financial practices and, despite a large investmentprogram, has managed to keep its long term debt-equity ratio low. ENELVENalso, however, requires a tariff increase.

104. To address satisfactorily these financial issues, the followingsteps should be taken:

(a) significant tariff increases (i.e.: not less than 50% effec-tive early in 1984) to improve the sector's cash generationcapabilities;

(b) a centralized revision of the investment programs of thelarge utilities to insure that the projects undertaken arerequired to meet the revised demand forecast, and that these

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projects are the least-cost solution (in this regard, thereare prima facie grounds to question the Uribante-Caparoworks and the TERHOZULIA coal plant);

(c) implementation of a program to improve the operational effi-ciency of the sector by addressing issues such as: (i) highgeneration reserve margin requirements, which may be due topoor maintenance policies and to inadequate staff trainingin the operation of large steam units (in the case ofCADAFE), (ii) high system losses, which could be caused bytheft, inadequate metering or administrative deficiencies,and (iii) excess personnel, due to political interferencesin the management of CADAFE;

(d) Government measures (i.e.: earmarking budget allocations,establishing severe late pay penalties) to cause all publicsector entities to pay their future electricity bills whendue, and settlement of overdue accounts now outstandingthrough a centrally-administered conciliation which wouldallow payment of net balances due over a period of time; and

(e) where feasible, refinancing or funding of outstanding debts,to reduce debt-service requirements in the coming years.

105. The sector has never in the past faced financial problems of themagnitude of its present ones, and the measures required to address themface strong political opposition which will pose a serious challenge to thewill and ingenuity of sector officials. However, failure to address theproblems in a timely manner, through measures commensurate with thedifficulties faced would lead to deterioration in the creditworthiness ofthe utililities to the point where works would have to be stopped affectingquality of service, destroying the morale of sector staff, and in themedium-term placing Venezuela in the unfortunate company of those LatinAmerican countries in which poor and unreliable electricity supply acts asa constraint to ecoroamic development.

F. Agriculture

106. Although Venezuela's agricultural sector has been a smallfraction of GNP over the past decade, output has increased at a real rateof 3.2Z per annum between 1970-1982, allowing the share of agriculture inGDP to remain roughly constant over the period. This recent expansion ofagriculture has been associated with significant changes in output composi-tion and land use, as livestock and food and feed grain production expandedsubstantially, while production of traditional commercial crops such assesame, coffee, cocoa and sugar showed little or no improvement over theperiod. Several factors have contributed to this growth and compositionalchange, including a number of direct government actions such as thesubsidized provision of credit, implementation of price supports andsubsidies, and infrastructure investments in the sector. Many of thesehave come under increasing criticism, however, as being inefficient and/orineffective.

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Growth and Change in Output and Productivity

107. Growth in Venezuela's agriculture continues to be dominated bythe livestock subsector, with a 66Z output increase since 1970. The rapidgrowth of this subsector can be attributed to the expansion of poultry(7.9Z growth rate p.a.) and pork (5.9% growth rate p.a.) during theperiod. Beef and dairy production also increased, but at a slower rate.In the case of beef, this was prizmrily due to low prices for beefthroughout the period. In contrast to livestock, crop production has beenerratic since 1979, when acreage under cultivation reached a peak; croparea harvested declined during the period 1979-1982 from 1.9 millionhectares to 1.6 million hectares despite high government guaranteed pricesfor many crops. The leading sector in crop production has been cereals,which accounted for 21X of the total value of the crop sector in 1970 but33Z in 1979. Much of the land removed from crop production has beenshifted to pasture for the growing livestock sector.

108. Reduction of the area under crops has been, as a whole, offset byincreased yields. This trend, however, does not hold for all crops. Ofthe major commercial crops, the reduction in area was fully or more thanfully compensated for by increases in yields in the cases of black beans,maize, and casava. For peanuts, however, although yields per hectarealmost doubled, the 81% reduction in acreage resulted in a substantialdecrease in total output. Cotton output dropped sharply (71%) reflecting alarge reduction in both acreage and yields. With regard to rice, asignificant increase in yields combined with a nearly doubling of acreage,expanded output by 128% over the nine-year period. On a per capita basis,real output of the people employed in agriculture increased in constant1968 prices from Bs 4.802 to Bs 7,108, or 4.8% per year on average.

109. Increases in labor and land productivity reflect the simultaneousoperation of several aspects of higher technology. In the case of rice, animportant factor has been the expansion of the area under Irrigation andImproved water management. Other more general factors affecting most cropshave been the wider utilization of Improved seeds, fertilizers andmechanical equipment. Four-wheel tractor imports have ranged from 3,000 to5,000 units per year, or about 1 for every 10 to 11 farmers with enoughland and crops suited for mechanization. Use of insecticides--domestic andimported-have ranged from 5,000 to 8,000 tons annually, while sales offertilizers have approached about half a million tons per year. Moderntechnology enters Venezuelan agriculture in three principal ways. First,it is introduced and maintained by agribusiness private sector firmsinterested in selling large volumes of mixed feeds, farm machinery,pesticides and fertilizers. For poultry and swine, these firms develop acombination of imported and domestic hatching eggs, baby chicks, breeds ofhogs and well formulated feeds that assure rapid growth and productivity.Second, technology is developed and distributed by several entities of theMinistry of Agriculture (the Fondo Nacional de InvestlsclonesAgropecuarias (FONAIAP), the Instituto Agrario Nacional (IAN), and severaltraining institutions) that conduct farmer meetings and short courses. TheCKA often supplies certified or other high quality seeds through imports ordomestic production contracts. Third, several Ministry of Agricultureagencies supply technology, credit and input subsidies In a package, and

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frequently supply some of the inputs, e.g., millions of seedlings of coffeeand cocoa. The first and third of these methods have been the moreeffective, and usually are tied to specific commodities.

110. A number of factors have contributed to these treuds inproduction and productivity in agriculture. Livestock production has beenstimulated primarily by variables outside the range of government policy:

(a) the limitation in the quality of land resources inVenezuela, making expansinn in crop production difficultwhile imports of feed enable livestock producers to draw onless fertile lands;

(b) increasing rural-urban migration, causing a decline Inseasonal labor available for crop production, permittinglivestock production to compete for labor more effectivelyby providing more days of employment per year; and

(c) increased domestic supply of high technology inputs(referred to above) allowing large increases inproductivity.

111. Crop production, on the other hand, has expanded primarily as aresult of government policies, which have been costly. Minimum prices tofarmers have been well above world levels. and since Venezuela must importsubstantial amounts of wheat, feed grain, cotton, vegetable oils, and milk,a complex system of domestic subsldies, import licenses and retail foodprice controls has been established. The doubling of rice yields in 20years has been possible In part because of substantial water controlprojects financed by the Central Government.

Government Policies

Credit

112. For many years, through the 1960's and 1970's, farm credit at lowinterest rates was the principal and almost sole policy instrument used bythe Government to stimulate production. From 1970 to 1974 the amountsloaned by the three government agricultural credit institutions (BancoAgricola y Pecuario (BAP), Instituto de Credito Agropecuarlo (ICAP), andBanco de Desarrollo Agropecuario, (BANDAGRO)) jumped from Bs 252 million toBs 854 million. By 1981, that amount had increased more than fourfold, butin 1982 fell by 11%. In real terms (1968 constant prices), credit tofarmers by public institutions between 1970 and 1982 noarly doubled.

113. In 1974 the Government adopted two measures of far-reaching, butnegative consequences. All farmers' debts, to both public and privatecreditors were immediately paid in full by the Government, cancelling outall previous agriculture debt. At the same time, an Agricultural Fund forInvestments was created for lending to farmers at very low interest rates,ranging from 3 to 5%. No distinction vas made as to the type of farmersand sizes of farms. A most elementary statement as to the purposes rc theloans (certified by an agronomist) was all that was required for borrowingfrom the Fund. The Government's Intention was to operate the Fund through

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the commercial banks, but no significant participation was obtained fromthem despite a government guarantee that finally was raised to 90% ofloans. For this reason the operation of the Fund had to be entrusted toBANDAGRO. It is uncertain how much of the Fund's resources have actuallybeen used in agriculture, since the large negative rate of interest of theFund's lending--especially in the absence of any kind of control andsupervision--made it very attractive to borrow from it and relend theproceeds elsewhere. In addition, the cancellation of debts created theexpectation that such a policy will be repeated. This increaseddelinquency, and even the extremely cheap loans obtained from the Fund arenot being repaid. The current stringency of government fiscal resourceshas restricted the ability of the Government to replenish the Fund,decreasing resources available to the government agricultural creditinstitutions. The expectation that the cancelling of debts will berepeated has in fact materialized recently with a measure to that effectadopted by the new Government that took office early this year.

Price Support and Subsidies

114. In recent years minimum guaranteed prices to producers havebecome the main policy instrument of the Government for expandingagricultural output. In 1973 only seven products were covered by the pricesupport scheme; the following year the scheme was extended to 22 productsand fish. Slnce 1974 the initial minimum prices, already high compared tointernational prices, were increased three times, so that in 1982 theywere, for almost all products, about double or more the minimum establishedin 1974, as shown in the following table:

Table 7: MINIMUM PRICES TO FARMERS FOR PRINCIPAL PRODUCTS INDESIGNATED YEARS

(Bollvares per metric ton, except as Lndicated)

Product 1974 1978 1980 1982Rice 80U 500-900 1400 1300-1600Rice, Filipino IK-8 37U-470 1000 640Maize-white 700 900 1400 18O0Maize-yellow 720 920 1400 1400Sorghum 600 800 1100 1400Soybeans 1400 1400 2000black beans 2000 225U 4000 4000Sesame 1800 2250 3600 3b00Peanuts 1750 1950 3000 3600Cotton, shzrtstaple 1970-2140 2550 3200 3350-4220

Plantain 390 390 640 500Coffee (46 kilos) 170-214 375-625 375-625 430-625Cocoa (4b kilos) 174-214 316-358 450-500 450-500Tobacco Virginia (kg.) 2.7-5.9 3.6-6.8 3.6-6.8 3.8-6.8Eggs, brown (doz.) 30-35 30-35 30-35 30-35Hogs, live 4250 4250 4250 4250Brollets, live 3900 3900 3900 4600Milk (liter) 1.02-1.05 1.10-1.20 1.60-1.85 2.95-2.75

Sour:es: CHA Informe Anual 1980, p. 89; CMA, Boletin Informativo deProductos .Agricolas, Vol. II, No. 4, Dec. 1982, pp. 1-3.

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115. To implement the price support scheme, the CMA (the implementingagency) had three major tools. First, the CMA, at 24 buying stationsacross the country, announced its readiness to buy any amount offered of agiven commodity at the guaranteed price, with some adjustments forquality. Second, for milk producers, the CMA paid stated amounts to theprocessors for each liter received, this payment to be reflected in theprice paid by the processor to the producer, while another payment was madeto the processor to subsidize conversion of fresh milk to pasteurized orpowdered milk. Third, for imports, decisions on the quantity of feedstuffsand meat allowed in the country were the responsibility of CIA, enablingthis institution to manage prices by controlling the flow of imports. Forcocoa and coffee, export subsidies by their respective commodityorganizations make minimum prices effective by increasing or reducingexports as needed.

116. Comparisons of actual and guaranteed farm prices during the late1970's indicate that most actual prices were close to or higher than theguaranteed prices. The table below compares the guaranteed minimum pricesand the international prices for eight of the most important agriculturalproducts. To effect the comparison, the guaranteed prices in localcurrency are expressed in U.S. dollars at the exchange rate of Bs 4.3 perdollar, which was in effect during the whole of the period covered. Itreadily can be seen that in most cases the domestic prices have been fromtwo to four times higher than the import prices and still would be quitehigher even if transportation costs were added.

Table 8: MINIMUM VENEZUELAN AGRICULTURAL PRICES AND INTERNATIONALPRICES, SELECTED COMMODITIES, 1982

InternationalMinimum Prices* Prices

Product Bolivar U.S. Dollars U.S. Dollars LocationPolished Rice 2,400 560 397 FOB Mill,

Houston

Sorghum 1,400 326 114 US, FOB Vessel

Maize, white 1,800 419 103 FOB, Buenos Aires

Maize, yellow 1,400 326 107 US Gulfports, FOBVessel

Soybeans 2,000 465 222 US Gulfports, FOBVessel

Cotton, Med. Staple 4,650 3,000 1,315 US 9-market Ave.SLM 1-1/6 inch

Acala 12,510 fiber a/

Milk, liter 2.5 ave .58 .30 US price to far-mers

* Per metric ton, except as otherwise noted.a! Assuming 33.33% fiber and deducting value of cotton seed at Bs 720

per metric ton.

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117. The Government policy in this field has pursued simultaneouslythe three objectives of ensuring that farmers received the guaranteedminimum prices, that importers do not obtain windfall profits and that theincreases in prices passed on to the consumers are limited. SinceVenezuela must import substantial quantities of wheat, feed grains, cotton,vegetable oils and milk, the pursuance of these objectives bave requiredsetting up a complex system of subsidies, import licenses and retailmaximum prices. Quite apart from its effectiveness--discussed later--thesepolicies have been costly. Since as indicated earlier, guaranteed priceshave beer. far above international prices, the CMA has consistently incurredheavy financial losses in paying cash subsidies or absorbing pricemarkdowns. On the average, these losses have amounted to about Bs 2.5billion annually. Another significant--though less obvious--cost has beenthe increased spoilage, inefficiencies and delays resulting from thecentralized control of marketing. Finally, a hidden cost to the Governmentis the absence of charges for irrigation water, which has been an importantfactor in the expansion of rice production.

118. It is not possible to determine--much less to measure--by directmethods and with any degree of certainty, the effectiveness of the abovedescribed policies in increasing agricultural production. We haveattempted to draw some inferences from the behavior of output of severalimportant subsidized crops during 1973-82. In the absence of subsidies,output of the crop sector as a whole might have been substantially lower,and certainly the output mix would have been different. Policy instrumentsof high guaranteed prices, control of imports and-in the case ofrice-free of cost irrigation water, have clearly been quite effective insubstantially expanding rice and sorghum production since the area underthese crops expanded enormously despite significant increases in yields.This area expansion has been to a certain degree largely at the expense ofcorn and cotton and to a minor extent all other commercial crops.

Assessment of Government Policies

119. From the discussion of the preceeding sections it may beconcluded that, with few exceptions, the Government policies have not beeneffective in expanding agricultural production in Venezuela in recentyears. The emphasis of policy was on the expansion of crops. Actually,crop production increased slowly during the last decade, while thelivestock subsector grew much faster with limited cost to the Governmentand to the economy. The reason is simple: Venezuela uses advancedtechnology, and has a comparative advantage in livestock productioncompared with most other crops other than cocoa and coffee.

120. As mentioned earlier, the remission of farmers' debt in 1974,created widespread expectations of its being repeated, increasing arrearsin the servicing of new debts even at the extremely low inter...st ratescharged. This results in a faster and continuous decapitalization ofagricultural public financial institutions, which require ever-recuirringgovernment contribations. As to the private commercial banks, though theirfarm portfolios increased somewhat in the last three years, their lendinggoes mainly to very large farming enterprises and, in addition, the actualfinal use of the funds always remains doubtful.

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121. With regard to the price support and direct cash subsidies, theiroverall effect has been to induce certain shifts among crops, rather thanto increase total output. Moreover, the two cases of successful expansionof output, namely rice and sorghum, pose serious questions concerning theefficient allocation of resources in agriculture. In the case of rice,where the area harvested nearly doubled since 1973, the incentives policieshave overshot the mark, since production is likely to exceed domesticrequirements and Venezuela will find itself burdened with a substantialrice surplus which could not be exported due to high price and poor productquality. As regards sorghum, a guaranteed price of nearly three times theinternational price imposes a very heavy burden on livestock production,and has diverted to this crop 180,000 hectares of scarce crop land thatcould better be used for growing other deficit products, such as cotton andoil seeds, to which production shifts from sorghum can occur quite easilyon a significant number of farms.

122. Not only have agricultural pricing policies affected producerdecisions regarding output volume and mix, they have also conveyed signalsto the consumer which are not consistent with those conveyed to theproducer because of the complex marketing interventions. Consequently,consumer prices do not reflect the real costs to the Venezuelan economy.More important, this system of price guarantees and subsidies is signi-ficant for large farms and medium-scale operators, perhaps 50,000 farms andmore than half the cultivated area. For some 200,000 small-scale, nearsubsistence farmers, the system has little meaning because they sell onlysmall amounts.

123. The promotion of technological change by the Ministry ofAgriculture has doubtless encouraged the rapid increases in productivity inVenezuelan agriculture over the past decade. Raising agriculturalproductivity further through greater use of modern technological inputs iscrucial for Venezuelan agriculture, since it has been estimated that only14% of the country's agricultural land is of A or B grade (on a scale offive), and twice that much is already under cultivation. However, moderntechnology generally is associated with large farms which have significantvolumes of output. Poultry enterprises do not need large amounts of land,and many coffee and cocoa producers are also small scale enterprises highup on distant mountain slopes or on tropical low lands. For these farmers,an all-weather road reaching their farms may have more impact on productionthan any combination of improved tree varieties and fertilizers.

124. The latest (1984) devaluation is likely to have some beneficialeffects on agriculture. On the import side, the list of 4.3 rate ofexchange has been limited to a total of US$1.8 billion of goods of popularconsumption. All other imports have to be made at the new official rate ofBs 7.50 per U.S. dollar, so the devaluation should stimulate agriculturalproduction as a whole, through import substitution of many products. Onthe export side, the new exchange rate will be a substantial stimulus forexpanding production and as well as for becoming more competitive in exportmarkets. However, for this potential benefit to materialize, it would benecessary, first, to remove or substantially reduce existing restrictionson price increases for these products. Apart from these effects, thedevaluation offers an opportunity to carry out some desirable adjustmentsin the pattern of relative prices in agriculture. The removal of the

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several feedstuffs and feedstuff components and of sorghum and corn fromthe preferential list should make it possible to eliminate the existingsubsidies. The present circumstances provide an opportunity to develop amore rational set of product prices and resources use, and enable Venezuelato import products expensive to produce domestically and import less ofproducts most adapted to the country's agricultural resources. The newGovernment has not so far explicitly stated a change of policies concerningagriculture. However, the transfer of agricultural prices and importpolicies to the Ministerio de Fomento as a first step in the elimination ofCMA, together with the lowering of the maximum interest for farm loans to8.5% and rediscount facilities in the Central Bank at 6.5% seem to indicatethat agricultural policy may be moving away from the direct controls andinterventions of recent years that have been far from succesful.

125. Finally, it is important to recognize that the nature ofVenezuelan agriculture has changed over the past few decades. Most of theoutput of the sector is now being produced by large modern farms usingadvanced technology. The number of small farmers has declined sharply andit is highly questionable as to whether price and subsidy policies have hadany impact on their income. If the government is interested in the welfareof these farmers then subsidy programs designed for and targeted explicitlyto this group should be implemented. Existing price and subsidy programscan be Justified only in terms of inducing production responses, and inthis regard, due attention should be paid to the issues of technology andcomparative advantage in Venezuelan agriculture. The sector can be asefficient as any in the world with high technology, feed lot operations(such as poultry, pigs, and cattle), but because of the limited fertilityof Venezuelan soils it will be more efficient to import feed grains than togrow them locally.

Export Possibilities

126. The lack of information on costs of production of each of themain commercial crops makes it impossible to assess their competitivenessin international markets and project exports. We have to limit ourselves,therefore, to some comments on the export possibilities of some crops basedon certain assumptions as to exchange rates and other policy instruments,without any attempt at quantification, as follows.

127. Coffee: Production of coffee has been fairly stable at between50,000 to 3UPW metric tons over the past 20 years. Exports were as highas 360,000 bags of 60 kilos as recently as 1975-76 but reached only 17,000bags in 1981-82. Exports had been maintained by a special coffee exchangerate and more recently by an export bonus at levels designed to maintain anacceptable flow of income to coffee farmers whose major resources werecommitted to coffee production. The Government, consulting with theInternational Coffee Agreement, accepted a reduction in its export quota inmid-1982 to 80,000 bags. Sharp increases in domestic consumption areresponsible for the decline in exports. Exports in 1982 were valued atBs 10.8 million but required a Bs 5 million subsidy. For the past threeyears, planting programs have replaced more than 12% of the trees. Asthese trees come into harvest in the next several years and other programsto increase yields and total production come into play, coffee production

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should increase. If regulations are relaxed, permitting prices to increaseby the amount of devaluation, higher prices would stimulate greater care,higher yields and larger harvests. Any exchange rate greater than Bs 6 perdollar would permit abolition of the subsidy, and coffee exports wouldbecome possible.

128. Cocoa. Although production has declined slightly, export volumeshave held up better than for coffee and the required subsidy has beensmaller. High prices in the world market, until recently, are the primaryreason for this difference. Exports in 1982 were valued at Bs 93.5 millionwith a subsidy of Bs 16.5 million. A variety of technical assistance pro-grams and special loans also have been used to encourage an expansion inproduction, but the 1982 drop in world prices led to some discouragementand defaults in loan repayments. The new exchange rate of Bs 7.5 perdollar would permit the elimination of the subsidy, even taking intoaccount the recent decline in world prices.

129. Rice. The high price guarantees, the increased area under irri-gation and improvements in technology combined to bring a near doubling ofyields, a tripling of area harvested and a sixfold increase in total pro-duction over the past 20 years. Although yields leveled off in the past 2years, acreage is still on an upward trend: obviously production has beenprofitable, compared with other possible irrigated crops. If the rationalefor high price guarantees is a desire to increase production, then thepresent situation, particularly the expectation of more land under irriga-tion and the recent devaluation would argue for a lowering of the priceguarantee. The exchange rate of Bs 7.5 per dollar should make it possibleto export rice without subsidy. It would bring forth the rice needed fordomestic consumption and some exports, particularly, if combined withefforts in a few selected areas relatively close to shipping ports andimproved, so as to provide a product readily accepted in internationalmarkets.

130. Fruits and Vegetables. Small quantities of tropical fruits andvegetables appear regularly in the export lists. While some of these salesmay be to passing steamers, the numbers indicate some commercial exports,probably to nearby countries.

131. Other Agricultural Products. Venezuela is less than self-sufficient in other agricultural products. Production trends are downwardfor cotton, white corn and most of the oilseeds, largely because they can-not compete with rice and sorghum at the existing minimum prices. Changesof price ratios in their favor could lead to some expansion in productionand so reduce the degree of dependency upon imports, but no exports ofthese products can be visualized in the foreseeable future.

G. Social Services

132. At the level of national averages, Venezuela is fairly advancedin the provision of essential social services. She leads Latin Americancountries in the provision of most services, and in a number of instancesis approaching the levels of basic needs provision enjoyed by developedwestern nations. For Venezuela, this achievement is the result of almosttwo decades of investment in education, housing, health service provision

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and basic social infrastructure. Despite Venezuela's great strides in thisarea, there is room for significant improvement in the distribution ofsocial services, both by geographic area and income group. In addition,for all services, the efficiency of service delivery could be improved.Maintenance of public buildings is also a problem area for social serviceagencies.

Education

133. According to all available indicators, Venezuela has made notableimprovements in the field of education during the last six years. In termsof basic literacy, total illiteracy declined from 16% in 1977 to 11.9% in1981, and illiteracy among adults, 30 years and older, declined from 28.1%to 22.2% over the same period. In rural areas, illiteracy declined sub-stantially as well, although the illiteracy rate in rural areas is stillover three times greater than that in urban areas. Currently, primary edu-cation is virtually universal, and enrollment in secondary and highereducation continues to increase. However, Venezuela is still below herLatin American neighbors in secondary enrollments despite the latter'slower income per capita.

Table 9: NUMBER ENROLLED IN SECONDARY AND HIGHER EDUCATION AS APERCENTAGE OF THE AGE GROUP, SELECTED LATIN AMERICAN COUNTRIES, 1980

Secondary School Higher Education

Venezuela 39 21Colombia 46 11Panama 65 23Brazil 32 12Mexico 37 15Argentina 56 23Chile 55 12

Source: World DevelopmLnt Report, IBRD 1983.

134. Although total expenditure on education in Venezuela is high--around 10X of GDP-the allocation of expenditures favors higher incomegroups. Much of education expenditure remains private, as public expendi-tures are only 50% of total education expenditure. Public sector expen-ditures are heavily concentrated in higher education, to the detriment of

Table 10: PUBLIC SECTOR EDUCATION EXPENDITURES BY TYPE, 1982(Percent)

Primary 25.7Secondary 6.?Higher Education 40.0Adult Informal Education 2.5Preschool, Special Programs 4.5Administration 20.4

Total 100.0

Source: Ministerio de Educacion.

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primary and secondary education, which benefit a larger portion of thepopulation. Expenditures on adult informal education also are very low,although the Government has been increasing these expenditures in absoluteand relative terms. Administrative costs are too large a percentage ofeducation expenditures. Quality of teaching staff varies by district, andbuilding maintenance is also very poor.

135. In addition to the general problem of the distribution of educa-tional funding, there are two specific issues of concern for Venezuela'seducational system in the near future. The first is the quality of primaryeducation. The number of dropouts is quite large, almost 10% in primaryeducation. At the same time the number of repeaters has been increasing,and while this may indicate that academic requirements are more strictlyenforced, nevertheless, steps should be taken to provide better instructionthe first time around. Despite recent improvements, the pupil/teacherratio is still too high in public primary schools. From the financialpoint of view, quality enhancing expenditures should pay off both in termsof lowering repeaters and in increasing enrollment in secondary schools.

136. In the area of higher education, the public sector has beengranting fellowships for technical and university education. Since 1974,more than 30,000 fellowships (becas) have been granted through the Mariscalde Ayacucho Foundation; more than 7,000 people have already completed theirstudies. The fellowships have been granted mostly for university and post-graduate studies in foreign countries.

Table 11: FUNDACION HARISCAL DE AYACUCHO FELLOWSHIPS(1974-81)

Granted Completed StudiesTotal 30,184 7,102Level (Z) 100.0 100.0

Technical 21.7 22.0College 54.1 47.6Post-Graduate 24.2 30.4

Country (Z) 100.0 100.0Venezuela 35.9 36.4Foreign 64.1 63.6

Source: CORDIPLAN Informe Social, 1981.

137. The program is quite expensive, and although is has been inexistence since 1974, there is very little evidence of its impact becauseno comprehensive evaluation has been undertaken. The contribution of theprograms of fellowships to the Venezuelan economy should be evaluated,given the pressing needs for further improvements in quality in the lowergrades. Perhaps the country could better focus on absorbing the trainedpersonnel, and at the same time, consider a shift in composition thusputting more emphasis on the country's critical need for trained technicalpersonnel instead of general university or post-graduate courses.

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138. For the future, the country should be prepared to deal with newissues emerging from the recent expansion of education in urban areas.First, if increased education raises the female labor force participationrate, the labor force can be expected to grow even faster than projected,which is an impressive 4% p.a. Presently, less than 30% of the women inthe 15-64 age bracket participate in the labor market. Second, highereducation standards in urban areas combined with rural/urban migrationbring poorly educated workers to the city. These workers have troublecompeting for jobs, both because of their low level of education andbecause their limited education did not include any specific skillstraining. These issues have already emerged and could become more visiblein the years to come. While they should be addressed in the context ofoverall macro-policy formulations, there are some aspects that areappropriately addressed at the sector level. In this regard, secondary andtechnical education, vocationally oriented, for both adults and teenagersshould assume an increasing role in both rural and urban areas in themedium- and long-term.

Health

139. In the last ten years, the number of physicians per person hasincreased by 20%, and total health support staff, (nurses and auxiliaries)has increased sharply. Hospital beds per thousand persons has remainedroughly constant over the decade, at about 30. On all three of thesehealth service supply indicators, Venezuela is well above the majority ofher Latin American neighbors. However, significant differences areregistered in these indicators by region. In 1980, physicians per thousandpersons ranged from 2.5 in the capital to around 0.7 in the rural areas.The distribution of health support staff is also heavily concentrated inthe capital, while in many outlaying areas the ratio of nurses per thousandis below the minimum necessary for standard emergency health care.

140. The mortality rate, which had been declining until 1978, hasremained constant since then. Infant mortality has declined sharply whileheart-related mortality has increased. Mortality caused by cancer hasremained roughly at about the same level during the last decade. Accidentis the most important cause of death for adults under 44 years of age, andthis rate has been increasing, particularly among men. This trendindicates the need for improved enforcement of traffic safety as acomplement to increased health service provision.

141. Public hospitals are reputedly in poor condition due to the lackof proper maintenance. Expenditures are heavily concentrated on salariesand administration which absorb more than 80Z of the total publicexpenditures on health, leaving very little funds for maintenance and othertypes of expenditures.

142. Expenditures on health are about 4% of GDP. Public expendituresaccount for more than half of the total, and real public expenditures percapita on health care have Increased over the decade, despite recentcutbacks in public expenditures required by the deteriorated fiscalsituation of recent years. Although the level of expenditure issubstantial, a redistribution of expenditures is needed to:

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(i) reduce regional differences in health services; and

(ii) maintain public hospitals and equipment properly.

Housing

143. Under the stimulus of strong government incentives to thissector, housing availability has improved steadily in recent years. Thestock of houses has increased by about 3.3X per year during the last fiveyears while population has increased by about 3%. During this period, thenumber of persons per room has also been declining, indicating a qualityimprovement as well. Home ownership has been increasing, and homeconstruction in rural areas has been increasing in absolute and relativeterms since 1979.

144. Officlal housing policies emphasize ownership by each Venezuelanfamily. They are designed to encourage residential construction in ruralareas and improvement and/or construction in poor urban neighborhoods(areas marginales). These policies have played an active role in housingnot only through direct construction programs but also through subsidiesfor private construction. The most important Government programs are:

(a) Instituto Nacional de Vivienda (INAVI) which financesresidential construction and/or home improvement forfamilies with incomes up to Bs 4,000 per month; usual terms:25-30 years, 72;

(b) Vivienda Rural, a program for rural areas, (population up to15,000) with household income lower than that of INAVI;

(c) other middle income family programs such as Fondo para elDesarrollo Urbano (FONDUR), which finances residentialconstruction/purchase of homes costing up to Bs 450,000in Caracas or Bs 350,000 in other areas;

(d) guararxtees and promotion of private construction, includinga Government commitment to buy houses or apartments if theyare not sold in the mrket In a given period at apredetermined price; Government credit guarantees, landprovision, and an expeditious permit processing.

The importance of (d) has been declining and was finally suspended by theGovernment in 1982, as part of a cutback in government expenditures.

145. Public policy in this sector seems to have been ill-directed; atthe end of 1982 the stock of unsold houses and apartments reached 38,804.Of this total, 46% were apartments costing between US$50,000 and US$80,000and the majority were located in Caracas and the central region. It is notappropriate to subsidize housing construction in the higher price brackets,and it is even less appropriate now given the oversupply. If the aim ofpolicy is to stimulate low-cost and rural residential construction, thensubsidies and loan programs should be targeted specifically for theseareas, especially given the current squeeze on government budgetaryresources. To improve the efficiency of properly targeted housing loan

- 48 -

programs, collections, which have lagged substantially behinddisbursements, should be improved. Resolution of this issue may involvestrengthening INAVI and FONDUR.

H. Employment and Income Distribution

146. Primarily as a result of increasing oil revenues, Venezuela'sreal national income per capita grew at the impressive rate of 5X per annumbetween 1972 and 1981. Although iuch of the petroleum income was absorbedby the public sector, private per capita income also increased over theperiod at an average rate of 2% p.a., despite much slower growth of outputper capita over the period. Increased national income on this scale canaffect the economic welfare of segments of the population dramatically oronly marginally, depending upon how the income is distributed both directlyto the private sector and indirectly, through the multiplier effects ofincreased government spending. For the poorest households, the extent oftheir integration into the multiplier mechanism is critical in determiningwhether they, too, share in Venezuela's new wealth.

147. Preliminary evidence on changes in income distribution over theperiod suggests that the majority of the population did indeed share in thebenefits of the oil bonus. Long-term evidence on household income distri-bution is currently available for urban areas only. Considering the dis-tribution of household income unadjusted for size of household (Table 12,below), urban household survey results show a clearly identifiable trendtoward increasing equality of income. The share of the poorest quintileincreased 42% over the period 1970-81, while the share of the richestquintile declined by 25Z. The middle and upper middle quintiles alsogained, an indication of the growing middle class in urban Venezuela. Thisequalizing trend among urban households occurred while there was strongrural-urban migration over the period which caused the urban population toincrease at over twice the rate of the rural population.

Table 12: HOUSEHOLD INCONIE DISTRIBUTION: QUINTILE SHARES(Urban Households Only)

Percent of Income

Quintiles of Households 1970 1979 1981

20- 4.2 4.5 6.020 9.9 11.6 11.020 12.9 15.6 15.420 4.1 23.6 28.820+ 52.0 44.7 38.8

100.0 100.0 100.0

GINI Coefficient .4262 .3696 .3336

Sources: 1970: Banco Nacional de Ahorro y Prestam , MERCAVI-70: Estudiodel mercado real de Vivienda en Venezuela; 1979-81: Encuesta de Hogaresfirst semester 1979-81. Quintiles estimated by interpolation.

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148. Data are available for the whole population from the Encuestade Hogares, a biannual household sample survey begun in 1977. Tabulatinghousehold labor income distribution by deciles of people, these data onceagain show a trend of increased income equality over the period, as poorerhouseholds increased their share of labor income relative to richerhouseholds (Table 13). Note that this distribution is a much weakerindicator of the distribution of economic welfare across households becauseit excludes non-labor income which is typically much more highlyconcentrated in tne upper quintiles than labor income.

Table 13: HOUSEHOLD LABOR INCOME

Cumulative Percent of Income

Deciles of People 1977 198110- 2.4 2.910 6.1 7.210 10.5 12.610 16.6 19.310 23-3 26.910 31.4 35.710 41.9 46.510 53.9 59.210 69.9 74.910+ 100.0 100.0

GINI Coefficient .352 .3C5

149. A final indicator of the impact of petroleum revenues on theincomes of poorer households in Venezuela is a comparison of Venezuelanhousehold income distribution (total household income) with theinternational norm for its income group, estimated by the Kuznets curve ofrelationship between income per capita and the share of total income of thelowest income group. This comparison is shown in Table 14 below. Althoughthis type of calculation has an associated margin of error which is verylarge, it is clear from the comparison that by 1979 Venezuela wasperforming at least as well as the norm, and possibly substantially better.

Table 14: HOUSEHOLD INCOME DISTRIBUTION, 1979

Quintiles of Percent of IncomeHouseholds Actual Predicted, Kuznets Curve20- 4.7 4.220 9.8 8.920 15.2 11.020 22.3 21.020+ 47.9 51.9

100.0 100.0

GINI Coefficient .396 .460

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150. Income distribution data are in general, subject to a number ofwell known measurement problems including the underreporting of income. Inaddition, total household income distribution is a poor proxy for thedistribution of economic welfare, because households with smaller percapita incomes tend co be larger households, whose total income may berelatively high.8/ Nevertheless, the extent of income distributionimprovement registered in the fragmentary data is persuasive. While moredetailed analysis is necessary to quantify fully the extent and detail ofthe distribution shifts, the inescapable conclusion at this juncture isthat the poorest households did indeed share in the petroleum-led incomegrowth which occurred over the past decade.

151. What were the mechanisms in Venezuela which transferred thisincome to the poorest households? Household income distribution isaffected by a number of factors including the demographics of householdcomposition (size, number of labor force participants, age of primaryincome earner), the distribution of labor income, the distribution ofnon-labor cash income, and the distribution of non-cash benefits andincome. The quantitative influence of these variables is difficult toisolate using the aggregated data which is available for Venezuela. Thebest that can be done here is to identify qualitatively some trends inthese variables and the probable effect that they had on the householdincome distribution over the period.

152. On the demographic side, total population increased at a fairlyconstant rate as slight decreases in fertility were offset by decreases inmortality. However, the decrease in fertility resulted in a changing agestructure of the population, with the working age population increasingfaster than the total population (4.0% compared to 3.4% for 1970-81).Related to this changing population structure was an increase in laborforce participants per household, from 1.4 in 1971 to 1.9 in 1981. Laborforce participation rate (LFPR) appears to have changed very little how-ever, either by age group or sex (although this detailed breakdown is onlyavailable for the period 1977-1981).

153. Normally, a rapid growth in the labor force such as occurred inVenezuela would be associated with deteriorating labor market conditionsand worsening income distribution at the bottom, where new entrants arecommonly found. However, in this case the high rate of labor force growthwas matched by an equally high rate of employment growth over the period.Employment increased an average of 4% per annum between 1971-81, and duringthe period 1972-78, when output was growing rapidly, employment expandedfaster than the labor force, especially in the public sector. Thisexpansion of employment allowed underemployed workers to move out of lowerpaid jobs into more highly paid jobs, leaving migrant labor from othercountries (primarily Colombia) to fill the lowest paying jobs.Consequently, aggregate real wages increased during this boom period,especially at the lower skill levels. Average real wages for obreros (bluecollar workers) in the industrial sector increased 5.6% p.a. from1972-78, despite the expansion of the labor force which brought in younger,less experienced workers. As the economy contracted between 1979-81,

8/ GDP per capita calculated at 1968 market prices.

- 51 -

employment continued to expand (although at a slower rate) but real wagesbegan to fall so that overall wage gains for the period were partiallyerroded. Evidence from household survey data suggests that real wagesdecreased proportionally more at the upper earnings brackets, however,which may have prevented a deterioration in income distribution in the lastfew years.

154. Ic appears, therefore, that the improvement in incomedistribution is primarily the result of improved labor market conditions,which occurred despite the handicaps of rapid labor force growth combinedwith an average increase of real GDP per capita of less than 1% per annumfor the period. How did this expansion of employment occur, and whichsectors were dynamic in terms of employment and output? Detailed data onemployment expansion for the entire period are only available fromfirm-reported data for the industrial sectors, but some impressions can begleaned by examining these trends (Table 15 below and Appendix Table 8.5).For the first six years of the period, large employment increases for themost part occurred in those sectors where output was expanding fastest:beverages, chemicals, electricity, transportation, rubber and rubberpri.iucts. For these sectors, average real wages also Increasedsubstantially (see Appendix Tables 8.6 and 8.7) indicating that theemployment growth was not associated with declining labor productivity.Only a few industries had employment-output elasticities greater than 1 inthis boom period, and these were primarily the protected sectors oftextiles, cement, and basic iron and steel products. Those industrieswhere employment and output moved in the opposite direction were in themining sectors, reflecting increased sector investment (which islabor-intensive). The employment-output growth ratios and the growth Inreal wages in this period suggest that the growth in employment was aresponse to the expansion of aggregate demand in the economy.

155. In the latter half of the period, however, this demand side pullweakened in the industrial sector. GDP growth came to a halt, outputdeclined in 7 of the 17 industries, and employment declined in nine. lnsix Industries, (tobacco, textiles, footwear, chemicals, cement and metalproducts) employment declined faster than output and the only industriesdynamic in employment over the period were the overwhelmingly public sectorindustries of basic iron and steel products, electricity, and mining(petroleum and iron). In petroleum, the large negative employment/outputgrowth ratio in both periods reflects increased exploration (a highlylabor-intensive activity) whlch should result in future output increases.Real wages for all employees declined during this period, especially in theprivate sector industries. Thus in the industrial sector, the employmentgrowth was output-driven in the first portion of the period but not so Inthe second portion.

156. The importance of the public sector in absorbing the rapidlygrowing labor force during the period of economic decline can be seen inTable 16, calculated from household survey data. The growth rate of publicsector employment (which represented 202 of total employment in 1981) was70Z higher than that of private sector employment. Private sectoremployment growth primarily occurred among the self-employed, and in thesectors of Commerce, Financial Services, and Construction. In the lattersector, that employment grew at all is puzzling, because real output (atmarket prices) declined 22% over the period.

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Tab 1X: UWI AND J L OU1W AVUME GWf RAUm AMU IN Dl S DIEXI5R!S 197241

1972-78 197I1 1972-81

,sllOWtPU Oubr cOutp Epauta Outst ,M! amiyaotpeQ

1.9 -5.6 -3.4 9.0 -1.6 -5.6 4.2 -4.3 -LO*rmi 2.9 -. 1 -7 3.3 4.8 .69 3.0 -1.9 -L1Jbod 3.8 5.6 .68 0.4 2.7 .15 2.7 4.6 .m3uaea 8.1 11.8 .6 1.6 3.1 .12 5.9 12 4.8Tabm i4.6 6.2 .56 -5.0 -1.7 2.9 L3 4.8 .27vg.tind' 1_f ^=I 3.1 1.9 :.6 -9.3 -6.8 1.4 -1.2 1.5 aDlbaauw 1.3 6.1 .21 -468 6.7 -L0 -L4 6.3 _2

W1ad Ito&=s & 1auL 1.6 5.0 .3 -10.1 -27 .8 -2.4 -1.3 Las1a6?qfto&acxu 5.8 6.0 .97 0.9 4.4 .D 4.2 5.5 .76Mnt1~ 2.8 2.5 1.1 -1.6 -7.5 .21 1.3 -1.0 -L3ibbw 6 bbwPtmk=s 6.4 8.6 7.4 2.4 4.8 .50 5.1 .73 .70

Qamldcs 6.0 10.3 .58 -L8 6.0 -. 3 14 .8 .3gzxt 6.5 5.5 18 -0L5 5.9 -08 4.1 5.6 .73

"tl P'oaa 1.7 12.6 .13 '5.8 4.1 1.14 4.9 6.3 -1.4Bui m &9 12S5 10.a 1.16 &.6 8L6 .65 10.2 10.0 L0

e nrwao i WP1 t 12.2 16.5 .74 -3.7 5.0 .74 6.6 L8 .75K1mctz1Yt1 5.3 15.6 .34 3.8 13.1 2.9 48 14.73 33

_ afactu!1zW(bJmr_m) 6.3 6.0 .79 -4.5 2.7 -1.67 2.6 6.2 .42

Sor: ppdlx Tabls 8.5 L, ad W.7.

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Table 16: OEtl t BY TYPE AND SB1!1P, 197781 1/(thasa1s oE people)

Average1977 1978 1979 190 19 Grth Rate

1977-81

Pbdlic Sector 786.4 817.3 874.3 906.4 927.0 4.2

Private Sector 3084.0 3177.1 3232.2 3338.4 3401.0 2.5

EhyeAes 1671.8 174.9 1771.4 1816.4 n.a. 2.8 2/EhuPIlyers 300.5 30L9 307.9 234.2 n.aw -7.9 -2/Self-BiWIoyed 761.5 800.6 845.1 976.9 931.6 5.9Domestic Service &

Fauily LTibr 350.2 325.2 307.8 300.9 289.4 -4.7

Activity

AgrIo.tuxe 679.5 639.9 632.5 637.4 628.9 -1.9MIinig & Hydrocarbons 54.6 48.5 55.5 62.8 61.5 -3.0

zuzfacturlrg 628.6 677.8 672.8 674.6 685.1 2.2incricity, Wae, Gas 43.0 46.6 49.5 49.8 51.3 4.5ostruction 325.5 369.1 366.0 386.7 403.4 5.5Cce, }itel6sRestmraits 678.5 696.7 745.8 8D2.9 830.1 5.1

Coamrdcat 262.5 281.5 285.9 302.4 316.0 4.7F e & Insurane 159.5 170.5 17L9 186.8 197.5 5.5Otber Services 612.2 640.9 684.4 696.5 711.6 2.7

Total Fplxmkeunt 3870.4 3994.4 4106.5 4244.8 4328.7 2.8

1/ AU fIgre refer tDsed sester.2/ 1977-1980 ooly.

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157. The role of wage increases and employment growth as an incometransmission mechanism in the Venezuelan economy, combined with the highrate of labor force growth and employment-output elasticities observed(especially in the period 1977-81) have important policy implications forthe future. In an average economy, employment will grow at rate of aboutone half of the growth of GDP; in Venezuela during the period 1977-81employment grew 3 time as fast as GDP, and over the period as a whole, theratio of growth rates was about 0.9. The high elasticity of employment isparticularly prominant in tl public sector, but even in the private sectorthe absorption was high. Tie implication of these trends is that thelargesse of petroleum has allowed Venezuela to employ significantly morepeople than economic efficiency would dictate, without a consequentdeterioration in real wage levels, and in this way achieve a significantmeasure of income redistribution in favor of labor income during thedecade. The problem will be to preserve these distribution gains in thecoming years. Unemployment, which has traditionally remained at about 5%of the labor force, has shown an increasing trend since 1977, rising to 8%in 1982; the rate of unemployment among young workers tas risen to about10-15%. Furthermore, the average length of unemployment has alsoincreased. Although the fertility rate is beginning to decline, pastfertility implies that labor force growth rates are projected to remainabout 3-3.5% per annum for the next 15 years. The absorption of this laborforce in an economically effiAient manner will require real output growthof about 6% per annum. To the extent that there are limits to petroleum asa prime source of growth and income in the medium term, employment andincome distribution problems will become more acute. In order to prevent aserious decline in the relative living standard of the poorest groups,Venezuela will need a growth path which makes substantially more efficientuse of its factors of production.

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III. THE OUTLOOK FOR THE VENEZUELAN ECONOMY

A. Development Policy Issues

158. The preceding chapters have described the evolution of theVenezuelan economy since the oil price increases of 1973-74, focusingparticularly on the years since 1978. They have also analyzed the conductof economic policy, both in its function of carrying out the plans of theGovernment for achieving social and economic objectives, as well as itsrole in reacting to the events outside the economy and outside the controlof the policy makers. In-addition, those chapters have presented a reviewof some of the key sectors of the economy with the purpose not only ofidentifying the main problems at the sectoral level, but also of bringingout the bearing of those sectoral problems on the overall performance ofthe economy and the importance of solving them to ensure future sustainedeconomic growth in Venezuela.

159. From a macro-economic point of view, Venezuela presents anunusual case. The investment over the past decade and the growth in theemployed labor force would have, in an average economy, produced roughlytwice the growth that was actually experienced. In Venezuela this ineffi-ciency in the use of factors has come in the first place from an abundanceof financial resources. In the absence of financial constraints at thebeginning of the 1974-83 period, the institutions of the Government and thepublic sector generally have lacked the necessary discipline and restraintin the use of resources. The second most important cause of thedeterioration of the economy in the recent years was the lack ofappreciation of the severe limitations posed by the scarcity of skilledlabor and experienced manageria.1 . personnel relative to the ambitiousprograms undertaken. This was particularly so in the public sector. Thecombination of these two factors has resulted in gross inefficiencies,enormous waste of resources and an accummulation of a large external debt.

160. This report purposely gives to the short run situation onlypassing attention since other institutions, in particular the IMF, havefocused on this in detail. However, the impact of the current situation onthe functioning of the economy over the longer term cannot be overlooked;and the fiscal, balance of payments, and monetary polities necessary to putthe economy back on course are treated here where they are important to thelong run functioning of the economy. For this reason, our discussion inthis report of the mediumr and long-run prospects of the economy is basedon the following assumptions: (a) that the exchange rate situation will beresolved either by a near-term reunification, or by a gradual movement, aswas the case in 1960-62, (b) that appropriate incomes and fiscal policieswill be undertaken so as to ensure that the new exchange rate is a viableone, and (c) that arrangements, whether de facto or de jure, will be madein the near future between Venezuela and the foreign commercial bankscurrently holding Venezuelan debt.

161. The problems facing the Venezuelan authorities are to restoreconfidence in the private sector and to impose discipline in thefunctioning of public sector institutions. The balance of payments

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generally exhibits a trade surplus. Current account invisibles, however,particularly travel and interest on debt, have been quite large and havecreated deficits on the current account in years of difficulty such as1977, 1978 and 1982. More importantly, the capital account registered astrong drain on the balance of payments during the 1979-82 period. Whilethe current account registered large deficits in 1977 and 1978 whichresulted in reserves losses, the serious imbalances registered during1979-82 were basically outflows of capital, not current deficits. It isessential, therefore, to restore confidence in the economy of Venezuela andits management, since failure to do so would require the maintenance of thecurrent restrictions indefinitely, with concomitant undesirableconsequences for the program to stabilize the economy and eventually resumegrowth. Moreover, the adjustment of the exchange rate opens an cpportunityfor removing certain distortions in the economy, including subsidies tonon-traditional exports, as well as the remaining domestic subsidies,particularly those on energy.

162. The events of the past decade have demonstrated the overwhelmi:Lgdependence of the entire economy on the petroleum industry. The fall ingovernment revenues in 1982 and 1983 has demonstrated dramatically the roleof revenues from petroleum in the public sector. Rising revenues createspending pressures that are hard to reverse and falling revenues bringabout severe fiscal strains. It is therefore essential that Veneztuela setin motion legislation and administrative arrangements to broaden therevenue base of the Go,ernment. An extensive analysis on this subject wascarried out by the IMF tander technical assistance in 1982; the World Bankendorses the recommendations of that mission.

163. On the expenditure side, the performance of the CentralGovernment in itself miy be considered fairly satisfactory. The problemsof overspending, excess labor and short-term borrowing arise primarily inthe state enterprises. These organizations, though owned by theGovernment--mostly through the instrumentality of the FIV-function, infact, as responsible to no one, having for the most part refused to submitto centralized fiscal discipline and, through their uncontrolled borrowing,have been allowed to become the proximate cause of the debt crisis. Inaddition, their investment programs are often contradictory and redundantand have resulted in a significant waste of national resources. Someorganizational arrangements for centralizing policies and decisions and forproviding services, would be useful, particularly in aluminum and power.Because at present lines of authority in the Venezuelan public sector arenot clearly defined, it has often been difficult to adopt or enforce policydecisions. This situation needs to be corrected. A failing of theGovernment during 1979-83 was lack of coherence in decision making, whichmade even more difficult the exercise of real control by enforcingdecisions. One of the consequences of such a situation was theuncontrolled borrowing of the state agencies and enterprises that led tothe debt crises.

164. Apart from the problems of excess labor and poor management,which are quite common, a problem which is symptomatic of almos. the entirepublic sector concerns maintenance. As a wealthy country with virtuallyunlimited capital, Venezuela has tended to purchase and buil ' fixed assetsand then simply replace them when they wear out. The result has been a

- 57 -

substantial waste of resources compared to the situation that could havebeen if even simple maintenance had been observed. Given the limitedoutlook for resources in the future, a vigorous program of maintenance forall public capital stock, as well as an encouragement of private effortsalong the same lines, would be of great importance in the coming years.

165. In general, the policies of the Central Government in the lastyears were, in the circumstances, well oriented. Ironically, the slowingdown of the economy in 1979 and the attempt to eliminate price distortionsmay in fact have been a source of increased fears on the part of theoverprotected and subsidized private sector, which then engaged in capitalflight.

166. In the social fields, the overall emphasis on basic needs andincome distribution was both necessary and appropriate. The progress onthe social front is especially noteworthy and the trends in incomedistribution and basic needs are also in the right direction. We wouldobserve, however, that the basic needs and poverty programs of theGovernment have had an urban bias and that there still exist significantproblems with the rur i poor. Moreover, this group is not being reached bythe conventional agriculture sector programs, and thus special programs mayneed to be developed for this target group.

167. Although in the past few years the production outlook for petro-leum has become favorable, in the short- to mediumrrun, petroleum is hardto sell and revenues are uncertain. The economy needs to be broadened bothin production as well as exports for reasons of fiscal soundness, stabilityand long-run viability. The mission therefore looked in some depth atmajor non-petroleum sectors of the economy with a view to the policies thatwould make them competitive in world markets.

168. Concerning the agriculture sector, the key point is thatVenezuela agriculture is, for all intents and purposes, a modern corporateindustry. In the production of pigs and poultry, Venezuela is as efficientas any country in the world. It could become reasonably efficient also inother livestock. These products come, however, from modern, capitalintensive farms. Price support programs, ostensibly designed for the poorfarmer, are not reaching him, as he has little marketable surplus. Thesubsidies are going, rather, to large corporations. Venezuela, as atropical country, can never be as efficient as temperate areas in theproduction of feed grains and certainly a rational long-run policy shouldcontemplate the importation, rather than the production, of most of thoseproducts. In the area of exports, there are possibilities for theexpansion of coffee and cocoa, particularly at the current more favorableexchange rate. Rice is produced in surplus, but only as a result of asupport price that is far above the world market and significantly inexcess of that which is necessary to provide for domestic needs. Problemsof quality, as well as price, would have to be resolved before this producthas possibilities in export markets. The milk price is also too high andappears to have been raised as a result of the Government's impatience withthe response to price incentives. Given the fact that arrears in thepayment of subsidies by CMA are high, it is the general feeling thateffective administration and timely payment, even at a significantly lowerprice, will, in the long run, be more effective than a high support pricein stimulating milk production.

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169. In the field of electric power the mission notes several Issues.First, in our judgment two investments, Guri and the Zulia interconnection,remain of high priority in spite of the present financial difficulties ofthe public sector. On the contrary, Uribante-Caparo and Carbozulia do notseem Justified at this time. As for electric power tariffs, they are ingeneral too low, but more significant, there is a serious problem ofarrears with accounts to the public sector. This is true not only forcompanies in financial difficulty such as SIDOR, but for the CentralGovernment as well. Finally, there is the serious issue of a lack ofbalance for prices of alternate fuels. This makes it cheaper for powercompanies to burn fuel oil to generate power than to purchase electricityfrom Guri, resulting in losses to Guri and wastage of the non-renewablenatural resource of petroleum. It is more important at this point toequalize fuel prices across the country in terms of their energy contentthan it is to raise them to opportunity cost levels if doing the latterwould maintain the present imbalances.

170. The mission looked in some depth at SIDOR. In the first placethe project was too large to be undertaken within the time and financialcontraints set down at the beginning. Technical and start-up problems,which might have been anticipated, caused cost overruns and reduced exist-ing production, and by reducing operating revenues these, in turn createdscarcities of funding which were solved in an ad hoc fashion, adding verysignificantly to the financial problems of the enterprise. In addition,there were technical problems as well. A priori the HYLSA direct reductionprocess was seen to be the best, and thus SIDOR put the major part of itsnew capacity into this type of plant, which had not been proven in such alarge scale. As things turned out, however, the Midrex process was thebette= one. There are a significant number of technical problems of thisnature that can be worked out or accommodated, but SIDOR will remain as anoperation of marginal viability at a unified exchange rate unless costs arereduced, mainly by gradually curtailing the large excess labor and loweringfinancial costs. Eventual profitability would in addition entail thoroughrationalization including the closure of the open hearth operations.

171. The aluminum subsector is potentially a very profitable business,although it has many problems in common with SIDOR--excess labor, costoverruns, and difficult markets. It is currently, and likely to remain,Venezuela's most important export after petroleum. Unlike SIDOR, it hasthree operating entities each of which exhibits the intensely autonomouscharacteristics of most of the Venezuelan public sector entities. The lackof coordination and cooperation is costly to the country. An example ofthis is given by the fact that ALCASA and VENALUM are committed to purchasesome 400,000 tons of alumina from abroad during 1984 and 1985 at $230 perton, while Interalumina will have a surplus of well over 500,000 tons whichit will have to export into a difficult market and which, if it is lucky,will bring $130 per ton. Recent information indicates that the problem hasbeen resolved through a series of swaps, and the availability of aBs 7.5/US$ exchange rate will allow the companies to show a bolivar profit,but it is clear that the country will have lost foreign exchange whichcould have been prevented had there been a willingness to cooperate. It isevident the need for a centralized arrangement for procurement,standardization of accounting systems and other operational matters. Theissue of subsidies is also important. The industry receives, through power

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subsidies and export incentives, roughly $85 million in annual subsidy atfull capacity. Given the cost structure of the aluminum industry,production cannot vary significantly and thus subsidies cannot stimulateoutput. In addition, the power subsidy (the average cost of EDELCA powerto the aluminum smelters is 4.5 ails per KWH while reasonable internationalcomparisons would indicate 12 mils) operates to the detriment of Guri.

B. Macroeconomic Outlook

172. The major macroeconomic task of Venezuela in the medium-term willbe to establish and maintain a program of economic diversification, and toavoid the balance of payments and external debt crises of the previous sixyears. For Venezuela, this requires (a) some type of debt rescheduling ofthe current short- and medium-term debt over an extended period and(b) growth, income and expenditure policies to insure that the balance ofpayments remains viable over the period of debt repayment. The degrees offreedom associated with Venezuela's long term growth strategy will beprimarily determined by the international petroleum market, as petroleumremains the mDst important determinant of Venezuela's terms of trade andbalance of payments position as well as fiscal revenues. Given the termsof a debt rescheduling and a long-term petroleum forecast, the balance ofpayments performance is essentially the result of growth and expenditurepatterns, which determine the level of imports. Thus, the question forVenezuela today is: What macroeconomic growth and expenditures policiesare compatible with a sustainable balance of payments and resonable debtservicing given certain levels cf petroleum revenues?

173. In the immediate future (the period which is most crucial for therecovery of the Venezuelan economy), the international petroleum marketdoes not have a bright outlook. It is likely that the OPEC average pricewill fall slightly in nominal terms in 1984 and would probably not recoverto the 1982 average until 1987 or after. In real terms this means thatVenezuela cannot expect the returns from a barrel of petroleum to return tothe 1980-82 levels until after 1990. In the 1970's the international termsof trade were very much in Venezuela's favor; in the 1980's they haveturned against oil exporters. Thus the only sources of real increases inexport earnings available to the country are non-traditional exports andincreases in the volume of petroleum. Although the former can, with appro-priate policies, be expected to increase, it accounts for less than 10% ofexport earnings, faces difficult markets (steel, aluminum) and will underthe mDst favorable conditions take some time to be a significant source ofoverall growth in real export earnings. An increase in petroleum volumecould be a strong factor in the balance of payments over the rest of the1980's. Current production levels are about 1.8 million barrels per daywhile the country has a sustainable capacity of 2.5 mb/d, which wouldrepresent an increase of nearly 40%. However, the OPEC agreement placeslimits on the production of petroleum, not exports, and market conditionsmake it unlikely that Venezuela will be able to produce any more than 1.8mb/d during 1984. We have assumed that after 1984 the country will beallowed to increase production by about 2% per annum. The restriction, asmentioned above, is on production; Venezuela can increase export earnings

- 60 -

by consuming less at home. In 1976 the country consumed about 250,000 b/d,by 1982 this had climbed to 410,000 b/d; this increase cost the countrysome US$2 billion of foreign exchange in that year. The domestic priceincreases on products in 1982 are estimated to have reduced consumption toabout 300,000 b/d and it is assamed that appropriate price increases (suchas occurred in early 1984) will keep the increases in domestic use ofpetroleum to about a 2% annual growth rate.

174. In order to be consistent with the balance of paymentsconstraints set forth above, the economy of Venezuela, as the result of itsaccumulated debt and its import structure, will probably not be able togrow more than 3% per annum over the long run. Venezuela's per capitaconsumption was about US$3,500 in 1982, it will probably be no greater thanUS$3,400 (1982 dollars) in 1990. Full recovery of real per capitaconsumption levels will be achievable before the end of the century with acombination of a slowing of the population growth rate, a significantimprovement in the efficiency of the economy and a drop in the importcontent of output, all of which are long-run possibilities which can comeabout with a proper and maintained set of economic policies.

175. The overriding problem for the balance of payments, and thus forthe economy during the rest of the 1980's is the external debt. At roughlyUS$35 billion, it is twice the amount of export earnings. Almost 3CZ ofexport earnings are currently devoted to interest on this debt. It isneither realistic nor desirable that the entire debt be repaid in the nearfuture, but Venezuela will have to be a net exporter of capital for someyears to come in order to get the debt down to manageable levels. If aconsistent policy of debt management is followed and if domestic policiesconducive to the establishment and maintainence of efficiency are adoptedand maintained, the country could be considered creditworthy for limitedamounts of net additional borrowing, particularly if such borrowing isdirected at highly productive projects and accompanied by policies toencourage efficiency.

176. It is assumed that the private capital flows will remain neutralin the coming decade, exhibiting neither the massive exodus of 1979-82 nora significant inflow. If however, development and economic managementpolicies conducive to efficiency and to the encouragement of the privatesector were set in place and maintained, a significant reflow of some ofthe capital that left the country might be possible. The Government whichtook office in early 1984 has thus far given strong indication that itintends to pursue such a course. Under such circumstances, both investmentand growth could be considerably higher than is currently foreseen, andreal consumption could be allowed to return to the levels of the early1980's albeit with some caution and restraint on the import of consumrgoods.

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STATISTICAL APPENDIX

TABLE OF CONTENTS

Table No.

I. Population, Employment and Income Distribution

Table 1.1 Population By Age Group, 1972 and 1983.Table 1.2 Annual Birth and Death Figures and Rates, 1972-1983.Table 1.3 Employment By Economic Activity, 1977-1983.Table 1.4 Employment By Branch of Economic Activity and Occupation,

1971, 1974 and 1977-1983.Table 1.5 Cumulative Household Labor Income Distribution, Decile

Shares (Z) and Gini Coefficient, 1977 to 1982.Table 1.6 Factors Affecting Income Distribution, 1971 and 1979 to

1983.

II. National Accounts

Table 2.1 Gross Domestic Product at Market Prices by Sector, 1970-1983(Current Prices).

Table 2.2 Gross Domestic Product at Market Prices by Sector, 1970-1983(Constant Prices).

Table 2.3 GDP of the Public and Private Sector by Economic Activity,1978-1982 (Constant Prices).

Table 2.4 Gross Domestic Product by Type of Expenditure, 1970-1983(Current Prices).

Table 2.5 Gross Domestic Product by Type of Expenditure, 1970-3JR3(Current Prices).

Table 2.6 Implicit Price Deflators for Gross Domestic Product, 1968 to1983.

Table 2.7 Fixed Gross Investment by Type of Good, Imported andDomestic, 1970-1982.

Table 2.8 National Disposable Income, 1970-1982.Table 2.9 Investment and Its Financing, 1970 to 1983.

III. Balance of Payments

Table 3.1 Balance of Payments, 1968 to 1983.Table 3.2 Composition of Merchandise Exports, 1970 to 1982.Table 3.3 Composition of Merchandise Imports, 1970 to 1982.Table 3.4 Imports by Economic Category, 1970-1982.Table 3.5 Export Detail, 1970 to 1982.Table 3.6 Isport Detail, 1970 to 1982.Table 3.7 Net International Reserves, 1970 to 1983.

IV. External Debt

Table 4.1 External Public Debt Outstanding Including Undisbursed as ofDecember 31, 1982, Debt Repayable in Forei-n Currency andGoods.

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Table 4.2 Service Payments, Commitments, Disbursements and OutstandingAmounts of External Public Debt, Projections Based on DebtOutstanding Including Undisbursed as of December 31, 1982,Debt Repayable in Foreign Currency and Goods.

Table 4.3 Detail of Public/Publi-'v Guaranteed External Debt andAverage Terms of New Public Debt Commitments, 1973, 1975 and1977-1982 and Projected Public Debt Service, 1983-1990.

V. Public Finance

Table 5.1 Central Government Operations, 1970 to 1983.Tabie 5.2 Regional Government Accounts, 1970-1983.Table 5.3 Municipal Government Accounts, 1970-1983.Table 5.4 Decentralized Agencies Accounts, 1970 to 1983.Table 5.5 Petroleum Sector Consolidated Accounts, 1976 to 1983.Table 5.6 Nonfinancial State Enterprises Consolidated Accounts, 1970

to 1982.Table 5.7 Financial State Enterprises Consolidated Accounts, 1970 to

1982.Table 5.8 Consolidated Public Sector Accounts, 1970 to 1982.Table 5.9 Accounts of the Venezuelan Investment Fund, 1975 to 1983.Table 5.10 Central Government Revenues, 1974 to 1983.Table 5.11 Central Government Current Expenditures, 1974 to 1983.Table 5.12 Central Government Capital Expenditures, 1974 to 1983.Table 5.13 Public Sector Resources for Investment, 1974 - 1982.

VI. Monetary Statistics

Table 6.1 Accounts of the Banking System, 1979-1984.Table 6.2 Change in Net Bank Credit by Origin, Destination and

Financing, 1978-1983.Table 6.3 Private Sector Claims on the Banking System, 1978-1984.Table 6.4 Legal Reserve Position of the Commercial Banks, 1978-1983.

VII. Agriculture

Table 7.1 Volume of Agricultural Production of Major Commodities, 1970to 1983.

Table 7.2 Value of Agricultural Production, 1970 to 1982.Table 7.3 Value Added of Agricultural Production, 1970 to 1983

(Constant Prices).Table 7.4 Exports of Selected Agricultural Products, 1970 to 1982.Table 7.5 Volume of Selected Agricultural Imports, 1970 to 1978.Table 7.6 Imports of Selected Agricultural Products, 1970 to 1978.Table 7.7 Area Harvested, Selected Crops, 1970 to 1983.Table 7.8 Use of Inputs in Agriculture, 1970 to 1980.Table 7.9 Financial Resources Assigned to Institutions in the

Agricultural Sector, 1970 to 1982.Table 7.10 Agricultural Credit Supplied by Public Agricultural Banks,

Financial Associations, and Commercial Banks, 1970 to 1983.

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Table 7.11 Producer Prices of Principal Agricultural Products, 1970 to1978.

Table 7.12 Retai Prices for Selected Food Products, 1970 to 1978.

VIII. Industry and Industrial Employment and Wages

Table 8.1 Production of the Venezuelan Oil Sector, 1970 to 1983.Table 8.2 Value Added in Industrial Production, 1970 to 1983 (Constant

Prices).Table 8.3 Volume of Production for Selected Industries, 1970 to 1983.Table 8.4 Manufacturing Industries of the Public Sector, Volume and

Value of Production and Sales, 1980-1982.Table 8.5 Index of Industrial Employment Growth by Activity,

1972-1981.Table 8.6 Average Real Wages, Obreros, 1972-1981, Selected Activities.Table 8.7 Average Real Wages, Empleados, 1972-1981, Selected

Activities.Table 8.8 Public Financing Assigned to the Manufacturing Sector, 1970

to 1983.Table 8.9 Balance Sheet of the Venezuelan Investment Fund, 1975 to

1983.

IX. Prices

Table 9.1 Cost of Living Index-Caracas Metropolitan Area, 1968 to1984.

Table 9.2 Urban Consumer Price Index, 1972 to 1983.Table 9.3 Wholesale Price Index: 1968-1984.

X. Education, Housing, and Health

Table 10.1 Percentage Distribution of the Population Over 15 Years ofAge by Level of Education, Sex and Location, 1977-1983.

Table 10.2 Illiteracy Rate of the Population Over 10 Years of Age, bySex and Age Group, 1977 to 1983.

Table 10.3 Percentage of Student Dropouts from Basic Education (Grades1 through 5) by Grade, 1971/72 to 1980/81.

Table 10.4 Percentage of Students Repeating a Grade Within BasicEducation (Grades 1 through 6), By Grade, 1972/73 to1982/83.

Table 10.5 Student/Teacher Ratio in Basic Education by Type ofInstitution, 1981/82 and 1982/83.

Table 10.6 Housing - Basic Statistics, 1977-1983.Table 10.7 Supply, Sale and Reserve of Apartments (Private Sector),

1977 to 1981.Table 10.8 Apartments Offered and Sold by the Private Sector, 1977 to

1981 (By Region).Table 10.9 Venezuela - Mortality Rates, 1972-1981.Table 10.10 Health Indicators, 1972-1981.

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Table 1.1: POPULATION BY AGE GROUP1972 and 1983

1972 1983Age Groups Thousands Thousands X

TOTAL 10939 100.00 15212 100.000-4 1770 16.18 2293 I5-075-9 1646 15.05 1944 12.7810-14 1481 13.54 1980 13.0115-19 1252 11.45 1703 11.2020-24 992 9.07 1445 9.5025-29 724 6.62 1125 7.4030-34 596 5.45 1025 6.7435-39 545 4.98 814 5.3540-44 477 4.36 725 4.7745-49 384 3.51 491 3.2350-54 311 2.84 475 3.1255-59 240 2.19 369 2.4360-C4 194 1.77 325 2.1465 and older 327 2.99 497 3.27

Source: OCEI, Encuesta de Hogares por Muestreo, Segundo Semestre, 1983.

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Table 1.2: ANUAL BIRI AND DEAIH FJIOES AND RAT8S 1972 - 1983 I/

Pb*ACICm LAfe(Jou 30) aLrthB Blrth Rote DecIu Ia th Rate * qscca (Yr)

1972 10939 406.1 37.1 73.5 6.7 66.61973 11279 405.5 35.9 76.5 6.8 66.11974 11631 433.4 37.3 73.8 6.3 67.21975 11993 446.1 37.2 74.6 6.2 67.31976 12361 462.2 37.4 76.7 6.2 67.31977 12736 465.3 36.5 74.3 5.8 68.11978 13121 475.8 36.3 72.5 5.5 68.81979 13515 481.3 35.6 73.7 5.5 68.9198D 13913 485.8 2/ 34.9 2/ 76.8 5.5 68.61981(*) 14313 489.5 71 34.4 Z/ a0.' 5.6 (-)1982 (M) 14714 492.6 Z/ 33.57/ 81.6 5.6 (-)

(w) pelmnary f1pzm.n-) not available.

I/ Populatian flgso dDbnot include unkdomented nigrants (estim teoo be if qrcdmtely 7.I &bowtke official pqplation totals).

2/ uiosi estlmtes

Sou-e: BCV, 1nfax Ew,mlco, 1981, 1982, ud 1983 and Codiplan, Tifam :WI Segamo Sitr.,1951.

Ti. 1.3s mr3Uf w amiic 7 . zI,Iisu(in 11inwa)

bNtlZ~~~~~~~~~~Gri lbwJii GVR 1QRi l'miii "wo QNji 1N--v

}-Mm 7 12 e II Go 1 13 Is111 a 3AWklf- m *9 -a 5 w M 0 -a 70 IT Is TY UK N

Pem_am N55 3 a 2 51 2 hl I *2 5 s 4 U 4

,,_, , , VI 42 la" o lam E lail Uls 111'ic au sl I7n15 -m --g11 15 0m -1 0 E 1W - 15 -w

cugt I 30 m 33 b 41 3 47 40 s MJ 43 331 q2IInrtedt,. CG

id r 43 2 4 I 0 3 in 2 Y 2 32 2 4

Tortuff Var aIP 12 211 63 232? in 242 1 24* 17 2am lii 23 1

1 3n t .U by 10 1 U 1 43 Irk* 43 lI 4 mY

and Cooda m aF a ] MR 2 1 9 l lb I0 12 113 113 21A lb 1 F.enm lOb in lWo 3' 12 4 Il', lb 11% 41 1131 44 12 n3

1l_pftd I 12 3 II 3 1 2 1& I IV 4 II

or~~ ru a2 v w 43 11 in

Tom w WY 4373 la" 43) 4w 047 411173JYI it" 4345 438 4412 4210

k,Iwlavu lob in) 243 nil 27N 31 43

II 3a " eveb mte _ r it yew.

MyN. Wau : gV* in .I IWO d l 133 (prwlt4i4r, hta).

- 67 -

Tal 1.4: E32WO Er MlWI CF 0M 1 ACtDLfY AM 1AD , 1971, 1974 and 1977-43(15 yemr sE c e a and r - In tt)

cMtIn 197; 2/ 1974 2/ 1977 1980 1981 1982 1983

PraEfmda, auiMBddlcU 250.5 271.5 378.2 417.6 433.0 465.0 472.4

?hg38m1a1 70.7 115.1 207.9 174.9 173.0 1PA.1 175.0Cf±o Eiployees 256.1 273.9 346.7 509.4 505.6 486.1 472.1Sslmiieaple 399.8 371.1 432.5 546.1 569.2 603.1 601.0FaSU tRXmE 678.9 706.1 700.5 639.8 632.8 639 700.81m Waoera 21.3 16.1 16.1 20.4 16.6 16.9 19.0

Udoe in TRaptand *tm1dcaticxa 191.8 230.0 323.9 380.4 381.9 385.7 370.2

AtlauR and Facto:yWdorers 499.9 60B.5 956.4 1074.3 1035.7 1030.1 969.6

Others emplyed Inservices 542.0 674.9 567.8 595.0 4.7 584.1 583.7

:cup8tiMn mtIdentified 89 18.9 27.3 30.' 19.3 17.9 18.3

Se%dvg Wor.k forFlist Trie - - 23.6 32.8 43.3 57.9 69.7

TUmL 2919.9 3286.1 3980.9 4420.9 4312.1 4470.0 4451.8

1 Dame refers to first semester for years 1977 to I983._/ Wbrk force refers to tkose person 10 years of ap ard older.

Sburce: BCV, Inforie Ecxwui1co, 1981, 1982 and 1983 (prelIminary data).

- 68 -

Tabl 1.5: Omlatcme NIumiold labor in atribjdo, ldle Sr CZ) ad Ghdfi4ents 1977 to 1962

QuLmwa P1 of aBudold Lao 1977 1978 1979 l986 19i 1982

usiid1 hit. Ax. let. . Ut 2ii. mst. 2auL lot 2ad. lot SlS_ tr S ume e mter S ester S_tee S-Ir SSmter Semsr Ster _ ter Seter

limt 2.4 2.6 2.4 2.4 2.5 2.5 2.6 2.8 2.8 2.9 2.7 2.8

Sami 6.1 6.5 6.2 6.2 6.3 6.5 6.5 6.9 7.0 7.2 6.9 7.0

Thid 10.5 11. 11.3 11.2 11.1 11.5 11.8 12.3 12.2 12.6 12.3 13

Fourth 16.6 17.1 17.2 17.4 17.4 17.4 18.3 19.2 V9.l 19.3 18,9 IA8

FLith 23.3 24.4 24.3 24.5 24.8 25.2 25.8 26.2 26.4 26.9 26.4 26.5

SLxth 31.4 32.9 33.4 33.5 33.2 33.3 34.5 35.4 35.4 35.7 34.9 35.2

Semet 41.9 43.1 43.1 43.4 43.4 43.9 4.5 45.8 45.9 46.5 45.5 45.9

E@&bth 53.9 55.3 55.8 55.6 55.7 56.1 ... ... ... 59.2 5A.4 5.6

l&nth 69.9 71.1 ... ... .. .... .. ... 74.9 74.2 74.4

Tsth 10 100D.0 13.0 100.0 00.O 100.0 100.0 100.0 100.0 10 10 100.0

-L-d CEfflct 0.3518 0.3378 033e 0.336 0.3358 0.3316 0.3Z18 0.3112 0.3106 0.3046 0.3138 0.3112

Scz:: Q.U)Il, sN uedo .9 b stre 191. Da e:rncted fr z die Noudold Surum of OCEI for adl yrs treludig 1962.

- 69 -

Mable 1.6: FALMJRS Rllt fC2ME DISMMIRJUDI;,1971 AND 1979 MU 1983

1971 1979 1980 1981 1982 1983

Wozlddg Age Pqcua:itxi ('000) 1/ 5,900 7,468 7,728 7,927 8,250 8,497A share of total pwmlation 0.548 0.553 0.555 0.554 0.557 0.559

*x meihlds ('000) 2,127 2,276 2,335 2,376 2,478 2,535Waddokg age/Bouebold (2.77) (3.28) (3.31) (3.34) (3.32) (3.35)

Labor force ('000) 2/ 3,015 4,232 4,375 4,475 4,615 4,732Partid.pEd:ion Fbte (n.a.) (0.567) (0.566) (0.565) (0.559) (0.557)Feala Participation Rate nea. 0.313 0.315 0.304 (0.307) (0.303)Labor Forcs/Hxsebold (1.42) (1.86) (1.87) (1.88) (1.86) (1.87)

EFauplmint ('000) 2,920 3,988 4,122 4,202 4,281 4,247Bp1C0,zuflt/4.X4IbBD (1.37) (1.75) (1.77) (1.77) (1.73) (1.68)Wages (Bs. mflliWOs) 23,175 86,602 105,143 119,642 124,529 124,785CPI - Caracas (1968-1.00 1.084 1.934 2.351 2.731 3.002 3.181Peam Wges (Bs. iL1lions) 21,379 44,779 44,723 43,809 41,482 39,228R em] Was/Esployee (EBs.) 7,322 11,228 10,850 10,426 9,690 9,237Rea] Wages/9 usExehdd (Es.) 10,051 19,674 19,153 18,438 16,740 15,475

1/ Pcxulation from the ages of 15 to 64.2/ EcowvacaUy actie ppzlaticaf frcn 15 to 64 years of age.

Source: OCEI, F=ues de WBgazem por 1ttreo and BCV, Informe EFomuico.

- 70 -

ble 2L1: GUS MES01 rsua C a MM MS IR SLIM 1970 - 1983OQI±oD at BDollar at arsnt Priam)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 190D 193 1981 1983

Total aP 5 5 57141 tin 73253 112234 118 1313S04 155706 169060 207737 2542D1 2852 291266 285263£ewim 1w rr i12 W W -4472 -7 -r i3r -- r 7-i-peVolsm 41431 44797 49314 55316 6758 83626 9566 11769 1 33931 152s 5 1524 2)773 227542 D M23

PCIRM17 ractw 13D07 14374 14388 2110 42465 37460 38593 42132 40567 57447 76624 83357 72065 64043AliwIbea 3Th 3W 4578 5 ir -W w -1w 119t0 -var i-Qr 1W76 I§3

se Polsu 8M05 9F 98m8 14653 35607 29330 30068 31821 29379 44384 6098 65631 5338 45537lICug 688 652 585 879 12D7 1156 1040 1041 lOS 1123 1390 1313 1121 970

Samodazy Ssort 11248 12681 14044 16879 25S26 26459 32563 38111 4294 51995 58255 62749 67341 69105Mufnaidu OW usrD ThT iis TflW 71 rWr r- ir68 -IS iW r -i 28518 -NiM

Petrolam Rdlnig 1989 2463 2290 3284 9029 5142 6468 6716 5750 11008 12679 11704 11456 12409Electricity intl

Muter 8 921 949 1041 1193 1407 1540 183 2124 2499 2579 77 490D 5575Caniasnon 2064 2360 3092 3819 4449 6201 8273 11488 14316 14753 14479 15693 15657 1436g

Tertiary Setor 27244 29e06 33307 36908 44659 56215 66915 8D052 92017 103919 126057 149141 136063 162729C,,I 52 -5-----f -O M r W -mr ii,r nrW ni -Iw -2r M -S -M

Tmmpoxtaia UdCadmt1m 545B 5680 6774 7363 8676 11063 1339 17130 21923 23452 25184 30769 35631 31961

Flm.ntial lIstits-tiar 7536 8287 9216 10WM6 12W8 15014 17392 207C4 23331 7386 37883 46277 49953 53F49

CGoe t 5771 6459 73Z4 7994 10433 12914 15397 18223 2D)97 23621 30178 34903 35222 34508Oder Servlcsj 2854 3356 3718 4307 4964 6019 6790 8215 92)S 10268 12078 13947 14353 15311sub-total 51499 56863 61739 73897 112950 1l34 t13iD1 164095 175568 213361 260936 295247 300269 297877Eincte Bod

qmom -1065 -1103 -1451 -1859 -2814 -598 -6300 456 -957 -10693 -13104 -16378 -15S79 -16391Plus: atu Dutls 1591 138 1214 1215 2098 3062 3333 3S69 3349 5069 6369 6339 6678 3977

Note: 1/ Mior In PeIs F onl Ut SoDial Services mUt te raiminUwemults of nt-profit private aervid.

-m: SM. Ioaw taonts, 1979-1985 (prellutniny data).

- 71 -

tMb 2-2: GC SS ICM PFM= Ar MM 89(23 SI 197D - 1983

Clliao d Nolln at 1968 Pdc.)

190 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 l98 1982 1983

Totia GP 50634 5a1 53889 57260 60732 SiU7 70067 74m 76376 7M96 75857 75628 76144 72496Peco -11176 1-060 -9687 10Z118 9147 -3iT 718 -- 69-9 -686 3W9 69i4- 703-7 5-MNwpat llan 3945B 41549 442 4w972 51585 5739 628 677W 69697 MM 690 6904 7007 66610

Pris S 13324 12908 12036 12752 12112 10830 10412 10ow0 105l 9 11233 10868 10624 10183 9774Aw It- --%W -Z -V 3w -543- 4 3 14W 45W <5 4763 79- QCwda 1'htgol.u 9131 8705 7917 8279 7302 S770 5655 550 M 55 5466 59 3 416 4492Mrinvg 619 611 576 743 852 824 682 572 58 627 637 628 54 419

Se y :or 11138 11730 12748 13862 14567 15778 1792 19530 2M8 20776 20219 2089 20527 20033Ihmd.uarLzg Mg- 6615 n76-3 7581 M333 936 10392 -IU 443 11 857 12277 1T3 12542 12339

ura.mr RefLing 2D15 1935 1770 29 1845 1348 1523 1492 1456 1467 1383 1294 1321 1392Eleatrldt ad

1ir 8m9 949 1012 1122 1266 1483 1575 1689 1674 1933 1950 2256 2533 2730Oa=tnnm1ai 3015 2231 2803 3150 3103 3661 4431 5jIO 6115 5519 4609 4511 4131 357Z

rTelM7 Saeto L570D 27272 29328 31216 36565 39195 43576 47334 48283 4S222 469M2 4Z33 4799R 46182Gwi_ 5416 -- S88 5681 2 6!95 - W 8655 - - 11 6T 672 6897 3TnmvporT ad

Cc.md.tl.n S223 515 6111 6314 6961 7664 8660 9603 10358 9851 93335 10355 1058 8848FImAdA 15.1Wu-

im 7226 7653 8261 9038 9969 11739 13066 14279 14265 14504 14023 15133 14645 14982Goiwr at 50Q2 5544 5973 6198 7177 7850 8622 9281 931 10073 10698 10586 10593 101.0Oter Serwl/ 2753 3072 3302 3740 4067 4578 4933 5516 5586 5583 5707 5695 5355 5122

Sib-tol 5Dl62 51910 54112 57830 61225 65803 71917 77344 79520 8 78027 79006 78708 75989

Onx.. 4040 -972 -1 275 -1569 4961 -32B7 -300 -4675 -84 -5203 -4777 -5697 -4910 -4774Plas: Outom I1tie 1512 1251 1052 999 1469 1901 1950 2108 1704 2398 2607 2319 2316 1279

Mae: 1/ Majwr caWmnst ia Pe adl atl Sodal Serdem ad thn rdwinid cmsuta of wm-prafit priwle arvlcm.

Smwor WCV. ioiinw EAmia 1979-1983 (pellugzy dsha).

- 72 -

Td*I 2L3z G T 1HE NUC AD RS= r 3 3M01 rIrYI* 197-1982

OMlmx GE fta at Cotwt 19fS hi)

1978 1979 198D 19a 1962

lk.h1jg2 c m T fbjbI ft1.m Mftl Pablic PkI1u Tatad fablic IPlMz Totadl 1jblc Prime* Tctal

Toal GO (_6p.) 19906 56766 74672 2153 5345 798 Z966 512% 735 2mN 51078 .aS Zs5S S263 73WIIfttmlon -VWU -- 7 -7W -7-M -- - -W -Ir -6C -r -61- - &IJ3bvott.,-m 13027 56766 67793 14217 531 67632 15117 2264 666M 1567 2078 66695 1638 1263 6761

P Y W5757 6792 10569 6279 4926 11203 5n 4997 106I 5731 493 1066 5143 5OW 3(23AgdasinaLU- ar r 4- -- - 4676- - 4Cuda Fttrolm 5U23 - 5423 5699 - 5099 5666 - 566 5MD - 53D 46 - 436

334 267 55 38M 247 6U7 405 232 637 411 217 6i 327 197 324

duccusey Sew M3197 17491 6685 3464 17312 31776 3b97 16522 219 360S 1601 rml 46360 16167 20627-610 A 11663 7F 111o2 1¶ T -iw MIi -10r 1W0 ur2n 13IU -1 Ir

P1'b.osm A Rzgq 1456 - 166 1467 - 1467 133 - 133 132% - 1294 132 1 - 132lctria r/ty ad arAr 1123 551 1674 1322 611 1933 1311 639 1950 153 719 256 106 65 2S33

ca otlm - L 6L15 6115 - 5519 5519 - 660 4609 - 41 *511 - 613 413

13629 33656 4M 14514 33706 48222 1492 32I 4690 I56 32325 66293 15060 3248 47998--4 -,MKsxw wy -NW-M -,:w -wr-r -,Mr -ww-r -Mr -X~

1tmpozt ml laSS 8517 10368 113 am36 905 1906 79Q 9A15 19S 71 IM0155 2117 8311 IO571da lMoiultims 2SS5 11660 14425 2 622 11i2 14504 2W 11475 14023 3213 11920 15133 3D97 12548 14665Comm 9331 - 9331 I1D73 - 10073 10o6 - 10496 105S6 - 3056I 10593 - 10593Other SE 1 30 S244 554 437 5146 5513 560 47 5707 6'00 5015 5695 3 4o2 5355

Lin: Iqdnz B*dM Qimi --577 -2171 -4838 -2574 -25i9 -O3 -2522 -2255 -4777 -3156 -2561 -5697 -n8 -2 -4910

Not: 1/ Izc3nd Omtm DaTt.

Smve: B3 .

-73 -

Tabl 2.4: GSB IU: IT= BY TfllS OF IDDUIIS, t9M4019J

19S0 1971 1972 1973 1974 L9 75 1976 1977 1978 1979 1983 198 1912 19|3

GOP raco cces 4RB 44 S5 5 7M5S lal 91 L135Z6 LMWSC 1500g 1645%6 MUCIII 246tD5 276792 Zl1149. 2657634aet Yams 294 D116 2760 Z9D ,433 SW 57Z1 6F3Z 660 899J 11378 12Ml 12910 N/A

-SbdnIII 09 113 2DCC06 1027 1023 162D 2D04 231 332 3597 3134 N/A

ClF Nah Pri 520Z 514 6502 73253 11224 111198 135104 155706 16806D D7737 254D1 35Z1 Z91268 235263

hsmulv Cwp - -393 -3D39 709 -Vi704 -9425 -1878 ID3S 2a1t -3N9 -2M 2 -4663 MS -263D1*4tX 96 *6 r IX 12E4 14173 210M 2"5 39179 55537 6413 =25 6455 7Z am 4ZS89

Emom ~~12225 14DD 1"53 2122 4117B5 39278 41057 4}5C 41957 64 863 84 75197 60f9

_bUl Ot645 5357B 5%6 66U14 e4s3D IMl73 133226 167737 191231 23D38 23321b 25 3OM63 2S133

COVAPCIOn 3JDZ 36476 4Mft 4Ut 5D62 72229 86721 103D69t 11888 135D87 17094 23a76 22483 219VLMC V2767 2B7n4 31763 3S1 70 44U 567S6 66M 8D110 9762 110329 t3Sl75 L6033 19 174747

e&U 6635 7762 8z18 9590 12T7Z 15%43 19785 2959 260 D753 3S123 42643 425% 4mZ2

- :otwl 15743 17102 1912M a4s4 24SC 36444 46505 i68 72413 65651 6Z79 6560 7533 42965Pgivo (Flmd) OM5 10216 9ot 12DV 14176 19S8 25173 36V 2 41375 376S3 32B3 27 ZZ9 16160

5Wdm 4170 3m9 3272 2616 463 4Z75 689 m6f -466 -2262 -4597 -M -t64 -102i7RAei aFilmd Mi8 3102 6a0M 6519 68B 10717 1752t 23662 3D% n9D 31162 4182 4786 3?575

QM In 1biS tod 36 94 aS 22 1309 1571 3DG6 146B 1062 2360 323 11X8 6W5 -53

is:l SWI Ian3 2D665 2124t 2"93 5U10 45S6 43P 52637 50Z 69t50 8373 82D3 66 35 695

-4MGB= -306 -273 -335 -400 -769 -6S 1I 211 -17 2 -1742 -189 -1750 -2739 -MA-WAt Fatr Xrm -253 -3DS -aL3S -2956 -D43 344 183 -364 -633 -79 1LM3 2Z47 -6SS1 956

-- 01d Sm M5S5 1705 18?68 25t37 SION 4556 47582 51062 47E67 67149 81027 SZ529 57144 5S895

CNPI I dA 4W95 53D 5936 70297 10949 118i42 13578 155342 16J4D 26978 25YAX 287455 28Ut15 2756D7

OAol Ac mSl. 458 4 a 34 -3S83 -24192 -9118 -la"7 136M6 245i6 -t498 -20236 -47120 lU8Si -15MD7

Smw: NW 8 o Zk

- 74 -

Table LS: GO= C F0O U 7WIE t Mi EDN. 1970 - 1995OtI1Imm of BoUli at I%f8 Priom)

1970 1971 1972 1973 1974 1975 1976 1977 1979 1979 198D 195 192 1983

ClP Facor Cot 47874 669 51569 5535 M932 61923 67630 72274 74324 74919 73471 73397 73500 675342n1r.m Tms 296 257 2619 23B 2364 3054 367 321 3003 3352 335 3185 3375 U.n.-subtdA lop J9 99 159 54 560 530 778 9f 875 jam 954 83 na..

GOP Make Prm 5063 5218 53839 5730 60732 66417 7X67 74777 76D6 77396 75157 756M9 76144 72494TM8 -467 1426 155 60D7 2476 17289 1673 16800 14463 2302 S350 2578 19951 16182

Gnu Dtic Iamc 49767 53613 55470 63307 85501 I706 868I9 91577 903 100447 104362 1MM& 96095 S11676

Umwri Gqp -2262 -3228 -1761 -57% 41900 -5850 -1100 6556 122 -1892 -a560 -603 3034 -086Iq2uts 9359 9925 10720 11579 14763 18531 223 3065 3335 394 23623 2707 2865 13570EWol8 1249 11729 10900 11283 936 7092 7263 69tl 689D 7235 6478 6212 5696 5857

Cqpdt to Impot 11621 13153 1281 17330 34163 24381 260W 23709 21353 30286 3A983 327M0 25667 2O39

RBwom haUl-abilltii 47505 53385 53709 57556 6610 75956 85749 98133 102121 98555 95802 96123 99129 80207

Co..mitim 32566 34698 365B7 407 48693 5Y31 5502 64856 69269 7247 73387 74236 75790 67195Private 3295 27252 9234 32462 39175 4643 490 53163 5798D 60610 6162D 61302 6298D 54772PubUc 6271 7346 7353 7585 9318 9600 11062 11693 11289 11837 12259 12936 121R0 12423

Invoctut 14939 15787 17122 17509 17609 21U5 26247 33277 32852 26109 21915 2187 23331 1302md,.te (FId) 8M0 9422 8772 9980 10178 M2r9 !613 lxir 1878 14977 11462 9196 70 63ai,u in Pridte

Stod. 3956 3417 321 19D0 198 2118 356 1244 -195 -775 -1274 -1343 -395 -2298Pkd)14 (FC1) 250 7861 53S0 5468 4888 6630 1OO6 12269 13M9 11097 1lo2s 1376 15079 10785Chw in lubbIcStock 34 87 79 161 562 778 1572 672 437 809 a9 271 1632 -113

Dfmtlc S5Aqp 177M 19015 18383 23260 37009 27675 27347 6721 21570 20DM 3D075 27970 M0305 214.4UM OcgtM

TDfam -277 -227 -253 -254 -359 -290 -430 -43 -599 -538 -536 -521 -2 -m4Mmc Facor lna -2275 -2772 -1617 -1874 -1397 15; 8) -147 -218 -235 343 669 -198 -2991

1N1tm1 Savi 14669 16016 17M3 21132 35Z32 2753 2697 290W 20753 27227 30Z2 2818 17497 133

GW at Prim 48359 49417 52272 55396 59365 64570 7047 746X1 76158 77161 7630 7697 74156 695f3

Soaur : KW ard Uorld Bak ad .taa1a idm fow df asto.

- 75 -

Table 2.63 UHI. MM EIQAm R G DIC 1`111. 0 190

1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 ISII 19R 119 1983

G=IumetteP ,C A..0 ICO.7 OL. 169.5 114.1 I.9 284.8 I833 192.8 20a.2 ia. 21i8M.4 335.1 377.1 32.5 33.5

XldgK IO.0D 105.5 IS5.2 110.4 115.8 1222 1428 161.1 170.9 183.5 S 96.5 211.4 244.3 273.3 293.2 310.9

Indin M00.O 97.7 97.9 123.1 132.6 268.0 S9.3 553.8 59i.S 629.7 609.0 18%.9 131Q.] 142.7 1320t 13(A.8

TOM at TtaIdIAIKx 200.0 92.6 93.1 112.1 314.S 153.6 363.7 34.7 331.7 343.2 X9.9 436 SA.0 527.9 5.2 376.1

Cuumqtten 300.0 102.4 104i 3OS.4 110.0 111.7 1183 133. I 46.2 I9.3 172.1 193J 20.8 25.8 26.7 321.4pmlic IOD.0 102.4 103.7 105.3 368.6 168. 113.9 126.1 131.6 351.2 163.7 3689 222. 264.5 39.4 319.0PIubUe 100.0 1L.5 105.8 105.7 115.6 12b.4 137.1 164I 178.9 196.3 23.1 23M5 3O 32.7 332.5 3.J8

Find loss 300.0 302.7 305.4 16.4 112.2 12D.5 13.3 161.6 175.9 192.9 22D.3 51.4 J37. 303.9 317.*4 3j

SUodu Watnr 100.0 102.7 I354 1011.0 132.0 137.7 233.0 D31.8 193.8 228.4 27.b 2i1.9 3209 46.2 417.7 446.8

Net (arm Tr.ntfeaid Not *actr InC. IOO. 131 111.4 120.6 132A 158. 19L2 225.5 22.4 21L.6 Z93.3 32.3 354.6 137.6 33IA 319.8

5sam: MY3. simi _cintm. ad Worl d .bw Ic 1Dam gm1 an l."

- 76 -

Tale 2.7: FEElD GM=DNEIr SY TME CP D, D1R= AC DMeff. 1970-1gl82IWlila Of ntO solivw)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 198D 1981 Igo

INRd 3512 4412 3170 5m 61 10493 14954 23677 264 194 19074 7mMddruy & EWdp. 3U -283-O 4237 499 68M 9'194 -IMF M 1&- I W

Mr' J 1852 2350 2794 32D3 3374 5514 SU9 13624 1 M55 1068X 11207 11498 IIU6Now 1431 1887 2199 2412 2707 3WD 4554 7157 725 57M 6057 6367 68n

TneUp 11 l7 11 1 M 755 172 2130 5D9 :2916 1770 2S01 1733C&J 100 71 72 63 231 436 982 1323 31D 1716 997 1817 1131

Mmi-2/ di 46 47 51 178 319 740 8D7 2149 12lDO m 1091 6a2Other31 ~~~5D 4B U8 73 Q2 I F4 168 705 535 98 17 -5

Lt_ kd Is 10 10 is 43 60 91 61 22 a 23 31 3S

D,Xc 80Z5 8906m 10672 12726 14369 2M10 2786 36SD7 452 . 4sa5 4507 4899

Rul 1t 2093 ;1i2 =27 4006 4367 5788 7765 9516 11639 14182 1524 13752 107181wRddta 3667 4103 f867 5552 653D 8753 1'934 1950 22l!a 22412 20D40 zm4 27178

lzd ~~~~355 392 3 S6 3510 446 586 5716 740 no0 4a o 45 707 748lwnZI S~~~63 3S9 522 ODD 468 1463 2003 1965 32.91 w 240? 2^ 278 1870

lXopozc &>d 1029 108 1292 1612 2019 2768 3614 3919 5237 4S3 5D74 6530 61D

1qpm 232 267 3D4 331 429 -983 763 1026 1215 1353 1440 1567 1674Iltvmtmk 86 42 24 35 110 164 161 137 30D 312 330 451 539

Wml> 11537 13318 1511K2 1861l6 2C98 30D8 42770 60484 71837 65553 6414S 69783 7016

IfPh 1970 to 1975, flou am FMs duet rmela biltly of CtF bmdk

_/ d#c Fx umm. an rewarAd nodre= setr c ard auto= duti.

QM db imp .o

.So : BCV. IEfco EwroL, 1979. 1980, 1981, 1982 (preUnnry data).

- 77 -

Td1. 2.8: WIIOUL DWMA IN=, 1970 to 19Q

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 19K) 1911 1982

lmgm ad SaldrD 2t.118 23,175 25,944 3,722 36,5M 45,07 53.973 63,727 75,81 86,16 105,143 119,642 124,52

a_ fnv Pr adtezpdm 3 X,736 22,621 25,33B 32,952 63,122 6o,540 60 75,W 75,567 9e,35 125,161 1j3,53 12.744

N .i lcme (f.c) 41,834 45.796 2,32 61,674 99.650 106,347 12072 139,610 151.398 185,47 230,306 259,170 253, 273

Not Inure& T m 2,837 2,727 2,647 Z,716 3,325 4,572 4,698 5,212 4,54 6,64 7,996 8,416 9,776

N etSa Taci (M.p.) 44,671 49,523 53,929 6X,390 102,975 110,919 126,770 146,822 155,962 192,066 235,300 237,56 263,0ONot CaT Tumlam

Ubraed -308 -273 -335 -400 -769 -69 -q& -1,211 -1,742 -1,742 -1,879 41,750 -2,7M

NutSIBr Wupombl 1x 44,363 46,250 53,594 63.99D 102,306 110,38 125,786 143,61i 154.200 190,3k 2136.421 365,36 X60,311

1/ lAchuh primm* ad publc rrprm, cxpmt suVlZp a d dizea turn.

S_wa: CV

- 76 -

TAU L9: Dlll am A,S PII=. 1970 T IM3Ouiliro d tmt go.)

1970 1971 1972 1973 1976 1975 197b 1q77 1973 1979 39) Js lw2 1963

CemD e Inm_t 15 743 17 102 19 202 2165 26906b 366 46 55 s 668 72 413 6562 62 791 6540 75310 42 965

0_w LSo 4620b 3,73b 3.310 2.636 5.922 5%6 3X735 4.1W. 576 98 .4.35 -6374 5.167 40,n77

3QF.OIVM!MWLM couri khl7a 7,515 9.05Z 10,748 11,8 1 16,590 A278 3.725 10,539 3N,A .227 40n,43 4Q,U4 n.a.Tpm9a K*immm 1,110 1.19 1,411 1.726 2,4n 3.523 5,336 6.049 10,516 7.90W 6, NA 9,439 8592 L.amlh1I3 dy 1qu19nt 3,515 4,%4 5.297 0,0Ol 6,5I0 10,077 13.736 a1,o7 21.63 18.0,5 17,06 19.712 Z.426 n.a

ULwtodg 101 52 36 53 I3S 226 252 196 322 3 in 4m2 574 theOdwrl/ S0 4O 48 73 n 2 1C4 136 705 35 9 17 - U .

Separ d I*iatwntPtl'musectur 3,302 133.90b 13.113 14.443 18,79 26.156 25.362 39.55B 60.9(0 35.393 M,5 22,6 20h.66 %,93ulibUc Sector 2,722 3.19b 0,039 0,311 6,117 12,2U 7),h43 25.130 1,50 3D,20 364,05 42,960 56,06 D,072

Gram_____ _nt__c 15,743 17,107 19,202 2,454 26,906 36,46A 16,505 04,61 7,433 65,652 Q2791 65,4N 75.M 42,3D

40ms_________ 15 25 17056 1a766 25137 51 NO 455 62 47 56 5062 64737 b7 149 U7 R7 50,wiPubUc S36y4qp 2v WiF TiS SbS X.PtlM S.vis 12,175 12,9M 14,539 13.0 19,676 18,f95 21,576 25. 2213 2R.277 29,67 30D 16,246 n.

Forldo swAqp 45h 66 634 -3,t03 -2,192 4,111 -3,077 13,16 24.51 1,49I -20,236 17,12D La L S,7

mrt p llCV

Thb I. I: nIdAS (V FA . l1CU ID35

kills C 13 £~~~~~~~~~~~~~~~~HaPml)dm*~~~~~~~~~~~~~~~~~~~~~~~P.1 iSrsue>1

591111 low tern 1a7n ton lnt t1s7 in7s 1an 1a? 3oi jol sm tea aic Ion

EWua PFlJ. 306 264 me0 its 132 4m aiM as 942 I4 9374 1430 39275 Sm jl 148HAt twcda leoar 22 322a 2310 DOS 329 44 30712 MO 2 Rn mm, 221 aim 51171 333 Ism I143 11771odr IV2 25U 10 24 273 Sl 5s go VA 414 43 Mi 974 IMF 157 3064ut_ do ON21 155 111 14A IN J7 115 10 3m Yll An " 43 717 low 1141

Euat c & Ws 2Y2 I9 2719 13m 13. 13 3340 9m 1411 504l5 WM1 14*3 Ig nil uisli 1 *4

i v,o.s Fo. 3.I0 1511 111 21222 21 =1 243, 374 2 11m7 50l4 3I2,% lSIt 3577 1212 3 Ism 0773Iquatatl Wm 53 511 in 34 44% 1£ SD1 lois 3035 273 Vs MW 41) all D w uns

lhel I22 52 40 7t 13 I?" 1% 2an 31 5W7 979 I15 sti IUEI 2z" 2384 "SWthmr 424 i5 4% 447 WA 3648 3121 114 l343 23) 214 213 h11 V12 3

lquat d C ti 1a 2aD l07 221MM 2 ) 1117 1114 WM 7106 so 12373 ICC lUllS llnC I 5 l31 3VJ7

Inae k n Wa 42 1 MD0 474 17k 41 224 41 -2S1A_ "IE 111I -- 536 91 a Ua -2V37 N 27

bt ear r nlr -711 -. 31S -511 -71 -W -dm -eN Imon 41 -in -s -177 a in -4 %n -2224ilt, 43 S 7 1 S 17 Sl 27 . 4 1. 714 t 11152 I3 Ih 22tA VA 5%% 14)Few T J 02 hn7 771 117 917 91 kW *w N1b 1st IU1 VI ins emll AM vim

met tintw Tlurra -77 41 41 --a bW 1 -11% -141 -It -211 _1-I i n 07 -14 -O1 -1%

oan At h1et. -a -3 -2 4 43 13171 2 -571 17 4130 40 _421 1m

Not Cqt, TtaI fwm -1 4 h 4 4 44 ii -1D -51 -U -22 -1 411 -11 -

NKan 536 22 -21 235 -1 -212 -43U 448 -104 -1 h 7 1 -i IPA II1 * 2

sbt jlke tSJ 71 Iwa 177 3tt3 124 MD -173 -11 IN& IV 215R qo 1ss An au binow m J II I 111 114 222 I3N 74 2152 t 12 21 12 242 In% It 117) "VA 34h73

Attma3nn Js .5 31 n6 9 Ion 31 2111 7NA in 13 lYh 3111 %I 1I37 MA

NoIt rist NWX lot Al -11 -DI II -7 MI 31 lb 04 0 35417 4t 4% 43, -u -hii

Su1lt To.mCW tI 111 3I I 41 311] 71 153 -11 -I4s -1730 44210 .4011 -IW 4A77 -Ill 373 _444%mUAe 5 1 5 -7 y e1 1 -1' -1 3b -1,2 -g1ii1 -1T 25Am 4*2 15m te 5 131 -It4 lit IC _ - I -4 -7 -44 -141 -2Wh -lbs -24l -4121 -01

anat1b dmaku - 24 t -14 V1? -47% -465 . 1Mb 231 I 914 -3211 -21 -JU11110l -3I71

caian..2/ O 1 .0 it 0 0 -4) -UZ -12 -32% -21% -I33 4rA 41)n 0RI -271

8_rl r4c beer -4 -11 4) -421 -212 -A 414? -27 . 27% 24 4230 7 -24?1 271n -747

I Ianial to Not Crma Tr fa CrFwet blt i tmnr d a ItIL nt tib 3.W kaths climr _m_us Uwu-tm bwalgw (ito).

Sawn! 1W. h n arm_ ar.. L979. 19W. 1931. 1992 frwwiSAay daa).

Pas. I of 2

_ mm w_ a 3. 1o U

_E _ S ,^ 9 ̂ x nw w ~5411- Zw Uw S6

_1t U.ti.q am {-as ai asia 2W am 11 15 54 63 3,X,,,, ~1 (-3, 1. 5 (. 54s (r -1 a0 (-3 54 31 Ii 1

h" 30 (- Ms t-t W as "ita aIs ao316 (-331 (- 5 - 315 () 33 233 50 .356

ford4. r-a1i 30 M Ws WI IM 411 5111 Ii 410 in pUUqdG U F0 s) Il (3} Ii (3 n1 (M33 3o i,n

M .- 3 3 (-3 a (-3 .. .. S 4Go f(-ts (33 -3 1 -3 3 33 3b v

h.16a Wa C<-) NI (-M a (-s Di (-3 3 u aM*3 (-3 5 (-3 S (-3 U (-3 M I G 6

*bm4t a a- 6 (-3 3 (- PA ( I 2 6 146

To" 1a.4imm 1153 U 24 515 M 19 NV SW M4 W313 a"3 8ltm4 %& t VA a 1 14 a allr 36t S Xn a

le@3 Ui . 11 a. J i 13 3 1 11£ 1 213 15 5Aa.. a a Al * I Isa 6 lb at 1CEt 1A I3 3 16 1a 1a 1£ l 1 1 s

u I u 1 Ii * 13 t it n 26 17

War Loomms M& it DU1 55 US lU1 1131 be 31r., Is. - - a £4 1 2r"lu"*- - - - . .. . . 5 * * -Uh a 10 a 1 * U 13 33 U ? 1 1raw 1. 6 6e * . 12 *. 2 .. 1___ 4o .* .. - .. I .. a. .. ui Iwn ARLI -06441 Guipmob ~~~~. ma3 113 3306Ih.t., 3 5) u 5 31 r 15 ur 42 39 1 * .*4INo_m* 1 L u 4 n a& * nl 6

s31 36 1A a 1 sr 416 8 11 nn U 3 m aUUs * -

-WOL -SIM

- 81 -I"hfr 3 a2n w m' D. 19u 10 19"U PA 2d 2

tElliuo Of IIS Daum

197b 1977 D78 DX191 9 198 11Vohmo ihim bahm 14RION b3mN VAI vabh 1410 Vbln %pu ThhiR Vi1bi Iha.. 14i1A

Qw& Pec1.m/ 50Z 563 4a 603 451 553 4 am 471 121 466 13637 36 103lH_s - 135 133 163 182Z 155 16185 190 170 t 5J7 261 as 20 -0minm 19 1639 132 1560 136 1676 1 29 12 ^3 116 3553 C) (-)OMum as 265t 195 2681 163 n77 1 29L 143 319 111 3133 C-) (-

.,m De,,lm 86 3172 23 3178 262 3189 9 215 210 S0 IIID 5f15 179 5176L1qd Go 16 18D 19 M3 14 145 14 283 9 Z9 13 137 C-) C-)

m-i-m a18 262 15 22 11 167 11 225 9 210 6 26 14 C-),,,, _ _- - - - 2 I 10 1 18 (-3 (-3 C-) (-)

Go Oil 21 278 22 336 16 251 25 491 27 765 23 1 5 (-Xmf&mI 222 2297 177 2216 21 263 If 315 153 423 121 3615 III (-)

e .. 1 4 1 8 4 73 3 95 (-) (-) C-) C-1OIJu 9 151 10 170 9 157 a 148 a 23D 17 327 C-) ()

Taw Pnvm & bE . 788 88n3 725 922 716 a7m 136m74 da IM9 666 1ism 565 I563

Im,k '2

1 17 254 12 168 13 137 13 139 12 148 12 1s .7 53A LUiim 16 17 10 11 D 23 126 176 213 403 259 46 225 317Cffee 18 27 11 28 14 42 8 25 2 8 1 3 1 3Com 8 13 9 '6 8 23 9 33 9 28 8 19 8 I5

War euqm 8a2 245 787 18S 532 86 1032 289 lOw 353 C-) 467 C-) 41dFewl,=1 47 5 69 7 3D 2 152 19 145 27 226 43 230 32

_mmmhm 196 18 187 18 160 14 1D 15 147 22 (-) (-3 C-) C-)P2sh 7 23 3 11 1 5 1 6 .. 2 .. I 10 12

m_ 21 .. 21 .. 42 32 .. 5 (-) (-3 C-) C-)AMI-kW >fIg 25 13 186 21 78 10 a2 44 F2 11 () (3 C-) C-)1rm Prc~ 32Z 31 50 3 105 25 322 5 507 122 7R 166 5 11t9Oder aChedla C106 15 158 23 45 10 66 27 37 21 (-) (-H M-) C-)achem 149 79 136 69 123 78 1s D8 131 136 (-) (-3 C-) (-)

p .-evm a8 23 133 13 10 3t 63 21 6 36 5 23 -) 21

lrn7,L 9342 9661 9t74 1460 19275 Zia 3816

Ij Vale a rulzd pda ard Wm in idi tlam [ baJs._i b3m cf fm ce in Ilii.c ef mm. AU cr d_ epald t. t of wm.

3m t I udu of _nm r 5W003.OOD dofl.

S-am: KWV I_e Zm * 91. 196M. 1981 aild 192 (Cpelldnary).

- 82 -

hIe 3.3: OM W= CF 1WISE l}ES 1970 ID 1982Of US &i3aSE1 1

1aRts 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

Food a lAvestoc 135 134 153 247 344 45 567 902 890 843 1171 1647 1352

Beua & Tcbsco 17 17 25 18 37 63 77 92 135 113 150 128 121

PR l.zrlas 2 / 76 74 82 128 225 215 264 334 277 379 42 395 394

Fels ad luIgi s 23 17 17 20 22 38 37 66 63 110 173 94 68

Gib & F 11 16 14 31 35 85 93 140 181 169 152 169 102

12m1 PLD&uaa 194 2D6 230 263 522 596 657 863 889 1006 1217 1235 1159

lMufamred C sGXD3 / 435 463 553 624 1117 1450 1692 2641 2677 2524 2789 3023 348

Hladdrmzy md Tranport Fquip. 737 894 1058 1184 1487 2524 342 4843 5486 4460 4562 5145 5009

Oc(eIs 13 13 19 6 4 14 13 5 3 8 2 4 17

IUtAL 1641 1834 2151 2521 3793 5435 6820 9886 10601 9612 1066 11840 11704

1/ Dlffes fmmn Balanc of Payii fixmr due to ent1imio1 of unwroed frporct.2/ E-:lud£g fuels.

/ eadfed md incllfIled uisufacaured g

S-urm: WV, rnform Fcim, varies years axd Dr.

- 83 -

T1e 3.4: Iqpgts by EHac ,mtgm7, 1970-1962

(Nlla af US doUln)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

Cita1 Goftk 436 540 652 761 848 1425 2032 3202 3458 2591 2549 2791 276Xrhddem and

4qu1um 412 522 635 744 788 1312 17192 2907 2816 2238 2342 2412 2526

E*u1wx 22 16 16 14 54 104 228 286 639 352 281 375 233Lvutock 2 2 1 3 6 9 12 9 3 1 3 4 5

-Cmur Q4ad 253 268 334 373 433 555 730 1066 1381 1337 160 1763 1728D.Ablm 171 178 218 219 V6 338 502 645 887 901 1119 1t1 11941b8-Larhm 62 90 116 154 157 217 228 421 494 436 48 581 534

R1 1a1s adh turmade Good 952 1026 1165 1387 2512 345 4058 561P 5762 561. 6403 7286 7212

TOTAL 1641 1834 2151 2521 3793 5435 683 9186 10601 9612 10636 118 11704.

S9zr: KY, ifone EICfoD., vSiam p,rs.

- 84 -

Tble 3.5: R DEfAfl. 1970 ID 1982(US uiics)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 19E0 1981 1982

A. btat PrimPotrolusa 1,6MO 1,499 1,390 1,364 1,012 816 762 731 661 729 604 565 449Petulisa Pnducts 827 811 780 860 689 415 505 429 444 428 313 254 246Ir Om 143 130 116 150 178 130 116 82 89 89 82 82 46CbffI. 13 15 13 11 13 10 13 8 10 6 2 1 - Icin_oo 7 7 7 8 7 8 5 5 4 5 5 5 4Other Eipoats 86 70 92 91 115 8D 107 84 82 150 224 267 229Total Coad 2,706 2.532 2,398 2,484 2,014 1,459 1,508 1,339 1,29D 1,407 1,230 J,174 975NW U2 134 137 202 221 230 2W0 275 32D 283 284 277 355Tobal Emporc 2,8B 2,666 2,535 2,686 2,235 1,689 1,708 1,614 1,610 1,690 1,514 1,451 1,33D

1. PFim (196&400)PetroioL 1/ 97.9 130.2 137.2 204.0 657.2 723.8 739.0 826.7 837.8 1174.1 2057.8 2413.6 2312.5Petrolauaiic&zcr I/ 94.4 116.9 130.8 195.6 596.1 624.1 628.1 740.8 7182 1195.1 18754 2147.2 2144.7Iron Cm 103.2 112.5 112.8 113.8 15.7 206.5 Z18.8 205.0 154.3 156.6 180.6 236.2 182.0Cbffe 102.6 107.4 119.3 125.3 126.8 236.5 201.3 341.6 402.6 419.4 536.8 402.6 536.8cmo: >98.9 98.9 98.9 131.0 212.9 206.8 276.8 681.2 681.2 626.5 529.9 404.5 340.6tflr Expwtc 2/ 111.4 122.5 132.2 157.9 1980 224.9 228.9 248.0 292.4 326.3 353.2 336.6 329.5Moal Cboda 97.6 124.5 133.5 193.4 560.6 615.6 619.5 721.5 711.2 1M.6 1567.1 1719.0 1693.9NB 105.2 110.4 115.8 122.4 142.8 161.1 170.9 183.5 196.5 211.4 244.3 273.3 293.2TOt etqna 97.9 123.8 132.6 188.0 519.3 553.8 566.9 629.7 609.0 884.9 1319.3 1442.7 1320.1

C. OCbnt FPa.Petrola 1.595 1,951 1,907 2,783 6,651 5,906 5,631 6,043 5,538 8,559 12,429 13,637 10,383Petroleum Pmboa 781 948 1,020 1,682 4,107 2,590 3,172 3,178 3,189 5,115 5,870 5.454 5,276rm or 148 146 131 171 273 268 254 168 137 139 148 169 83

Cffee 13 16 16 14 17 20 27 28 42 25 8 3 3Cacao 7 7 7 10 15 17 13 36 28 33 28 19 15Other Etaa 96 84 121 143 Z27 181 245 208 240 489 792 899 756T-otl GoodC 2,640 3,152 3,202 4,803 11,20 8,982 9,342 9,661 9,174 14,360 19,275 20,181 16,516NS 139 148 159 247 315 370 341 504 629 599 693 757 1.061Totl Etq 2,779 3,300 3,361 5,050 11,60 9,352 9,683 10,165 9,803 14,959 19,968 20,938 17,557

L/ 7zex umd to elucb mamlcaabIe lndeu fr Othar EtortC.2, MN Iidec tad to deflaec 0ther Eors- caxry.

Barm: BLo and Saute atzt

- 85 -

Table 3.6: fl IMEM, 39701 0 1982(US Sl1k's)

Capqy 1970 I97 1972 1973 1974 1975 1976 1977 1978 1979 198D 191 1982

A. utaint Primcm_r N 1n-DAmb 8D 82 103 128 118 150 152 2b5 290 22 171 179 n.a.Case DuharSm 167 171 205 20 223 223 313 354 477 471 553 539 ns.RIrd Inte Gods 11 970 966 1,062 1,21 1,7a 2.142 2.649 3.198 3.174 2,800 2,655 2,664 n.a.IadatdAl Itdpst 30 f4 534 591 5t6 796 1.033 1.565 1,407 1,033 973 89 n.-.Otlbr ctalGoods 23 16 15 14 46 76 146 173 369 200 I1 165 n.a.Tatl Coob 1,63 1,717 1,919 2,145 ,714 3.390 4.293 5,555 5,717 4,732 4,452 4.436 4,633Ws 499 538 574 611 793 1,022 1,114 1,S6 1,908 I.9D2 1,721 1,04 2,063Total Iqporr 2,127 2.255 2,493 2,756 3,507 4.412 5.407 7,071 7.625 6.634 6.173 6,340 6,696

3. Prm (1968120)Qrant NmrDanlm 103.0 109.8 112.6 122.2 132.6 1445 150.3 156.6 170.1 196.3 233.2 324.1 na.

Cose Dtbla 102.3 104.1 106.3 109.1 123.6 148.2 160.2 182.0 185.8 191.1 202.4 219.2 na.Rw wid htaumit GoC. 1/ 105.6 110.6 116.4 123.2 145.7 162.6 172.7 185.3 2.5 217.0 253.3 234.1 n.n.IXuut qm t 106.2 112.5 119.0 125.8 144.2 165.3 173.5 185.7 2D3.2 215.3 240.6 27l.2 n.a.Otier CqI ot 105.1 112.6 116.2 I.5 129.2 148.1 164.8 170.4 173.5 176.4 217.2 224.5 n.s.Taul Gooad 105.2 110.4 115.8 122.4 142.8 161.1 170.9 183.5 196.5 211.4 244.3 273.3 293.2Ws 105.2 110.4 115.8 IZ2.4 142.8 161.1 170.9 183.5 196.5 211.4 244.3 273.3 293.2Toaul Xapou 105.2 110.4 115.8 122.4 142.8 191.1 170.9 183.5 16.5 211.4 264.3 273.3 293.2

C. awn PrimG... NU.-Thjbln 82 90 116 154 157 217 223 421 494 436 485 %I 534Casrtrbls 171 178 218 29 276 338 502 65 887 9 1,119 1,182 1,194R-ar! lt±ermiae CooSs 1/ 1,024 1,068 1.236 1,492 2.595 3.482 4,575 5,926 6,395 6,076 6,724 7,569 9,092Inhatssl Eydpun, 412 522 635 744 788 1.312 1.792 2,907 2.816 2,238 2,342 2,412 2.526

r Ciqdtal Caood 2A 18 17 17 60 113 230 35 641 353 207 379 238Total Goods 1,713 1,896 2.z22 2,626 3,876 5,462 7,337 10,194 11.234 10.004 IO,577 12.123 13.584Ws 5325 4 665 748 1,133 1,646 1,903 2,782 3,749 4,021 4,205 4,931 6.050Ttaul 15on0 2,238 2,490 2,887 3,374 5,009 7,108 9.,20 12,976 14,983 14,025 15,082 17,054 19,634

/ BOD aijuste ludtd.

Saga: VY msi slasistmd

- 86 -

lable 3.7: HEU IN 1 USIIES1S, 1970 TD 1983(1i & Per - HilUor of U.S. dollaxr) 1/

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 198D 1981 1982 2/ 195

Net ijtensai1 PAverven 1023 1479 1756 2412 6581 9243 9285 9129 11510 1596 19708 19069 14164 14433

Br 1015 1459 1677 2401 64Z39856 8570 8145 643 7740 705 9619 10039 11149Gold NWH 39 -WI1 472 1472 475 1 -94 48 39Foign ExdF, 466 874 1047 1658 539D 7296 6874 6506 5007 6398 5599 7035 5354 6346SO03 48 83 128 143 147 145 146 165 218 350 343 445 40 450DM Net Pwi£tin 117 111 1ll 12B 424 943 1078 999 732 5C8 599 655 116 914

_omil hr4nu7'xvi (?t) - _ - - l39 290 6U. 916 87 729 1483 2452 1521 6o

Nationl Petroleu CAr t) - - - - - - - 3911 7142 1(823 766O 2540 2252Shxt-tem forelip mem - - - - - - - - 39E8 7170 IC 7806 2718 n.a.

Of whihd: 3/cconts a ble b - - - - - - - 1876 2669 2M00 2201 2432 n.e.

B s - - 13 75 93D 555 - n.a.LOebli -tis - - - - - - -17 -28 -59 -149 -178 n.a.

c4mw da13l MSzNt) 8 2D 79 11 19 97 74 68 2S8 350 377 338 64 343

1/ Net LI,tr tck Rarue figre In this table differ from th bilance -of pq,tg (table 3.1) due to tih inclueian oE the NatONalPletroleum Cmwr adt the eaIzi of tbe ictegory 'offidal eetion of zyer>M.

2/ Data fran IW. Gold wluad at the ny offitcal price of 1.5S300 per acm Introduced an September 27, 1982. CetTal Ihdc Iljitlitim how liconettel act oE foeigi eI p.

3/ Data from rlU. On SeptqWer 27. 1982 thle short tenn aets except for the acdam vable aM a suli operstirg halance wertramcferred to the Cetral BRi

S--our: V.Y Worfm 4ono do oar e .Yom the lW.

- 67 -

Table 4.1s EXTEiRAL PUBLIC DEBT UTtlTANDIIN INCLUDING

UlI6IUStstO ASe OPcSECEmIe 51. 132e

DEBT REPAYABLE It FOUtEI11 CUReECCT ARD 60006 Of bi

tin Theousads o1 US Dollars)

Type of Credltor Debt uleteedieg at

Creditor Coentry Desbursed Uediebereed Total

Suppliers Credits

belgiuem 5,723 - 5,725

Fraens 44,053 23.427 73.450

Germeay Federal Repubile of) -

Italy "14 - 414

laeps 50,263 11,217 65,43'

11*tbarleasd 1,720 1,101 2,621

Norway 354 - 354

Per tege I-__

Sal t rland 1,621 1.021UMIted Kingdom - -

Uelted States 1,06 - 13.068

Total Suppliers CredIts 122,424 46.74S 171.361

Fleec1lel institellun

Bekte__

Frame. 21,220 5.640 26.,60

Derusey (Federal Republic of) 236"'01 1.626 293.427

Italy S70 _S7tl

lap.. 30.437 515 30.132

Luxemburg

Switzterland _

Jelted Kingdom 210.000 - 210,000

el ted States 765,315 - 765,335

Multiple Loedore 9,121.723 777.375 1.6891,06

Total Fineecll lestitetleec 10.446,154 715,15 11.231,310

Seeds

Bere"y (Federal RoepblIc .o) 5$13,58 - 513.8

Japas 361.672 - 361.672

1elt:4 States 350,134 - 350,134

Meltiple Lesgere 7,375 - 7.975

Tetel BOnds 1,233,673 - 1.233J,67

ltlonel Isatlee

Uelted states 1"33 1"33'

Multiple Leeder - - -

Totel Natl*nallsatlem 13,339 13.3"'

Nd ItIllaters I Loans

Cerperaclee Aedils Foments 940 - 340

l1O0 87.477 - 7.477

IDOB 63,017 - 63.017

Total Netlelaterel Lean. 151,434 - 151.434

Illteral Loearn

Canada 46,706 1.000 47.706

Germanr (Federal Republic of) 37.526 - 37,828

UMlted States 64,226 - 64,226

Tetal Bilateral Lese 141,750 1.000 143.760

Tetel External Pubile Debt 12,122.050 634.301 12.356.351

*I Estlited.

DI Dnly debt. vitl em origlnal or extended maturity of over goe year erelecladed.

ce Deb' outstanding laced.. principal Ie arreere but eucledes Interest Is

ereer.

gSerces SCY

- 88 -

Table 4.2: SERVICE PA?IMTS, COITIENTS, uISBURSBENTS MND CUTSTANDIN?C AMOINTS OF Page 1 of 10EIRSL PUBLIC DOCA?

PROJECTIONS BASED ON DEBT OUTSTANIJING INCLtMINO UNIOZSBRSED A5 OF DEC. 31. 982DEST REPAYABLE IN FOREI14 CURRENCY AND aOODS

(IN THOUSANDS OF U.S. DOLLARS)TYPE OF CREDITOR SUPPLIERS CREDITS

TOTALYEAR DEBTOUTOSTAtlJINGA T T RA N S A C t I O N S D URIN P E R I OD OTHER CHANGES

: BEGINNINC OF PERIOD

: DISOURSEO : INCLUDING C0MMIT- : DISSSE- : S E R V I C I P A N t E N T S CANCEL- AO.US1 -J NLY :UNDISBUASEO: MENTS : MNTS -..............................-- -.. 5 LATIONS :Ea i

PRINCIPAL INTERCST: TOTAL: (1) : 3 t :2) (3) (4) (: 1 (61 (7) (a) 15l

1970 36.536 liS.72S 33.390 45.403 9.346 1.26S 10.641 - -5371971 72.227 139.233 141.428 104.785 11.474 2.216 12.690 di 19.451972 177.793 280.971 169.564 16.139 43.321 1.211 G1.522 - 4.4361973 302.843 419.9GO 126.444 122.795 75.771 14.271 90.049 * 34.0091974 320.760 504.664 319 49.176 71.372 15.748 87.120 3.739 32.411.;%7S 320.920 *C2.287 * 32.770 197.OG0 14.b42 21l.402 * j.CJ91976 217.232 255.579 79.997 5.377 72.752 5.782 *JM.534 1.019 -4. J21917 144.729 2S7.503 34.531 573 55.171 5.11 C0.3:2 - 2C.9141978 96.833 269.779 165.942 61.648 57.540 4.7iC6 4.2.2 - $3.k$X1979 112.476 431.399 - 9.534 31.035 5.0.9 36.114 * -22.4&71f.*0 65.34g 377.09? - 75.692 22.606 6.610 29.218 - -1.22t1961 139.391 354.058 - 7S.774 65.053 7.636 72.749 - -4.1021982 137.098 242.903 44.787 46.855 5.359 S3.247 -24.6461953 122.624 171.369

* * * * TE FOLLOWING FISIIES ARE PROJECTEO * * * * D

¶9l3 122.624 171.349 - 32.280 3S.980 5.75 41.734 * 21J84 118.927 135.391 - 16.351 35.962 5.016 41.068 --1985 99.315 99.428 - 113 32.494 3.913 26.47 - -19BG 66.933 60.932 2 - 2.494 2.6u7 35.051 -t9B7 34.439 34.439 - - 30.376 1.240 31.S.6 -I-193 4.062 4.062 - - 4.0G3 32 4.0j5 * I

* ThIS COLUNN 1SHOWS THE AMOUNT (If AkITiiMLTIC IMALANCE IN THE AMOUNT OUTSTANDING INCLUODItJ UN32SB17ASED frOM ONEYEA2 TO THE NXT. THE MOST COMON CAUSES Of IBALANCES ARE ChANGES 1N ExCHANGE RATES AND TR&NSFER OF aEtrSFIOM4 ONE CATECORY J0 ANOTHER IN THE TABLE.

_ 89 _

Table 4.2: CUVIZC P ,AIHN . CMITMENTS. DISRURSENENTS MD OUTSTANDING AkUNTS OF Page 2 oa 10RUERNAL PUBLIC DEBT

PROJECTIONS BASED ON OEBT OUTSTANDING INCLUDINO UNDISLURSED AS OF DEC. 31. 1982DEBT REPAYABLE IN FOREIGN CURRENCV AND GOODS

(IN T#HOUSANDS OF U.S. DOLLAUSITYPE OF CREDITOR FINANCIAL INSTITUTIONS

TOTALYE A OEST OUTSTANDING AT : T R A N S A C T I O N S o U R I N C P E R I 0 D : OTHER CHAIJGES

SIGI: NINS-OF PER1OO :._. _......... .. _.... ....... -- - -- - -- -- --- -- - -..-- - -- - ---- - -- - ......... __... .... ... .... .____.._

DISBUhSEDt: INCLUDING COMISST-: DISBURSE-: S f R V I C E P A Y N E N T S CANCEL- ADJUST-ONLY :tINDZSBURSED: MENTS : MENIS :------- - ----------- ----------- LATIONS MINT

: : : : : PRINCIPAL INTCREST TOrA:.(: ) (2) (3) : d) : 5 : 16) 17) (a) 191

3970 109.191 164.704 119.511 146.905 S.656 16.424 22.030 22.297 -t1973 252.139 296.261 232.018 225.684 29.140 22.284 C1.424 - *1.31t972 446.0C6 493.270 256.1 2G0.349 75.33q 32.117 107.4J5 414 ,4. gr1973 626.785 676.130 73.160 118.314 86.431 55.08 341.SRI - :-51974 662.137 666.412 92.320 69.709 265.G96 72.740 331.44iS 7.6a8 3a 441971 436.376 483.992 - 16 170. 366 48.S68 21a.754 24 -5041976 217.196 213.268 1.053.010 1.000.000 106.173 23.638 132.411 - . -t.47)3977 1.206.37S 1.261.03S 1.595.571 1.575.575 70. 132 121.294 191.426 295 11.,401975 2.712.399 2.797.323 1.901.546 1.686.546 68.577 :7a311^ 347.418 - 38.3321979 4.557.406 4.676.225 3.G59.679 3.G62.206 695.560 482.01 3.177.001 - 3.7061960 7.S36.233 7.644.250 2.358.275 2.453.146 1.310.477 1.064.541 2.2BI.011 1.61 .26.Cr.t1931 8.646.121 3.61.322 2.000.000 1.966.264 1.177.539 1.582.707 2.760.246 - 49.3G?1962 9.391.627 9.461.616 2.590.60o0 1.732344 1.329.11t 1.413.056 2.740.167 - 506.0013932 10.446.154 11.231.310

THE FOLLOWINO FIGURES ARE PROJECrtEO - - * -

3963 10.446.154 11.231.310 - 732.736 1.499.500 1.110.579 2.610.079 - -23114 9.720.287 9.731.806 - 2.422 *.Sq2.298 976.5!% 2.a75.9-13 7s955 7.632.417 7.832.417 - - 1.880.333 71-9.321 2.G'.1.652 * 2

195G 5.952.0:B 5.952.058 - - 1.044 626 58s.q7s 2.42CG.54 - -2s&., 4.107.460 4.107.4S0 - - 1.7790 34 389.OJI 2.100.6.u

19S9 2.22C.427 2.328.427 - 9134b1 221.401 1.434.b-i2 -

*933 1.414.97 *.434.979 - - 676. 23 334.820 61a.003 - -l1990 736.715 738.715 606.609 63.420 670.019 -

3991 322.107 132.107 - - 120.299 9.356 140. 15 --1992 3.607 1.807 - - 301 147 446 - -

_ -HIS COLUMN SHOUS THE AMOLUr OF ARITH4METIC IMBALANCE IN THE AMOUNT OJTSTANU]f- IN:LUOIN0 U?.UIS9URSEO FROM CNEYEAR TO THE NEXT. THE MOST COMMIN CAUSES OF IMBALANCES ARE CHANGES IN E)CHANG.E RATES AND 1RANSFER GF DEBTSFROM ONE CATEGORY TO ANOTHER IN THE TABLE.

- 90 -

Table 4.2: SERVICE PAYtNS, CONNIThENTS, DISBURSEMENTS MND OUTSTADINDC MOUNTS JFEXTERNAL PUBLIC DEBT Fag 3 of 13

PROJECTIONS BASED ON DEUT OUTSTANDING INCLUDING UNOIS6URSMD £S Of DEC. 31. '062DEST REPAYASLE IN FOREIGN CURRENCY AND 0000S

(IN THOUSANDS OF U.S. DOLLARS)TypE Of CSEOITOR BONDS

TOTALYEAR DEBT OUTSTANDINGA T : T R A N S A C T I O N S O u R I N C P E R I a o oTHE CIALNCGS

:ECXNNIWiOf or IDoo :-----------------------~~~~~~~~~~~~~~~~~~ ............ ...... ........... ......................................

OISSURSEO: INCLUDING COMMIT-: OIS6URSE- S E R v I C E P A v N f N T s CANCEL- :&0AUST-ONLV :UIDISBURSED: MINIS NEWTS :. LATIONS MCEI J

PRItNCIrAL INTEPRsT TOTAL: 11 ) : {(2) (32 ) (1 3 (6) (7) go )91

1070 30.322 38.322 - - 1.000 2 .SA4 3.'4 -*

1971 3727.2 37.322 - - 9I0 2 .670 32Gl* 3.27q1972 39.600 39.600 39.300 39.500 1.000 2.759 ;. 7',-1973 79.031 79.031 11.350 .t51S 7. nc5 5s. 74S1074 33.446 *3.446 1.900 1.900 5 5G7 L.4"7 12.or.4 o1975 04.002 04.002 - - 10.122 i.109 6.1 2G * ? GlO1976 71.179 71.179 - - 1.775 C.GGO 14.9935 *2.401077 G4.944 64.944 424.720 424.720 5.199 1i ua 9in.0'S * I.wIJ1973 496.457 496.457 655,942 661.942 9.456 411.251 53. to7 R ft.O179979 1.254.560 1.254.500 1S3.600 153.600 10.3 63 3..f-s 03.39d ., * *s I1930 1.339.330 1.339.330 27S.556 27S.516 23.155 102.2S5 126.210 * 48AlOll 1.512.4G1 l.Ss2.466 - - 30.112 121.034 952.417 * -197.6771082 1.434.071 1.434.075 - - 14.233 112.499 253.737 - -44.1%1983 1.233.679 1.233.679

* - * * THE FOLLOWING FIGURES ARE PROJECTED * * * - *

1933 1.233.673 1.233.679 - - S5.6f 94.040 149.7 -;1934 1.177.9863 g.77 q3 - - 283.502 99.0Ž0 3j*4',5 * I1965 391.479 891.479 - - 02 .100 6b.^:-,,I tCs. nr * -21"t0 733.073 73.1713 - - 145.730 sa.50S9 2(14.10 .

i'Ž7 643.143 643.143 - - 4O.41 A d7.I40 i. -. r1 - .1936s 502.661 502.661 - - :90.223 30.092 227..1 .

1939 312.440 312.440 - - 94.639 234363 113.2fl n*t990 217.602 217.602 - 167.036 13.563 120.601 . 31991 50.567 50.167 - - 13 4.422 4.25 --1992 50.464 50.434 - - O.9003 441 14.51 - -

* THIS COLUMN SHOWS THE AMONT OF ARITHMETIC IALAINCE IN THE AMOUNT OUTSTAI.O3%G lteLUOING uro.:6.si%Eo rum. a.VE-Ar TO THE NEXT. THE MOST COMON CAUSES OF IMALANCES ARC CH"ANES IJ EaCo- CGE RATES ANO lQar;SId OF DCLTSWP ONE CATECORY TO ANOTHOER IN THE TABLE.

- 91 -

Table 4.2: SERVICE FAYKNT!, COX NITHENTS. DISIURSEMNTS MD OUTSTMNDINC AMOUNT OWVXTARNAL PUBLIC DEBT Page 4 of 10

PEOJECTIONS *aSED ON OCOT OUTSTANDING INCLUDING UNODIS4UPSEO AS OF DEC. 31. 1962ODET REPAYABLE IN FOREIGN CURflNCY AND GOODS

tIN 7HOUSANWS OF U.S. DOLLARS)TVPE OF CREDITOR NATIONALIZATION

TOTALvisa : mOT OUTSYNOIN AT T R A N S A C T I O N S OUR aI N P I P I O D UINER CHANCES

*CGINNING OF PERIOD

0ISSURSE9 INCLUDWIN CO IT- DIS0URSt- : S a v I C I P A V N E N I S CANCEL- AoDUST-ONLY UNDISBURSED: HWTS :NETS ----------- --------- -,,,,,---LATIONS MN1I .

PRINCIPAL INTERIST TOTAL(1) (2) : 2 (4) (5 :)I :I ( 9)

1q701-q . . . . .

*073- --. . . . .

974 - - - - - - - '3*e41976 113.924 11.24 - 393 7.305 1I.499976 102.521 102.531 - - 313)2 50.0 1 ,481 - *7.lQ0

1977 1.006.946 1.006.945 - - 31.217 47.266 4d3u.%3 i -. 378171 022l.00 622.003 I -SO.34f 26.q2t 177.2071979 471.663 471.463 a -s.646 56.032 145.7761910 302.817 312.817 - ' 306.613 24.720 331.3321 *6:6

13R1 7T.573 75.173 - - 9.700 2.010 12.6i0 - -X.7741Q*3 29.099 29.099 .- -700 2.134 1;41993 19.3: le.39

* * * * * * THE FOLLOWING FIGURiS Aug P*OJECTEO * * * * -

1913 19.9 19.399 - .700 l.35U 21.056 -

1964 9.700 9.700 , - -. 700 * 2 10.282

THVS COLUIR SHOWS 1111 AMOUNT OF ARITH.aIIC ISMALANCE IN THE AmOUNr OUTSTANDING INCLUDING UNDIS3uASED PrON ONEVIEC 10 THE 74E1. THE MOST COMAON CAUSES OF I*GALANCES &RI CHANGES IN SxCHANUE RATES 11.0 TR&NSFpa OE61 DgSFROM ONi CATEGO*Y TO ANOTHER IN THE TABLE.

- 92 -

Table 4.2: SERVICZ PAYMENTS. COKMITIENTS. DISRURSLMLNTS AND OUTSTADN OUnS or * S EXTERNAL PUBLIC DELtP

PiIOZECTIONS BaSIO ON DCST OUTSTANDINa INCLUOING tMISOURS5D AS OF VeC. 31. 1962DEtT REPAVABLE IN P`if ION CLuR.OCw AND co Os

(IN INOUSANDS OF U.S. DOLLARS)TPE OF CREDITOR MULTILATIRAL LOANS

CREDITOR COUNTaV CORP. ANDIN& POMENTOEAR : DEBT OUTS&NDINGA T T A A N S A C T I O N S O U R I N a r .R C2OahlAs

; C0GINNING OF PIRIOO...... ............... ......... ............... ...... ........... .......................

OISSURSED ; INCLUWINC COMMIT- :ZsIURSE- S t I V I C E P A * N E N I S CANCEL- A:oUST-ONLY UNOISSURSED: MtNTS NTS --.-------- ......... ... LATIONS MINT .

PRINCIPAL INTIRISI TOTAL(1) (23 2 : (: 3 : (5 (6 41 : 17I (: 1

197t . . . .

1972 - .1033 1.111 1.611 IS*974 1.511 il,Sl . .53 013i075 I*Ul I.SlI . . 113 1131976 1.111 1.511 ' ' * f0t A1977 1.511 1.611 .76 ;I,71276 1.43S 1.425 - - 63 120 20J1971 1.352 1.352 - 90 :11 201 *

iin 1.281 1.261 - - 9s l05 *l91 1.163 1.113 - - 10t S7 2041982 1.OS6 1.0 - - its I7 2021963 940 1140

* * * * * THE FOLLCWuZN FIGURES ARE PROJECTIO * * -

1912 940 940 -26 77 203964 stA 614 - - 27 ls1s 177 677 - - 49 S4 202l9o6 529 029 - - 162 42 D41067 217 327 -- 76 26 :04

966 I 1l .2 - 91 12 203

T41S COLLUM S.OiaS TIC AMOUNT Of AUITSI6.TIC INDALA%CE Ii THE ANOtiNT OUT:A%n:NQ. If.C;,LpU4C UwOG 4 lM,tO fUf? ON.%CAR TO CN1E NtAT. THE "CCi COMHN CAUSES Of INCALANC(S ARC CHANWCS 1k tAb K&tM. ta IECS VID Iaaer.rO Of 0(011FrON ONC CAT(EOVT 10 ANOITHR IN 1II TAULE.

- 93 -

Table 4.2: SZIVICZ ATS 5, COKrMS DISOUiCIENTS MID WUTST*NDIG JL4OUNTM O Page 6 of 10- EXTEUI FPUL IC DEEt

PMOJ&CIIOS 5S50 ON DoET OUTSTANOING INCLULING UNOISSItSUO AS of DEC. 31. 1962aigT mgravrahs IN fOPEION CURRECY AM GOODS

(IfN THOAIS OF U.S. OOLL&ASITYPg or CUEOITUR WLTILAVEnAL LOANS

CDlTOIO COWiTRv to"WEA DE: TOUTSTANDINGAT TIAN"s ca bOcS DURINa PEIOD OTHER CHAMOS

*E@3#41No OF P16100o,, ........................................................ ........ ............. ,_,__........... .......................

OISURSEO SINCLUOINS: COMMIT- OISOURS11: S I V I C pAY N 4 CANCEL- ADJUSCtONLY :UWOISOUESEz: 0EN'TS MiNTS ........... _ -. .. ..... LASON% wM-

PRINCIPAL INIIRISI TOTAL(1) fl 5 z (4) (SI is) (76 (so

1170 3211.14 211.q - 11.334 * .302 13.1,1 22.400 4.1121971 216.6 27.n6 O1.000 9.111 10.415 13.710 22.1261 1.211 1072 211.790 29t.334 2.000D 16.193 10.96 13.71P F 246741973 221.027 206.313 11.090 11.130 19.946 33.GW*.1914 222.35? 290.644 21.000 20.494 17.60 11.166 2 .I2'S 22S.014 291.230 13.467 17.C-o 1,07 33.4'sns 9.11T1976 221.403 247.23 10.8111 1.107 14..Iq 23.9051t9? 213.17? 325.722 -. 137 21.19 31.210 21,272%*19' 196.319 206.790 2.901 20.232 14.911 22.0*01979 1790.0 ISS.1 - I1.s 24.92% 4.11s 3q.7001910 ISS.343 11.033 * 461 2 12.d72 ,.7 or,2 i 1.1129ine1 132. I" 1233. -I- 1.295 9.25 34.5441711 102.161 109.11 - . . 11.404 7.797 26go2011193 87.471 87.477

* * * * I* THe FOLLOWING FIGURES ARE POO.JtCTED * * *-

*w*X2 61.471 07.4?* -9.101 9313 34.9301*q4 67.670 67.070 -- .220 2.362 22.2321nt Or - so 45.150 - 1 7.05 2.793 20.C201396 30.411 30.431 - * is. 66 '.624 17.S *Ol937 14.St 14.319 - - 7.11S 17 2 "

1lon 7.363 *.61 - -. 4.60 402 5.2; 1939 2.21S 2.2S1 - - 2.12311 52 2.5

* 1"3S 1oCuO.d SV1 THE alCFmt Or ARITMETIC tZSALANCE IN THE AUPDUIE OUtS?ANOIUO 3"CLUOINO UNDISSuOSSO rFow oNETEAR to TUE NtEA. T" MOST COVM CAUSES or INIALANCtS "aE CHANGES IN EXCHANGE 3675tts ANO liANs i of 066PROM ONE CAftECOV TO ANOT0E4 IN TE.TABLE.

- 94 -

Table 4.2: 5ISVICE PAnTETs. COKhkTMelNTS* DISSURSElMETS MND OUTSTANDING AMOUNTS OI Pa,c* ? of 10UxTrUAL FUILIC DgT

reaOCCt ows "Sao ON OUlT OuT SlAMmIN 1NCLUO1M6 uNOSSURSCO *S OF DEC. 31. 114201DT REPAVAILE IN POUgtC CuaI(NCv AND 0o0S

(IN 70HUSN&DS ap U.S. DOLLARS)TYPE OF CR t07OR MULTILATERAL LOANS

CRtDIIa. COUNTRY IDWEA" : 1t OUTSTLNDiNG AT T a SACTIO N S DU I N G P a a a o0 OTHER CHANGES

:tGIINGW or OF w oo;

:DISUUSID: INCLUOIS: COMIT* i DISIRS1- I 5 I ; V I C C P A V NI H T S CANCEL- :AODJUST-ONLy :UN1SI'JRSEO: MINTS I NTS -: LATIONS :HENt

: PRINJCIPAL INTCR1ST royaL

1970 24.56 10.430 402 1.201 2.633 2.'24 4.0721971 26.962 91.999 61.907 1.372 3.8u7 .2. I1972 21.440 114.020 400 14.9( 4.332 3.013 7.245 *l.4'.972 42.020 101.532 416.00 2t.333 4.297 4.000 0.31i3 2.000 :1tc§974 61.921 1%0.304 - .047 4.7%4 5.3t.5 10. 1) 592 4.034:171 09.311 141.112 A4.260 1.7.1 g.C3g 10.312 -1.74997C 76.444 142.362 - 24.20 7.388 G.I7? 14.2frG - 7,2C.219'?. ,09100 1393.6 . 11.427 19.41fiJ 28.33 12.591 .n .id '1975 92.299 110.b17 - 6.324 96.1 .C!4 17.sr,1 - 0.0721979 91.34 107.77 - 4.006 10.193 6.213 *C,OaL 49 S1,1s90 93.219 117.09S 2.032 10.030 5.190 15.220 175 2.329tool *1.869 501 - 3.t23 9.193 4.40 13.999 39 -2.1461102 79.233 73.2|3 - 8.670 3.371 12.545 * -1.191933 62.017 S3.017

* * * * . * THI FOLLOWING FIGURES ARE PROJtCIIO * * * **

1963 2.Ot7 62.017 - 713 3:.11 I0. .rd 5W5S09 95.909 - 7.1sX62 2:."IS 9.649

t-b-t9 46.347 483-1-7 7.000 2.2nz .2r2' I1994 41.246 41.34i - -. 11151 1.-1 6.701 a1917 34.404 34.490 - . 7.032 e.E*.4 g4i: - 6'913 21.459 27,d59 . 6.755 9.023 ,. . - -9989 20.703 20.703 - - 4.400 (.C4 1.064$090 10.303 10.303 -. 231 506 4.337 -1991 12.S72 12.572 - 2.9 2f 2.957 . -q992 9.73 97X2 - 1.470 a33 q.7" *

tHM COLUMN s5MsW 764 AMOUNT Of A41?TOMTIC IWALANCt IN 1*04 AMOUNT OUTSTANOI)iJ1 ItCLUr:Ii4 6t* CLJUJ:tO faUU OPAVE&* TO 7.T %faT. TIN MOST COMMO4 C1USt; Of ImeALANcts ARE CiJ"AtS IN EXCHIANGE MRAiS &O tRAN"fla Of CLI5T5FnOM ONE C&TlWNV 10 ANOT,4i AN THE TAILS.

- 95 -

Table 4-2: sEvCz PAT?ENTh, CDOMITM1ENTS, DISBURSEMENTS AND OUTSTANDING AMOUNTS OF Page 8 of 10EXTRNAL PUBLIC DEBT

PROJECTIONS BASED ON DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF DEC. 31. 1982DEBT REPAYABLE IN FOREIGN CURRENCY AND GOODS

(IN THOUSANDS OF U.S. DOLLARS)TYPE OF CREDITOR MULTILATERAL LOANS

TOTALYEAR : OEBT OUTSTANDING AT T R A N S A C T I O N S D U R I N G P E R I O D OTHER CHANGES-

: SEG!NNIIG; OF PERIOD

DISBURSED : INCLUDING COMMIT- : DISBURSE- S E R V I C E P A V M E N T S CANCEL- ADJUST-ONLY :UNDISBURSEO: RENTS : RENTS ----------- ----------- .----------- LATIONS MENT -

: : : : : PRINCIPAL : INTEREST TOT4L(1) (2) (3) (43 (5) (61 (73 (8) : )

1970 235.760 340.351 402 20.539 12.540 14.812 27.452 4.852 -1971 243.659 323.961 96.907 17.883 l4.303 15.0°9 29.392 1.2111972 247.238 405.354 28.400 31.099 15.288 16.731 32.019 - -1.4501973 263.047 417.010 48.111 41.934 22.027 20.077 42.104 3.000 2.05q1974 285.823 442.463 22.000 29,141 22.122 21.084 43.20S 592 4.97.11975 296.236 446.683 - 27.727 22.659 21.231 44.030 29.870 -1.7:91976 299.358 392.205 - 35.101 26.495 21.864 4t.259 - 2.8621977 310.748 3G8.572 - 16.564 41.499 24.380 65.879 12.591 4.301978 290.113 318.782 - 11.789 29.166 23.592 52.758 - G.0721979- 278.809 295.688 - 5.1I5 3S.708 21.262 56.970 49 5151980 248.823 260.489 - 2.500 32.766 17.722 5O.489 6.004 -2.3291381 215.228 219.39O - 3.123 36.985 13.762 50.747. 32 -2.14619R2 180.220 180.220 - - 27.190 11.759 38.49 - -1.5261993 151.434 151.434

- * -* THE FOLLOWING FIGURES ARE PROJECTED.

1983 151.434 151.434 - - 27.441 8.377 35.818 - -

1984 t23.993 123.093 _ _ 26.G19 6.7t4 23.313 - _1295 97.374 97.374 - - 25.014 5.079 30.0q3 - 2198G 72.362 72.362 - - 22.979 3.554 2G.533 - 11957 49.384 49.3H4 - - 14.3G 2.257 it.C:. - -11988 35.015 35.015 - - 11.776 1.449 13.225 - -11989 23.238 23.238 - - 6.935 76G 7.701 -1990 16.303 16.303 - - 3.731 509 4.239 - -1991 12.572 12.57: - - 2.599 358 2.957 - -1992 9.973 9.973 - - 47O 288 1.758 - I

THIS COLUMN SHOWS THE AMOUNT OF ARITHMETIC IMBALANCE IN THE AMNUNT OUTSTANODN INCLUt7IN UNDISCURSED rROt ONEYEAR TO THE NEXT. THE MOST COMMON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER Of DEeTSrROM ONE CATEGORY TO ANOTHER IN THE TABLE.

- 96 -

Table 4.2: SERVICZ PAMENS. COUtI UTS. DIISUURSDENZTS MND STADINC MWNTS OF Page 9 of 10* =RUAL PUBLIC DENT

PROJECTIONS BASED ON DEBT OUTSTAIDINO INCLUDIN UIDSCURSED AS OF DEC. 31. 1982DEBT REPAYABLE IN FOREIGN cuJREIC AND G00DS

(TN THOUSANDS OF U.S. DOLLARS)TYPE OF CREDITOR BILATERAL LOANS

- TOTALYEAR : DEBT OUTSTANDING T : T R A N S A C T I O N S D U R I N G P E R l O D OTHER CHANGES

: BEGINNING OF PERIOD :.__..._... _________ ..................... _ .. _ .. _.____________............................ . ..... -- --- -- - --------- ----- ---- ----..................... ____.___.____

DISWURSED: INCLUDING COMUIT-: DISBURSE-: S E R V I C E P A Y N E N T S CANCEL- ADJUST-ONLV :UNDIS3URSEtO: PENTS : *E%ETS - -- :-----------: LAT7ONS MI ENT

: PRINCIPAL : INTEREST TOTAL* (1) : 4(2) (21 (4) (5) 16) (7) (8) (9)

1970 125.574 135.546 4.924 9.469 13.157 5.160 10.317 - -197? 121.886 127.313 15.728 7.014 13.753 4.897 18.650 247 6001972 115.216 129.641 86.751 45.148 13.753 4.546 18.304 94 -8st973 146.387 202.452 97.126 1.963 20.310 6.517 26.827 - 6.4071?24 128.011 285.675 3.bO1 9.8B2 18.938 5.086 24.524 31 18.307-19-5 119.531 293.614 - 169.146 24.159 5.677 29.3_C 2.012 -139J341975 253.509 253.509 30.890 13.104 56.799 14.119 70.918 - 15.6271977 225.694 243.227 62.567 11.765 44.250 13.013 57.268 - 14.7771978 208.639 276.341 - 30.607 40.807 11.006 51.813 - 19.2501979 217.907 254.784 - 13.378 28.248 10.257 38.505 - E.0261980 209.938 233.462 45.000 43.180 32.635 13.362 45.9S7 1.863 -13.3661931 212.853 230.S98 - . 10.666 31.665 11.771 43.43G - -11.978¶¶W2 179.875 165.9S5 - 6.058 33.574 CI.224 46.603 - -3.6211983 143.760 149.760

* * - * * * !TM FOLLOWING FIGES ARE PROJECTED * * * * -

1983 148.760 149.760 - 1.000 34.018 11.209 45.227 -t9C4 1t5.743 115.743 - - 34.459 8.710 43.169 -1O25 8t.285 81.285 - - t4.215 6.438 20.653 - -11955 67.0G9 67.069 - - 12.911 5.299 18.210 -1937 S4.1S9 54.159 - - 10.866 4.256 15.122 - -

1988 43.293 43.293 - - 1t.294 3.345 14.G39 - -

1989 31.999 31.999 - - 10.982 2.4t6 13.228 - -

1990 21.017 21.017 - - tt.4P6 1.500 12.986 -1991 9.532 9.532 - - 9.532 541 10.073 - -

- THIS COLUMN SNOWS THE AMNOUT Of ARITHMETIC IMBALANCE IN nlE AMOUNT OUTSTAMOItG INCLUDING UCD!SSURSED FROM4 ONEYEAR TO THE NEXT. THE MOST COMMN CAUSES OF IMBALANCES ARE CHANGES iN EXCIIANGE RATES AND TRANSFER OF DEBTSFROM ONE CATEGORY TO ANOTHER IN THE TABLE.

- 97 -

Table 4.2: SzVCE Pk!NNTS oDKNi1NNSs DIns srSEs mD OUTsTANDING AHouT Or Page 10 of 10EXrERNAL PUBLIC DEW

PROJECTIONS SASED ON DOET OUISTANDTIN INCLUDING UNOISWRSED AS OF DEC. 31. 198iDEBT REPAYABLE IN FOREIGN CURRENCY AND) OODS

(IN THOUSANDS OF U.S. DOLLARS)TOTAL

YEAR :ODEUTUTSTANDINC AT : T R A N S A C T I O N S U R I N P E R I O D OTHER CHANGES.: 8EGINPNG OF PERIOD

--- -- -- --- -- -- -- -------- -------- -------- -------- -------- ------------- .. .. .. .. .. .. .. .* DISBURSED: INCLUDING: COMMIT-: DISBURSE- : S E R v I C E P A Y N E N T S CANCEL- : ADJUST-

: ONLY :JNDISBURSED: MENTS :ENTS ---- :-----------:-----------: LATIONS : "ENT -: PRINCIPAL INTEREST: TOTAL

: (1) : (2) : (3) (4) (5) : (6) (7) (6) : (9)

1970 "S4.783 794.649 198.227 224.316 41.799 40.275 82.074 26.449 -1381971 727,933 924.090 457.001 355.435 - 79.660 47.114 126.774 1.527 31.9521972 1. 06.812 1.361.936 563.696 542.735 148.695 64.364 213.059 soe -1.4461973 1.419.094 1.794.983 345.591 285.006 , 205.939 102.495 308.434 3.000 53.0251974 1.540.577 1.9s4.660 125.140 179.808 383.695 121.964 505.6S9 12.050 175.4471975 . t.422.994 1.e89.502 - 229.659 435.790. 103.S12 539.302 31.906 -28.53s1971 1.261.505 1.393.271 1.163.897 1.053.152 284.987 121.5S3 106.s40 1.019 933.O671977 2.961.43e 3.204.229 2.121.413 2.029.197 604.S56 222.565 827.133 12.986 72.6021978 4.426.450 4.780.691 2.760.430 2.678.532 336.292. 393.347 749.639 - l99. at1979 6.892.823 7.334.319 3.513.479 3.843.803 669.760 653.656 1.543.416 49 -69.7441980 9.805.040 10.238.745 2.708.831 2.855.774 t.735.059 1.229.210 2.964.269 9.532 -52.573

* 1961 . 10.872.632 11.150.407 2.000.000 2.058.827 t.351.4S5 1.740.750 3.092.205 39 -264.0451I82 11.351.994 11.534.868 2.590.800 1.924.189 1.592.701 1.557.041 3.149.742 - 423.984

**1983 12.12w2.050 12.956.SSI

* * * - * * 7HE FOLLOWING FIGURES ARE PROJIECTEO * D * * *

1983 12.122.050 12.956.951 - e16.016 1.662.335 1.231.317 2.893.652 - 21984 11.275.733 11.294.618 * - * 18.773 2.292.643 S.036.677 3.379.320 - a1985 9.001.870 9.001.983 113 2.054.653 B60.957 2.915.610 - -i9S0 6.947.330 6.947.330 - - 2.05s.740 * 651.937 2.710.6771987 4.538.590 4.388.590 - - 1.975.130 444.710 2.419.830 - -2198I. 2.913.453 2.913.453 - - 1.130.807 263.219 1.394.02G - S1989 1.782.656 1.782.656 - - 789.019 t61.365 950.3e4 - -1990 993.637 993.637 - - 760.864 78.996 867.860 - 51991 204.778 204.77 - - 142.533 IS.177 157.710 - -192 62.244 62.244 - - 51. 74 4.1418 56.722 -2

= THIS COLIJWd SHOWS THE A4MOUNT OF ARITHMETIC IMBALANCE IN THE AMOUNT OUTSTANDING INCLUDING UNDISSURSED FROM ONEYEAR TO THE NEXT. THE MOST COM1ON CAUSES OF IMBALANCES ARE CHANGES IN EXCHANGE RATES AND TRANSFER Or DESTSFROM ONE CATEGORY TO ANOTHER IN THE TABLE.

- 98 -

TELL 4.38 hcAU CC bbUcUtley 0jim.d I 8t11 bb A-twm term at Mv hhUc t611 Olmncm.1973, 17, ad 1971-191-HU d P?RI--W MAt1c igI L, 11-9

GtM LLOM) Aw I at 2

1973 1973 1971 191 1919 19W 1979 Am2

3L aL J 5IAIUUC D1111D OLT-' UIL mu (-) t-) t-) t-) t-) C-) (-) (-)

ahlI.le/R6l1y Gar. I 540.6 1 261.5 6 42.S 689.8 9 W5.0 10 81L6 *1, M20 321221Plivak NP_weed C-) ?t- t- (-Tf H7 3 {-) {-)Tt_cLvmtwout mAtt ad

ou 1lS. li: u31. L986.?7 1.393.3 A 7 7,3 10.233L7 ll.ISl4 ,536.9 12 957.0OtLdal tm 72.1 4i5.7 Sff.1 550.5 4.9.0 450.0 3b7.2

mItUala 44.3L5 32.2 318J 25.7 260.5 219.4 130.2 151.4ID 230.6 247.8 36.8 1866 161.6 133.2 105.9 b7.5166 - - - - - - -

3tlog 28S.7 2535 V6.3 254.8 233.5 210.6 167.0 1.9.8PCW C t1m 1.256.5 747.6 4.185.6 6,8638 9,71..8 10.7m.4 11.167.7 12655.S

SupUom 504.7 255.6 269.e 431.4 371.9 354.1 212.9 171.4f1rAcal Markat 751.9 399.4 3,323.6 5,930.S 8.91.1 10.270.8 10.85.? 12.465.0

lw a5.1OS. (DM) 15f06 1,261.5 4426.5 689.8 9825o0 10 872.6 11.35X.0 121221Offical. Creta 41L8F 5Y.9 i W. 'iii T 458.8 4Z9.1 3tA1 3M

14shlaterm U5.8 299.4 20.1 21.8 21.6 216.2 18D.2 151.4IJW 222.4 221.4 196.4 179.1 155.3 133.2 105.9 87.5WA6 - - - - - - - -

RLttoral 128.0 253.5 208.6 217.9 209.9 212.9 179.9 144.8fk1mu Crgditors 11 2.7 708L6 3,927.7 6.36.i 9.346.3 10.443.6 10.991.9 L.821.9

Suppiers 30.6 217.2 9%.8 112.5 85.3 139.A 137.1 122.6Flnmcal Mackate 746.0 361L9 3,20.9 5.832.0 S.8781 10,225.6 10.825.7 11.679.8

099C2ME3 345.6 _ 2t121.4 2,760.4 3,811.S 2,7O8 Z,C00.0 2,590.8Ctfiddl Crudtom 145.2 62.A - - 45.0 -

ktkiatteu1 48.1 - - - - - - -

29W --- -----

til1IRL 97.1 - 62.6 -- 45 - -

Piuva_ Crdit 2al4 - 2.08. 2,760.4 3.A1.3.5 2,663.8 2,00. 2,590.8supplers 126.5 - 3.5 165.9 - - - -

-a m1a1 takA 7T.9 - 2.M3 2.594.5 3,813.5 2.663.S 2,00. 2.10.

-. SIONSWNS 285.0 229.7 2,029.2 2,6785- 3,8U.9 2,855.8 2 , 08. 1.924.2Uflida CadDLW 63.9 196.9 2&3 42.4 1.35 51.4 13.8 6.1

NkfAi1n1a 43.9 V.? 16.6 11.8 5.2 2.5 3.1 -UD 19.1 13.5 5.1 3.0 1.2 0.5 - -t16 - - - - - - - -

UlItml 2.0 169.1 11. 30. 13.4 4.9 10.7 63V1mo Cuto2 1.1A 3L8 2.000.9 2.36.1 3.825.3 21,04.4 2,054.0 191.1

%VpIi- 122.8 32.8 0.6 61.6 9.5 75.7 788 648*FGNICAl ma.k 18L3 0.0 2,000.3 2.574.5 3,815.8 2.28.7 1.966b3 I.83.3

aDEDWL Ewamr 205.9 45.8 604.6 356.3 68 19735.1 1 35S.5 1 S .7tfIdl Crgdlrnm UA 1 -K7 70A 66.0 654 J T .

Ilti]atamL 22.0 22.9 41.5 29.2 35.7 32.8 37.0 D.2Ilm 17.7 17. 21.9 20.2 24.9 22.6 27.3 IL416- - - _ - -

Ulaar.1 MJ.3 26.2 4.3 40.8 28.2 32.6 31.7 33.6?ds Csotam 163.6 38. SI88 236.3 5.8 2L669.7 1.208 1.,31.9

SaP1Jn 75.a 197.1 55.2 57.5 31.0 22.6 65 46.9Vinamcw1 eta 87.8 JD.3 715.3 784 g9 1.3,4 1,234 1.475.3

M mm5 79.1 i206.1 1 424.6 2 322.2 2 95 .1 1.120.7 707.4 31.5Oftdl c twm 1.6 149.9 -7 45 -14.0 -54.9 :7

oIzlIeoml 19.9 4.9 -24.9 -17.4 -30.5 -30.3 -33.9 -27.229W 31.4 4.1 -16.8 -17.3 -23.8 42.2 -27.3 -18.4M11L - - - - - - -

UIRaral -183 165.0 -32.5 -40.2 -14.9 16.2 -21.0 -27.5Pd_ Ccrdito 77.5 -356.0 1.4ML0 2,349.8 2.999.5 1,L34.7 762.2 36L2

Sup2LiaDz n4.0 -164.3 -%A 4.1 -21.5 53.1 13.7 -2.3Mlond MaCm 3L.5 -10 1,925.0 2.,.1 3,109.9 1.3BL3 756.2 3960

NM 1%IB1 (DO) 1W.5 103.5 222.6 393.3 656.1 1,229.2 1,740S 1351^ 0Ofidal rnrdLl 321i 2.9S 37.4 34.6, 3.5 31.1 25.5 25.

l8ulzjMag1 M.1 21.2 24.4 236 21.3 17.7 13.8 ILSUV 16I0 16.1 15.4 14.8 14.9 12.4 9.3 7.Da - - - - - - - _

UlAM1 6.5 5.7 13.0 11.0 10.3 13.4 l1J 13.2Pkva Cnaidtom 75.9 76.6 185.2 387 627.1 1,19LI 1.715.2 1,532.0

plier 14.3 14.5 5.2 4.7 5.1 6.6 7.7 6.4Plndu1Pmkts 6L.6 54.8 U7 327.1 565.1 1.166.8 1,704k6 1.2.6

MTl DW6Ve 43.4 -309.6 1.202.1 1,92&9 2,25 -10 .5 -t M -1,225.6OCffd-l Credtto -a 122.9 -gs.8 -62.2 W6.9 =-41 -80.6 W77

NubCLUteral. 0.2 -6.4 -49.3 41.0 -51.8 -4LO 47.6 -3A.9JJW -14.6 -20.2 -32.2 -32.1 -3L6 -34.6 -36.5 -21.2

3th1eral -24.9 139.3 -45.5 -21.2 -25.1 2.9 -32A -.LSlIlwg Ctudtom L6 326 1,:96.9 t.991.1 2,372.4 63.4 '03. -3.145.9

SiPLpem 32.7 -176.8 -59.J -0. -2.6 44.5 6.0 4.5'wg 'ld tkA -31.1 - t1 1,792.2 2.169,0 2D5448 22L5 -9464 -1.125.6

- 99 -

able 4.3 (tinmc4ttn) No 2 ot 2

L973 1975 1977 197t 1979 m 19S1 1982

WL D*X WaZIiZ tOS) 3L8.4 539.3 827.1 749.6 JA, 2,96k3 3.01L2 3,149.7Offietul Crtitor 6L9 73.9 123.1 104.6 95.5 9.5 94.2 85.8

MGtLI 1ceral 42.1 44.I 65.9 52.8 57.0 50.5 50.7 38.9YAW 31.7 3.7 3Z.1 35.1 39.8 3S.1 36.5 26.2

ULIsAMI 26.8 29.8 57.3 51.8 38.5 46.0 43.4 46.8?ft.t. Cre1tots 239.5 465.4 1U4.0 6.3.I I.452.9 2.867.8 2.998.O 3,064.0

suppUee 90.0 211.6 60.4 62.3 36.1 29.2 72.7 53.2Fland. M.jdrets 149.5 235.1 Z.1 405.5 1.271.0 2,507.2 2.912.7 2,998.9

AVERAIZ 26: FINLTr DI5 Mi OM119IM

Inrt.c (Z) 7.1 - 7.3 7.9 13.4 12.5 18.3 17.6tub.rLty (ytmr) 13.6 - 7.4 9.8 7.3 7.3 6.5 8.2

CEcowFarLad tyenrs) 2.3 - 3.4 4.0 2.1 3.1 1.0 1.7CGmt clhmn () 15.0 - 9.8 9.4 -13.3 -10.0 -25.3 -29.3

QEFL OUDtiEIzermt (2) 6.2 - 8.4 - - L3 - -abtuaity (Ytuur) 14.5 - 12.0 - - -10.6 - -

GCm Pecad (ye.uu) 3.2 - 3.8 - - -L6 - -Creat IIgtnt (2) a6 - 7.5 - - 7.0 - -

PREVACK 001 RS1atemc (2) 7.7 - 7.2 7.9 13.4 12.5 183 17.6

Xaceurty (years) 13.0 - 7.3 9.8 7.3 7.2 6.5 H.2grow Fe zd (yu) 1.7 - 3.4 4.0 Li 3.3 1.0 1.7Genr E1luc (2) 10.9 - 9.8 9.4 -13.3 -10.3 -25.3 -29.3

mix molN UC K (us. 5 MIuM16)

Gnu Nat. Pta.ct (COP) 16.383 27.68 36.231 39t569 48.725 5979% 68.1715 4A.1IPZitu of C. a S. (CS) 5V279 10.092 10,947 10.855 16.305 22.231 24.51 ()Sqtt atf C. r a S 0) 4.397 7.892 14.016 16.553 15.9Y 17,4Z 2D.49 ()I_L Nsrm (FM) 3,194 9,971 9.602 8,609 t13,18 13,360 12.719 6,579

WDUPAL WM

DaW~CqlC (Z) 79.2 12.5 40.4 63.5 60.1 48.9 46.3 ()DOamo (2) 9.4 4.6 12.2 17.4 20.1 1.2 16.7 17.8USnCS (2) 5.8 5.3 7.6 6.9 9.5 13.3 12.6 ()DIM; (Z) 1.9 1.9 2.3 1.9 3.2 5.0 4.5 4.6

DX/Ct (2) 1.9 1.0 L0 3.6 4.0 iS 7.1 (-)INr/$W (2) 0.6 0.4 0.6 1.0 1.4 2.1 2. 2.3RES33 (S) 207.3 730.4 216.9 126.9 134.5 122.9 1120 54.3USAM (Worthd) 8.7 L5.2 8.2 6.2 9.9 9.2 7.4 (-)

kcoportUn of DL.bzr.a1 DebrGwa=mdomuuLoom (2) 6.6 8.3 1.9 Q9 0.6 05 0.4 0.3

Var. tat. Rae lom (.) 22.9 18.3 60.2 61.6 75.1 77.8 81.3 85.1Use of 1S Cmtt (11saL) - - - - - -

1983 2986 1985 1986 1987 1988 1989 1990

rim FM vr sON=

TtA1 Oat Servi 2 83.7 3 379.3 29156 2871O1 24192J I94.0 9804 867.9pdtdplt t; t tl3;w T 130%;7 'L73;K 'I. 'ISOi 78a0 7^Lb.rg.c 1,231.3 11096.1 am1. 651.9 444.7 263.2 161.4 79.0

OfftdLl Crltm 11.0 76.5 50.7 44.7 31.7 27.9 21.1 17.2?r1ndpta 61.5 6.T 39.2 3n.9 25.2 23.1 17.9 152Ltamc 19.6 15.4 11.5 8.9 6.5 4.8 3.2 20

PeVI,to Ccwatne k236 Zj8-_9 2 9 22L I366 2 929.3 850.6PrL.ptu 1.600.9 2,231.' Z4015.4 2.022.9 1.9w.9 1,107.7 f71.1 7-3.61XaeeC 1.21L.7 1L071.3 8W9.4 643.1 438.2 258.4 1582 77.0

C-): mumil t,lat.lo

!2M: Z5eeeml Oft TL>tet. Bonn' Analysi ad PeoJemtom Daqtuec, 14dsak

- 100 -

Tabe 5.1: MMJ(AAL WVUU (PE I , 1970 to 1983Otll oef BDUolwu)

Ptel.1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 19M0 9 192 1983

Oarent Pem. 9496 11634 12187 16019 42557 4088) 38107 40174 40123 483 62697 92672 74567 718L2

Direct 4585 6615 7084 10184 29454 26139 25406 (3 23893 31931 45108 73267 5211R 4280Petrolnmu (2843) (4770) (5090) (7802) (2682)) (22854) (21255) (21322) (17603) (25584) (37945) (63215) (4M603) (34082)Other (1742) (1845) (1994) (2382) (64) (32O5) (4151) (4771) (6290) (6347) (7163) (10052) (9515) (8726)

Indirect 1450 1532 161 1716 2260 3143 3034 3470 4293 4840 6030 7058 9467 17245

bontax Newa 2/ 3461 3487 3452 4149 10813 11598 9667 10911 11937 11568 11559 12347 129W2 11759(Fecro1a Rcaaltiw) (2860) (2869) (2791) (3378) (9625) (8794) (6757) (8099) (7571) (7724) (7386) (7600) (662D) (6464)

Girrent F_aendires 7159 8057 8924 10087 15368 19266 19736 24425 27546 32157 41209 54616 54440 53796Opertimg E ni.r 4603 5372 5747 6341 8239 10223 11660 14373 16903 19293 23588 29452 30445 29515R

WW_ m SaUrLm (3715) (4C92) (4526) (5030) (6541) (On) (9216) (11199) (12139) (13M11) (16334) (19606) (19193) (19l51)Pude c Goods (428) (715) (777) (776) (1077) (139) (1022) (1603) (1916) (1787) (1796) (2495) (3438) (1899)Iztert peyta (166) (189) (164) (190) (206) (3M1) (762) (1007) (2D68) (3300) (4267) (5763) (6149) (n.a.)Otler (294) (376) (280) (345) (415) (515) (660) (564) (78D) (1195) (1191) (1588) (1665) (8534)

Qirieat Trmufers 2556 2685 3177 3746 712 9043 8076 10052 10643 12864 17621 25164 23995 24212To ret o public sector (2387) (2500) (2970) (3493) (6669) (840O) (7190) (OM06) (9830) (11757) (16329) (20004) (21010) (2D963)Other (169) (185) (207) (253) (460) (643) (886) (1046) (813) (1107) (1292) (5160) (985) (324g)

Current Account surpho or 2337 3577 3263 5962 27189 21614 18371 16049 12577 16182 2488 38056 2C127 1816Deii _

q%ta1 Kiwditwzu 2959 3141 3489 4485 24147 20748 17729 24378 19795 10945 21987 32753 27438 21546Qmptal Fmton e -m Tu l M- ww- 7w -W- w-z-wQtaiaL Tmfexs 1496 1638 1551 2309 21165 15035 12656 16329 11499 3791 15922 23792 14112 8362

(to State terxprisa) (1405) (1521) (1487) (2274) (21021) (14977) (12344) (16261) (11390) (3657) (15312) (234(1) (13464) (7718)Otber Capftal TrasfeD 3/ 165 255 391 480 786 2799 1802 3465 3751 3682 2223 4607 7143 7705

ove.aiL &upii or Deficit (-) -622 436 -226 1477 3042 866 642 -8329 -7218 5237, -499 5303 -7311 -2530

Finmadsg (Met) 622 -436 226 -1477 -30 2 -866 662 8329 7218 -5237 499 -5303 7311 2530-teCn at ~~~~(477) (9) (234) - -T- 5)8 -T77) 7TM- -(8519) 6500) (7) 872)(513) (3415) 405

Dmta.c credt (278) (477) (120) (284) (101) (M0) (639) (2126) (4W) (-) (-) (652) (42D) t8270)5/Ot'r credit (1) (3) (5) (38) (94) (24) (26) (60) (55) (23) (19) (28) (19) (1))

cizatl ioa (-146) (-629) (-41l) (-433) (-537) (-259) (-205) (-3183) (-2495) (-4328) (-5172) (-4419) (--6616) (-42)C-b Balam ar Other 4/ (-12) (-296) (278) (4427) (-2748) (-728) (-3625) (807) (-827) (-1002) (-3140) (-3077) (10073) (-1544)

JI Fi:xds t1 pi with e,orft p r i ion bs. for Bm.35 vrUllon in 1974, Ds 93 adlliU in 1975, Bs.104 mIlUon in 1976 Be. 185 tillinIn 1977, 3B 182 -II-fan in 1978, Ds. U4 idLIIm in 1979, ant uspdfied arunts in 1980 thms 1982.

2/ Eu&s Be. 1715 uil1-on of reim emts of public debt opeetam for 1979. Incluees Be 635.7 illion and Hs.68.8 mdllinn in 1978aid 1979 rmpectielyr frm the 'F de G.wtsi.

3/ Fim the Ce=r1 GwA=vm to Pegional sod Mzcdpal Gowrenvos s Deotralized A .ncie.I; Lclnd debt Wt prescribed by is.Credit from the BCv mamted to Be. 7 bilmio.

Sourac: WV, Izfos Emadco, 1979, 198), 1981. an 1982 (prenlinay data). Oficir de Prenupuato. 1.slficwamn de los LcasFIsm1a- ad the 1W.

- 101 -

TaSe 5.2: S;AI I@w a_W AC1I 1970 - 1983@111m oE &emmt Bo31rm)

P.i.1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980D 98 1912 1983

0 1 1 14 11 17 42 74 22 34 56 36 36 89 32 146 117IrAlro TMmm-'- -y -I - - UFr Fy iT m w -w -r -Tr F1

Other RNevO 10 8 11 33 65 14 25 43 19 19 75 17 132 102

OlematEz %m1muz 944 9E 1254 1265 1666 2230 2622 2864 3100 3379 4548 7161 026 6157Wm3" 933 Salam W 7 7 -w T3w i73 -T w -fr -r 7I w -a -zj1Purdme cf GooCs a-d Serviom 155 129 172 167 2 32 422 440 465 329 459 2205 771 PAOmnt Tiumf to

P d1ve Sgctat 91 79 L08 85 102 142 157 256 253 22D MR 302 321 1191

Opnemt S91pl or D ct (-) 930 -970 -4237 -1223 4592 -2 -2588 -208 -3064 -3343 -4459 -7129 s8e0 w6O

awit Tr.ufem 1106 1240 1563 1630 239 4871 3253 453B 4687 n72 6557 9477 9830 11691to lsooataljx.d Ap4d -33 -3D -1 --- I _ 7[ -0 -1 2 1 -Z 16 199 -27 -Yr -3-to n im lit 69 -93 112 -116 -424 -306 -279 -305 -m -356 -4 -671 -671 742f Goatrta CoGowmm 1/ 113 1363 1726 1765 '494 5246 3637 4964 52S5 6727 7323 10454 11015 IWMS

Qnruit SLgph or Dfict ) 6 270 346 407 757 2663 665 1730 1623 2829 2096 2348 3950 5651

CitSil 1 _Xiwm 160 2) 306 368 661 1423 1564 1577 1633 1415 1480 2683 2194 3007Cqdtal Foznale 16 T 1w W -T -5 74W -I T i-25 1415 Tr7 -mg -WF1znm Intint 7 5 5 4 6 8 9 9 7 - 13 5 5 4Cqital ZrwuD to

state In _prin - - - 2 2 8 6 4 1 - - - - -

Om:aUl Surph or Defirt 16 66 40 39 96 1240 419 153 -10 1414 618 -135 1756 2b44

Fina_im (ot) -16 -6 -40 -39 6 -120 919 -153 10 -1414 -618 135 -1756 -2644D ti ciult - - - - - - - - 167 - - na.A.,,z,t1m -10 12 -15 19 -2B -1 - -I - 1153 -93 -154 -548 r.OdLr / -9 -61 -29 -34 -1 -25 -25 -22 -18 -24 -14 158 -157 n.a.Cob lhince 3 7 4 14 -17 -1214 944 -130 8 -404 -709 447 -105 na.

1/ Includ. cpitmi &- oxreat tri fem from the Cearal GCmTmm.2/ Debt not prescrib y l a wn.

Ssum: DCV. hBom E=mdco, ulm yema. SW the lW.

- 102 -

Tae 5.3: MNICIAL 8O311 AM1S, 1970-198304±lUoiu of Oinwi BDli m)

. 1.1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 191D 1981 1982 1913

Oae!V ElhwMM 609 626 685 759 Ws8 907 1 216 1 5 1.654 1 90D 2 639 2 537 258A 3567i-lirec Tes -393 40 4 492 -T W 1,100 1,230 iiw f!i rf 'I9 WFee 88 91 a 76 87 97 131 127 124 122 229 180 62 57Okiur 128 126 160 191 189 162 243 274 300 412 607 530 574 765

O d~ E d! itum 779 817 940 1 03 1 137 1 499 1 0 1933 2 18 2 100 3 135 3406 3565 4447Nhowad mrto-w -Mr -7r `xg -'SW ~ rT~ T~

rdh. of tGods aid ServLw 155 164 173 180 185 218 215 242 345 284 393 539 501 691Oxmre Transfers to

Pivate Sectwr 34 30 60 75 55 70 95 128 166 107 142 137 159 2D2ImeretcPaymcs - - - - - - - - 2 1- - - -

perating Suplus or Defict -) - 70 -191 -255 -244 -329 -592 -594 -432 -504 -208 -46 -H9 M1 -0

Oavew Tymufei 316 321 276 404 543 1.154 692 1 071 1 176 t 351 1.460 1 AMi 2469 2361from CAnral Gomnennt 232 2 419 4 4153 7 '995 W -1 t550 lZr Tfrau Reonal Goweumrts 89 93 112 116 12L 306 279 305 372 356 4R9 671 871 742to Decntralized Andm - -4 -10 -6 - -1 -2 -2 -1 -2 _ -2 -100fran th Priv Sector - - - - - - - - - - - 50 73

Ojrxetm ccam Surpuu or Deficit (-) 146 130 21 160 214 562 98 639 67 t143 964 1.99 1488 1500

Caital En xesitre 77 101 120l 120 166 265 2b0 397 501 5W 557 723 627 711CWttal Fomati 67 67 110 115 135 2bl 257 395 48D 487 553 715 619 711Fiztal In t 10 14 10 5 31 4 3 2 21 13 4 A a

Entepr1a (10) (14) (10) (4) (21) (3) (3) (2) (20) (13) (4) (4) (n.) )Others (-) () () (1) (3) (1) (-) (F) (I) (-) (-) (4) (na.)

Oirall Srplus or Deficit(-) 69 29 -99 40 48 297 -162 242 171 643 407 876 861 789

F1nSodi9 (Net) -69 -29 99 -40 -48 -297 162 -242 -171 -643 407 -76 -86 -789r_tic Credit -- -- - - - 43 9 0 2/ - n.a.Azrizarlon - - 40 -22 -8 -11 -36 -1 1 -2 - -82 -70 -15 n".Ochwr 1/ -33 -32 -29 -34 -54 -45 -46 -57 -46 -62 -56 -130) n .

I/ Debt not pescribdi by 1A.2 Inlrudq diL.ene qperatito.

S-ars: WV. Irfoae Ecuxuco, variaus yearu and the lFW.

- 103 -

Table 5.4: MfIIUiL A£IC1ES AW3I . 1970 10 1983OIllI of (QWut sDoliur)

Pre].1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 I390 1991 1982 1983

Opmezat Revewni 959 1123 1289 1321 2178 2315 2721 3206 3914 3668 5722 5743 6513 6495Sam of Goodb md Servicsm Y 88 129 91 131F 152 172 180 251 216 370 253 -W439 44Othr 869 1035 1160 1230 2D47 2163 249 3026 3663 3432 5352 569( 6064 6o51

0puUmtt EqnIlwunm 1828 2025 2279 2613 3292 4186 5002 5933 6433 7319 10563 12619 1198 32865Wd.M ai Salsra 1161 iIW�75i 7urcdas cE Okl aMl Servk. 444 505 477 529 6b4 825 924 12DW 1323 1227 1329 2634 2054 2175

Owmot Trmmfetu toPrimte Sector 223 250 334 457 56 797 945 1018 1138 950 2582 2124 2D73 MM

pertiSX SurpRlu or Deficit (-) -869 2 -990 -1292 -1114 -1871 -22RU -2727 -2519 -3671 -41 -h876 -5455 -637n

wrmi Truferg f rtm Fablic Sector 1/ 1337 1260 3510 1946 2791 3556 3946 5536 6061 6903 8370 9877 85-6 8739

Ckrrnt Jumt Surplu or Deficit (-) 468 358 520 654 1677 1685 1665 2H09 3497 3232 3529 3Ml I 3113 2369

Cypttal Sapunditure 683 595 722 865 2068 1740 2033 3558 5390 4536 378A 4725 4872 n.-.Cqpttal Foun.tion M T1 2 31 39 5 43 2 F -W W -W - T41 -74 2Owifr. Stodrs 39 11 1 -1 24 48 -19 70 81 -25 101 197 119 -53Acqasitlai of indatlrg mets 15 33 -289 62 16 13 16 43 39 31 -130 38 33 38FizmtA Iax Ia t. 371 415 770 2/ 765 Z/ 1895 1416 1725 3266 4876 4077 3572 3874 4049 n.a.

Owrall Sjrpl or Dcftcit (-) -215 -237 -202 -211 -371 -55 -368 -749 -1893 -1306 -255 1724 -1761 nA.

Ftnmclg (*te) 215 237 202 211 371 55 368 749 1893 13m4 755 3724 1761 n.a.MadliaaM 1rA Ter Credit - 86 12 1 1-7 4 -4 9 -11 62 231 49 -71 13 n.a.

Ib_ttc - (66) (12) (126) (17) (-8) (-49) (t-) (62) (231) (49) (-73) (13) (n.a.)Shrt TermCre&t 13 - 40 - 6 1(1 -121 159 162 273 25 -10 59 n.s.Goh Balancr 1)2 151 150 85 348 -38 538 601 1669 a130 181 1805 1689 ns.

1/ LIlud cqAWtnl tra,fem frut Central Gawrnent.I/ Includes B0.291 mlllia ad Bg. 91. ldlUor. nF cpttal tramffes to h3 eholO t.n 1972 am 1973, rpeettwely.

smwrm: wCY* Infome Eluico, 1979. 1981 od 1981 ssd the FW.

- 104 -

Tabl 5.5: PETROLEUM SECTOR CONSOLIDATED ACCOUNTS, 1976 TO 1983(Millions of Current Dollvares)

1976 i977 1978 1979 1980 1981 1982 1983

Operating Revenues 39,257 41 724 40 029 62 245 84 783 89 920 73 808 65 296Foreign Sales 37,320 39,481 37.258 58,19 78328 981 7 it. 06 59947Domesttc Sales 1,671 1,848 1.964 2,074 2,452 2,664 3,642 4.071Interest Income 148 395 799 t.652 3.950 5.522 3.068 1,259Other 118 - 8 - 53 19 30 19

Opr ting Expenditures 6 714 7 120 7 832 10 093 13 054 13 212 13 0Gb 14 342lSges sl7d d-ries 1,B4 ,090 , ~~~~~~2,'6 4,'489 4,743 5,'218 6,38

Purchase of Goods and Services 1/ 4,872 5,030 5,297 7,229 8,565 8.469 7,690 7,845Crude Oil and Derivatives 1,206 776 517 973 1,607 467 902 961Technological Fees 1,413 1,457 1,384 1,531 562 478 277 231Other 2/ 2,253 2,797 3,396 4,725 6,396 7524 6511 6,653

Transfers to Private Sector - - - - - - 100 111

Operating Surplus or Deficit (-) 32,543 34,604 32,197 52,152 71,729 76,716 60,80D 50,954

Transfers to Central Government 28 114 29 531 25 364 33 474 45 511 71 507 50 610 41 740Direct Taxes 3/ 21 255 t1 63.21 25 542 T i3 632560 34 028Indirect Taxes 102 110 190 166 180 692 1,430 1,248Royalties 6,757 8,099 7,571 7,724 7.386 7.600 6.620 6,464

Current Account Surplus or Deficit (-) 4,429 5,073 6,833 18,678 26,218 5.209 10,190 9,214

Capital Expenditures 3.752 2 642 4 765 7 751 10.325 14 489 21 045 11 311Capital Formtion I 1 4 i34 4 . 17 [ 12T353 15 642 12 156Change In Stocks 2,361 380 421 1,235 564 2.136 5,403 -845

Overall Surplus or Deficit (-) 677 2,431 2,068 10,927 15,893 -9280 -10,855 -2097

i/ Excludex depreciation expenditures and variations in stocks.if Includes other taxes not classified under transfers to the Central Government.*- Includes tax on paymer.ts for technological assistance to former oil concesstonartes.

Source.: PDVSA, laforme Anual. 1981 and 1982; BCV, Lnforme Economico. various years:and IMF.

- 105 _

Tibd 56: IW3AL 337lM 1WIU X LM_ = ACUMX S, 1970 W 1982 1/Q 11111m of Qar BorvDrim)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 198D 11 198Z

q,KUtLrg aR_ulm 2842 3199 3779 4949 9031 10611 10745 13593 15655 18854 24241 28570 2B735Sale Ci Gocila ad S 2 111 0 6 -if W2 9767 T003 I W 48 77 17595 22431 - 27004

ist~t inom 32 54 89 56 90 60 77 177 255 454 529 719 671Othr - - - - 449 78W 629 618 723 105 121 1478 1060

oprtau i _ 81bumaitm 2544 2959 3505 4650 8512 10958 10657 14319 16924 a1755 30491 3472) 355041M aM Salni 7 s W TZ 6 Z30 - 7ffE 9 2 - - -7Im q wRuciteme cE Cooka ad Servie 1336 1544 1932 2828 550 7000 6022 8179 9081 11131 15427 17508 15116Intret V.,.ta 76 82 109 177 352 514 542 603 1133 2154 3697 4999 7312Trafer co kPnve Sector 2/ 8O 105 141 160 M01 1144 1327 1688 2D04 2340 2575 2911 3110

_aitg Surpha or fifac t-) 298 240 274 299 519 -347 88 -726 -4069 -2901 -6250 -6150 -6769

Qwxc Trasfeis 112 144 118 34 747 835 600 956 108 1061 1544 1549 4688to Caetnd 69 146 Z 13i 7lT 37 -M 9 346 -W -5X 233

W.rect Ta (45) (80) (113) (283) (862) (554) (354) (301) (260) (238) (243) (299) (64)lrdfrc TmS 3/ (24) (28) (33) (45) (142) (157) (40) (69) (99) (108) (139) (232) (169)

frau ltral Gaimc 4/ 181 252 264 362 172 1546 994 1326 1467 1407 1926 208D 4921

oirect h t Surpn or dit (-) 410 384 392 333 1266 488 688 230 39 4840 -4706 -461 -2081

Cqdtal §V!qgt= 1186 2298 3878 3931 5071 8725 7416 1851 18Z05 1660 22203 1588 21988

Own inStods 9D 301 110 216 1278 1376 35 905 613 1534 2245 -1277 1290Findal In tO,z 95 22 -48 16 296 75 1M 140 734 315 53 247 245

Capital terP 856 637 939 1491 3787 3181 6564 8723 7513 1122 4332 25780 9991Cdtal Trmfeu frau Catal

Governent 837 579 735 1169 387 2733 6408 8443 7604 1225 4490 6024 4430laweaf from Irmtiwzs 19 58 2D4 322 -40 4W4 156 280 -91 -103 -158 19756 5561

Ovian Smzphn or Defict (-) 8D -1277 -2547 -2107 -18 -5056 -164 -9198 10653 -16716 -22577 5299 -4078

F *01101:119 (N1t) 4--D 1277 2547 2107 18 5056 164 998 10653 17407 22577 -5259 14078Ihdu 1-A low ia Crmit 465 531 6 98 854 -396 77D 2483 7423 2892 5246 5035 -1872. 5473

Foreig (143) (610) (425) (170) (-163) (-415) (-735) (-258) (126) (4656) (1798) (n.a.) (a.m.)*mtic (322) (-79) (263) (684) (-233) (1185) (3218) (7681) (2766) (590) (3237) (n.a) (n.a.)

Shit Tem Cndl1t 112 527 140 12D5 655 2170 2762 14274 3308 12260 9103 -7839 43Bl1Ar grntd -19 -20 -89 8 -91 -177 -474 -106 -439 -3RZ -355 1234 -1272Odur -638 239 539 128 -150 2293 -4607 3155 4892 2B3 8794 3178 9439

/ EI1s Ustrla Sector.J laluA wAmU1dam paid by 0M4 of Bs. 239 million, Bs.563 millon, R..593 uillion,Ba.763 mdllion, U..886 millon Bs.1 ,091 IlUaon.

B.908 aIllion, aid Bs.1041 illi2n Ji.1209 million for the yea 1974 to 1982. rpectively.3/ Inchua igyadtis paid fra 1970 to 1975.!5 Latxsud raoc trisfem to 044 only from 1974 to 1977.

Sm5m: WCV. Iofor Ea,c on wnim y a-d tabim frao BCV'a Dqpartnc of Public Sector Accauna ad the Df.

- 106 -

Sble 5.7: FUWEAL SlATE 1NS WIULaN AMXS 1970 W 1916241111 d0 Of QrMw ol_wz)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 198D 196l 1982

operap vg aRi m -M856 849 734 1045 2219 3724 4360 5376 7537 9387 124 16748 16187Iarat Inco 44 468 550 79t 216 3452 7W2T §W M6 - 10885 T1T34 1iotwhr 422 31 18 21 103 272 433 242 621 943 1583 2976 3M

OJa tut g _ cod trgIOIS 960 745 901 1193 1457 2C95 2516 3548 5462 7356 9669 110O3W_n ad 418mim -- r !Ar T s T -w 1W1 r -5- -m -mIrde of Goods aui Scevie 550 443 198 221 254 378 760 969 1564 1726 156 2140 397Irterat Pq'ms 160 188 190 262 394 355 522 559 819 74 3719 5210 511t

Opwig Supl or Defict -) -159 -111 -11 144 1026 2267 2265 2860 3989 3925 5112 7079 5184

Qifa.I Trauf et -246 -130 79 -115 439 -276 -382 -50 -42 -747 -198 -224 694from rat of public se,tnr - - - - - - - - 187 3 535 3T7 2259to ist of public tor -246 -130 -79 -115 -139 -27b -382 -5 -6( -750 -733 -761 -1565

Omw it Acaxrt Suphm or Deficit -) -405 -241 -90 29 887 1991 1883 2359 3568 3178 4914 6855 5878

CApital E nditure 321 -318 49 1177 1778 5339 6391 5483 8321 6622 11323 27019 11460Cadtal Formtim 271 -36 240 728 704 950 1372 A97 2D3A 2234 2124 Z683 2490

*a In Stou -93 -218 -22 7 7 217 109 113 -58 -6 709 52 3Finc±al Inswtuem 143 26 -169 442 1067 4172 4910 4473 6341 4394 8190 242 8967

Copdtal Revmme 1162 910 673 900 16477 12075 5143 7918 4321 3897 10819 17393 9928Capital Trrfez from %rital

-overnotnt 1030 918 752 1105 16477 12244 5443 78118 376 3432 10l2 17272 8967Rev fran lnusturn±s 132 -6 -79 -205 - -169 - - 554 465 -3 121 961

Ovan SwrphL or Defcit (-) 436 9b 534 -248 15586 8727 935 4694 -432 453 4410 -2771 4346

F_neloclm (Net) -436 -987 -534 248 -15586 -8727 -935 -469 132 -453 -41.0 2771 -43(6Medit ud La5 Tea Craft -168 -24 391 -77 423 245 977 -203 1076 W ' 20 2973 3156

Fozei4 (2) (361) (-81) (4178) (-) (-2) (-85) (4111) (4145) (-641) (-62) (na.) (n.a.)n-tic (470) (-385) (472) (-599) (428) (273) (3062) (-90) (1221) (3744) (263) (n.a.) (n..)

Short Teua Credit 65 127 -41 1932 -941 1831 92 155 1141 6638 5651 -1443 280Lom Grated -778 -499 -341 -1979 -4497 -9197 -932 6352-42742 -13874 -11893 556 11584Otlbr 1/ 445 -591 -543 1072 40576 4606 5317 1704 10957 3103 1631 685 1902

1/ Oktw fiwAda1 qieriouw.

Sawre: BDC, Iafouw E acn vrlaus year ard tablm from BCV's Departmrz of PublUc Sector Aotmoss ad tte DF.

- io7 -

MA" 5.1 6 1 m MiMi A=h31 39U70 D 19

3970 1971 1972 3on 3914 197 91976 1971 1979 Ion 31 tin 391

TaWM. _ lo709 373 30 99 _11 237 97oS741 79g 71.3 3. IIn, g 46749 2 1 ,2 3l IS0~~Knww ~ ~ ~ - -tiw -K ,w 2: w -w 13:97 I:4 -1 K 92t949 -,~~- -W.u

Dirge 4.M 9,915 7,619 10.139 21,959 73.133 2%9,909 3,1 239) 1,93 99.333 73,37 9,330lam3 ,117 1.94 2.101 2,217 2,0 3.79 3,6 ,13 , V9A 9,2B 7,14 s0, 11.49

Ibim _m_ B,271 1.774 9.3o 31,97 2G3,91 2,3O n,993 *33 93 ",9w2 12,31% 93.791 3.6,u *,140glad el GM Ed brvlii 3.,n 3.390 3.173 4,1. 7.939 *.3 M.*%94 26,43 3B? 44,11114, 57.111 11.919 47.1043ott _- 21 439 922 1.91 p.7 Z.211. 3,22 9,9 .1,715 7.,9w 30,91%1 M,($ I 39,..,

Othmr(amwu1n i vwIft. 3141 1.312 3.17 4640 1131113 1133.I 3Ofl 33.IH 12.3310 12.323 132.9 13.111 33,71111_tiwr %Pwnm 1,m3 1,3D2 1397 11 VA . " 391. 41 9T1.s 11 9 01 s139 9931 3113 1921101

s|w=K INM t,,_ IS W2 JIMw I&n 677 1 b A* 4 1* 14 4 4W M IA% it iDs 4%m tt "Al S12 7m

hi§ dwo or Gaid SwvW(le t_udm ir*rt p_urcs) 1,764 9,331 9,472 3, 1. 9.272 13,11 19,72 2D,72 29043 329, 42,929 90.1s3 96,729ro ts w Pmwti 11or wd Aterd VI7 1.9 410 3,0D1 1,979 2.74 1910 4.137 9,174 *, R2 9.39 30.13 4.9

A AM t 11013N or bltdt (- z 3 u9,u , %,t l e 73.22 _2 2, zn n n o,nn * n s3,m9 s,_

tal%pan bb 1 79 4 13 b 1.7 a 1.2 11.2 2n lSb 25 n I l99b 1. 43410 1A39 91334 ' 1.14Fotsrm_Llon V W 5 Y m>

0 9mw in .ad. l 94 a Z2 3."3 1.,3 31" 13,9 I.01 ,.73 %oie to eri

Aqsttm of lutdat triil.au' '9 357 4117 19 074 212 7 392 93 to - ' 322Gootrihatlh to ltonut la nlt

OIwinaLt 2 11 73 1t K 3 M 1III2 M 1 13 t( 7 Flnla3 blotIst tiz 742 Z77 ,313N 3291 5.b75 b.79 ?,1D 33.79 ,199 32,312 M1,722 31,719

Capft"mm I _ 1. 15 117 -4f 279 31 2 4w 732 -393 39An 2

0_ bil .u,m or lfdt (-t -772 -17 -2.4b% -j Z I,21.2 ,5313 l -40.293 - . -391 3,I73

nLowcft (Nt1 772 Z 7 24 1. 323 -310 2Y2 431 -1 30291 31 * 9 91 4 23999194.19.1 ~~~~~~fi ~ ~ NW ~~~TN1 ~~~ -~' -~I E;- - `~T ~ IIiI~ 7T.wN91fi redit ;A ss5s M i1H >54w g -t -d !;m [

Unmdm (713) (1.327) (I.I73) (.1 ,3) (109) (2.339) (33,344) (9b,9) (I3.30 (?,.W) ( 13.243 (3.942) "3.14)ltamtlASAm ( 37) (2I) (4133 (447) (3.O) (3.025) (3,az1) (3,p2) (2,9 3, ) (939 (9,09) (9,94)

D tic Cnit in 152 31 3Ib 2.214 ,131 13,73 9,213 3,49 13,249 1D 97n ,.0DTO&O t(95) (U1.) (507) (775) (2.990) (3.71D) (Z.Oiw) (7.0,4) (9,314) (2.32t) (3.37) (13.907) (W)

_nntimtlm (256) (672) (349) (412) (39b) (4t) (5p5) (M) (099) (99) (1.394) M4.M) (1,21)Other hi't, 6t -310 -929 31.3 30 -23,43 4,433 -11.225 -2,3OI 2,9931 -,7s0 -41 -7,9 7.4M

It 09.y 19 oad 1912 hm. bon awala wuIW to inu nrd9 . r_m n d.a.-2/ Inel_ dIvrd hwsr'1/ Iaclu3 )Ixddpul Gvwmm'. cial33tfn d fbwi.t' 1ndW * CGweal Gmamw - in I _ Sta 1 J rpi (drtall unotlabir foWr bWd.n 1t_e fl t'I ad a Ia

.. teprln) fnr 1970 to 19 o. In onl ad 39r2, i9r9_wtua wr av lahle ror GCmvuI Gtwnwu uay.5/ hcalm ,1t3 tumfen to tIu pul v. wter In tlw MM" d lb-'91 Ed lo.94 iIioen far 1972 Ed 3973 min m inly.WI/ 7ih3& at lm an den not pmeuled by law. I 1 In tlw famlp imaa 99 VI? Ed tim Nstam. P_rqlar 1, * t9 r

*-,it otulwu Ed s b iuw

Sum I KW, IIIaw E mularnimnmd thi DV.

- 108 -

Mible 5.9: A3N5 WV S WEM DNDWT m, 1975 70 191006UO ofd QwOe Ioliwz)

Fm.1975 1976 1977 1978 1979 1980 1961 1982 196

q>|ECxef R-_x_M 1,465 1,572 1,917 2,41M 2, 2,975 3 915 39157 aL*ewAt Inom 1,485 1,563 1,711 1,922 2.30 2,186 TDv106 - - 20 45t 552 789 553 S X2 652Otdr - 9 - 28 4 - - 2SS m

qClm 1zuau twz 11 14 15 17 22 26 32 713 37Idma -x_ SalaSim -T -E 1 pPdrch aof Goodin ad S 4 4 5 6 9 10 13 19 14P'trjm.al lbtdiaui - - - - - - - 673 -

Owzm Accxt Suphrin o 1dt j-) 1 1.558 1,902 2,3S63 , 9 3,863 2,11 3.8

Cmltal Tm_ fri tmdCxr1 Gownmnr 7532 - 2 3,000 11,609 5_06_ 2,312

Qqpdtal Z=un_daum 1.141 4.118 5.S71 6,89 3,100 4,572 10,604 10.215 6 33sldd1 2d S*apmt 4 3 - - 30 - 9 1No b"i to vtd pablIc seaw 1,13; 4,115 5,571 6.839 3,070 4,572 10,39S 105214 6.=

O 1ral surap or I&f1dt (-) 7, -2,123 -1,169 -4,455 -SD 1,377 5.06 -2,32D -4

Surm: WV aud the D1F

- 109 -

Table 5.10: CEfltL 0DY dTfiT REf1 3, 1974 7D 1983-iiom Of Q1rez BDU imm)

Fret.1974 1975 1976 1977 1978 1979 19O 1981 B9R 1983

Total bEVnmB 42,557 40,880 38,107 40,474 40.123 48,339 62,697 92,672 74,567 71,812TaW Rev 31,714 29,282 2440 29 563 2B,186 36,771 51,138 80 325 61,585 60 053

Tun an I==m l prfLts 29 i6,065 25 025 Y- Ir. 45,= *,"W 73Y 4& 9Petroleum sctor 26,8D 22854 21,255 21,322 17,603 25,54 37,915 63,285 42,603 34,082Ira ore 359 61 285 192 57 50 27 2 4 -Otblr :ior 2,229 3,150 3,774 4,21 5,818 6,207 7,050 9,810 9,326 8,537

Danth adglift aes 46 74 92 68 415 90 86 170 185 189vae t an xxs and svcs 1,057 1,Z2 1,213 1,497 1,855 2,257 2,J23 3,042 4,253 4,642Liqutor 428 495 568 625 652 735 833 897 1,161 1,160Clprett 335 326 360 33D 387 725 1,175 1,170 1,564 1,624Petrl,em ProFics 211 278 248 335 397 24 29 621 1,135 1,469Regpstmtioa Tax 77 97 49 199 407 270 2M 338 375 373Nacdr 6 6 8 8 8 8 8 9 13 12

_e1inami~t1~ _ _ _ - 5 5 7 7 5 4Taxes an Intertiadtae 839 1,110 1,374 1,973 2,438 2,583 3,207 4,016 5,214 2,517

Qnt.s duties 736 1,0C7 1,358 1,957 2,416 2,567 3,194 4,007 5,214 2,57Cular duti.' 93 10 - - - - - - - -Otbmr 10 13 16 16 22 16 13 9 .a. na.

Tac as I iotrausctoms 364 831 447 - - - - - - 10,086

Nctx revn 10,843 11.598 9,667 10,911 11,937 1.568 11,559 12,347 12.982 11,759Frc~,erty~ ~ncm 9,806 9,78 7,482 8,763 8,312 81,92D 8,676 9,497 9,272 8,709

Roalti frrn petrelem 9,625 8,794 6,757 8,099 7,571 1,724 7,386 7,600 6,620 6,464Proftls from bllc frstiudMlo la 987 725 664 741 1,196 1,290 1,897 2,652 2,245

Auiirstrative fees axd CdUqo S80 1,278 1,553 1,502 1,605 1,583 1,677 2,034 2,344 1.587P=t fem 129 158 158 42 24 31 31 37 48 35Taiu rixd 87 101 109 114 116 117 128 127 130 117Psts1 anid Telemoin 1aaservler 67 65 84 95 57 20 15 13 24 16C5B servics 361 747 89 936 1,162 1,184 1,280 1,515 1,773 1,041stap Fees 78 132 247 189 140 138 150 242 263 141T-npo¢ ChRs 38 29 75 77 72 68 S 60 79 213Otbes 48 46 2 49 34 25 12 40 27 24

Relubmsevents 142 333 410 429 934 809D I 855 617 g 1,124FinE 41 58 88 87 89 63 67 71 95 113Other 2 46 88 134 130 997 194 254 128 442 339

1/ E,cudes Bs.11715 mllion of relimaewnts of public debt qetapios.It Iixhl Bs.635.7 ndlim aix Bs.6S.8 ilmi In 1978 ard 1979 respectively from the Faodb de Garnriea'.

San-an: BKV, Idaore Ecoumw, vaiUs yeas, tle IM, ad Oficl'a de PesuUmeUo, Clmalficadon de Io Irgfos Fiaales-

- 110 -

Tb] 5.11: CEN1AL WVRff1? URIJZr 1DJRES, 1974 70 193egliimu of QzxrrM Bolivares)

1974 1975 1976 1977 1978 1979 198D 19& 1982 1983

Total (re,t EWexitiwe 15,368 19,266 19,736 24,425 27,546 32,157 41,209 54,616 54,460 53,796

Purchase of Mods ard servlces 8.239 10,223 11.660 14.373 16,903 79.293 23,588 29,452 30,645 3,586

Gools 1,077 1,399 1,022 1,603 1,916 1,787 1,796 2,495 3.438 1,899Supplies 494 708 794 1,304 1,611 1,317 1,562 2,222 1,708 n.a.tiitary Coc sucirn and Equpme 583 691 228 299 305 470 234 273 1,730 na.

Wias ard SalarLes 6,541 8,008 9,216 11,199 12,139 13,(11 16,334 19,606 19,193 19,151Rerr 84 114 156 125 129 170 187 303 79 n.Interest Payesrts 206 301 762 1,007 2,068 3,300 4,267 5,763 6,169 n.a.Otber senices 244 252 345 246 449 762 745 1,C15 1,162 n1a.Maintenance and ResizB 87 149 159 193 202 263 259 270 28D 232

Cirrent Tramfes 7,129 9,043 8,076 10,052 10,643 12,864 17,621 25,164 23,995 24,212

Tcamfes abroad 198 145 204 405 108 92 135 167 138 102Trasfets to private sector 262 498 682 641 705 1,015 1,157 4,993 2,847 3,147

Cemir subslaes 187 485 682 641 705 1,015 1,157 1,308 1,036 1,899Subsidiest proJuBers 75 13 - - _ - - 3,685 1,81.1 1,248

Trxsfezs to fficdal brji - - - - - 2A - -

Trnsfers to public sector finanialenterprises - - - - 187 3 535 537 2,259 3,402

Tramifers to nonfiraideLl public: enterprises 1,751 1,546 994 1,326 1,467 1,407 1,926 2,080 4,921 3,828Agri ltural Marketing Corp. (09.) (1,751) (1,546) (994) (1,326) (764) (722) (425) (-) (752) n.a.

TraIsfers to umicipal andregloal geurnmencs 2,171 3,370 2,357 2,389 2,408 4,102 6,328 8,283 6,111 5,697tuncipal 289 416 360 375 411 532 541 1,028 662 761regioal. 1,882 954 997 2,014 1,997 3,570 5,787 7,255 5,449 4,936

Traisfers to decertralizei agtzes 2,747 3,484 3,839 5,291 5,768 6,245 7,540 8,967 7,561 7,918Social Seuity nra. 356 298 382 403 368 290 484 190 168Other health care ar soLl sevices n.a. 389 417 559 665 717 735 1,069 943 853E&xatiooal iar.icutiow n.a. 2,056 2,360 3,470 3,8Q3 4,511 5,610 6,352 5,711 5,628RegiorAl anl development iprrces Ma. 201 186 103 114 12G 84 136 99 116A.icltural developmrt ipancles n.a. 366 42) 563 531 331 617 536 300 366Other n.a. 116 158 214 232 198 2D4 390 318 787

Others - - - - - - - 113 158 -

Sourcs: BCV and the DE.

- ill -

Table 5.12: OENRAL _0VIWIT CUVA EX 1lD ES, 1974 70 1983Ou.13ons of OEIt Bollwra)

PWI.1974 1975 1976 1977 1978 1979 1980 195 1982 1983

Total Caqtas1 E3pritures 24,103 20,676 17,622 24,378 19,795 10,945 21,987 32,753 27,436 20,546

C4dtal Famalm ,2196 2 914 3271 4,584 4 545 3,472 3,832 4 354 6183 4,479mNtuJ>,m1 TT Ir 7r > T. =-, -fw- 2 , -T - ., -}

Mahineryd " equipms 183 360 215 272 255 431 634 533 556 45Otber p sal an rvice 239 35B 421 335 342 263 593 141 252 78Aaqtsitin nofd stt* bWdid ( 41 25 36 44 1 10 - 49 89 11

Dintct FTrAnal Intt - - - - - - - 304 445 182

Fkwxr twst Abromd 144 58 312 68 119 134 610 87 100 408

CvTr& Traufezu 21,763 17,704 14,039 19,726 15,122 7,339 17,545 28,008 2D,71 15,477TAImsf to u=ciLpGl and

regonal 8-xrrs 742 2,727 1,695 3.343 3,662 3,620 1,968 4,003 6,454 6,934Trmsfer to Venevm Inventnt Fuxd 13,000 7,532 - 2,500 - - 3,000 11,609 5,061 2,312Tmfer to officda I 62 280 123 IL 148 127 227 913 19 113Trrfers to otber pAIbr aet

fiiowls Istitetion 3,415 4,432 5,3iO 5,237 3,619 2,305 7,595 4,75D 3,777 2,918Veiniel Deuelqmuct Cap. (COP) 783 57 104 66 35 34 25 16 704 n.m.N1t±mu1 lrtitite cE IHbIg (INAVI) 1,391 282 1,500 1,779 1,444 426 3,064 2,060 1,727 909lostitute for Agrolbmml rld1t (ICAP) 618 923 757 769 650 721 693 1,O6 555 749

seme Cn e Qzyam C-q3omdon (CC) 215 1,359 411 622 407 430 1,450 356 300 183Agrpecudan Crsi±t Fund (rA) - 600 969 300 100 147 485 264 85 -

Fund for Cardty DeveLom,t (FWAMM) 5 263 216 350 208 208 100 140 98 50S-il Irditriml GDorportI (M eaUb> ) 92 433 399 400 359 80 50 214 210 50Fund for Urban D relFopmet (PC) - - 132 350 - - 300 87 - -

Otber 1/ 311 515 832 591 416 259 928 607 98 977Traufers to mzfcHamia1 stce enterprises 3,827 2,733 6,403 8,443 7,604 1,225 4,490 6,024 4,430 2,367

Petrodmicalwttute (PE5 pIVE 1,291 578 617 718 231 33 32 34 27 18Sdel CIMrp. (SRD) 509 - - 598 - - - - - -1atrown CArp. (EWDI - - 549 376 27 - - - - -Water and Seierau lrutiue (INO6) 931 386 630 3,026 3,773 92 1,902 1,427 2,099 889Flectridy CoancU. (CAMPE) 200 32 138 1,855 1,348 18 82 - -

P4bh1c Wadi Co. (CSB) 96 13 2,429 630 13 - - 50 - -Agricltral Na*ethCorp.(O(&) 133 - 85 94 64 118 298 1,249 - -

Subw (CAMIX) - - - 100 575 - 300 1,150 979 1,234TeleptuP Co. (CM - 367 - 347 153 - - - - -

natlomal Ports Iutritue (INP) - - 122 255 722 - 514 903 858 57bnlimialp S1tatioc Sezv±a (DM) - - - - - 391 380 475 300 -

Other 21 667 1,285 1,838 434 638 573 982 736 167 169Tnmfer= to decen t tralized ag 44 72 107 122 89 62 255 604 689 771Trazfers to other uzznolidstal sector 3/ 673 - 386 - 9 - - 105 67 8Tramfers t die private eor - - - - - - - - 133 54

1/ c t fes to IPASFA, IPAE, FlCAEE, EVCCAD, FCE, Fn mD,, vDcA, snl DuY.

3 Ie m catal ti fer to CVll, 1EXMl, %tIwI Dodqards (ADWIA 4), Nat-oal Airlirn (LAV), VIMFS , DIUMLD. PFtOffice (IE0L), Shdppilg CxqiV (C&VN), Rafrudlr (MAFE), Tampmattmn (INMEM), Militrzy In&mtry (CAVM). MIEC31 , HltelCcrpornloc (DWRIU), O3RfR , VMA A, Television Station (VIV), ElcFcity CammJ (MEMA), and IarAet al Mrport,(TAO).For 1975 ad 1976, PE EW and CUP otdi Na. 1,000 tadllin as Ea.1 ,500 rapeciwly.

31 I=,, de Furd for Eqort FinAucirg (FDERPO), the Fuxl for Regioral Developa (FMD), awd the Venuelan Television Stoati (VIV).

Scre: BW an the DF.

- 112 -

Tahl 5.13: EC SER EE( UUS DI MSD(, 1974-1982(NIHxuo of Oizrreit hoUvare)

1974 1975 1976 1977 1978 1979 1980 1961 1982

1. Sourc

A. Curret Acamut Surpls 31,364 26.552 26,486 25.925 25 714 40.073 52,719 50 077 37.1931. Central L;mmrHit 1/ 33,858 30,014 25,6 25,055 22,407 27,939 37,817 58,060 41,1372. &M*mu Govumeni -1,592 -2,208 -2,588 -2,808 -3,064 -3,343 -4,459 -5,845 -5,89D3. )bmcdpal Goverumt -329 -592 -594 -432 5D4 -208 496 -69 -14. De 1mtru4zd Amies -1.114 -1,871 -2,281 -2,727 -2.519 -3,671 -4,841 -6,876 -5,4555. FinuLal Public Enrprise 1,026 2,267 2,265 2,860 3,989 3,925 5,112 7,079 5,1846. Notfizn?dal Ablic Enterprie 2 -485 -1,058 4,123 3,977 5,405 15,431 19,586 -1,472 3,188

B. Capital Accunt PEvumes -40 279 156 280 463 362 -161 19.877 6.522

C. BkYnxuLog 3,184 4,059 13 212 16,490 17,502 10,122 12,588 14,849 24,6281. Extermil 594 2,339 11,144 9,426 13,.358 7,860 11,214 3,442 18,6912. Doaestic 2,590 1,720 2,068 7,064 4,144 2,262 1,374 11,407 5,937

Total 34,54 30,890 39,854 42,.95 43.679 50.557 65.146 84,8D 68,343

II. thes

A. Inweenn!t EexItuzc 12,062 20.456 25,013 36.456 43,478 41.119 54,114 70 064 68,9141. Gross FYxed Irwestuets (8,767) (14.781) (18,265) (28,566) (31,499) (32.320) (41.982) (41,342) (55,195)

a. Gentral Goemset 3/ 2,340 2,972 3,583 4,652 4,664 3,606 4,442 4,441 6,283b. PegLail Gonnuenet b53 1,407 1.569 1,564 1,625 1,415 1.467 2,478 2,189c. HMuicipal Goveument 135 261 257 395 480 487 553 715 619d. DmntraHIr Apncies 153 324 308 292 514 459 212 851 823e. Finmd,al Public E!terprsles 711 1,167 1,481 1,010 1,980 2,228 2,833 2,735 2,493f. NIn¢mfsranL Public Etcerprises 4,775 8,650 11,067 20,653 22.236 24,125 32,475 30,122 42,788

2. Finuial} Invet (3,295) (5,675) (6,748) (7,890) (11,979) (8,799) (12,132) (28,722) (13,719)

B. 6artlzation payms 1J44 1, 434 3 6 6 4,148 3,142 4,688 6,368 8,879 8,1391. Faternal 1,086 1,025 3,021 3,297 2,447 3,720 5,024 4,045 6,8982. Dertic 356 409 595 851 695 968 1,344 4,834 1,241

C.Csh baLzc 4/ 21,004 9,000 11,225 2.091 -2.941 4,750 4,664 5,860 -8710

Total 3,8 30,890 39,854 42,695 43,679 5D,557 65,146 84,80 68,343

1/ Incle trasfers to private secor sl abmd.'/ COperating surplus or deficit mnt of taxe paid to Central G_erit.1,/ Inluries contri1zitim to iwntentioewi organzations./Balatcig item.

Sourc: BLV

- 113 -

Mbe 6.1: AON1'S CF 1EM B RMU SYSIUf, 19791984 Paw 1 of 9(- n MlWions of BoijaM)

-De 31 Had 311979 1900 1981 19812 198Z' 27 1963 3/ 1963 '/ 1964

1. C4mtml Bonk

Net izlernstioal erves 33,512 30, 345 36,783 29,999 42.637 47,777 47777 53642Aseets 33,642 30,502 36,992 30,144 42,962 47,904 47,904 53,742lilitim -13D -157 -209 -145 -145 -127 -127 -116

Net ditic as -8,625 -2,875 -4,532 6.969 -13,712 -1.749 -8,749 -17,953Net clai on pjb1ic sectoc -9,469 -4,049 -7.200 -30 -11,625 -4,981 -11,981 -18,033

Net Citrl GbnOw t (-7,139) (-3,580) (-6,915) (791) (-2.837, (3,632) (-3,368) (-7,616)Asmas /2,253/ /1,681/ /1,652/ /7,970/ 14.290/ /10,254/ /3,254/ /3,2331Liab 1ite-s /14,392J /-5,261/ /4,567/ /-7,127/ /-7,127/ /-6,622/ /-6,622/ /-10,849/

VeueJal Invesziet Fdux deposits (-1,370) (-301) (-333) (-561) (-561) (-175) (-175) (-137)Nft other rel1zed apoces (375) (376) (146) (423) (423) (44) (44) (97)Social securty fmd depiaes (-22) (-3) (-135) (-6) (-6) (-5) (-5) (7)Sae local _werxzts (-634) (-574) (-249) (-28) (-28) (13) (13) (-49)Net offidAl r:teprae (-679) (33) (206) (-701) (-8,616) (-8,490) (-8.490) (-10,271)

Aeets /1231 /490/ /493/ /-/ 1-1 /24/ /24/ /19/Liabdities /-0 /-457/ /-2D7/ /-701/ /48,616/ /8,514/ /-8,514/ 1-10.290/

Offcial capital aix surpls -4,440 -5,641 -7,353 8,216 -4,536 -10,562 -10,562 -12,735Ckedit to coucrcal banks 2,119 2,280 2,902 6,839 6,839 3,654 3,654 4,297Cedit to rest of bazvg syates 1,374 3,388 5,780 7,101 7,101 8,230 8,230 7,047Credt tO rest of finavdal syates 1,258 668 645 953 953 809 809 1,619Net crit to omumutary internaial

oizatlons -197 -275 -170 -204 -204 -260 -260 -368Net uwulaaafied asets 730 754 864 526 -12,310 1,361 1,361 220

Osmterpart uuequlted fomip mbonge 1,472 1,651 1,425 9,158 1,243 7 982 982 5,217AUlocatlc of S3. 1,023 1,366 1,583 1,501 1,501 1,7 1,427 2,529Vabuin adll 459 285 -87 -258 -258 6,555 -445 2.688Colterpart deposits held by PDIS& - - - 7,915 - - - -

elimad la4term foreigL Labilities 2 487 411 166 166 64 64 66

MahiuIties to cocrwcal bants 11899 11,351 15,167 13,658 13,658 22,321 22,321 16,447

lAWs4litiea to reSt of banindg sytesa 1,157 1,461 1,447 471 471 443 443 574

Iiabilities to west of fincl systea 99 157 178 136 136 58 58 43

IUalities to private sector 10,257 1Z,363 13,623 13,379 13,379 15,160 15,160 13,342Mboetary liab3lities 10,064 12,228 13,508 13,224 13,224 14,929 14,929 13,162

Cbrremcy In circulation (9.866) (12.091) (13,305) (12.915) (12.915) (14,634) (14,634) (13.029)llerd depolits (198) (137) (203) (309) (309) (295) (295) (133)

Other liablitles 193 135 115 155 231 231 180

- 114 _

Table 6.1: ACMh1S G' 7HE DDICG SYM1, 19794984 PaW 2 of 9(In IilhIa of Boifwm)

-a--er 31 Mmrd- 311979 195) 191 1982 1 f9 2. 1983 /I 1983 '/ 1984

II. CtMrdal Berko

Not interntlreserves 1,583 716 1 532 337 3 365 4'872hmtts 19lr -,. 2,1i3 2Liabilities -1,334 -1,168 -1,099 -1,867 -1,793 -1,741

Other net foredg am 159 194 260 320 514 548

Ncazy teserwve acrreny holdiW 12,092 11J60 12 3.731 23,245 17,6U

Net dintic 5e 55,869 67,885 76 672 90,2a 9 104 949Net ral s mw public setor -9,226 -10,608 -4,650 -1,521

Net Central Goverrut (-3,845) (-5,072) (1,232) (198) (5,072) (10,434)Aeets 11,496/ A,3811 /7,124/ /4,103/ /8,497/ /14.204JLiabilties /-5,341/ /-6,453/ /-5,892/ /-3.905/ /-3,425/ 1-3.770/

Net offical exterpeis (-5,407) (-5,653) (-6,244) (-4.954) (-6,762) (-7,074)Assets /765/ /778 /865/ /1,128/ /1,296/ /1,325/LL lities /-6,172/ /-6,431/ /-7,109/ /-6,802/ -8,058/ /-0,399/

Otber de ltraUzed awices' bods (26) (117) (117) (106) (169) (120)Official cspital ard surpl -1,862 -2,137 -2,274 -2,740 -2,541 -1.940Creit to ret of bldrg system 1,329 1,640 1.809 1,744 2,008 1,895Crdit to priwte sector 58,877 69,136 75,388 84,827 85.978 86,159Net unlasified aets 3,269 4,211 635 5,422 8,5Ct 6,867Net interbi flost 3,482 5,643 6,009 5,638 6,834 8,488

Medium-ad long-term foreign Ilablities 2,004 2,425 4,005 6,868 6,696 6,673

U.abdlUties to etsry mtholties 2,646 2,346 557 5,036 2,504 3,167

U-bilities to rest of bm*iig system 1,552 1,574 2,530 2,167 2,620 2,152

iabiLities to priwte sector 63,501 75,057 86,765 90,558 114,563 116,021None>tarylabitm 29,014- 34713 37,556 33,764 -W,874- -4T,9WOther liabilitie 30,578 35,836 44,129 50,973 63,136 65,564Pivaete cqaital nd surplus 3,909 4,408 5,080 95,1 6,553 6,463

- 115 -

T2a 6.1: A=SM OF Wr BM;U SYsia, 1979-1984 Pw 3 df 9(In Mtilie si oBolvam)

Daoer 31 Ibrch 311979 1980 1981 1982 L At12 'I 1983 ' 1983 I/ 1984

III. Conidated tmbetsY Sgutm

Not 1 _35,095 32 061 8 3,315 335 43,174 51,142 51.142 58 514Asam_ 36,559 33.36 39,623 32.347 45,186 53,062 53.062 60.3Liabilitis -1,464 -1,325 -1,308 -2,012 -2,012 -1,920 -1,920 -1,857

Otbr not fomiUp mets 159 194 260 320 320 514 514 548

et dmatic asU 44229 62,277 71,809 92,221 71,494 95,930 88,930 85 026Net cla4i an pubUc sector -18,695 -14,657 -12,095 -4,706 -16,275 -6,502 -13,502 -15

Net &a1 Gjeu-C (-10,984) ({1,652) (-5,683) (1.015) (-2.665) (8.704) (1,704) (2,818)Net Ve luwm LIn_tent Fus1 (-1.370) (-301) (-333) (-561) (-561) (-175) (-175) (-137)NHt otha d eountralized amic' (401) (491) (248) (529) (529) (213) (213) (217)Net social ae1rity fuEmi (-22) (-3) (-135) (-6) (-6) (-5) (-5) (-7)Nt state *nd l1CCl gouerinsmg (-634) (-574) (-249) (-28) (-28) (13) (13) (-99)met cffical seterprism (-6,086) (-5,618) (-5,943) (-5.655) (-13,544) (-15,252) (-15,252) (-17,326)

UEfCital cilital and mirplm -6,302 -7,778 -9,627 -10,956 -7,276 -13,103 -13,103 -14,675vdi f to rt of bdtIgJ ystem 2,703 5,028 7,589 8,845 8,845 10,238 10,238 8,942

CFedlt to rin of firI2clal syscin 1,258 668 645 953 953 809 809 1,619kaedit to private *ector 58,877 69,136 75,388 84,827 84,827 85,978 85,978 86,159

It credit to normoeatry inteirationalocgdzatlam -197 -275 -170 -204 -204 -260 -260 -368

Not unaclo ifild asets 3,437 4,322 1,499 5.948 -6,890 9,129 9,129 6,335-. t lnterbm&k float 3,148 5,833 8,58D 7,514 7,514 9,641 9,641 11,548

CoatexAPrt umreqidlmd forlgo erheqp 1,472 1,651 1,425 9,158 1,243 7,982 982 5,217

.din l ren d lianbilt 2,00 6 . 2,912 4,416 7,034 7,034 6.760 6,760 6,739

Llabdlitiin to rmt of benin sytn 2,709 3,035 3,977 2,638 2,638 3,063 3.063 2,726

Ua*.Lities to trt of f1nudal swtem 99 157 178 136 136 58 58 43

LabtlitLsS tD private sector 73,753 87,420 100,388 103,937 103,937 129,7Z3 1Z9,723 129,363Mmecary llabLltIm 39,078 46,941 51,064 46,988 46,988 59.803 59,803 57,156Other liabilities 30,771 35,971 44,244 51,128 51,128 63,367 63,367 65,744Private cqital and swplw 3,904 4,408 5,080 5,821 5,821 6,553 6,553 6,463

-116 -

1a 6.1: ACM S (I lIE 1MDG SYSMI, 1979-1961 1! 4 of 9(IL mllim of Iou.)

ur 31 thVr 311979 1983 19U1 1982' 1912 zl 1983 /7 19E3' i961

IV. Pat Of the ="" Bnt

listwnatieecaaml -424 -30 -669 -18369 -484 -322meba -st S8S 78 502 4S6LxibLltir -1,009 -all -1.318 -1,871 -1.328 -778

0or not fo eg sd _ 24 3 3 1 - -

Mmetay rerv a, cum oldm 1,209 14 1 820 654 537

N1t dintic ames 38,107 49,895 63,132 76,419 8D,73 81 800Net clanm mn publC uaWr -5,212 -8,481 6,915 -8,334 -12,106 1i- 1. E

Not ctodit to Centrl GoMmenwt (-1,412) (-4,075) (-4,757) (-4,075) (-7,197) (-64939)Nat ochd deowizalimud saniel (-573) (-591) (-47) (-67) (-608) (-817)Nat official ettaptiai (-3,227) (-3,815) (-3,351) (-3,572) (-4,301) (-3,746)

Cffid4al capital ad aurplz -507 -768 473 -406 -874 -74Cdlt to arcnial bmnk 1.755 1,875 2,785 2,356 2,873 2,618C iit to t d flindal aytm 107 82 50 83 70 4UCtit to privute ector 40.983 5b,006 66,536 77,235 81,447 81,825?it tacJsUisf amsets 966 1,136 4.241 5,840 9,297 8,174Nkt Interhs* flost 15 50 ZD 125 27 17

Mitm- ad lu- I foig lialitis 6,588 7.248 7,624 9,154 9.973 9.50

IUM11. ±1i to talt o acmitie 1,379 3.387 6.118 7,923 7,685 7_S

LiabilitLes to cd-1 I . 930 1 1,83 1,272 1474 7

LI.Iles to bwiate sectr 30,019 39 338 49 057 57 52 61.372 63 544?mtfy flailitia 561 739 I k 1.064 578 53Ocher 'IAMultla 27,547 36,405 45,188 53,432 57,997 60,245Pridve capital ad swplmo 1,911 2,194 2,665 3,037 2,797 2,768

- 117 -

Table 6.1: A= S CP 7HlE WI SY!S, 1979-1984 paw 5 of 9(in KSllmu of DOlUs)

D _acb 31 March 311979 1980 198 1982' 1 1983

A. MorW k

Otherme facelaamets 24 3 3 1 -

Mbetm rmer ad wr ym twld= 187 237 156 177 265 222

Net daintlc aes 20,56B 24,162 29,274 34,031 38,458 39,4 6Net eaIne m publc sector 760 552 492 388 479 748

Net &ntral Govrruim (626) (451) (411) (315) (408) (682)Not other detrsaie x es (134) (10) (81) (73) (71) (66)

Credit to carcdal IbzI 518 449 511 485 756 509redit to zt of bidgystea 6 4 2 2 1 4

crdt to priwme sectr 18,749 22,413 27,01 31,587 34,871 35,529Met uwlafisl uaes 535 744 1,199 1,569 2,351 2,636

:afia-;x low-term ford1 lI ltfim 136 116 65 4 27 27

LiaW4tif to naty ajkEiste 1.291 3,184 5,576 6,857 6,827 6,809

TIabdlitltw to wciErcdil brks 358 434 501 456 733 658

UabtlE tlrozwt of bakdrg eystmn 42 13 13 10 14 24

Liabilitie to private sector 18,952 20,655 23,278 26,882 31,150 32,130Otber lHib1ft,lt 17,706 19,300 21,799 25,180 29,338 30,340

Of idch: nDrtwp boods (13,572) (10,324) (7,377) (5,542) (2,400) (1,907)Privote capital and surplus 1,246 1,355 1,479 1,702 1,812 1.790

- 118 -

Tbe 6.1: A0UN:S CF 1HE BM( SYS1, 1979-1984 Page 6 of 9(In MLilI.s of Bolivaxes)

December 31 Match 311979 1980 1981 1982 Z1 1983 1984

B. Agriailbral Dvelopimt Bk

Net teaau esers -303 -137 -773 -756 -733 -297

kutetat rees and a.rency tmldfr, 374 312 74 235 110 84

Net daestic amets 2,833 3,037 3,89 3,757 3,909 3,282Net dIais a pibllc sector -3,497 -6,005 -4,981 -4,667 -4,955 -5,068

Niet Cetral GDvrmient (-1,482) (-3,961) (-2,657) (-2.525) (-2,780) (-2,781)Net other erralfzed agncis (-707) (-692) (-888) (-760) (-679) (-883)Not official enurprisme (-1,308) (-1,352) (-1,436) (-1,382) (-1,496) (-1,404)

Official capital ai aurphlu -tU -83 -232 -234 -232 -232redt to concercial banks 180 198 159 90 58 53

Credit to test of badking systea 26 26 26 25 - -Credit to private sector 5,205 7,736 7,576 6,760 6,926 6,846Net uclasified amets 985 1,150 1,261 1,990 2,112 1,683

Mediumrad xi1c-term foreiga liabilIties 2,184 1,386 1,210 1,402 1,303 1,30D

TLabilities to wmnetary authoricles - 120 95 151 328 167

Tabiit1ir to consErCal banks 316 580 494 498 438 437

LiabLitles o rest of banking system 2 2 2 1 1 1

LiLablities to private sector 402 1,124 1,310 1,184 1,216 1,164iYaetary liabilities 231 255 252 167 203 142Other liabilities 90 785 825 782 781 790Private capital and surplus 81 84 233 235 232 232

: 119 -

Taile 6.1: AffNl OF ME BMEC SYIM. 1979-1984 EPu 7 of 9(In HLUhlm of oUvIim)

le~r 31 Hich 311979 198D 1961 192 '/ 1983

C. Wiixhu' Bm

Hat MEMOl -149 77 70 -650 -196 -2

etuty xre mv i aezs hdfAm 627 886 1,22 375 104 58

Hat dtlc aseA 2,047 6.515 10,555 14,176 10,009 10,230Nlt ca an puik sect -2,475 -3,028 -4,426 4,055 -7,845 -7,523

Not Cimtrla Gaeuen t (-556) (-565) (-2,511) (-1,865) (-4.825) (-4,840)Not ftALal aterpxdm (-1.919) (-2.463) (-1.915) (-2,190) (-3,02D) (-2,683)fiLcta1 cWpitad and axpls -23 -23 -23 -23 -30 -30

9Keit to omrctial beab 222 249 237 281 53 284Qcedit to rest d bming systen 31 62 32 30 2 -

a,adft to rest d ffnaciadh 1syst 68 79 37 39 28 28Credit to private seoar 5,341 11,042 14,337 17,515 16,316 15,968Nat uiclasinf1m assets -1,117 -1,866 361 389 1,485 1,503

iedL%xr- md IOW-ten fouli4p liabLdLine 204 518 592 78 993 813

LiUbilities to catbry athxz1tie 88 311 447 915 530 530

LUabUt.lili to co drcal bwns 2.17 83 784 263 203 211

L1bUit1 to reSt of bnkioe system 12 5 12 4 - 17

Llablitles to private suo= 2,004 6.561 10,019 12,641 8,191 8,635Ibutazy labdLItLes 330 484 952 887 375 389OtIe llabilites. 1,432 5,719 8,559 11.134 7,576 8,006Private cwltal and su¢pl 242 358 50B 620 240 240

- 120 -

bbIs 6.1: AOMRNI OF 1M B WMC SYSI. 1979-1984 Ppm 8 c 9(In MULta1x of Bolivarm)

1631 M ec 311979 1980 1981 1982 1 -1983 T18

D. National Savinp and Loan hAocatim

Net res erve 28 30 34 37 45 57

Mmaty rmeserve a.qmm holdln 21 50 37 33 175 173

Net dstic a_ets 12,719 16,228 20,246 24,498 28,373 28,932Not clat am publlc sector - - - - 215 361

Not cfil (a) at-)r(-)ss (215) (361)Official capital aid surpbm -403 -62 -618 -549 -612 -612Cceflt to Hor-a b.m 835 979 1,809 1,500 2,006 1,772Cedit to rest of b.rd aystem 12 5 - ill 67 83(k'dit to not of flkc1al w1 stem 39 3 13 44 42 2DCedit to private secto 11,688 14,810 17,622 21,373 23,334 23,482Net uwclsfiad mets 548 1,093 1,420 2,019 3,321 3,826

tIUz_-and log-tem farep lg abeIitl 4,064 -5228 5,757 670 7,650 7,423

iabIite1s to crda. but% 39 55 84 55 100 96

LlabLlUet torest ofi gn" systen 4 27 26 28 28 28

LAabilitlse to prwite sector 8,661 1,998 14,450 16,815 2D,815 2Otber labLi1ttie 8,319 10,601 14,O05 16,335 20,302 21,109Pivate capital a1 aarpls 342 397 445 48U 513 506

- 121 -

Table 6.Is IM S W IS NWO SVSIU. 1979-A984 Iw 9 ud 9(in 1I111Jtat d bOlVa)

-D06d 31 Mwcd 311979 1980 1981 1912 1912 f/ 1983 3/ 1983 27 191

V. xolUdWAd 5md1t S!nm

_ _t i______ 34,671 32.031 37.66 28.967 41.8D5 50.25S - .252 5_1_2

0tw Mc fnoml k mmem 183 197 2b3 321 321 516 514 ye

Nbt do cti t _ 79 088 106,698 125.179 157,654 136 901 165 O, 158 096 155 729Not elibs co publsecto -23,9U? -23,138 -21,010 -13.014 -2409-18,W -2S,*011 -25'.016

Not Ctzura1 C _mz (-12,396) (-12,727) (-10,440' (-3,060) (-6,740) (1,507) (-5,493) (4,121)1bt aiVn.aiLn Innutm ntPud (-1,370) (-301) (-333) (-56) (-561) (-175) (-175) (-137)Nit othur 1ne1waiaud qgnrcs (-172) (-10) (-559) (-158) (-158) (-395) (-395) (400)bt soci1l ecurity fund (-22) (-3) (-135) (-6) (-6) (-5) (-5) (-7)

stt *t ad local n (-634) (-574) (-269) (-26) (-t2 (13) (13) (-99)Nt off'icil " mira i. (-9,313) (-9,433) (-9,994) (-9,201) (-17,116) (-19,553) (-19,553) (-21.052)

offLdal icuIl *d *urpl -6,809 -,546 -10,500 -11,758 -4,078 -13,977 -13,977 -15,549Cb dot to d of ftmida.1 systm 1.3b5 750 695 1,036 1.03b 879 679 1,667CLidlt to pclYWs scotor 99,860 125,137 141,924 162.U02 162,02 I67.425 167,425 167,964Not Coat to _mtazy i0m stim.

-mrndat1c -197 -275 -170 -206 -2DO -2 -M -366Mc iax-uuid _a*r 4,964 b,101 5.740 11,842 996 18.426 18.42b 16,00DUK irzm_ic fiRot 3,812 6,469 8,500 7,690 7,690 11.211 11,211 12,011

x Wxe*dtsd f ign!Mu 1,472 1.651 12 4J5 9.158 1,2 3 9g2 S,217

.:diamwd lmK-wm foradg IaMlit.i 8.594 10.1w 1 12.060 16 .188 16.1J8 lb,733 16.733 11

UtMIitl_ to twt d fl.zcW *ysts C__ 157 178 136 13b 58 so 43

Lldb _M to Dr1jM!t cumtar 103 I777 126 758 149 445 161 460 161 460 191,095 191 095 192 907pkmwL%7 U.Mlltim 39,69 47: 6Y 52,2b8 928:4 48,0V- 6'-. *06381 57,

Q,zasy In cidcalatic (9,86b) (12.091) (13.305) (12.915) (12.915) (14,634) (14,634) (13.029)Dmnd dqopsta (29,773) (35.589) (38.963) (35.127) (35.127) (45.747) (45.747) (44.5S)

Othw liabilities 58.318 72.376 t9,432 104.560 10X.560 121.364 121,364 125,989UsL ad s*ntW dapiits (54.2D6) (64.143) (79,933) (91. 42) (9A.0W2) (10b.134) (106.134) (111,8I)-adn (1,019) (4.135) (4.592) (7.595) (7,595) (4,089) (4,089) (3,698)Othwr (3,091) (4,098) (4,907) (5,923) (5,923) (11,141) (11,141) (10.489)

Prlvate cpltA ad urplus 5,820 6,602 7,745 8,858 8,858 9.350 9,350 9,231

1/ For conprlm paqpau tlm .ffct of tai follAdg in a awludbd: (a) pld rwvalualnc; (b) s-t raliztica of Itarrttanlwarvm. aly to th nt of ch. dpluts af PlSA Imlt at the Cmral Bh* (Is.7,915 mdilUn); and (c) tnefor of lb. 3.610Millo of thc Sswrd_ StaMbl1-t4on Find to the Central Covet . The firn two 1m thur aoaaurz-svy in ttm c=t.patunrequited fomii .dun4 aoit. hcw 1st arructimn mints Um Pxmd Athin afficial ita1 au mupl1.

Z1 In acxdom Mdth the 0d-f. Wml _t.T/ For c Iu pgpin, data in ti colum man ctudt I 7,000D mllian trmfer d aural Ibk gpM mmalustlm pofit. to

the Clal cmmit.

Sm9rci: WCV ad the DF.

- 122 -

Table 6.2: CANZ I8 N Mr BANC CDIT Y ORI=N, D NATI,AND FDWIN, 197?-1983(in Bi11iQW of H1IIvurm)

Daoulber 31

1978 1979 198D 1981 1982 1983

TOWl crzat 21.8 5.3 27.4 18.7 32.5 15.4

Ctral Bdk 9.4 -2.9 5.7 -1.6 11.5 0.9Of hlch: owgp bm(1.2) (-0.3) (2.0) (2.5) tl.l) (1.1)

GomrcAl buc 7.0 0.3 9.9 9.1 9.9 7.1''t ofd bid qystm 5.0 9.2 9.2 9.2 11.9 3.9Iutwb.*L flout 0.4 -1.3 2.6 2.0 -0.8 3.5

By dntlntSLmMis credt to publc sector 2.1 -3.6 0.8 2.1 8.0 6.0

mm OCoral Gaermt (-1.0) (-2.5) (-0.3) (2.3) (7.4) (8.2)m- at e sefergl s^^"rmmnn (5.3) (0.8) (1.2) (-0.3) (0.5) (0.1)Not effida l ewtrpria (-2.2) (-1.9) (-0.1) (0.1) (0.1) (-2.3)

GflcL l capltal and reoervm -0.7 -0.9 -1.7 -2.0 -1.3 -5.9Cedit to ptlvate sector 16.2 11.8 25.2 16.8 20.2 5.4Otlmr I/ 4.2 -2.0 3.1 -2.2 3.0 9.9

JaIIltIin to private sector 14.7 8.0 23.0 22.7 12.0 29.6Mudiw ad log-rm

fore.g4 ilaAlltim 1.3 2.1 1.6 1.8 4.2 0.5Internstimu1 rmmm

(increae -)5.9 -5.1 2.6 -5.6 s.7 -6.5Other 2y -0.1 0.3 0.2 -0.2 7.6 -6.2

I/ CndI fit to u metLary lntazrAtil czgUali, credit to the mat of tief1n.^1s1 sywt, Interb float, md ra mcliified _o.

21 IwT_ls mdamr emerm1 mets axd vauat adjustments.

Smu: Crt1 Bdk of Vsuaela d thie TM.

- 123 -

Table 6.3: PRIVATE SECTOR CLADIS ON THE BANXING SYSTEM, 1978-1984(In Billions of Bolivares)

Decet . 31 March 311978 1979 1980 1981 1982 1983 9

Total private sector claim (H-3) 95.8 103.6 126.7 149.4 161.5 191.1 192.9

Total money and quasi-money (N-2) 87.3 94.8 115.9 136.8 146.6 170.6 173.4Liquid liabllities 3.96 52.3 48.0 60.4 57.7

Currency outside banks (9.0) 9.9 12.1 13.3 12.9 (14.6) (13.0)Demand deposits (29.6) (29.7) (35.6) (39.0) (35.1) (45.7) (44.7)

Quasi-liquid liabilities 48.7 55.2 68.2 84.5 98.6 110.2 115.5Time and savings deposits (48.4) (54.2) (64.1) (79.9) (91.0) (106.1) (111.8)Mortgage bonds (cedulas) (0.3) (1.0) (4.1) (4.6) (7.6) (4.1) (3.7)

Other liabilities 3.4 3.0 4.2 4.9 6.0 11.1 10.5

Private capital snd surplus 5.1 5.8 6.6 7.7 8.9 9.4 9.2

(Annual percentage change)

Total private sectorliabilites (M-3) 17.1 8.4 22.1 17.9 8.1 18.3 23.0

Total money and quasi-money (M-2) 16.9 8.6 22.3 18.0 7.2 16.4 21.2Liquid liabilities 19.9 2.6 20.5 9.6 -8.2 25.8 23.6

Currency outside banks (22.2) (10.0) (22.2) (9.9) (-3.0) (13.2) (7.4)Demand deposits (19.3) (0.3) (19.8) (9.6) (-10.0) (30.2) (29.2)

quasi-liquid liabilities 14.3 13.3 23.6 23.9 16.7 11.8 20.0Time and savings deposits (13.6) (12.0) (18.3) (24.6) (13.9) (16.6) (24.2)Mortgage bonds (cedulas) (50.0) (223.3) (310.0) (12.2) (65.2) (-46.1) (-27.5)

Other liabilities 23.2 -11.8 40.0 16.7 22.4 85.0 110.0

Private capital and surplus 17.7 14.4 13.4 16.7 15.6 5.6 5.5

Sources: BCV and the IMF.

- 124 -

Table 6.4: LEGAL RESERVE POSITION OF THE 03OMERCIAL BANKS. 1978-1983(In Billions of Bolivares)

December 1/1978 1979 1980 1981 1982 1983

1. Deposit obligations subject tolegal reserve requirements 67.1 69.1 81.0 93.5 87.4 120.7

Demand deposits 35.7 36.8 41.9 44.7 38.7 50.5Savings deposits 13.5 14.5 16.9 18.6 18.7 25.2Time deposits 17.9 17.8 22.2 30.2 30.0 45.0

2. Required reserves 8.1 8.4 9.8 11.0 11.1 13.815 per cent of demand deposits 5.4 5.5 6.3 6.7 6.0 7.710 per cent of savingp deposits 1.3 1.5 1.7 1.9 1.9 2.58 per cent of time deposits 1.4 1.4 1.8 2.4 3.2 3.6

3. Additional reserve requirements 0.5 1.2 3.0 4.1 1.7 2.240 per cent of deposit obligationsin excess of limit 2/ 0.1 - 1.7 2.6 - 0.3

On government deposits 3/ and/oragricultural loan requirement 4/5/ 0.4 1.2 1.3 1.5 1.7 1.7

Other (on offshore deposits) - - - - - 0.2

4. Total required reserves (2+3) 8.6 9.6 12.7 15.1 12.8 16.0(Total required reserves excluding BND) 6/ (8.1) (9.2) (9.5) (10.9) (11.1) (14.2)

5. Actual reserves 10.2 10.4 11.5 15.0 13.7 22.2(Actual reserves excluding BND) 6/ (10.2) (10.4) (11.2) (14.6) (t3.2) (21.8)

6. Excess reserves (5-4) 1.6 0.8 -1.3 0.1 0.9 6.2(Excess reserves excluding BND) 6/ (2.0) (1.1) (1.7) (3.7) (2.1t) (7.6)

7. Free reserves 7/ -0.6 -1.3 -4.1 -0.7 -2.8 4.9(Free reserves excluding END) 6/8/ 117) TJ) U3 (1.6 ) (6.8)

i/ Data are for average of last week oE month.

2/ From June 1975, there has been a marginal reserve requirement of 100 per cent on deposit obligations inexcess over a limit of 20 times the paid-up capital and reserves.

3/ A 25 per cent additional reserve requirement was inLtroduced on all public sector deposits with commercialbanks in April 1976. In July 1977 the reserve requirement was increased by 10 per cent for sight deposits.15 per cent for savings deposits, and 67 per cent for time deposits. In June 1978 the additional reserverequirement was rescinded.

4/ Commercial banks were required to hold 20 per cent of their portfolio in agricultural credit and, to theextent that they fail to meet this requirement, they are subject to a 100 per cent reserve requirement onthe amount of the shortfall. This requirement was raised to 22.5 percent In February, 1984.

5/ Includes deposits required to meet reserve requirements on foreign currency deposits, nonresident deposits,and certain types of credit operatiors.

6/ The Banco Nacional de Descuento (END) ran into serious difficulties in 1978. The Government intervened inDecember of 1978 and made it an official bank. Since then it has not been able to comply with the reserverequirements.

7/ Excess reserves minus Central Bank credit to commercial banks.

8/ Excess reserves excluding END minus Central Bank credit to commercial banks excluding BND.

Sources: Central Bank of Venezuela ard the IMP.

- 125 -

Table 7.1: Vtf OF fWAWUXIUAL ljCrii (F M WMUR OIMU, 1970 to 1983 1/

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

Plant tavdm

Rime 226 153 165 302 297 363 277 496 502 614 656 681 670 509M&E,e 710 713 506 454 554 653 532 674 591 612 29 452 5(1 429

7 2 7 9 34 70 124 280 340 396 403 347 377 220Bears 33 35 30 25 33 37 40 28 33 31 33 33 27 na.Coa 317 323 318 272 293 317 353 304 304 315 325 327 342 na.poFnr 125 115 109 124 152 152 135 179 171 191 191 171 217 238Seame 126 94 59 78 72 65 62 82 65 42 57 46 53 51Cotton 40 46 57 60 70 88 60 58 57 4S 48 24 17 35PaS 7 14 14 88 28 22 21 23 26 18 15 8 7 n.a.3oarms %968 989 997 902 937 860 900 875 900 873 89a 915 921 n.a.cam 19 19 17 22 18 20 13 16 17 15 13 14 15 n.a.H.ywes 78 71 79 67 72 82 89 113 108 100 101 104 105 n.OCra 180 219 206 243 251 266 266 32D 314 330 351 368 372 384CoLas 39 46 48 35 33 42 53 49 9 73 79 60 80 r a.Tatos 87 73 80 84 94 101 117 124 149 167 169 137 146 n.a.cos rs/ 146 151 155 160 IS 154 155 160 161 159 159 161 160 na.Coffee 61 58 40 66 46 65 50 58 59 54 58 64 s aSugr Cone 5,027 5,348 5,736 5,241 5,856 5,486 5,769 5,356 4,828 4,769 4,987 4,531 4,968 4,724Pl ha.Jm 370 378 372 369 382 370 373 406 445 437 418 426 430 455

hnm P&n&

_tk 3/ 924 970 1,049 1,023 1,100 1,187 1,557 1,199 1,202 1,271 1,311 1,349 1,382 1,429Cartte 4/ 1,117 1,158 1,169 1,306 1,328 1,382 1, 434 1,508 1,632 1,612 1,663 1,702 1.708 1,752P 4/ 903 1,12 8,053 895 1,248 1,253 1,372 1,551 1,432 1,475 1,531 1,558 1,538 1,702QrSj*- 21 65 87 at 88 101 110 119 110 128 134 145 187 214 n.a.Egp 2/ 1,406 1,477 1,527 1,562 1,627 1,744 1,822 1,810 2,024 2,299 2,257 2,289 2,498 2,489

Flah (t1.1f ofrkw) 118 130 144 156 149 148 140 148 177 166 178 186 2M8 n.a.

Lmber 5/ 438 470 560 555 482 518 342 317 434 341 226 204 220 134

1/ Volts In thouandl of ustric tew ns ctherwle noted.

3/ HuiUas of liter.4T Thsar si cbas.

5/ Insuds cf uters3 .

Saara: WCV, Infare Fw co. varIes years. For 1981 ard 1982 dsta, FtC, M'oria y Owts, 1982.

- 126 -

Table 7.2: VAUE UF AGRIQl1JRAL PlWICMI0, 1970 1D 1982(uLilcs of boliV at 1968 prim)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1960 1981 1982

Agrlcultzl. Prodtion 4700 4704 4648 4885 5210 5552 5372 5751 5917 6085 6218 6131 6334.

Plant Produts 209 1971 1811 1940 2066 2241 203 2408 240' 2488 2521 2391 2452Cerels 415 371 299 361 405 94 411 686 637 730 721 692 702l.s 48 49 40 34 43 49 52 39 44 41 44 39 37Paots aid lbbas 227 224 219 201 221 224 231 224 214 227 229 219 247Oilse and Fibers 248 230 2M8 226 263 269 226 247 23D 174 18D 138 130Fruits 340 346 351 318 363 357 379 360 414 411 422 433 435Vegetables 104 107 113 108 121 132 149 162 173 202 210 176 209Coffee, C I, Sugar,

To,o, Plantairs 627 644 581 662 650 716 655 690 692 703 715 694 692

nimal Produts 1956 2039 2129 2214 2414 2578 2668 2719 2906 3009 3117 3201 3336Milk 579 608 657 642 689 744 725 756 754 797 822 8146 86Beef 643 631 672 729 765 798 824 828 13311/ 1324 1369 1400 1411Pork 228 274 213 224 28S 307 310 380 n.a. n. n.a. o.s. n.a.Poltry 231 235 282 306 349 390 412 383 444 464 501 526 588Otheeat 19 23 24 23 24 28 29 33 n.s. n.a. na.. na. an.E4W 256 268 281 290 299 321 338 339 377 424 425 429 470

Fish Products 98 108 110 110 103 103 100 100 III 111 129 113 121

Fatry Products 74 79 91 91 80 83 51 79 74 63 39 39 39

Othtr Produtxion -.1 qervices 563 507 507 530 547 547 450 445 422 414 412 387 386

I/ TInld k" mad *-Jther ?*at" fron 1978 to 1982.

Source: PCV, Iorme E mm, varlous yems. For 19EI ad 1982, data fron MAC, Mrla y 0itau 1982.

- 127 -

Table 7.3: VAUE hX C A.aLZRAL PJC1XQI, 1970 TD 1983(udllo11 te bollUw at 1968 pries)

1970 1971 1972 1973 1974 1975 1976 1977 L978 1979 198D 1961 1982 1983

=L 3544 3592 3543 373D 3950 4236 4063 4403 4682 4677 4765 4676 4^3 4863

PUt P=xbeac 1594 1580 1470 1575 1658 1823 1693 1926 2057 2102 2D44 1927 2D5 1965

Iqmin 41 43 35 29 38 43 45 35 44 37 40 35 34 34RBoo ad llMzrs 196 196 190 176 193 196 204 194 210 197 201 19D 218 237Oilsee and Fibem 180 160 151 160 183 199 163 179 155 136 135 102 89 107Frdts 308 326 329 33 343 336 358 341 359 390 4 412 414 427Veidl 94 98 104 97 109 118 133 144 149 182 190 156 189 188Coffee, Cao. Sugar,

TOi.coP, PEaralW 537 552 485 571 550 613 55 581 613 606 610 595 590 601

Anima fto&u%s 1493 1565 1620 1683 1835 1956 2015 2D69 2Z13 2260 2339 2399 2480 .2554EL5k 48 558 54 58aF 616 643 6W -; 7 T 6W9 7lW 76

MeatD/ 875 909 917 987 1095 1158 1225 1251 1357 1364 1421 1447 1500 1549Fgp 132 139 145 150 154 166 174 175 196 219 219 221 243 243

___ P___ 85 93 95 95 89 89 87 86 97 95 112 97 104 103

Foasti:ro Pncts 63 67 77 79 68 71 43 68 62 55 33 33 34 32

Otber Prozcdim and Servicn 309 287 281 296 308 297 245 254 253 237 237 22D 220 2D9

I/ rlnclx. Pbultry for all yem.

Source: WC, hIform Eaco o, wiaz yer, ad the DF.

- 128 -

Tale 7.4: EfS S AERE aL2URAL P MUCES, 1970 m 1982(Voam In tbmumu of etrlc tots ard Valim In idlim of aren lb.)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 198D 1981 1982

CoffeeVolt. 16.6 19.7 17.5 14.9 16.5 13.6 17.9 11.3 14.1 7.9 2.4 1.2 1.0Value 77.3 83.4 77.5 79.7 99.0 86.3 161.1 22D.1 198.3 105.8 34.2 14.3 12.7

CaaVoluIm 11.6 11.5 11.1 13.0 11.5 13.6 7.6 9.4 7.1 9.0 9.3 8.5 7.6Value 32.5 25.8 23.5 47.1 83.4 7L0 56.9 167.1 137.2 140.5 123.3 88.7 65.3

CatwVolze - - - - 1.6 1.3 9.0 1.0 0.5 0.5 1.8 0.5 -Value - - - - 1.4 1.3 42.8 1.1 0.3 2.4 7.9 0.5 -

Preh FruitVolj, L4 10.4 12.3 14.1 10.0 5.7 15.8 12.8 13.9 14.9 9.5 n.a. n.a.Value 3.5 5.1 6.3 7.9 6.4 5.7 16.0 19.2 29.1 36.5 32.6 n.a. 4L3

Fish 1/V-i-m 8o 9.7 11.9 9.9 7.3 8.0 83 3.1 1.4 1.0 0.4 0.5 10.2ValUe 45.3 59.7 63.0 55.8 68.9 90.0 106.8 52.8 23.8 25.1 6.4 5.9 53.4

RimaVolu.e 59.3 - - 2.1 66.6 32.6 1.0 - - - - -

Vai,e 32.4 - - 1.4 87.6 50.4 1.3 - - -

Voltu. 35.4 32.1 152.3 34.4 1.9 0.' 0.6 0.5 0.0 - - - -

value 24.1 23.0 115.8 26.0 1.1 0.1 1.0 0.9 0.0 - 0.1 - _

Pldcallos ant

Vohute 23.3 L9.2 11.5 7.8 6.9 11.0 4.2 5.3 5.5 na. n.a. na. n.a.Valu 6.5 5.9 3.6 2.7 2.7 5.6 3.7 4.8 5.4 na n.a n.a. 8.8

l/ lwaludes Cruma ,ws.

swrcs mAc, AWxrio Fatamatisco Agroa.oa 1978 and BCV, Lforti£n E o, f-or later years.

- 129 -

Table 7.5: VOLUME OF SELECTED AGRICULTURAL IMPORTS, 1970 TO 1978(In thousands of metric tons)

1970 1971 1972 1973 1974 1975 1976 1977 1978

CerealsMaize 109.1 105.2 0.6 350.1 414.0 93.8 344.4 621.6 327.8Sorghum 1/ 180.7 329.6 352.6 402.0 443.9 462.4 478.6 448.9 540.2Wheat 690.3 596.2 718.6 544.8 540.4 732.3 712.7 704.7 805.6

LegumesBeans (black and dry) 22.1 18.5 25.9 7.5 17.0 16.0 10.4 48.8 30.2Peas 15.1 17.0 18.7 31.2 11.1 14.4 20.5 18.7 15.4Other Legumes 2/ 71.4 77.3 88.0 95.1 75.3 87.5 109.7 169.8 222.4

Other CropsPotatoes 19.3 14.3 12.5 12.7 4.1 31 1.4 19.0 29.3 17.6Cotton 6.0 4.4 7.3 9.1 4.8 1.7 2.4 14.3 8.9Sugar 0.9 0.9 0.3 17.0 26.1 56.0 85.9 225.3 430.7Tobacco 0.1 0.1 - 0.1 - - - 0.1 0.1

Animal ProductsMilk 17.7 6.9 11.6 33.0 17.0 37.1 50.8 129.2 102.9Cheese 0.4 0.4 0.5 0.7 1.4 3.3 3.5 16.7 6.5Beef and Cattle - 0.0 0.0 - 1.8 31.3 34.9 39.9 41.5Pork (and by products) 2.6 0.5 0.3 0.4 0.1 0.3 0.8 5.1 6.1

Fish 4/ 27.6 32.9 10.9 8.2 4.2 30.9 8.0 3.0 7.5

-: less than 50 tons.1/ Sorghum and other unground grain.2/ Includes soya beans lentils, garbanzo beans, sesame, peanut and soya flour and soya oil.3/ Refers to November through December only.4/ Includes fish meal for all years; 1975 figure includes beef meal as well.

Source: MAC, Anuario Estadistico Agropecuario, 1978.

- 130 -

Table 7.6: IMPORTS O SELECTED AGRICULTUaAL PRODUCTS, 1970 TO 1978(Millions of bs. at current prices)

1970 1971 1972 1973 1974 1975 1976 1977 1978

CerealsMaize 33.0 30.0 0.5 198.0 284.0 51.0 203.7 457.5 244.4Sorghum 1/ 39.5 81.6 85.5 130.9 224.1 278.1 238.9 304.8 284.3Wheat and Flour 190.3 179.9 212.5 285.7 503.4 632.7 500.3 420.1 495.7

LegumesP'eas 8.6 9.3 10.2 39.3 21.5 18.3 27.6 30.3 24.0Beans (black and dry) 23.0 20.8 30.2 11.2 46.8 38.6 19.1 91.3 57.5Other Legumes . 37.1 42.2 55.1 134.8 83.1 78.6 124.4 227.2 339.9

Other CropsPotatoes 9.0 6.7 5.6 13.7 4.1 3/ 8.3 26.1 49.3 27.3Tobacco 0.7 1.3 0.5 0.7 0.4 0.7 0.4 1.0 0.6Cotton 19.1 14.7 25.2 35.0 29.8 9.2 25.4 125.3 102.2Sugar 1.8 1.8 0.5 21.0 59.4 5.0 146.6 314.3 482.3

Animal ProductsMilk, processed 53.6 19.7 41.8 136.6 72.5 202.8 1u5.7 504.1 383.0Cheese 3.5 3.6 4.3 5.1 9.6 24.1 25.4 118.3 58.4Pork (and by-products) 16.4 2.2 1.5 2.6 0.8 1.3 5.7 42.1 67.7Beef and Cattle - - - 0.1 8.8 9S.5 122.9 197.2 241.2

Fish 41 20.1 29.4 13.3 22.4 13.1 51.3 25.0 25.3 38.8

Total 455.7 443.2 486.7 1,037.1 1,361.4 1,498.5 1.677.2 2.908.1 2,847.3

I/ Sorghum and other unground grains.2/ Includes soya beans. lentils, garbanzo beans. sesame, peanut and soya fluu;, and soya oil.-TI R,fers to November through Decenber only._/ Includes fish meal for all year.; 1975 figure includes beef meal as vell.

Source: MAC, Anunrio Estadlstico Agropecuarlo, 1978.

- 131 -

Taw 7.7: AMEL HRVM . S5=) OS, 19730 70 1983(In thbtrab cf hem1am)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 Iga l9g 1983

Total 1801.7 1788L8 1551.8 1558.8 1694.7 1727.6 1711.0 1740.9 1772.3 1656.9 1727.3 1656.9 1643.0 1513.,0

Cetm1m 722.7 704.1 536.8 559.5 609.7 665.2 655.2 759.1 766.6 847.9 804 785.4 n.a. n.a.Rlce 1130.6 65.3 113.0 17.3 113.5 9Q.I 169. i 16.17 -i.2f - 24. UT11maim. 58LL 587.7 456.1 438.9 462.4 506.2 488.7 432.0 413.5 408.9 394.2 311.7 305.0 251.0Sorgbm 2.9 2.4 5.0 6.1 29.4 44.0 72.2 156.1 185.5 241.2 211.9 229.3 185.9 163.0Wh1a 1.4 1.4 1.4 1.5 1.6 1.5 1.4 1.4 1.5 1.1 1.1 1.1 n.s. n.a.

110.6 111.8 96.9 78.2 92.0 100.6 112.0 71.4 80.0 76.2 76.0 69.1 62.0 65.0

bo (bomdiC nad dry) 90.7 95.8 83.2 66.6 80.7 89.3 100.4 61.5 69.7 65.9 65.9 58.8 51.9 n.a.OtkeD 14.2 11.2 9.8 a8 7.7 7.5 7.7 6.9 6.9 6.9 6.9 7.0 n.a. n.a.

lR=u Ian bem 76.6 77.0 77.4 63.8 74.0 68.5 75.5 79.0 74.1 76.7 71.0 75.8 74.0 78.0Potato 14.4 13.8 12.41 14. T 14.1 13.5 I1516 1T 1 -.6 I1 n.a.Crnm. 38.9 40.2 40.6 33.9 39.6 37.4 40.2 45.1 41.4 42.8 36.4 43.5 39.3 n.a.Otde 23.3 23.0 23.9 17.5 Z0.1 17.0 21.8 18.3 17.1 17.3 16.9 16.8 17.8 ns.

Frits 205.8 194.8 204.7 186.1 190.8 188.6 202.5 i%E5 200.5 197.8 199.9 201.7 202.0 M)5O0B^~~~~~-T. 3-,C ;[ 4.6 44.9 4S. -4U 46.T Z 45.3 -. 47. 6. n.a.

Plauaim 61.6 61.4 59.6 57.8 59.9 57.5 58.0 56.2 59.0 587 57.7 55.9 55.9 58.0O°Mw 28.9 23.9 31. 25.6 26.9 2U.S 33.5 D.6 29.3 30.7 29.0 32.6 32.7 n.a.cooon 19.3 19.4 19.7 20.1 19.7 187 19.1 19.4 19.7 19.2 19.1 19.1 19.9 n.a.Avoadom 12.2 10.3 12.4 10.5 10.1 10.9 12.5 10.7 9.9 10.0 10.3 10.5 10.6 n.m.MUS 6.0 5.5 6.0 5.2 5.4 5.9 6.2 7.7 7.4 6.9 7.0 7.1 7.2 na.Othex, 24.1 23.9 21.9 21.1 22.2 23.2 27.8 28.3 28.6 27.0 29.2 29.6 28.7 ns.

*ewtablm 14.8 14.5 15.4 15.2 17.1 19.2 Z0.7 20.9 23.0 26.0 26.1 24.5 26.0 26.0olors 2.1 2.0 2.3 1.8 1.9 2.4 3.0 2.4 2.6 3.8 4.6 3T.6 71 na.Ppezs 0.7 0.7 0.7 0.7 0.8 0.8 1.3 1.1 1.3 1.4 1.5 1.4 1.7 n.a.cmrrn 0.5 0.5 0.5 0.5 1.3 1.4 1.3 2.1 2.2 2.3 2.4 1.9 1.9 n.a.T-o 5.8 4.8 5.0 5.1 4.9 5.9 7.1 7.1 8.7 9.8 8.7 8.8 8.5 n.m.Othem 5.7 6.5 6.9 7.1 8.2 87 8.0 8.2 8.2 8.7 8.9 88 9.8 n.a.

31mItrinls 671.2 686.6 62D.6 656.0 711.1 685.5 645.1 642.1 628.1 516.3 545.9 500.4 nam. n.a.Sme iTYE?1 T if7 'i7I T74 153 1.7 S; -1 1 51.0 1 ; T 73K I. E 962 i8oCottan 43.3 50.8 56.3 58.8 64.7 784 51.4 47.2 46.6 38.5 36.3 21.3 14.8 24.0P1maCt 9.7 17.7 17.8 10.7 30.7 22.1 19.0 14.2 16.2 11.4 9.0 5.9 3.8 n.a.Sisal 10.1 9.9 10.5 11.6 10.7 10.8 12.1 7.1 5.4 4.9 4.8 4.8 4.8 ns.Coffee 256.8 288.1 276.7 272.5 272.5 275.4 268.5 258.2 265.8 256.4 257.8 261.2 259.0 261.0cm= 70.6 72.6 69.1 72.7 72.7 74.0 68.5 69.7 67.5 60.4 57.9 58.7 n.a. n.a.Sugpr Coe 63.1 68.3 73.6 69.6 76.0 77.2 79.6 84.1 74.5 72.0 77.3 60.3 64.0 70.0Tobeeco 9.5 9.9 8.9 9.1 9.8 11.1 10.6 10.6 10.8 14.7 12.6 13.0 r.a.. n.a.

Smm: BCV, Inftm Eccotc, varjn yer ad MAC, Mmria y Cliat, 1982.

- 132 -

lble 7.8: LW OF MM IS Di IAM= . 1970 1D 1980

1970 1971 1972 1973 L974 1975 1976 1977 1978 1979 1900

Fritll z Sm 20S,940 178,495 209.758 226,689 303.362 347,732 392,652 410,791 496,847 535.193 583.116

uatldd l (io) 9.13 5.891 2.68. 12073 - 0 0 0 0 0

Soso (crtilad) Ta 14 5ig ll,8n 11,561 15,787 17.631 36,04z 39,422 39,130 36.195 35.721 39.200Nd= 1TzR; 6,055 5,300 6,500 6,500 6,343 8,335 6,577 8,000 9,500 8,500CaCtan 1.2b6 1,225 1,313 2,070 3,155 2,263 1.400 2,123 1,800 42D 442S"_ 667 38 125 462 325 351 111 533 450 400 2501KI (WACIL) 70 266 343 652 611 1,714 1,90D0 1,665 600 197 8b. (Other) - - - 3 40 250 256 261 45 74 -RLUa 4,627 4.236 4,060 6,000 7,000 23,049 23,400 24,417 23,000 24,819 30,000Penile' 30 - - - - 275 82D 1,000 600 94 -Ptc Ae 735 - 40) 1OD - 1,797 2,200 2.554 1,700 187 -

UNS -

Madi1ua.z (iwom)1beld trctocs 2,667 3,406 2,380 2.217 2,786 5,346 4,528 4,100 - - -Tradi tracoam 528 33 127 200 230 197 267 2DO - - -kHrvestats 132 148 101 151 41.5 480 366 323 - - -S.odul 434 635 529 234 433 966 330 325 - - -Plouzh 177 146 42 246 315 397 556 43 - - -Odums 774 729 471 957 1,274 1,059 472 994 - - -

Smu: MC, Ammrlo 1st4Adito Awpmaio. 1978

- 133 -

Tmbl 7.9: rM = IICUML aiGM, I DIWM1O IN 15 U L t3. 1970 1 19(-SlUau QC on.)

lmtlmfe 1970 1971 1972 1973 1974 1975 197b 1977 1975 1979 196 19t 1U

me 335.4 360.7 43.7 472.2 357 59.7 627.0 41.7 42b.0 43.2 67.5 4.%9.7 2,96.6ilml 203.3 165.8 170.7 171.7 3.1 M0.5 15. M.L u 276.0 *02.0 62.0 395.ICW 237.1 313.1 179.2 177.9 602.9 845.1 643.4 716.0 64.0 720.0 694.0 3*W..1 70D.0cm 15.0 51.0 35.0 224.7 1,M.2 1t5665 1.235.2 1.231L0 HZ.0 W0 723.1 757.0 794.LUEMM - 50.0 43.5 5S.0 25b 6 80.0 .0 W7.5 130.0 127.4 227.4 537.1 40.FCA - - - - - - 337.2 26.8 100.0 247.0 450A0 2D0. 55.0RCaPc - - - - - - 39.2 4. 0 44.0 142.4 450.0 195.0 95.0RJ3C4D - - - - - - IB8B 23.0 21.4 IL4 54.4 S4.0 34.0101 IIICI"L W

mMjA XM1lJ - - - - - 59.8 72.7 79.1 103.9 103.9 167.3 13A.7 129.7

livd" - - - - - - - - 4.0 120.0 407.3 60.0 -* SUDi I/ 64.8 28.4 3S.3 42.3 226.1 292.9 259.5 453.6 5S7.6 702.6 682.4 1.160.0 1,355.S

0DS 2/ 313.9 3Y..7 327.6 353.3 367.3 - - 22.5 6.3 19.9 46.3 65.0 41.7

lmLL 149.5 1.323.7 1.20.0 1,497.3 4.2b9.9 3.7211L 3.70b.2 3.119.0 3.22b.0 XOMS 5.210.3 9.,Sb 6,657.1

IMTIIRML M 10.20b.1 12.761.0 13.478.4 14.57L0 42.518L5 39.875.0 4.571.0 50.M93.0 54.212.? 50.95.3L 72.ML& 94.5&4.1 8b.232.9

-GIULI SHMEor ilur (Z) 11.2 10.4 9.3 10.1 10.0 9.4 8. 7.6 6.3 7.5 7.2 9.9 7.7

1/ 61k mAsidlm _t br td Lw 1979 tl bI 131 b an n mmi Sdt mu 2btZ'J elucaM IQ1 1U pwjst. qrlauluml .a6am ad iul _m pto *m 1970 to 1974.

1z.a , aC1Sl1, ClW. CA. RC. DUN, Cl. DWEJ. lbtl. ad ToldAa Urdwmlttu ftm 1975 to 193.

Ssum: 3C4 hjm1o o -sudl .Aain1o 1978, diw Oiclu - m1 d. Pi_umqm.to. ad omiai it1mtw.

- 134 -

Tae 7.10: ANZ3AL CY JWT S .W 3 RX IUM mMAL 3ZRAL U FINANC ALSOCUMOSI All CM4WCM RAW.1970 to 1913

1970 1971 1972 1973 1974 197' 1976 1977 1978 1979 198D 196 1982 3963

AM Aglagltn. SWAM 350 441 22 694 1 182 3 266 1892 2-%2 3 279 3 11 360 3761 3 057 2 175I.-dWM mf UNDGI MI17 i- TLl fi-w t; 2,41* Yi218 2433

ICA - - 65 1,511 250 321 655 324 310 636 624 567

Conzdal 11i 523 645 795 914 1 227 1 892 5,135 8 10,0112 99h64 11,561 13,199 13,241 14,2

Finaida Aoatdora 1/ - - - 113 256 263 262 485 465 668 795 349 954 735

1U>L 873 1,086 1,307 1,79 2,665 5,421 7,289 11,68P 13,626 11,743 15,964 17,809 17,252 16.972- -- - - --- -.- --

I/ Fro 1979 to 1983. f1wrzw udb mirm mtd frc FCA

Srmx: WV, hforam evwo. wm-aw yasm. .d MAC, Aomlo Etd:steo Agrqmaiarlo 197H, ma MC. PM1.U y Ointa. 1982.

- 135 -

Table 7.11; PRODUCU PRICZS OF RINCIPAL AGIRICULTURAL PlODUCTS. 1970 TO 1978(In be. for 1ndtcatel weight.)

Unitof 3970 2971 1972 1973 1974 1975 1976 1977 1978

Voight

Rice (paddy) 100 kgE 62 63 66 69 7S 85 80 81 80Ma.'e (yellow) 100 kg* 39 40 38 45 60 67 SI 91 94loans (bldck) 100 kp 140 147 146 198 305 273 260 2:6 284Potatoes (white) 100 kgs 64 55 66 76 81 88 94 91 90

Ca,sava (sweet) 100 kGs 25 25 27 30 30 43 50 6h 76To;Ll toes 100 kg6 77 47 95 74 79 94 138 113 193PlantaLns 100 kJi 8 9 12 12 13 15 18 18 21Bananas 100 kg. 17 21 19 19 21 25 30 4s 44

Coffee (washed) 46 kgs 370 373 353 465 234 295 294 529 621Cacao (fino do aeguod) 50 kc, 250 231 241 40S 309 260 27a 715 636Subar cane 1000 kg. 37 38 38 41 41 43 54 b3 66Sesame 100 kg* 114 120 131 126 180 191 209 20n 215Cotton fiber (Ced) 100 kgs 129 126 130 133 187 214 211 2L8 249

Milk I/ 100 Is. 66 68 68 72 93 lob 105 121 122Beef (live weight) 21 100 kgs 165 176 176 206 244 421 470 517 501Park (live weight) 100 kg. 261 263 267 306 363 284 308 338 408Poultry 100 kg. 275 275 270 287 343 389 3139 393 406

Eggs (white, medium) 30 doz. 47 59 60 60 70 70 83 8E 14

Tt Before 1971, an average of all milk; from 1971 on, cold &Ilk at pauteurLaing plant._/ Before 1972, all beef, live weight; from 1972 on, youn samLals 300 to 375 kilos, for slaughter.

Source: MAC. Aruario EZtaditilco Agropecuarlo, 1978

-136-

Table 7.12a RETAIL PrICKS 7OR SELCTD OD NM OD m , 1970 TO £'JId(So. pot kilo)

1970 2971 1972 1973 1974 1975 1976 1977 1978

Rice 1.51 1.54 1.52 1.55 1.64 1.83 1.74 1.70 1.77'.alSe .63 .62 .64 .77 .92 1.04 1.20 1.32 1.37hmans (black) 1.84 1.92 1.81 2.09 3.73 3.63 3.21 3.GB 3.3SPotatoes (white) .95 .91 1.06 1.21 1.17 1.23 1.30 1.27 1.34Cassava .63 .69 .73 .73 .73 1.01 1.18 1.43 1.47Tomatoes 1.49 1.39 1.57 1.84 2.11 2.56 3.GO 3.76 4.01Plantains .18 .19 .21 .22 .23 .29 .34 .15 .37Banana (Guisoo) .52 .S1 .5L .58 .65 .70 .75 .78 .96Coffee 11 3.94 3.90 3.89 4.73 4.53 5.84 5.94 8.14 9.75Oranges tper dozen) 2.17 1.63 1.5L 1.97 1.79 2.45 3.81 3.80 5.20Siagr .97 .96 .96 .98 1.12 1.2S 1.23 1.2S 1.31

Milk (pastearlsed) 1.18 1.17 I..1S 1.14 1.46 1.69 1.69 2.02 2.04baef 5.80 6.09 6.98 9.07 10.56 11.98 13.31 15.70 17.64Porlk 6.21 6.24 6.49 7.18 8.07 9.05 10.93 14.00 14.68Poultry (broilers) 3.95 3.93 4.11 4.04 4.55 4.91 5.37 5.8l 6.20

E,g. 3/ 2.23 2.58 2.63 2.69 3.08 3.19 3.52 3.52 3.53Yellow chee" 10.25 10.34 11.04 12.37 14.17 15.34 1.36 16.75 16.37Fresh tuna 4.85 4.86 4.94 4.119 4.68 5.68 5.35 5.99 9.03

I/ Wholesale prices, retail prices were 70 to 90 ceatevo higher. wbes available.T/ Per i1ter.zt White, large, per dozon.

Source: MAC. Anarlo ZetadsctLco A&rEcmario. 1971.

- 137 -

Tal 8.1 DU1WtlIQN tF 113 VR OIL S1CR 1970 t 1983 1/

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 19a 1982 1983

i Qll 1,353 1,295 1,175 1,228 1,086 856 837 8U7 790 860 791 769 4)2 656NatI'3U Gm 2/ 48,42 47.579 46,02D 4,433 46,426 38,008 37,135 37.512 34,842 36,943 35,451 34,687 33,280 n.a.N dbr aGm quids 14 21 26 30 27 24 26 27 22 24 21 2) 21 n.m.DIedb1 471 453 413 477 437 317 361 356 362 360 337 16 316 312Pbd Qll (298) (284) (248) (304) (280) (177) (214) (D00) (206) (197) (171) (147) (136) (n.a.)Gm wd nq (65) (69) (67) (70) (70) (67) (76) (79) (81) (C9) (71) (80) (86) (na.)Dlewl ad Gm-Ull (55) (5B) (5&) (59) (48) (50) (45) (50) (52) (55) (65) (62) (62) (n)Otba0 (53) (42) (44) (44) (39) (23) (26) (27) (23) (29) (30) (27) (30) (n.a.)

Eqpzts 1,277 1,226 1,161 1,197 1,022 772 788 725 716 772 68 646 567 548C Oil 889 837 783 776 645 537 502 492 454 514 471 46 -38 360Lq'dfiel PeoIm Gm 10 17 17 27 23 15 16 19 14 14 9 6 6 n.a.Dexivativw 378 372 361 394 354 22D 270 224 248 244 20L 174 173 n.a.

Dic Caqtln 31DexivatiJ. 73 77 83 93 91 89 94 95 107 116 132 138 136 129Fuel 0U1 4/ (23) (24) (24) (27) (24) (18) (14) (15) (17) (21) (30) (30) (33) (30)Gmom i.1 vqphta (26) (27) (29) (32) (35) (38) (43) (47) (52) (55) (58) (60) (62) (62)

dLawl am: Gs-c (9) (10) (11) (14) (15) (16 (17) (16) (W3) (23) (26) (29) (23) (26)Ote (15) (M) (19) (2C) (I 70' (17) (2D) (17) (18) (17) (18) (19) (13) (11)Ibra1 Gm Z/ 29,983 31,413 31,493 34,814 36,564 33,719 34,087 34,684 32,550 34,615 33,324 32,606 31,616 n.a.

L.qtufed Pe1m CGas 3 4 5 6 8 8 7 5 6 6 8 8 8 9

11 Volum In mifliow of barels Pit uten ilkatte otherwise.I/ NUlc E 3.31 DOmec Cmwuopid Inclm delveeds to lrtercatanal mrlide and air tranport In tmsit.W/ 1Ipxs1 deziFie cumd by the petroleiu irdhstry fran 1977 to 198.

Sman IDVS& ad BCY, hInforme FELan, varis yea.

- 138 -

Table 82: V1UE AID IN DuulAL MWIY lW, 1970 70 1963 1I11111' of BoUliem at C fst 198 Pice)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

Thai MmaRfacwrtxi 6219 6615 7163 75a 8333 9286 10392 10839 11443 118S7 12277 12025 12542 12339

Tratrieal lIkurfi 3274 3474 3739 3926 4273 4685 4963 5161 5487 5826 5874 6011 6164 6147Food128D 1411 1530 1532 1652 1807 1890 1976 2126 2293 2236 228D 2388 2463Uenrap 675 708 782 902 934 1071 1226 1459 1527 1650 1925 2139 2282 26682/Tbacco 311 316 355 390 433 460 510 525 571 629 602 542 460Temtile 495 522 540 588 635 652 659 541 562 545 473 478 434 813/W-arf A4pazrl 213 216 231 230 293 337 314 276 300 283 259 219 223Skis ULds 29 35 34 23 2B 34 33 39 34 34 35 31 32FoobmaW 87 104 101 94 113 139 150 141 144 158 157 174 199Wood and COk 67 60 63 62 63 53 53 49 53 58 51 47 42 1354

ndtm an Accaaodes 117 102 103 117 122 132 128 155 170 176 136 1o 104

rateradiate iustries 1880 2060 2225 243D 2655 2872 3357 3407 3685 3829 4356 4019 4351 4455Roper ad ilp 274- 3 3 Z} 360 396 473 460 459 7M 5ZOcda1 Producs 536 589 650 675 824 853 1008 885 1171 1256 1615 1412 1474 1426Deriv. of Ptrol. & tal 7 6 6 6 7 6 6 6 7 7 8 10 10 9Rhbber and Ribter Prots 156 162 179 iS 231 262 302 272 293 327 331 337 327 4735/PLattl Prouts 86 118 132 119 126 158 178 173 196 198 164 149 154Nolnealic Mnals 411 445 501 526 546 570 619 652 667 662 607 602 627 545Bic metals 410 427 433 563 548 627 795 946 891 920 1160 986 1211 14W3

Capital Good intrie 835 82D 928 989 1154 1470 1780 1967 1938 1880 1776 1725 1735 1443tdl Peao}c 3 55 ITT 331 36 0 - 42522 795 674 - 6 5397 5 1il 49

Nrlectridal Mhfiry 67 57 60 61 72 87 95 96 102 94 86 87 95 80Electrical I rhine 6 Equip. 205 203 243 243 300 373 449 453 464 469 478 465 472 42DTnportai Equ4pete 308 282 294 325 398 548 714 623 698 618 617 612 596 453

Otb' r nlstries 230 261 271 236 251 259 292 304 333 322 271 273 m 294primugq I 1096 2T -I 192 187 20 -f21 -23 a 1 85 194 ;.sOtbel 50 65 69 52 59 72 82 92 99 86 89 88 98 n.

1/ Ecndoe petroleum rdirdrg.

SI -nWlud earing Aavtl", `Sd:m aM dob-, ad 7oew C.

4/ Ihu amd hciCaOEL5/ bide "Plastic Prkatu-.

Sore: WCV ad the TW.

- 139 -

Tble 8.3 V11 COF CU1M PM MDW =MM, 1970 A 1963 1/

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

Sted 789 771 964 907 895 919 752 676 679 1,203 '84 1,818 1,990 2,146Alu1izi 22 22 23 33 51 52 45 43 8D 210 156 314 273 332Amenia - - - 49 238 18D 294 33D 273 331 439 50S 55 462Sul1uric Ad(9 O) 70 31 79 68 93 117 82 39 92 128 114 79 113 I Piu*mc cild 13 8 11 7 10 28 10 29 17 8 - - - -Cot Imn 510 515 534 535 560 535 427 351 418 509 498 417 20 169SIJr 409 462 493 441 507 469 &94 406 371 32D 323 303 364 348Dmmels 293 32; 356 383 384 353 329 379 356 3m2 469 482 444 346Cit 2,644 2.8D0 2,982 3,413 3,495 3,455 3,538 3,742 4,107 3,973 4,842 4,876 5,432 4,151FertLllzer 129 89 138 99 168 160 126 161 84 297 441 485 630 576Imtar (O'der) 51 38 45 54 111 80 94 81 60 42 101 134 195 1Pqper SWd C. 242 267 291 334 342 384 423 464 493 511 501 501 481 486Catic Sods ( 1ui) 10 10 9 9 9 7 2 10 a 8 22 25 30 34Una - - - 4 55 27 117 151 135 220 276 315 372 390Rubber 2/ 1.758 1,947 2,130 2,212 2,466 2.669 2,737 2.934 3,089 3,444 3.483 3.681 3,590 3,385Imer lhbi2 / 1,026 1,066 1,318 1,251 1.162 1,186 1,138 1.068 921 747 695 562 328 242Ve1m 2/ 70 80 89 97 118 144 163 163 183 158 155 154 155 112

P_maeq 50 57 64 66 79 92 97 99 104 92 94 82 94 72QarcJai 2D 23 25 31 39 52 66 64 79 66 61 49 40 22

I/ In dtumt of etric taruml otbhezuLbe no .2/ in dwuszmf of uiits.

Smarce: BC3, nori Ecmco 1979, 1981, 1982, and 1963 (praeUiuimy data).

- 140 -

Table 8.4: MANUFACTURING INDUSTRIES OF THE PUBLIC SECTORVOLUME AND VALUE OF PRODUCTION AND SALES, 1980-1982

P r o d u c t i o n S a l e sVolume Value Volume Value

(thousands (millions (thousands (millionsof tons) of Bs.) of tons) of Bs.)

SIDOR1980 1,474 2,928 1,944 3,5861981 1,411 2,732 1,936 3,8381982 1,585 4,164 1,815 4,148

ALCASA1980 110 775 107 8341981 112 811 111 9051982 94 735 88 703

VENALUM1980 216 1,350 206 1,5281981 202 1,528 209 1,5511982 181 939 166 1,042

PEQUIVEN1980 642 734 458 5271981 625 752 517 7131982 888 880 719 976

NITROVEN1980 544 498 357 2691981 627 478 430 3381982 626 475 453 258

Source: BCV and State Enterprises

-141 -

Table L5 I llOF ISUMII BLUIIIf OWEU AC_VfMl, 132-N

Elpby- ReelTeul _et ve*ut

8eoXr 1972 If n7 15 1376 1377 I118 17m 1SO 1361 0wU a mu a me n

(Ml d7 ) (CS Pa. P.a

Petrolewm 47.4 45.8 45.6 46.0 4.i5 4.7 3.2 3J.7 a 10.3 45.4 4.2 4.3

Ir Mining 5J.1 0.1 30.1 NA. 3.6 5.2 EJ 104.3 110.3 104.3 31.0 3.0 -1.3Food 106.2 07.3 114.3 121.2 I5.3 123.4 152.9 124.0 13.4 134.5 3.6 2.7 4.6Uergm 336 32.1 103.3 110.5 121.9 141.9 lei 153.4 154.4 157.4 5.2 53 12.2

Tetco 177J 182. 13.2 183J. 1913 215.0 2126 5 h3 2M.1 119.5 123 1 4.JTat leeJfarlmg Apparl 143.4 144.6 14.6 154.6 10.3 165.5 173.1 161. 146.2 123J -10.0 -12 1.5Fom ' 13.5 91.6 115.9 113.9 114.9 111.1 119.7 111.7 1.4 S.9 -12.3 -1.4 6

Woo Prodcts A Fwrniore OA. 81.7 51.0 313 S 3.6 91.6 #32 71J 73.8 67J -19.9 -2.4 -1.3Papr A Papr Prujctb 176N 11U.0 15I3 37.5 23. 211.1 245.5 247.7 2533 Z35.5 4.5 4.2 S5O

Printluig 1&%2 hO.8 143.2 S0.I 152.2 151.1 1SU 1513 147.P 14C.7 12.7 13 -1.0Rr A Rbr Preduet 132.3 145.0 1I 168.7 18i 185.3 192.2 214.6 C 8.3 6.5 s 5.1 i. 7 3

_im,al1 1133 116.4 121.; 131.0 1412 15.3 161.1 153. 5SO3 1SZ7 34. 3.4 5.cal* Preietlon 653 67.9 9L9 .1 101.0 1143 121.6 113J 1076 13.1 44.2 4.1 5.0

Gmnt A Cby ProdeW 1m. 14.4 14.1 162.3 178.2 15.6 13 0.9 17.5 14. 164.3 21.0 2.1 0.4Mel Prodee 113.6 121.4 121.6 113.0 116.3 119.6 12.5 124.8 119.2 104.J -7.7 4.9 6.3

-BRc Irrn & Steel' 619J. 667.0 78Z3 *SJ 10.6 I175.J 12S.3 15.7 iin.0 14603 13.5 10.2 10.0Trnsprtation Eq.ipmet 351.2 401.1 47.2 35SJ 063 667.5 70.LI 715.1 411.1 .7 78.2 6.6 65

AaImiblIsRepIr* 123.5 113.4 11.93 13.2 157.4 13.2 134. 113 "33.1 57.5 -31 -3.7 ne.a

ElecrlcIty 131.0 15.5 147.4 I56.5 162. 167.7 178.4 187' 1.3 133.5 52.3 4.8 14.7lk-lag 145.0 157.5 171.2 131.2 2211 3.7 271.7 30.6 323 345S 1403 10.2 ns.

_iale' 107.7 15.7 I.1 1227 1;6.1 12LO .7 124.6 121.0 11U.4 9.3 1.1 9.7.

Lua*y' 113.5 10.7 35.3 66.0 8s5 £1.5 31.0 733 11., S5.7 50.s -7A n..

Nufe.lcbrlg (Avege? 141 A.4 147.2 1573 170.3 I5. 134.2 04.1 131.9 1M 175.0 25. 2.S 6.2

Sowea Illaeterlo del Trabeja, A_1re EatsdlUatl, 131; Be - 11 onlea n ' apears Indlot INS tht ham - 1961.

Re"l output font fr NmW.

- 142 -

Table &.6 AVERAE REAL WlES. OENOS a/, 1972-61. SELECTED ACTIVITIES

1972 1115 1974 1m 11m In7 3176 199 113 1961

Petrolew 2226 1672 2329 2263 17U 2103 D53 1743 1671 1952Iron MiUlng 3209 1601 1167 1761 1549 1765 1743 103 1521 1945

Food G15 U24 C10 774 707 S? 914 914 S3 753

Devraps 145 1160 9U3 117 122 1045 1030 10917 1200 1175

Tobacco U44 941 1094 1036 125S 1230 1150 1390 1505 1545

Textileesweeving Apparel 736 731 124 051 773 922 652 *94 715 7S5

Feotwear 5S1 622 672 720 134 676 162 91C 840 697

Wood Products I Furniture 552 553 602 561 m0 562 S70 635 660 620

Paper A Paper Products 656 s4 1057 947 82 747 704 105l 1053 192

Printlig 1323 1149 1377 1175 1219 1205 1237 1452 13B4 1305

Rubber A Rubber Products 1073 1076 1416 1225 lio 15;0 145 1467 1303 1316

Csemicals 947 114 126S 110 1056 AI'S 1394 1121 Il1s 1110

Comnt Product 161 1096 1171 1365 1023 1242 1177 1065 1214 *77C.iant A Clay Products 776 760 196 619 755 *70 172 1065 1067 1501

Uaalc Iron A Steel 1022 1046 1255 9C6 1015 675 1063 1162 SS0 763

Metal Products 1022 941 1064 1092 967 1001 1120 1057 1065 1256

Transportation Equlpoat 1169 1076 1666 1376 1735 C65 1257 1692 1616 1495

Auto Repair 74 746 106 135 776 837 995 976 1016 033

Electricity 1432 1339 IS6 1571 1449 1332 1279 1566 1875 IS65

Banking 1161 869 1135 1321 3082 1077 1164 1242 1100 130

Hotels S63 616 638 643 647 672 756 667 679 647

Laundry 56O 65C 709 653 625 747 as 633 601 635

TOTAL 1065 971 111. 1100 1036 1421 1460 1171 1162 1136

a/ Obraro. are generally blue collar eployees.

Sourcel Nominal Wage Oetau CORDIPLAM, Indimderes Soclalesl Nominal Wage Date deflated by Carecas CPI.

- 143 -

Table 5.71 AVENAOE REAL MOU, ESPLEADOS 1/ 312-81, SELEPUD ACTIVITIES

1172 1973 1974 1375 1376 1977 1m76 1373 19o 111

Petrlaeum 4230 465o 4643 41S1 356 3531 34165 3336 276 3530

Iren mining 3404 3616 3834 3250 2399 315 3066 2S30 26S7 3263Feed 2013 2003 2340 2339 2115 2171 2051 2201 1927 1697

avearage 1926 1354 2061 2084 2366 1105 1991 2192 2124 1743

Tobacco 2226 1336 2055 2094 1337 2307 2221 2642 2336 2591

Text II Igeev lng Apparel 1954 l3S0 2206 2016 2009 2363 2304 2257 1005 1765Footwear 1487 1426 1623 1671 1763 2123 2124 2206 1974 1584

Wood Products & Furniture 1225 1013 1414 1103 1lS3 1191 1491 1191 0OSO 041Paper * Paper Products 1360 1304 1846 1523 1539 1680 1314 2U64 2190 1942

Priatleg 1395 1902 1317 1937 2056 2443 2336 2436 2006 222CRubbor & Rubber Products 1823 1511 2001 I33S 1340 1802 1983 2143 1751 2222

Chemlcale 2S31 2904 3160 2721 2547 3063 20S1 224S 2363 2433

Ceomt Product 1S54 1855 2229 1934 1342 1531 160 1664 1630 1745

Cemnt 6 Clay Products 1822 1306 2003 1900 1933 1860 1i8s 2033 2012 2326

Basic Iron & Steel 1798 1304 1355 1960 2191 2437 2324 3033 2783 242S

oetel Produets 31O9 1i4 1S52 1377 1155 2127 2395 2257 s72 2259

Treasportet len Equipnmt 3018 2751 3276 2773 2738 2565 2764 3560 3022 2303

ARto Repir 1079 1077 1359 1143 1323 1227 1257 1294 1237 12xOElectricity 1009 1713 1839 1920 189 1826 177S 2044 18I 1600

Banking 1413 1602 1535 1634 1S5S 1643 lOlS 1620 1436 1343

Hotels 1298 1067 1237 1301 1082 1330 1635 1311 l151 1107

Laundry 1429 966 1523 1436 1335 1332 16B 1270 1636 1120

TOTAL 2025 1946 2167 2046 2000 2391 2296 22S2 19S2 lo88=u mu m. m_ m. _u _a m* m_

Empleados are gener I ly wbIto col lar amploysee.

Sources NomInl Wage Dstat ODRDIPLNI. ldlcedores Soclalesa Nolmal Wags Date deflated by Caracas CPI.

- 144 -

abe 8.8: PMIC IDICBG AUIU M1 UK _OVACnWG 9QC, 1970 to 19I5(Millions of Current Bs.)

Intrial Grp. 1971 1972 1973 1974 1975 1976 1977 1978 1979 19S0 1981 1982 1/ 19831

Priva Imbatry 247 188 243 290 1.872 1.728 1.62D 1,407 1.752 2,060 2,846 2,944 1.751

Camumr Good. Izdkimtries 40 44 56 112 553 406 264 159 306 368 1.010 609 567

Food 19 31 41 80 467 355 187 118 221 186 827 n.a na.Fuxdrture aid Jces 6 2 6 9 28 15 22 23 39 51 66 na. na.Printing 11 8 8 10 39 24 31 11 42 70 45 na. na.Othe 2/ 4 3 1 13 19 12 24 7 4 61 72 n.a. na.

Intermediate Caood Idmitriem 181 125 161 141 1,149 1l,O0 1 0E9 1.095 1.319 1.492 1.257 2,144 1.002PWr aid Pulp 0 3 1 - 35 72 8 48 8 34 37 n...a.Teiill 93 63 79 53 2)7 140 172 306 433 340 347 na.. a.Rubber and Pl stic PindbAs - - - 3 31 29 58 20 15 232 141 na. n.m.ChecProa &cts 15 21 22 18 12S 34 105 44 22 36 142 n.. n.a.N-irostalllc MLnerals 5 6 14 11 225 278 2E4 108 97 284 249 na. s.anMetal Produts 4 3 2 20 256 185 117 54 54 447 239 na. Da.

Others 3/ 64 29 43 36 267 282 375 515 690 119 102 n. nsa.

CWLtal Goods JnAstrles 26 19 26 37 170 302 267 153 127 2a0 579 191 182Non-e1e<rIca1 dMN ibnery 2 4 2 9 22 18 107 98 10 48 150 n.a. U..F.Ierical M.dilnezy 1 2 2 1 38 40 64 32 2 36 40 na. .a.Selentific Equirmt - - - 16 - - 5 2 - 8 0 n.a. na.mTraisport qdpmnwt 4/ 23 13 22 11 110 82 91 21 115 108 389 n.m. na.m

Adilic IndLatrles 5/ - 5 2 63 1,022 _2.321 3.66 4.655 815 480 4.377 2.002 1 72Iron a*d Steel - 5 2 63 1,015 2,099 2.812 3.761 29 85 3.102 988 1,004Otber Bsic tals - - - - 7 222 850 8S4 786 395 1,275 1.014 m

IUIAL 247 193 245 353 2,894 4,049 5.282 6.C62 2.567 2.540 7.222 4,946 3.477

I/ No det led bre*dam available. t-eridte C totd includ private seetw bmic metal*s :metrle./ZI Includes *wg Ah dmrel, hotminr, BH9as ad Toba.'3/ Incxaes szk ad mde. vow aid blk De.ivr1i of P lcro1m aid Go gad aw ler iabktries.

/ Incli p.blid luatd rim for all as._I Inclds private Inist fra 1970 to 1981.

SAres: BCV.oL, unom Eciao vriam years. Orltnal dat fma B.I.V.. C.V.F., mWDPIPJM1 F.C. aid F.I.V.

- 145 -

T81 6.9: MW N MM U Or NM I1UDVl1 p , 1975 1M 19M041111mm of an.)

1975 1976 1977 1978 1979 198D 1981 1982 1963

Not r _t_uxt1mi 2,963 4,466 56896 582 5101 86062 103D 6918 33269sht-tem forli -NiN 271 3T6 -6C -M -61 M'-2. ITED Im1 1,714 1,717 1,717 1,717 1,567 1,477 1,357 - -Otbmrbmds 337 478 563 50D 471 430 435 519 409

Huhiu,r- an l1gteem fore1i uem 1,527 2 36892 4 740 5,370 6,059 7,065 9,166 9 552Blatad Imim to foreign Czral Bd 72 1,123 16 1,936 2.358 3,165 3,819

Cost RICA (72) (8W) (70) (101) (133) (110) (236) (329) (AM)El Saiwdor (97) (141) (186) (251) (308) (356) (435) (449) (433)C*MteMI. (130) (231) (269) (323) (273) (291) (321) (314) (423)

1xw (95) (1411) (194) (269) (292) (321) (327) (245) (218)Nkaragu (68) (112) (123) (155) (190) (238) (316) (456) (406)Panama (121) (109) (86) (135) (113) (178) (352) (53D) (671)

can RepublUc (-) (-) (196) (258) (258) (520) (653) (794) (788)J _amca (54) (157) (184) (145) (122) (168) (39D) (565) (712)PeNr (65) (143) (338) (247) (221) (143) (115) (86) (57)Be C-) C-) C-) C-) C-) t-) (-) (31) (45)

Bllaterl loas for develapaut projects 2 2 496 643 800 1,046 1,270 1,533 1,761Costa RIcs H-) (53) (100) (147) (152) (204) (222) (230) (29)E1 SaVlr (1) (46) (72) (67) (62) (76) (109) (198) (265)Guataimla C-) (-) (52) (85) (183) (270) (358) (.414) (367)H:ir -) -) (-) (4) (23) (65) (148) (228) (325)WNarag (1) (18) (58) (65) (62) (58) (55) (56) (106)

son (-) (8D) (183) (207) (229) (259) (260) (259) (243)immim H~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~_ (4) (31) (68) (89) (114) (118) (117) (111)

Dominic= Republic () (-) (-) (-) C) () -) (31) (63)

o to IBM 430 430 430 430 40 369 339 1,546 1,3954or bD Ie W S s d LOBa - - 13 21 23 32 37 31 21Fha In tant of MB 396 816 1,245 1,675 2,104 2,147 2,147 2,132 2,110RICKab In taNt of Cmrbbeu RewlnLe Bar 7 34 60 87 107 107 107 105 106

Damu tic Per 16,33 11,653 7,496 2,121 1,372 302 338 462 76CdLo ad alrty - L 2 2 2 2 2 2 5

emsits In Ceatra Bak 16,343 11,652 7,494 2,119 1.370 300 336 460 73

Net doetIc credit -2D 833 48 723 -17 2S4 412 62 -11 863 14 423 19 433 546Met credit to -a sectr _tW < 3S, S 4 5,633 S2,S69

tam to state ezeneiea (924) (2,294) (5,926) (8,462) (9,403) (10,705) (7,7W') (10,387) (11,694)S-Wm (Stel) /919/ /2.073/ /3,802/ /5,278/ /5.278/ /5,278/ /2,073/ /2,073/ A1.934/AIMP (Aalumm) -/ /211/ /32/ /299/ /356/ /338/ /317/ /2951 /270/VEU4 (A ina) - 1-/ /750/ /A,0/ /1,300/ /1,30/ A,214/ /A,24 /1,070/ClF to1d1i comany) /5/ /10/ /20/ /166/ /219/ /340/ /331/ /337/ /337/KLiJ Olnrmrd prodacta) -/ //- /33/ A/40 /40/ /-// H-CADE (IleclrLdey) i-I 1455/ /6W /760/ /1A571/ /1,753/ /2,975/ /4,135/

1A (Electricity) i-I / /575/ /1,000/ /1,450/ A.7t5 /1,836/ /2,936/ /3.26/Other // /-/ f-t H-! A123/ /220/ /557/ /662/

Inumtmets In stodd (213) (2,958) (4,897) (9,200) (11,329) (14,599) (D,915) /35,246/ (40,765)lt t offlaii 136 176 168 185 133 133 133 413 413v (136) (176) C-6) (n5) tl33) (133) (133) (13) (43)

BEV H_ H_ H_ OM) t,( ( 4m tw)

CEfifAl cepLtal aol xmerA -22,469 -24,463 -28,864 -31.313 -34,101 -1,.42 -56,775 -8,Z5 -69,920CAPIal (-2D.532) (-2D,969) (-23,469) (-23,531) (-23,534) (-26.032) (-37,61.1) (-4702) (45,398)Raery (41,937) (-3,494) (-5,395) (-7,779) (-10,567) (-15.410) (49,131) (-22,123) (-24,522)

Not tmcli lf e mnet 363 312 589 781 1,393 1,582 1,S0 2,233 3,146

S5wos: Vmmien rmste Furd ad the Di.

- 146 -

Table 9.1: COST OF LIVING INDEX - CARACAS METROPOLITAN AREA,1968 TO 1984

(1968- 100)

Food, Bever-Year ages, and HouseholdAverage Total Tobacco Apparel Expenses Others

Weights 100.0 27.1 6.1 30.8 35.4

1968 100.0 100.0 100.0 100.0 100.01969 102.4 102.9 101.7 101.3 103.11970 105.0 104.3 105.4 102.6 107.51971 108.4 107.9 105.8 103.3 113.61972 111.5 113.2 108.9 104.9 116.31973 116.1 121.8 117.3 107.2 119.11974 125.7 137.3 141.0 112.0 126.51975 138.5 157.5 164.9 117.6 139.31976 149.1 171.4 192.1 122.4 150.81977 160.7 192.6 211.3 124.6 164.61978 172.2 210.5 229.2 129.5 177.71979 193.4 245.5 287.1 144.9 191.01980 235.1 326.8 419.8 171.9 213.11981 273.1 387.2 487.8 200.0 242.71982 300.2 424.8 474.6 214.9 277.81983 318.1 458.0 475.1 214.9 308.6

1983January 307.7 431.6 473.2 209.8 300.6February 308.4 434.8 471.4 209.8 301.0March 311.3 441.3 467.7 211.0 304.5April 313.6 450.8 464.5 211.3 305.5May 314.8 455.3 465.2 211.5 306.1June 316.7 457.0 469.1 214.4 306.5July 318.4 461.5 471.3 214.5 308.3August 319.9 462.3 472.6 216.7 309.3September 323.8 470.7 476.7 218.3 313.0October 326.4 475.7 485.7 219.9 314.4November 327.3 477.3 490.8 220.3 315.1December 329.3 478.2 492.8 220.8 319.0

1984January 328.8 474.2 493.7 220.9 319.6February 330.0 474.5 495.6 223.0 319.8March 334.3 482.3 499.6 224.4 325.3April 345.5 504.6 507.8 226.5 340.7may 348.8 509.4 512.3 227.6 345.4June 351.7 514.4 517.8 229.7 347.7

Sources: BCV and the [EF.

- 147 -

Table 9.2: URBAN CONSUMER PRICE INDEX,1972 TO 1983

(1971 - 100)

Food, Bever-Year ages, and HouseholdAverage Total Tobacco Apparel Expenses Others

Weights 100.0 30.74 6.43 28.23 34.60

1972 102.9 104.6 103.2 101.6 102.31973 107.6 112.9 110.9 104.3 104.81974 117.3 127.8 132.0 109.2 112.21975 130.2 146.6 155.6 115.6 123.91976 140.7 159.4 181.1 120.9 135.21977 152.8 180.2 201.4 124.5 147.41978 164.4 197.3 220.0 130.0 159.41979 184.1 227.2 267.7 155.9 171.61980 223.4 297.5 371.5 169.7 193.01981 259.7 353.8 428.7 196.6 219.11982 285.6 389.7 430.0 211.1 250.51983 303.1 419.2 437.1 213.0 278.3

1.983January 292.6 395.7 431.9 207.8 270.8February 293.3 398.5 430.7 207.8 271.1March 295.8 403.4 427.8 208.8 274.5April 298.8 413.5 427.6 209.2 275.6may 299.9 416.7 429.2 209.4 276.2June 301.5 418.2 432.2 211.7 276.6July 303.9 422.6 434.8 213.5 278.2August 305.4 423.9 436.2 215.4 279.1September 308.8 430.8 440.1 216.7 282.1October 311.1 434.7 447.6 218.1 283.3November 312.0 436.0 452.6 218.6 284.1December 313.9 436.9 454.5 219.3 287.8

Source: Central Bank of Venezuela (BCV) and the IMF.

- 148 -

Table 9.3: WHOLESALE PRICE INDEX: 1968-1984(1968 - 100)

By Orli By Sector of ProductionYear National Domestic Imported Agriculture Manufacturing BectrIcIty

Average Total

1968 100.0 100.0 100.0 100.0 100.0 100.01969 101.5 101.2 102.1 101.5 101.7 99.01970 103.1 101.7 105.2 99.9 104.3 100.01971 106.7 104.1 110.4 100.5 108.9 100.31972 110.5 106.9 115.8 104.9 113.3 97.31973 117.8 114.6 122.4 118.5 119.5 95.81974 137.5 133.9 142.8 135.4 139.4 94.81975 156.3 153.0 161.1 153.9 159.2 93.51976 167.5 165.3 170.9 172.8 169.3 94.51977 184.9 185.8 183.5 206.3 182.6 101.71978 198.5 199.8 196.5 216.6 196.5 112.31979 216.8 220.6 211.4 243.9 212.5 125.01980 260.3 271.2 244.3 310.8 249.5 125.11981 29b.3 312.0 273.3 372.2 279.1 163.71982 320.2 338.8 293.2 391.8 302.5 1i6.91983 342.5 364.2 310.9 447.4 318.8 174.6

192January 314.5 333.4 287.0 396.7 295.3 180.5February 312.5 329.7 287.3 378.1 296.5 179.5March 317.5 335.7 290.9 395.7 298.9 178.8Aprll 318.0 335.9 291.9 393.7 300.0 174.3may 318.4 335.5 293.4 377.3 303.3 170.7June 321.0 339.1 294.6 387.7 304.0 175.6July 323.1 342.1 295.3 395.3 304.8 175.8Augut 323.2 342.4 295.2 395.1 305.1 171.8September 324.0 343.6 295.3 394.9 305.5 188.4October 322.9 341.4 295.7 393.8 305.2 166.3November 324.0 343.2 296.0 398.3 305.3 184.3

1983January 327.1 347.6 297.0 410.0 306.5 187.5February 329.5 351.4 297.5 415.8 308.1 176.8March 330.1 352.0 298.1 417.8 308.3 181.3April 334.0 358.2 298.7 437.2 309.0 171.8May 335.4 360.0 299.4 440.7 309.7 176.5June 340.9 360.1 312.6 443.2 322.7 169.0July 345.3 365.6 315.8 458.4 320.8 168.8Auguat 349.1 370.4 317.9 461.9 323.7 179.3September 352.6 375.1 319.7 475.2 325.3 173.8October 352.1 373.5 321.4 466.0 327.1 168.8November 355.6 376.1 325.8 465.9 331.2 173.8December 358.8 380.3 327.4 476.3 332.8 167.8

1984January 364.1 385.5 332.7 475.1 338.7 182.3February 364.2 383.8 335.6 462.2 341.8 177.3March 376.0 403.1 336.5 506.6 345.9 172.8April 380.5 409.7 337.7 521.2 347.8 166.3

Source: BCV, Inforlu Anual. 1981-83

-149 -

Table 10.1: EIEMZ DWGOFN P llE I3IYUI OV1E IS A4 (F AGEIT LEML OF UXCAT, SEX AID WCAT, 1977-1983 3/

Sax, l o Utio midlenel of dwation 1977 1978 1979 1983 1981 1982 1983

TWa 100.0 100.0 100.0 100.0 100.0 100.0 100.0No fduCation 17.4 16.3 15.1 14.3 13.7 12.8 12.1Primary 46.5 46.3 45.9 45.7 45.0 44.6 44.2S.cxriazy 27.8 28.8 30.3 31.4 32.6 33.5 34.5Superior 5.0 5.3 5.5 6.0 6.2 6.2 7.0Uupedffled leIl 3.3 3.3 3.2 2.6 2.6 2.5 2.2

ale 100.0 100.0 100.0 100.0 100.0 100.0 100.0No E6ztlm 14.8 13.8 12.8 12.3 11.8 10.9 10.4Prilmy 48.1 48.1 47.6 47.3 46.8 46.3 46.0Se--oday 27.7 28.4 29.9 30.9 31.7 32.7 33.4Superior 5.9 6.2 6.4 6.9 7.0 7.5 7.9Uxupecdifd leve 3.5 3.5 3.3 2.6 2.8 2.6 2.3

Feialu 100.0 100.0 100.0 100.0 100.0 100.0 100.0NoEftention 2D.0 18.7 17.4 16.2 15.6 14.6 13.8Pridmy 44.9 44.6 44.2 44.2 43.2 43.0 42.4Secoedaxy 27.8 29.2 30.8 32.0 33.4 34.3 35.3superior 4.1 4.4 4.6 5.1 5.5 5.8 6.2U.pecified e1wl 3.2 3.1 3.0 2.5 2.4 2.3 2.1

Urban 100.0 100.0 100.0 100.0 100.0 100.0 100.0Nlo tAmice 11.0 10.2 9.4 8.9 85 8.0 7.5PFinry 46.4 45.9 45.1 4.3 43.8 43.2 42.5

5ecoodazy 33.4 34.4 35.8 37.0 37.9 38.7 39.6S-uperior 6.3 6.7 6.8 7.5 7.7 82 9.6Upedfied level 2.9 2.8 2.9 2.3 2.1 1.9 1.8

Rural 100.0 100.0 100.0 .100.0 100.0 100.0 100.0No dceation 39.1 37.2 35.0 33.5 32.7 30.7 29.9Priury 47.0 47.9 48.7 50.5 49.1 50.0 50.6SeczxLuxy 8.8 9.5 11.0 11.5 13.1 14.2 15.0Suerio 0.5 0.5 0.8 0.6 0.7 0.7 0.9Utpedftes legel 4.6 4.9 4.5 3.9 4.4 4.4 3.6

1/ Seconu oenter fizu for all yeare&SmarcID: ,WIH, lzfcin Socal o untie, 198t, II BU for later yas.

- 150 -

Table 10.2 ILLITERACY RATE OF THE POPULATION OVER 10 YEARS OFAGE, BY SX AND AGE CIOUP, 1977 to 1983 1/

Sax and Age Group 1977 1978 1979 1980 1981 1982 1983

Total 15.4 14.3 13.1 12.5 11.9 11.0 10.410 to 14 6.1 5.5 4.0 4.5 4.0 3.2 2.615 to 19 6.2 5.7 5.1 4.2 4.0 3.5 2.920 to 24 7.9 6.5 6.0 5.2 5.2 4.7 4.325 to 29 8.7 7.8 6.8 6.3 6.2 5.6 5.230 years and over 27.4 26.0 24.3 23.2 22.2 20.5 19.5

males 13.3 12.4 11.3 11.0 10.4 9.5 9.110 to 14 6.8 6.0 4.7 5.3 4.7 3.6 3.115 to 19 6.8 6.4 6.0 5.4 5.0 4.5 3.920 to 24 7.8 6.6 6.2 5.7 5.8 5.3 4.825 to 29 8.1 7.2 6.3 5.4 5.7 5.2 5.130 years and over 22.0 20.7 19.3 18.9 18.0 16.5 15.9

Femles 17.4 16.3 14.9 14.0 13.4 12.5 11.710 to 14 5.5 4.8 3.4 3.7 3.4 2.7 2.115 to 19 5.5 4.9 4.2 3.0 3.1 2.5 1.920 to 24 8.0 6.4 5.8 4.8 4.6 4.4 3.725 to 29 9.3 8.3 7.2 7.1 6.6 6.0 5.330 years and over 32.7 31.2 29.1 27.4 26.2 24.3 23.0

I/ Second semeter figures for each year.

Source: OKDIPLAN, Inform Social, segundo sesestre. 1981 and DCV for later years.

- 151 -

Table 10.3: PERCENTAGE OF STUDENT DROPOUTS FROM BASIC EDUCATION(GRADES 1 THROUGH 5) BY GRADE, 1971/72 to 1980/81 1/

18t Grade 2nd Grade 3rd Grade 4th Grade 5th Grade Total

1971/72 10.3 5.6 15.1 8.7 7.6 8.61972/73 10.4 5.6 15.5 8.9 7.5 8.61973/74 10.7 5.6 15.3 8.6 8.5 8.61974/75 8.6 3.5 14.1 7.4 5.1 6.91975/76 11.9 5.7 14.4 7.5 5.6 8.21976/77 7.4 4.0 7.2 7.1 7.7 6.01977/78 8.3 9.1 6.8 7.6 8.0 7.11978/79 8.5 5.0 6.0 7.3 7.4 6.11979/80 8.4 3.8 5.0 7.2 7.8 5.71980/81 9.1 4.4 4.7 6.7 7.1 9.1

, Dropouts defined as those students enrolled in a grade who do nLOt continueinto the next grade the following year.

Source: Ministerio de Educacion, Anuario Estadistico, 1982.

- 152 -

Table 10. 4: PERCENTAGE OF STUDENTS REPEATING A GRADE WITHINBASIC EDUCATION (GRADES 1 THROUGH 6), BY GRADE, 1972/73 TO 1982/83 1/

1st Grade 2nd Grade 3rd Grade 4th Grade 5th Grade 6th Grade Total

1972/73 - - - 9.2 7.2 - 2.5

1973/74 - - - 10.1 6.9 - 2.7

1974/75 - - - 10.3 8.8 - 2.9

1975/76 - - - 10.3 8.3 - 2.7

1976/77 - - - 9.7 8.0 - 2.5

1977/78 10.2 7.8 7.5 8.4 6.3 2.1 7.6

1978/79 12.7 8.9 8.4 8.6 6.5 2.5 8.6

1979/80 13.2 10.4 9.5 9.1 6.8 2.6 9.3

1980/81 14.1 11.1 10.4 9.6 6.9 2.6 9.8

1981/82 14.3 11.3 9.4 9.9 7.0 2.2 9.9

1982/83 14.5 11.3 10.5 9.7 7.2 2.4 10.0

1/ Data refers to those students who are repeating an entire grade or one semesteronly. Decree #1633 (June 15,1976) eliminated automatic promotion from grades Ithrough 3 and 6th grade. Figures for last 6 years refer only to those studentsnot passing year end exams required for promotion.

Source: Ministerlo de Educacion, Anuario Estaditico, 1982 and 1983.

- 153 -

Table 10.5: STUDENT/TEACHER RATIO IN BASIC EDUCATION BY TYPE OFINSTITUTION, 1981/82 AND 1982/83

Students 1/ Teachers 1/ Student/TeacherRatio

81/82 82/83 81/82 82/83 81/82 82/83

Total 2591.0 2660.4 78.5 80.8 33 33

Public Institution 2285.7 2352.4 69.6 71.6 33 33

National 1428.6 1445.1 41.8 42.4 34 34

Autonomous 5.5 6.1 0.2 0.2 28 31

State 740.3 786.1 24.1 25.4 31 31

Municipal 111.3 115.1 3.5 3.6 32 32

Private Institution 305.3 308.0 8.9 9.2 34 33

1/ In thousands.

Source: Ministerio de Educacion, Anuario Estadistico, 1982 and 1983.

- 154 -

Table 10.6: HOUSING-BASIC STATISTICS, 1977-1983

Percentage of Construction# of Houses Construction 2/ houses owned by Persons/Room of Rural

Year Thousands 1/ (Thousands) their occupants Urban Rural Houses 3/

1977 2,363 65.0 71.0 1.91 2.18 33.3

1978 2,428 74.1 72.5 1.95 2.34 34.8

1979 2,502 83.4 73.4 1.93 2.31 22.6

1980 2,585 91.0 74.1 1.90 2.23 26.7

1981 2,676 89.6 74.9 1.88 2.18 35.1

1982 2,766 96.4 n.a. n.a. n.a. n.a.

1983 2,862 n.a. n.a n.a. n.a. n.a.

1/ Based on stock at the beginning of 1977 plus the # of "Soluciones habitacionales-~J Soluciones habitacionales.

B, By the public sector.

Sources: CORDIPLAN, Mission estimates.

- 155 -

Table 10.7: SUPPLY, SALE AND RESERVE OFAPARTMENTS (PRIVATE SECTOR) 1977 TO 1981

Initial New FinalReserve Construction Total Sales Reserve

(a) (b) (c a+b) (d) (e-c-d)

19771st. semester 6806 6407 13213 5969 72442nd. semester 7244 7822 15066 5114 9952



1980Ist. semester 19580 11645 31225 9218 220072nd. semester 22007 15906 37913 11626 26287

1981lst. semester 26287 14589 41574 11891 289852nd. semester 28985 14719 43704 9562 34142

Source: CORDIPLAN, Informe Social, segundo semestre, 1981

_ 156 -

Table 10.8: APARTMENTS OFFERED AND SOLD BY THE PRIVATE SECTOR, 1977 TO 1981(By Region)

Region 1977 1978 1979 1980 1981

TOTALApartments offered 14377 17050 23947 27974 28653Apartments sold 11389 15054 16693 21107 21433

Capital RegionApartments offered 7884 9587 8985 9682 10149Apartments sold 6982 9052 8465 7779 7466

Central RegionApartments offered 1994 2409 5058 5529 5251Apartments sola 1582 2170 2682 3399 3646

Central-West RegionApartments offered 603 731 1411 2141 2529Apartments sold 442 633 674 1558 1657

Zuliana RegionApartments offered 2278 1833 3022 3658 4180Apartments sold 1462 1584 2473 3386 2843

Northeast RegionApartments offered 148 339 1113 2062 1967Apartments sold 53 358 564 1145 1488

Guyana RegionApartments offered 91 1184 3272 2952 2995Apartments sold 53 476 790 2914 2925

All Other RegionsApartments offered 1380 1007 1652 1804 2358Apartments sold 815 781 1045 926 1408

Source: CORDIPLAN, Informe Social, 1981 segundo semestre

- 157 -

Table 10.9: VENEZUELA - MORTALITY RATES, 1972-1981

Infant GeneralMortality Mortality Accidents and

Year Rate Rate (%)1/ Heart Related Cancer Violence

1972 52.5 6.7 11.4 7.9 9.21973 53.8 6.8 10.9 7.9 9.91974 45.8 6.3 12.0 8.3 10.91975 43.8 6.2 12.8 8.7 11.01976 43.8 6.2 13.0 8.9 11.31977 39.5 5.8 13.4 9.1 12.21978 34.3 5.5 14.5 9.7 13.71979 31.7 5.5 14.7 9.6 14.61980 31.8 5.5 15.0 9.7 15.11981 35.2 5.1 15.8 9.4 14.4

1/ Causes of death refer to general population

Source: CORDIPLAN, Informe Social, segundo semestre, 1981.

Table 10.10: HEALTH INDICATORS, 1972-1981

Public Bed/Pop. Phys./Pop. Nurses/Pop. 1/Year Hospitals Hospitals (per '000) (per '000) (per '000)

1972 340 182 3.0 1.0 2.21973 346 183 3.1 1.1 2.11974 355 182 2.9 1.1 2.71975 380 186 3.0 1.1 2.61976 386 183 2.9 1.1 2.91977 440 190 3.1 1.1 2.81978 444 197 3.2 1.1 2.91979 446 189 3.0 1.1 3.21980 457 191 3.0 1.2 3.21981 464 196 3.0 1.2 3.1

1/ Graduates nurses and auxiliaries.

Source: CORDIPLAN, Informe Social, segundo semestre 1981.

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