CAF finances study to simplify investment in Venezuela

The Andean Development Corporation today made a non-reimbursable technical cooperation grant for US$82,000 to finance a project designed to eliminate administrative barriers to investment in Venezuela, which Conapri will put through during the next five months.

The agreement was signed by the executive president of the CAF, Enrique García, and Michael Penfold, executive director of the Venezuelan Council for Investment Promotion (CONAPRI). At the signing, García said this initiative stems from the results of the Andean Competitiveness Project organized by the CAF, which promotes an agenda for national and regional competitiveness. To generate an appropriate climate for investment means simplifying paperwork, rules and procedures for local and foreign investment both public and private. The project to remove administrative barriers is perfectly in line with the needs of the Venezuelan business sector and should stimulate the productive sector, the president of the multilateral institution said.

Under the coordination of CONAPRI and with technical assistance from the World Bank’s Foreign Investment Advisory Service (FIAS) which gives advice on attracting foreign investment, a diagnosis of administrative barriers to investment in the public sector will be carried out. The fundamental purpose is to implement a Decree-Law on Simplification of Administrative Procedures (Official Gazette No. 36845 of December 7, 1999). The diagnosis will identify the administrative barriers faced by local and foreign investment at time of entry, and operating barriers related to transaction costs involved in paperwork, tax and customs procedures and registration, among others.

The Ministries of Planning and Development, Production and Commerce, and Science and Technology as well as SIEX, the Central Bank and SENIAT will be involved from the start to guarantee a practical focus and later implementation of the results.

Objectives of the project The principal purpose of the project is to simplify administrative procedures by identifying barriers to investment and improving relations between the private sector and government agencies. The idea is to make them more efficient, flexible and accountable for their actions with a view to improving Venezuela's image as an investment destination. All the steps required to make an investment will be identified and quantified in terms of time and money, based on existing laws and regulations that affect local and foreign investors.

Additionally the study has three fundamental objectives: to prepare a "map" to locate the impediments or formal and informal barriers to set up and operation; analyze the effectiveness of administrative steps in relation to government objectives; and finally assist government to set the priorities for administrative reform.

After analysis of the results, the CAF may sponsor similar studies in the other Andean countries on simplification of the administrative barriers that hinder trade between Andean countries in an effort to improve the competitiveness and contribute to the region’s integration in line with the needs established by the Andean Community.

The Andean Development Corporation (CAF) is a multilateral financial institution whose mission is to support the sustainable development of its shareholder countries and regional integration. Its shareholders are Bolivia, Colombia, Ecuador, Peru and Venezuela, along with seven partners: Brazil, Chile, Jamaica, Mexico, Panama, Paraguay, and Trinidad and Tobago.

The Venezuelan Council for Investment Promotion (CONAPRI) works to attract and promote both local and foreign investment, and assists the government in institutional matters to improve the investment climate in the country, particularly in the legal and administrative area. CONAPRI is a non-profit non-governmental organization set up in Venezuela in 1990 with the joint participation of public and private sectors.