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Interview | Alejandro Grisanti, analyst at Barclays Capital for Latin America
"We do not see any risk in falling oil prices"
"In 12 years, OPEC Member States grew at an annual average of 6.3%, Venezuela 2.3%"
Alejandro Grisanti is afraid that Venezuela is still tied to the statism of the 1970's and has not cashed in on the oil boom (Photo: Venancio Alcázares)
VÍCTOR SALMERÓN | EL UNIVERSAL
Saturday October 01, 2011 04:38 PM
Global shaking challenges political initiatives. Developed countries will grow at tiny rates if they do not fall into a new recession; and the Eurozone threatens to crumble. Nevertheless, Alejandro Grisanti, an analyst at Barclays Capital for Latin America, manages a scenario where Venezuela could disregard the crisis and focus on overcoming domestic troubles in order to grow more.
China and its endless demand of oil mean, from his viewpoint, that the Venezuelan oil basket, the source of 95 out of 100 incoming US dollars, will continue challenging the law of gravity.
He adds that a slower growth in the United States and Europe also prove that the Chinese economy does not run the risk of overheating in the short term.
How do you view the use made by the government of President Hugo Chávez of the oil boom starting in 2004?
There has been an oil boom in 2004-2010. In per capita terms, it is tantamount to the oil boom of 1974-1980. However, this government is so inefficient that it has failed to use it properly to provide increasing wellbeing.
Is Venezuela's growth comparable to the growth elsewhere in Latin America?
Over the past 12 years, Venezuela annual growth averaged 2.3%, whereas the rest of Latin American countries grew by 3.5% on average, and OPEC (Organization of Petroleum Exporting Countries) Member States grew by 6.3% on average.
Latin America and OPEC have learned to do things better, but Venezuela has missed many chances; it is still anchored to the exacerbated statism of the 1970's.
What would you recommend in the event of a change of government next year or of a new economic cabinet?
In the oil sector, increasing the output is important. This could be made by means of incentives, under the current law, concerning royalties and the windfall tax on the companies that have projects at the Orinoco Oil Belt, which are making slow progress.
"With such incentives, you could increase production by two million barrels per day of oil in six-year term," he added.
"While the OPEC acknowledged that Venezuela holds the largest reserves of oil in the world, then making a deal to increase the quota is feasible."
With regard to the Venezuelan State way of managing oil revenues, he thinks that changes must be made as well. "There is the need to come back to better tax monitoring; closing all those parafiscal funds and (state-run oil holding Petróleos de Venezuela) Pdvsa should sell again all the dollars to the Central Bank, for the Central Bank to be responsible again for the exchange policy. In no country in the world, the exchange policy is in the hands of the Finance Ministry."
"The combination of high oil prices and capital in search of yield in the world is perfect to think about phasing out exchange control and reintroducing the Venezuelan bolivar as an exchange currency into the world."
He summed up by saying, "I do not see the need of adjustment measures; just by making changes, the country could start growing at high rates."
What is Barclays' forecast for Venezuela this and next year?
By this year, our forecasts envisage economic growth at 4.3% and 3.5% next year.
L'economia in Venezuela sembra dare segnali di miglioramento.
Dato che i rischi politici mi sembrano quelli di sempre, direi che l'attuale debolezza degli Hugo-bond è da imputare principalmente al generalizzato flight to quality.
Prezzi interessanti in un'ottica di lungo periodo.
Non è che si preparano a stappare lo champagne? 
