Source: http://worldcityweb.com/home/MIA/publications/magazine/8/617/

Exports to Venezuela jump 44 percent

by Mary Dempsey

South Florida is supplying the machinery for President Hugo Chavez’s populist initiatives.

With Venezuela’s economy growing at double-digit speed and oil-windfall revenues at-the-ready to fund the populist programs of President Hugo Chavez, South America’s oil-producing giant has gone on a shopping spree.

And just as in the good-time days of the 1970s and 1980s when caraqueos flew to South Florida for weekend shopping sprees, Venezuela has favored Miami for its purchases.

South Florida shipped nearly $2.3 billion in goods to Venezuela in the first nine months of 2005, a jump of $692 million compared to the same period a year earlier. Leading the list were computers, motor vehicles, machinery, telephony equipment and jet parts all needed to push forward on government initiatives.

Overall, exports from the Miami Customs District hit the $24.9 billion mark, an increase of more than 14 percent. But when it came to exports to Venezuela, the jump was nearly 44 percent. Among South Florida’s Top 10 trading partners, only China saw a greater increase in shipments from Miami: 82 percent, to total $123 million from January to September.

Among the top exports, South Florida’s shipments of cell phones and parts to Venezuela rose 81 percent in value, to total $288 million for the first three quarters of 2005. Computer parts and computers increased 76 percent and 66 percent, respectively, for a combined value of nearly $338 million. But it was trade in construction equipment that posted the biggest jump. It grew 97 percent, to a value of $183 million, while regional jet parts swelled more than 81 percent, ending near $42 million for the first three quarters of the year.

Petroleum drives the Venezuelan economy, and its oil exports reached $13.8 billion in the third quarter, the highest since the Venezuelan Central Bank began reporting the figures in 1997. With Venezuelan oil averaging $44.95-a-barrel so far this year, nearly double what the government had forecast for 2005, the Chavez administration has plenty of ready cash to pay for its ambitious projects: housing construction for the poor, a government-owned commercial airline, extension of the Caracas subway system and initiatives for new dams and other infrastructure improvements.

At the same time, the private sector is benefiting from an economy that is projected to grow 10 percent this year after posting 18 percent GDP growth in 2004. Economic activities that flourished in the first three quarters of the year included manufacturing, which rose 9.3 percent; commerce and repair services, which saw 18.1 percent growth; the construction sector, which boomed with an 18.4 percent improvement; and government services, up 7.3 percent.

This growth contrasts to the stagnation that occurred from 2002 to 2004 during political upheaval that included a coup, a two-month strike in the crucial petroleum industry and protests that disrupted local commerce. A 2004 referendum secured Chavez’s leadership and opened the door to his aggressive initiatives which require equipment that the country does not produce or does not produce in sufficient quantities.

At the same time, economic good times have boosted consumer spending in Venezuela. In the third quarter of 2005 alone, according to Venezuela’s Central Bank, the country’s imports rose 28 percent to a record $6.7 billion.

That doesn’t mean the good times will continue. Analysts are predicting that Venezuela’s growth will slow in 2006 to just 5 percent of GDP. Inflation, meanwhile, is project to rise to about 10 percent.

In overall trade, computers and computer parts continued to grab the top spots in Miami’s export list, with the combined value of the two exceeding $3 billion for the first nine months of the year. Worldwide, computer demand is on the rise. South Florida’s tech bounty also extends to cellular phones, another hot commodity on global markets. More than $1.2 billion in shipments of cell phones and cell phone parts were shipped from South Florida from January through September, a jump of 7 percent from the same period a year in 2004.