i found it interesting that venz own press is starting to report this...

11: 23 A.M.) Analysts consider that nationalizations restrain investments in Venezuela

Caracas. - The nationalizations of companies in strategic sectors of the Venezuelan economy in the last year cause fear between the present transnational companies in the country and return the attractive country little for future foreign investments, according to experts.

At the moment, the Venezuelan State controls more of 90% of the cementera industry, the majority of the companies in the sectors electrical, oil and iron and steel and a part of the telephony, after which the transnational companies were forced to completely reduce or to eliminate their interests in the country, reviewed AFP.

The increase of the state dominion in the economy, holds in addition to a regulation to prices and control of change that reduce to the yield and competitiveness of the present companies in Venezuela, has restrained the rate of direct foreign investments in that country, said the analysts.

“The foreign investment would have at least to be of 3% of Producto Interior Bruto (PIB), about 6,000 million dollars, and we did not arrive at 10% from that”, said to the AFP the economist Orlando Ochoa.

The total of direct foreign investments (IED) in Venezuela reached 400 million dollars in 2007, the smaller number in the region in agreement with the Conference of the United Nations on Commerce and Development (the UNCTAD). By way of comparison, in the same year, Colombia received 8,200 million dollars and Brazil other 37,400 million.

The registry of direct investments in Venezuela is only superior to the one of Hungary in a list of 34 countries published by the UNCTAD and including in the report of the National Council of Promotion of Investments (Conapri).

The acquisition of companies on the part of the State, some by means of expropriation, increases the sensation of legal insecurity and lack of protection of the investments existing in Venezuela, according to the experts.

At the moment, between main the foreign companies that maintain investments in Venezuela honor Nestlé and Cargill in the food industry, the telephone Movistar Spanish, the pharmaceutical laboratories Pfizer and Merck, automotive the General Motors and the branch of the Spanish Bank Bilbao Biscay, according to Conapri.

For Luis Vicente Leon, director of the Datanálisis poll, the foreign industralists “develop investments based on the awaited return and of if they are protected from the point of view of the capacity of repatriation of capital and generation of yield in the future”.

In Venezuela “the companies are put under the risk of which the State in a while decides certain to declare them of public utility, to take them or to buy them”, over the economic convenience, said Leon.

The companies that wish to invest in Venezuela also review the risk country, that is located in 648 points, level only surpassed by the one of Argentina, but more of the double than in Brazil and Colombia, according to data of the ministry of Finances in Caracas.

For the industralists who have grown thanks to the governmental plans of development the nationalizations will allow the small industries to be associated with the State and will impel new investments.

“A group is leaving transnational companies so that among another group of transnational companies”, it said Alexander Uzcátegui, president of Industralists by Venezuela, of governmental tendency, with reference to the projects of investment between Venezuela and Iran, Belarús, Argentina and Brazil, among others.

But according to Ochoa, the agreements between these governments are symbolic operations “in a process of political integration” and they do not have any impact in the development of the investments in Venezuela.