From the Editors of VenEconomy

Revenue Watch Institute (RWI) and Transparency International (TI) have presented Revenue Watch Index 2010. This is an annual report that evaluates the existence and quality of information and legal regulations in 41 countries with hydrocarbon and mining industries.

This year, Venezuela, with a score of 63, came 14th in the world and seventh among the nine Latin American countries. This ranks Venezuela as one of the countries with a considerable level of opacity in the information supplied by Petróleos de Venezuela.

Venezuela was ranked way below Brazil, which headed the index with a store of 97. It is worth noting that this good performance by Brazil is due to the decisions taken so that its state-owned oil company could comply with the requirements for it to be quoted on the New York Stock Exchange.

Even so, it could be considered that Venezuela did not come out so badly. At least in this index it was not ranked near the bottom, has been happening in nearly all the international rankings on competitiveness, transparency, economic freedom, freedom of speech, and productivity.

This “acceptable” result is based on the fact that both the Ministry of Energy and Oil and PDVSA have increased the number of publications and reports issued in the past three years.

But more does not mean better. The fact is that the index does not evaluate the quality of the information, which would reveal how true, accurate, updated, and timely PDVSA’s reports are; nor does it evaluate the quality of compliance with laws and regulations. It is common knowledge that, in these two categories, PDVSA falls far short of any acceptable world standard and falls equally far behind the achievements attained by other countries in the region.

Here are some of the observations made with regard to Venezuela:

• The existence of complex rules that allow room for “arbitrariness in decisions, conflicts of interest, and opacity.”
  
• A lack of clarity in the division of responsibilities between PDVSA and the Ministry of Energy and Petroleum, which is hardly surprising if account is taken of the fact that Rafael Ramírez has been at the head of both organizations for years, so neutralizing the Ministry’s controlling and regulatory role over the state-owned oil company.
  
• There is growing concern over the quality of official data.
  
• Poor performance as regards the transparency of information on access to resources and special funds.

In 2011, Transparency International, together with Transparencia Venezuela, will start monitoring public information on the country’s hydrocarbons and mining industries, which means that one challenge facing the next National Assembly will be the passing of a law on access to public information that guarantees this constitutional right and requires government officials to render accounts.

VenEconomy has been a leading provider of consultancy on financial, political and economic data in Venezuela since 1982.