Bill in Venezuela Paves Way for Future Private Investments

RIO DE JANEIRO, BRAZIL – The draft law introduced by Venezuelan President Nicolás Maduro on Tuesday, September 29th, paves the way for higher private investments in the economy, which would reverse decades of state intervention.

The text of the “anti-blocking” bill describes the Executive with the power to change the ownership, management or administration of public companies and joint ventures, according to a draft seen by Bloomberg news outlet.

The change could allow further private or foreign investment in the state-owned Petroleos de Venezuela and in the country’s oil sector, the production of which has plummeted as a result of declining commodity prices, mismanagement, corruption and sanctions. Foreign investment in the country’s oil sector has been limited to 49 percent since 2006.

“They may be considering handing over the management, perhaps the ownership, of Venezuelan refineries, and I believe the only ones who would be interested are the Iranians,” said opposition legislator Ángel Alvarado, a member of the National Assembly’s finance committee.

The bill is being analyzed in the so-called Constituent National Assembly, the president’s parallel legislative body that is considered illegitimate by many countries. The draft is currently being analyzed by the body’s finance committee and could be approved as early as next week, according to a legislator who requested not to be identified.

Both PDVSA and the Ministry of Petroleum failed to comment.

The law also allows for the return of dozens of expropriated companies – from soap manufacturers to kitchen oil producers – to their original owners. Most have gone bankrupt since the government took control. Under the bill, former owners, some of whom have sued Venezuela in international courts to recover billions in lost investments, would be required to agree to restore production quickly.