Venezuela’s location, the diversity of its resources, its modern infrastructure and its present and future economic prospects make it a natural candidate for companies in search of international investment opportunities, which guarantee long term profitability.

Opportunities for investments and trade in Venezuela are abundant in sectors such as the production and distribution of oil and gas, electrical distribution, petrochemicals, aluminium, steel, agriculture, tourism and consumer products and services, to name just a few.

The country’s extensive participation in regional and sub-regional trade agreement allows many Venezuelan products to be exported with reduced tariffs to other Latin American countries. Many of its products enjoy preferential access to North American and European markets as well.

There are many reasons as to why Venezuela is one of the best emerging countries to invest in:
Strategic Location
Venezuela is at the same time an Andean, Caribbean, and an Amazonian country. Conveniently located at the North end of the South American continent, it has an enormous potential for development and investment. It is an ideal site for international business operation due to the combination of its proximity to Latin American and Caribbean markets and its relatively short distance from North America and Europe.

Legal Security
The restructuring and reform process which began in 1999 has been accompanied by the establishment of a body of norms which seek to, among other things, promote investment and distribute it fairly among both national and foreign investors. This is the reason why legal security is needed to facilitate the growth of private investment in the country. As a consequence, investment (foreign and national) is protected by the Constitutions of the Bolivarian Republic of Venezuela through the promotion and protection of investment laws: Statutory decree number 2095 and in decisions numbers 291 and 292 of the Andean Community of Nations.

The Constitution of the Bolivarian Republic of Venezuela, approved by a national referendum in December 1999, is aligned with international principles that regulate investment among which the following are highlighted:

Economic Overview
The country has a long tradition in the production and export of petroleum and gas, and Venezuela’s proven hydrocarbon reserves are among the largest in the world. This fact, combined with its substantial hydroelectric resources, characterises the country as one of the most important energy sources of the Western Hemisphere, and certainly as its main energy exporter. Concerning the economy overview, thanks to the efforts and sound policies implemented by the Government, the country has achieved an important and positive outcome in the year 2007. Today, its economy presents strong and clear signs of recovery through indicators such as the capacity to pay its international financial obligations, the liquidity and solvency of its financial system, a substantial improvement in the perception of country risk, the elimination of unbalances in the fiscal accounts, a substantial growth of GDP, the fall in the rate of unemployment and the restraint of inflation, which is under control.

According to predictions from the Economic Commission for Latin America (CEPAL), the Venezuelan economy enters its fifth consecutive year of sustained growth in 2008, and was the third fastest growing economy in the region for 2007, with a growth rate of 8.5 percent, surpassed only by Argentina (8.6 percent) and Panama (9.5 percent), a CEPAL report said in December 2007.

INVESTMENTS BY SECTOR
Petroleum Sector: The petroleum industry on an international scale has a market competitiveness, which is constantly improving, pressed by opportunities in traditional and new areas, in which technology stimulates development and competitiveness that were previously unavailable to the market because of high costs and difficulty of operation.

In Venezuela, sustained petroleum strategies have been carried out according to a policy of production in tune with the petroleum market and with adherence to OPEC agreements. At the moment, proven oil reserves surpass 76, 000 million barrels, which make Venezuela the country with the fourth largest proven oil reserves in the world. Its huge daily production of oil puts her in third place as a world producer. On top of this, one of the largest reserves of heavy and extra-heavy oil in the world is found in the bituminous Orinoco belt, with 51% of the total reserves of heavy crude oil in the world.

Gas Sector: The prospects of energy growth on a global scale are increasing by the rate of 2.5% annually including an increased participation in conventional sources of clean energy gas, awaiting a more pronounced increase in its global demand over the next ten years, to the rate of approximately 2.7%. This was estimated with reference to the sustained growth over the last 10 years. For Venezuela, with reserves of around 146 trillion cubic feet (TCF), the need for the development of infrastructure is great, as a guarantee for opportunities expected to result from demand on a global and domestic sale.

Petrochemical Sector: Petrochemical development in Venezuela has the potential to be much greater than it currently is. Among the competitive advantages that Venezuela has in this area, it is worth mentioning the availability of raw materials, their geographical location and the easy access to markets with high growth, i.e. Latin America. These advantages can sustain the diversification of our exports and reactivate the national economy in this sector.

Mining Sector: Mining is an activity of great economic potential by virtue of the enormous reserves that exist within the country. Stimulated by the exploration, storage, and marketing plan both internally and externally.

Tourist Sector: Venezuela has varied climate and scenery, which provide a unique potential for a tourist destination. Nevertheless, this sector has not been adequately exploited, so it can definitely be converted into an attractive source of investment. Venezuela is aware of this reality, and that is why it has approved a series of laws that is aimed at promoting its development. At present there are several projects for building hotels and tourism complexes in preferential areas to develop adventurous, mountain, ecological and beach-front tourism activities.

Trade Sector: The objective of trade policies in Venezuela is to facilitate and consolidate the change towards competitive commercialisation, in order to satisfy the consumption of goods and services through the promotion of competitiveness and exports, with the aim of placing our goods and services on international markets.

Industrial Sector: The main objective of the strategy for industrial development is found in the re-industrialisation of the country, in conditions of greater equality and competitiveness, supported by a policy which has been agreed upon.

Agriculture Sector: Agriculture plays a fundamental role in the new economic model which is being implemented in the country. It is of pivotal importance to the national food system and production of fibres as an industrial raw material. The important water and biological resources available make possible an agriculture sector of a much larger scale than the current one, and with a competitive potential in tune with the new international realities of new technologies and of the geographic location of the country.

Aluminum Sector: The inclusion of private capital into companies in the aluminium sector. There are reasons for recommending the opening of the sector to private investment, in order to attract new investment: Technological updating which increases competition, maintain industrial activity and the source of employment, open opportunities for economic expansion and employment, under water development: national transformers.

Telecommunications Sector: One of the non-petroleum sectors that have had the greatest growth in the economy over the last few years has been telecommunications. It has accumulated an investment of over $ 16 billion in the last 5 years. With the development of new technologies and the granting of new concessions, the telecommunications sector can be expected to receive further investment of over $8 – 10 billion in the next ten years.

As the Senior Economic Advisor to the Japan International Cooperation Agency (JICA), I was given the task of formulating and coordinating strategies for the economic development of Zambia. Zambia was chosen as a model, to see if the Asian Experience and micro and macro economic strategies could be applied to this Nation to bring about positive and measurable changes. The programme, officially called Strategic Action Initiatives for Economic Development (SAI ED), is commonly called the TRIANGLE OF HOPE (TOH) programme. The expression “Triangle of Hope” refers to the need for three forces namely: “Political Will”, “Civil Service Efficiency” and “Private Sector Dynamism” to work together with Integrity, if a nation is to succeed in providing the vital needs of jobs and wealth creation.

Arising from my many visits to Zambia, I can vouch that:

• Zambia is a veritable Paradise… a land of beauty (and home to the great Victoria Falls). Landlocked Zambia is a great“island of peace” with no internal conflict or external threats for more than 30 years.
• Parliamentary democracy flourishes with a stable Government. The recent elections where the ruling party was returned to power, was peaceful and transparent. The Government of Zambia (GRZ) is committed to Private Sector growth as a driving force for the economy and has committed itself to creating the investment environment for dynamic growth to welcome private local and foreign investors to become engines of growth.
• The Government is taking concerted efforts to implement programmes like Clients Charter, Integrated Approval Systems, E-Governance, etc to facilitate business and improve efficiency in the delivery systems. The Zambian Development Agency (ZDA) has been set up to serve as a One-Stop Facilitation Centre to help Investors.
• “Landlocked” Zambia is truly “LANDLINKED”. With 8 countries sharing its border, Zambia, with an internal population of over 11 million people, offers itself as a stable base to serve a 350 million Regional Market, through “Economic Union” programmes with its neighbours.

Within Asia, Zambia is presently targeting Malaysia, India and China as sources for foreign capital and technology. The Government of Zambia had hosted several seminars and visiting missions from these countries to promote business opportunities in Zambia.

To date, two Malaysian commercial projects have committed to a JV with Zambian businessmen, i.e. the assembly/manufacture of mobile phones to make Zambia a production centre for Sub Saharan Africa and an Educational Centre. The Malaysian Kulim Hi-Tech Park is involved with JICA in undertaking a Master Plan to develop a Multi Facility Economic Zone (MFEZ), which is expected to be ready by 2009/2010. The MFEZ combines the benefits of a normal Industrial Park and an Export Processing Zone and is designed to create infrastructure and approval systems that will benchmark the best that Asia offers.

Tata of India has invested in a hotel and an assembly plant for commercial vehicles and soon a US$120 million Hydro Power project will be launched. Vedanta has also set up one of the biggest copper mines in Zambia. Recently, as a result of the TOH strategy, Indian companies have committed to set up a Super Speciality Hospital to serve the region, and a copper salt project. Other medical and educational projects are under active investigation. China has invested in a US$18.7 million Cotton Textile project and is also involved in the mining sector and in the creation of MFEZs.

My Advice To The Malaysian Business Community
These are challenging times and Malaysia as a nation is seeking and often finding new avenues for growth and expansion, both within and outside the country. The Malaysian Government is encouraging cross border business ventures in order to sustain economic growth.

• In May 2008, the Malaysian Industrial Development Authority (MIDA), that has for some time been fostering and assisting Malaysian Companies in cross border investments, has for the first time set up a special Cross Border Investment Promotion Division. Malaysian Businessmen must take full advantage of this and the incentives offered for such overseas investments.
• Malaysian Businessmen must not be deluded by the images on TV and the news media about violence, death, tribal conflicts, starvation, etc in Africa. Africa is not one monolithic bloc. It contains more than 50 nations and it is on record that only 20% of nations in Africa are in any sort of conflict and convulsed in the type of poverty and starvation that grabs International headlines.
• Zambia is one among the 80% of nations that does not grab headlines and thus is unknown, simply because it is a peaceful nation, dedicated to growth and giving its citizens a fair share in growing world prosperity. Therefore, Malaysian and Asian Businessmen should not “paint Africa with one brush”. Go and take a look at Zambia and the potential it offers. Put at least a toehold in this nation, for Africa is the next region of dynamic growth and peaceful Zambia would be a good place to start one’s “African Adventure for Growth & Profits”.
• Zambia has a stable political environment, liberal exchange control regime (one can repatriate capital and profits without problems), it recognises and welcomes expatriate skills to help drive the economy and most critically Malaysia has earned for itself a good reputation and Zambians are pro-Malaysia.

1) MATRADE Marketing Mission to Botswana, Zambia and South Africa (Gaborone, Lusaka & Johannesburg), 3 – 9 August 2008

Objectives:

To promote Malaysian products and services
To explore market opportunities for Malaysian products and services
To expose local business communities on various opportunities offered by Malaysian companies for trade and investment
To have direct business contact with businessmen in the respective country
To register, kindly contact:

Ms Rozy Izyani Md Rusaln,
Tel: 03-6207 7260 or rozy@matrade.gov.my
Mr Shariffudin Baharudin,
Tel: 03-6207 7258 or dien@matrade.gov.my
Mr Adli Haikal Hanib,
Tel: 03-6207 7255 or haikal@matrade.gov.my

2) INTRADE 2008

INTRADE 2008 will be held from 13 – 16 November 2008 at MATRADE Exhibition and Convention Centre (MECC). INTRADE 2008 will cover international showcases involving 40 industry sectors, including services. 800 international buyers from 59 countries will be participating in this event. In conjunction with this event, KL International Trade Forum and trade seminars will be organised.

Objectives:

A trade fair to enable Malaysian companies to expand into the global market
To register for participation, kindly contact:

INTRADE secretariat at 03-6275 4133/7172,
email: enquiry@intrademalaysia.com
or visit www.intrademalaysia.com

3) Halal Malaysia Week 2008, 23 – 26 July 2008 – “Bringing Halal Malaysia to Bangladesh”
The Ministry of Entrepreneur & Co-operative Development (MECD) in collaboration with Epic Tips Sdn Bhd will be organising the event in Dhaka, Bangladesh.

Objectives:

To promote and market halal Malaysian products and services overseas
To register for participation, kindly contact:

Ms Norazlina Majid, Tel: 03-8024 6190,
Fax: 8024 6140 or email norazlina.majid@epictips.com
Mr Taufiq Nazarudin, Tel: 03-8024 6140,
H/P: +6017-2591 900 or email taufiq@epictips.com

4)The 5th China-ASEAN Expo 2008 in Nanning, China, 22 – 25 October 2008
Organised by The People’s Government of GuangXi Zhuang Autonomous Region, the event will be held from 22 – 25 October 2008 in Nanning City, Guangxi, China.

Highlights of the events:

Business prematching
Meetings and forums
E – booths
Cultural events
In conjunction with the event, MASSA will be organising a business mission to Nanning, China.
Details of participation will be forwarded to members in due course.

Jordan is situated at the heart of a region that interconnects three continents. Its location and excellent transportation network make it an ideal base of operations for companies seeking to export to countries and regions which Jordan has bilateral and multilateral trade agreements with, thereby expanding their market to over 1 billion consumers in Europe, North America, and the Middle East. Additionally, the Kingdom’s stable political and economic environments enhance its suitability as a base from which to supply such large markets. Jordan is home to a competitive and vibrant economy that has achieved consistently high growth. The Government has set for itself the objective of achieving annual growth of 6 – 7% in the coming decade.

The Investment Promotion Law in Jordan offers a number of benefits and incentives to investors in the key sectors of the economy, including: industry, agriculture, hospitals, hotels, leisure and recreational compounds, maritime transport, railways, pipeline transportation and distribution services for water, gas and petroleum derivatives as well as their exploitation, conventions as well as exhibition centres and call centres. Jordan’s economy offers special opportunities in fast rising sectors that include pharmaceuticals, minerals, ICT, Dead Sea products, textiles and apparel, tourism, real estate, and automotive industries.

The Jordan Investment Board (JIB) is a governmental body that was established by means of the Investment Promotion Law of 1995 and the Investment Law of 2003. JIB is a world-class agency entrusted with promoting Jordan as a unique destination for foreign direct investment and sustaining domestic investment to achieve economic prosperity in the Kingdom. JIB is at the disposal of all investors seeking assistance in their business and investment needs.

Jordan embarked on an ambitious program of economic reform and incentives in the late 1980s, a period of economic challenge in the Middle East. Supported by careful planning, the government began instituting a number of measurers to stabilise the economy, such as pegging the Jordanian Dinar to the US dollar, embarking on a set of legal and regulatory reforms, and introducing a new prudent monetary policy.

The actions paid off: by the beginning of the 21st century. Jordan’s economy is flourishing. We have created special economic and qualified industrial zones that make our exports highly competitive, and diversified and expanded our markets. Investor confidence in our economy, our political stability, our good international relations, and our cost-competitiveness has produced a groundswell of investment from around the world.

We will continue our prudent monetary policy; introduce new economic, financial and legal reforms; further liberalise our economy, and streamline business practices across every sector to attract new ideas and capital.

MASSA just concluded its 17th Annual General Meeting recently. As we look back over the years, the association has come a long way. Members have continually benefited from the business linkages and contacts made through the Association. Mindful of its objectives, MASSA continues to seek out potential trade and investment destinations.

In this edition, we feature Jordan and the Kingdom Of Saudi Arabia. Both economies are thriving in the heart of the Middle East and present enormous possibilities for business. Members can contact our MATRADE officials in the Kingdom Of Saudi Arabia, while the Jordan Investment Board (JIB) is ready to receive and assist members with their enquiries. We would also like to thank the Embassy of Egypt and Syria for successfully organising the Cross Border Investment seminars in April 2008.

From South America, we also present a country feature on Venezuela – a country with abundant investment potential, not only in the oil and gas sector. Y Bhg Dato’ J. Jegathesan has contributed an article on Zambia. Read about his efforts under the SAI ED (aka TOH) programme.

More activities are in the pipeline and I do hope that members are keeping in constant contact with the Secretariat for activities and happenings on the cross border front.

We look forward to meeting you at the many events and functions and count on your participation to make each activity a success.

Hamidah Tun Ghafar
Editor

Recent global economic developments such as the slow down in the USA, weaker demand growth in Europe and Japan and the rise in inflation owing to escalating energy and food prices are issues of concern not only to Malaysia but globally as well. Prospects of the world economy in 2008 have become increasingly uncertain and challenging. Malaysia being an open economy in which international trade constitutes more than 200 percent of gross domestic product (GDP) is not insulated from these global headwinds.

Given the prevailing circumstances, we must continue to remain vigilant to emerging developments and respond appropriately to stay competitive. MASSA is committed to support our Government as they undertake policy reviews to make the necessary adjustments, while ensuring that consumers are not too burdened and businesses receive adequate support to remain competitive given such challenging times.

I take this opportunity to congratulate Y Bhg Dato’ Jalilah Baba, the Director General of Malaysian Industrial Development Authority (MIDA), who recently took over the helm at MIDA on 15 June 2008. We look forward to further strengthening MASSA’s cooperation with her esteemed colleagues at MIDA in our cross border activities and programmes.

We appreciate very much the support and cooperation of MASSA members and look forward to their active participation in MASSA’s programmes and activities.

TAN SRI DATO’ AZMAN HASHIM
President