Weekly Report - 17 February 2004

VENEZUELA | New `maximising' oil policy. Alí­ Rodrí­guez, president of the state oil company, PDVSA, announced last week that the firm would be trying to achieve an annual production level of more than 5m barrels of crude by 2009. The government claims that since mid-2003 it has recovered its pre-crisis production level of 3.1m bpd (though former PDVSA employees say that it only occasionally reaches peaks of about 2.6m bpd). In any case, the target set by Rodrí­guez appears to entail switching from the current policy of accompanying Opec's line of curbing output to maintain world prices, to one of seeking to maximise output.

Rodrí­guez said that achieving the new target would demand investments of about US$37bn, of which PDVSA would put up US$27bn, with the rest expected to come from foreign firms engaging in exploration and extraction in Venezuela.

COLOMBIA | Gearing up again for tax reform. Finance minister Alberto Carrasquilla has started preparing the ground for a new attempt to push through congress a sweeping tax reform. Last week he told bankers that the country had `not yet solved structurally its fiscal problem.' Crisis areas, he said, were pensions, where reserves to meet obligations `have run out', and the public debt, which rose from 23% of GDP in 1996 to 54% in 2002, and since then has only been brought down to 50.6%.

The executive has started discussions with the various blocs in congress, seeking to build a consensus around a reform package including: taxing pensions and eliminating special retirement schemes; lowering the rates of value-added and income taxes while extending the coverage of the former and removing exemptions to both; and doing away with `distorting' taxes such as those on assets and financial transactions, and stamp duty.

PERU | Fishing revenues on the rise. Last year Peru's earnings from exports of fish and seafood reached US$202m, or 22% more than in 2002. Sales of frozen products, which expanded by 16%, accounted for 75% of total earnings. Worth noting: China was the leading market, thanks mainly to its purchases of fishmeal and frozen pota (giant squid).