Seb Country Analysis 2007 Venezuela

República Bolivariana de Venezuela SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS

Analyst: Rolf Danielsen. Tel : +46 8 763 83 92. E-mail : [email protected] The economy is responding to accelerating fiscal laxity and cheap credits financed by high oil revenues. The reelection of President Chaves in a lanslide victory has set the stage for continued investor concern about socialist policies and widespread nationalization plans.

Country Risk Analysis dçîÉêåãÉåí=ä~êÖÉëëÉ=ëÉÅìêÉë=~=åÉï=íÉêã=Ñçê=`Ü~îÉëK==cçääçïáåÖ=~=îçä~íáäÉ= ÄÉÖáååáåÖ=çÑ=íÜÉ=ÇÉÅ~ÇÉI=ÇìÉ=íç=éçäáíáÅ~ä=íìêÄìäÉåÅÉI=dam=ÖêÉï=Äêáëâäó=~í=NMKPB=áå= OMMSI=ÇÉëéáíÉ=ÇÉÅäáåáåÖ=çáä=çìíéìíK==qÜ~í=ã~êâÉÇ=íÜÉ=íÜáêÇ=óÉ~ê=çÑ=ÇçìÄäÉ=ÇáÖáí= ÖêçïíÜI=~ë=ÜáÖÜ=çáä=éêáÅÉë=~ääçïÉÇ=íÜÉ=ÖçîÉêåãÉåí=íç=ÅçåíáåìÉ=ã~âÉ=ÖççÇ=çå= éçéìäáëí=éêçãáëÉëI=åçí=ÉåíáêÉäó=ìåÉñéÉÅíÉÇ=áå=~å=ÉäÉÅíáçå=óÉ~êK==^ë=~=êÉëìäí=çÑ= ÖçîÉêåãÉåí=ä~êÖÉëëÉ=~åÇ=ÖÉåÉêçìë=ï~ÖÉ=ê~áëÉë=Ñçê=éìÄäáÅ=ëÉÅíçê=ïçêâÉêë=éêáî~íÉ= Åçåëìãéíáçå=ÖêÉï=Äêáëâäó=ÑçääçïÉÇ=Äó=ÖçîÉêåãÉåí=Åçåëìãéíáçå=~åÇ=áåîÉëíãÉåíëI= é~êíáÅìä~êäó=áå=áåÑê~ëíêìÅíìêÉI= ÜÉ~äíÜ=~åÇ=ÉÇìÅ~íáçå=ïáíÜ= GDP (change) ëéÉÅá~ä=ÑçÅìë=çå=íÜÉ=éççêÉê= 20% ëíê~í~=çÑ=íÜÉ=éçéìä~íáçåK==qÜ~í= ï~ë=äáâÉäó=áåëíêìãÉåí~ä=áå= 10% ëÉÅìêáåÖ=~=ä~åÇëäáÇÉ=îáÅíçêó= Ñçê=íÜÉ=áåÅìãÄÉåíI=mêÉëáÇÉåí= 0% `Ü~îÉòI=ïÜç=ïçå=ïáíÜ=SNB=çÑ= îçíÉë=~Ö~áåëí=PUB=íç=íÜÉ= -10% çééçëáíáçå=ïÜáÅÜ=Ü~Ç= ã~å~ÖÉÇ=íç=àçáå=ÑçêÅÉë=ÄÉÜáåÇ= -20% çåÉ=Å~åÇáÇ~íÉ=Äìí=ïÜáÅÜ= çíÜÉêïáëÉ=êÉã~áåÉÇ= 2001 2003 2005 2007 Ñê~ÖãÉåíÉÇ=~åÇ=ÇáëçêáÉåíÉÇK== = mêáî~íÉ=áåîÉëíãÉåíë=ÅçåíáåìÉ=ëìÄÇìÉÇK==qÜ~í=ÉäÉÅíáçå=îáÅíçêó=ÇáÇ=äáííäÉ=íç=ÇáëéÉä= áåîÉëíçê=ÑÉ~êë=êÉÖ~êÇáåÖ=íÜÉ=ÑìíìêÉ=ÅçìêëÉ=çÑ=íÜÉ=ÉÅçåçãóK==qÜ~í=ï~ë=ìåÇÉêëÅçêÉÇ=~ë= íÜÉ=éêÉëáÇÉåí=áå~ìÖìê~íÉÇ=Üáë=åÉï=íÉêã=Äó=éêçÅä~áãáåÖ=~=ëçÅá~äáëí=é~íÜ=Ñçê=íÜÉ= ÅçìåíêóI=áåÅäìÇáåÖ=íÜÉ=å~íáçå~äáò~íáçå=çÑ=ìíáäáíáÉë=~åÇ=ëíê~íÉÖáÅ=Åçãé~åáÉëI=áå= é~êíáÅìä~ê=çÑ=íÜÉ=çáä=ëÉÅíçêI=íÜÉ=Åìêí~áäáåÖ=çÑ=ÅÉåíê~ä=Ä~åâ=~ìíçåçãó=~åÇ=íÜÉ= Éëí~ÄäáëÜãÉåí=çÑ=~ÇÇáíáçå~ä=éêÉëáÇÉåíá~ä=ÇÉÅêÉÉ=éçïÉêëK==qÜÉëÉ=ãÉ~ëìêÉë=ÅêÉ~íÉÇ=åÉï= ÅçåÅÉêåë=çÑ=ãçêÉ=áãéáåÖÉãÉåíë=çå=áåÇáîáÇì~ä=ÑêÉÉÇçãë=~åÇ=éêçéÉêíó=êáÖÜíëI=ïÜáÅÜ= Ü~îÉ=âÉéí=éêáî~íÉ=áåîÉëíãÉåí=ÇÉã~åÇ=çå=~=ÇÉÅäáåáåÖ=íêÉåÇ=Ñçê=ëÉîÉê~ä=óÉ~êë=~åÇ=áë= åçï=íÜêÉ~íÉåáåÖ=íç=ÄêáåÖ=åÉÉÇÉÇ=ÇáîÉêëáÑáÅ~íáçå=çÑ=íÜÉ=ÉÅçåçãó=íç=~=Ü~äíK==láä= êÉîÉåìÉë=êÉéêÉëÉåí=ãçêÉ=íÜ~å=OMB=çÑ=damI=VMB=çÑ=Éñéçêí=É~êåáåÖë=~åÇ=RMB=çÑ= ÖçîÉêåãÉåí=êÉîÉåìÉëK== =

important your attention is drawn to the statement on the back cover of this report which affects your rights.

July 4, 2007

SEB Merchant Banking Country Risk Analysis July 4, 2007

fåÑä~íáçå=êÉã~áåë=ëíìÅâ=áå=íÜÉ=ÇçìÄäÉ=ÇáÖáí=~êÉ~K==aÉëéáíÉ=éêáÅÉ=Åçåíêçäë=çå=Ä~ëáÅ= ÑççÇëíìÑÑ=~åÇ=ãÉÇáÅáåÉë=~åÇ=ÜÉ~îáäó=ëìÄëáÇáòÉÇ=ÉåÉêÖóI=íÜÉ=ê~íÉ=çÑ=áåÑä~íáçå=Ü~ë= ÅçåíáåìÉÇ=íç=ÅäáãÄK==få=OMMSI=áí=êÉ~ÅÜÉÇ=NPKSB=~åÇ=çÄëÉêîÉêë=éêÉÇáÅí=áí=ïáää=êÉ~ÅÜ=OMB= ÄÉÑçêÉ=óÉ~ê=ÉåÇI=ÇÉëéáíÉ=ÖçîÉêåãÉåí=~ëëìê~åÅÉë=íç=ÄêáåÖ=áí=Ççïå=íç=NMBK==qç=íÜ~í= ÉåÇë=íÜÉ=ÖçîÉêåãÉåí=êÉÅÉåíäó=~ÅíÉÇ=Äó=ãçééáåÖ=ìé=ÉñÅÉëë=äáèìáÇáíó=áå=íÜÉ=Ä~åâáåÖ= ëóëíÉã=Äó=ëÉääáåÖ=ÖçîÉêåãÉåí=ÄçåÇë=êÉÑìåÇ~ÄäÉ=áå=Ççää~êë=Ñçê=äçÅ~ä=ÅìêêÉåÅóI= _çäáî~êÉëI=~í=íÜÉ=çÑÑáÅá~ä=ÉñÅÜ~åÖÉ=ê~íÉ=JJ=~å=~ííê~ÅíáîÉ=ÇÉ~ä=~ë=íÜÉ=é~ê~ääÉä=ã~êâÉí=ê~íÉ= Ü~Ç=åçëÉÇáîÉÇ=íç=Ü~äÑ=íÜÉ=çÑÑáÅá~ä=ê~íÉ=ÑçääçïáåÖ=íÜÉ=éêÉëáÇÉåíÛë=áå~ìÖìê~íáçå=ëéÉÉÅÜK== = cáå~åÅá~ä=Ä~ä~åÅÉë=~êÉ=åÉîÉêíÜÉäÉëë=áå=ëìêéäìëK==aÉëéáíÉ=ÖÉåÉêçìë=ìëÉ=çÑ=çáä=ãçåÉó= ÇçãÉëíáÅ~ääóI=çÄîáçìëäó=Ñ~ê=~ÄçîÉ=íÜÉ=ÉÅçåçãóÛë=~Äëçêéíáçå=Å~é~Åáíó=áå=îáÉï=çÑ= ~ÅÅÉäÉê~íáåÖ=áåÑä~íáçåI=Ñáå~åÅá~ä=ã~Åêç=Ä~ä~åÅÉë=~êÉ=äáâÉäó=íç=Ü~îÉ=êÉã~áåÉÇ=áå= ëìêéäìëÉëK=få=OMMSI=Ñçê=íÜÉ=ëÉÅçåÇ=ëìÅÅÉëëáîÉ=óÉ~ê=íÜÉ=ÉñíÉêå~ä=ÅìêêÉåí=~ÅÅçìåí=ÉåÇÉÇ= áå=~=ä~êÖÉ=ëìêéäìë=çÑ=NRBLdamK==qÜ~í=ï~ë=ìëÉÇ=åçí=çåäó=íç=ÄìáäÇ=êÉëÉêîÉë=íç=PM=ÄáääK=Ó= ~äãçëí=NO=ãçåíÜë=çÑ=áãéçêí=ÅçîÉê=I=Äìí=~äëç=íç=êÉíáêÉ=ÉñíÉêå~ä=ÇÉÄíI=ïÜáÅÜ=~ë=~=êÉëìäí= ÇÉÅäáåÉÇ=ÑìêíÜÉê=íç=OQB=çÑ=damI=íïç=íÜáêÇë=çÑ=áí=äçåÖ=íÉêãK==qÜÉ=ÅÉåíê~ä=ÖçîÉêåãÉåí= Ä~ä~åÅÉI=Äó=Åçåíê~ëíI=ï~ë=éêÉëÉåíÉÇ=ïáíÜ=~=ÇÉÑáÅáí=~êçìåÇ=NB=çÑ=damK==eçïÉîÉêI= áåÅäìÇáåÖ=çÑÑJÄìÇÖÉí=áåÅçãÉë= Ñêçã=íÜÉ=ëí~íÉ=çáä=Åçãé~åóI= CPI inflation (%) 40% masp^=~åÇ=íÜÉ=ÅÉåíê~ä=Ä~åâI= ~åÇ=çÑÑJÄìÇÖÉí=ÉñéÉåÇáíìêÉ= 30% íÜêçìÖÜ=íÜÉ=ëçÅá~ä= ÇÉîÉäçéãÉåí=ÑìåÇI=clkabkI= 20% íÜÉ=çìíÅçãÉ=áë=äÉëë=ÅäÉ~êI=Äìí= ã~ó=Ü~îÉ=áåÅäìÇÉÇ=~=ëìêéäìëK= 10% ^í=äÉ~ëí=ÅÉåíê~ä=ÖçîÉêåãÉåí= ÇÉÄí=êÉÇìÅÉÇ=ÑìêíÜÉê=íç=NSB=çÑ= 0% damK==fjcÛë=îáÉï=çå=ÖÉåÉê~ä= ÖçîÉêåãÉåí=Ä~ä~åÅÉë=ïçìäÇ= 2001 2003 2005 2007 Ü~îÉ=ÄÉÉå=ÜÉäéÑìä=áå=íÜáë= ÅçåíÉñíI=Äìí=sÉåÉòìÉä~=Ü~ë= ÅÜçëÉå=íç=ëìëéÉåÇ=é~êíë=çÑ=áíë=ÅççéÉê~íáçå=ïáíÜ=íÜ~í=çêÖ~åáò~íáçåK=== = qÜÉ=çáä=ëÉÅíçê=áë=âÉó=íç=sÉåÉòìÉä~Ûë=ã~Åêç=Ä~ä~åÅÉK=jçëí=çÄëÉêîÉêë=Éëíáã~íÉ= sÉåÉòìÉä~Ûë=çáä=éêçÇìÅíáçå=~í=OKU=ãáääáçå=Ä~êêÉäë=~=Ç~ó=EãÄéÇFI=~í=ïÜáÅÜ=äÉîÉä= êÉëÉêîÉë=Å~å=ä~ëí=Ñçê=RMJNMM=óÉ~êëK==eçïÉîÉêI=ÇÉëéáíÉ=ä~êÖÉ=åÉï=çáä=ÇáëÅçîÉêáÉëI= éêçÇìÅíáçå=Ü~ë=ÄÉÉå=áå=ëäçï=ÇÉÅäáåÉK==dçîÉêåãÉåí=áåîÉëíãÉåí=éä~åë=ëÉÉ=éêçÇìÅíáçå= äáÑíÉÇ=íç=ãçêÉ=íÜ~å=R=ãÄéÇK==ïáíÜáå=íÜÉ=åÉñí=ÇÉÅ~ÇÉK==qÜ~í=ÅçìäÇ=ÄÉÅçãÉ=ÅÜ~ääÉåÖáåÖ= åçï=íÜ~í=íÜÉ=ÖçîÉêåãÉåí=Ü~ë=ÇÉã~åÇÉÇ=êÉåÉÖçíá~íáçåë=çÑ=é~ëí=çáä=Åçåíê~Åíë=áå=~= Ñ~ëÜáçå=îáÉïÉÇ=ìåÑ~áê=~ãçåÖ=íÜÉ=ã~áå=éä~óÉêëK=cçê=Éñ~ãéäÉI=~=ÇáëéìíÉ=áë=åçï= éÉåÇáåÖ=ïáíÜ=íÜÉ=çáäJã~àçê=mÜáääáéëJ`çåçÅçK==líÜÉê=ÅçìåíêáÉëI=áåÅäìÇáåÖ=áå=íÜÉ= jáÇÇäÉ=b~ëíI=Ü~îÉ=ÉñéÉêáÉåÅÉÇ=ã~àçê=ÇáÑÑáÅìäíáÉë=áå=Éñé~åÇáåÖ=çáä=éêçÇìÅíáçå=~ÑíÉê= íÜÉó=âáÅâÉÇ=çìí=ÑçêÉáÖå=çáä=Åçãé~åáÉëK========= = ^åÇ=íÜÉ=Ñáå~åÅá~ä=ëÉÅíçê=áë=âÉó=íç=íÜÉ=ÜÉ~äíÜ=çÑ=íÜÉ=ÉÅçåçãóK==`çìåíáåÖ=çåäó=Ñçê= NMB=çÑ=dam=áå=íÉêãë=çÑ=íçí~ä=~ëëÉíëI=íÜÉ=Ä~åâáåÖ=ëÉÅíçê=áå=sÉåÉòìÉä~=áë=ëã~ää=ÉîÉå=áå= ~=i~íáå=^ãÉêáÅ~å=éÉêëéÉÅíáîÉI=Äìí=áë=ëíáää=âÉó=íç=íÜÉ=ÑìåÅíáçåáåÖ=çÑ=íÜÉ=ÉÅçåçãó=~åÇ= íç=íÜÉ=~Çãáåáëíê~íáçå=çÑ=áãéçêí=~åÇ=Éñéçêí=Ñáå~åÅáåÖK=fí=áë=íÜÉêÉÑçêÉ=çÑ=ÅÉêí~áå=ÅçåÅÉêå= íÜ~í=íÜÉ=ÖçîÉêåãÉåí=Ü~ë=ÉåÅêç~ÅÜÉÇ=çå=áíë=ÑìåÅíáçå~äáíó=Äó=ÄìêÇÉåáåÖ=áí=ïáíÜ= éçäáíáÅ~ääó=ãçíáî~íÉÇ=äÉåÇáåÖ=íç=Ñ~êãÉêë=~åÇ=pjbë=Ñçê=ëçãÉ=PMB=çÑ=íçí~ä=~ÅíáîáíóI= ïÜáÅÜ=ÅçìäÇ=ëççå=ÄÉ=ê~áëÉÇ=íç=QMBK=qÜÉ=äÉîÉä=çÑ=kmi=Ü~ë=êÉÇìÅÉÇ=íç=çåäó=NKRBI=Äìí=~= ÅçãÄáå~íáçå=çÑ=ã~åÇ~íçêó=äÉåÇáåÖ=~åÇ=ÉÅçåçãáÅ=ëäçïÇçïå=ãáÖÜí=ëÉÉ=íÜÉã=êáëÉ= èìáÅâäóK====== 2

SEB Merchant Banking Country Risk Analysis July 4, 2007

= ^í=íÜÉ=ÉåÇI=éçäáíáÅë=ã~ê=áåîÉëíçêëÛ=éÉêÅÉéíáçåëK==jêK=`Ü~îÉò=Ü~ë=ã~ÇÉ=áí=Üáë= Ü~ääã~êâ=íç=ÅÜ~ääÉåÖÉ=íÜÉ=rpI=Äó=íóáåÖ=ìé=ïáíÜ=íÜÉ=~åíáJrp=êÉÖáãÉë=áå=ÅçìåíêáÉë=ëìÅÜ= ~ë=`ìÄ~=~åÇ=fê~åK==qÜÉ=rp=Ü~ë=êÉëéçåÇÉÇ=Äó=ÉåÇáåÖ=~êãë=ë~äÉë=íç=ÜáãI=Äìí=Ü~ë=ëç=Ñ~ê= ãçëíäó=áÖåçêÉÇ=Üáë=êÜÉíçêáÅK==jêK=`Ü~îÉò=Ü~ë=~äëç=íÜêÉ~íÉåÉÇ=íç=ïáíÜÇê~ï=Ñêçã=íÜÉ= tçêäÇ=_~åâ=~åÇ=íÜÉ=fjcI=Äìí=ëÉÉãë=íç=Ü~îÉ=ëíçééÉÇ=ëÜçêí=çÑ=áãéäÉãÉåí~íáçå=~ë=ëìÅÜ= ~=ëíÉé=ãáÖÜí=Ü~îÉ=ÄêçâÉå=íÜÉ=äÉÖ~ä=Ä~ëáë=Ñçê=çìíëí~åÇáåÖ=ÄçåÇ=áëëìÉëK==få=ÖÉåÉê~äI= ã~åó=äçÅ~ä=çÄëÉêîÉêë=åçíÉ=íÜ~í=ëç=Ñ~ê=íÜÉ=éêÉëáÇÉåíÛë=êÜÉíçêáÅ=Ü~ë=çÑíÉå=ÄÉÉå=ïçêëÉ= íÜ~å=Üáë=~ÅíáçåëK==cçê=Éñ~ãéäÉI=êìãçêë=ë~ó=íÜ~í=ÉîÉå=ïÜÉå=ÜÉ=Éñéêçéêá~íÉÇ=ä~åÇ=íç= íÜÉ=ÄÉåÉÑáí=çÑ=ëèì~ííÉêë=áå=ÜáÖÜ=éêçÑáäÉ=Å~ëÉëI=ÜÉ=Ü~ë=~Åíì~ääó=é~áÇ=íÜÉ=ä~åÇçïåÉêë=~= Ñ~áê=éêáÅÉK==kÉîÉêíÜÉäÉëëI=íÜÉ=êÉÅÉåí=ÅäçëìêÉ=çÑ=íÜÉ=ä~ëí=êÉã~áåáåÖ==ê~ÇáçLqs=ëí~íáçå= åçí=ÖçîÉêåÉÇ=Äó=`Ü~îÉòÛ=éçäáíáÅ~ä=ãçîÉãÉåíI=~åÇ=íÜÉ=êÉJå~íáçå~äáò~íáçå=çÑ=íÜÉ=íÉäÉJ Åçãé~åó=íÜ~í=çîÉêëÉÉë=ÖÉåÉê~ä=ÉäÉÅíáçåëI==Ü~îÉ=ÖáîÉå=êáëÉ=íç=ÑÉ~êë=çÑ=sÉåÉòìÉä~=ÖçáåÖ= Ççïå=íÜÉ=êç~Ç=çÑ=~=éçäáÅÉ=ëí~íÉK=== JJGJJ= = qÜÉ=ê~íáåÖ=çÑ=sÉåÉòìÉä~=éêÉëÉåíë=~=ÇáäÉãã~=ÄÉíïÉÉå=ëíêçåÖ=ÖêçïíÜ=~åÇ=ÜÉ~äíÜó= Ñáå~åÅÉë=áå=ã~Åêç=~åÇ=~=éççê=áåîÉëíçê=Åäáã~íÉ=~åÇ=ÇìÄáçìë=ëíêìÅíìê~ä=éçäáÅáÉëK== eçïÉîÉêI=ã~åó=çÄëÉêîÉêë=ëÉÉã=íç=~ÖêÉÉ=íÜ~í=ëç=Ñ~ê=íÜÉ=êÜÉíçêáÅ=Ñêçã=íÜÉ=êÉJÉäÉÅíÉÇ= éêÉëáÇÉåí=Ü~ë=ÄÉÉå=ëÅ~êáÉê=íÜ~å=Üáë=~ÅíáçåëI=~åÇ=áå=ãçëí=Å~ëÉë=ÜÉ=ëÉÉãë=ïáääáåÖ=íç= é~ó=~=Ñ~áê=éêáÅÉ=Ñçê=å~íáçå~äáòÉÇ=éêçéÉêíóK==j~åó=éÉçéäÉ=ÄÉäáÉîÉ=ÜÉ=ïáää=ÅçåíáåìÉ=íç= Çç=ëç=~ë=äçåÖ=~ë=ÜÉ=Ü~ë=íÜÉ=ãçåÉóI=ïÜáÅÜ=áë=Ä~ëáÅ~ääó=~=ÑìåÅíáçå=çÑ=íÜÉ=çáä=éêáÅÉK==qÜÉ= ëìêêÉåÇÉê=çÑ=íÜÉ=ä~ëí=áåÇÉéÉåÇÉåí=ê~ÇáçLqs=ëí~íáçå=ï~ë=~=Ä~Ç=çãÉåI=íÜçìÖÜK=== = ^ë=ëìÅÜI=sÉåÉòìÉä~=áë=áå=íÜÉ=Åçãé~åó=çÑ=çíÜÉê=ÅçìåíêáÉë=íÜ~í=~êÉ=Ñáå~åÅá~ääó=ëÉÅìêÉ= Äìí=ã~ó=ÄÉ=ä~ÅâáåÖ=íÜÉ=éêçéÉê=ÅÜÉÅâ=~åÇ=Ä~ä~åÅÉë=áå=ÖçîÉêåãÉåíK==pìÅÜ=ÅçìåíêáÉë=~êÉ= ëçãÉíáãÉë=ê~íÉÇ=ÜáÖÜI=Ñçê=áåëí~åÅÉ=`Üáå~I=p~ìÇá=^ê~Äá~=~åÇ=oìëëá~I=çê=îÉêó=äçïI=Ñçê= áåëí~åÅÉ=fê~åK==qÜÉ=ÇáÑÑÉêÉåÅÉ=ã~ó=äáÉ=áå=áåîÉëíçêëÛ=éÉêÅÉéíáçå=çÑ=éçäáÅó=éêÉÇáÅí~Äáäáíó= ~åÇ=íÜÉ=éêçíÉÅíáçå=çÑ=éêçéÉêíó=êáÖÜíëI=ïáíÜçìí=ïÜáÅÜ=ëíêçåÖ=ã~Åêç=Ñáå~åÅÉë=~êÉ=çÑ= äáííäÉ=î~äìÉ=íç=áåîÉëíçêëK==qÜáë=áë=êÉÑäÉÅíÉÇ=~äëç=áå=íÜÉ=ÉñíÉêå~ä=ê~íáåÖë=~åÇ=áí=áë= ëóãéíçã~íáÅ=íÜ~í=çåÉ=çÑ=íÜÉãI=pCmI=äçïÉêÉÇ=íÜÉ=çìíäççâ=çå=sÉåÉòìÉä~=ÑçääçïáåÖ= íÜÉ=éêÉëáÇÉåíÛë=áåÑä~ãã~íçêó=áå~ìÖìê~íáçå=ëéÉÉÅÜI=ÇÉëéáíÉ=åç=áããÉÇá~íÉ=ÅÜ~åÖÉ=áå= ÉÅçåçãáÅ=î~êá~ÄäÉëK==

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OMMS

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OTIO

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NMB

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NQB

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NRB

How to read the chart? Moving out from the center reduces risk.

Resilience 12 10 8 6

oÉëÉêîÉëLáãéçêíë=EãçåíÜëF

Macro balance

0

Absence of event risk

T JNB

Venezuela

dçîÉêåãÉåí=ÇÉÄíLdam

PMB

Bangladesh

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Liquidity

2

_ìÇÖÉí=Ä~ä~åÅÉLdam

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4

Information

Average EM

Graph: The pentagon shows the risk profile of Venezuela quite similar to the one of Bangladesh, despite obvious differences between the two. Both are weak on resilience, information and event risk, but strong (as avg. EM) on liquidity and macro balances.

= 3

SEB Merchant Banking Country Risk Analysis July 4, 2007

= Key data: 2001 2002 2003 GDP (mill. US$) 116,6 77,0 84,0 GDP/capita (US$) 4691 3041 3259 GDP (change) 3,4% -8,9% -7,8% Investments/GDP 26% 23% 16% Budget balance/GDP -5,2% -1,5% -3,7% Govt debt/GDP 60% 51% 51% CPI inflation (%) 12,5% 22,4% 31,1% Money demand (%) -8,3% -6,7% 27,0% Stock prices 7246 7145 13544 Interest rates 14,7% 28,8% 17,2% Exch. Rate ($) 763,00 1401,25 1598,00 Trade/GDP (%) 44% 60% 50% Oil price (Brent) $24 $25 $29 Billions US $ Export of goods 27,9 28,8 28,3 Imports of goods 23,8 17,4 14,0 Other: -2,1 -3,8 -2,5 2,0 7,6 11,8 Current account (% of GDP) 2% 10% 14% FDI 3,5 -0,2 0,7 Loan repayments -5,0 -5,3 -6,8 Net other capital flows -4,3 -2,8 1,7 -3,8 -0,8 7,5 Balance of payments Reserves UIU UIM NRIR Total debt 38,8 36,3 37,8 o/w short term debt 7,8 7,2 7,6 Sources: Oxford Economics and SEB estimates Rating history Fitch (eoy) Moody's (eoy) S&P (eoy) Type of government: Next elections Other: Latest PC deal Latest IMF arrangements

2004 110,9 4225 18,3% 20% -2,8% 40% 21,7% 29,4% 27553 12,6% 1918,00 56% $38

2005 141,0 5274 10,3% 25% -0,1% 36% 16,0% 37,3% 23584 11,7% 2147,00 61% $54

2006 181,9 6692 10,3% 31% -0,7% 30% 13,7% 55,9% 33301 10,1% 2147,00 58% $65

2007 168,1 6071 6,5% 34% -0,6% 28% 20,5% 9,1%

2008 174,7 6205 4,0% 37% -0,6% 26% 20,7% -18,7%

10,0% 2585,08 64% $65

10,0% 2715,57 60% $61

40,6 21,5 -3,6 15,5 14% 0,9 -5,3 -8,8 2,3 NTIV 39,3 9,3

57,4 29,0 -2,9 25,5 18% 1,4 -2,8 -18,5 5,6 OPIR 44,2 10,2

66,6 38,1 -1,3 27,2 15% -2,6 -3,7 -15,3 5,5 OUIV 45,2 10,4

61,0 47,2 0,6 14,3 9% -0,8 -4,7 -12,3 -3,5 MIM 45,7 10,5

55,8 48,9 -2,9 4,1 2% 3,0 -4,9 -2,9 -0,7 MIM 46,3 10,6

B BB+ B2 B3 Caa1 B2 B CCC+ BB Federal Republic (CIA fact-book) 2010 - legislative, 2012 - Presidential

BBB2 B+

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35

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V e n z u e la 1000 750 500

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S o urc e : R e u t e rs E c o W in

4

SEB Merchant Banking Country Risk Analysis July 4, 2007

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