Analysis: IT
Strengths and Weaknesses
According to the World Online Paper Venezuela is a "stroller" in the
information society today. This is interpreted to mean that they are moving forward, but
at a leisurely pace. It is my opinion that the complete privatization of the telephone
company in the year 2000 will speed up the telecommunications process.
The following are the IT strengths and weaknesses of Venezuela:
Strengths
Natural resources. Venezuela is rich with
natural resources, specifically oil and petrochemical products. They are the
hemisphere’s leading producer of petroleum. Since these areas are open for
international companies to do business, a dept of international companies have come to do
business in Venezuela. These international companies have brought with them a need for
advanced telecommunications. Since there is a global need for the natural resources, this
should continue to be a consistent and reliable source of revenue and telecommunications
improvements for Venezuela.
Lack of government intervention. The Venezuelan government is
very open to foreign investment in their country. They to not impose any tariffs or
restrictions to companies wanting to do business in their country. They realize the
importance of allowing companies to do business without heavy restrictions with in their
limits.
When the phone system becomes completely privatized in the year 2000, the
government’s intervention in telecommunication will be limited, and many
international companies are positioning themselves to take advantage of this opportunity.
Education level. Venezuela has one of the highest literacy rates
in Latin America. The majority of Latin American countries have much lower rates, and the
governments do not contribute as many resources to education. This gives Venezuela an
opportunity to become a leader in telecommunications for Latin America. If they can
integrate some more technology programs into their curriculum, a possibility exists of
becoming the technology leader for Latin America.
4. Low cost of doing business. Labor costs
in Venezuela are much lower than in many more
developed countries. Therefore, it would be a benefit to international companies to hire
and
train
local Venezuelans to complete jobs.
Weaknesses:
Although the future of telecommunications looks positive in Venezuela, there are a
number of potential challenges which could affect the positive outcome.
- Lack of stability of Conatel and a deficient regulatory framework.
Conatel is a semi-independent from the Venezuelan government. Politics plays a part in the
decisions being made with regard to telecommunications. A difference of opinion as to
where the future of the regulatory agency should go exists. The government would like to
continue as the owner of the agency and the private sector would have access through a
concession process. The private sector favors clear established regulations for every
service and interconnectivity. They would like to limit the government control and
monitoring.
- The economy. The instability of the economy could negatively
affect the future of telecommunications in Venezuela. Venezuela has experienced booms in
the past, only to have trouble later. In the late 1980’s Venezuela was one of the
hottest emerging markets, following sweeping market reforms. Then after two Presidential
coup attempts, which led to impeachment of President Perez in 1993, the optimism faded,
and many investors pulled out of the country.
The 1994 banking crisis eroded the value of the currency. With erratic exchange rates
and payment delays, the international business confidence in Venezuela hit rock bottom by
late 1995. Since then, with the help of the International Monetary Fund, Venezuela has
been recovering, and entering into a new stage of growth.
The rocky history of the past could persuade foreign investors to take out of the
country what they want, with investing as little in the infrastructure as possible. If
Venezuela does not prove long-term stability, then foreign direct investment will be
limited, and the benefit to Venezuela will be restricted.
- Education. Education is a strength and weakness for Venezuela.
As mentioned as a strength, their educational track record compared to other Latin
American countries is good. But, an overall need for increased technical knowledge is
still vital to the future of Venezuela. If the educational programs are not updated to
include technical information, no human resources will exist to run, or continue to
advance the country.
4. Reliance upon outside for technology equipment.
Venezuela is too reliant upon the United States
and other countries for the production of
hardware and software. They produce almost nothing in
their country. It would be very
beneficial to Venezuela to get involved with production. They
would increase employment of well
paying highly desirable jobs, they could start to gain revenue
through exports and they would have
systems developed for their own people. Currently the
equipment and software
that comes into the country needs to be adapted for the specifics of
Venezuela.
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