Venezuela Promotes Its Tech Development Through Special Economic Zones

Venezuelan VP Delcy Rodriguez (L) and Shenzhen Mayor Qin Weizhong (R), Dec. 9, 2024. X/ @MieloDan

December 12, 2024 Hour: 12:51 pm

The South American country aims to encourage its non-oil international insertion.

During her tour of the Kingdee company in Shenzhen, Venezuelan Vice President Delcy Rodriguez highlighted the importance of Special Economic Zones (SEZs) in strengthening bilateral cooperation.

In China, the Bolivarian official explored advanced technologies in artificial intelligence and data analytics, which are used to optimize production processes in more than 170 countries.

In addition to attracting foreign investment through tax benefits, SEZs facilitate the development of artificial intelligence and digital industries, also serving as hubs for cooperation and the exchange of knowledge and technologies.

According to Rodriguez, companies like Kingdee offer opportunities for Venezuela to advance in process automation and digital talent development through training programs, experience sharing, or the creation of joint initiatives.

Since 2023, Venezuela and China have formalized agreements to jointly develop SEZs in regions such as Shenzhen–La Guaira, Shenzhen–Paraguana, Shanghai–Carabobo, and Shandong–Anzoategui-Monagas. These zones aim not only to foster technological innovation but also to promote knowledge transfer and strengthen Venezuela’s productive sector.

Shenzhen, China. A team of 2,020 drones is performing😃😃
This year marks the 40th anniversary of the establishment of the Shenzhen Special Economic Zone. Shenzhen has changed from a small fishing village into one of the most developed cities in China. pic.twitter.com/mSBTqQuDcA
— Sharing Travel (@MyChinaTrip) August 29, 2020

Legal Framework and Objectives of the SEZs

Promulgated in 2022, Venezuela’s Organic Law of Special Economic Zones establishes the framework for regulating their creation, operation, and development.

Unlike the earlier “free zones,” Venezuelan SEZs prioritize economic sovereignty and national production, with a focus on the primary and secondary sectors.

This legislation promotes productive integration, export diversification, and import substitution. It also provides tax incentives and legal guarantees to attract investment while adhering to state regulations.

One key feature of these SEZs is their territorial focus, which seeks to link local development with national economic activities. This includes the mobilization of goods and services in strategic areas to reduce import dependency and overcome restrictions imposed by unilateral coercive measures.

Inició el 25 Foro Mundial de Desarrollo de las Zonas Económicas Especiales que China por primera vez, desde hace dos décadas y media, realiza fuera de su país y ese escenario escogido fue Venezuela por su importancia y oportunidades de desarrollo e inversión en el país. pic.twitter.com/kV62im6ctr
— Madelein Garcia (@madeleintlSUR) December 12, 2024

The text reads, “The 25th World Forum on the Development of Special Economic Zones has begun. For the first time in two and a half decades, China holds this forum outside its country. The venue chosen was Venezuela due to its importance and opportunities for development and investments.”

The Past and Future of SEZs

This type of strategy was implemented in China starting in 1980 as a mechanism to integrate its planned economy model with openness to foreign investment and commercial activity. Proposed during President Deng Xiaoping’s administration, the SEZs became strategic points for developing a mixed economy and strengthening the State’s role in industrial, technological, and commercial projects.

Through investment incentives and the training of a highly skilled workforce, China ensured that its state-owned enterprises initially benefited from these enclaves, consolidating a model that not only attracted foreign capital but also boosted its own productive capacities.

In Venezuela, the incorporation of SEZs seeks to reduce dependence on external economies and promote internal development through export diversification and reduced imports.

The SEZs in Venezuela and China have managed to establish an initial framework for cooperation in strategic areas such as infrastructure, technology, and education. For instance, Kingdee has offered training programs to prepare professionals in digital innovation.

Although the realities of China and Venezuela are different, the Asian giant’s experiences provide valuable lessons. While China successfully inserted its model into the global dynamics of offshoring and outsourcing in the 1980s and 1990s, Venezuela today faces the challenge of adapting to a changing international landscape shaped by economic sanctions.

“This type of strategy will allow us to continue advancing, with great effort and perseverance, in building a new economic model,” Venezuelan President Nicolas Maduro said regarding the creation of four new SEZs.

Through the establishment of SEZs, Venezuela seeks to create a productive system that combines tax incentives with internal development, aiming to boost the country’s non-oil international engagement.