Dec. 27 (Bloomberg) -- Venezuela, the biggest oil exporter in the Western Hemisphere, will deal with falling oil income without cutting social spending, President Hugo Chavez said.

“We haven’t been touched this year” by “the worst crisis in the history of the world,” he said today on state television. That will change in 2009 as oil customers keep suffering, he said. He called for increased production of non-oil exports such as gold, cocoa and coffee as well as an increase in tourism.

Venezuela is facing a steep drop in income because 92 percent of the country’s export revenue comes from oil. Crude oil has declined 74 percent in New York to $37.11 a barrel since setting a record $147.27 a barrel July 11. The country’s heavy crude sells at a discount to the benchmark New York price.

Chavez said late yesterday he instructed all of his Cabinet members to work on ways to save money and had appointed a media committee to make announcements about economic plans.

“We guarantee the social investment and current spending,” Chavez said in a phone call to state television. “We’re preparing a series of measures and initiatives to keep the crisis from whipping us.”

Cocoa

The country’s budget for next year is based on oil selling for an average $60 a barrel. Banks and governments have been cutting their outlook for 2009 prices. JPMorgan Chase & Co., the largest U.S. bank by assets, cut its forecast Dec. 18 to $43 a barrel from $69.

No budget adjustments will be made until after the first quarter, Finance Minister Ali Rodriguez said Dec. 17. That will delay austerity moves until after a vote on a constitutional amendment to eliminate presidential term limits, which Chavez said may happen as soon as Feb. 15.

Chavez has propped up his popularity by spending a five-year oil bonanza on infrastructure and jobs programs while also building up record foreign reserves and expanding the country’s money supply. Reserves rose to $39.8 billion Oct. 30. They have since declined by $2.6 billion, or 6.6 percent, to $37.2 billion.

Venezuela was the world’s biggest cocoa exporter in the early 20th century, before oil income crowded out agriculture. Chavez spoke today from Barlovento, a region of Venezuela’s Caribbean coast known for its cocoa.

Cocoa prices have increased 66 percent in the past year to their highest prices since the early 1980s. It has had the biggest price increases of the 19 commodities tracked by the Reuters/Jefferies CRB Index.

“We have to escape oil dependence,” he said. The government will seize underused land for production of non-oil goods, primarily for domestic consumption, while also trying to boost production of crops that can be sold for dollars, he said today.

To contact the reporter on this story: Steven Bodzin in Caracas at sbodzin@bloomberg.net.

Last Updated: December 27, 2008 17:30 EST