Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Friday, June 24, 2016

June 23, 2016


International Trade

Venezuela’s government owes shipping companies over US$ 1 billion for unreturned containers

International shipping companies operating here report it has been impossible to recover containers and government is welching on payments: “There are between 4,000-6,000 containers in the hands of government agencies, some of them for over a year. The use and delay in returning these assets has generated a US$ 1 billion debts, which keeps growing by the day”, says Eddy Meayke, President of Venezuela’s Shipping Line Association. Se reports Venezuela has become an insolvent and high risk client, which is leading shipping companies to set conditions for service here. “They will demand cargo is prepaid, with a warranty for the cost of the container and average delays”, he said.  Meayke also reported a 60% drop in cargo volume to Venezuela. José Modica, President of Venezuela’s Exporters Association, reports that lack of containers has hindered exports, which have gone through their worst year in a decade, and that out of 3,000 exporting companies here in 2010, only 773 remain. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Gobierno-millardo-navieras-devolver-contenedores_0_870513202.html)

 

Trade Minister claims Venezuela will exceed 2015 export figures

Foreign Trade and Investment Minister Jesús Faría claims that “the government is making progress with an export-oriented industrialization model.” He says that this model can replace imports, boost exports and create jobs, as well as provide conditions for the country’s political stability and independence. (El Universal, http://www.eluniversal.com/noticias/daily-news/minister-faria-venezuela-will-exceed-exports-figures-from-2015_316050)

 

 

Oil & Energy

PDVSA unit eyes up to US$ 600 million to overhaul Aruba refinery

CITGO Petroleum, the U.S. unit of Venezuela's PDVSA, will likely invest about US$ 400 million to US$ 600 million to overhaul Aruba's refinery under a 25-year lease with the Caribbean island's government, a top PDVSA official said on Wednesday. CITGO earlier this month signed the agreement to reactivate the 235,000-barrel-per-day refinery, which would help process this nation's extra-heavy crude. The previous operator, Valero Energy Corp, idled the refinery in 2012 because of its low profit. "We're eyeing investments in the refinery that would be more or less between US$ 400 (million) and US$ 600 million," Jesus Luongo, vice president of refining, trade and supply, said in an interview on the sidelines of an oil workers' rally in support of the leftist government of Nicolas Maduro. (Reuters, http://www.reuters.com/article/venezuela-aruba-refinery-idUSL1N19E18K)

 

Russia’s ROSNEFT to build LNG plant in Venezuela

Russian oil firm ROSNEFT and Venezuela’s PDVSA have signed an agreement on the basic terms of a joint venture for the extraction, preparation and monetization of gas fields of Patao, Mejillones and potentially of Rio Caribe. Venezuelan Petroleum and Mining Minister Eulogio Del Pino said that PDVSA and ROSNEFT might sign documents on the establishment of a joint gas project in Venezuela within two months, possibly in July, during a Venezuelan visit of Igor Sechin on May 22-24. “We will certainly implement the extraction [of gas] offshore in Venezuela and will definitely put an LNG liquefaction plant there," Sechin said in an interview. (PRIME BIZ NEWS: http://www.1prime.biz/news/_Report_Russias_Rosneft_to_build_LNG_plant_in_Venezuela/0/%7B71E5F3C3-BAF4-4957-B5F1-4409BF1AD2D8%7D.uif)

 

 

Economy & Finance

China denies meeting with opposition over Venezuela’s debts

China has denied reports that it held talks with opposition representatives, seeking assurance that Venezuela’s large debt to Beijing is repaid if President Nicolas Maduro leaves office. Hua Chunying, a spokesperson for China’s Foreign Ministry, said those talks “absolutely do not exist”, in reference to a report published by the Financial Times. She added that bilateral mechanisms between both nations “are functioning well”, and expressed trust that Venezuela’s people “will have the wisdom and capacity to deal with their internal affairs”. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/China-dirigentes-MUD-prestamos-Venezuela_0_870512941.html)

 

Is Venezuela close to boiling point?

Has the crisis in Venezuela hit a point of no return? A growing number of analysts seem to think so. The country’s dire economic situation — marked by rampant inflation, chronic shortages of basic goods and rolling power blackouts – has deteriorated in recent weeks, with violent food riots erupting across the country. Yesterday a gunman opened fire at the country’s central bank. “Venezuela is on the brink of economic and social collapse,” Capital Economics said in a note earlier this month. “There is a high chance of a sovereign default and a removal of the president over the next eighteen months.” “The worst part of this story is that Venezuela hasn’t hit bottom yet – the only light at the end of this tunnel seems to be from another of a series of oncoming locomotives,” said Russ Dallen, managing partner at Caracas Capital Markets. (Financial Times: http://www.ft.com/fastft/2016/06/21/is-venezuela-close-to-boiling-point/)

 

 

Politics and International Affairs

U.S. in new talks with Venezuela amid worsening crisis, Shannon meets with Maduro

A senior U.S. diplomat is in Venezuela to jumpstart dialogue between the normally hostile governments as the socialist-run nation is torn apart by daily food protests and a campaign to oust President Nicolas Maduro. Thomas Shannon, a career diplomat with extensive experience in Latin America, flew to Caracas after weeks of looting and hunger riots in Venezuela. The riots led to hundreds of arrests and several deaths; and as Venezuela unravels, U.S. officials are increasingly concerned about the risk of further bloodshed and a humanitarian crisis that could spill across its borders and undermine President Barack Obama's legacy in a region where he made history by reopening relations with Cuba. State Department spokesman John Kirby said Shannon, who now serves as Undersecretary of State for Political Affairs, hopes to foster dialogue about the social, economic and political challenges facing this country.  The visit comes as the Organization of American States is set to meet later in the week in Washington to debate the mounting crisis and weigh sanctioning Maduro for allegedly stamping out political dissent in violation of regional commitments to democracy. Socialist-run Venezuela has for years had tumultuous relations with Washington, and a similar rapprochement led by Shannon stalled last year over the jailing of opposition leader Leopoldo Lopez. Despite a harsh exchange of words at a summit in the Dominican Republic last week, U.S. Secretary of State John Kerry and Venezuelan Foreign Minister Delcy Rodriguez agreed to re-start talks in an effort to reduce tensions. Shannon steps into the quagmire with an uncertain outcome. A procession of visits he made last year to Caracas yielded no tangible results, setting low expectations that this trip could result in a breakthrough on releasing political prisoners and calls for the referendum to move forward. The opposition held talks with Maduro two years ago after bloody anti-government protests swept the nation, but that dialogue eventually dissolved without bearing fruit. Today, government opponents are taking a different tack, organizing around a recall referendum they hope will lead to Maduro being removed from office this year with one of their own potentially to replace him. After meeting with Shannon, President Nicolas Maduro said: “I have confirmed to him in a long conversation our interest that sooner rather than later we can build an agenda of respect, a positive agenda between the United States government and the revolutionary and Bolivarian government that I lead”. The discussions went on for nearly two hours. (Reuters, http://www.reuters.com/article/us-venezuela-usa-idUSKCN0Z71YT; El Universal, http://www.eluniversal.com/noticias/daily-news/shannon-meet-with-venezuelan-congress-representative_316094; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414864&CategoryId=10717)

 

…but Maduro again threatens to radicalize “the revolution

President Nicolas Maduro has threatened to “radicalize the revolution” is Venezuela is suspended or there is an intervention as a result of today’s scheduled meeting of the Permanent Council of the Organization of American States on applying the Hemispheric Democratic Charter in the case of Venezuela. “If someday the forces of the imperial right wing approve in any instance a plan to expel Venezuela, suspend, exclude or intervene in Venezuela, rest assured that I would not hesitate to take the most radical steps I need to take to radicalize the Venezuelan revolutionif they commit the mistake of messing with Venezuela, I will call on national union, for all patriots to defend peace, sovereignty and integrity of this sacred land”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/maduro-suspenden-intervienen-venezuela-radicalizare-revolucion_315981; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/presidente-maduro-constituci%C3%B3n-bolivariana-es-%C3%BAnica-carta-que-reconocemos-venezolanos)

 

… Capriles tells Shannon “there is no dialogue” in Venezuela, and Lopez says recall takes precedence over talks

Two-time presidential candidate Henrique Capriles met with the U.S. Under Secretary of State for Political Affairs, Thomas Shannon, and told him that “there is no dialogue” in this country. “I told Mr. Thomas Shannon, with whom I had the opportunity to talk to a couple of hours ago, that in Venezuela, there’s no process of any dialogue,” said Capriles. “Maduro wants to deflate concerns of our sister countries and the governments of Latin America. Since the Latin American governments are aware that the social unrest in Venezuela, for which Venezuela has no solution, will also have an impact on their countries,” added Capriles, also the governor of Miranda state. Imprisoned opposition leader Leopoldo Lopez wrote from his jail cell that “the Democratic Charter will facilitate the process so that the dialogue that currently does not exist in Venezuela can, in the first place, take place and that it can also be effective and have an agenda and clear time frames”. He added that “no talks can be above the constitutional right our people have to a recall referendum on Nicolas Maduro this year 2016”. (The New York Times: http://www.nytimes.com/aponline/2016/06/21/world/americas/ap-lt-venezuela-us.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414792&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/capriles-shannon-talks-have-been-held-venezuela_316057; and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/lopez-carta-democratica-facilitaria-proceso-dialogo_316180)

 

Capriles reports that 98% of required recall signatures have been validated, denounces government sabotage

Capriles spoke as thousands of Caracas residents stood in a warm drizzle waiting to verify their signatures on a recall petition by having their fingerprints taken. The weeklong verification drive began Monday and is the first of a series of steps in the byzantine recall process. People in the lines said they were glad to wait and see the recall as the best way to remedy the shortages and triple-digit inflation that are forcing many here to skip meals. Members of the opposition say the recall drive and food riots have caused the government to tighten control over critics. Human rights groups say intolerance for dissent has led to the jailing of dozens of people they consider of political prisoners. Over the weekend, officials arrested two opposition activists who had been traveling outside of Caracas to participate in the validation process. On Tuesday, Human Rights Watch denounced the arrests and called on authorities to produce a legal rationale for holding the men or release them immediately. Opposition leader Henrique Capriles has reported that by the second day of a 5-day period, 156,968 signatures, almost 98% of those required, have now been validated as demanded by the National Elections Council (CNE). Jesus Torrealba, Executive Secretary of the Democratic Unity (MUD) coalition has charged that the regime and the ruling PSUV party have started to “actively sabotage” the process of validating signatures in a petition to start a recall referendum process against President Nicolas Maduro. He specifically accused regional officers of the National Elections Council (CNE) for a deliberate slowdown in Nueva Esparta, Carabobo, Aragua and Anzoátegui, along with other obstacles to voter movement. He accused regional director Joe Uzcategui of holding up the process in the island of Margarita for several hours. At the same time, Capriles accused President Nicolas Maduro of instructing the National Elections Board to slow down the validation of signatures for a petition to carry out a recall referendum against the President. He repeated his charge that the CNE was carrying out a deliberate slowdown in procedures. “They assigned 300 machines nationwide for more than 1.3 million people”, placing faulty equipment in faraway locations, and accused the 4 members of the pro-government faction that dominate the 5-member council of planning the delays. He warned election officials that to deny constitutional and human rights “has administrative and penal consequences”. He says the National Guard is there to safeguard the Constitution, not Maduro’s interests. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/22/capriles-dice-que-se-han-validado-el-98-de-las-firmas-para-revocatorio/; El Universal, http://www.eluniversal.com/noticias/politica/capriles-esta-para-garantizar-constitucion-interes-maduro_316111; http://www.eluniversal.com/noticias/politica/mud-denuncia-cne-saboteo-activo-del-oficialismo-validacion_316080)

 

OAS Almagro calls for "content and timing" in Venezuela talks

Secretary General of the Organization of American States (OAS) Luis Almagro has called for an agreement on “mediators, content and timing” so that “distrust does not hinder” talks between the Venezuelan government and the opposition. “A successful dialogue entails agreement on mediators, content and timing that generates mutual trust,” Almagro made his statement after a meeting of the OAS Permanent Council, which received Spain’s former President José Luis Rodríguez Zapatero to elaborate on the situation of international mediation in Venezuela. Zapatero, who heads a group of 3 former presidents proposed by the Union of South American Nations (UNASUR) to broker talks here, warned that any talks in Venezuela will be “long, hard and difficult”. He defended the group’s “full impartiality”, and said talks must produce “results, facts”, and said the UNASUR group was only in a “preliminary stage”, and called their efforts a “preventive peace process”. Opposition leaders here have seriously questioned the impartiality of Zapatero, and Leopoldo Lopez Sr., father of imprisoned leader Leopoldo Lopez Mendoza, says the former Spanish president “is a negotiator” on behalf of President Nicolas Maduro, and that his work is “unacceptable” because human rights are not negotiable. Zapatero has ignored opposition calls for a recall referendum to oust Maduro, which is a right established in Venezuela’s constitution.(El Universal, http://www.eluniversal.com/noticias/daily-news/oas-almagro-asks-for-content-and-timing-for-talks-venezuela_316081; and more in Spanish: Infolatam: http://www.infolatam.com/2016/06/21/zapatero-advierte-de-que-dialogo-en-venezuela-sera-largo-duro-y-dificil/; Factor MM: http://linkis.com/factormm.com/FNE7K)

 

Congress Speaker, opposition legislators travel to OAS Permanent Council

Henry Ramos Allup, President of the National Assembly, and Luis Florido, head of the legislator´s Committee on Foreign Policy, are in Washington to attend the special meeting of the Permanent Council of the Organization of American States (OAS), where participants will discuss a report by the OAS Secretary General Luis Almagro on Venezuela’s situation. Upon arriving in Washington, Ramos Allup said “conditions are necessary in order to have talks, but the government does nothing, provides no demonstration, and the country’s situation becomes more serious by the day”. (El Universal, http://www.eluniversal.com/noticias/daily-news/congress-speaker-anti-govt-deputies-travel-oas-permanent-council_316082; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/ramos-allup-washington-cada-dia-agrava-mas-situacion-del-pais_316181)

 

U.S. hopes for 'group of friends' to help Venezuela

Washington has high hopes for an Organization of American States meeting on Venezuela on Thursday, which could lead to the formation of an alliance of interested nations to help resolve its crisis, a top State Department official said. "Tomorrow's meeting is in our view a very important meeting," Annie Pforzheimer, acting deputy assistant secretary for Western Hemisphere Affairs, testified at a House of Representatives subcommittee hearing on Wednesday. "We could see the formation of something like a 'group of friends' from the OAS member states who would... try to work with the parties in Venezuela and urge them to pursue sustainable solutions there," she said. (Reuters, http://www.reuters.com/article/us-venezuela-oas-usa-idUSKCN0Z82GW)

 

 Chavista” leader claims Maduro’s resignation is being negotiated

Former Caracas Mayor and legislator Juan Barreto, a long-time supporter of the late President Chavez, says several pro-Chavez groups have asked President Nicolas Maduro to avoid an election that could cause them a severe defeat if it is lost by 80%. He says Maduro’s resignation is being negotiated in order to avoid the disappearance of the “Chavista” movement. In a radio interview, Barreto added that Maduro does not agree with resigning, but is considering it; and said greater doubts would arise if the National Elections Board does not cooperate with citizens in considering opposition suggestions aimed at improving the process. The information was denied by Congressman Diosdado Cabello, First Vice President of the ruling PSUV party, who said “Juan, you are wrong. You have been misinformed. No one is negotiating Nicolas Maduro’s departure. Whoever wants to desert, let him desert. But that is not the case”. More in Spanish: (Tal Cual: http://www.talcualdigital.com/Nota/127188/juan-barreto-renuncia-de-maduro-se-esta-negociando?platform=hootsuite; El Nacional, http://www.el-nacional.com/politica/Cabello-Barreto-Nadie-Nicolas-Maduro_0_871113214.html)

 

Venezuela’s Cardinal says the recall process must proceed in order to have talks

Venezuela’s Cardinal Jorge Urosa says that in order to have talks between the regime and the opposition there must be mutual respect and compliance with the Constitution, which provides for recall procedures against public officials. He says that government and the Elections Board are under the duty to quickly carry out a vote. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/dialogo-permitirse-revocatorio_0_871113217.html; El Universal http://www.eluniversal.com/noticias/politica/urosa-afirma-que-revocatorio-indispensable-para-que-dialogo_316161)

 

Mexican senators request firm stance on Venezuela

The Mexican government must take an “assertive” stance on the collective defense of democracy and protection of human rights in view of the social, political and economic deadlock in Venezuela, according to the National Action Party (PAN). In a letter to Mexico’s President Enrique Peña Nieto, and in light of the “disruption of democratic order” in Venezuela, a number of senators of the conservative party said enforcement of the Inter-American Democratic Charter of the Organization of American States (OAS), is “indispensable and urgent”. “Mexico needs to speak up to request the release of political prisoners in Venezuela and call upon the country’s authorities to resolve the partial rundown of services and (violation of) basic rights to food, public security, and law enforcement millions of Venezuelans are suffering” senator Laura Rojas emphasized. (El Universal, http://www.eluniversal.com/noticias/daily-news/mexican-senators-request-firm-stance-venezuela_316055)

 

Bolivia’s Morales accused OAS SG Almagro of promoting US intervention in Venezuela

Bolivia’s President Evo Morales has accused OAS Secretary General Luis Almagro of promoting “planned US intervention against Venezuela”, and has called him an “infiltrated agent of the empire”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/22/morales-acusa-a-almagro-de-promover-la-intervencion-de-eeuu-contra-venezuela/)

 

Maduro in Cuba taking part in the Colombian cease fire agreement


 
 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.


 

Tuesday, June 21, 2016

June 21, 2016


International Trade

Up to a week can go by without ships any ships docking at the La Guaira port

Eduardo Vargas, President of the Vargas State Chamber of Commerce, reports the drop in imports is now at 85% and says that a week can go by without any ship arriving at La Guaira port. He said the government is buying the scarce amount of merchandise arriving “to make it seem that they are importing enough to supply local markets”. He says the government is importing with no planning and according to the most acute scarcity, because they have neither the operational or financial ability to meet demand. More in Spanish: (El Nacional; http://www.el-nacional.com/economia/Pasa-semana-ingrese-buque-Guaira_0_868713212.html)

 

 

Logistics & Transport

LUFTHANSA suspends service to Venezuela

German airline LUFTHANSA has suspended all flights to Venezuela due to the economic situation and its inability to exchange local currency into dollars. More in Spanish: (Notitarde; http://www.notitarde.com/Lufthansa-suspendera-vuelos-a-Venezuela/Economia/2016/06/16/997298/)

 

 

Oil & Energy

Oil tanker diverted from Venezuela to Aruba under investigation

A ship carrying 260,000 fuel barrels from state-run oil company Petróleos de Venezuela (PDVSA) illegally diverted from its route to reach Aruba. The ship had set off from the Amuay refinery at the Paraguaná Refining Center (CRP) (north-western Falcón state) to the Carenero port (north-central Miranda state). The information was confirmed by Vice-Admiral José Goncalves, a captain at Las Piedras port in Paraguaná. He explained that the vessel failed to comply with an order of departure signed by the Paraguaná Harbormaster’s Office, a document under which the journey was to leave directly for Carenero. According to unofficial information, the PDVSA-chartered ship identified as “Port Said” departed from Paraguaná on June 15 and had to arrive in Carenero the next day. However, the vessel reached this port on June 17, that is to say, one day later because it went to the island. (El Universal, http://www.eluniversal.com/noticias/daily-news/oil-tanker-diverted-from-venezuela-aruba-under-investigation_315744)

 

Venezuelan pleads guilty in U.S. over PDVSA bribery scheme

A Venezuelan businessman pleaded guilty on Thursday to charges stemming from what the U.S. Justice Department called a large, ongoing investigation into bribery at Venezuela's state oil company. Roberto Rincon, 55, pleaded guilty in federal court in Houston to two counts including conspiracy to violate the Foreign Corrupt Practices Act over his role in a scheme involving officials at Petroleos de Venezuela S.A. (PDVSA). Rincon, who was president of Texas-based TRADEQUIP Services & Marine, was arrested in December along with another Venezuelan businessman, Abraham Jose Shiera Bastidas, for conspiring to pay bribes to PDVSA officials to secure energy contracts. The guilty plea, ahead of a trial set for next week, was the sixth in what the Justice Department said was an ongoing probe involving PDVSA, the exclusive operator of oilfields in the economically struggling OPEC country. An indictment filed against Rincon in December alleged that five PDVSA officials received hundreds of thousands of dollars in bribes made through wire transfers, mortgage payments, airline tickets and, in one case, whiskey. From 2009-14, more than US$1 billion was traced to the conspiracy, with US$ 750 million to Rincon, a Venezuelan citizen who lives in Texas, according to court documents. In pleading guilty, Rincon admitted that he and Shiera agreed to the pay bribes to ensure their companies were placed on PDVSA bidding panels, enabling them to secure lucrative energy contracts, prosecutors said. (Reuters: http://www.reuters.com/article/us-venezuela-usa-corruption-idUSKCN0Z2297)

 

 

Commodities

Maduro says he is willing to support POLAR’s productivity

President Nicolas Maduro has indicated he is willing to support the POLAR’s groups efforts to increase productivity.  Addressing the group’s CEO Lorenzo Mendoza, he said: “if you want to talk and produce, I am ready for you to produce whatever you need to produce”. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/maduro-mostro-disposicion-a-apoyar-produccion-de-e.aspx#ixzz4BpkmTeCd)

 

 

Economy & Finance

China seeks to renegotiate Venezuela loans

China is renegotiating billions of dollars of loans to Venezuela and has met with the country’s political opposition, marking a shift in its approach to a nation it once viewed as a US counterweight in the Americas. Venezuela is facing one of the worst crises of its 200-year history, with a collapsing economy and political deadlock stoked by the oil price slump. China, which is Caracas’s biggest creditor and has loaned the country US$ 65 billion since 2005, has already extended the repayment schedules for debts backed by oil sales. Beijing has also sent unofficial envoys to hold talks with Venezuela’s opposition, in the hope that if President Nicolas Maduro falls his successors will honor Chinese debts, sources on both sides of the negotiations told the Financial Times. Its recognition of Maduro’s fragile position and the rising clout of the opposition, led by Henrique Capriles, is another sign that the diplomatic noose is tightening around Caracas’s socialist government. “One fact we shouldn’t overlook is that Venezuela really doesn’t have the money,” said Guo Jie, a Latin America expert at Peking University. “I think there will be a rational solution for both parties, be it loan repayment extension or a loan restructuring.”  José Guerra, an opposition member of the legislature’s finance commission, confirmed the talks. "It is true that some [opposition] lawmakers and consultants have met with the Chinese…Both sides want a close-up," he said. One aim of the talks was to “maintain a relationship [looking] probably at a post-Maduro era," he added. BancTrust, a Latin American investment bank, said a Chinese debt restructuring could free up cash equivalent to about 650,000 barrels of oil per day, thereby “alleviating [national] cash flow needs… [which] might help the government to improve staple goods supply.”  One Chinese oil industry insider, who believes it is in the country’s long-term interests to accept “looser” conditions, said: “Certainly the terms of the [Sino-Venezuelan] debt will have to be renegotiated. But there’s no way it could be totally overturned.” (Financial Times: http://www.ft.com/cms/s/0/18169fbe-33da-11e6-bda0-04585c31b153.html#axzz4CCErX64v)

 

Venezuela 2016 default likely, PDVSA may go first, Moody’s says

Venezuela is “highly unlikely” to have enough hard currency to fully make its debt payments this year, although a default isn’t inevitable, according to a report from Moody’s Investors Service. State-owned oil company Petroleos de Venezuela SA, which has large payments due this year, is likely to default before the sovereign, the credit ratings company said. That, in turn, could imperil government finances to the point it won’t be able to make payments either, according to the report. Moody’s said there is a non-negligible probability that a credit event for both could be avoided, although a default is more likely than not. Venezuela’s debt is the most expensive in the world to insure against non-payment using credit-default swaps, after the tumble of the price in oil, which makes up about 95% of the country’s export revenue, eroded its hard currency reserves. The International Monetary Fund predicts its economy will shrink 8% in 2016, while inflation rate will reach about 480%. (Bloomberg, http://www.bloomberg.com/news/articles/2016-06-20/venezuela-2016-default-likely-pdvsa-may-go-first-moody-s-says)

 

Venezuela says oil at US$ 50 enough to avoid PDVSA default

Crude prices around US$ 50 a barrel are enough for Venezuela’s state oil producer to avoid a default on its debt, says company president and national oil minister Eulogio Del Pino. The company’s average production cost is around US$ 12 a barrel, he said. Petroleos de Venezuela SA will be able to make payments on its dollar bonds due later this year, Del Pino said. PDVSA, as the Caracas-based company is known, has interest and principal payments totaling US$ 1.4 billion in October and US$ 2.8 billion in November, according to data compiled by Bloomberg. "We are working to pay that," Del Pino said, noting that "we have been paying all of our debts" during what he called "the longest cycle of low prices that we have had." Crude’s rally from a 12-year low at the start of the year to near US$ 50 a barrel is helping boost Venezuela’s ability to repay debt. Still, prices are well short of the US$ 121.06 a barrel the country needs to balance its budget, according to RBC Capital Markets. Venezuela, which depends on oil for 95% of its export revenue, remains the country most at risk of failing to pay its debt in the world, according to credit-default swaps. The company is currently sending about 300,000 barrels a day to China, Del Pino said, confirming that there had been talks with the Asian country about renegotiating some of its debt. “We are in that process to talk with our friends, the Chinese,” he said “We’re talking all the time. We’re monitoring the price, the conditions to bring the oil to China. That’s something that is all the time under discussion.” (Bloomberg:  http://www.bloomberg.com/news/articles/2016-06-16/venezuela-says-oil-at-50-will-be-enough-to-avoid-default)

 

The bolivar has devaluated 67% year to date

A few days ago the SIMADI FOREX system went above VEB 600/US$ 1, up to VEB 603.32/US$1, which amounts to a devaluation of 67% year to date, according to published Central Bank data. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/devaluado-bolivar-va-ano_0_868113579.html)

 

 

Politics and International Affairs

Venezuelans face long lines to validate recall vote signatures, almost one third collected despite obstacles

Supporters of Venezuela’s opposition who are petitioning for a recall referendum on the rule of President Nicolas Maduro faced long lines in the capital, Caracas, Monday as they began a process that required them to appear in person to validate their signatures. Thousands of petition signers from central Miranda state began lining up in the El Hatillo municipality of greater Caracas at one of the 125 centers set up nationwide by the National Electoral Council, or CNE. By 1:30 p.m. local time, only about 530 of the 4,000 people in line had been able to validate their signatures, with many older and disabled people expressing frustration at the slow pace of validation. “The process has been really complicated,” said Miguel Castejon, an opposition member of the Primero Justicia political party who was helping coordinate the process at the center, said in an interview. “We have only two machines for all these people.” In the Capital District, for instance, 97,000 people are to validate their signatures, yet there are only 23 fingerprint scanners provided by the electoral authority. At the regional CNE headquarters located in Plaza Venezuela, east Caracas, a great number of voters have been standing in lines, for there are only 11 fingerprint scanners available. “The validation process was launched nationwide at 8:00 a.m., but we have reports that at 6:00 a.m. people were already lining up to take part,” said the former presidential candidate and current governor of Miranda state, opposition leader Henrique Capriles. As chief promoter of the recall, Capriles said he hopes the electoral authority will comply with the schedule established for the validation process, which is from 8:00 a.m. to 4:00 p.m. every day from this Monday until next Friday, June 24. Capriles reported that by the end of the first day 71,557 signatures had been validated, almost one third of the requisite 194,729 needed for launching a recall procedure which would then require almost 4 million signatures in order to officially call for a recall election. (Bloomberg, http://www.bloomberg.com/news/articles/2016-06-20/venezuelans-face-long-lines-to-validate-recall-vote-signatures; Reuters, http://www.reuters.com/article/us-venezuela-politics-idUSKCN0Z61ZX; El Universal, http://www.eluniversal.com/noticias/daily-news/great-influx-people-first-day-for-signatures-validation-venezuela_315759 ;http://www.eluniversal.com/noticias/daily-news/opposition-expects-validate-600000-signatures-five-days-venezuela_315705; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414699&CategoryId=10717; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/oposicion-valido-71557-primer-dia-segun-capriles_315837; El Nacional, http://www.el-nacional.com/politica/firmas-validadas-primer-dia-proceso_0_869913280.html)

 

Former presidents to report on mediation efforts in Venezuela at OAS and UNASUR

The three former presidents that are attempting to promote talks in Venezuela between the Maduro regime and the opposition will report on their efforts to the Organization of American States (OAS) and the Union of South American Nations (UNASUR) this week. At the request of Venezuela, José Luis Rodríguez Zapatero (Spain), Leonel Fernandez (Dominican Republic) and Martin Torrijos (Panamá) will speak to the Organization two days before the body discusses whether or not to invoke the Hemispheric Democratic Charter in the case of Venezuela, as requested by OAS Secretary General Luis Almagro. Almagro welcomes the report, saying: “it will be essential to know which obstacles this initiative has encountered, why it has not progressed and which will be the means to overcome the situation”. He has proposed adding the OAS and other former heads of state to the efforts. “If you do not release the political prisoners, if you do not put a date on the recall referendum (against President Maduro), what are you going to talk about?”, he says. The Council of Foreign Ministers of the Union of South American Nations (UNASUR) was also called together by their Secretariat General to take part in a special meeting next week in Quito, Ecuador, to tackle the Venezuelan crisis. The meeting has been scheduled for June 23, and aims to “assess the progress of the talks between the (country’s) government and the opposition, (a move) promoted by the UNASUR’s Secretariat General”. Opposition leader Henrique Capriles says he hopes the former presidents “will not lie” at the OAS meeting about a political dialogue “that has not taken place, because if they do we will contradict them”.  (El Universal, http://www.eluniversal.com/noticias/daily-news/unasur-fms-ex-presidents-hold-quito-meeting-over-venezuela_315721; and more in Spanish: Infolatam: http://www.infolatam.com/2016/06/19/los-tres-expresidentes-explicaran-su-mediacion-en-venezuela-ante-oea-y-unasur/; El Nacional, http://www.el-nacional.com/politica/Capriles-presidentes-mientan-Venezuela-OEA_0_869913305.html)  

 

Lopez says recall referendum is above any talks

Imprisoned opposition leader Leopoldo López says there can be no dialogue above a recall referendum to be held during 2016, as is established as a right in Venezuela’s constitution, and asks the international community to support the referendum process. Lopez made his statement through his Twitter account, which is managed by his relatives. He added that talks should be held to discuss the problems of the people, but that human and constitutional rights are “not negotiable”. (El Universal: http://www.eluniversal.com/noticias/daily-news/leopoldo-lopez-talks-should-above-the-recall-vote_315728; and more in Spanish: Infolatam: http://www.infolatam.com/2016/06/20/opositor-lopez-dice-ningun-dialogo-puede-estar-por-encima-del-revocatorio/)

 

Court again suspends appeal hearing for Leopoldo Lopez

The hearing for an appeal by opposition leader Leopoldo Lopez, who is sentenced to almost 14 years in prison for violent actions that took place after a protest march, was suspended Monday, his defense attorney said. Lopez’s hearing was postponed after one of the designated judges said he was feeling too ill to attend the session, A new date for the appeal was not announced. Suspension of the hearing took place at the same time as a visit by Spain’s former Justice Minister Alberto Ruiz Gallardon and Spanish lawyer Javier Cremades, who came to Caracas on Sunday to counsel Lopez’s defense team. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414688&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/leopoldo-lopezs-appeal-hearing-adjourned_315741)

 

Kerry announces plans for immediate high-level talks with Venezuela

U.S. Secretary of State John Kerry has announced immediate high-level talks involving himself, his Venezuelan counterpart Delcy Rodriguez and U.S. Undersecretary of State for Political Affairs, Thomas Shannon, who will be the first to travel to Caracas. Kerry and Rodriguez agreed on the talks during a bilateral meeting on the sidelines of an Organization of American States’s General Assembly meeting in the Dominican capital. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414344&CategoryId=10718)

 

Spain urges Venezuelan government "to encourage" talks with Legislature

Spanish Foreign Minister José Manuel García-Margallo has told his Venezuelan counterpart Delcy Rodríguez that it is necessary to pave the way for talks between the Venezuelan government and the legislature. He made his remarks in a telephone conversation with Rodríguez during her stopover on Sunday in Madrid. García-Margallo voiced his government’s hope for this initiative may led to an “urgent, substantive, effective and respectful” dialogue between representatives of the Executive and Legislative powers, within the Venezuelan constitutional framework and in accordance with mechanisms therein enshrined. The move includes “the possibility for a recall vote” promoted by the opposition against the term in office of President Nicolas Maduro. (El Universal, http://www.eluniversal.com/noticias/daily-news/spain-urges-venezuelan-govt-encourage-talks-with-legislature_315714)

 

Armed man opens fire in Venezuelan Central Bank, wounding two

An armed man broke into Venezuela’s central bank Monday and exchanged gun fire with security forces before being subdued by police. Central bank President Nelson Merentes said a man opened fire, wounding two national guardsmen before police were able to bring the situation under control. Merentes said there were no fatalities in the attack. Local media earlier reported that an “irregular situation” was unfolding at the bank situated in downtown Caracas, with employees barricading themselves in their offices after an armed man entered the institution’s statistics department. (Bloomberg, http://www.bloomberg.com/news/articles/2016-06-20/armed-man-opens-fire-in-venezuelan-central-bank-wounding-two; Reuters, http://www.reuters.com/article/us-venezuela-cenbank-idUSKCN0Z628X; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414709&CategoryId=10717)

 

No food, no teachers, violence in failing Venezuela schools

The soaring crime and economic chaos stalking Venezuela is also ripping apart a once up-and-coming school system, robbing poor students} of a chance at a better life. Officially, Venezuela has canceled 16 school days since December, including Friday classes because of an energy crisis. In reality, Venezuelan children have missed an average of 40% of class time, a parent group estimates, as a third of teachers skip work on any given day to wait in food lines. Many students have fainted from hunger and administrators tell parents to keep their children home if they have no food. And while the school locks its gate each morning, armed robbers, often teens themselves, still manage to break in and stick up kids between classes. "This country has abandoned its children. By the time we see the full consequences, there will be no way to put it right," Movement of Organized Parents spokeswoman Adelba Taffin said. The annual dropout rate has doubled, more than a quarter of teenagers are not enrolled, and classrooms are understaffed as professionals flee the country. As many as 40% of teachers skip class on any given day to wait in food lines.  Classrooms with puddles are used as emergency toilets now that the bathrooms have no running water. Students play dice on the cracked asphalt of the yard, trading insults and piles of bills.  Venezuela now has the highest teen pregnancy rate in South America. The favorite make-out spot for students is behind a pile of 30,000 unopened textbooks that block the auditorium stage. The government delivered the books at the start of the year, but teachers decided they were too full of pro-socialist propaganda to use. The supplies they really want are not available. In chemistry class, students can't perform experiments because they have no materials. The new cafeteria never opened because there was no food or cooking gas. (The New York Times: http://www.nytimes.com/aponline/2016/06/17/world/americas/ap-lt-venezuela-undone-empty-schools.html)

 

Peru prosecutor says Chavez, Brazil firms may have funded Humala

A Peruvian prosecutor said Thursday that late Venezuelan President Hugo Chavez and two Brazilian construction companies may have bankrolled President Ollanta Humala's campaigns before he took office in 2011. Prosecutor German Juarez has been investigating first lady Nadine Heredia, the co-founder and current president of Humala's party, for her possible involvement in undeclared campaign contributions. He asked a judge to bar her from leaving Peru. Humala has denied taking money from Chavez. Humala's office did not immediately respond to requests for comment on Thursday. Heredia has said she has no intention of leaving Peru and is cooperating with investigators, whom she describes as under pressure from political foes. Another informant alleged that construction companies ODEBRECHT SA and GRUPO OAS, both tangled in a vast corruption scandal in neighboring Brazil, gave Humala and Heredia hundreds of thousands of dollars and paid the salary of an adviser close to Brazil's Workers Party to help with Humala's 2011 campaign, Juarez said. (http://www.reuters.com/article/us-peru-humala-inquiry-idUSKCN0Z302D)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

Friday, June 10, 2016

09 June , 2016


Logistics & Transport

Why airlines are abandoning Venezuela

In the 1970s Venezuela’s oil wealth attracted business travelers from all over the world. An Air France Concorde flew between Paris and Caracas once a week. But for airlines the supersonic boom has given way to a frustrating bust. On May 28th LUFTHANSA announced that it was suspending its thrice-weekly flights from Frankfurt to Caracas as of June 18th. Two days later LATAM, Latin America’s largest airline group, declared that it would cut all its services to the country after August 1st. In recent years AIR CANADA, AMERICAN AIRLINES, ALITALIA and GOL have all scaled back or suspended their Venezuelan operations. Why are so many airlines crossing the country off their schedules? Desperate to avert a sovereign default, which would cut off credit to the ailing oil industry, the government has tightened currency controls introduced by Chávez in 2003. The restrictions make it almost impossible for companies to convert local Bolívares into dollars. This has made it difficult for international airlines, who typically charge customers in local currencies, to repatriate their profits. LUFTHANSA has written off the more than US$ 100 million it says it is owed; LATAM says it is due US$ 3 million. The International Air Transport Association (IATA), the airlines’ trade body, estimates that Venezuela’s government is withholding US$ 3.8 billion of airline revenues.  Demand for flights to Venezuela has, in any case, fallen in recent years as fewer business travelers visit the country. LATAM says that flights to Caracas make up less than 1% of its business. Caracas’s airport is often deserted. But the carriers’ departures are a symbolic blow to the government and exacerbate Venezuela’s isolation from the rest of the world. Just a handful of foreign airlines remain. AIR FRANCE, UNITED AIRLINES and IBERIA have all said they will maintain their flights for the time being. But it might not be long before they, too, fly away. (The Economist: http://www.economist.com/blogs/economist-explains/2016/06/economist-explains-1)

 

 

Oil & Energy

PETROPAR willing to repay PDVSA debt at 50% discount

Eddie Jara, Director of Paraguay’s state oil company PETROPAR, says this company is willing to pay off a debt now being claimed by Venezuela’s PDVSA this very year, but at a 50% discount. PDVSA had previously said it will sue if the US$ 287 million debts are not paid off within 10 days. PETROPAR is basing its offer on the deal PDVSA made with Uruguay and the Dominican Republic. PDVSA suddenly made its demand right after Paraguay sided with OAS Secretary General Luis Almagro in his call for applying the Hemispheric Democratic Charter in the case of Venezuela. More in Spanish: (Fox News Latino: http://latino.foxnews.com/latino/espanol/2016/06/08/petropar-quiere-pagar-deuda-venezuela-este-ano-pero-si-le-condonan-el-50/)

 

Del Pino: OPEC to assess production bands

Petroleum and Mining Minister Eulogio Del Pino says that a new system of production bands proposed by Venezuela will be evaluated by the Organization of Petroleum Exporting Countries (OPEC) in November this year. He reports that during the meeting held on June 2 in Vienna, Austria, a number of countries such as Saudi Arabia and Iran took “extreme positions” on control of the oil market and that for that reason he proposed a country-specific production band and also one for OPEC in general “so that we have a range and certain amount of flexibility.” (El Universal, http://www.eluniversal.com/noticias/daily-news/del-pino-opec-assess-production-bands_314012)

 

 

Commodities

Regime confirms CLAP food distribution system is “political          

Protests over food distribution have increased after the government here established a new system for distributing food at controlled prices through the so-called Local Committees for Supply and Production (CLAP). Opposition representatives immediately charged that distribution was discriminatory, directed only to regime loyalists; and the charge was promptly confirmed by Executive Vice President Aristobulo Istúriz who says “the CLAP is a political defense instrument for the people who battle against the bourgeoisie and an oligarchy that wants to defeat the revolution”. He said the system intends to control around 70% of all food distribution. His words were echoed by Erika Farías, who coordinates the local CLAP system, who said it is a political instrument “for revolutionaries” and that the committees “must be made up by Bolivarian and chavista men and women” who not only deliver food but also talk to families on current events. Nutrition Minister General Rodolfo Marco Torres said food items will now be distributed in bags every 20 days to families that comply with CLAP requisites within their neighborhood. Members of the CLAP recently rallied at Miraflores presidential palace to defend “nutrition sovereignty” and protest international interference. CLAP system czar Freddy Bernal says the system does not intend to replace the private system and means to ensure that price-controlled food goes to the really needy. The opposition controlled National Assembly has rejected the CLAP system because it promotes further discrimination and makes the food crisis worse. Caracas city council member Gladys Castillo has charged that in taking a census for food distribution the CLAP system “asks people if they are for or against the revolution, and those who are not for the revolution do not eat…in lower income neighborhoods houses are marked with a “0” if they say they are opposition and they sell them nothing.” More in Spanish: (Correo del Caroní: http://www.correodelcaroni.com/index.php/nacional-2/item/45979-gobierno-remarca-que-los-clap-son-un-instrumento-politico-de-la-revolucion-y-manejados-por-chavistas; Notitarde; http://www.notitarde.com/Economia/Freddy-Bernal-Clap-distribuiran-50-de-los-productos/2016/06/08/991154/; El Universal, http://www.eluniversal.com/noticias/economia/red-publica-privada-establecen-alianza-para-expendio-alimentos_313998; http://www.eluniversal.com/noticias/politica/diputados-vecinos-exigieron-defensor-investigar-los-clap_313968)

 

Maduro creates mining ministry

President Nicolas Maduro has announced the creation of a ministry devoted just to mining, as this nation pushes to develop untapped mineral resources to diversify away from the oil industry, which provides nearly all its foreign exchange. Maduro's government is seeking international partnerships with foreign investors to boost gold production. This year, Venezuela inked an agreement with Canadian mining company Gold Reserve to develop the Las Brisas and Las Cristinas mines as a way of resolving a long-running arbitration dispute. Maduro appointed Roberto Mirabal to the lead the ministry. (Reuters, http://www.reuters.com/article/us-venezuela-mining-idUSKCN0YU070)

 

 

Economy & Finance

Inflation here will reach 3560% by 2019 if Maduro remains in office

The International Monetary Fund projects that inflation here will reach 3560% by 2019 if President Nicolas Maduro reaches the end of his term of office. Economist Asdrubal Oliveros explains that the number is based on the premise that current economic policies will continue. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Inflacion-continuar-Maduro-poder_0_862714078.html)

 

World Bank sees plunge in Venezuela

The World Bank is forecasting that Venezuela’s economy is shrinking 10.1% this year, more than double the multilateral’s prior estimate and the worst performer among all countries tracked by the World Bank. Lower international commodity prices have torpedoed Venezuela’s economy, weighing on Latin America’s prospects in general. Venezuela’s Nicolas Maduro is clinging to power amid growing street protests and economic meltdown. (Bloomberg, http://www.bloomberg.com/news/articles/2016-06-07/world-bank-sees-three-year-brazil-decline-plunge-in-venezuela)

 

Venezuela crisis is opportunity for foreign bond investors

As Venezuela's economy teeters on the edge of collapse and some people go hungry, a growing number of foreign investors are reaping outsized returns betting on this nation's depressed debt. Venezuela's bonds have sunk so low amid a deep crisis that even if it defaults on its debt, bondholders reckon there will still be rewards when the country eventually recovers, helped by its huge reserves of crude. Venezuelan dollar bonds on average have returned an impressive 14.1% so far this year, according to DATASTREAM figures. That means investors have reaped around US$ 3.5 billion in returns from the bonds already in 2016, according to a calculation by London-based brokerage EXOTIX Partners. The figure is nearly three times the US$ 1.2 billion Venezuela plans to spend on imports of pharmaceuticals this year as dire shortages of medicines from anti-itch skin cream to chemotherapy drugs hit home. (Reuters, http://www.reuters.com/article/us-venezuela-bonds-analysis-idUSKCN0YU0EN)

 

Can Venezuela recover from current economic meltdown?

Inflation is expected to reach 720% this year in Venezuela. Many are unable to pay the current high food prices, with looting and smuggling creating more problems. When and how can this oil rich company get back on track? Donald Kingsbury, lecturer in Political Science and Latin American Studies at the University of Toronto, joins Bloomberg TV Canada’s Rudyard Griffiths to share his thoughts. (Bloomberg, http://www.bloomberg.com/news/videos/2016-06-07/can-venezuela-recover-from-current-economic-meltdown)

 

 

Politics and International Affairs

Elections Board again fails to announce dates for recall signature validation

Despite an announcement by opposition coalition MUD Secretary General Jesús Torrealba, the National Elections Board has again failed to announce specific dates for validating signatures calling for a recall referendum or how many signatures are preliminarily approved. Torrealba had made his announcement after meeting with the only independent member of the Elections Board, Luis Emilio Rondon, and had said validation of approximately 1.3 million signatures could take place sometime between 15 and 22 June. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/EFE-Venezuela-paso-respuesta-revocatorio_0_862714135.html)

 

…and pro-government gangs attack legislators seeking recall decision from Elections Board

A group of members of the National Assembly who tried to visit the National Elections Board this morning has been attacked with explosive devices by pro-government gangs and beaten with metal pipes, motorcycle helmets, and stones. Julio Borges, head of the Democratic Unity caucus at the National Assembly received facial wounds and charged General Favio Zavarce with allowing the attacks to take place after ordering the National Guard to eject the lawmakers from the Board premises. Borges said “we went there on behalf of over two million people who signed the petition to revoke, and on orders from General Zavarce we were barred from entering and attacked…the general issued the order for us to be pushed towards the attacking group…we said we were there in peace, bearing the Constitution, simply to be listened to. But the pro-regime Board members refused to see us; they believe they are above the Constitution, above the people.” More in Spanish: (El Impulso: http://www.elimpulso.com/noticias/nacionales/fue-lo-dijo-julio-borges-luego-agredido-colectivos; El Nacional: http://www.el-nacional.com/politica/Julio-Borges-Zavarce-empujaran-colectivos_0_863313734.html)

 

Opposition will not attend future meetings with mediating group without an agenda

The Democratic Unity coalition (MUD) says it will not meet again with former presidents José Luis Rodríguez Zapatero (Spain), Martín Torrijos (Panama) and Leonel Fernandez (Dominican Republic) until a specific agenda for talks with the Maduro regime is set. Coalition sources say the recall referendum against President Maduro has not been included and is not negotiable. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/MUD-reunira-mediadores-agenda-concreta_0_862714084.html)

 

Zapatero reportedly admits he failed to get the opposition to back off on recall referendum

Spain’s former President José Luis Rodríguez Zapatero reportedly has admitted that his attempt to bring about talks between Venezuela’s opposition and the Maduro regime is about to fail after opposition leaders refused to participate. Opposition sources say “he told us that if there is no progress over the next few days he will have to announce his withdrawal”. Zapatero appears to have proposed that the Democratic Unity (MUD) coalition back off from demanding a recall referendum against President Nicolas Maduro during 2016 in exchange for improved treatment of political prisoners. Jailed opposition leader Leopoldo Lopez rejected the offer personally delivered by Zapatero during an unprecedented prison visit and this seems to have doomed the attempt at mediation by the Spanish politician and former Presidents Martin Torrijos (Panama) and Leonel Fernandez (Dominican Republic). The fact that the Venezuelan government allowed Zapatero to visit Lopez, something it has not let any other international mission accomplish, is seen as proof that the regime is urgently trying to stop the OAS from calling in the Democratic Charter. Opposition leaders say the “dialogue” proposed serves only for the Maduro regime to gain time and avoid a recall referendum, and the distrust Zapatero whom they see as someone supporting that strategy. Maduro subsequently called Lopez an “ungrateful brute” for not accepting Zapatero’s offer. More in Spanish: (El Nacional: http://www.el-nacional.com/mundo/Zapatero-admite-fracaso-oposicion-Maduro_0_862114172.html; http://www.el-nacional.com/politica/Rodriguez-Zapatero-MUD-olvidar-revocatorio_0_862114158.html; http://www.el-nacional.com/politica/Maduro-Leopoldo-Lopez-bruto-malagradecido_0_862114185.html)

 

National Assembly majority expects to appoint new Supreme Tribunal justices before August 15th

Legislator Carlos Berrizbeitia, who heads the National Assembly’s special committee for rescuing the Supreme Tribunal, says that they hope to partially rebuild the Supreme Tribunal before August 15th, which is the end of the Assembly’s first term. He explains the procedure will take place in 4 phases: submit arguments for revoking the decision that appointed 13 principal justices and 21 deputies; appointing a new committee for appointing the judiciary; summon and evaluate new candidates; and appointing the 34 magistrates. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/MUD-aspira-nombrar-magistrados-agosto_0_862714099.html)

 

Maduro calls on Prosecutor general and judiciary to jail Miranda Governor Henrique Capriles

President Nicolas Maduro said recent protests by the opposition, headed by Miranda state governor Henrique Capriles, are madness, and called upon the judiciary, the Prosecutor general, and police to jail all those who – according to him – promote violence. He says that any talks should focus on installing a “truth commission”, respecting institutions and rejecting violence. He also criticized the opposition for not attending talks being promoted by Spain’s Zapatero, Panama´s Torrijos and the Dominican Republic’s former president Leonel Fernandez. More in Spanish: (Venevision: http://www.noticierovenevision.net/politica/2016/junio/7/159075=presidente-maduro-exhorto-a-las-autoridades-a-encarcelar-a-los-factores-que-promuevan-violencia; El Universal, http://www.eluniversal.com/noticias/politica/maduro-propone-tres-puntos-para-agenda-dialogo_313902)

 

Police used tear gas to break up student protest

Police used tear gas on Tuesday to break up an student march toward the seat of Venezuela’s CNE electoral council to demand the activation of the recall referendum against President Nicolas Maduro. The demonstration was blocked by police cordons installed on different streets of east Caracas, which forced the protesters to make a detour. After the marchers reassembled at another point along the way, the cops scattered them with tear gas bombs. “What we’re seeing is an example of the dialogue practiced by this government: bringing out the security forces to repress a demonstration,” opposition leader Henrique Capriles said in a statement. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2413869&CategoryId=10717)

 

An average 19 daily protests recorded in Venezuela due to food shortages

An average of 19 daily protests and looting incidents are being reported throughout Venezuela as nationals tried to find food staples that have disappeared from shelves amid scarcity hitting the country. On Tuesday these incidents took place in the states of Monagas (east Venezuela); Lara, Trujillo and Táchira (west); Guárico (center); Anzoátegui (northeast); and Nueva Esparta (north), according to local media. Some reports indicate people in some cases asked for sale of foodstuffs; others forcibly took food products carried by trucks. (El Universal, http://www.eluniversal.com/noticias/daily-news/protests-recorded-venezuela-due-food-shortage_313952; and more in Spanish: (Notitarde; http://www.notitarde.com/Economia/Aumentan-las-protestas-por-escasez-de-alimentos/2016/06/09/991288/; El Universal, http://www.eluniversal.com/noticias/caracas/gnb-pnb-dispersan-protesta-por-comida-california_314010)

 

Spain asks Venezuelan government, opposition to perform humanitarian aid plan

Spanish Foreign Minister José Manuel García-Margallo has urged the Venezuelan government and the opposition to jointly manage a humanitarian aid plan Spain will propose at the European Union. The initiative will be presented by García-Margallo next June 20 during a meeting of the EU Foreign Affairs Council in Brussels, Belgium. In words of the Spanish official, the objective is for the plan to be “implemented jointly” by the government here and the opposition-controlled Congress. (El Universal, http://www.eluniversal.com/noticias/daily-news/spain-asks-venezuelan-govt-opposition-perform-humanitarian-aid-plan_313960

 

Paraguay says that Venezuela needs stability to lead MERCOSUR

Venezuela “needs to have peace and stability” if it is to assume the rotating presidency of the MERCOSUR bloc, Paraguayan Foreign Minister Eladio Loizaga said on Tuesday. He said that next month’s scheduled transfer of the chairmanship from Uruguay to Venezuela will have “to take very much into account” the decision of the Organization of American States to invoke the Democratic Charter over the political situation in Caracas.
Loizaga spoke days after OAS Secretary-General Luis Almagro invoked the Charter, citing what he called “the alteration of the constitutional order” in Venezuela. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2413871&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/paraguay-venezuela-unlikely-take-over-mercosur-presidency_313949)

 

Venezuela: free political prisoners and respect constitution, urge European MEPs

Venezuela’s government should release all political prisoners immediately and respect the constitution, including the procedures that may lead to the impeachment of the country´s President, urged the European Parliament on Wednesday. In a resolution passed by 501 votes, to 94 against with 73 abstentions, MEPs backed mediation efforts by the Union of South American Nations (UNASUR) to launch a national dialogue between Venezuela’s government and opposition.  MEPSs stress that about 2,000 people Venezuela are in prison, under home arrest or on probation for political reasons, including political leaders such as Leopoldo Lopez and Antonio Ledezma and Daniel Ceballos and that the rule of law and separation of powers are not duly respected in the country. They express “grave concern” at serious deteriorations in democracy, human rights, the economy and society. The text underlines that Venezuela faces a “serious humanitarian crisis” due to shortages of food and medicine, and that the government is preventing the entry of humanitarian aid into the country, and boycotting various international initiatives to assist civil society. It also points to the economic crisis, which it attributes to inefficient governance, and to high crime rates due to complete impunity. Finally, MEPs stress their wish to send a European Parliament delegation to Venezuela to hold a dialogue with all sectors involved in the conflict as soon as possible. (European Union: http://www.europarl.europa.eu/news/en/news-room/20160603IPR30212/Venezuela-free-political-prisoners-and-respect-constitution-urge-MEPs)

 

Venezuela is at a breaking point

Venezuela, home to the world’s biggest oil reserves, is in the throes of economic crisis. With inflation projected at nearly 300 percent this year, how do Venezuelans live amid six-hour lines for groceries, crumbling hospitals and growing violence? Nathan Crooks, Bloomberg’s Caracas bureau chief, walks Aki and guest co-host Catarina Saraiva through his daily life, how things got so bad and what’s next for the troubled country. (Bloomberg, http://www.bloomberg.com/news/audio/2016-06-08/41-venezuela-is-at-a-breaking-point)

 

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.