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, October 17, 2014

October 17, 2014


International Trade

 
Cargo arrived at Puerto Cabello:

  • Over 1,900 tons of milk from Cooperativa Nacional de Productos Agrícolas and ECOLAT, for state agency CASA.
  • Over 780 tons of infant formula milk from Nestlé México S.A. for Nestlé Venezuela.
  • 290 tons of powdered whole milk from Mundial Cargo.
  • Over 390 tons of shampoo and soap from Procter & Gamble México.
  • Over 160 tons of washing machines and spare parts from Honour Lane Shipp Nanjin Bra for Lilly & Associates
  • Over 120 tons of frozen beef from Lorsinal S.A. for Distribuidora de Alimentos Finos C.A.
More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-dos-mil-toneladas-de-leche-llegaron-al-puerto-carabobeno-2251405/2014/10/14/364775)

 

Private imports have dropped 70% so far this year at La Guaira

Eduardo Quintana, Vice President of FEDECÁMARAS-Vargas, says "The siege against private importers is increasing. There is no vessel traffic congestion at the docks and the container port that looks naked to the eye".
Compared to 2013, he added, so far this year, there has been a drop of 70% in private imports. More in Spanish:
(El Nacional; http://www.el-nacional.com/)

 


Logistics & Transport


Only 61 of 124 aircraft in Venezuela's domestic fleet remain active

Venezuela´s Airline Association warns that only 61 out of 124 aircraft in the nation's domestic fleet remain active. 18 are awaiting certification or operating permits, and 45 are in planned or unplanned maintenance. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141015/de-124-aviones-que-consta-el-parque-aereo-nacional-61-estan-activos)

 

American Airlines, LUFTHANSA to increase flight service to Venezuela

General Rodolfo Marco Torres, Vice President for Economic Affairs met with American Airlines representatives and announced that the airline will increase flights in two cities "in the next few months". German airline LUFTHANSA also announced it will increase weekly flights to Venezuela from three to four during the winter season. More in Spanish: (AVN; http://www.avn.info.ve/contenido/american-airlines-se-reunió-gobierno-e-informó-que-aumentará-frecuencia-vuelos; http://www.avn.info.ve/contenido/lufthansa-incrementa-vuelos-venezuela; El Nacional; http://www.el-nacional.com/)

 

Outsourced workers threaten to paralyze Puerto Cabello port

Outsourcing has increased at Puerto Cabello port as the Port Authority (BOLIPUERTOS) has been turning stowage work over to other companies which use some 2,000 workers that do not benefit from minimum wages and only collect when they service ships. They are now seeking better working conditions and have threatened to paralyze activities if they are not heeded. More in Spanish: (Notitarde, http://www.notitarde.com/La-Costa/Trabajadores-tercerizados-amenazan-con-paralizar-el-puerto-2250882/2014/10/14/362586)

 
 

Oil & Energy


Global oil glut sends prices plunging

Oil prices posted their biggest one-day drop in nearly two years as a U.S.-led wave of crude crashed into weak global demand, threatening the stability of some countries and providing an economic lifeline to others. World-wide demand is stagnant, and the International Energy Agency cut its full-year oil-demand growth forecast to the lowest level in five years. U.S. output is expected to increase again this year, and Venezuela could veer into political crisis because of sharply lower crude prices, some analysts say. Venezuela was already running low on hard currency because of rampant spending at home and other problems. When prices of oil were close to US$ 100 a barrel earlier this year, Venezuelans across the country rose up to protest shortages and what many leaders of the demonstrators called the government’s bungled management of the economy. OPEC – has not heeded Venezuela’s calls for an emergency meeting. Indeed, Saudi Arabia, Iran and Iraq, which account for half of OPEC’s output, are currently selling crude to Asian buyers at a discount in order to maintain market share. Asdrubal Oliveros, head of Caracas-based consulting firm ECONANALITICA, said Venezuela has few options. “Venezuela can generate as much noise as it wants within OPEC, but it’s Saudi Arabia that calls the shots,” he said. (The Wall Street Journal, http://online.wsj.com/articles/global-oil-glut-sends-prices-plunging-1413334648)

 

Venezuela is importing oil for the first time in history

Venezuela is reported to be expecting a shipment of crude oil from Algiers on October 26th. The government has had to take this step in an attempt to cut expenses amid the drop in oil prices and its own inability to increase short term production. Extra heavy crude oil from the Orinoco belt requires mixing with other components so that it can be refined locally. The high cost of gasoline used for mixing requires cash payment and weighs heavily in PDVSA accounts. Venezuela has instead decided to sign a supply contract for Algerian Saharan Blend, to save on FOREX. It may also cut crude shipments that do not generate income, such as its swap agreements within PETROCARIBE. Oil production here shrank by 195,000 BPD in the Q2 2014, and is now reported close to 2,700,000 barrels. More in Spanish: (El País, http://internacional.elpais.com/internacional/2014/10/17/actualidad/1413502704_182767.html)

 

Economy & Finance

 
Oil price fall triggers new fears of Venezuela default, benchmark bonds yield highest since financial crisis

The fall in the oil price has further fomented worries of a possible default, pushing up Venezuelan bond yields to more than 18% and boosted credit default swaps to over 2,230 basis points. Venezuela has continued to insist that it will meet its international bond obligations, despite international reserves falling to an 11-year low of US$ 20 billion. Yet, although the country also has low debt-to-GDP ratios, this has not calmed default fears. Analysts are dusting off their spreadsheets to see at what energy price a default by Venezuela might be inevitable. Francisco Rodríguez, senior economist at Bank of America Merrill Lynch, believes the country could continue to service its debt at oil prices as low as US$ 60 a barrel – but only if Caracas also takes a series of politically difficult moves, such as slashing domestic gasoline subsidies and its subsidized oil program to Cuba. “There are things the government could do, although they have not yet, that could make US$60 oil sustainable,” he said. Others believe the crunch could come at a higher oil price. Russ Dallen, of Caracas Capital Markets, estimates that PDVSA’S cost of production is around US$ 66 a barrel for its heavy oil mix, which in turn is trading at a US$ 7 discount to global oil price benchmarks. After taking into account the extra revenues that the country needs to finance imports rather than just oil production, Dallen estimates Venezuela’s “sovereign break-even oil price” is above US$ 100 a barrel, significantly higher than current oil prices. (Financial Times, http://www.ft.com/intl/cms/s/0/b7a2ee04-5478-11e4-84c6-00144feab7de.html?siteedition=intl#axzz3GL0EGsCm; Reuters, http://www.reuters.com/article/2014/10/16/venezuela-debt-idUSL2N0SB1P720141016

 

Oil slide puts Maduro under pressure for reforms... he claims there will be surplus income

The slump in global oil prices has heightened pressure on President Nicolas Maduro to enact politically risky reforms to bolster Venezuela's weak public finances and its ability to pay down debt. Crude prices under US$ 85 have given new voice to reformers within Maduro's government, and critics outside, who say he needs to make urgent changes. "The government continues to study the changes ... The decisions will come bit by bit," a senior official at state oil company PDVSA said, explaining a package of reforms that were mooted earlier this year and include unifying a complex system of exchange rates - effectively devaluing the bolivar currency. Maduro himself has ruled out the possibility that falling oil prices may hit the Venezuelan economy. "We have made provisions for any scenario," Maduro says. He further says "82 is still good for us. So much so that we will have surplus oil income". (Reuters, http://www.reuters.com/article/2014/10/16/venezuela-oil-idUSL2N0SA01B20141016; Bloomberg, http://www.bloomberg.com/news/2014-10-16/venezuela-goes-from-bad-to-worse-as-oil-prices-plummets.html; El Universal, http://www.eluniversal.com/economia/141016/nicolas-maduro-rules-out-slowdown-driven-by-drop-in-oil-prices; http://www.eluniversal.com/economia/141016/president-maduro-oil-prices-will-bounce-back; and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/maduro--petroleo-a--82-por-barril--sigue-siendo-bu.aspx#ixzz3GObTP8c0; El Universal, http://www.eluniversal.com/economia/141017/maduro-asegura-que-caida-del-petroleo-no-afectara-la-economia; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/venezuela-tiene-margen-de-maniobra-en-un-escenario.aspx#ixzz3GOWY14qJ)

 

Venezuela scales October debt mountain but population still pays price

Venezuela’s government has resisted calls from a leading political opponent to default on its debts. But its decision to pay bondholders has raised concerns that it is ordinary citizens who will pay the price. Venezuela has begun to pay the US$ 4.5 billion in debt maturity payments owed by the sovereign and by oil company PDVSA. But while bondholders may breathe more easily, analysts say devaluation is needed urgently as the country continues to suffer excess demand for dollars. Following the payment, the bonds duly rebounded somewhat. Venezuela and PDVSA’s maturity schedule is now relatively spread out until 2017. Francisco Rodríguez, Bank of America Merrill Lynch economist, told Emerging Markets the market was not paying attention to the fact that the country’s imports have fallen around 40% at the same time as it faced a reduction of dollar inflows. “There is a perception in the market that Venezuela needs an economic adjustment,” said Rodríguez. “But the market is missing the import contraction... Venezuelan citizens are paying an excessive cost for this adjustment... The government is shooting itself in the foot here. It’s eroding its capacity to pay for goods and service by effectively handing out a dollar subsidy to some people, and paying for that via inflation tax.” (Emerging Markets, http://www.emergingmarkets.org/Article/3389525/Financial-Markets/Venezuela-scales-October-debt-mountain-but-population-still-pays-price.html)  

 

Local industries owe foreign suppliers over US$ 10 billion, cannot plan on new credit for 2015

Ismael Pérez Vigil, Executive President of the National Council of Industries (CONINDUSTRIA) says domestic industries here owe foreign suppliers a backlog of around US$ 10-11 billion since 2010 which prevents them from opening new credit lines abroad, despite efforts by the National Foreign Trade Center aimed at establishing a FOREX plan for 2015. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/industria-debe-al-extranjero-mas-de--10-000-millon.aspx#ixzz3GOaPTEY5; El Universal, http://www.eluniversal.com/economia/141017/la-deuda-con-proveedores-limita-planificacion-para-2015)

 

Venezuela's debt insurance costs surge on oil price drop

The cost for insuring Venezuelan sovereign debt against default or restructuring surged on Wednesday as global oil prices swooned to a 27-month low before rebounding, illustrating rising investor concerns over the OPEC member nation's ability to service its debt. (Reuters: http://www.reuters.com/article/2014/10/15/venezuela-debt-cds-idUSL2N0SA2AJ20141015)

 
 

Politics and International Affairs


Nominating Committee selected by National Assembly to cover Election Board vacancies

The National Assembly reached a qualified agreement on 10 members for a Nominating Committee that must select new Elections Board authorities. The only opposition party abstaining was Proyecto Venezuela. More in Spanish: (AVN; http://www.avn.info.ve/contenido/aprueba-comité-postulaciones-electorales; El Universal, http://www.eluniversal.com/nacional-y-politica/141015/designacion-de-rectores-del-cne-puede-demorar-64-dias; El Nacional; http://www.el-nacional.com/)

 

Prosecutor General rejects UN "meddling" with the López case, UN High Commissioner "very concerned"

Prosecutor General Luisa Ortega Díaz says the "recommendations" issued by the United Nations Working Group on Arbitrary Detention in connection with the case of imprisoned opposition leader Leopoldo López is not binding. She described the resolution as "meddling." Díaz remarked that international organizations cannot give orders to Venezuela in any matter because "we are a sovereign, free and independent country." Zeid Ra’ad al Hussein, the UN Commissioner for Human Rights says he is "very worried" about the López case and planned to meet with Lopez's wife in Geneva. Lopez himself sent a message from his jail cell demanding that the government abide by instructions from the UN Work Group on Arbitrary Detentions.  (El Universal, http://www.eluniversal.com/nacional-y-politica/141015/venezuelan-attorney-general-rejects-un-meddling-with-lopezs-case; and more in Spanish: El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/141017/desde-su-celda-lopez-exigio-al-gobierno-acatar-a-la-onu)

 

...and Venezuela joins UN Security Council

With 181 votes in favor, the Bolivarian Republic of Venezuela was elected to serve as non-permanent member in the United Nations Security Council, as the sole candidate from Latin America and the Caribbean. (AVN, http://www.avn.info.ve/contenido/venezuela-joins-security-council; http://www.avn.info.ve/contenido/venezuela-get-voice-peace-truth-freedom; El Universal, http://www.eluniversal.com/nacional-y-politica/141016/venezuela-wins-a-seat-on-the-un-security-council; More in Spanish: CNN Español, http://cnnespanol.cnn.com/2014/10/16/venezuela-nuevo-miembro-no-permanente-del-consejo-de-seguridad-de-onu/)

 

1,6 million may have migrated from Venezuela since 1999, almost 90% of college level

In the absence of official data, research by Tomás Páez of the Central University indicates the exodus of Venezuelans since 1999 could be as high at 1.6 million, which is 5.5% of its 29 million total populations. Almost 90% of them have attended college or hold degrees. The number of Venezuelans applying for US resident visas has grown steadily since 2011 up to 9,500 in 2014. An additional 21,725 were granted student visas, more than double those in 2009. Over 10,000 Venezuelans hold valid Colombian identification cards, according to that nation's Foreign Ministry. More in Spanish: (El Nacional, http://www.el-nacional.com/mundo/millones-personas-emigrado_0_502149944.html)

 

Special Report: Murder in Venezuela: Most foul

Bound and beaten, with multiple stab-wounds to the chest, the body of Robert Serra, a 27-year-old member of parliament for Venezuela’s ruling party, was found at his Caracas home on the night of October 1st. His female assistant, María Herrera, had also been stabbed to death. Almost before the blood was dry, many leading government spokesmen, including President Nicolás Maduro, were already attributing the crime to “hired killers” working for the opposition. Democratic Unity (MUD) alliance leaders immediately condemned the murders and called off a planned demonstration to avoid stirring up animosity. Diosdado Cabello, a former army officer who serves as president of the National Assembly, said he felt “threatened” and filed a complaint with prosecutors. Maduro twice vowed to present “within hours” the conclusions of police investigations which would supposedly vindicate his claim of an opposition plot. The Democratic Alliance (MUD) demanded a professional, criminal and scientific investigation of the case, one that is not conditioned by political interests. It declared that "it is unacceptable for political leaders to issue value judgments without investigating, point to culprits and appear as spokespersons for an investigation". Maduro now says a Colombian paramilitary group was behind the killing of Serra and his partner. Maduro said Serra's bodyguard had confessed to conspiring with a Colombian gang to kill the member of the National Assembly. He also said he would "get to the masterminds of Serra's murder inside or outside of the country". Colombian Foreign Minister Maria Angela Holguín has said she will discuss the matter next week with her Venezuelan counterpart, Rafael Ramírez. A further twist to the tale came almost a week after the double murder, when the center of Caracas was brought to a halt for several hours by a supposed gun-battle between police and what were officially described as “gang members” wanted for murder. Five of the latter died in the shoot-out, some of them allegedly executed by police. They were members of the “collectives”, a term now virtually synonymous in Venezuela with groups of civilian gunmen working as enforcers for the government. The most prominent of them, a former policeman by the name of José Odreman, who had been filmed and photographed with many leading government leaders, including President Maduro himself. Speculation is now rife as to whether factions within the government are at odds over reining in the armed collectives, whose “social cleansing” activities are often combined with common crime and who may even have been involved in the Serra case. While the police, who answer to the interior minister, General Miguel Rodríguez Torres, may have good reason to disarm and neutralize gangsters—whatever their political allegiance—some government ministers continue to see the collectives as an essential element in the defense of the revolution. In a further twist, warrants against six Scientific, Criminal and Forensic Investigation Agency (CICPC) officials were later issued for the events that resulted in the death of the five members of two pro-government collectives. The warrants were issued barely hours after members of some 50 collectives protested outside the CICPC’s headquarters on Wednesday, and distanced themselves from any groups involved in crime. Ramiro Andrade, member of one collective, stressed that it was an unarmed group, which belongs to the Bolivarian militias. However, he noted their group relied on weapons solely provided by the State, and that such firearms would be used when necessary only. (The Economist, http://www.economist.com/blogs/americasview/2014/10/murder-venezuela?fsrc=scn/tw_ec/most_foul; BBC, http://www.bbc.com/news/world-latin-america-29642445?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief%20War%20Dogs%20PROMO; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41493&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/141016/pro-govt-groups-lodge-document-with-investigation-agency; and more in Spanish: El Nacional; http://www.el-nacional.com/; El Universal: http://www.eluniversal.com/nacional-y-politica/141017/holguin-tratara-con-ramirez-senalamientos-en-el-caso-serra)

 

 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, October 14, 2014

October 14, 2014


International Trade

 
CENCOEX presents plan for FOREX use in import requirements in 2015

The National Foreign Trade Center (CENCOEX) has prepared a General FOREX Plan for the Nation, in order to organize and plan FOREX requirements by private companies during 2015. Participants must register a sworn statement on what goods they produce and their FOREX plan for 2015. More in Spanish: (AVN; http://www.avn.info.ve/contenido/plan-divisas-optimirzará-atención-requerimientos-para-importaciones)

 
 

Oil & Energy

 
Oil prices dropping in global markets, analysts believe it could drop a further US$ 10 or more

Brent oil prices dropped yesterday by more than US$ 2 per barrel to their lowest level since 2010, after major Middle East suppliers said they will maintain production levels even if this means lower prices. Prices have dropped around 25% since June. Saudi Arabia has privately said it can accept prices between US$ 80-90 per barrel. Oil ministers from Kuwait and Algeria dismissed possible production cuts as crude’s slump to a four-year low prompted Venezuela to call for an emergency meeting of the Organization of Petroleum Exporting Countries. Kuwait hasn’t received an invitation for any urgent OPEC meeting to discuss a reduction in output, says Oil Minister Ali Al-Omair. His Algerian counterpart Youcef Yousfi said yesterday he knew of no plans for any emergency session and was unconcerned by current price levels. (Bloomberg, http://www.bloomberg.com/news/2014-10-13/oil-bear-market-strains-opec-unity-as-venezuela-seeks-meeting.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2355986&CategoryId=10717; and more in Spanish: El Universal, http://www.eluniversal.com/economia/141013/precios-del-petroleo-caen-en-los-mercados-internacionales)

 

Minimum oil quotas for repayment of Chinese loans were eliminated from the Chinese Fund Agreement in a fourth amendment to the Venezuela Fund Protocol. Minimum oil dispatches will now be made “via the exchange of diplomatic notes in compliance with the laws.” Also, the three-year deadline to honor the loans was eliminated. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41443&idc=4)

 

Central Bank's funding of PDVSA rose 127%

Venezuela's Central Bank has loaned PDVSA VEB 578.025 billion, an increase of 127% over the past year, and analysts say this brings a new distortion into the economy by creating more inflation. According to a JP Morgan report Central Bank loans to PDVSA are now 16% of GDP, more than twice what they were the year before. Although oil prices remain above official budget estimates for the year, PDVSA has continued to seek funding for special programs in housing, subsidies to the general population, labor costs, mining and investment in basic industries as a result of the government's growing fiscal deficit. Economist Richard Obuchi, of ODH Consultants says: "Over the past decade the nature of the Central Bank has changed away from being the monetary authority in charge of preserving the value of our currency...now the government has gained control over both the Central Bank and PDVSA and uses them to maintain a high level of public spending". Credit to the oil company jumped 2,521% between January 2010 and May 2014, and accelerated in 2013 and 2014. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/asistencia-crediticia-del-bcv-a-pdvsa-aumento-127-.aspx#ixzz3G7jMthdx)

 

Legislator says domestic fuel prices could be adjusted before the end of this year

Pro government legislator Fernando Soto Rojas, Chairman of the Energy and Oil Committee at the National Assembly believes there will "probably is a decision" in raising gasoline prices before Christmas. He said the Committee has received many proposals on the matter which are being organized in order to present them to President Nicolás Maduro for a final decision, and added that "there is a majority consensus in Venezuela that we are practically giving gasoline away". More in Spanish: (Noticia al Día, http://noticiaaldia.com/2014/10/soto-rojas-aumento-del-precio-de-la-gasolina-podria-decidirse-antes-que-finalice-el-ano/)

 

ConocoPhillips files new multi-billion dollar arbitration against Venezuela's PDVSA

ConocoPhillips (NYSE: COP) has filed for arbitration under the rules of the International Chamber of Commerce (ICC) against Petroleos de Venezuela (PDVSA), the Venezuela state oil company, for contractual compensation related to the Petrozuata and Hamaca heavy crude oil projects. ICC arbitration is a separate and independent legal action from the investment treaty arbitration against the government of Venezuela, which is pending before an arbitral tribunal under the World Bank's International Centre for Settlement for Investment Disputes (ICSID). In September 2013, the ICSID tribunal ruled that Venezuela unlawfully expropriated ConocoPhillips' significant oil investments. The arbitration process to determine compensation owed by Venezuela under the investment treaty for ConocoPhillips' expropriated investments is progressing as planned. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2356054&CategoryId=10717)

 
 

Commodities

 
SIDOR's production now projected at 18% capacity this year

Union leader José Luis Alcocer says that by October 6th this year the state owned steel complex Siderúrgica del Orinoco (SIDOR) "will have produced an total of 697,340 tons of liquid steel, which is a mere 29% of the low goal of 2.4 million set for 2014." According to monthly results this year's production will be only 18% of plant capacity. Alcocer says that monthly production has dropped from 360,000 to 77,000 tons between 2007 and 2014, due to lack of investment and inactivity. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/sidor-producira-este-ano-18--de-su-capacidad-insta.aspx#ixzz3G70SyIGw)

 

Workers demand investment in BAUXILUM and CARBONORCA, operating far below capacity

Workers are on strike at CVG BAUXILUM, the first stage in Venezuela's aluminum industry, demanding payment of a special bonus and investments in the industry. Unofficial reports indicate alumina production is at less than half capacity, as is bauxite production at 25% capacity.  The anode carbon plant CVG CARBONORCA has been in operation only two months this year and it no longer exports its products. It is estimated their production this year will be 30,000 tons, one quarter of its installed capacity of 120,000 tons. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141013/exigen-inversiones-para-bauxilum-y-carbonorca)

 

Car sales in Venezuela hit rock bottom

Venezuela's automobile sector is having one of its worst years ever. Between January and September, only 13,419 vehicles have been sold, according to the Venezuelan Automobile Chamber (CAVENEZ), with a monthly average of 1,491 cars. Sources in the automobile sector estimate that barely 20,000 units will be sold by the end of the year, not including state-run car assembling plants or imports by the public sector. A few years ago, such low sales were unimaginable. Back in 2007, the car industry recorded record highs, as it sold almost 500,000 units, including locally-assembled and imported cars. However, two main hurdles have arisen ever since: declining car assembly and virtually frozen imports. Over the first nine months of the year, only 10,286 cars have been assembled, an 82.29% decline from the same period in 2013, according to CAVENEZ. (El Universal, http://www.eluniversal.com/economia/141013/car-sales-in-venezuela-hit-rock-bottom)

 

Local potato growers are in a state of emergency

Potato grower associations in Venezuela have called a state of emergency due to lack of information on yearly seed imports from Canadian suppliers. "Time has run out, we need to have the seeds in Venezuela November 15-20 in order to begin the first planting cycle", says Aldemaro Ortega, Director of the National Potato Growers Federation. He said the group travels each year at the start of October to negotiate with Canada's Potato Board, and adds they have no information whether a contract to acquire seeds has been signed, for what quantity and quality, which signed it, and estimated arrival. Imports are now controlled by the government. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/productores-de-papas-se-declaran-en-emergencia.aspx#ixzz3G1Pf3100)
 

 

Economy & Finance

 
IMF believes Venezuela will continue servicing public debt

Robert Rennhack, Assistant Director of the Western Hemisphere Department at the International Monetary Fund (IMF) says Venezuela will continue servicing its public debt through 2015 despite the difficult economic situation here. "It's hard to predict the ability to honor debt next year", but that "evidence so far is that they will continue paying, but it is a very difficult economic situation". More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Venezuela default almost certain, Harvard economists say

Venezuela should default on its foreign debt as a shortage of dollars makes it impossible for the government to meet its citizens’ basic needs, Harvard University economists Carmen Reinhart and Kenneth Rogoff said. The economy is so badly managed that per-capita gross domestic product is 2% below 1970 levels, the professors wrote in an opinion piece published by Project Syndicate today. A decade of currency controls has made dollars scarce in the country with the world’s biggest oil reserves, causing shortages of everything from deodorant to airplane tickets. (Bloomberg, http://www.bloomberg.com/news/2014-10-13/venezuela-default-almost-certain-harvard-economists-say.html)

 

Venezuelan international reserves are at their lowest level in the last 11 years, at US$ 19.7 billion last week, down over 8% from the start of 2014 when they were around US$ 21 billion. Economist José Guerra claims the reasons are threefold: An increase of imports, a decrease in the price of gold and lower oil prices. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41434&idc=2; More in Spanish: El Nacional; http://www.el-nacional.com/)

 
 

Politics and International Affairs
 

Opposition charges harassment against legislators

The opposition Democratic Unity Conference (MUD) has charged that the government "is promoting chaos and conflict" by acting "irresponsibly" toward national institutions, and accused it of "harassment and threats" against National Assembly members Ismael García, Juan Carlos Caldera and Carlos Berrizbeitia through "legal subterfuges to try to deprive them of legislative privileges". MUD Secretary General Jesús Torrealba explained that by doing so the government is seeking to alter the Nominations Committee that should designate members of the National Elections Board and the Supreme Court. "This is a fraudulent way of fabricating a majority they do not have", he said. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/141014/la-mesa-denuncio-acoso-contra-diputados-opositores; El Nacional, http://www.el-nacional.com/politica/MUD-asegura-gobierno-busca-delante_0_500350102.html)

 

84% of the Venezuelans polled believe the country is facing an economic crisis while 81.3% think the crisis is political, according to the most recent poll by IVAD on government management and Venezuela’s political context carried out in September. Only 28.6% is confident Nicolás Maduro and his government can solve the country’s economic problems. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41441&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/141013/poll-75-think-venezuela-goes-in-the-wrong-direction; More in Spanish: El Nacional; http://www.el-nacional.com/)

 

Two arrested over lawmaker Robert Serra murder

Venezuela's Supreme Court says two people have been arrested on suspicion of killing Robert Serra, a lawmaker from the governing PSUV party. The socialist member of the National Assembly and his partner, Maria Herrera, were stabbed to death earlier this month at Serra's home in the capital, Caracas. Serra was a rising star in the party known for his passionate speeches. In a statement, the Supreme Court named the suspects as Eduwin Torres and Carlos Garcia, but did not give any further details about who they were or their possible motive for allegedly killing Serra. The court's statement did not say whether the suspects had denied the allegations. If convicted, they could face up to 30 years in jail. Government officials said evidence suggested the murder had been planned and was not a robbery gone wrong. President Nicolas Maduro has blamed opposition groups in Venezuela and elements in neighboring Colombia for Serra's murder. (BBC News, http://www.bbc.com/news/world-latin-america-29593513?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief%20War%20Dogs%20PROMO%2010%2014%2014%20FINAL)

 

Second request in less than a week

The United Nations Council on Human Rights’ Work Group on Arbitrary Detention asked the Venezuelan government to immediately release Voluntad Popular leader and former San Cristóbal Mayor Daniel Ceballos, in prison since last March 19. It also asked for comprehensive compensation for the damages caused by his arbitrary detention. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41437&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/141013/opposition-mayor-un-calls-for-release-of-deposed-mayor-daniel-ceballos; More in Spanish: El Nacional; http://www.el-nacional.com/)

 

Venezuelan foreign minister rejects UN "meddling"

"As we have told the Department of State not to meddle with our affairs, we are saying the same to any working group of any organization," says Venezuelan Foreign Minister Rafael Ramírez. He was referring to the communiqué issued by the Working Group on Arbitrary Detention of the United Nations (UN) on Wednesday, urging Venezuela to release opposition leader and founder of the Voluntad Popular party, Leopoldo López, for considering he has been subject to an "arbitrary detention" since February. "The trials related to the violent actions occurred earlier in the year is provided for within our legal framework and under our Constitution," he argued. (El Universal, http://www.eluniversal.com/nacional-y-politica/141013/venezuelan-foreign-minister-rejects-un-meddling)

 

Guyanese FM, Ban Ki-moon hold meeting on Guyana-Venezuela controversy

Guyanese Foreign Minister Carolyn Rodriguez-Birkett and US Secretary General Ban Ki-moon met two weeks ago to hold talks on the Venezuela-Guyana border dispute. The Guyanese Ministry of Foreign Affairs reports the meeting took place on September 26. "Their discussions focused on the continued involvement of the United Nations Secretary General in the solution of the controversy which arose as the result of the Venezuelan contention that the Arbitral Award of 1899 that definitively settled the land boundary between Guyana and Venezuela, is null and void," Georgetown informed. (El Universal, http://www.eluniversal.com/nacional-y-politica/141013/guyanese-fm-ban-ki-moon-hold-meeting-on-guyana-venezuela-controversy)

 
 

 
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.