Economics, Trade & Business
Chavez nationalizes Venezuelan steel company
Venezuela's President Hugo Chavez ordered the nationalization of local steel company Sidetur on Sunday in the latest of several recent government takeovers in South America's top oil producer. Sidetur, a subsidiary of local steel company Sivensa SVS.CR, produces mainly rebar, bar, beam, angle and flat products. According to its website (www.sidetur.com.ve), it has six plants in Venezuela, an annual production capacity of more than 835,000 tonnes and exports products to 25 countries. Chavez said Sidetur was producing 40 percent of the steel rods used in construction in Venezuela. "You will see at what price we buy them, since they belong to the people, and at what price we sell the rods," he said. (Reuters, 10-31-2010; http://www.reuters.com/article/idUSN3110242520101101)
Venezuela steel company protests at state takeover
Venezuelan steel products company Sidetur on Monday protested being nationalized by President Hugo Chavez and denied it had ever broken the South American country's price controls. In the latest of several government takeovers in recent weeks, Chavez said the company was charging too much and ordered its expropriation during his regular television broadcast on Sunday. Six local construction firms also were nationalized. "We are concerned there is a plan to mislead public opinion and justify the expropriation with the argument that Sidetur sells rebar at high prices," the company said in a statement. (Reuters, 11-01-2010; http://www.reuters.com/article/idUSN0114284320101101)
Canadian sought a partner to stay in the mine
Marc Oppenheimer, Crystallex's president in 2002, welcomed the choice of the company by the Corporación Venezolana de Guayana (CVG) as an operator in Las Cristinas. (El Mundo, 11-01-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=18&Id_Noticia=35348)
Venezuela undertakes path to become leader in cocoa production
The Bolivarian Republic of Venezuela undertakes from now on the path to become a leading power in cocoa production and exportation, with the aim to strengthen the commercial and economic exchange of the nation with countries of Central Europe, Asia and Africa. The information was stated by Venezuela’s President Hugo Chavez during his Sunday program Alo Presidente, number 366, carried out in a chocolate factory in the central state of Miranda. The traditional Sunday program was devoted to Venezuelan cocoa, branded by the Venezuelan President as both one of the best in the world and a as a strategic product, which in a future will be exported to countries such as Portugal, Libya, Saudi Arabia, Ukraine, Belarus and Russia. President Chavez explained that national cocoa production per hectare for the last 11 years has increased at least 30% in virtue of the funding and the scientific-technological development granted by the National Government to the sector. (AVN, 11-01-2010; http://www.avn.info.ve/node/26033)
Venezuela's business chamber expects the government to protect economic rights
The Venezuelan Federation of Trade and Industry Chambers (Fedecámaras) will go the Supreme Tribunal of Justice (TSJ) to file a suit requesting "constitutional protection" of economic rights. Although the legal action is ready, the business association is holding internal consultations to set the date when the business group will go to the TSJ. (El Universal, 11-01-2010; http://english.eluniversal.com/2010/11/01/en_eco_esp_venezuelas-business_01A4679695.shtml)
"In the event of seizing Polar, the State will be consolidated in the sector"
The Venezuelan government has put special emphasis on displacing the private sector from the foodstuffs market. Such a longing for becoming the main producer continues effective; in that struggle it has disclosed its ultimate target: the giant food manufacturer and supplier Empresas Polar. Ángel Alayon, an economist and professor at the Institute of Management Higher Studies (IESA) warned that any seizure of Polar would result in terrible consequences. (El Universal, 10-29-2010; http://english.eluniversal.com/2010/10/29/en_ing_esp_in-the-event-of-sei_28A4664413.shtml)
Politics
Santos and Chavez morning reviewed the progress of the bilateral commissions
The presidents of Colombia, Juan Manuel Santos, and Venezuela's Hugo Chavez in Caracas on Tuesday reviewed the progress of the five bilateral commissions created during the process of the restoration of relations between the two countries, diplomatic sources said. Tomorrow is the second meeting between the leaders after they announced, on the 10th August in the Colombian city of Santa Marta, reconciliation between their two countries and the opening of a new stage in bilateral relations. (El Mundo, 11-01-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=10212)
Chavez Says Golf Courses Should Be Seized, Put to Other Uses
President Hugo Chavez said some of Venezuela’s golf courses should be expropriated and used for other purposes. “That’s an injustice -- that someone should have the luxury of having I don’t know how many hectares to play golf and drink whiskey and, next door, there’s misery and children dying when there are landslides,” Chavez said during his weekly television show, “Alo, Presidente.” (Bloomberg, 10-31-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a_zQ474E50qk)
Congressmen expect to revise international agreements
In the first four countries -Russia, Ukraine, Iran and Syria- visited by Venezuela's President Hugo Chávez in his latest tour, more than 40 agreements were executed. The current National Assembly (AN) barely knows about their contents. Independent Deputy-elect María Corina Machado highlighted that pursuant to article 187 of the Constitution, the AN has the authority to vet the agreements, if they are deemed to run contrary to national interests. The agreement with Russia on development of the nuclear program, including the building of a nuclear reactor and a nuclear station, as well as the sale of a refinery property of state-run holding Petróleos de Venezuela (Pdvsa) in Germany -among others- seem not to be in the national interest. (El Universal, 10-29-2010; http://english.eluniversal.com/2010/10/29/en_ing_esp_congressmen-expect-t_29A4665171.shtml)
Venezuela looks for better income redistribution based on socialist model
The measures adopted by the Venezuelan Government such as the nationalization of companies, creation of joint ventures with friend countries, promotion of local values, and the creation of social production companies, among others, are just some of the tools used to try to redistribute incomes. The statements were made on Sunday by the Science, Technology and Intermediate Industries Minister Ricardo Menendez in a TV interview. He assured that most of the problems affecting society are caused by capitalism, which has created huge differences among the diverse social classes. (AVN, 11-01-2010; http://www.avn.info.ve/node/26053)
Petroleum & Energy
Only 148 lake equipment of the 1,137 PDVSA seized
from contractors in May 2009 (motorboats, barges and tug boats) are operational while the rest remain as scrap in the wharfs, said Venezuelan Oil Engineers Society (SVIP) regional president Hernán Ugalde. He blamed PDVSA for not buying the spare parts the vessels, choosing instead to stow them. (Veneconomy, 11-01-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23721&idc=4)
Pdvsa acknowledges that social welfare programs jeopardize it
The number of obligations and commitments of a social nature imposed on state-run oil holding Petróleos de Venezuela (Pdvsa) by the administration of President Hugo Chávez causes the oil industry to regard the State interests as a potential risk for its operations. A Pdvsa paper submitted to US financial authorities in the context of issuance of bonds explains that "the Bolivarian Republic of Venezuela, as the single owner of the company, by attempting to use PDVSA as a vehicle to reach certain macroeconomic and social objectives, could adversely affect the results of our operations and financial status." "We might make investments, expenses and sales in conditions that affect our operational and financial results," the state-owned holding added. (El Universal, 10-29-2010; http://english.eluniversal.com/2010/10/29/en_ing_esp_pdvsa-acknowledges-t_29A4664691.shtml)
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.
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