November 8th, 2010

Economics, Trade & Business

Venezuela Raises Price Caps on Corn Flour and Rice

Venezuela’s government is raising the price of corn flour and rice by as much as 24 percent for the first time since March in a bid to avoid food shortages. The government, which regulates prices of basic food goods, raised the cap on corn flour, which is used to make the breakfast staple arepa, by 24 percent to 3.37 bolivars ($0.78) per kilo from 2.72, according to a resolution published today in the Official Gazette. It also raised the cap on rice by 22 percent to 4.46 bolivars per kilo from 3.66. (Bloomberg, 11-08-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ax.eJPgsVULQ)

BCV proposes to reduce inflation thorough planning

Nelson Merentes, the president of the Central Bank of Venezuela, said that reducing the inflation rate is the government’s most important challenge; to that end, there is the need for several changes in terms of production and imports. (El Universal, 11-08-2010; http://english.eluniversal.com/2010/11/08/en_eco_esp_bcv-proposes-thoroug_08A4706255.shtml)

Venezuela growth hit by state seizures

Venezuela, the only Latin American nation still in recession in the last quarter of 2010, risks fresh blows to its growth prospects in 2011 after a spate of new nationalizations hitting key resource industries. Privately run steel manufacturing plant Sidetur was taken under state control after officials accused its operators of keeping productivity low and not doing enough to meet domestic demand. Earlier in October two glass factories went under state ownership in a measure seen largely as the result of President Hugo Chavez objecting to the companies' U.S. ownership. (UPI, 11-08-2010; http://www.upi.com/Science_News/Resource-Wars/2010/11/08/Venezuela-growth-hit-by-state-seizures/UPI-45111289217060/)

IOE: Venezuelan government is "destroying" the private sector

Venezuelan government actions against the private sector feed what has been described by the International Organization of Employers (IOE) as the "Venezuelan case." In the opinion of Antonio Peñalosa, Secretary General of the organization based in Geneva, the "blindness" of Venezuelan authorities is creating a scenario that will be difficult to overcome. The international business leader considers that the economic policy implemented by President Hugo Chávez is aimed at destroying the private enterprise. (El Universal, 11-08-2010; http://english.eluniversal.com/2010/11/08/en_eco_esp_ioe:-venezuelan-gove_08A4705053.shtml)

Politics

New agreements with Syria under discussion

In Damascus, Venezuelan Foreign Affairs Minister Nicolás Maduro and Syrian Prime Minister Mohamed Nayi Otri studied new ways to boost bilateral cooperation in economics, trade, oil and energy, amongst others areas. They are studying strategic alliances, a joint development and industrial projects, especially in crude refining and in the production and manufacturing of olive oil and cotton. (Veneconomy, 11-08-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23805&idc=1)

"Chávez needs silence of the media," IAPA cautions

The government of President Hugo Chávez seeks to control the ideas of the media and impose silence, warned a report presented to the Inter-American Press Association (IAPA). The report on freedom of expression in Venezuela, which was presented in the context of the 66th General Assembly of the Inter-American Press Association (IAPA), considered that the Venezuelan government has decided to use the seizure of companies as a means of social control and therefore it needs the silence of the media. (El Universal, http://english.eluniversal.com/2010/11/08/en_pol_esp_chavez-needs-silenc_08A4704811.shtml)

Julio Borges: If the President does not believe in personal initiative, it does not believe in the Venezuelan

The National Coordinator of the Primero Justicia Party and National Assembly member Julio Borges said that "we have been insisting that most of the country disagrees with the government's radical way; recent opinion polls show that 70% of the population disapproves. But we want to talk to the 30% who think that the radical route is correct." "The President and the government do not believe in private enterprise, they do not believe in Venezuela, the simply do not trust the people that have the potential to create jobs, to grow and thrive." (Ultimas Noticias, 11-08-2010; http://www.ultimasnoticias.com.ve/capriles/cadena-global/detalle.aspx?idart=3450756&idcat=56657&tipo=2)

Venezuela, Colombia to install commission this Monday to boost bilateral trade

Venezuela and Colombia will install this Monday in Caracas a bilateral commission to study the integral cooperation agreements endorsed by the two countries, as established by the presidents Juan Manuel Santos (Colombia) and Hugo Chavez (Venezuela) during a meeting held past Tuesday. The commission will be installed in the headquarters of the Science, Technology and Intermediate Industries Ministry, and the Minister and Vice President for Productive Economy Ricardo Menendez will chair the encounter, Telesur informed. (AVN, 11-08-2010; http://www.avn.info.ve/node/27192)

Acid from Cuba

Those who thought that the unexpected suspension of last Sunday’s Aló Presidente would bring a brief respite from the anxiety generated by Chávez’s habitual Sunday announcements were mistaken. Instead, the state-owned Venezolana de Televisión broadcast an interview with Hugo Chávez from Cuba in which he dropped three bombshells whose repercussions are impossible to predict. (Veneconomy, 11-08-2010; http://www.veneconomy.com/site/index.asp?ids=44&idt=23805&idc=1)

Petroleum & Energy

Revenues of Pdvsa foreign subsidiaries down 7 percent

State-run oil holding Petróleos de Venezuela (Pdvsa) recorded falling income for sales of oil and gas products, and byproducts, manufactured by its foreign subsidiaries. According to a report released by Pdvsa, in the six months ending June 30, 2010, the volume of sales of crude oil and refined products of oil and liquefied petroleum gas by Pdvsa subsidiaries abroad totaled 3.1 million bpd, 7.2 percent less than 3.34 million bpd on average in the first half of 2009. (El Universal, 11-08-2010; http://english.eluniversal.com/2010/11/05/en_ing_esp_revenues-of-pdvsa-fo_05A4697171.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.