Economics & Finance
Chavez and Kadhafi had announced a joint billion U$ dollar development fund
“There is the money to begin this project: producing milk, rice and ecologic tourism”, said the Venezuelan President last October 25th, upon announcing a billion dollar development fund together with Libya’s Muammar Khadafi. This fund was part of 69 agreements signed by Chávez during his recent visit to the Libyan president – most of which were simply memorandums of understanding, the first step toward negotiations. Their purpose was to finance joint industrial and agricultural ventures in Venezuela, aimed at increasing exports from the North African nation. More information in Spanish. (El Nacional; 02-22-2011; http://www.entornointeligente.com/articulo/1092760/Chavez-esperaba-crear-fondo-de-$-1-millardo-con-Gadafi)
Economic study shows Venezuela is reaching a point of no economic return
That Latin America faces the possibility of staging a great story of economic success in the coming years is already widely shared analysis. But among large countries Venezuela is in serious danger of losing the train. In the Caribbean Giant, "the deterioration of the productive and external debt dependence and reduce growth potential and increase the likelihood of new crises," according to a new economic study on the Latin American region by the advice Madrid Solchaga Recio & Associates It specializes in the latest report confirmed the view that 12 years of Chavez are about to put Venezuela on a point of no economic return. (El País, 02-19-2011;
Chavez Currency Market Takeover could spur further devaluation
The U.S. dollar is becoming scarce in Venezuela nine months after President Hugo Chavez took over the currency market to slow capital flight and fight inflation. Companies including Kellogg Co. and Pernod Ricard, S.A. have reduced imports since the Central Bank imposed currency trading system that limits purchases to $50,000 a day. Rationing may lead Chavez to further devalue the bolivar, according to Alberto Ramos, a senior Latin America economist at Goldman Sachs Group Inc. in New York. Chavez devalued the currency twice in the past 13 months, pushing inflation to a five-month high of 28.5 percent in January. (Bloomberg, 02-21-2011; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aKAbqPKpwacI)
FEDECAMARAS considers a general wage increase untenable and would generate exponential growth of inflation, said the head of Fedecámaras Noel Álvarez in a communiqué. He said it is necessary to increase workers’ minimum wage but urged the government to do so by meeting with the workers and the private employers. The Tripartite Commission (State, private employers and workers) has not been summoned in over a decade. (Veneconomy, 02-18-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=24955&idc=3)
Pricing 2022 PDVSA bonds may get monetary and financial authorities in trouble, according to América Economía. Public banking institutions that bought this new foreign currency convertible bond will have to thoroughly assess what strategy to use when they sell such securities withiin the Foreign Currency Securities Transactions Integrated System (SITME) so as not to have financial losses. (Veneconomy, 02-18-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=24954&idc=3)
Total Imports from Brazil declined 12.6% during January
Brazilian exports to Venezuela fell 12.6% in January respect to the same month of 2010, which dragged down the trade between the two nations by 1.8% during the first month of the year. The report of the Secretariat of Foreign Trade (SECEX), Ministry of Development, Industry and Foreign Trade of Brazil, said last January that goods sent to Venezuela for a total of over 208.3 million dollars FOB , were $ 30 million less when compared to the total of a year ago, when this indicator stood at 238.4 million dollars. Brazil is the main market where Venezuela acquires agricultural inputs and livestock, especially beef (live and frozen) and sugar, chicken and coffee, among other items. (El Mundo, 02-21-2011; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=17&Id_Noticia=47595)
Venezuela-based Alimentos Polar has found an alternative to its home market: Colombia, where it registers $100 million in annual sales, Portafolio reports. More information in Spanish. (Portafolio, 02-17-2011; http://www.portafolio.com.co/noticias/empresas/polar-entra-al-mercado-canino-en-colombia
Commodities
It’s official: Venezuela oil company profits down
Venezuela's energy minister concedes profits from the South American country's state-run oil company fell last year. Rafael Ramirez says profits at Petróleos de Venezuela SA fell 28.8 percent in 2010 compared to 2009, despite an increase in international oil prices. Ramirez told the National Assembly on Thursday that profits reached $3.1 billion last year compared to $4.3 billion in 2009. (AP, 02-18-2011; http://finance.yahoo.com/news/Official-Venezuela-oil-apf-2088167079.html?x=0&.v=1)
Venezuela Oil Price Falls to $85.02
Venezuela's weekly oil basket fell slightly from the previous week, with the price of oil in international markets slipping on the easing of tensions in Egypt. According to figures released by the Venezuela Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petróleos de Venezuela S.A. (PDVSA) during the week ending February 18 fell to $85.02 from the previous week's $85.64. According to the Ministry, the average price so far in 2011 for Venezuela's mix of heavy and medium crude is $85.67, higher than 2010's $72.43, and much higher than 2009’s average price of $57.01 -- but still below the high set by 2008's average of $86.49. (Latin American Herald Tribune, 02-18-2011; http://www.laht.com/article.asp?ArticleId=387368&CategoryId=10717)
Venezuela's Amuay refinery to halt FCC unit for repairs in late 2011
Venezuela's Amuay oil refinery will shut its fuel catalytic cracking (FCC) unit for maintenance works in late 2011, the head of Venezuela's Paraguaná refining complex, Jesus Luongo, said yesterday. Amuay, which has a processing capacity of 645,000 barrels per day (bpd), is part of the Paraguaná complex and its 104,000-bpd FCC unit is key for the fuel production. Venezuela is also planning maintenance works in its Cardón refinery, namely in the lubricants unit and in a hydro treatment unit, both scheduled for 2011, Luongo said. (ADP News, 02-22-2011; http://adpnews.info/?nid=cd26b3a5f0a7badc)
Politics
Venezuela's allies tell OAS chief not to meddle
Allies of Venezuela in Latin America came to the defense of President Hugo Chavez's government on Saturday, telling the head of the Organization of American States not to meddle in Venezuela's domestic affairs. Nations belonging to a left-leaning bloc led by Venezuela and Cuba accused OAS chief Jose Miguel Insulza of being a pawn of the U.S. government, which has urged Chavez's administration to allow an international investigation into alleged human rights abuses. Dozens of Venezuelan students participating in a hunger strike are demanding that Insulza look into their allegations that the government improperly uses judges and prosecutors to persecute Chavez's political adversaries. (AP, 02-19-2011; http://news.yahoo.com/s/ap/20110220/ap_on_re_la_am_ca/lt_venezuela_hunger_strike_1)
Venezuela: US should mind own business on protests
Venezuela's top diplomat hit back at the United States on Friday over its suggestion that President Hugo Chavez's government should allow an international investigation into alleged human rights abuses. Foreign Minister Nicolas Maduro said the matter is a domestic affair and Washington has no business meddling. "We absolutely reject that the U.S. get involved in this issue," he said. "Our country does not accept tutelage from anybody." Maduro was responding to a statement Thursday from the U.S. State Department, which urged the South American nation to permit an investigation "as a means to promote dialogue and understanding." (AP, 02-18-2011;
Criminalizing dissent?
Biagio Pilieri, a former journalist and mayor, was until recently little known in Venezuela. But last September he was elected to the National Assembly. He has been unable to take his seat because, despite parliamentary immunity, he is under house arrest, awaiting trial for the third time on corruption charges of which he has already been cleared.
Mr. Pilieri is just one of more than two dozen Venezuelans that opponents of President Hugo Chávez say are political prisoners. They include two other elected representatives. Thousands of opposition supporters have been subjected to political persecution, ranging from loss of government jobs to pursuit through the courts. Some have fled abroad. (The Economist, 02-17-2011; http://www.economist.com/node/18184396?story_id=18184396)
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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