Economics & Finance
Central Bank President says Venezuela won't default on foreign debt
Nelson Merentes, President of the Central Bank said Venezuela will not default on its foreign debts and investors should continue to buy bonds from the OPEC member and the state oil company. Risk indicators consistently rank Venezuelan debt as having one of the highest default risks among the globe's major borrowers, so investors are focused on whether the socialist government of President Hugo Chavez will keep on paying. Most experts believe Venezuela can pay, given high prices for its main export, oil, and a long history of meeting debt payments. But some analysts are worried about a drop in crude output and the erosion of the country's manufacturing base. (Reuters, 04-03-2011; http://www.reuters.com/article/2011/04/04/us-latam-summit-merentes-idUSTRE7304O620110404)
Venezuela touts agreements signed during Chavez tour
Venezuela's government signed a series of agreements in energy, trade and agriculture during President Hugo Chavez's visits to Argentina, Uruguay and Bolivia last week, officials said Sunday. Venezuela Foreign Minister Nicolas Maduro said Chavez's stops in those three countries promoted economic development and "the big objectives of South America's unity." Maduro and other Cabinet ministers discussed Chavez's trip during a televised appearance, saying the accords signed included agreements to team with Bolivia in food production, cement and textiles and to work with Uruguay to increase beef and milk production in Venezuela. Maduro said a total of 46 agreements were signed with the three countries, the state-run Venezuelan News Agency reported. In its energy agreements, Venezuela is supplying fuel while also working with the countries on joint oil and natural gas projects. (CBS News, 04-03-2011; http://www.cbsnews.com/stories/2011/04/03/ap/latinamerica/main20050262.shtml)
Venezuela has a USD$ 6 billion trade deficit with MERCOSUR
Venezuela’s possible full membership in MERCOSUR, while formally withdrawing from the Andean Community (CAN) has local entrepreneurs and economic integration experts "awaiting and uncertain" as they do not know about government actions in this regard. Several experts convened by the Center for Dissemination of Economic Knowledge (CEDICE) to discuss such processes, consider it "irresponsible that the government advances on its own the agreements with other countries, behind Venezuela's back," according to Delsa Solórzano, a deputy to PARLATINO, the Latin American parliament. Luis Alberto Russián, the CEO of the Chamber of Venezuelan-Colombian Economic Integration (CAVECOL), said that government authorities need to report the private sector on its negotiations, given their important implications. (El Universal, 04-01-2011; http://english.eluniversal.com/2011/04/01/venezuela-has-a-deficit-with-mercosur-for-usd-6-billion.shtml)
Expert says Venezuela's pullout from the Andean Community is unreasonable
Venezuela’s deadline to leave the Andean Community (CAN) is due to become a fact on April 21, after having led and encouraged integration over the past 41 years. Venezuela has had five years -as set forth in Article 135 of the Cartagena Agreement- to think reconsider its withdrawal. In the meantime, the remaining member countries -Colombia, Peru, Bolivia and Ecuador are engaging in bilateral talks in order to preserve the Andean trade exchanges. Félix Arellano, the director of the School of International Studies at the Central University of Venezuela (UCV), considers Venezuela's withdrawal as "unreasonable" from the economic, commercial, political, geopolitical and legal standpoints. (El Universal, 04-01-2011; http://english.eluniversal.com/2011/04/01/venezuelas-pullout-of-can-is-unreasonable.shtml)
Business leader says resumption of relations between Venezuela and Colombia will not clarify trade rules
Business uncertainty has increased about Venezuela’s impending withdrawal from the Andean Community of Nations and import and export facilities undertaken under community rules are falling into a limbo. José Rozo, president of FEDECÁMARAS, Táchira, says that within less than 20 days for Venezuela's full withdrawal from the CAN, a great void of information arises because the Government has been managing the process reopening trade with Colombia in an almost clandestine way and is practically setting terms for trade. "Venezuelan officials have told their Colombian peers that the state owned VENECOM will take care of importing from the neighboring country, such staples as food, building materials and personal hygiene and sanitation, among others" said Rozo. He reports that as the system under CADIVI has little credibility among Colombian suppliers, the executive agreed to pay directly from the Central Bank of Venezuela. More information in Spanish. (Tal Cual, 04/04/2011; http://www.talcualdigital.com/index.html)
Venezuela's Stock Market drops 1.8% for the Week
Venezuela's stocks lost value this week on low volume, with less than ten thousand shares traded per day. The index closed at 70,321 for a loss of 1.8% for the week ending April 1. Two main stocks dropped in price: Banco Provincial lost 6.7% to Bs. 28, while BANESCO rose 1.1% to Bs. 8.5. The Venezuela Stock Market Index is now up 7.63% for the year to date. (Latin American Herald Tribune, 04-04-2011; http://www.laht.com/article.asp?ArticleId=390814&CategoryId=10717)
Commodities
Venezuela cancels oil data certification by independent agency
Venezuela said on Tuesday it was no longer publishing oil production and export data certified by an independent auditor in a move that will likely add to skepticism over the OPEC member's assessment of its vital crude sector. The socialist government of President Hugo Chavez routinely provides higher figures for the main export by South America's biggest crude producer than those provided by bodies including OPEC and estimates from industry experts. (Reuters, 03-29-2011; http://www.reuters.com/article/2011/03/29/venezuela-oil-idUSN2927108720110329)
Republican lawmaker proposes replacing US oil imports from Venezuela
Connie Mack, a Florida Republican who chairs the House Western Hemisphere Subcommittee, urged President Barack Obama to approve the construction of an oilsands pipeline from Canada to the US Gulf of Mexico that would force Venezuelan President Hugo Chávez to realize that "the US is not willing to fund his regime indefinitely," AP reported. Mack spoke at the opening ceremony of the hearing held in Capitol Hill about oil dependence. He said that "the US Department of State remains a hostage, when it should be calling for an end of the (Venezuela's President Hugo) Chávez regime for its numerous human rights violations and for supporting terrorism." Venezuela currently supplies 10 percent of oil imported by the United States, Mack said. "We need to immediately concentrate on replacing foreign oil from thugocrats like Hugo Chávez in Venezuela with reliable, stable allies like Canada," said Mack. (BBO Financial Services, 04-04-2011)
Ecuador warns of "drastic measures" if PDVSA fails to increase output
Ecuadoran Minister for Nonrenewable Natural Resources Wilson Pástor said that the state-run oil company Petróleos de Venezuela (PDVSA) should carry another drilling rig to the oilfield it runs jointly with Ecuador s state oil company PETROECUADOR. He warned that his country would "take drastic measures" if the state-run oil company Petróleos de Venezuela (PDVSA) fails to increase oil output at Sacha oil field in Ecuador's Amazon region, for its oil production joint venture with Ecuador's state oil company Petroecuador.. (El Universal, 04-01-2011; http://english.eluniversal.com/2011/04/01/ecuador-anticipates-drastic-measures-for-pdvsas-failure.shtml)
Venezuelan oil basket hits USD 100.72 per barrel
The Venezuelan oil basket closed the week at USD$ 100.72 per barrel. As a result, the average price of the Venezuelan oil climbed to USD$ 91.14 in 2011. The ministry of Energy and Petroleum reported that improvements in the economies of China and the United States and the Libyan conflict led to an increase in the purchase of oil contracts for future delivery. (El Universal, 04-01-2011; http://english.eluniversal.com/2011/04/01/venezuelan-oil-basket-hits-usd-10072-per-barrel.shtml)
Politics
Chávez announces further nationalizations
In an interview published by the Uruguayan newspaper La República, President Chávez said the government of Venezuela will nationalize means of production, but also favor the coexistence of "social ownership" and partnerships with private enterprise, "Market fundamentalism, neoliberalism. We began to fight from day one. And we have been deepening the intensity and pace," said Chavez during his visit to Montevideo. "We have a nationalization scheme. (...) The basic state industries, steel, petrochemicals, aluminum, large basic industries, had also been privatized, and were recovered," he said. More information in Spanish. (El Universal, 04-04-2011; http://www.eluniversal.com/2011/04/04/presidente-chavez-anuncia-mas-nacionalizaciones.shtml)
Chávez- Santos meeting postponed
Colombian Minister of Foreign Affairs María Angela Holguín reported that a meeting to be held last Friday between Colombian President Juan Manuel Santos and his Venezuelan counterpart Hugo Chávez will not take place due to technical problems with the aircraft which would carry President Chávez to Colombia. Minister Holguín made a brief statement and did not answer any questions, AP reported. Chávez and Santos spoke on the phone and the Venezuelan leader "told him (President Santos) that his plane is still broken and cannot leave in the next few hours," Holguín said. Venezuela's Minister of Communication and Information Andrés Izarra, through the social network Twitter, clarified that the meeting of both presidents had been adjourned. "Aircraft spare part will not arrive on time from Caracas. Agenda with Santos has been rescheduled for April 9. We are still in Cochabamba." (El Universal, 04-01-2011; http://english.eluniversal.com/2011/04/01/president-chavez-goes-on-a-tour-of-latin-american-countries.shtml)
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