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.

Tuesday, July 5, 2011

July 04th, 2011

Economics & Finance

During the first semester 2011 SITME allocated U$D 3.943 million
SITME is cutting its supply of foreign exchange. The swap market was given a daily average of U$D 60 million and over the first half of this year SITME disbursed a total of U$D 3.943 million which comes to a daily average of U$D 32 million dollars. Central Bank statistics show that between September and December last year the supply was maintained at a daily average of U$d 42 million. More information in Spanish. (El Universal, 07-04-2011;$3943-millones.shtml)

Banks’ legal reserve requirements reduced from 17% to 14%, according to a Venezuelan Central Bank (BCV) resolution. This frees up Bs.F.10 billion is liberated to be directed towards Misión Vivienda (Housing Mission). The plan includes funds that go to the central government by purchasing certificates. (Veneconomy, 07-01-2011;

Venezuelan international reserves down U$D 935 million this week to total U$D 28,389 million, according to the Venezuelan Central Bank (BCV). Of that amount, U$D 28,386 million is deposited in the BCV and U$D 3 million is in the Macro Economic Stabilization Fund (FEM, after its initials in Spanish). (Veneconomy, 07-01-2011;

Conindustria: They claim that the "fence" industrial officer does not stop
The Government steadily continues to fence in private industrial and productive activities, according to the Venezuelan Confederation of Industries (CONINDUSTRIA). Carlos Larrazabal, president of CONINDUSTRIA says “For several years Conindustria has denounced the attacks to which Venezuelan companies are subjected because of state interference in production. We have called this process a siege, which has been extended to all private enterprise and he concept of property enshrined in our Constitution." More information in Spanish. (El Universal, 07-04-2011;

Expert says agriculture is not among government priorities
According to Carlos Machado Allison, a Professor and agricultural expert with the Institute of Management Higher Studies (IESA), stagnated production is the result of mistaken public policies on agriculture. In a recent book he says that reduced funding for research and transfer of knowledge to growers has arrested the development of the production apparatus. The impact is shown over nine years in terms of the yield per hectare presently recorded in the country's primary items. (El Universal, 07-02-2011;


Venezuelan oil falls to U$D 100.43
The average price of Venezuela s basket of crude oil fell by U$D 0.64 this week due to the uncertainty over the euro zone debt crisis earlier this week and concerns over the economic growth of the main oil-consuming countries, such as China and the United States. (El Universal, 07-02-2011;

Logistics & Transport

Holiday decree increases port costs
The declaration of not working for the day, decreed by the Government, will impact storage costs in the ports.
While loading and unloading of ships will remain today and tomorrow, goods may not be dispatched until next Wednesday, said a source close to the port activity. This situation requires importers to pay for services for five days of storage. More information in Spanish. (El Universal, 07-04-2011;


Chavez returns to Venezuela
Venezuelan President Hugo Chavez has returned to the nation's capital of Caracas, state-run VTV reported Monday morning. The network reported that Chavez returned to Venezuela from Cuba at 2 a.m. local time. Venezuela celebrates its bicentennial today (July 5th). Chavez has been in Havana, Cuba, for weeks undergoing treatment after doctors performed emergency surgery. He announced last week that they had removed a cancerous tumor. (CNN, 07-04-2011;; AVN, 07-04-2011;

Leading rival says he won’t push Chavez to cede power
Henrique Capriles Radonski, the governor of Miranda state, and Venezuela’s leading opposition presidential candidate said he won’t press for Hugo Chavez to relinquish power while he recovers from cancer, and will continue with plans to defeat him at the ballot box next year. Capriles said today Venezuelan law allows Chavez to remain in Cuba for as long as he wishes, and he hopes Chavez overcomes his illness. “There’s no need for him to cede power to Vice President Elias Jaua in the meantime.” (Bloomberg, 07-02-3011;

The Washington Post says Hugo Chavez appears vulnerable
For 12 years, President Hugo Chavez has dominated Venezuela, forging an almost mystical connection with his followers, marginalizing political rivals and accumulating power as he brought every state institution under his control. Blessed with charisma and funded with billions in petrodollars, he pledged to rule for decades. And few in Venezuela, whether friend or foe, could envision a political landscape without him in the central role he has held since taking office in 1999 and embarking on a self-styled revolution to create a socialist state. But now, after astonishing his countrymen by revealing that he had a cancerous tumor, the 56-year-old former paratrooper appears vulnerable. Gone is the indomitable combatant who has rolled over political opponents and emerged victorious when defeat seemed certain, as when he was briefly overthrown in 2002.” (The Washington Post, 07-02-2011;

Nicaragua is a key beneficiary of Venezuelan aid
One of the most benefitted countries from the Venezuelan financial aid has been Nicaragua. The Central Bank of Nicaragua has estimated such solidarity at U$D 1.55 billion. Other private sources in the Central American country put it somewhere between U$D 500 million and U$D 800 million annually. And the Economic Research Center reports that based on the announcements made by the Venezuelan government the number totals U$D 7.92 billion through 2010.  Venezuelan cash has gone to improving power generation, to supplying gasoline and oil byproducts, grants and debt relief, scholarships, housing, and direct subsidies of wages and salaries, such as the U$D 34 wage bonus given on a monthly basis to over 155,000 public servants with Venezuelan funds. Financial resources were recently approved for an additional U$D 107.2 million from the Venezuelan Cooperation Fund to subsidize the electricity rates. (El Universal, 07-02-2011;

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.

No comments:

Post a Comment