Economics & Finance
Expansive spending policy may hit 2012 inflation projection
The government will increase public spending during 2012 while authorities have estimated the annual inflation rate at between 20% and 22%. Analysts, however, believe that higher spending will impact this target. José Guerra, Director of the School of Economics at the Central University says "the (inflation) goal can’t be met because of the projected spending." Economist Orlando Ochoa believes that the expansionary spending policy will hamper the inflation goal. Analysts believe prices will behave very similarly to what they did in 2011. (El Universal, 12-26-2011; http://www.eluniversal.com/economia/111226/expansionary-spending-policy-is-to-hit-2012-inflation-target; http://www.eluniversal.com/economia/111224/economic-sectors-mushroom-out-of-spending-and-overvaluation)
New U$D 4 billion loan from the China-Venezuela Fund
President Chávez announces that a new U$D 4 billion loan will be signed with the China-Venezuela Fund in February 2012. This will bring the total to U$D 8 billion, almost half of which will go to housing projects and to the central region railway project that will join Cúa-Tejerías-La Victoria-San Juan de los Morros. More in Spanish: (Agencia Venezolana de Noticias, 12-26-2011; http://www.avn.info.ve/contenido/anuncian-firma-nuevo-tramo-4000-millones-fondo-pesado-china-venezuela; El Universal, http://www.eluniversal.com/economia/111226/comision-china-llegara-al-pais-para-revisar-convenios-de-cooperacion)
Firing freeze extended to 31 December 2012, business says competitiveness is hurt
President Chavez has signed a decree that extends the existing freeze on firing to 31 December 2012, for all workers except management and temporary workers. FEDECAMARAS Vice President Jorge Roig says the continued freeze is bad for employment quality and hurts competitiveness, with a “vicious circle”, where employers cannot dispense with less productive workers and hire new ones. More in Spanish: (Agencia Venezolana de Noticias, 12-26-2011; http://www.avn.info.ve/contenido/firmado-decreto-prórroga-inamovilidad-laboral-hasta-31-diciembre-2012; El Universal; http://www.eluniversal.com/economia/111227/afirman-que-la-inamovilidad-laboral-afecta-la-competitividad)
FEDECÁMARAS President says socialist plan is displacing the private sector
FEDECÁMARAS President says “There is here a political design to avoid sufficient strength in the private sector to balance the Government; that is they prefer multinationals, businessmen from other countries, with the State as the key economic agent, with a very much weakened surviving business community”. He says economic policy for the past 4 years has limited space for private business. More in Spanish: (El Universal; http://www.eluniversal.com/economia/111226/afirman-que-plan-socialista-esta-desplazando-al-sector-privado)
Commodities
REPSOL, ENI agree to invest U$D 1.5 Billion in Perla gas field, along with PDVSA
State-owned energy giant Petroleos de Venezuela S.A. (PDVSA) has signed a gas-supply contract with Spain’s REPSOL-YPF and Italy’s ENi that will speed development of the “Perla 1” gas field, one of the world’s largest. PDVSA President Rafael Ramirez, has said - in a joint press conference with the heads of REPSOL-YPF, Antonio Brufau, and ENI’s Paolo Scaroni, that the three companies have signed “a contract for the supply of gas” from the Cardon IV block, where Perla 1 is located, to the PDVSA’s natural gas subsidiary, PDVSA Gas. Ramirez claims the contract gives a clear “economic signal” as to the company’s plans to “bring the gas to shore as soon as possible.” (Latin American Herald Tribune, 12-23-2011; http://www.laht.com/article.asp?ArticleId=455146&CategoryId=10717; The Washington Post, http://www.washingtonpost.com/business/venezuela-signs-natural-gas-supply-contract-with-spains-repsol-italys-eni/2011/12/23/gIQAOQiwDP_story.html)
Venezuelan oil drops to U$D 103.89
Venezuela's oil basket slipped to U$D 103.89 this week. Oil prices fell earlier in the week and rose later in international markets, currently in turmoil from the debt crisis which is rocking European and world markets. Figures released by the Venezuela Ministry of Energy and Petroleum show the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending December 23 fell to U$D103.89 from the previous week's U$D 104.39. (Latin American Herald Tribune, 12-23-2011; http://www.laht.com/article.asp?ArticleId=455099&CategoryId=10717)
International Trade
Trade with Colombia increased 25% in ten months
The Venezuela-Colombia Economic Integration Chamber (CAVECOL) says binational trade has increased 25% after intensive meetings and bilateral agreements between both nations; and there is still pending a joint definition of terms for the Partial Agreement signed last month by Presidents Hugo Chavez and Juan Manuel Santos, which should be ready by year end. The expected definition includes the number and description of tariffs and the list of sensitive products, as well as sanitary and conflict resolution rules. The Chamber says that from January to October this year trade rose to U$D 1.753 billion, which is 25% over the same period in 2010. More in Spanish: (El Universal, 12-27-2011; http://www.eluniversal.com/economia/111227/intercambio-con-colombia-aumento-25-en-diez-meses)
Logistics & Transport
New seaport projected in Puerto Cabello
The Bolivarian Port Authority (BOLIPUERTOS) has announced that construction of a new and modern maritime terminal will begin in Puerto Cabello during mid 2012. The project is estimated to have an initial cost of VBF 520 million and has been assigned to the China Harbour Engineering Company (CHEC). Official information says the first stage will be completed in 2014, and the final stage in 2030 in order to raise port capacity. The new port is projected to receive PANAMAX and POST PANAMAX ships and diminish loading and unloading times. More in Spanish: (Notitarde, 12-27-2011; http://www.notitarde.com/notitarde/plantillas/nota.aspx?idart=1520013&idcat=9849&tipo=2)
Politics
Chavez again takes to airwaves, gives out houses
President Hugo Chavez made his second live television appearance this week, this time to give out homes as part of a housing drive ahead of next year’s elections. “I’m at the head of this housing mission, it’s a personal challenge,” he said. “We can’t let our guard down.” (Bloomberg, 12-24-2011; http://www.bloomberg.com/news/2011-12-24/venezuela-s-chavez-takes-to-airwaves-again-gives-out-houses.html)
Keller y Asociados polling firm: Chávez is "doing very badly" in polls
Alfredo Keller, head of the Alfredo Keller y Asociados polling firm, says that President Chavez is "doing very badly" in polls. This is the reason why the Venezuelan president is promoting a campaign based on giving money and tightening the love-hate-love" knots with his followers. "Chavismo has tumbled to a third of the population. It has lost touch with the rest of the citizens. We are talking about Chávez's populism. Love for the checkbook has failed to work as effectively as in the past. Chavismo is no longer as fervent as before. Today, it is merely an estimate," said Keller in an interview. (El Universal, 12-26-2011; http://www.eluniversal.com/nacional-y-politica/111226/keller-y-asociados-polling-firm-chavez-is-doing-bad-in-polls)
Chavez denies fear of being replaced
President Chavez publicly denied that the decision to nominate Foreign Minister Nicolás Maduro as Governor of Carabobo, and Executive Vice President Elías Jaua as a candidate to be Governor of Miranda state is a strategy to avoid either one becoming consolidated as a substitute. He said: “The opposition is saying I want to get rid of Jaua and Nicolás (Maduro), that I am sending them to the slaughterhouse. I am not getting rid of anyone because they are tanks that I am deploying around the nation…. I am sure they will win the Governorships of Miranda and Carabobo.” More in Spanish: (El Nacional, 12-26-2011; http://www.el-nacional.com/)
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