Economics & Finance
BCV Vice President: Economic growth will continue in coming years
According to preliminary estimates by the Central Bank of Venezuela (BCV) Gross Domestic Product (GDP) ended in 2011 with growth of 4%, double the budgeted goal, thanks to improved economic performance, both in the activities oil, as in non-oil exports. "That means we enter a growth path where all the activities that make up the economic sector, both industrial and services, we are indicating that growth will be for several years and the benefit for the population", says Eudomar Tovar, first Vice President of the BCV. More in Spanish: (AVN, 01-12-2012; http://www.avn.info.ve/contenido/vicepresidente-del-bcv-crecimiento-economía-continuará-próximos-años)
Government may issue bonds for VBF 62.9 million
The Ministry of Planning and Finance and has received a green light from the National Assembly for a bond up to VBF 62.9 billion bolivars (US$15 billion), as provided in the Debt Act of 2012. The National Assembly approved financial terms for debt service operations for VBF 25.8 billion, VBF 20 billion for fiscal management and VBF 17.1 billion for restructuring of public debt. More in Spanish: (El Universal, 01-11-2012; http://www.eluniversal.com/economia/120111/dan-luz-verde-al-gobierno-para-que-emita-bonos-por-bs-629-millones)
Pull out of ICSID can scare away foreign investment away
Venezuela's potential departure from the International Center for Settlement of Investment Disputes (ICSID) could scare away investments from foreign companies, according to arbitration expert Luis Alfredo Araque. "Nobody in his right mind is to invest in a country which is not at ICSID". Araque pointed out the organization is set up not to damage States, but to prevent governments from committing abuses of authority. "ICSID is meant to prevent States from stealing; it is not intended to punish States, but to protect investments." (El Universal, 01-10-2012; http://www.eluniversal.com/economia/120110/pull-out-of-icsid-could-shoo-foreign-investment-away)
DATANALISIS expects consumption to grow 5-6% this year
Luis Vicente Leon, director of DATANÁLISIS estimates that this year consumption will grow between 5% and 6%, last year’s growth was 3%: "This growth could be the most important compared to those recorded in the last four years." Growth would be due to an increasing amount of money put out by the Government during an election year. More in Spanish: (Últimas Noticias, 01-11-2012; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/consumo-crecera-este-ano-entre-5--y-6-.aspx)
Commodities
Humala signals Venezuela's support in Peru's petrochemical projects
Peruvian president Ollanta Humala underlined the role played by the Venezuelan State oil company PDVSA in the development of petrochemical projects in his country. He explained that Peru is promoting investment "from other brother countries in domestic projects, like the petrochemical center at the south of the country and other projects that will allow the entrance of capital of Brazilian and Venezuelan companies, for example." (AVN, 01-11-2012; http://www.avn.info.ve/contenido/humala-highlights-venezuela039s-support-peru039s-petrochemical-projects)
Russian oil company says PETROMONAGAS will increase production by 20%
TNK-BP, Russia's third largest oil producer, which is half owned by BP, has said it plans to increase production of heavy oil at its Venezuelan joint venture PETROMONAGAS by 20% in 2013. The company added that it intends to raise its heavy crude oil production at the joint venture, where it acquired a stake from BP in 2010, to 145,000 barrels per day (bpd) next year, Reuters reported (El Universal, 01-10-2012;
Refineries hit by eight failures in the past 30 days
Venezuela's refining circuit has reported several incidents in the past month that have affected the production capacity of oil byproducts. According to oil workers and statements issued by state-run oil company Petróleos de Venezuela (PDVSA), there have been at least eight failures at the refineries of El Palito (with a refining capacity of 140,000 barrels per day); Amuay (645,000 bpd) and Cardón (310,000 bpd) since December 2011. (El Universal, 01-11-2012; http://www.eluniversal.com/economia/120111/refineries-hit-by-eight-failures-in-the-past-30-days)
Ramirez says OPEC will not get involved in Iran dispute
OPEC will not get involved in the standoff between Iran and Western powers over its nuclear program, says Venezuelan Oil Minister Rafael Ramírez. "OPEC will not get involved in the issue with Iran," Ramirez told reporters following a meeting between Iranian President Mahmoud Ahmadinejad and Venezuelan President Hugo Chavez. He said sanctions are "causing instability in the market." (Reuters, 01-09-2012;
Clash at gold mine leaves 6 dead, 4 injured
At least six people were killed and four injured in fighting between gangs for control of a gold mine in southeastern Venezuela that has since been placed under military control, regional authorities said. The clash occurred Monday at an illegal mine in the Manaima sector on the Paragua River, according to the Bolivar state government’s citizen safety secretary, Julio Cesar Fuentes, who told Efe that around 1,500 illegal miners were in the area. (Latin American Herald Tribune, 01-11-2012; http://www.laht.com/article.asp?ArticleId=461540&CategoryId=10717)
Dependence increased due to food imports during 2011
The decline in production of basic agricultural products has forced the government to increase purchases abroad in order to meet demand. The increasing dependence on imported food is one of the negative economic results in 2011.
According to Francisco Ibarra, ECONOMETRIC’s director, domestic production " was the best in the last three years, but … conditions that prevent Venezuela reach its growth potential are still present and that the economy continues to float on what happens with oil prices". More in Spanish: (El Nacional, 01-12-2012; http://www.el-nacional.com/; El Universal; http://www.eluniversal.com/economia/120112/importaciones-de-alimentos-se-incrementan-12-en-2011)
CADIVI authorized over U$D 6.305 billion for food imports in 2011, according to a press release from the Currency Exchange Board, this is an 11% increase over 2010. Key imports were wheat, soy oil, corn, powdered milk, malt, animal and vegetable oils. More in Spanish: (El Mundo; http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Cadivi-autorizo-mas-de-$6-000-millones-para-el-sec.aspx ; El Universal; http://www.eluniversal.com/economia/120113/cadivi-elevo-12-los-dolares-para-compras-externas)
International Trade
Iran asks Venezuela to repay debts exceeding U$D 290 million
Iranian President Mahmoud Ahmadinejad may have visited Latin America to lead people to believe that he has allies in the region, but he also seized the opportunity of his visit to Venezuela to demand the payment of a U$D 298 million debt that the Venezuelan government has contracted with state-run Iranian companies. Venezuela has debts with Iranian firms in the areas of automotive industry, construction, and housing, which are three of the main pillars of the relationship between Caracas and Tehran. (El Universal, 01-11-2012; http://www.eluniversal.com/economia/120111/iran-asks-venezuela-to-repay-debts-exceeding-usd-290-million)
Importing is more expensive in Venezuela than in neighboring countries
According to the Venezuelan National Council of Industries (CONINDUSTRIA) importing from Venezuela is more expensive than in other nations in the region. Council Chairman Carlos Larrazabal says the average cost of bringing a container into the country is U$D 2868, which is 69% more expensive than doing so in Colombia; 66% more expensive than doing so in Brazil; and 52% more expensive than doing so in Mexico. More in Spanish: (El Universal; http://www.eluniversal.com/economia/120113/importaciones-son-mas-caras-en-venezuela-que-en-paises-vecinos)
Colombia and Venezuela regulate economic agreement
Delegates from the Trade Ministries of Colombia and Venezuela are meeting in the Colombian capital to move forard on a legal framework to regulate trade between both countries, according to Colombian Minister of Trade, Industry and Tourism, Sergio Diaz-Granados, who says the agreement will maintain free trade on some 4,200 traditional items. More in Spanish: (Ultimas Noticias;
Politics
US continues open to dialogue with Venezuela; Venezuela to shut down Miami consulate
State Department spokesperson Victoria Nuland says there “has been no deep change in policy toward Venezuela”, after expelling the Venezuelan Consul General in Miami on espionage charges.”It has been a difficult and complex relationship, but it does not change the fact that if there are ways to improve, we are open to it”. President Chavez has called the decision to expel Consul General Livia Noguera arbitrary and unjustified, and announced he may shut down the Consulate in Miami. More in Spanish: (El Nacional; http://www.el-nacional.com/)
A person was killed every 30 minutes in Venezuela during 2011
There were 18,850 homicides in Venezuela in 2011, according to sources of the Scientific, Criminal and Forensic Investigation Agency (CICPC). This means that a person was killed every thirty minutes. If one murderer were involved in each case, 18.850 gunmen have put 29 million Venezuelans against the wall. If they had used a single bullet for every murder, the criminals would have spent a little more than 18 and a half boxes of bullets, with each box containing 1,000 bullets. And therefore, they would have spent some VEB 226,080 (U$D 52,576, at the official exchange rate of VEB 4.30 per US dollar), as each box costs approximately VEB 12,000 (U$D 2,790.7). Consequently, each bullet taking one person's life cost U$D 2.70. (El Universal, 01-11-2012; http://www.eluniversal.com/nacional-y-politica/120111/a-person-was-killed-every-30-minutes-in-venezuela-in-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.
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