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, January 17, 2012

January 17th, 2012

Economics & Finance

Venezuela to pull out of ICSID
Energy and Oil Minister Rafael Ramirez confirmed that Venezuela will pull out of the International Center for Settlement of Investment Disputes (ICSID). "We will pull out of ICSID. It is not a mechanism to settle differences and for that reason we will get out of it," says Ramirez. The Minister said that new projects with foreign companies that will be backed by state oil company PDVSA”. (AVN, 01-15-2012;; The Washington Post,

Chavez refuses to acknowledge value in expropriated land
President Chavez says his government is not ready to pay for the value of the land, but for improvements made on them, as "these lands always belonged to the nation." "They wanted us to pay them per hectare," the president explained during a telephone conversation aired on state-run TV channel Venezolana de Televisión. He added that the owners of seized lands "never managed to prove that they were their owners." "The people were the expropriated ones here. They (apparent owners) had those lands as a result of the historical dispossession of our people," he asserted. (El Universal, 01-16-2012;

Vicepresident Jaua admits that lag in price regulations generates shortages
Vice President Elias Jaua said that when the government delays in adjusting product prices, shortage occurs. The official said the government recognizes the actions of the private sector of the economy and although the government has a regulatory function, it will also talk to them. More in Spanish: (El Mundo, 01-17-2012;

Inflation erodes purchasing power, averages 22.2% under Chavez
As interest rates on deposits are much lower than the inflation rate, rising prices erode the purchasing power of deposits; and as a result, investors are losing money. In 2011, Venezuela's inflation jumped 27.6%, while funds deposited in saving accounts earned 12.5% and time deposits a 14.5%. President Chavez has confirmed that average inflation in Venezuela during his administration is 22.2%, during the presentation of his 2011 Report and Accounts at the National Assembly. (El Universal, 01-16-2012; and

Bank credit to business up 4.8%
The Banking Superintendent (SUDEBAN) reports that banking credit to business rose from VEB 85.803 billion in December 2010 to VEB 128.599 billion during 2011, for an increase of 49.8%. More in Spanish:  (Últimas Noticias, 01-17-2012;,8-.aspx)

Central Bank VP says debt level in accordance with economic growth
Central Bank VP Eudomar Tovar says the level of debt, 23.6% of GDP, is in accordance with the growth the country requires to meet the needs of the population. More in Spanish: (AVN, 01-17-2012;ís)

Agriculture Minister claims caloric consumption has risen from 1900 to 2800 since 1999
Land and Agriculture Minister Juan Carlos Loyo claims local caloric consumption rose from 1900 in 1999 to 2800. He added that this index is above levels set by the UN Agriculture Organization (FAO). More in Spanish: (AVN, 01-17-2012;ías-del-venezolano-se-elevó-1900-2800-desde-1999)


Aluminum smelter seeks financial aid
Venezuela's aluminum smelter CVG ALCASA has requested U$D 90.4 million in financial assistance from the Executive Office to cover payroll expenses, the purchase of raw materials, spare parts and the reactivation of smelting cells. It has also submitted several proposals to the Ministry of Industries to improve cash flow. Elio Sayago, president of aluminum smelter Aluminios del Caroní S.A. (ALCASA), said that this includes importing of 5,000 tons aluminum per month to feed currently inactive installed capacity for mineral processing. (El Universal, 01-16-2012;

International Trade

US exports to Venezuela through November at their best level in three years
The US Department of Commerce reports that Venezuela’s imports from the US closed at U$D 11.240 billion in November, close to their highest level in 2008. Figures show Venezuelan imports have risen 15.5% over the same period in 2010, making it a six month run of over one billion monthly, the best result since the 2008 economic crisis. More in Spanish: (El Mundo, 01-17-2012;

Imports from Colombia up 20.6%
Between January and November Colombia’s exports to Venezuela were up 20.6% figures according to data from Colombia´s Autonomous Department of Statistics (DANE). In the first 11 months of last year Venezuelan purchases totaled U$D 1.553 billion, compared to U$D 1.287.6 billion during the same period in 2010. More in Spanish. (Últimas Noticias, 01-17-2012;,.aspx)

Miami Consulate closure paralyzes trade
Foreign trade sources report that export and import certificates issued by the Venezuelan Consulate in Miami, which covers Florida, Georgia, North and South Carolina will be paralyzed. The Miami Consulate serves some 200,000 Venezuelan residents in those states."These sources say: Without those certificates, Venezuelan importers cannot seek currency from the Exchange Board (CADIVI)”. Venezuela also has consulates in Boston, Chicago, Washington, New York, New Orleans, San Francisco, and San Juan, Puerto Rico. More in Spanish: (El Nacional, 01-17-2012;

Logistics & Transport

Venezuela mulls revival of neglected ports
Venezuela is pushing for an early regeneration of its maritime and defense port facilities, neglected over many years and found to be lacking in basic infrastructural capacity. Moves for the development and refurbishment of the country's ports so far have attracted a major Chinese investor, China Harbor Engineering Co., which pledged an initial U$D 600 million. More suitors are expected to follow CHEC to gain access to a key part of the oil exporter's infrastructure. President Hugo Chavez also signed agreements with Russia that are likely to result in supply and local assembly of a range of naval defense craft, including submarines, defense and security data showed. (UPI, 01-11-2012;


Venezuela closing Miami Consulate after diplomat’s expulsion; US calls it sovereign decision
Venezuela will respond to the U.S. expulsion of its consul in Miami by closing – at least temporarily – its consulate in the Florida city, says President Hugo Chavez. “Foreign Minister Nicolas (Maduro) has recommended closing the consulate, well, we’ll close it then” the socialist leader said while offering his annual state of the union report to Venezuela’s National Assembly. State Department spokesman William Ostick says the United States believes that the closure of the Consulate is a "sovereign decision" and added that Washington will not respond by taking any new steps in response to Venezuela's move. "The decision on how to manage their consulates and provide consular services to their citizens abroad is solely in the hands of the government of Venezuela". (Latin America Herald Tribune, 01-13-2012;; El Universal;;;

Foreign Minister claims CELAC is one of Venezuela's foreign policy achievements in 2011
Venezuelan Foreign Affairs minister Nicolas Maduro says the most significant achievement in Venezuela's foreign policy during 2011 was the creation of the Community of Latin American and Caribbean States (CELAC). "The creation of the CELAC opens a new path for Latin America and the Caribbean. It is a project gathering diverse political, ideological and cultural thoughts from the continent," says Maduro. (AVN, 01-16-2012; center;

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