January 31th, 2012

Economics & Finance

Chavez again threatens to nationalize banks over agriculture loans to farmers

President Hugo Chavez threatened to take over the country’s banks if they don’t hand over 40 billion bolivars (U$D 9.31 billion) for agriculture loans this year. Chavez, speaking on state television yesterday, cited Banesco Banco Universal, BBVA Banco Provincial and Mercantil Banco Universal for giving loans to industrial producers and not to small farmers. The government plans to create a fund called Ezequiel Zamora to assign the loans directly, while borrowers pay the banks, Chavez said. The president will use special legislative powers granted to him by the congress to create the fund, he said. (Bloomberg, 01-30-2012; http://www.bloomberg.com/news/2012-01-30/chavez-threatens-to-seize-banks-to-guarantee-agricultural-loans.html)

Chavez: Venezuela won’t accept rulings by World Bank’s international arbitration body

Venezuela’s government will ignore future decisions by a World Bank-affiliated arbitration body involving any business disputes in the South American country, President Hugo Chavez said Friday. Venezuela formally began its withdrawal from the Washington-based International Center for Settlement of Investment Disputes this week. (The Washington Post, 01-28-2012; http://www.washingtonpost.com/business/industries/chavez-venezuela-wont-accept-rulings-by-world-banks-international-arbitration-body/2012/01/27/gIQAp9LSWQ_story.html)

Venezuela receives shipment of gold, says it has withdrawn U$D 9 billion from foreign banks

Venezuela repatriated a final shipment of gold from foreign banks Monday, saying the country has withdrawn a total of U$D 9 billion in its gold reserves and moved it to the country’s Central Bank. The shipment of 14 metric tons (15 tons) brought the total amount of gold shipped to Venezuela since November to 160 metric tons (176 tons), Central Bank President Nelson Merentes said. Merentes did not say from where the shipment had arrived, nor in which foreign banks Venezuela still has gold. While some economists have questioned the move, Chavez has said having the gold in Venezuela will help protect the oil-exporting country from economic troubles in the U.S. and Europe. (Washington Post, 01-30-2012; http://www.washingtonpost.com/business/venezuela-receives-shipment-of-gold-says-it-has-withdrawn-9-billion-from-foreign-banks/2012/01/30/gIQAIRIWdQ_story.html)

Commodities

Over 550,000 agriculture units received financing in 2011 in Venezuela

A total of 554,293 agricultural units received State credits in 2011. That is an increase of 200% compared to 2010, highlighted this Sunday president Hugo Chavez, during his weekly TV and radio show "Alo, Presidente."

President Chavez recalled that governmental program Mission AgroVenezuela, launched on January 25 2011, was the first "grand mission" created to boost the socio-productive development of the country. Almost 700,000 agricultural production units registered, almost all of them have been inspected already.

In reference to financing, the head of State said that "of the whole units that have been included in the financing system, we have granted credits to 81%: 554,293." (AVN, 29-01-2012; http://www.avn.info.ve/contenido/over-550000-agriculture-units-received-financing-2011-venezuela)

PDVSA debt up 40%, even at higher oil prices

Venezuelan oil prices rose in 2011, but it did not translate into much higher oil revenues given the performance of oil exports. Balance of payments figures provided by the Central Bank of Venezuela (BCV) show that with oil prices at U$D 101.04, oil revenues amounted to U$D 89.9 billion, with export volume at 2.51 million barrels per day, according to state-run oil holding Petróleos de Venezuela (PDVSA) as of June 30, 2011. (El Universal, 01-28-2012; http://www.eluniversal.com/economia/120128/even-with-higher-oil-prices-pdvsas-debt-is-up-40)

Venezuela’s export barrel averaged U$D 107.58/bbl., this week, down from U$D 108.04/bbl. posted last week, according to the Ministry of Oil and Mining. The average for the year is U$D 108.23/bbl as compared to an average U$D 101.04/bbl. last year. (Veneconomy, 01-30-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=29190&idc=4)

SIDOR says it will produce 3.7 tons of liquid steel during 2012. Carlos D’Oliveira, President of the state owned company made the announcement in a press release. More in Spanish: (Agencia Venezolana de Noticias, 01-31-2012; http://www.avn.info.ve/contenido/durante-2012-sidor-producirá-37-millones-toneladas-acero-líquido)

Gold production plummets at VENRUS and RUSORO

Both companies have survived due to sales to the Central Bank (BCV). VENRUS did not process a single gram of gold in January 2012, as the La Camorra gold processing plant has been paralyzed since November. If it sells an expected 250 ounces this week it will use up inventories. RUSORO produced 1000 ounces approximately in January 2012, but the reduction is dramatic considering it averaged 6,000 ounces per month production during 2011. More in Spanish: (El Universal, 01-31-2012; http://www.eluniversal.com/economia/120131/en-picada-produccion-aurifera-de-venrus-y-rusoro)

International Trade

Imports from Colombia said to double

Even as the governments of Venezuela and Colombia have not concluded negotiations on a partial trade agreement, ECOANALITIC is projecting imports from Colombia could double this year. A report by the firm says Colombia’s export volume to the local market should total U$D 4.5 billion in 2012, this would double imports in 2011, according to the Venezuela-Colombia Economic Integration Chamber. More in Spanish: (El Universal, 01-31-2012; http://www.eluniversal.com/economia/120131/estiman-que-se-duplicaran-compras-a-colombia)

Byelorussia admits irregularities in Venezuela

Caracas and Minsk traded over U$D 2 billion in 2011, but irregularities have been reports. Byelorussian President, Aleksandr Lukashenko, admitted that "complaints and law violations were brought to light in Venezuela". (El Universal, 01-28-2012; http://www.eluniversal.com/nacional-y-politica/120128/byelorussia-admits-irregularities-in-venezuela)

Politics

Elias Jaua appointed to Agriculture and Lands Ministry

President Hugo Chavez has appointed Vice President Elias Jaua to take command of the Agriculture and Lands Ministry. He said that outgoing minister, Juan Carlos Loyo, will leave his functions to follow a medical treatment.

Also, he said that strategies will be reinforced so as to give more strength to agricultural production. (AVN, 29-01-2012; http://www.avn.info.ve/contenido/elias-jaua-appointed-agriculture-and-lands-ministry)

Mexican Ambassador and wife kidnapped, held 4 hours, assailants not captured

Mexico’s  Ambassador to Venezuela, Carlos Pujalte, and his wife were kidnapped Sunday night and freed Monday morning after a large amount of dollars were paid to captors, according to unofficial sources. The Mexican Embassy reports both the Ambassador and his wife are in good health, has asked the Venezuelan Government for an extensive investigation, and has offered to assist local authorities. The criminals remain at large. More in Spanish: (Tal Cual, 01-31-2012; http://www.talcualdigital.com/index.html)

Venezuela’s new chance

In 13 years of ruling Venezuela, Hugo Chavez has often benefited from his opposition. His first election victory reflected disgust with a complacent and corrupt political order; in his early years, the remnants of that elite played into his hands by boycotting elections while trying to oust him through non-democratic means. In the last presidential election, in 2006, Mr. Chavez faced a respectable but uncharismatic opponent with a history in the old order. He won handily, then forced challenger Manuel Rosales into exile.

Six years later Mr. Chavez’s Venezuela is a wretched mess of inflation, food shortages, rampant drug trafficking and one of the world’s highest murder rates. Yet in the opposition, a promising new political generation has emerged whose leaders look a lot like their counterparts in Brazil, Chile or Mexico. They are populist but pragmatic; internationally schooled yet focused on the problems of the poor; and committed to peaceful change. With another presidential election less than nine months away, they are offering Venezuela a path toward rejoining the democratic world. (The Washington Post, 01-30-2012; http://www.washingtonpost.com/opinions/venezuelas-new-chance/2012/01/25/gIQA2kOxaQ_story.html)

Spanish Government told to stand up for expropriated nationals

Ana Oramas, a congresswoman in the Spanish Parliament has requested an appearance by that nation’s Foreign Ministry in order to provide information on “the lack of physical and legal guarantees suffered by Spanish citizens in Venezuela. The parliamentary delegation from the Canary Islands asked the Government to disclose what it is doing on behalf of Spanish citizens whose property has been expropriated in Venezuela. More in Spanish: (Tal Cual, 01-31-2012; http://www.talcualdigital.com/index.html; El Universal, http://www.eluniversal.com/economia/120131/solicitan-aclarar-expropiaciones-realizadas-a-los-espanoles;  El Nacional; http://www.el-nacional.com/)





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.