February 21th, 2012

Economics & Finance

Government expands funding sources

In order to obtain added revenue, President Hugo Chavez does not just pressure state-run oil Petroleos de Venezuela (PDVSA) and the Internal Revenue Service (SENIAT): Public banks and state-run companies must also render extra funds in order to meet expanding public spending. At a council of ministers held last Wednesday, Chavez showed a wide array of funding sources. Here claimed to have "a little book" for Finance Minister Jorge Giordani, showing availability of funds and a breakdown of the “Socialist Efficiency Fund”, a facility designed to manage earnings from public companies. (El Universal, 02-18-2012; http://www.eluniversal.com/economia/120218/venezuelan-government-expands-funding-sources)

Commodities

Venezuela ships fuel to war-torn Syria

The government of Venezuela's Hugo Chavez is emerging as a rare supplier of diesel to Syria, potentially undermining Western sanctions and helping the Syrian government fuel its military in the middle of a bloody crackdown on civilian protests. A cargo of diesel, which can be used to fuel army tanks or as heating fuel, was expected to arrive at Syria's Mediterranean port of Banias this week, according to two traders and shipping data. The cargo could be worth up to $50 million. (Reuters, 02-18-2012; http://www.reuters.com/article/2012/02/18/us-venezuela-syria-idUSTRE81F2AU20120218; The Washington Post, http://www.washingtonpost.com/business/chavez-says-venezuela-free-to-sell-oil-to-any-nations-it-wishes-amid-reports-of-sales-to-syria/2012/02/16/gIQAd7UZIR_story.html)

Crude oil cleanup Monagas river said to be 95% completed

Cleanup work on the crude oil spill into the Guarapiche river in the state of Monagas, has been 95% completed, according to the executive director for environment at PDVSA, Ramiro Ramirez. As for other areas hit by the accident which took place at the Jusepin Operational Complex, Ramirez said that the state company has installed permanent monitor points in the area and that intense cleansing work continues. (AVN, 02-19-2012; http://www.avn.info.ve/node/100083)

Government names temporary board at steelmaker SIDETUR

The Government has named a temporary state- run board at steelmaker Siderurgica del Turbio, S.A. after the government seized the company’s assets in 2010, according to a resolution by the Industry Ministry published today in the Official Gazette. SIDETUR’s management had continued to operate the company since the seizure as it waited to conclude compensation talks with the government. Ramon Ernesto Perdomo was named as the head of the board, according to the resolution. (Bloomberg, 02-17-2012; http://www.bloomberg.com/news/2012-02-17/venezuela-names-temporary-board-at-steelmaker-sidetur-1-.html)

Venezuelan oil rises to U$D110.82

Venezuela's weekly oil basket rose to U$D 110.82 as oil prices rose in international markets on concerns over attacks on Iran's nuclear facilities and on good growth numbers from the US. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending February 17 rose to U$D110.82 from the previous week's U$D108.39. (Latin American Herald Tribune, 02-17-2012; http://www.laht.com/article.asp?ArticleId=471323&CategoryId=10717)

Politics

Chavez says he’ll undergo another operation in coming days, Venezuelan bonds rally

President Hugo Chavez said he’ll undergo another operation as part of his battle with cancer in the “coming days” after tests in Cuba showed a “wound” in the same area where a tumor was removed in June. Chavez, 57, said he traveled to Cuba on Feb. 18 for a routine check up and that tests showed a lesion of about 2 centimeters in diameter. He said he’s still evaluating where to have the operation and that doctors will remove the lesion to see if it’s malignant or not. Venezuelan bonds rallied on the prospect of a change in government and policies that have fueled the region’s highest inflation rate and dried up investment amid nationalizations. The yield on Venezuela’s benchmark 9.25% bonds maturing in 2027 fell 23 basis points, or 0.23 percentage point, to 11.66% today at 2:45 p.m. in New York, according to data compiled by Bloomberg. The bond’s price rose 1.38 cents to 82.88 cents on the dollar. (Business Week, 02-21-2012; http://www.businessweek.com/news/2012-02-21/chavez-says-he-ll-undergo-another-operation-in-coming-days.html)

Hugo Chavez faces an uprising at the ballot box

On Feb. 12, Henrique Capriles Radonski, a 39-year-old Venezuelan state governor, won a primary election to become the opposition’s candidate against Hugo Chavez in October’s presidential election. He won 1.8 million of an astonishing 3 million votes — double the turnout predicted by most analysts. The next day, Capriles, a devout Catholic, was greeted by a commentary on the government-run Web site of Venezuelan National Radio titled “The Enemy Is Zionism.” Capriles, it explained, is the descendant of Jews. “In order to understand the interests embodied” by Capriles, the commentary declared, “it’s important to know what is Zionism, the Israeli ideology that he sneakily represents.. . . It is, without doubt, an ideology of terror, of the most putrefied sentiments of humanity; its supposedly patriotic impetus is based in greed.” And so on. Thus began the latest — and what will surely be the ugliest — political campaign by Chavez, a ruler who has served as a friend in need to Moammar Gaddafi, Bashar al-Assad and Mahmoud Ahmadinejad — and who now is facing his own homegrown democratic uprising. But Venezuela’s spring differs from those of Libya, Syria or Iran: Instead of pouring into the streets, Venezuelans — fed up with the chaos and violence of Chavez’s 13 years in power — are marching to the polls and trying to restore the country’s crippled and compromised institutions. (Washington Post, 02-17-2012; http://www.washingtonpost.com/opinions/venezuelas-hugo-chavez-faces-an-uprising-at-the-ballot-box/2012/02/17/gIQAfApFOR_story.html)