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.

Friday, March 23, 2012

March 23, 2012

Economics & Finance

Industries required to register
The Ministry of Industries has now established an operation aimed at recording all individuals and companies involved with manufacturing. The information will then be a part of the Industry and Commerce Integrated Authority (SIGESIC), which in turn will establish requirements and procedures to be met in registering all persons or corporations, public or private, that carry out any activity that involves adding value, sale of goods, services, including not for profit institutions. It has been announced that this will provide reliable information for establishing procedures and policies aimed at promoting industrial development. More in Spanish: (Tal Cual, 03-22-2012;

New Labor Law will eliminate outsourcing
The new Labor Law (LOT) aims at eliminating outsourcing and protecting the social rights of workers, according to Foreign Minister Nicolas Maduro, who also coordinates the presidential commission that is working on the project. The commission met with workers and members of the National Assembly and reviewed key issues such as the new system of social benefits, salaries and wages, working hours and new working relationships. More in Spanish: (AVN, 03-22-2012;

61.07% of food sold by the Government was imported
A report by the Ministry for Nutrition shows purchases for the basic basket at 4,004,867, of which 3,484,367 tons were distributed directly to the MERCAL network and third parties, mainly the private sector and 520,500 tons went to the strategic reserve. The report noted that of the 3,484,367 tons of food distributed through official networks and private trading, 61.07% was purchased abroad by CASA. Another 461,323 tons were negotiated under oil compensation agreements with other countries, exchanging oil for food. More in Spanish: (El Nacional, 03-21-2012;

BANDES debt to China is 8.6 times equity
2011 results for the Economic and Social Development Bank, published by the Ministry for Planning and Finance, show that total debt with banks abroad, basically with BDCarrojan, is now 8.6 times equity, which is above the limits set by the law that establishes the bank. More in Spanish: (El Nacional, 03-21-2012;

Ricardo Hausmann: "Venezuela is prostrated and trying to provide artificial oxygen for the economy"
The economist and professor at Harvard University criticizes the disregard for private property, high inflation, lack of interest in children not attending school, lack of teachers, the collapse of PDVSA and the heavy indebtedness of an economy whose mismanagement "is unforgivable." More in Spanish: (El Nacional, 03-21-2012;

Devaluation expected for 2013
Asdrúbal Oliveros,  the director of ECOANALÍTICA, says a "wait and see" mode is in place because the next 3 years will be very complex, particularly for the private sector which must be prepared to operate in a difficult and changing environment. He says the private sector must take advantage of the increase in spending and consumption, and should take special care of inventories, particularly those for which it is more difficult to obtain foreign currency, such as food and medicines. More in Spanish: (Tal Cual;; El Universal,


Government claims oil output rose to 2.99 mln bpd in 2011
Venezuela's efforts to boost oil production have apparently gained traction as the country's energy ministry reported 2011 production at 2.99 million barrels per day, up 5% from the year before. The socialist administration of President Hugo Chavez wants to increase production to 3.50 million bpd by the end of this year, with much of the new output coming from the huge Orinoco extra heavy crude belt. While production from the country's traditional western oil heartland around the city of Maracaibo has continued to decline, output from fields in the east and in the central Orinoco region has been growing. The ministry's report said crude exports averaged 2.47 million bpd in 2011, up from 2.42 million the year before. (Reuters, 03-21-2012;

PDVSA's receivable accounts up 44% in 2011
Crude oil sales via international agreements, as well as sales of fuel to governmental bodies, have had an impact on Venezuelan state-run oil company PDVSA's finances. Preliminary numbers on the management of the oil industry -published in PDVSA's 2011 Report - show that accounts receivable rose 44% in a year, from U$D 20 billion in 2010 to U$D 28.9 billion in 2011. In the report, PDVSA explains that "this increase in accounts receivable was influenced by the increase in the price of the Venezuelan oil basket, and the debts contracted by CORPOELEC, PEQUIVEN and CVG on sale of liquid and gaseous fuels." (El Universal, 03-22-2012;

Government negotiating asset compensation with Canada-based miner
The government is negotiating a deal to compensate Canada-based RUSORO Mining for the takeover of its gold-mine assets, Oil and Mines Minister Rafael Ramirez said. “We’re in talks with the RUSORO company ... which, as in all the nationalization processes, happens because the government compensates companies for their assets ... but we have to reach agreement on the price,” said Ramirez. (Latin American Herald Tribune, 03-21-2012;


Presidential elections have been confirmed for October 7, according to an announcement by National Election Board Chair Tibisay Lucena. Regional elections will be held on December 16th. More in Spanish: Tal Cual, 03-23-2012;

Chavez, Capriles tied ahead of election, poll shows
President Hugo Chavez is locked in a statistical tie with his rival Henrique Capriles Radonski seven months before presidential elections, according to a poll by Consultores 21. Chavez was favored by 46% of those surveyed compared with 45% for Capriles, said Saul Cabrera, vice president of the Caracas-based pollster. Another 9% of the 2,000 people polled between March 3 and 13 were undecided, Cabrera said today in an interview. Chavez, who is battling cancer, had 47.3% support in a December poll by Consultores 21. That was before Capriles won a primary to select a single opposition candidate to oppose Chavez in the October vote and before the president underwent a third cancer operation in less than a year. The poll had a margin of error of plus or minus 2.3 percentage points, Cabrera said. Should Chavez be unfit to run in the October elections, Capriles would beat all four of the government officials best positioned to succeed the president, the poll shows. (Bloomberg, 03-22-2012;

Chavez denounces plot to kill rival in repeat of 2006 vote
President Hugo Chavez said he had evidence of a plot to kill the opposition presidential candidate Henrique Capriles Radonski, without giving details. Before the 2006 election, Chavez also said security forces had broken up a plot by “radical fascists” to assassinate opposition candidate Manuel Rosales.  In a television interview Capriles replied: “Yesterday someone on television was saying that they had information that someone was preparing an assassination attempt against me,” “Quite honestly, I’ll tell you one doesn’t know if that’s a warning or a threat.” On his Twitter account, Capriles added; “When you’re in an important position such as leading a country, you need to speak the language of peace,” Capriles said. “It’s not about offering security to me, you need to offer security to all the people you serve.” (Bloomberg, 03-20-2012;

The White House wishes President Chávez "good health"
"We have no details about his health, except that he is back in Venezuela, but we wish him well," said US State Department Acting Assistant Secretary for Public Affairs Mike Hammer, when asked about unofficial reports published in various countries regarding the health condition of Venezuelan President Hugo Rafael Chávez. (El Universal, 03-22-2012;

Petitions from 4 countries affect Venezuelan atlantic coast
The Commission on the Limits of Continental Shelf of the United Nations (CLCS for its acronym in English) will evaluate applications for marine extension affecting the Atlantic coast from Venezuelan Guyana, Barbados and Trinidad and Tobago. Furthermore, having delivered its recommendation in the case of Suriname.
Of these four applications, Venezuela has established its position only if the presentations of Barbados and Guyana recently. More in Spanish: (El Universal, 03-21-2012;

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