April 03, 2012

Economics & Finance

Foreign corporate non repatriated dividends estimated at U$D 12.3 billion

For three years many foreign companies have not been authorized by the Foreign Exchange Administration Commission to repatriate dividends or profits. At the end of 2007, multinationals were authorized to repatriate U$D 5 billion, but in 2008 were able to repatriate under U$D 2 billion. In 2010 the Currency Board authorized only U$D 100 million for repatriations and by the end of 2011 it had only authorized U$D 200 million for dividends and profits. According to estimates by the economic research firm ECOANALÍTICA, total accumulated dividends pending repatriation currently amount to U$D 12.3 billion. (El Universal, 04-02-2012; http://www.eluniversal.com/economia/120402/companies-weigh-options-to-repatriate-dividends)

Currency outflows estimated at U$D 131.5 billion under Chavez

Based on balance of payments information published by the Central Bank of Venezuela, economist Miguel Angel Santos, believes that throughout the tenure of Hugo Chavez (1999-2011) the outflow of currency, after time-based adjustments, adds up to U$D 131.54 billion. (El Universal, 03-31-2012; http://www.eluniversal.com/economia/120331/outflowing-currency-reaches-usd-1315-billion)

March inflation 0.9 pct, could end 2012 at 20%

Consumer prices rose 0.9% in March, the lowest monthly rate in the last four years, according to President Hugo Chavez. Venezuela had the highest inflation in the Americas last year at 27.6%, and economists had expected it to be even higher in 2012 due to a pre-election spending bonanza by Chavez's government. Economist Jose Gregorio Piña forecasts that inflation in Venezuela could end under 20%, if the trend registered in the last nine months is sustained; but financial consultant Henkel García says the new controlled prices will repress inflation for only a few months. Garcia explained inflation will increase before six months are up as public expenditure will also increase. (Reuters, 03-31-2012; http://www.reuters.com/article/2012/03/31/venezuela-inflation-idUSL2E8EV0ZG20120331; AVN, 04-02-2012; http://www.avn.info.ve/contenido/inflation-venezuela-could-end-under-20-year; Veneconomy; http://www.veneconomy.com/site/index.asp?ids=44&idt=30011&idc=3)

New laws pave the way for more debt

In 2000 the government passed the Law on Financial Administration of the Public Sector to organize fiscal accounts, but since 2009, this law - as well as other legal instruments - has been amended to allow more debt financing and to use non recurring income with no limits. Now the President has been given the green light to request additional debt and use other financial schemes to conduct public loan operations and ask for more credits. (El Universal, 04-02-2012; http://www.eluniversal.com/economia/120402/laws-pave-the-way-for-more-debt)

Commodities

Official 2011 reports reveal huge losses in Guayana region state-owned industries

Consolidated operating losses at aluminum iron, steel and gold state-owned companies in the Guayana region total VEB 7 billion, according to official figures presented by the Chavez Government to the National Assembly. The astounding figure adds on to those revealed last week, which show that over the past three years those companies did not produce or sell almost U$D 20 billion, as a whole. More in Spanish: (Tal Cual, 04-03-2012; http://www.talcualdigital.com/index.html)

PETROCEDEÑO accident under control

According to a statement released by state-run oil holding Petróleos de Venezuela (PDVSA), the situation caused by an accident at the joint venture PETROCEDEÑO in the state of Anzoátegui is now under complete control. "The event occurred this Sunday at area 9 of the joint venture Petrocedeño is now completely under control thanks to the oil industry's Safety and Emergency Management team," stated Pdvsa's communiqué. (El Universal, 04-02-2012; http://www.eluniversal.com/economia/120402/petrocedeno-operational-event-under-control; Fox Business, http://www.foxbusiness.com/news/2012/04/01/explosion-at-venezuelas-petrocedeno-upgrader-kills-worker/)

Tocoma turbines to make first spins in September

The first turbines set up in the Manuel Piar-Tocoma hydro-electric plant, located in Bolívar state, should make their first test spins in early September, said Electric Energy Minister Hector Navarro. Once it is operational, Tocoma is to generate power equivalent to that produced by the Caruachi plant, some 17,000 megawatts. (Veneconomy, 03-30-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=29996&idc=3)

International Trade

State enterprises report delays in ports

Delays and difficulties in Venezuelan ports are not a problem just for private companies. The 2011 Annual Report by the Ministries of Trade, Science and Technology and Industries show that state owned companies also faced important hurdles in importing goods. The nationalized telephone company CANTV reports "slow arrival of equipment and materials is due to delays in import procedures and transfers in storage". More in Spanish: (El Universal, 04-03-2012; http://www.eluniversal.com/economia/120403/empresas-estatales-reportan-trabas-en-puertos-nacionales)

Argentina-Venezuela trade expected to reach U$D $2.800 billion this year

Argentine Ambassador Carlos Alberto Cheppi says trade with Venezuela is expected to grow to U$D 2.8 billion this year, and added that in 2004 total trade was U$D 100 million. The goal of Presidents Cristina Fernandez and Hugo Chavez, of Argentina and Venezuela, is to end 2012 with trade at U$D 3 billion. More in Spanish: (AVN, 04-03-2012; http://www.avn.info.ve/contenido/esperan-que-intercambio-comercial-argentina-venezuela-llegue-2800-millones-este-año)

Trading with Venezuela grows Nicaragua exports

The United States continued to be Nicaragua´s main trading partner, with a total U$D 2155 million, followed by Venezuela with U$D 88.7 million, according to the Nicaraguan Export Center. More in Spanish: (El Nacional04-03-2012; http://www.el-nacional.com/)

Politics

Chavez leaves Venezuela for more radiation therapy in Cuba

President Hugo Chavez left Venezuela today to continue radiation therapy in Cuba as part of treatment for an undisclosed type of cancer, six months before seeking re-election. Chavez, who spoke earlier in a nationwide broadcast from the presidential palace in Caracas, said that this will be the second of five radiation sessions in an attempt to prevent cancerous tumors from returning. He returned to Caracas from his first session in Cuba on March 29. (Bloomberg, 03-31-2012; http://www.bloomberg.com/news/2012-03-31/chavez-to-return-to-cuba-today-to-continue-radiation-therapy-1-.html; El Universal, 04-02-2012; http://www.eluniversal.com/nacional-y-politica/120402/chavez-back-to-cuba; Latin American Herald Tribune, 04-01-2012; http://www.laht.com/article.asp?ArticleId=486403&CategoryId=10717; The Washington Post, http://www.washingtonpost.com/world/the_americas/venzuealan-president-chavez-returning-to-cuba-for-cancer-treatment/2012/03/31/gIQAt7VdnS_story.html)

WIKILEAKS: Cuban intelligence sustains Chavez regime

According to WIKILEAKS reports quoted in Miami's "Nuevo Herald", Cuban spies with direct access to President Hugo Chavez have a key role in sustaining his regime by providing constant reports on opposition movements, rumors in barracks and any sign of potential betrayal in revolutionary ranks. The reports - which include State Department cables and analysis by private intelligence firm STRATFOR, show Chavez' high dependence on Cuban intelligence services. More in Spanish: (El Universal, 04-03-2012; http://www.eluniversal.com/nacional-y-politica/120403/wikileaks-espias-cubanos-sostienen-el-regimen-de-chavez)