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, May 29, 2012

May 29, 2012

Economics & Finance

Liquidity to increase uncontrolled through October 7th elections, oil dependence increases
The market here considers public expenditures will continue to increase circulating currency supply in order to create a general feeling of wellbeing. Monetary liquidity has been increasing rapidly, particularly because of public sector spending, in order to speed economic growth. According to the Central Bank, to date there are VBF 165.125 billion more than last year, after the numbers rose 52.8% in mid May. This is 20 points above last year. The bad news is that, instead of diversifying, Venezuela is deeper into the renter model which means scarce formal employment, overdependence on oil and the inability to create sustained prosperity. Official numbers point to deindustrialization, with the country exporting oil only. Oil income promotes massive imports. More in Spanish: (El Mundo, 05-29-2012,, El Universal, 05-26-2012;

Falling oil prices turn on alarms
Economist Luis Oliveros says that if the average price for Venezuela's oil basket falls below U$D 80 a barrel there will be severe fiscal problems because the economy has become untenable with an income below U$D 100 a barrel. He said: "I predict that the short term is more likely to bring prices down instead of up." More in Spanish: (El Mundo, 05-28-2012;

To report barriers on the private sector: FEDECAMARAS President Jorge Botti is scheduled to speak at the 101st International Labor Conference of the International Organization of Employers (IOE) to be held in Geneva starting May 30th. More in Spanish: (Tal Cual, 05-28-2012;

Chavez says Venezuela has 30 million hectares of arable land and that one of the priorities of the Bolivarian revolution makes it a true power in the continent through production of rice, corn and soybean crops. More in Spanish: (AVN, 05-28-2012;áreas-cultivables)


PDVSA sees no cash for 43% of its exports
Petroleos de Venezuela (PDVSA), the bastion of "bolivarian" diplomacy and the economic pillar for the Venezuelan Government, has slowly seen its cash flow dry up due to unorthodox trade practices that compromise thousands of barrels of crude oil and associated products, according to a REUTERS report. The state oil company produces around 3 million BPD, including liquid natural gas, and it is estimated 2.4 million BPD are exported. But official operations reports for 2011 prove that PDVSA did not receive a single cash dollar on 43% of its sales, a slice that is up considerably from 32% in 2009. Barter agreements for medical services, cattle, and even nutmeg are drying up cash for the largest enterprise in the nation, which is besieged by increased debt, backed up payments to suppliers and contractors, and delays in productive projects. More in Spanish: (El Universal, 05-29-2012; and Ultimas Noticias;

PDVSA budget insuffient to meet collective bargaining obligations
A hurdle facing upcoming oil industry collective bargaining discussions is a budget deficit within the state oil company, PDVSA: Personnel expenditures were estimated at 43.7 billion VBF (around U$D 10.1 billion) before negotiations began. Preliminary figures now show that the proposed agreement presented by the United Oil and Gas Workers Federation mean an increase in personnel expenditures of around 35-40%, which would force PDVSA to seek an additional 15.2 billion VBF. More in Spanish: (El Nacional, 05-29-2012;

Analyst estimates that price of gold is to keep a high floor
Economist Angel García Banchs says problems and uncertainties facing the global economy, particularly the debt crisis in Europe, have hit the prices of commodities, which have declined in the past weeks. Gold is one of these commodities and, in the case of Venezuela, it accounts for 73% of international reserves held by the Central Bank of Venezuela (BCV). As a result, when the price of gold falls, Venezuelan international reserves tumble as well. International reserves are used by the government to pay imports and debt obligations. Therefore, when the price of gold sinks, Venezuela s capacity to meet those commitments dwindles. However, he says that despite the uncertain world economic outlook the price of commodities will not see a sharp decline in the next few months. "Drops in the price of gold and oil are limited. (These commodities) have a high price floor". (El Universal, 05-28-2012;

PDVSA tanker has repairs in Bahamas after incident
A tanker operated by Venezuela's state oil company PDVSA damaged its hull hitting a sandbank in the Caribbean and is undergoing emergency repairs at a shipyard in the Bahamas, maritime sources said. The sources said no oil spill had been caused by the accident involving the Aframax-class tanker Yare, which was delivered to a subsidiary of PDVSA by shipbuilders in Japan a year ago. (Reuters, 05-28-2012;

International Trade

FTA between Colombia and the United States also helps Venezuela
The North American Free Trade Agreement between Colombia and the United States indirectly favors Venezuela due to improvements in the economic atmosphere in the neighboring country, says Moisés Bittan, former President of the Colombo-Venezuelan Chamber of Commerce. More in Spanish: (El Mundo, 05-28-2012;

Container freight prices increase 20-30% starting June 1st, according to destination. The announcement was made by the board of the Puerto Cabello Association of Cargo Container Operators (ASOTRACONTAINER), which explained spare part prices and general maintenance costs were behind the move. More in Spanish: (Notitarde, 05-29-2012;; El Carabobeño;


Cabello says a Chavez nomination could be presented by Internet to Election Board
Candidates for the presidential elections in Venezuela, scheduled for October 7th 2012, can register starting June 1st through 11th, according to Tania D'Amelio a Director at the National Election Board (CNE). National Assembly and PSUV President Diosdado Cabello has stirred up further controversy by saying President Chavez could be nominated via Internet, while avoiding a specific date for the enrollment of his nomination. More in Spanish: (El Universal, 05-28-2012;; AVN, 05-28-2012;

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.

Friday, May 25, 2012

May 25th, 2012

Economics & Finance

Consumption soars 5.7% and US dollar shortage intensifies
After a huge dose of public spending, including wage hikes and increased subsidies, the Government has once again elevated private consumption, which has soared to 5.7% in the first quarter 2012. The problem is that higher demand forces authorities to increase and speed up the authorizations of US dollars within an economy that is highly dependent on imported products and finished goods. In order to meet demand, imports have climbed 48.5%. (El Universal, 05-23-2012;

GDP numbers point to deteriorated manufacturing sector
Figures for the first quarter of 2012 released by the Central Bank (BCV) confirm that the manufacturing sector is "quite deteriorated," according to Carlos Larrazábal, head of the National Industry Federation (CONINDUSTRIA). He said statistics for over 300 industries are very discouraging as they show growth of only 0.7% during the first quarter this year, as opposed a reported overall growth by 5.6% year to date. Food and agribusiness dropped by 6.9% and has been falling for four consecutive quarters. Overall Central Bank information shows that agriculture, industry, mining and oil have dropped 10 percentage points within national GDP in the 1998-2011 periods, during the Chavez Administration. They steadily fell from 42.4% to 32.1% over all these years, with the exception of 2003. (El Universal, 05-23-2012;; and more in Spanish: El Nacional;; Tal Cual;; El Universal, 05-24-2012;

Private construction has dropped 10.6% over nine consecutive quarters, said Venezuelan Construction Chamber chief Gilbert Dao. The Central Bank (BCV) itself admits the few supplies obtained are being absorbed by official housing programs. (Veneconomy, 05-21-2012;

Private sector holds over U$D 143 billion abroad, despite exchange controls
Central Bank figures on balance of payments reveal that between the first quarter 2003 and the first quarter this year private sector deposits abroad have grown 248% from U$D 41.268 billion to U$D 143.638 billion, despite exchange controls. One of the means used to send capital abroad is the instrument devised by the Government itself to obtain financing and reduce liquidity domestically: these are the dollar denominated bonds issued by PDVSA and the Finance Ministry, which companies and individuals purchase and sell abroad in order to obtain hard currency. More in Spanish: (El Universal, 05-25-2012;

Draft antitrust bill sets more ways to expropriate
The National Assembly is speeding up an Antitrust Law which aims to establish that goods used to produce essential products could be declared of public utility, and it provides for additional mechanisms for expropriation. (El Universal, 05-23-2012;

Reserves lower due to drop in gold prices
As gold prices continue to drop so do reserves held by Venezuela's Central Bank, which holds 11,76 million troy ounces as 73% of its international reserves. More in Spanish: (El Universal, 05-24-2012;


PDVSA loses U$D 21 billion in  China financing schemes
The recent amendment to the financing agreement between China and Venezuela, approved Tuesday by the National Assembly, calls for PDVSA to increase crude oil shipments to China to 530,000 BPD (barrels per day) at discounted prices - which means the national oil company will receive U$D 21 billion less per year for exports. Venezuela has two agreements with China, both paid for in oil. One is the "Great Volume Fund", a U$D 20 billion loan by China, of which 10 billion yuan are exclusively earmarked for imports from China. This credit is repaid by exporting 300,000 BPD. The new amendment raised the figure to 530,000 BPD. More in Spanish: (El Nacional, 05-25-2012;

Crude oil prices under U$D 90 for the first time in six months due to an increase in US reserves to their highest level since 1990, due mainly to fears on Greece's possible exit from the euro and the situation with Iran. More in Spanish: (El Universal, 05-24-2012;

PDVSA royalty contribution down 76% in January, according to the Central Bank monthly report. Analysts claim that one of the elements that bears upon this calculation is the oil barrel reference price used in royalty transfers. More in Spanish: (El Universal, 05-24-2012;

International Trade

Loopholes detected  in Venezuela-Colombia trade agreement
Asdrubal Oliveros, of the ECOANALITICA research firm says the recent trade agreement by Venezuela and Colombia is "significant progress" in bilateral relations, but, that it continues to have "loopholes" in matters concerning transportation, investment protection and dispute resolution that were previously covered by the Andean Community. More in Spanish: (El Universal, 05-24-2012;

585 trade operations have been made using the Sucre (Single System of Regional Compensation, in Spanish) for U$D 208 million in the first four months of this year, according to Central Bank (BCV) first Vice President and chief of the Sucre Regional Monetary Council Eudomar Tovar today. (Veneconomy, 05-22-2012;

Logistics & Transport

Port system "collapsing" due to massive imports
Carlos Larrazábal, head of the National Industry Federation, says the situation at Venezuelan ports has become "extremely serious" since the Government took over control and launched a large scale import policy. "The problem is due to the larger volume of imports. We imported U$D 13 billion during the first quarter and are headed toward U$D 50 billion in imports, an unheard of figure for an economy this size". State agencies such as CASA and PDVAL use Puerto Cabello - the nation's main port - for permanent storage. Refrigerated containers bringing in food from South American nations have been stored at Cartagena (Colombia), Colón (Panamá) and Kingston (Jamaica). More in Spanish: (El Universal, 05-24-2012;; El Nacional;

Serious delays reported at Puerto Cabello
31 vessels were reported in the Puerto Cabello harbor this Monday, bearing bulk, containers and assorted cargo. 23 ships remained in the bay, waiting to dock, according to sources close to the Puerto Cabello Port Authority. The situation is critical as Puerto Cabello is not equipped to manage the overload and Carabobo State Legislator Neidy Rosal says it takes up to two weeks to offload cargo that should normally be processed in 24 to 72 hours, mainly due to electricity outages which encumber all procedures. More in Spanish: (El Carabobeño, 05-22-2012;;; Notitarde;;)

Freightage to Venezuela 60% more expensive
Antonio Landaeta, President of FEDECAMARAS in Carabobo State says that due to the saturation at Puerto Cabello freightage to Venezuela costs 60% more than shipping to countries like Colombia or Chile. He says higher costs are due to delays in offloading cargo. 22 of the ships awaiting to discharge cargo at Puerto Cabello are grain carriers and their offloading is slow since there are only three or four docks equipped to service grain shipments that take longer to offload than containers. More in Spanish: (Tal Cual, 05-24-2012; and El Universal, 05-23-2012;

Multinational companies holding Venezuela inventories in Panama
According to Panamanian business sources, warehouses in the Colón Free Zone in Panama are increasingly storing more merchandise destined to Venezuela due to decisions by multinational companies to lower inventories held locally here due to the risk of expropriation. This seems to be particularly the case with pharmaceutical and personal care products. More in Spanish: (El Nacional, 05-24-2012;


Chavez reappears, leads cabinet meeting
President Hugo Chavez reappeared on Tuesday in a live television broadcast, the first time he has been seen in public view since returning from cancer treatment in Cuba almost two weeks ago. Chavez spoke in a strong voice and did not appear tired during the broadcast, which lasted more than two hours. He made no reference to his health, of which few details are known. (Reuters, 05-22-2012;; The Washington Post,

Colombian and Venezuelan armies militarize the border
Colombia and Venezuela have militarized both sides of the border in order to persecute members of the Colombian Revolutionary Armed Forces (FARC) who last Monday killed 12 Colombian troops. The Colombia-Venezuela Northwest border was taken over by security forces from both countries in an attempt to lay siege to the members of the FARC Front 59 that is based in Venezuela, according to Colombian authorities. (El Universal, 05-23-2012;

Venezuela sent Syria 35,000 tons of diesel oil
A Venezuelan ship loaded with 35,000 tons of diesel oil has arrived to port in Syria, according to that nation's Oil Minister Sufian Alao. Syrians have been facing fuel scarcities for months due to international sanctions that have led Western oil companies to interrupt supplies to this country. More in Spanish: (El Mundo, 05-24-2012,

....and rejects US State Department human rights report
A Department of State reports points out Cuba and Venezuela as countries where respect for human rights concerns the United States. The "Human Rights Practices 2011" report says the Chavez regime has continued using the judiciary to "intimidate and persecute political, union and business leaders, and civil society". The Chavez government called the report an "unacceptable interference into internal affairs".  More in Spanish: (AVN, 05-25-2012;  and El Universal;

Romney calls Chavez, Castro a "great danger"
Republican candidate Mitt Romney terms the Castro regime in Cuba and Venezuelan President Hugo Chavez a "great danger" to the United States and the world and says the United States should pay more attention to Latin America. According to the GOP presidential candidate Chavez and Castro "are a great danger to the United States and to people around the world... we must promote our values, free enterprise, democracy". More in Spanish: (El Universal, 05-24-2012;

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.

Tuesday, May 22, 2012

May 22th, 2012

Economics & Finance

Liquid reserves estimated at U$D 1.6 billion
Liquid reserves at the Central Bank - reserves immediately available for imports and debt repayment - are shrinking rapidly. After a reduction of 17% year to date, total national reserves now stand at U$D 25.495 billion, the lowest point since 2007. However, since most of that amount is in gold bars, a report by the SINTESIS FINANCIERA research firm shows that disposable or liquid reserves are only U$D 1.6 billion which "would cover only ten days of imports". More in Spanish: (El Universal, 05-22-2012;

Public debt grows uncontrolled, Central Bank director says it must be reined in
The Finance Ministry reports that domestic public debt closed 2011 at U$D 34.690 billion, a jump of 62.2% over U$D 26.838 billion at the close of 2010. Foreign debt came to U$D 39.909 billion, that is 7.8% over U$D 37.35 billion the year before. Armando León, a director at Venezuela´s Central Bank says "At this time the debt is manageable but last year's growth pattern should not be replicated, we should not resemble other countries that are in crisis". León estimates imports will grow 35% this year and considers a drop in 6.9% food production during the first quarter 2012 to be "alarming". More in Spanish: (Tal Cual, 05-22-2102; and El Universal;

Agricultural imports rose 375%
Official figures on the National Statistics Institute web page show agricultural, vegetable and animal imports were above U$D 10 billion during the first quarter 2012, which is 375% above the same period last year. Beef and other animal products have had the most significant growth. More in Spanish: (El Nacional, 05-22-2012;

Government says foreign deposits increase to U$D 40 billion
Balance of payments information released by the Central Bank (BCV) at the end of the first quarter shows that government financial authorities have cut authorizations of US dollars for private sector imports, while increasing foreign deposits and public debt. The government raised foreign deposits by U$D 4.13 billion to U$D 40.97 billion.
The BCV claimed overseas accounts have swollen due to "to increased deposits held by the National Development Fund (FONDEN), the investment funds backed by Chinese loans, and the deposits held by monetary authorities and state-run companies." (El Universal, 05-21-2012;

Non-oil exports fall 8% in the first quarter
Venezuela would be the poorest country in the hemisphere -positions currently held by Haiti- were it not for oil. In the first quarter 2012, non-oil exports amounted to U$D 1.04 billion. This is 8% lower than that in the first quarter of 2011, and it would cover only 7.9% of the imports necessary to meet everyday demand of other kinds of products.
The official numbers highlight the failure of the government policy to reduce dependence on oil. (El Universal, 05-21-2012;


US Department of Energy projects Venezuela's 2012 oil revenue at U$D 63 billion
The pace of Venezuelan oil income for 2012 is similar to that recorded last year, according to estimates by the US Energy Information Administration, and data released by the Organization of the Petroleum Exporting Countries (OPEC). In a report released last week, the US Department of Energy said that between January and April 2011, Venezuela received U$D 21 billion from oil exports. If this trend continues unchanged, Venezuelan oil revenues would amount to USD 63 billion by the end of 2012. The report also shows that between January and April Venezuela s oil revenue per capita would amount to U$D 764. (El Universal, 05-21-2012;

ECOPETROL's profit 85% more than PDVSA's in 2011, Colombia displaces Venezuela in world attention
Colombia´s state owned firm ECOPETROL had profits 85% more than Venezuela's PDVSA in 2011, according to a comparative study by ECOANALITICA research firm. Although PDVSA's 2011 income was U$D 124.7 billion versus ECOPETROL'S U$D 30.4 billion, profits showed reverse results: PDVSA made only U$D 4.4 billion due to fund transfers to the government, and ECOPETROL made a net U$D 8.3 billion. Concurrently, Colombia is displacing Venezuela in the attention of world forums and markets because, according to expert Roger Tissot: "Venezuela is the more attractive country for its oil production potential and has the largest heavy oil reserves in the world, such as the Orinoco belt, but has had the worst economic performance in the region by high inflation, the high unemployment and policies to attract capital away". More in Spanish: (El Nacional, 05-22-2012;

Colombia says will increase natgas flow to Venezuela
Colombia said on Friday it would send 50% more natural gas this year to neighboring Venezuela, which has yet to start producing the fuel commercially despite huge reserves. Colombia currently exports about 200 million cubic feet (mcf) of natural gas per day to Venezuela, but Energy Minister Mauricio Cardenas said that would rise to 300 mcf in September. "The supply of Colombian gas to Venezuela is going to increase, as will the flow of Venezuelan fuel to Colombia," Cardenas said during a meeting of energy officials in Caracas. (Reuters, 05-18-2012;; Fox Business,

Venezuela sends third diesel shipment to Syria
Venezuela has sent a third shipment of diesel to Syria, the energy minister said on Friday, underscoring President Hugo Chavez's support of the Middle East country despite its intensified crackdown on protesters. Earlier this year, Venezuela's government said it had sent at least two shipments of fuel to Syria, potentially undermining Western sanctions as a rare supplier to the increasingly isolated regime of President Bashar al-Assad. A lawmaker from Chavez's socialist party said in March that another shipment was being prepared and Energy Minister Rafael Ramirez confirmed that it had been sent. (Reuters, 05-18-2012;


Chavez sets no date for registering candidacy
President Hugo Chavez placed a telephone call to a United Socialist Party meeting during which he said no date has yet been set to present his candidacy for reelection to the National Elections Board:"We have not set a date yet, it will be between the 1st and 11th of June". He had previously said he will no longer act as "a runaway horse", due to health problems, but said he will take over the reins of his reelection campaign after the 1st of July. "I have to accept it. I confess to the country that unfortunately I will no longer be the runaway horse you used to see around. Now, I am on a diet, work eight hours a day, and ask God to give me the strength of the buffalo rather than that of the horse." (El Universal, 05-19-2012;; Reuters,; Latin American Herald Tribune, and more in Spanish: (Tal Cual;

...and says he will not respond to Uribe's accusations
During the same telephone conversation, Chavez said he will not respond to former Colombian President Álvaro Uribe Velez who accused him of supporting Colombia´s FARC guerrillas; but he did accuse Uribe of endangering regional peace toward the end of his administration. More in Spanish: (El Universal, 05-22-2012;

Road connecting Venezuela and Brazil closed for 96 hours
Trunk Road 10 that connects Venezuela with Brazil was blocked for 96 hours by a demonstration staged by indigenous miners of the Ikabarú community, in the Gran Sabana municipality, south the state of Bolívar. The blockade started on Thursday morning and demonstrators are still waiting for a response from Venezuelan authorities. Demonstrators are rejecting alleged abuses by National Guard troops who burnt a camp, equipments and attacked miners. The road blockade near the Wará Bridge, a few yards from the entrance of Santa Elena de Uairén town, restricted car traffic on the international road. (El Universal, 05-21-2012;

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.

Friday, May 18, 2012

May 18th, 2012

Economics & Finance

Venezuela´s economy grew 5.6% in the first quarter 2012, according to a joint announcement by Jorge Giordani, Minister for Planning and Finance, and Central Bank President Nelson Merentes. Giordani says this shows growth for six consecutive semesters and the highest level in the last 15 quarter and stressed that the growth estimate in this year's budget was 5%. Petroleum industry growth was pegged at 2.2%. More in Spanish: (AVN, 05-18-2012;ía-venezolana-creció-56-primer-trimestre-2012;ómico-actividad-petrolera-se-ubicó-25; El Universal,;

Imports increased 48,5% during Q1 2012, according to a Central Bank report, up to U$D 13.190 billion from U$D 8.883 billion in Q1 2011. More in Spanish: (AVN, 05-18-2012;

Private construction drops for nine quarters in a row
Construction in Venezuela grew by 29.6% in Q1 2012 but this was entirely due to public investment, as private activity continued to recede. Central Bank figures show private sector construction contracted by 10.6% and has been dropping for nine consecutive quarters. More in Spanish (El Universal, 05-18-2012;

Nation's debts increased 22.5% in the first quarter of 2012
Venezuela's debts as a nation increased by 22.5% and closed Q1 2012 at U$D 93.3 billion. The increase is due to new loans from China, new bonds issued by the Government and PDVSA, renegotiations with expropriated companies and market variations. More in  Spanish: (El Nacional, 05-18-2012;

International reserves at lowest point this year
International reserves reached their lowest point this year and closed at U$D 25.651 according to Central Bank official figures. The drop in reserves has increased by constant transfers to the National Development Fund (FONDEN). More in Spanish: (El Mundo, 05-18-2012,

VEB 5.30 per U$ dollar exchange rate gains ground
Financial authorities have set a new strategy: On the one hand, they will increase the amount of imports made with the VEB 5.30 per US dollar exchange rate used by the System for Foreign Currency Denominated Securities Transactions (SITME), a mechanism created by the Central Bank for companies that do not receive US dollars through the Foreign Exchange Board (CADIVI). On the other hand, they have cut more highly subsidized imports channeled through CADIVI at an exchange rate of VEB 4.30 per US dollar.  As transactions through SITME gain ground there is a gradual devaluation of the Venezuelan currency. Official data show that CADIVI authorized U$D 4.9 billion for imports, the lowest amount in the last six years and a 9% decline compared to the same period in 2011. (El Universal, 05-16-2012;

Over-budget loan appropriations soar 103.5% in a year
The government estimated FY2012 at VEB 297.8 billion (U$D 69.25 billion), but this amount has not been enough to meet the financial requirements of government agencies and state-run companies, thus leading the government to request additional loans. The National Assembly has approved extraordinary appropriations amounting to U$D 6.63 billion - at the official exchange rate of VEB 4.30 per US dollar - to date this year. This exceeds by 103.5% appropriations authorized for the same period in 2011, which were U$D 3.25 billion. (El Universal, 05-16-2012;

Small and medium business endangered
The impact of new regulations imposed by the Government on Small and Medium Enterprises (SMEs) could result in closure or disinvestment of these enterprises, according to an alert issued by the National Council of Trade and Services (CONSECOMERCIO). The new Labor Law (LOT), along with recent minimum wage increase and prices regulated by the SUNDECOP seriously compromise the future of SMEs operating in trade and services throughout the country. More in Spanish: (Tal Cual, 05-16-2012;

Overall business climate index for Latin America recovers, except for Venezuela
According to the quarterly study by Brazil's Getulio Vargas Foundation and the University of Munich, which consulted 149 experts from 18 countries, the Latin American Economic Climate Index was up to 5.2 points in April, its best level since July 2011. Venezuela went from 4.5 to 3.4 points. (Veneconomy, 05-16-2012;; El Universal, 05-16-2012;


Iron, steel and aluminum production falling
Mining has dropped 3.2% in Q1 2012, within an apparently growing and expanding economy, as compared to last year. In his report on the economy, Planning and Finance Minister Jorge Giordani admitted a drop in production in iron, steel and aluminum industries concentrated in the Guayana region. More in Spanish: (El Universal, 05-18-2012;

Aluminum industry paralyzed
For the first time in over three decades, almost all of the domestic industry in Guyana aluminum processing is paralyzed, with some companies in "technical closure" having sent their workers home and others trying to "stretch" inventory - and all because of the almost total lack of aluminum due to the crisis VENALUM and ALCASA. More in Spanish: (Tal Cual; 05-16-2012;

Stalled mining in Guyana
Canadian, Russian, Iranian and Chinese have landed in the southern state of Bolivar interested in gold mining, metal largest southern municipalities of the entity and of which live 90% of the population.
Two months after the expiry of the extension of the Order of Strength, and Value Range number 8413, which restricts the production and sale of gold to the State, the industry remains stagnant with no prospect of recovery. Rusoro Mining companies such as Promotora Minera de Guayana, are administered by the state after the expiration Minerven extension to form joint ventures. More in Spanish: (El Nacional, 05-16-2012;

International Trade

Trade with Colombia rises by 18%
The exchange of goods and services between Colombia and Venezuela grew 18% in the first quarter, compared with the same period in 2011. Luis Alberto Russián, chief executive of the Chamber of Venezuelan-Colombian Integration, said that bilateral trade closed the first 3 months at U$D 564 million: U$D 449 million in Colombian imports and U$D 115 million in Venezuelan exports, mostly fuel from the El Vigía plant in Mérida state. The trade balance for the country shows a deficit of U$D 334 million. More in Spanish: (El Nacional, 05-17-2012; and Ultimas Noticias, 05-17-2012;,6-millones-de-litros-de-combus.aspx)


In Venezuela, top diplomat steps into the void while cancer forces lower profile for Chavez
After nearly a year of cancer treatment that has forced President Hugo Chavez to step back from the spotlight, a burly former bus driver with a dark mustache and affable smile is emerging more than ever as the president’s stand-in. In recent weeks, Foreign Minister Nicolas Maduro has led news conferences, touted a new labor law and criticized the U.S. government with gusto. He even rallied a crowd of supporters while wearing a track suit emblazoned with the yellow, blue and red of Venezuela’s flag, just like one Chavez sometimes wears. (The Washington Post, 05-16-2012;

Brazil is following Chavez illness closely, according to a statement by Brazilian Foreign Minister Brasil Antonio Patriota, who wished the Venezuelan President a rapid recovery. More in Spanish: (Tal Cual, 05-18-2012;

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.