Economics &
Finance
MERCOSUR entry translates into more imports,
more government weight in the economy
Industry Minister Ricardo Menéndez has stressed that one
of the advantages of joining the South American trading area was to have
cheaper food imports, at zero tariffs; but Ismael Pérez Vigil, Executive
President of the National Industrial Council (CONINDUSTRIA) warns that joining
"21st Century Socialism"
and the MERCOSUR will increase strengthen an economy based on imports, which is
what Venezuelan industrialists fear the. Perez Vigil added that it will also
increase the government's weight within the economy. Minister Menéndez said
MERCOSUR entry: "will bring tariffs down to zero and, certainly, make
those goods cheaper."He noted that 52% of Venezuela's purchases from
Mercosur Member States are tied to foodstuff (El Universal, 07-05-2012; http://www.eluniversal.com/economia/120705/mercosur-means-higher-venezuelan-state-weight-on-economy
and http://www.eluniversal.com/economia/120704/venezuelan-govt-underscores-cheaper-imports-through-mercosur)
Questions raised on Venezuela
joining MERCOSUR
More than six years after Hugo Chavez said that joining MERCOSUR
was Venezuela's destiny, the presidents of Argentina, Brazil and Uruguay have
decided that his oil-rich nation will finally become the fifth full member of
the common market. Venezuela holds the world's largest crude oil reserves and
the move potentially links the region's top energy and agricultural suppliers. But
the decision at last week's summit to welcome Venezuela into Mercosur after the
leaders temporarily suspended Paraguay has brought questions about the move's
timing and legality. Such decisions must be unanimous under Mercosur rules, and
Paraguay's senate has long objected to Venezuela's membership. Uruguay's
President José Mujica has taken "full
responsibility" for allowing Venezuela's entry after his Foreign
Minister criticized the manner in which the decision was taken. (Fox News,
07-04-2012; http://www.foxnews.com/world/2012/07/04/questions-raised-on-venezuela-joining-mercosur/
and more in Spanish: El Universal; http://www.eluniversal.com/economia/120706/uruguay-comprometido-con-el-petroleo-venezolano)
ECONOMÉTRICA alerts of quick increase in foreign debt
service
The Government's aggressive use
of foreign debt since 2007 will translate into a higher exposure by the
national and state owned Petróleos de Venezuela (PDVSA) over the next five
years, says the ECONOMÉTRICA analysis firm. Their report adds that there is a worrisome
increase in the rate of debt service payments to hard currency income for oil
exports. More in Spanish: (El Universal, 07-06-2012; http://www.eluniversal.com/economia/120706/alertan-sobre-veloz-crecimiento-del-servicio-de-deuda-en-divisas)
Year-end inflation may close at 20%
Eudomar Tovar, First Vice President at the
Central Bank believes inflation could close the year between 20-22%, under
budget projections. He based his statement on the Consumer Price Index for
June, saying "there is a significant
decrease in the trend to accelerated inflationary increase...which indicates to
us we will close the year below the budgeted target...in this sense it is
necessary to continue working on productivity". More in Spanish:
(Últimas Noticias, 07-06-2012; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/inflacion-podria-cerrar-el-ano-en-20-.aspx)
Commodities
PDVSA sends 2.3% of production to
MERCOSUR
After seven years of trying to diversify export
destinations, PDVSA has raised remittances to China, but not to the four
nations within the MERCOSUR trade bloc. Exports to Argentina, Brazil, Paraguay
and Uruguay were 2.3% of total volume last year, with a tendency to diminish as
Argentina and Brazil spur exploration in order to reduce imports. More in
Spanish: (El Nacional, 07-06-2012; http://www.el-nacional.com/)
Paraguay opens bid to replace PDVSA
as a fuel source
A decision by Venezuela to paralyze fuel shipments to
Paraguay has led the latter to seek other sources, according to PETROPAR
President Sergio Escobar. More in Spanish: (El Universal, 07-06-2012; http://www.eluniversal.com/economia/120706/paraguay-abre-licitacion-para-reemplazar-a-pdvsa-como-proveedor)
Maintenance shutdown at PETROPIAR
PETROPIAR, a heavy crude oil upgrader jointly operated by
state-run oil holding Petróleos de Venezuela (PDVSA) and US CHEVRON, will stop
operating for 46 days for maintenance and also to expand its processing
capacity by 17% to 210,000 barrels per day (bpd). PDVSA promised that the downtime scheduled
from July 8 through August 23 would not impact production. (El Universal, 07-04-2012; http://www.eluniversal.com/economia/120704/maintenance-shutdown-at-petropiar)
Venezuelan Construction Chamber (CVC, after its initials in Spanish)
reports there are 107,000 ongoing housing construction developments paralyzed
at by the end of this year’s first quarter, up 18.8% from the same period in
2011 (80,000 housing units). CVC Chief Gilbert Dao pointed out that in
addition, some 90,000 projects (up 12.5% from the 80,000 in the first quarter
of 2011) which have not even begun work. (Veneconomy,
07-04-2012)
International Trade
Belarus to develop a space station
in Venezuela
Belarus is to take part in the construction of a space
station for satellite launching in Aragua state (central-northern Venezuela), says
Venezuelan Ambassador to Minsk Américo Díaz Núñez, adding that the space
station will be just one of the projects to be jointly executed by Venezuela,
China and Belarus. "The satellites
are currently manufactured in China, but an agreement has been reached to
assemble them in Venezuela," he added. (El Universal, 07-04-2012; http://www.eluniversal.com/nacional-y-politica/120704/belarus-takes-part-in-construction-of-space-station-in-venezuela; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=532397&CategoryId=10717)
And also a thermo-electric plant
China, Belarus and Venezuela will build a thermo-electric plant in the
Santa Inés industrial zone in Barinas state, a project estimated at U$D 900
million. It will be financed by China while Belarus offers the technology. It
is expected to be ready in three years. (Veneconomy,
07-04-2012)
Logistics
& Transport
Delays at customs have increased in
the last two weeks, said
CONSECOMERCIO Customs Committee chief Cipriana Ramos. She pointed out an
increase of imports has resulted in a collapse of communication systems and
that the merchandise could be subjected to up to five inspections in light of
the number of agencies and requirements at local ports. (Veneconomy,
07-04-2012)
Politics
Global leftists close ranks with Chavez
120 leftist parties from all over the world and 400
international delegates within the so-called Sao Paulo Forum are meeting for
the first time in Caracas, in support of President Hugo Chávez for his third reelection.
Their master document reads: "US
meddling and influence can be felt in the Bolivarian Republic of Venezuela
through several attempts at influencing the Venezuelan election, promoting
undemocratic clues ahead of the election of October 2012. For the Venezuelan
and hemispheric left, the reelection of Commander Hugo Chávez is of the essence,"
they admonished. (El Universal,
07-04-2012; http://www.eluniversal.com/nacional-y-politica/120704/world-leftwing-closes-ranks-with-venezuelan-leader;
AVN, 07-04-2012; http://www.avn.info.ve/contenido/sao-paulo-forum-give-proposals-face-world-capitalist-crisis)
Paraguay accuses Chavez of meddling,
withdraws envoy
Paraguay's new government ordered home its ambassador in Venezuela on
Wednesday after accusing President Hugo Chavez's government of meddling in an
attempt avert the impeachment of the leftist Paraguayan president's last month.
The swift impeachment of Paraguay's former President Fernando Lugo drew strong
criticism from left-leaning governments in South America. Chavez ordered
Venezuela's ambassador to leave Paraguay and halted oil shipments in protest. (Reuters, 07-04-2012; http://www.reuters.com/article/2012/07/04/us-paraguay-venezuela-idUSBRE8630R520120704; El Universal; http://www.eluniversal.com/nacional-y-politica/120704/paraguay-recalls-ambassador-to-venezuela)
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