Economics &
Finance
2013 Budget to be presented on
Monday
The 2013 Budget bill will be presented to the National
Assembly for debate and approval, says the president of the Commission on
Finance and Economic Development, Ricardo Sanguino. The Special Law on
Indebtedness for the fiscal year 2013, which provides resources required for
productive and social development projects, will also enter into consideration.
Once the documents are submitted they will go to the Finance Commission. (AVN, 10-14-2012; http://www.avn.info.ve/contenido/2013-budget-be-tabled-monday-executive; El Universal, 10-15-2012; http://www.eluniversal.com/economia/121015/venezuelas-2013-budget-bases-on-socialist-model)
International reserves far from
optimum level
International reserves remain below the optimum level (U$D
26.8 billion) established by national authorities. On October 10, reserves stood
at U$D 25 billion. (El Universal,
10-15-2012; http://www.eluniversal.com/economia/121015/venezuelas-international-reserves-far-from-optimal-level)
Analysts foresee exchange rate
adjustment in 2013
Reelected President Hugo Chávez will face economic
imbalances. Analysts believe that devaluation, price increases of controlled
goods, and a possible slowdown may appear after the December 16 gubernatorial
elections. Alejandro Grisanti, an analyst at British investment firm Barclays
Capital, explains that over the past two years, the Venezuelan Government has
kept the official exchange rate frozen at VEB 4.30 per US dollar, but with
public expenditure exceeding income by 12% of GDP, this rate would be hard to sustain
in 2013. Luis Vicente León, director of THE DATANALISIS polling firm estimates
that despite an announced radicalization of Hugo Chávez's revolution, more
pragmatic economic measures are expected. He forecasts a devaluation of
approximately 60% between January and March next year. (El Universal, 10-15-2012; http://www.eluniversal.com/economia/121013/analysts-forecast-exchange-rate-adjustment-in-2013)
After Chavez re-election, Venezuela faces
economic reckoning
One measure of investor confidence in Venezuela, the
price of its bonds, took a hit Monday as they fell 5% to 7%, said Russell
Dallen, a managing partner of the brokerage firm Caracas Capital Markets.
(Latin American Herald Tribune, 10-12-2012; http://www.laht.com/article.asp?ArticleId=607239&CategoryId=10717)
Private companies depend on Government
partnerships
Establishing joint ventures and partnerships with the
Government will be key for many private companies to continue operating in the
country over the next six years, according to the Decree Law Regulating new
forms of association with the State, published on June 15, 2012. Companies integrated
with State agencies and companies will have better access to inputs, government
procurement, tax exemptions and preferential financing plans. More in Spanish: (El
Nacional, 10-15-2012; http://www.el-nacional.com/)
Special funds have provided U$D
132.9 billion to government programs since 2005.
According to Finance and Planning Minister Jorge Giordani over the past
7 years funds from the National Development Fund (FONDEN), the China-Venezuela
Fund and the Large Scale and Long Range Fund have provided funding for 688 projects.
The Minister said this funding structure is unrestrained by budgetary
constraints. More in Spanish: (El Universal, 10-15-2012; http://www.eluniversal.com/economia/121015/fondos-paralelos-han-dado-a-los-planes-oficiales-1329-millardos)
Commodities
Oil price rebounds to U$D 102.12
The Venezuelan oil basket closed the week at U$D 102.12
per barrel, U$D 1.41 higher than the previous week, according to the Ministry for
Petroleum and Mining. (El Universal, 10-12-2012;
http://www.eluniversal.com/economia/121012/venezuelan-oil-rebounds-to-usd-10212)
Crude oil shipments to the US above
965,000 bpd in September
Crude oil shipments from Venezuela to the United States rose to an
average of 965,000 barrels per day (bpd) in September 2012, according to the US
Department of Energy. This is lower than that reported August 2012, when
shipments to the US were 1.02 million bpd., but it is a 22% jump over levels
recorded in September 2011, when Venezuela shipped only some 790,000 bdp to the
US. (El Universal, 10-12-2012; http://www.eluniversal.com/economia/121012/venezuelan-crude-oil-shipments-to-the-us-over-965000-bpd-in-september)
Logistics
& Transport
More snags in port operations as 23
vessels remain at bay in Puerto Cabello
Shipping operations have slowed further here as authorities add an
underwater inspection to shops before allowing offloaded ships to depart.
Meanwhile, 23 vessels remained at bay in Puerto Cabello, 7 of them bearing
foodstuff, such as corn, wheat, soy and rice. More in Spanish: (El Universal,
10-15-2012; http://www.eluniversal.com/economia/121015/cuestionan-nuevas-trabas-en-las-operaciones-portuarias;
Notitarde; http://www.notitarde.com/La-Costa/Permanecen-23-buques-fondeados-en-la-bahía/2012/10/13/139029)
Politics
Chavez shuffles cabinet, then tweets
about it
President Hugo Chavez shuffled his cabinet on Saturday
then announced the changes from his Twitter account, days after winning a
re-election bid that could extend his rule to nearly two decades. Chavez on
Sunday beat opposition challenger Henrique Capriles by a resounding 11 percentage
points, giving him a third six-year term to continue his self-styled socialist
revolution. He named General Nestor
Reverol, who has led Venezuela's anti-narcotics agency, as the new interior
minister. That post is key to addressing the violent crime that is the top
complaint of Venezuelans of all social classes. (Reuters, 10-13-2012; http://www.reuters.com/article/2012/10/13/venezuela-chavez-idUSL1E8LD3EG20121013;
El Universal, 10-15-2012; http://www.eluniversal.com/nacional-y-politica/121015/chavez-appoints-six-ministers-via-twitter-exacts-efficiency; The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuelas-chavez-swears-in-vice-president-6-other-ministers-in-post-election-shake-up/2012/10/13/637cf102-15a6-11e2-9a39-1f5a7f6fe945_story.html;
Fox News, http://www.foxnews.com/world/2012/10/13/venezuela-chavez-swears-in-vice-president-6-other-ministers-in-post-election/)
Popular controllership, new
technologies for Agriculture Ministry
Boosting people's controllership and bringing science and
technology in Venezuelan fields will be crucial tasks in the administration of
Juan Carlos Loyo in his return to the Ministry of Agriculture and Lands.
Last Saturday, Venezuelan President Hugo Chavez sworn-in
Juan Carlos Loyo, who had previously headed the Agriculture Ministry.
After informing the appointment, President Chavez
demanded efficiency, for which Loyo said he would assume the commitment to
consolidate Venezuela as an agricultural power. (AVN, 10-15-2012; http://www.avn.info.ve/contenido/popular-controllership-new-technologies-agriculture-ministry)
Once a partner of Colombian
guerrillas, Venezuela now helps in peace talks
When peace negotiations between Colombia’s government and
Marxist rebels begin this week, a country once accused of helping the
guerrillas in their war against the government will be on hand: Venezuela,
whose president, Hugo Chavez, has had an affinity with the insurgents. (The
Washington Post, 10-14-2012; http://www.washingtonpost.com/world/the_americas/once-a-partner-of-colombian-guerrillas-venezuela-now-helps-in-peace-talks/2012/10/13/ac8b23ac-155e-11e2-9a39-1f5a7f6fe945_story.html)
Venezuela sinks under a big, incompetent
government
"The Misery of
Venezuela" editorial and Mary Anastasia O'Grady's op-ed "Chavismo Wins, Venezuela Loses" both
highlight the waning of two rights critical to liberty: the right to control
one's own property and the right to freedom of contract. What Hugo Chávez has
done to Venezuela provides a sad current events example of a lesson repeatedly
taught but not long remembered. (The Wall Street Journal 10-14-2012; http://online.wsj.com/article/SB10000872396390443294904578048823671963266.html?KEYWORDS=Venezuela)
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