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, October 30, 2012

October 30th, 2012

Economics & Finance

Government plans to relax exchange controls, calls for higher tax collection
Planning and Finance Minister Jorge Giordani says exchange controls will remain, but with some modifications since he believes controls are "absolutely necessary" within Venezuela's economy. He also called for fiscal reform, saying domestic taxes are only 12% of that should be collected due to evasion, overpricing exports, manipulating foreign exchange and speculation. More in Spanish: (Últimas Noticias, 10-29-2012;; Infolatam, 10-29-2012)

Giordani: Inflation will be fought with more production
The government is committed to increase production of tomatoes, potatoes, onions and paprika, in order to meet the inflation target for 2013, says Minister of Planning and Finance, Jorge Giordani. He said Venezuela can be self-sufficient in these areas "that lead to higher prices." More in Spanish: (El Mundo, 10-29-2012;

Venezuela's food basket hits USD 427.64 in September
The average price of the standard food basket in Venezuela amounted to VEB 1,881.96 (USD 427.67) in September 2012, according to a report prepared by the National Institute of Statistics (INE).
The figure represents a 2.5% increase compared to August, when the food basket price amounted to VEB 1,835.25 (USD 417.38). (El Universal, 10-29-2012;

Socialist plan calls for creating 450 communes per year
The communal State is under construction. You can feel it in communities. The Government's plan, presented by President Hugo Chávez sets the goal of "consolidating and supporting the people's power during 2013-2019, which will lead to the creation of 3,000 socialist communes, 450 communes per year, based on the demographic characteristics of the country's territorial development axis. (El Universal, 10-29-2012;;

Giordani presents his arguments against devaluating the bolivar
In a recent interview, Planning and Finance Minister Jorge Giordani proposed seven reasons for not devaluating Venezuela's currency, he said: 1) Currency needs are being met by SITME and CADIVI; 2) we have a flourishing economy; 3) we do not need dollar denominated bonds, there is no need to pay 13% abroad; 4) we are applying planned indebtedness since early this year; 5) China provides funding at rates under 13%; 6) many foodstuffs can be produced domestically to abate inflation; 7) as to food imports - we can change consumer preferences. More in Spanish: (El Mundo,


Growing doubts two months after explosion in Amuay refinery
More than 60 days have passed since the explosion resulting from a gas leak in Amuay refinery (northwestern Falcón state). The blast caused more than 40 deaths, six people missing, hundreds of injured, and damages in hundreds of dwellings and stores neighboring the refinery that belongs to state-run oil company Petróleos de Venezuela (Pdvsa) and is part of the Paraguaná Refining Center (CRP). To date, no official findings have been revealed concerning the causes of the gas leak that devastated the surroundings of Amuay refinery, including a detachment of the National Guard, the enterprise Puramin, and several stores, dwellings and buildings. (El Universal, 10-27-2012;

Venezuela claims the EXXON lawsuit undermines trust in international arbitration
Venezuela's defense team at ICSID claimed, "The fact that the plaintiffs are well-known US companies that have managed to manipulate the international arbitration system by pretending to be Dutch companies, undermines the trust that we may feel towards international arbitration". (El Universal, 10-27-2012;

Electricity generation said to be reaching 20,000 MW
Electric Energy Minister Héctor Navarro says electricity generation has risen by almost 5,000 MW since the 2009 crisis and is not reaching 20,000 MW. More in Spanish: (AVN, 10-30-2012;ón-eléctrica-nacional-se-ubica-casi-20000-megavatios;ía-eléctrica-cumple-tres-años-grandes-inversiones-curso)

International Trade

Turkey interested in Venezuelan oil
Turkey's ambassador to Caracas, Muhsin Tugrul Kiliçaslan, says a bilateral Energy Cooperation Agreement has been recently signed between Turkey and Venezuela, under which Venezuela sends oil to Turkey in exchange for the construction of dwellings. "We started the cooperation in the construction sector. It is a win-win situation for both parties. You (Venezuela) need construction and we (Turkey) are very good at it and we require oil," the ambassador remarked. (El Universal, 10-29-2012;

Logistics & Transport

Vessels waiting to enter port increased, government vows to improve operations
The weekend closed with 33 ships waiting at bay to enter the port of Puerto Cabello. Members of the maritime community need to double work shifts in order to speed up paperwork; and the state-run port authority, BOLIPUERTOS, says it will set up joint committees with shippers in order to improve operations in Venezuelan ports, after meeting with shipping line representatives. "New work commissions will be set up in order to tackle and propose mechanisms for further approach between ports and its users, with the purpose of improving port operations and boosting economic development." (El Universal, 10-29-2012;; and more in Spanish: El Carabobeño, 10-29-2012;

A new passengers’ gangway will go into operation at Maiquetía, according to Maiquetía International Airport Institute (IAIM, in Spanish) General Director Luis Gustavo Graterol, who said tests had begun with a Boeing 757-200 plane last October 10. (Veneconomy, 10-29-2012;


Controversial Defense Minister suddenly replaced, nominated for Governor of Trujillo
In a surprise last minute move President Chavez replaced his Defense Minister, General Henry Rangel Silva, who has repeatedly been associated with drug trafficking complicity, and named him a candidate for Governor of the state of Trujillo, one of the poorest and smallest in the nation. Incumbent Governor and government party candidate Hugo Cabezas hurriedly withdrew his nomination. Rangel Silva served as Defense Minister since January this year and has been quickly replaced with Navy Chief, Admiral Diego Molero. More in Spanish: (AVN, 10-30-2012;ávez-designa-almirante-diego-molero-como-nuevo-ministro-para-defensa; El Universal,

Election Board allows pro government candidates to register after process was closed
The United Democratic Opposition is calling for the Elections Board to withdraw a decision to allow 7 pro government gubernatorial candidates, and 101 other citizens to register in different states long after the registration process was closed. Pro Government Board member Hernández has called the decision an exceptional situation with insignificant impact, but opposition representatives say it is illegal and will appeal to the Supreme Court, as well as the Organization of American States and MERCOSUR. (El Universal, 10-29-2012;; and more in Spanish: El Nacional;

Government is willing to evaluate the cases of the 14 political prisoners, says attorney Gonzalo Himiob. He explained the government has asked legal reports indicating which legal benefits correspond to each of the prisoners, under the Constitution and laws. Of the 14, nine already qualify for parole, which has been repeatedly turned down by the courts. (Veneconomy, 10-29-2012;

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