November 13th, 2012

Economics & Finance

Devaluation is considered imminent, by different economists and market analysts even as government economic officials claim the foreign exchange type will remain at Bs.4.30:$ in 2013. Ecoanalítica representative Asdrúbal Oliveros considers it necessary to transfer around 15% of what Cadivi delivers to the private sector, while keeping the Transaction with Foreign Currency Securities System (SITME) in place. (Veneconomy, 11-11-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32764&idc=2)

Government domestic debt increased 64% in 10 months

As foreign indebtedness remains the same as last year at U$D 43.5 billion, the Government's domestic indebtedness climbed from U$D 35.8 billion to U$D 58.7 billion over the past 10 months. Government debt is 28% of GDP, but when adds in PDVSA's debt the share rises to 40% of GDP. More in Spanish: (El Universal, 11-13-2012; http://www.eluniversal.com/economia/121113/la-deuda-interna-del-gobierno-aumento-64-en-10-meses)

Domestic production lags skyrocketing sales

Venezuela has had high inflation over the past three decades as sales outstrip domestic production. Now inflation has slowed down due to vast imports. Data from the Central Bank of Venezuela (BCV) for the first seven months of the year show retail sales grew 8.71% over the same period in 2011. (El Universal, 11-12-2012; http://www.eluniversal.com/economia/121112/venezuelan-domestic-production-lags-behind-skyrocketing-sales)

Commodities

SEC report shows Venezuela's national iron and steel industry advanced only 17% in six years

According to information supplied by the Venezuelan government to the US Securities and Exchange Commission (SEC) in the annual management report, by September 2012, the project on the National Steel and Iron Social Production Enterprise "was completed approximately by 17%" over the past six years. Based on the (El Universal, 11-10-2012; http://www.eluniversal.com/economia/121110/venezuelan-national-iron-and-steel-industry-has-advanced-17-in-six-yea)

PDVSA's Isla Refinery in Curacao began the process to re-initiate its catalytic cracking unit after four months, said the refinery’s union chief Ángelo Meier on Monday. The 335,000 barrels per day (bpd) capacity facility has operated at half-speed this year due to frequent failures in water, vapor and electricity services. (Veneconomy, 11-12-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=32774&idc=4)

Venezuela's oil basket shrank to U$D 96.38 per barrel this week, slipping U$D 1.18, according to the Ministry of Petroleum and Mining. "This week, crude oil prices were impacted by persistent uncertainty over the global economy and its effects on oil demand, higher commercial inventories in the United States, and a stronger US dollar versus the euro," the ministry said. (El Universal, 11-09-2012; http://www.eluniversal.com/economia/121109/oil-basket-shrinks-usd-118-in-a-week)

US may end oil imports by 2017

According to estimates by the London based International Energy Agency in its World Energy Outlook 2012, the US may lead the world in oil production - above Saudi Arabia - as it accesses light oil deposits through new technology and reaches 11 million BPD of crude oil production by 2017, a development which could seriously impact markets. More in Spanish: (El Mundo, 11-13-2012; http://www.elmundo.com.ve/noticias/economia/energia/eeuu-entrara-por-la-puerta-grande-de-la-produccion.aspx)

Government takes over Anglo American Nickel concession

Venezuela will take control of a nickel concession operated by Anglo American Plc (AAL) when it expires tomorrow, said an official from the Oil and Mines Ministry. The official briefed on the matter, who isn’t authorized to speak publicly, responded to questions today by e-mail. Concessions and permits for the London-based company’s Minera Loma de Niquel expire tomorrow, Claudia D’Amato, a Sao Paulo-based spokeswoman for Anglo American, said today in a telephone interview. The operation accounted for 13,400 metric tons of Anglo’s 29,100 tons of nickel production last year. (Bloomberg, 11-09-2012; http://www.bloomberg.com/news/2012-11-09/venezuela-to-take-over-anglo-american-nickel-concession-1-.html)

Guayana region has ceased aluminum processing as SURAL, the national aluminum processing plant - with close to 350 employees - has remained paralyzed for the past 4 months and partially inactive during all of 2012. Other private plants that add value into the aluminum process are in a similar situation. PIANMECA is closed, and WESTALCA is operating at 8% capacity and has no future contracts. All of it is a result of the crisis at state owned VENALUM and ALCASA which has finally impacted private companies as well. More in Spanish: (Tal Cual, 11-13-2012; http://www.talcualdigital.com/index.html)

Logistics & Transport

Foods on vessels at bay could be lost

Approximately 14 ships loaded with food risk losses as they have to wait for up to two weeks in Buenos Aires for dock allocation. Neidy Rosal, deputy to the Legislative Council Carabobo state, noting that while the national government not performs the necessary equipment in the primary zone, will worsen this situation and in turn would increase the risk of loss of goods. More in Spanish: (Notitarde, 11-12-2012; http://www.notitarde.com/La-Costa/Alimentos-cargados-en-buques-en-bahía-podrían-perderse-/2012/11/12/146026; El Carabobeño, http://www.el-carabobeno.com/impreso/articulo/38647/neidy-rosa-buques-con-materias--primas-para-hallacas-permanecen-en-baha)

Politics

Chavez will not attend  the XXIIth Iberamerican Summit, says Spain's Foreign Minister José Manuel García-Margallo, who confirmed that the Venezuelan president will not be at the to be held next Friday and Saturday in Cádiz, Spain. More in Spanish: (El Nacional, 11-13-2012; http://www.el-nacional.com/)

Maduro says relations with the US can be based on respect and equality

Vice President and Foreign Minister Nicolás Maduro says the government hopes that relations with the US can be based on respect, equal rights and non intervention into internal affairs. He says that as long as the US complies strictly there will be no problem naming new ambassadors. More in Spanish: (AVN, 11-13-2012; http://www.avn.info.ve/contenido/vicepresidente-aspiramos-que-relaciones-entre-ee-uu-y-venezuela-se-basen-respeto-e-igualda; El Universal, 11-13-2012; http://www.eluniversal.com/internacional/121113/maduro-estima-posible-que-venezuela-y-eeuu-tengan-embajadores)

Debate rages over Chavez's socialist plan

Three weeks after Chavez scolded his Cabinet for not starting the plan for "socialist communes" the debate rages on amid gubernatorial races scheduled for December 16th. While government representatives claim Chavez received a new mandate in the October 7th presidential elections, the opposition says the initiative aims at eliminating regional authority. Opposition leader Henrique Capriles Radonski, running for reelection as Governor of Miranda, says "the Constitution cannot be clearer: It says Venezuela is a federal and decentralized state, which is not someone's whim. Our main charter calls for municipalities and state governments and anything that goes against this is unconstitutional." His opponent, former Vice President Elías Jaua says that on October 7th the people also "elected the Second Socialist plan". In the meantime, National Assembly President Diosdado Cabello has denied any intention of eliminating municipalities and state government. More in Spanish: (El Universal, 11-13-2012; http://www.eluniversal.com/nacional-y-politica/121113/psuv-la-consulta-no-es-para-eliminar-la-constitucion)

Venezuela was elected to the UN Human Rights Council 2013-2016, by 154 out of 194 votes.

Brazil and Argentina were also elected to replace three slots left vacant on the Council by Cuba, Mexico and Uruguay starting January 1st. More in Spanish: (El Universal, 11-13-2012; http://www.eluniversal.com/nacional-y-politica/121113/venezuela-ingresa-al-consejo-de-derechos-humanos)

Venezuela, the bane of human rights

New members have been selected for the United Nations Human Rights Council, the top-level group for the protection and promotion of human rights. Its members have not always been paragons of respect for human dignity. Those leaving the 47-member council at the end of this year include China, Cuba and Russia. But up for a seat this time is a truly unqualified candidate, Venezuela. Its strongman president, Hugo Chávez, has brazenly trampled human rights in his quest for power and political control. A new member must get at least a majority, or 97 votes, from the General Assembly. Since the council was created in 2006, the assembly has never voted down a candidate, according to Freedom House. Some candidates, such as Sudan, have dropped their bids in the face of opposition. But the assembly selected Moammar Gaddafi’s Libya. (The Washington Post, 11-11-2012; http://www.washingtonpost.com/opinions/venezuela-the-bane-of-human-rights/2012/11/11/7f2ccfae-2abd-11e2-b4e0-346287b7e56c_story.html; El Universal, 11-09-2012; http://www.eluniversal.com/nacional-y-politica/121109/hrw-criticizes-venezuelas-candidacy-to-un-human-rights-council and http://www.eluniversal.com/nacional-y-politica/121112/venezuela-enters-the-un-commission-on-human-rights; Fox News, 11-12-2012; http://www.foxnews.com/world/2012/11/12/us-in-tough-contest-for-seat-on-human-rights-council/)