Economics &
Finance
The 2013 Budget Bill was passed by the
National Assembly, with government votes only, as the opposition called the VEB
396.4 billion budget insufficient, “arbitrary
and lacking any planning.” The 2013 Special Indebtedness Bill (VEB 116.6
billion) also passed with the dissenting votes by the opposition. (Veneconomy,
12-05-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=33108&idc=2)
Venezuelan bonds rally as Chavez silence grows
Venezuelan
bonds surged the most in two years, sending yields to the lowest level since
February 2008, on speculation President Hugo Chavez’s health is too fragile for
him to complete his third term. The yield on Venezuela’s benchmark 9.25%
securities due in 2027 fell 33 basis points, or 0.33 percentage point, to 9.18%
at 3:12 p.m. in Caracas, according to data compiled by Bloomberg. Yields have
plunged 1.74 percentage points since mid-November. The bond’s price rose 2.62
cents today to 100.50 cents on the dollar, the biggest one-day rally since June
2010. Chavez said Nov. 1 that he planned to attend a MERCOSUR trade summit in
Brasilia. Failure to appear would heighten speculation that the president’s
health is worse than he has let on and increase the possibility he won’t
complete a third six- year term set to begin in January, said Emilio Garcia, a
bond trader at BancTrust & Co. in Caracas. (Bloomberg, 12-05-2012; http://www.bloomberg.com/news/2012-12-06/venezuela-bonds-rally-on-speculation-chavez-sick-caracas-mover.html;
http://www.bloomberg.com/news/2012-12-05/chavez-s-longest-silence-since-cancer-fuels-health-rumors.html)
60% of oil revenues go to imports, according
to university professor and economist Luis Oliveros, who says, "60% has been directed to imports, 12% to
different funds such as the FONDEN National Development Fund, and 2% to the
international reserves, while capital outflows were 26%." (El Universal, 12-06-2012; http://www.eluniversal.com/economia/121206/venezuela-directs-60-of-oil-revenues-to-imports)
Dollar exchange rate should be around VEB 7.68:$ to be
competitive, says CONINDUSTRIA President Carlos Larrazábal, upon
presenting its Third Quarter 2012 Survey of 300 industrialists polled.
Respondents noted a 47% drop in production, and warned that if there are no
changes in public policies for 2013, growth will not go over 3%. (Veneconomy, 12-04-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=33094&idc=2;
El Universal, 12-05-2012; http://www.eluniversal.com/economia/121205/competitive-forex-rate-needed-to-boost-industries)
Venezuela is off the international investment radar screens
A study on international investment trends by the World
Bank's Multilateral Investment Guarantee Agency (MIGA) shows that most
companies point to China, India, Brazil and Russia, plus a list of 29 nations
that included México, Colombia, Perú and Argentina; but not Venezuela. More in Spanish: (El Universal, 12-07-2012; http://www.eluniversal.com/economia/121207/venezuela-permanece-fuera-del-radar-de-la-inversion-extranjera)
Commodities
S&P lowers Venezuela’s
Siderurgica del Turbio to ‘CCC-’
Standard & Poor’s Ratings Services lowered its long-term corporate
credit and senior unsecured ratings on Siderurgica del Turbio, S.A. (SIDETUR)
to ‘CCC-’ from ‘B-’. In October 2012, the government of the Bolivarian Republic
of Venezuela (B+/Stable/B) took control of SIDETUR’s operating assets, but it
hasn’t announced the amount or time of the compensation. The government also
required the transfer of all funds in the company’s local currency bank
accounts. The U.S. dollar denominated reserve account associated with SIDETUR’s
notes due 2016 was not affected. (Latin American Herald Tribune, 12-05-2012; http://www.laht.com/article.asp?ArticleId=653999&CategoryId=10717)
International Trade
Venezuela will apply MERCOSUR
nomenclature
Tovar Nunes, spokesman of the Brazilian Foreign Ministry
announced that Venezuela will immediately apply 28% of MERCOSUR's common tariff
in order to accelerate incorporation into the organization. It aims to achieve
full adaptation by 2016. (El Universal, 12-06-2012; http://www.eluniversal.com/economia/121206/mercosur-discusses-speedy-adaptation-of-venezuela-to-the-bloc;
AVN, 12-06-2012; http://www.avn.info.ve/contenido/mercosur-debate-bolivia039s-inclusion-full-member
and more in Spanish: AVN; http://www.avn.info.ve/contenido/venezuela-acelera-paso-mercosur-adopci%C3%B3n-nomenclatura; El Universal, http://www.eluniversal.com/internacional/121207/mercosur-acelera-incorporacion-plena-de-venezuela-al-bloque; El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/cifras-clave-de-mercosur-con-el-ingreso-de-venezue.aspx)
Argentina´s bilateral trade with
Venezuela has grown 30%
in one year, says Argentina's Ambassador to Venezuela Carlos Alberto Cheppi,
who adds that total Argentine exports to Venezuela should close this year at
U$D 2.3 billion, while Venezuelan exports to Argentina would be around U$D 1.5
billion, and most of these are fuel. More in Spanish: (AVN, 12-07-2012; http://www.avn.info.ve/contenido/venezuela-y-argentina-aumentan-intercambio-comercial-m%C3%A1s-30)
Venezuela to create joint venture
with SAMSUNG
Venezuela and South Korean multinational SAMSUNG have
agreed to a joint venture to manufacture telecommunications components, says
Science and Technology Minister Ricardo Menendez. The Venezuelan government,
which will own 51% of the company, considers the deal a “strategic alliance” to boost Venezuelan exports of electronic parts
to its partners in MERCOSUR, the minister said. (Latin American Herald Tribune,
12-05-2012; http://www.laht.com/article.asp?ArticleId=653991&CategoryId=10717)
Venezuela approves terms on U$D 417
million loans, AVN Reports
Venezuelan lawmakers approved the conditions of U$D 417 million of loans
from Banco Bilbao Vizcaya Argentaria SA (BBVA) and Japan Bank for International
Cooperation to finance transportation projects and a steel plant, the state
news agency AVN said today on its website. BBVA will lend Venezuela 162 million
euros (U$D 211 million) for a steel plant, while Japan Bank for International
Cooperation will lend 17 million yens (U$D 206 million) to finance construction
of warehouses for Caracas-Cua train line, according to the state news agency. (Bloomberg,
12-06-2012; http://www.bloomberg.com/news/2012-12-06/venezuela-approves-terms-on-417-million-loans-avn-reports.html)
Logistics
& Transport
Non-commercial air operations
restricted in Maiquetía
The Ministry of Air and Aquatic Transportation, through
the National Civil Aeronautics Institute (INAC), has confirmed an
administrative decision whereby "air
operations at Simón Bolívar International Airport of Maiquetía shall be
restricted immediately for general aviation aircraft from 6 a.m. to 10 a.m. and
from 4 p.m. to 7 p.m." (El Universal, 12-05-2012; http://www.eluniversal.com/economia/121205/non-commercial-air-operations-restricted-in-maiquetia)
Politics
Chavez arrives back after cancer
treatment in Cuba
President Hugo Chavez arrived back in Caracas in the
early hours of the morning Friday, according to a video released two hours
later by state television, but not carried live. Chavez, accompanied by his
daughter Maria, was received by Vice-President Nicolas Maduro, Diosdado
Cabello, President of the National Assembly, and a very small group of officials. In a sort of date stamp, he
recalled that yesterday, December 6, marked 14 years of the start of the
Bolivarian revolution. He said that would be echoed in the December 16 governor
elections, 8 days from now. (Latin American Herald Tribune, 12-07-2012 http://www.laht.com/article.asp?ArticleId=654187&CategoryId=10717)
Uncertainty increases due to
Chavez's absence from MERCOSUR
After days awaiting confirmation, Brazil's Foreign
Ministry finally announced that President Chavez would not attend the ongoing
MERCOSUR Presidential Summit in Brasilia, which he had said he would - "God willing" - attend in a
statement on November 1st. Nicolás Maduro, Vice President and Foreign Minister,
also failed to attend the meeting; Venezuela's delegation was led by Vice
Minister Verónica Guerrero. Former Minister Teodoro Petkoff, a political
analyst and journalist, says the President's "health is pretty deteriorated", and "he is now really taking his treatment seriously". He says it
is noteworthy that Chavez "is no
longer doing things he enjoys: campaigning, supporting his candidates,
attending summits..." (Infolatam, 12-07-2012; http://www.infolatam.com/2012/12/07/la-forzada-ausencia-de-chavez-en-mercosur-reabre-incertidumbre-en-venezuela/)
Diosdado Cabello: The power behind
the throne
Former Lieutenant Diosdado Cabello, President of the
National Assembly and of the government's United Socialist Party has taken the
front during the campaign for state governors, as his power within the party
and public exposure grows exponentially. During the absence of President
Chavez, Cabello is at the center of political debate, increasing rumors that
point to him as the man destined to succeed Chavez. His priority during these
weeks has been to position himself as the guardian of "chavista" legacies and values at
stake during campaigns speeches in seven states, a role previously assigned to
the President himself. Governor Henrique
Capriles Radonski, running for reelection in Miranda, centers his fire on
Cabello, calling his opponent, former Vice President Elías Jaua, a "Cabello puppet". Cabello's
positioning has created tension within party lines, with local leaders accusing
Cabello of acting in an authoritarian and excluding manner. Freiman Páez, a
dissident regional leader, describes the former coup participant as "the Stalin of Venezuelan politics".
(Infolatam,
12-07-2012; http://www.infolatam.com/2012/12/05/diosdado-cabello-el-poder-detras-del-trono-en-el-regimen-chavista/)
US seeks improved relations with
Caracas, according to Mike Hammer,
Assistant Secretary of State for Press, who adds that "unfortunately Caracas has not shown an
interest in exchanging ambassadors". More in Spanish: (El Universal,
12-07-2012; http://www.eluniversal.com/nacional-y-politica/121207/eeuu-busca-vinculos-para-mejorar-relacion-con-caracas)
Norway closes diplomatic mission in
Venezuela, citing rampant violent crime
Norway will close its embassy in Venezuela because of
rampant crime and move the diplomatic mission to neighboring Colombia, its
ambassador said Wednesday. Norwegian ambassador Lars Vaagen said the decision
to move the embassy to Bogota next year was made after analyzing the problem of
widespread violent crime in Venezuela. “We
see the security situation as increasingly difficult,” Vaagen said in a
telephone interview. Norway’s embassy in Caracas has been operating for almost
45 years. In polls, Venezuelans consistently rate violent crime as their top
concern. (The Washington Post, 12-05-2012; http://www.washingtonpost.com/world/the_americas/norway-closes-diplomatic-mission-in-venezuela-citing-rampant-violent-crime/2012/12/05/f33b9264-3f1b-11e2-8a5c-473797be602c_story.html;
El Universal, 12-05-2012; http://www.eluniversal.com/nacional-y-politica/121205/norway-moves-diplomatic-delegation-from-venezuela-to-colombia; Fox News, http://www.foxnews.com/world/2012/12/05/norway-closes-diplomatic-mission-in-venezuela-citing-rampant-violent-crime/)
Transparency International calls
Venezuela the most corrupt country in Latin America.
In its Annual Report, Transparency International, ranks Venezuela 165th
along with Haiti, after both obtained 19 points in the 100-point scale. The two
countries are ahead only of Afghanistan, North Korea, Somalia or Iraq, which
were the most corrupt nations worldwide. (El Universal, 12-05-2012; http://www.eluniversal.com/nacional-y-politica/121205/ngo-venezuela-is-the-most-corrupt-country-in-latin-america;
Fox Business, http://www.foxbusiness.com/news/2012/12/05/factbox-transparency-international-global-corruption-index/)
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