January 29th, 2013

Economics & Finance

Delayed economic decisions fuel inflation, shortages in Venezuela

After two months of uncertainty over necessary economic decisions, Vice-President Nicolás Maduro says President Hugo Chávez has approved several proposals to be announced by specific officials. He said these announcements will deal with the budget, management of gold reserves, price controls and resources for housing, and added that policies will be aimed at stimulating exports. Economist Asdrúbal Oliveros says delays on economic decisions have impacted inflation, which was 3.5% for December, whereas shortages were reported at 16.2% in December and continue to rise. (El Universal, 01-28-2013; http://www.eluniversal.com/economia/130128/delayed-economic-steps-lead-to-inflation-shortage-in-venezuela; Bloomberg, http://www.bloomberg.com/news/2013-01-28/chavez-health-improves-enough-to-dictate-venezuela-economic-plan.html)

PDVSA will no longer issue dollar denominated bonds

Oil and Mining Minister and PDVSA President Rafael Ramírez says the state owned oil company will no longer issue dollar denominated bonds. "It will no longer be done", he said. The last such issue was placed privately with the Central Bank in April 2012. More in Spanish: (El Mundo, 01-29-2013; http://www.elmundo.com.ve/Noticias/Economia/Mercados/Ramirez--No-se-van-a-emitir-bonos-de-Pdvsa-en-dola.aspx)

....yet government plans call for U$D 600 billion over the next 6 years

On the other hand, Ramírez says they will "need U$D 600 billion to carry out the nation's plan" during 2013-19, and added that one of this year's objectives is to further housing programs by investing VEB 80 billion, recently approved by President Chavez in Havana. More in Spanish: (El Universal, 01-29-2013; http://www.eluniversal.com/economia/130129/600-millardos-necesita-el-plan-de-gobierno-a-seis-anos; El Mundo, http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Gobierno-revisa--Presupuesto-2013-para-aumentar-el.aspx)

Price brackets may be set on non-controlled products and services, including vehicles

Trade Minister Edmée Betancourt says her office has begun talks with several productive sectors in order to review cost structures and evaluate the possibility of fixing price brackets on products not subject to controls, including vehicles. She said they will seek fair prices "through common agreement". More in Spanish: (El Universal, 01-29-2013; http://www.eluniversal.com/economia/130129/analizan-bandas-de-precios-para-rubros-no-controlados)

Maduro says Chavez asked him to seek rapprochement with the private sector

Vice-President Nicolás Maduro returned from Cuba and said President Hugo Chávez asked him to "send a message of encouragement to private entrepreneurs." (El Universal, 01-26-2013; http://www.eluniversal.com/nacional-y-politica/130126/chavez-asks-maduro-to-seek-rapproachment-with-the-private-sector)

Despite a decade of currency controls, U$D 150 billion have fled

Currency controls have now been in place for ten years, since 22 January 2003 and are a permanent policy despite the rebound in crude-oil production rebounded and oil. Yet Barclays Capital's latest report shows that over this decade of currency controls capital flight reached U$D 150 billion. From 2007 to 2012 capital flight averaged U$D 20 billion per year, three times the average for the five years prior to the establishment of controls. (El Universal, 01-25-2013; http://www.eluniversal.com/economia/130126/despite-a-decade-of-currency-controls-usd-150-billion-has-seeped-throu)

Commodities

Government increases windfall tax on oil firms

Energy Minister Rafael Ramirez announced Venezuela is changing its oil windfall tax brackets through which the government raises income for social spending and other purposes. By broadening the standing sliding scale, state company PDVSA and foreign partners will have to pay the government 20% of income when oil sales are between U$D 55-80 per barrel, 80% if between U$D 80-100, 90% between U$D 100-110, and 95% above U$D 110. (Reuters, 01-28-2013; http://www.reuters.com/article/2013/01/28/venezuela-oil-windfall-tax-idUSL1N0AX96K20130128; More in Spanish: El Mundo, http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Gobierno-propone-incrementar-el-aporte-por-precios.aspx; El Universal, http://www.eluniversal.com/economia/130128/modifican-rango-de-precios-del-crudo-para-aportes-al-fonden)

Mining Corporation created and assigned to PDVSA

Oil and Mining Minister Rafael Ramirez announced the creation of a Venezuelan Mining Corporation, attached to Petroleos de Venezuela and charged with administering government owned mines. PDVSA Industrial will be responsible for this corporation and it is estimated that this year's gold yield should be about 4 tons and 14 tons projected for 2019. More in Spanish: (El Mundo, 01-28-2013; http://www.elmundo.com.ve/Noticias/Petroleo/Mineria/Gobierno-crea-la-Corporacion-Venezolana-de-Mineria.aspx)

Chinese institutions will undertake national mining mapping

China's CITIC Construction, supervised by the Chinese National Bureau for Geological Surveying, and 5 other technical agencies including SINOPEC, an oil company involved in the exploration of the Orinoco Oil Belt, will carry out nationwide geological exploration that will quantify deposits of gold, diamonds, bauxite, iron phosphate and coltan through an agreement with the Venezuelan Government. More in Spanish: (El Nacional, 01-28-2013; http://www.el-nacional.com/)

2012 export barrel averaged U$D 103.16/bbl., up U$D 1.91/bbl. in a strengthened market due to a more positive outlook on global economy and oil demand, says the Oil and Mining Ministry. (Veneconomy, 01-26-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33513&idc=4)

International Trade

MERCOSUR committed to present commercial proposals to the EU before October

MERCOSUR member nations have announced their commitment to present their first commercial offers on agricultural goods, services and products to the European Union no later than this year’s last quarter, within the framework of the negotiations between the two blocs as a result of an association agreement. (Veneconomy, 01-28-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33529&idc=3)

Venezuela and Poland sign cooperation agreement

Foreign Minister, Elias Jaua met with Poland's President Radoslaw Sikorsk in Santiago de Chile and signed a bilateral framework cooperation agreement between Poland and Venezuela. More in Spanish: (Ultimas Noticias, 01-27-2013; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/venezuela-y-polonia-firman-acuerdo-de-cooperacion.aspx)

Grain purchases abroad up 57% through October 2012

According to the National Statistics Institute, Venezuela spent U$D 1.130 billion on grain imports during the first 10 months of 2012, to supplement deficiencies in domestic production. This is 57.2% above the previous year, in basic grain imports from different countries; comprising 3.882 million metric tons of basic grains such as wheat, rice, corn, sorghum, oats and barley. More in Spanish: (El Mundo, 01-28-2013; http://www.elmundo.com.ve/Noticias/Economia/Agro/Compras-de-cereales-crecieron-57--hasta-octubre-de.aspx)

Logistics & Transport

Companies must post a VEB 3 million bond to operate at each Venezuelan port

The National Port Authority (BOLIPUERTOS) now required a VEB 3 million from bond companies operating at each Venezuelan port during 2013, applicable to 1886 operators nationwide - including shipping agents, stevedoring services, equipment and machinery leasing, and coal and sugar traders operating at La Ceiba port. If a company operates at three ports (i.e. Maracaibo, La Guaira y Puerto Cabello), the amount can go up to VEB 9 million as a separate bond is required for each terminal.  Small and medium companies will be hardest hit as the list includes cooperatives which lack capital and assets for bond collateral. Operators also say credit and insurance have risen out of proportion due to this requirement and many are analyzing profitability along with investments needed. More in Spanish: (El Carabobeño, 01-29-2013; http://www.el-carabobeno.com/impreso/articulo/47660/empresas-deben-cancelar-tres-millones--de-bolvares-en-fianza-para-operar-en-el-puerto)

Port mobilization increased 17% in 2012

Water and Air Transportation Minister Elsa Gutierrez says there was an increase of 17% in cargo and container mobilization of cargo in the 6 major ports during 2012. More in Spanish: (El Mundo, 01-28-2013; http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Movilizacion-de-cargas-en-los-puertos-aumento-17--.aspx)

Politics

Government says no date for Chavez return has been set

Communication and Information minister Ernesto Villegas read a communiqué in Chile saying President Chavez's general evolution is favorable after a surgery undergone in Havana, Cuba, last December 11. He said Chavez began systemic medical treatment for underlying disease - cancer - and overcame a serious respiratory infection. Villegas also said the government does not want to create "false expectations" over his return to Venezuela. (AVN, 01-28-2013; http://www.avn.info.ve/contenido/chavez-overcame-respiratory-infection-progressing-favorably; and more in Spanish: El Nacional; http://www.el-nacional.com/)

National Assembly President plans to visit ailing Hugo Chavez in Cuba

The president of the National Assembly said he hopes to return to Cuba this week to see President Hugo Chavez, who is receiving additional treatment nearly seven weeks after undergoing cancer surgery. Diosdado Cabello expressed optimism about Chavez's condition. The president hasn't been seen or spoken publicly since before his Dec. 11 operation, but Cabello said he was encouraged by Chavez's recovery when he last saw him about two weeks ago. (Fox News, 01-27-2013; http://www.foxnews.com/world/2013/01/27/venezuelan-congressional-president-plans-to-visit-ailing-hugo-chavez-in-cuba/#ixzz2JIXwlORb)

Chavez signed letter to CELAC calls it the most important unity project in contemporary history

Vice President Nicolas Maduro read a lengthy typewritten letter bearing a signature of President Hugo Chavez to attendees of the second Summit of Latin American and Caribbean States (CELAC). The letter calls for strengthening regional unity and says the bloc "is the most important project of political, economic and social unity in our contemporary history." It also reiterates rejection of the "shameful imperial blockade" against Cuba and the "continuous colonization and now progressive militarization of the Malvinas islands," which it claims violates resolutions by the United Nations Organization. Analysts note that no photograph of President Chavez signing the letter was made available at the high level international meeting. (AVN, 01-28-2013; http://www.avn.info.ve/contenido/chavez-celac-most-important-unity-project-contemporary-history; El Universal, http://www.eluniversal.com/nacional-y-politica/130128/maduro-reads-message-sent-by-president-chavez-to-celac; Reuters, http://www.reuters.com/article/2013/01/28/venezuela-chavez-idUSL1N0AW0PN20130128; The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuela-vp-maduro-reads-typewritten-letter-he-says-ailing-chavez-sent-from-havana/2013/01/28/9a686668-6959-11e2-9a0b-db931670f35d_story.html)


The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

January 25th, 2013

Economics & Finance

114% adjustment in FOREX rate needed to correct overvaluation

The combination of a fixed official FOREX rate and inflation four times that in the US and the rest of Latin America, have caused an overvaluation of Venezuela's Bolivar, leading to skyrocketing imports as imported products are cheaper than domestic products.  As it is virtually impossible to meet the demand for US dollars for imports, companies have cut down production and the Government has no other choice but to devalue the currency. As imbalances due to currency overvaluation become critical, ECOANALÍTICA's CEO Asdrúbal Oliveros believes that an 114%  adjustment in the FOREX rate is required,  going from VEB 4.30 to VEB 9.22 per U$D. (El Universal, 01-23-2013; http://www.eluniversal.com/economia/130123/experts-114-adjustment-in-forex-rate-is-vital-to-correct-overvaluation)

80% of local companies are hit by delays in obtaining US

Carlos Tejera, General Manager of the Venezuelan-American Chamber of Commerce and Industry is calling for an agreement between government and the private sector to jointly overcome difficulties in food production, distribution. He says 70-80% of VENAMCHAM affiliates are reporting delays and a reduction in the amount of US dollars they are allocated by the FOREX Administration Commission (CADIVI), and that additional delays in import permits have also hit the food trade chain. "Some firms report delays from three to six months." (El Universal, 01-24-2013; http://www.eluniversal.com/economia/130124/delays-in-sale-of-us-dollars-lash-some-80-of-venezuelan-companies)

PDVSA debt jumped 150% in five years

Venezuelan state-run oil company PDVSA is under significant pressure from its obligations with the Government and the need to invest in core activities, all of which translates into higher debt. By the end of 2012, PDVSA's debt was U$D 40 billion, which is up 150% from U$D 16 billion in 2007. Corporate debt increased 15% in 2012. (El Universal, 01-23-2013; http://www.eluniversal.com/economia/130123/pdvsas-debt-spikes-150-in-five-years)

“70% of the beef consumed in Venezuela is domestic,” claims Agriculture and Lands Minister Juan Carlos Loyo who added this figure is backed by statistics and the records of control slaughter houses in the country, even as he admitted beef is being imported in order to meet demand and population growth. (Veneconomy, 01-23-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33464&idc=3)

FONDEN has received U$D 102.2 billion since its creation in September 2005 through the close of 2012, according to a report published in El Nacional. According to the report, PDVSA has transferred U$D 56.9 billion to the National Development Fund and the Central Bank (BCV) another U$D 45.3 billion. Although the fund was established in order to carry out infrastructure projects, analysts say the government has used part of the funds to meet public sector day to day spending. (Veneconomy, 01-23-2013;

http://www.veneconomy.com/site/index.asp?ids=44&idt=33462&idc=2)

IMF forecasts drop in Venezuela's oil revenues

In its World Economic Outlook Update report for 2013, the International Monetary Fund (IMF) cut its growth projection for Latin America and the Caribbean by 0.3%, and estimated growth in the region at 3.6%.
IMF's Research Department Division Chief Thomas Helbling said that economic growth forecasts for Venezuela may be cut, yet refused to disclose the estimated adjustment before the IMF issues its Global Economic Outlook.

The multilateral body also estimated that the price of the oil basket may drop 5% in 2013 and 3% in 2014 to U$D 100 and U$D 97, respectively. (El Universal, 01-24-2013; http://www.eluniversal.com/economia/130124/imf-forecasts-drop-in-venezuelas-oil-revenues)

Commodities

Oil imports from the US soar 474.96% in 2011-2012

Venezuela's oil-related imports jumped by 474.96% in January-November 2012 over the same period in 2011, according to data revealed by the Venezuelan-American Chamber of Commerce and Industry (VENAMCHAM).
In 2012, Venezuela's imports from the US were U$D 2.79 billion, far above 2011 (U$D 486 billion), for oil and oil byproducts. Non-oil imports also soared 21.9% in January-November 2012, from U$D 10.75 billion in 2011 to U$D 13.10 billion. Venezuela's oil exports were U$D 34.49 billion in 2012, down 11.35% from 2011 (U$D 38.91 billion). (El Universal, 01-24-2013; http://www.eluniversal.com/economia/130124/venezuelan-oil-imports-from-the-us-soar-47496-in-2011-2012)

Basic products in short supply

Roberto León Parilli, President of the ANAUCO consumers union, reports that from the Central Bank's own data by December 2012 there was 78.8% scarcity in sugar, 43.3% in cornmeal; and 34.9% in ground coffee. More in Spanish: (Tal Cual, 01-25-2013; http://www.talcualdigital.com/index.html)

Politics

Officials again claim Chavez improving, active

Ernesto Villegas, Minister for Communications and Information, has again said President Chavez is evolving positively. He says the President is fully active, making decisions and issuing instructions to his government, but he said the government does not "want to create expectations over a date for his return". At the same time Foreign Minister Elias Jaua remarked that Chavez is "facing the most complex and deep battle against the disease". Jaua said that the President's brother, Adán Chávez, governor of Barinas State, Oil and Mining Minister Rafael Ramírez, Attorney General Cilia Flores and Vice President Nicolás Maduro held a meeting with the President "dealing with economic and political affairs, the workings of the pro government PSUV party, and the upcoming mayoralty elections". Still no photos or even taped messages directly from the President have been issued. More in Spanish: (AVN, 01-25-2013; http://www.avn.info.ve/contenido/villegas-evoluci%C3%B3n-del-presidente-ch%C3%A1vez-es-positiva; and El Universal; http://www.eluniversal.com/nacional-y-politica/130125/jaua-asegura-que-chavez-librara-una-batalla-mas-compleja)

Maduro charges he is target of assassination plot

Vice President Nicolas Maduro is claiming unidentified groups have entered the country in order to assassinate both him and National Assembly President Diosdado Cabello, while Hugo Chavez recovers from cancer in Cuba. He provided no proof of the claim, but he said action would be taken shortly. "For several weeks we've been following groups that have infiltrated the country with the aim of making attempts on the life of (Assembly head) Diosdado Cabello and my own," Maduro told a crowd of red-shirted "Chavista" supporters. (Reuters, 01-23-2013; http://www.reuters.com/article/2013/01/24/us-venezuela-chavez-idUSBRE90M1EM20130124; The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuela-vice-president-says-plot-uncovered-announces-new-trip-to-cuba-to-see-chavez/2013/01/23/23101410-65c8-11e2-889b-f23c246aa446_story.html; CNN, http://edition.cnn.com/2013/01/23/world/americas/venezuela-maduro/index.html?iref=allsearch)

Opposition will choose presidential candidate by consensus

Ramón G. Aveledo, Executive Secretary of opposition Unified Democratic Panel (MUD) has presented a twelve point manifesto about the nation's current political uncertainty. According to the document, should a presidential vote be held any time soon, the MUD will present a candidate chosen by consensus. (El Universal, 01-23-2013; http://www.eluniversal.com/nacional-y-politica/130123/venezuelan-dissenters-to-choose-presidential-candidate-by-consensus)

Improved Venezuela-US relations possible

Senator John Kerry, President Obama's nominee for Secretary of State, told a Senate committee that "Depending on what happens in Venezuela there could be a real opportunity for a transition". At the same time, Vice President Nicolás Maduro has confirmed that Venezuela's OAS Ambassador Roy Chaderton is a "special envoy" to advance with the US. He said "we have no problem in maintaining respectful relations, in order to normalize diplomatic relations at whatever level possible". More in Spanish: (Tal Cual, 01-25-2013; http://www.talcualdigital.com/index.html; El Universal, http://www.eluniversal.com/nacional-y-politica/130125/kerry-ve-posible-un-cambio-de-rumbo-con-venezuela; and  http://www.eluniversal.com/nacional-y-politica/130125/buscan-regular-relaciones-con-eeuu-al-nivel-que-sea-posible)



The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

January 22th, 2013

Economics & Finance

Key pro Government legislator forecasts FOREX rate adjustment in Venezuela

Rodrigo Cabezas, former Finance Minister and Speaker of the Latin American Parliament, says some economic adjustments are to be implemented in 2013 in Venezuela, and will be announced gradually by the relevant ministers.

Adjustments may include changes in the price of some goods and services, and the foreign exchange rate, as well as some fiscal reforms and steps to curb speculation. Cabezas says "the main thing we must do is preserve growth" and ensure competitiveness, not simply use devaluation for fiscal purposes which has always been inflationary". (El Universal, 01-21-2013; http://www.eluniversal.com/economia/130121/deputy-forecasts-forex-rate-adjustment-in-venezuela)

Central Bank seeks shelter in US dollar to protect international reserves

Despite past verbal attacks by President Hugo Chávez on the US dollar, the Central Bank of Venezuela (BCV) is relying on US bills for international reserves.  BCV's President Nelson Merentes explains that "for the purpose of minimizing the risks stemming from the widespread global economic crisis, it (the BCV) privileged safety and liquidity in its investment strategy for international reserves, and therefore it cut down non-US dollar exposure, as other foreign currencies were expected to depreciate." (El Universal, 01-19-2013; http://www.eluniversal.com/economia/130119/venezuela-seeks-shelter-in-us-dollar-to-protect-international-reserves)

Domestic debt up 62% in 2012

The Venezuelan government is now issuing debt massively in bolivars in order to meet skyrocketing public spending. As a consequence, devaluation would grant the government more bolivars for dollars and immediately reduce the  burden on public accounts. Research firm SÍNTESIS FINANCIERA has just reported that Venezuela's domestic debt, that is the debt in bolivars, closed 2012 at VEB 249.3 billion (U$D 57.97 billion) in 2012, 62% higher than in 2011, rising from 9% of GDP to 16.3% of GDP. (El Universal, 01-21-2013; http://www.eluniversal.com/economia/130121/venezuelan-domestic-debt-jumps-62-in-2012)

Venezuela's population increased by over 4.1 million between 2001 and 2011 for a total 28.946 million, according to Census data released  by the National Statistics Institute. The report reveals 88.8% live in urban areas and 11.2% in rural areas. More in Spanish: (AVN, 01-22-2013; http://www.avn.info.ve/contenido/poblaci%C3%B3n-venezolana-se-increment%C3%B3-m%C3%A1s-41-millones-personas)

Abandoned U$D 200 million government owned rice processing plant occupied by 1500 unemployed

A rice processing plant bought from China at a cost of U$D 200 million, which was abandoned on Cocuina Island in Delta Amacuro State has been taken over by over 1500 unemployed inhabitants of the region. Occupiers demand the project be reactivated and include them as workers. More in Spanish: (El Nacional, 01-22-2013; http://www.el-nacional.com/)

Commodities

Ambani said to mull U$D 2 billion Venezuela spend

Reliance Industries Ltd. (RIL) plans to spend more than U$D 2 billion on Venezuelan oil fields, betting President Hugo Chavez’s failing health won’t lead to political upheaval, said a person with direct knowledge of the decision. The operator of the world’s biggest refining complex is jointly assessing investments in four oilfields in with state-run company Petróleos de Venezuela SA, said the person, who asked not to be identified, citing confidentiality terms. Reliance is waiting for data on the blocks from PDVSA to start the due diligence process, the person said. (Bloomberg, 01-21-2013; http://www.bloomberg.com/news/2013-01-20/ambani-said-to-mull-2-billion-venezuela-spend-corporate-india.html)

FAO reports hunger virtually eliminated in Venezuela, a major regional importer of wheat, corn and soy

The FAO Regional Office for Latin America and the Caribbean's recently published "Panorama of Food and Nutrition Security for 2012" shows Venezuela has a very low hunger index within the region and "has managed to eliminate hunger, with an index under 5% as the regional average is 8.3%, due to MERCAL and other government sponsored programs. The report points out Venezuela is one of the 5 major importers of wheat, corn and soy in the region. More in Spanish: (El Nacional, 01-22-2013l; http://www.el-nacional.com/)

International Trade

Food imports from Argentina will increase in order to prevent shortages the government does not admit to. The announcement was made by Vice President Nicolás Maduro and Argentinean Planning Minister Julio De Vido during an event in Caracas. The goal is to guarantee Venezuela “has a three month intact food reserve and no one in the market can leave short of basic products,” explained Maduro. (Veneconomy, 01-20-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33401&idc=3)

Venezuela will spend U$D 16 million in Uruguay milk imports

Uruguayan Foreign Minister Luis Almagro says President José Mujica's recent support to the Chavez regime has opened up Uruguayan powdered milk exports to Venezuela. He announced an agreement to send Venezuela 4500 tons of powdered milk monthly for a total around U$D 16 million. More in Spanish:  (El Universal, 01-22-2013; http://www.eluniversal.com/economia/130122/venezuela-invertira-16-millones-en-comprar-leche-a-uruguay)

Logistics & Transport

Port costs fuel inflation

Cipriana Ramos, FEDECÁMARAS Vargas President and coordinator of the Customs and Port Affairs Committee says imported products have to wait about 45 days to be nationalized at an average daily cost of U$D 15,000 as well as additional payments to the Port Authority which hit both the importer and the final consumer as they become reflected in inflation. More in Spanish: (Tal Cual, 01-21-2013; http://www.talcualdigital.com/index.html)

Imports are projected at 2,500 containers, plans to expedite cargo are announced

SENIAT, Venezuela's tax authority, along with the Port Authority (BOLIPUERTOS) and the CASA food distribution system are estimating 2,500 food containers will arrive over the next few months and hope to dispatch 100 units daily by increasing the number of processing offices for food and bulk imports to 6, working 24x7 at Puerto Cabello port. They also say there will be a permanently open Non-Intrusive Inspection Circuit. More in Spanish: (Notitarde, 01-22-2013; http://www.notitarde.com/La-Costa/Aumentar%C3%A1n-taquillas-para-despacho-de-la-carga-de-alimento-y-al-granel/2013/01/21/161238)

New General Managers appointed at ports nationwide: all of them are military, according to Official Gazette 40.092 dated 17 January 2013. More in Spanish: (Bolipuertos, 01-21-2013; http://www.bolipuertos.gob.ve/noticia.aspx?id=6629)

Politics

Chavez brother says leader expected to return home from Cuba in 'coming days'

One of Hugo Chavez's brothers says the Venezuelan president is expected to return home from Cuba in the coming days as he continues to recover nearly six weeks after undergoing cancer surgery. Argenis Chavez is one of the president's five brothers and the president of the National Electric Corporation. He tells The Associated Press that the president continues to recover. He said after an event Monday at the Supreme Court that the decision about when Chavez returns is up to his medical team but that he is expected to return to Venezuela in the "coming days." (Fox News, 01-21-2013; http://www.foxnews.com/world/2013/01/21/brother-chavez-says-venezuela-leader-expected-to-return-home-from-cuba-in/#ixzz2Ie7knfkD; The Washington Post, http://www.washingtonpost.com/world/the_americas/brother-of-chavez-says-venezuela-leader-expected-to-return-home-from-cuba-in-coming-days/2013/01/21/9facfad8-6406-11e2-889b-f23c246aa446_story.html)

Maduro says Chavez to start new step in recovery

President Hugo Chavez will soon enter a new stage in his recovery from a fourth cancer operation in Cuba, Vice President Nicolas Maduro said, without providing further details. Maduro says he last saw Chavez Jan. 14 during a visit to the Venezuelan president’s bedside in Cuba. “He is stabilizing in all his medical indicators, in the function of his organs, in all his fundamental vital indicators and is fully conscious,” Maduro said today in an interview on the Televen television network. “He is gaining vital strength to begin a second stage of recovery that will be announced through official reports.” (Bloomberg, 01-20-2013; http://www.bloomberg.com/news/2013-01-20/venezuela-s-maduro-says-chavez-to-start-new-step-in-recovery-1-.html; El Universal; http://www.eluniversal.com/nacional-y-politica/130120/vp-maduro-chavez-is-to-start-a-second-phase-of-treatment; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=663599&CategoryId=10717; Fox News, http://www.foxnews.com/world/2013/01/20/venezuela-vp-says-optimistic-hugo-chavez-will-soon-return-to-homeland-following/)

Maduro will travel to Chile, along with Elías Jaua to attend the two summits to be held this week, announced Chilean Foreign Affairs Minister Alfredo Moreno on Monday. The Latin American and Caribbean States Community (CELAC) Summit with the European Union will be held on January 26 and 27 and a CELAC Summit will take place on Monday, January 28. (Veneconomy, 01-21-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33415&idc=1; El Universal; http://www.eluniversal.com/nacional-y-politica/130121/venezuelan-vp-fm-to-attend-celac-european-union-summit-in-chile)

Foreign minister Jaua in Havana, plans foreign policy discussions with ailing Chavez

Venezuela's top diplomat says he plans to visit President Hugo Chavez in Cuba, where the ailing leader remains out of sight more than a month after a fourth cancer- recovering from cancer surgery. Foreign Minister Elias Jaua says he intends to meet with Chavez to discuss Venezuelan foreign policy. (Fox News, 01-23-2013; http://www.foxnews.com/world/2013/01/21/venezuelan-foreign-minister-in-havana-plans-foreign-policy-discussions-with/#ixzz2Ie7TOTBt)

Envoy says Venezuela open to better ties with U.S.

Venezuela's government is open to improving troubled ties with Washington and is considering a U.S. proposal for the return of anti-drug agents kicked out of the country eight years ago by President Hugo Chavez, a senior official said.

There has been no word from Chavez since he had cancer surgery in Cuba five weeks ago, so every move the government makes in his absence is being picked over for clues to what the OPEC nation might look like in a post-Chavez era. Venezuela's ambassador to the Organization of American States (OAS), Roy Chaderton, said U.S.-Venezuela relations were "not hot, not cold. Zero degrees". (Reuters, 01-20-2013; http://www.reuters.com/article/2013/01/20/venezuela-chavez-idUSL1N0AP0FZ20130120)

Colombia's Santos:  "I do not think as Chavez does, but respect differences"

Colombian President Juan Manuel Santos says his government has seriously tried to respect the balance of power, and that "there cannot be good government without total press freedom". He also say he is far from agreeing with President Chavez, but seeks to find common issues to work together despite while respecting differences. More in Spanish: (El Nacional, 01-22-2013; http://www.el-nacional.com/)

Supreme Court President Luisa Estella Morales pledges support for "Bolivarian socialism"

She made here statements in the opening ceremonies for the 2013 judicial period, and specifically mentioned the five key objectives in the plan presented by President Chavez for 2013-2019, including "the continuing construction of XXIst century Bolivarian socialism". More in Spanish: (El Nacional, 01-22-2013; http://www.el-nacional.com/)



The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

Caracas, January 18th, 2013

Economics & Finance

Moody's downgraded Venezuela’s Ratings Outlook to negative, from stable and affirmed the B1 local currency and B2 foreign currency government bond ratings, citing increased political uncertainty and associated risks to the Venezuelan economy and government finances, informed Reuters. (Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33350&idc=2; El Universal, 01-17-2013; http://www.eluniversal.com/economia/130117/moodys-changes-forecast-on-venezuelas-pdvsa-bonds)

UN forecasts economic Venezuela's growth at 2.5% in 2013

A "modest acceleration of economic growth" is expected in the next two years in Latin America and the Caribbean with growth rates at 3.9% in 2013 and 4.4% in 2014, according to a United Nations report entitled, "World Economic Situation and Prospects 2013." Countries in the region reporting below average growth (3.9%) are: El Salvador, 2.2%; Venezuela, 2.5%; Argentina, 3.2%%; Cuba, 3.5%; Honduras, 3.5; %; Guatemala, 3.7% and Mexico, 3.8. (El Universal, 01-17-2013; http://www.eluniversal.com/economia/130117/un-forecasts-economic-growth-in-venezuela-at-25-in-2013)

Venezuela registers highest inflation in the region

According to official figures from Argentina's National Statistics and Census Institute (INDEC), inflation there 2012 was the second in South America (10.8%), after Venezuela with 20.1%, and followed by Uruguay (8.6%), Brazil (5.8%) and Bolivia (4.5%). (Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33348&idc=2)

Public spending rose 6.7% in 2012

According to Finance Ministry data, public expenditure was U$D 96.27 billion in 2012, up 6.7% in real terms (after inflation) from 2011, when public spending was U$D 75.81 billion. Increased spending was mainly in construction, government services, and trade, underlining the economy's growing dependence on public expenditure showing. (El Universal, 01-17-2013; http://www.eluniversal.com/economia/130117/venezuelas-public-expenditure-climbs-67-in-2012)

Chinese loans to Venezuela were U$D 46 billion in four years

According to a comparative analysis by the Economics Faculty of Mexico's National Autonomous University, twelve Latin American countries received U$D 85.8 billion in credits from China from 2005-2012. The amount exceeds the credits granted by the World Bank (U$D 53.3 billion) and the Inter-American Development Bank (U$D 66.9 billion) during the same period. The study shows that Venezuela has received U$D 46.5 billion, which is 55% of the total loans granted to the region. These funds were mainly directed to government projects, and programs in state-owned oil company PDVSA. (El Universal, 01-16-2013; http://www.eluniversal.com/economia/130116/chinese-loans-to-venezuela-amount-to-usd-46-billion-in-four-years)

Banco Mercantil was the financial institution best rated by Venezuelans according to a study by IZO marketing consulting firm. The study is designed to analyze client experience through strategic indicators, sectors’ and countries’ positioning (BCX Index). Venezuela’s general average ranked second after Colombian companies. (Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33349&idc=2)

Commodities

OPEC is keeping its global crude demand outlook unchanged for 2013 up barely 0.85% from last year in line with a global economy that, despite starting with a slight recovery, will continue to be threatened by uncertainty. The Vienna based group foresees world economy growing 3.2% in 2013, slightly up from last year’s 3%. (Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33357&idc=4)

Central Bank reports severe shortages at the close of 2012

The Bank reports high shortage indexes in 6 key products: precooked corn (43.3% - which means the same percentage of establishments visited did not have the product); wheat flour (76.8% in December, up from 10.8% in January); sunflower oil (86.1%); corn oil (56.8%); vegetable based oil (67.1%); and sugar (78.1%). More in Spanish: (El Universal, 01-18-2013; http://www.eluniversal.com/economia/130118/bcv-reporto-que-seis-rubros-cerraron-2012-con-escasez-grave)

Official claims production levels and product distribution are normal

Karlin Granadillo, National Superintendent of Fair Costs and Prices, says production and shipment of products remains at normal levels and dismissed the idea of shortages. She says there is normal decrease in production during January, due to collective vacations in December; and claimed that toilet paper-producing companies are 100% operational and toothpaste companies are at about 80% of their output level. (AVN, 01-17-2013; http://www.avn.info.ve/contenido/production-levels-and-shipment-products-are-normal)

Venezuela won Las Cristinas arbitral case

Attorney General Cilia Flores announced that a case brought against Venezuela by Canada's Vannessa Ventures Ltd. over a exploration and mining contract for the Las Cristinas Mine in Bolivar state was decided in favor of Venezuela. In an official publication she states "the decision to rescind the contract....was not expropriation" and therefore did not violate the Bilateral Investment Protection Treaty between Canada and Venezuela. More in Spanish: (AVN, 01-18-2013; http://www.avn.info.ve/contenido/venezuela-gan%C3%B3-juicio-internacional-sobre-mina-cristinas-del-estado-bol%C3%ADvar; El Universal, http://www.eluniversal.com/economia/130118/ciadi-fallo-a-favor-de-venezuela-en-juicio-por-las-cristinas)

International Trade

Government will import U$D 180 million in food from Argentina

Argentina's Federal Planning Minister Julio De Vido and Venezuela's Nutrition Minister Carlos Osorio have met in Caracas and reached an agreement for Venezuela to import "rice, milk, chicken and cattle beef, and all products needed to guarantee nutrition". More in Spanish: (El Nacional, 01-18-2013; http://www.el-nacional.com/)

Politics

Maduro says Chavez is serene and conscious

After a three day visit, Vice President Nicolás Maduro is reporting that "in general terms I see him very quiet, very serene, and very conscious of all phases he has gone through after his operation". More in Spanish: (AVN, 01-18-2013; http://www.avn.info.ve/contenido/maduro-ch%C3%A1vez-est%C3%A1-sereno-y-consciente-del-proceso-post-operatorio; El Universal, http://www.eluniversal.com/nacional-y-politica/130118/maduro-dice-que-evaluan-escenarios-pero-chavez-sigue-al-mando)

VP did not deliver annual report speech to Congress to avoid violating the Constitution

Vice President Nicolás Maduro says the Government, including himself, is fully aware that it was not up to him as vice-president to address the National Assembly (AN) to present the Government's Annual Report, as it would have been a violation of the Constitution. He said: "The President instructed me to show up at Congress to submit the Yearly Report in writing as I am not entitled as vice-president to do it in his stead. We were always aware of this." (El Universal, 01-16-2013; http://www.eluniversal.com/nacional-y-politica/130116/vp-refrains-from-addressing-congress-to-avoid-violating-the-constituti)

Venezuela's military presented their proposal for the 2013-19 plan, to Vice President Maduro and Defense Minister General Diego Molano said they would obey and enforce the Supreme Court's decision “allowing the President to return to the country when his health improves.” He also ratified their loyalty, endorsement and solidarity to Hugo Chávez. (Veneconomy, 01-16-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=33361&idc=1)

Government publishes decree with Chavez signature

Venezuela's government has published a decree signed by President Hugo Chavez, while his vice president said Wednesday that the ailing leader also sent a message of gratitude to the military for its loyalty. It was the first time the president's signature has appeared in the Official Gazette since his latest cancer surgery in Cuba more than five weeks ago. The decree issued Tuesday and published in the government newspaper on Wednesday names former vice president Elias Jaua as Venezuela's new foreign minister. The signature is printed along with the presidential stamp. (Fox News, 01-16-2013; http://www.foxnews.com/world/2013/01/16/venezuela-publishes-decree-with-chavez-signature/)

Foreign Minister´s appointment termed a forgery

Perkins Rocha, an expert in public law and former Justice in the Administrative Court, has filed a Supreme Court case claiming a decree purportedly signed by President Chavez appointing Elías Jaua as Foreign Minister is false and says all action by Jaua should be considered null and void.

The decree's text indicates it was signed in Caracas while Chavez remains in Havana, and Rocha points out that the law states all such appointments must be made in Venezuela. More in Spanish: (Tal Cual, 01-18-2013; http://www.talcualdigital.com/index.html)

15 daily public protests registered during 2012 in Venezuela

The Social Conflict Observatory's annual report shows there were 5483 public demonstrations against the government during 2012, a 3% increase over 2011. This new record surpasses the total number of protests registered in 1999-2002, the first four years of Mr. Chavez's rule. Protests included marches, demonstrations and the closing of public roads. More in Spanish: (El Universal, 01-18-2013; http://www.eluniversal.com/nacional-y-politica/130118/en-2012-se-registraron-en-venezuela-15-protestas-diarias)

Panama fired its' OAS Ambassador Guillermo Cochez for an unauthorized speech on Venezuela's democracy which Venezuela's OAS Ambassador termed an "open interference" into internal affairs.  Panamanian President Martinelli had previously disavowed statements by Cochez saying they do not reflect Panama's position. More in Spanish: (AVN, 01-18-2013; http://www.avn.info.ve/contenido/gobierno-panam%C3%A1-destituye-embajador-cochez-oea; El Universal, http://www.eluniversal.com/nacional-y-politica/130118/panama-destituye-a-embajador-por-sus-criticas-hacia-venezuela)


The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.