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.

Friday, January 18, 2013

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;; El Universal, 01-17-2013;

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;

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;

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;

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;

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;


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;

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;

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;

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;; El Universal,

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;


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;; El Universal,

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;

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;

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;

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;

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;

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;; El Universal,

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. 

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