January 04th, 2013

Economics & Finance

59% of dollar revenue goes to pay for imports

Central Bank President Nelson Merentes revealed that their year-end report shows imports totaled U$D 56.35 billion in 2012, the highest amount in the last 16 years and that this was 59% of Venezuela's FOREX revenue from exports. (El Universal, 01-03-2013; http://www.eluniversal.com/economia/130103/venezuela-allocates-59-of-dollar-revenue-to-pay-for-imports)

Only half of 2012 oil revenue went to the Central Bank

Official data shows that only half of Venezuela's oil dollar income, U$D 46 billion, went to the Central Bank. The remainder went to funds managed freely by the government, such as the National Development Fund (FONDEN). (El Universal, 01-02-2013; http://www.eluniversal.com/economia/130102/pdvsa-transfers-to-central-bank-only-half-of-oil-revenue-in-2012)

"FOREX board must turn the tap on to ensure supplies"

According to Luis Vicente León, who heads the DATANALISIS research firm supply will be vital in Venezuela in 2013, a likely election year given President Hugo Chávez's delicate health status, and it is essential to increase foreign currency allocation in order to ensure supplies and avoid scarcities. (El Universal, 01-03-2013; http://www.eluniversal.com/economia/130103/forex-board-has-to-turn-the-tap-on-to-ensure-supply)

SITME opens 2013 operations with U$D 15 million sales

SITME bid U$D 15 million in its first operation in 2013, compared to the first 11 months of 2012 when it traded a daily average of U$D 40 million. The average fell to U$D 18 million daily in December. Financial sources report the Central Bank does not have enough bonds to keep up the daily average. More in Spanish: (El Universal, 01-03-2013; http://www.eluniversal.com/economia/130103/el-sitme-inicia-el-ano-con-la-venta-de-15-millones-de-dolares)

Central Bank says reserves are up U$D 3.596 billion, for a total of U$D 29.743 billion. More in Spanish: (El Mundo, 01-04-2013; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/bcv-reporta-un-incremento-en-las-reservas-de-$3-58.aspx)

Central government debt up to U$D 100.964 billion

Data from the Planning and Finance Ministry shows 2012 ended with total indebtedness by the central government up to U$D 100.964 billion, 27.3% above the U$D 79.282 billion for 2011. The figure does not include debt totals for state enterprises such as PDVSA, which would raise the national total significantly, and no information has been made available about them. Central government debt rose mainly due to domestic bond issues. More in Spanish: (Últimas Noticias, 01-04-2013; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/la-deuda-del-gobierno-asciende-a-100-964-millones-.aspx)

Commodities

Chavez cancer imperils U$D7 billion Caribbean oil funding

President Hugo Chavez’s battle with cancer threatens U$D 7 billion of subsidized oil exports that help prop up Cuba’s economy and contain inflation in Caribbean nations from Jamaica to the Bahamas. Chavez, hospitalized in Havana after a fourth operation, sent Cuba U$D 3.6 billion of oil in 2011 through the PETROCARIBE program that serves 70 million people across Central America and the Caribbean. Cuba failed to make discoveries in the first offshore drilling effort since 2004 as Repsol SA, Petroliam National Bhd. and Petroleos de Venezuela SA reported dry wells. (Bloomberg, 01-03-2013; http://www.bloomberg.com/news/2013-01-03/chavez-cancer-imperils-7-billion-caribbean-oil-funding-energy.html)

International Trade

Trade with Colombia projected to rise by more than 30% in 2013

Luis Alberto Russian, CEO of the Venezuelan-Colombian Economic Integration Chamber (CAVECOL), says that according to estimates by affiliated companies binational trade between the two countries this year will continue the 2012 upward trend and could increase between 30 and 35%. More in Spanish: (El Universal, 01-03-2013; http://www.eluniversal.com/economia/130103/intercambio-con-colombia-se-elevara-en-mas-del-30)

Venezuela among Uruguay's main export markets

Brazil, China, Argentina, Venezuela and Russia were the main markets for Uruguayan exports in 2012. Venezuela came in fourth as a destination for U$D 406 million in sales, an increase of 24.7% over 2011, and 4.6% of total exports. More in Spanish: (El Universal, 01-03-2013; http://www.eluniversal.com/economia/130103/venezuela-entre-los-principales-mercados-para-uruguay)

Logistics & Transport

Port  service charges have been adjusted

The Ministry for Aquatic and Air Transport has adjusted port service charges for ships and related services, which are to be set in dollars, "according to international standards, but payments will be made in national currency". This means any exchange adjustment will become a higher cost for importers. More in Spanish: (El Universal, 01-04-2013; http://www.eluniversal.com/economia/130104/ejecutivo-nacional-ajusto-tarifas-de-los-servicios-portuarios)

VEB 1.7 billion investment planned for airport improvements in 2013

National Civil Aeronautics Institute President General Francisco Paz, says VEB 580 million were invested in repaving runways and improving infrastructure during 2012 and that an additional VEB 1.7 billon have been budgeted for 2013 in order to continue improvements. More in Spanish: (El Universal, 01-04-2013; http://www.eluniversal.com/economia/130104/gobierno-invertira-bs-1700-millones-en-mejorar-aeropuertos)

Politics

Chávez has difficulty breathing due to severe lung infection

Ernesto Villegas, Minister for Communications and Information, announced that President Chavez is suffering from a "severe lung infection", after being undergoing cancer surgery in Havana on December 11th. "After a serious operation last December 11th, commander Chavez has suffered complications due to a severe lung infection which has caused difficulties in breathing which require strict medical treatment", said the Minister in a two minute broadcast. More in Spanish: (El Nacional, 01-04-2013; http://www.el-nacional.com/; El Universal, 01-04-2013; http://www.eluniversal.com/nacional-y-politica/130104/presidente-sufre-insuficiencia-respiratoria)

Maduro and Cabello claim to be "more united than ever"

Vice President Nicolás Maduro and National Assembly President Diosdado Cabello put in a joint appearance right after returning from a trip to Cuba and claimed to be "more united and brotherly than ever", in order to stem rumors that they are in feuding. Maduro, a civilian, was nominated by Chavez as his successor before leaving for Havana for his fourth cancer operation. Cabello is due to take over as acting President on January 10th if Chavez is absent, provided he is reelected as President of the National Assembly on January 5th. Former Lieutenant Cabello added: "The President has called for revolutionary unity and we will not be taken out of that position". Cabello has convened a session Saturday, Jan. 5. in order to elect the parliament's board of directors and start a new period. (AVN, 01-03-2013; http://www.avn.info.ve/contenido/parliament-elect-new-directors-next-jan-5; and more in Spanish: El Universal, 01-04-2013; http://www.eluniversal.com/nacional-y-politica/130104/maduro-y-cabello-aseguran-estar-mas-unidos-que-nunca)

Potential disputes brewing ahead of Chavez inauguration if he is too sick to attend

President Hugo Chavez is due to be sworn in for a new term on January 10th and his closest allies still aren’t saying what they plan to do if the ailing leader is unable to return from a Cuban hospital to take the oath of office. Chavez hasn’t been seen or heard from since his Dec. 11 cancer surgery, and speculation has grown that his illness could be reaching its final stages. The president’s elder brother Adan joined a parade of visitors to Havana this week, while the vice president has returned after at least two bedside visits with Chavez. His health crisis has raised contentious questions about the swearing-in set for Jan. 10, including whether the inauguration could legally be postponed, whether Supreme Court justices might travel to Havana to administer the oath of office, and, most of all, what will happen if Chavez can’t begin his new term. (The Washington Post, 01-03-2013; http://www.washingtonpost.com/world/the_americas/potential-disputes-brewing-ahead-of-chavez-inauguration-if-venezuela-leader-too-sick-to-attend/2013/01/03/f41d4c38-55cb-11e2-89de-76c1c54b1418_story.html; CNN, http://edition.cnn.com/2013/01/03/world/americas/venezuela-chavez-scenarios/index.html?iref=allsearch; Fox News, http://www.foxnews.com/world/2013/01/03/potential-disputes-brewing-ahead-chavez-inauguration-if-venezuela-leader-too/; http://www.foxnews.com/world/2013/01/02/chavez-delicate-after-cancer-surgery-says-vice-president/)

Chavez foes want Vice President to take power

Venezuela’s opposition say cancer- stricken President Hugo Chavez is unable to fulfill his duties and that the government should temporarily hand his full powers over to Vice President Nicolas Maduro. Ramon Guillermo Aveledo, executive secretary of the opposition alliance known as the Democratic Unity Table, said the government should “tell the truth” about Chavez’s state of health. Chavez, who is supposed to be sworn in for his next term on Jan. 10, hasn’t been seen in public since alighting from a plane in Havana Dec. 10 to undergo a fourth cancer-related surgery. (Bloomberg, 01-02-2013; http://www.bloomberg.com/news/2013-01-02/maduro-to-return-to-venezuela-after-chavez-cuba-visit.html)

Venezuelan high court: no need to clarify the inauguration date

As January 10 approaches, discussions over the option of postponing the swearing in ceremony have sparked up. There is growing expectation about the decision pending in the Supreme Court's Constitutional Court, where two petitions for a ruling have been lodged. Article 231 of the Venezuelan Constitution, sets January 10 as the start of a new presidential term. Nevertheless, the high court has previously ruled that the inauguration of the Head of State in the Legislature should take place on that very day, neither before nor after. (El Universal, 01-03-2013; http://www.eluniversal.com/nacional-y-politica/130102/venezuelan-high-court-no-need-to-clarify-the-inauguration-day)

Washington rules out "made in America" solution for Venezuela

State Department spokeswoman Victoria Nuland, has confirmed that Washington has contacted both the Venezuelan government and opposition, but said the US Government is not involved in a possible political transition in Venezuela due to the state of health of President Hugo Chávez. "Obviously we talk to Venezuelans of the whole political spectrum, as we do with every country in the world. Any political transition in Venezuela has to be the result of decisions by Venezuelans, there is no 'made in America' solution", said Nuland at a press conference. (El Universal, 01-03-2013; http://www.eluniversal.com/nacional-y-politica/130103/washington-rules-out-made-in-america-solution-for-venezuela; http://www.eluniversal.com/nacional-y-politica/130101/us-venezuela-are-reportedly-seeking-post-chavez-thaw)



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.