January 15th, 2013

Economics & Finance

Pro government congressman warns Venezuela reaching limit for oil funding

Jesús Faría, a National assembly member from the ruling PSUV party warns that a fiscal reform is needed to increase non-oil income and says "at this time we are reaching the financial limit" of income provided from oil. He called for a progressive tax structure where those who earn more should pay a greater percentage of their income. More in Spanish: (El Mundo, 01-15-2013; http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Faria--Venezuela-esta-llegando-al-limite-en-el-uso.aspx)

Only the government expects 6% growth in 2013, all others estimate slowdown to 2-4%

Venezuela's economy grew 5.5% in 2012, along with 20.1% inflation, a huge fiscal deficit and a restricted allocation of foreign currency in the market. The government has projected 6% growth for 2013, but this prediction is conditioned by pending fiscal and exchange adjustments, as well as reduced spending. As a consequence, private analysts, investment bankers and multilateral agencies expect growth will actually drop to somewhere between 2-4%. The UN Economic Commission for Latin America expects a 2% slowdown. More in Spanish: (El Mundo, 01-15-2013; http://www.elmundo.com.ve/)

Food shortages bigger worry than Constitution

At a bustling food market in downtown Caracas, armed officers belonging to President Hugo Chavez’s National Bolivarian Guard marched by boxes of lettuce and tomatoes, checking prices and storage rooms. The inspection is part of a nationwide campaign to crack down on over-pricing and hoarding the government blames for shortages of basic goods, from toilet paper to sugar. The government said today that consumer prices in December jumped the most in 2 1/2 years, highlighting the growing economic problems that are amassing as Chavez’s battle with cancer unleashes a power struggle. (Bloomberg, 01-11-2013; http://www.bloomberg.com/news/2013-01-11/chavez-s-food-shortages-bigger-worry-than-venezuela-constitution.html)

Black money market thrives as economists say Venezuela is on track to have the highest inflation rate in the world in 2013. Paula Newton explains. (CNN; 01-14-2013; http://edition.cnn.com/video/#/video/world/2013/01/14/pkg-newton-venezuela-economy.cnn)

Commodities

State-run aluminum industries face crisis early in 2013

A bleak new year has begun for Venezuela’s aluminum makers after fierce labor protests and an output decline caused by shortages in raw materials and spare parts in 2012. Union leaders continue to call for further investment and subsidies for industries which lack financial capacity to meet fixed costs; while officials claim improved conditions are expected in 2013. (El Universal, 01-12-2013; http://www.eluniversal.com/economia/130112/venezuelan-state-run-aluminum-makers-face-crisis-early-in-2013)

US oil byproduct sales to Venezuela up 195% in 2012

According to US Energy Department data, petroleum byproduct exports to Venezuela rose significantly from January to October 2012. The figures reflect complicated operating conditions in the Venezuelan oil-refining sector last year with the US supplying an average 71,000 barrels of by-products to Venezuela, a 195% hike over 2011. More in Spanish: (El Universal, 01-12-2013; http://www.eluniversal.com/economia/130112/us-sales-of-oil-by-products-to-venezuela-up-195)

Agriculture products cost rose 35% in 2012, basic food basket up 28.5%

Agriculture product prices rose 35% in 2012, according to Central Bank data; with an 11% jump in December alone. Farm representatives say rising transportation costs, scarce spare parts and problems acquiring fertilizers have hit crop prices. The Teachers Federation Center for Social Analysis says prices in the basic food basket - subject to price controls - rose an average 28.5% last year, and that "2.2 minimum wage salaries are needed to pay for the monthly basket". More in Spanish: (El Universal, 01-14-2013; http://www.eluniversal.com/economia/130115/el-precio-de-los-productos-agricolas-se-disparo-35-en-2012 and El Nacional; http://www.el-nacional.com/)

Wheat inventories may exceed storage capacities

The Wheat Processing Association warns that due to recently increased wheat purchases caused by of recent scarcities "granaries are now full, ships are waiting at bay and others are on their way, which can exceed storage facilities".  (El Universal, 01-14-2013; http://www.eluniversal.com/economia/130114/delays-in-venezuelan-seaports-results-in-wheat-surplus; and more in Spanish: El Nacional; http://www.el-nacional.com/)

International Trade

Venezuela's trade surplus with the United States dropped U$D 9.2 billion

According to recent data from the US Commerce Department, Venezuela's trade with the United States dropped 31% between January and November 2012, to U$D 19.7 billion, U$D 9.2 billion less than the same period of 2011. The traditional surplus (imports minus exports) dropped along a historic rise in imports from the US. More in Spanish: (El Mundo,01-14-2013; http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Superavit-comercial-de-Venezuela-con-Estados-Unido.aspx)

Logistics & Transport

34.3% advance work has been completed on expansion and modernization of La Guaira Port, according to the General Pedro Castro, Deputy Minister of Air and Aquatic Transport. Completion is scheduled for 2014. (Bolipuertos, 01-14-2013; http://www.bolipuertos.gob.ve/noticia.aspx?id=6606)

37 vessels remain at bay in Puerto Cabello, and one sugar laden ship from Brazil has been waiting since December 23rd; others are bearing wheat, soy and rice paddy. Ship count included 7 tankers, 2 carrying vehicles, and 2 cattle ships. More in Spanish: (Notitarde; 01-15-2013; http://www.notitarde.com/La-Costa/Buque-con-azúcar-espera-en-bahía-de-Puerto-Cabello-desde-el-23-de-diciembre/2013/01/15/159738)

Politics

Opposition to challenge top court ruling on Chavez swearing-in at regional court

Venezuela’s opposition plans to present a case before a regional human rights court to challenge a Supreme Court decision that allowed the indefinite postponement of President Hugo Chavez’s inauguration. The case is being prepared by a group of lawyers for the country’s opposition coalition, said Gerardo Blyde, a lawyer and opposition politician. He told reporters that it’s not yet clear when the case will be brought before the Costa Rica-based Inter-American Court of Human Rights. (The Washington Post, 01-12-2013; http://www.washingtonpost.com/world/the_americas/venezuela-opposition-to-challenge-court-ruling-on-chavez-swearing-in-before-regional-court/2013/01/12/34147e32-5ce9-11e2-b8b2-0d18a64c8dfa_story.html; Fox News, http://www.foxnews.com/world/2013/01/12/venezuela-opposition-to-challenge-court-ruling-on-chavez-swearing-in-before/)

Democratic Unity Board asks the OAS and MERCOSUR to debate Venezuela

Ramón Guillermo Aveledo, chairman of Venezuela's united opposition has written MERCOSUR and the OAS calling for them to act upon the Supreme Court's decision to rupture the democratic process. In a letter, Aveledo says that extension of the Presidential term is "a clear case of usurped authority, and violates clearly established legal and constitutional rules". More in Spanish: (El Universal, 01-15-2013; http://www.eluniversal.com/nacional-y-politica/130115/mesa-solicito-a-oea-y-mercosur-debatir-caso-de-venezuela)

Brazil calls for rapid elections if Chavez dies

High ranking Brazilian officials report this country has asked Venezuelan authorities to hold elections "as soon as possible" in case President Chavez dies; the request was made to Vice President Nicolás Maduro. Although the Venezuelan Constitution calls for new elections in 30 days after the death of the President, some fear a change in rules should Maduro be likely to lose at the polls. More in Spanish: (Tal Cual, 01-15-2013; http://www.talcualdigital.com/index.html)

US and Latin America are monitoring the situation in Venezuela

Roberta Jacobson, US Assistant Secretary of State for Latin America says the US and other Hemispheric governments have been in contact over the situation in Venezuela, and adds: "We would like the situation to become clearer" and says if "new elections" are required by the Venezuelan Constitution they would hope these elections are "open to all". More in Spanish: (El Universal, 01-15-2013; http://www.eluniversal.com/nacional-y-politica/130115/estados-unidos-y-latinoamerica-revisan-situacion-venezolana)

Jaua says "people’s will above bourgeois formalities"

Elías Jaua, Vice President of the government party PSUV in the central region claims the people’s will is above bourgeois formalities used by right-wing sectors. “Beyond legal technicalities, the problem is who governs in the country: whether the people or the bourgeoisie. And here rules the Bolivarian people with the leadership of Hugo Chavez". Jaua made his remarks at an assembly called in support of the recent ruling of the Supreme Tribunal on the President's continuity in office. (AVN, 01-14-2013; http://www.avn.info.ve/contenido/people039s-will-above-bourgeois-formalities)

Trio of Chavez protégés hold key to Venezuela's future

A month after President Hugo Chavez left Venezuela for a fourth cancer operation, his commanding control over the government is slowly moving into the hands of an unlikely trio of protégés who may shape the future of the nation. Chavez's cancer has left him in serious condition in a Cuban hospital and created a leadership vacuum after 14 years of cult-of-personality socialism that has made him a dominant figure in Latin America. Given a micro-managing style that put an inordinate number of decisions in his hands, and his unique ability to control an alliance that ranges from union activists to military officers, that leadership is now being shared out among his top allies. (Reuters, 01-14-2013; http://www.reuters.com/article/2013/01/14/us-venezuela-chavez-trio-idUSBRE90D07Z20130114)

Government political team meets in Havana

Vice-President Nicolás Maduro and Cuban President Raúl Castro met at Havana's according to Cuban official media. National Assembly Speaker and ruling party Vice-President Diosdado Cabello also attended the meeting, along with Oil Minister Rafael Ramírez and Solicitor General Cilia Flores. No meeting agenda was revealed. (El Universal, 01-14-2013; http://www.eluniversal.com/nacional-y-politica/130114/venezuelan-government-political-team-meets-in-havana; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=661837&CategoryId=10717)

Officials claim Chavez conscious, clinical course favorable; brother says he is not in coma and recovering

Communications and Information minister Ernesto Villegas officially said the President’s respiratory infection has been controlled. “The President is conscious, communicating with his family, his political team and the medical team which takes care of him, keeping updated with relevant information”. His brother, Adan Chavez, who is also governor of Barinas state, denied that the president was in a coma and that his family was considering disconnecting life-support machines, according to a statement published on the Barinas state government’s website. “We know this is part of a dirty war by the necrophiliac opposition in this country”. (Bloomberg, 01-12-2013; http://www.bloomberg.com/news/2013-01-12/venezuela-s-chavez-not-in-coma-and-recovering-brother-says.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=661972&CategoryId=10717; AVN, 01-14-2013; http://www.avn.info.ve/contenido/chavez-conscious-clinical-course-favorable; El Universal, http://www.eluniversal.com/nacional-y-politica/130113/chavez-requires-specific-actions-for-respiratory-failure; http://www.eluniversal.com/nacional-y-politica/130114/people-have-the-right-to-know-whether-the-president-elect-is-to-rule; Reuters, http://www.reuters.com/article/2013/01/14/venezuela-chavez-idUSL2N0AJ0DA20130114; Bloomberg, http://www.bloomberg.com/news/2013-01-14/chavez-s-recent-health-is-favorable-infection-controlled.html; The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuelas-government-says-chavez-is-conscious-and-responding-to-treatment-for-lung-infection/2013/01/13/82857c0c-5dec-11e2-8acb-ab5cb77e95c8_story.html)

HRW says Venezuela’s Government acts to curb discussion about Chavez health, inauguration

Venezuela should end censorship and intimidation of media that challenge the official line regarding President Hugo Chávez’s health and inauguration, Human Rights Watch said.
In recent days, the government has ordered a television station to cease transmission of spots that question its interpretation of the constitutional requirements for the re-elected president’s inauguration. Intelligence agents have searched the home and confiscated the computers of a blogger suspected of authoring tweets questioning official information provided about Chávez’s health. (Latin American Herald Tribune, 01-14-2013; http://www.laht.com/article.asp?ArticleId=662100&CategoryId=10717)

Opposition demands accurate information on the President's health, rejects governance from Cuba

Opposition parties say Venezuela's government is "paralyzed" and say Cuba's Castro brothers are only interested in keeping Venezuelan subsidies and not the problems of the people. Thomas Guanipa, Secretary General of Primera Justicia says: "We cannot understand how they speak of sovereignty when in fact they are being managed by foreign parties" More in Spanish: (El Nacional, 01-15-2013; 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.