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/)
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.
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