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, February 8, 2013

February 08, 2013

Economics & Finance

2013 income tax collections projected at VEB 54 billion, an increase of 47% from last year, according to tax authorities. More in Spanish: (AVN, 02-08-2013;

Banking sector reports the highest return in the region
In a report on banking performance in Venezuela, Colombia, Peru, and Ecuador, FITCH RATINGS shows that the average return on assets of Venezuela's banking system (4.1%) return is among the highest in the region. However, FITCH says returns may drop in 2013 because of lower interest rate spread and higher pressure on banking fees. They warn that "solid return and regulations on the payment in cash of dividends (up to 50% of net profits) led to the preservation of capitalization in Venezuelan banks in 2012." (El Universal, 02-07-2013;

Total stability for workers in both the public and private sectors has been established, even if they commit faults, according to labor attorneys analyzing the new Labor Law (LOTT). This comes along with a job freeze extended constantly since 2002. VENAMCHAM’s latest poll, shows 60.47% of businessmen report that a key impact is difficulty in hiring hire new staff. (Veneconomy, 02-06-2013;

Government approves cuts Chavez once slammed, to delay devaluation
Last week the government cut PDVSA's contribution to an off-budget fund - the second-biggest source of public spending - by U$D 2.9 billion. Central government outlays, which surged 26% in the year before the October 7 election, have declined 7% since then, according to Bank of America Corp. At the same time, consumer prices jumped the most in over two years in December, pushing inflation to 20.1%. (Bloomberg, 02-06-2013;


SIDOR records no exports in eight months, subjected to inspection by the military
It has been eight months since Venezuela's state-owned steelmaker SIDOR halted exports to meet domestic demand, and domestic steel supply continues running low.   Although SIDOR's liquid steel output in January 2013 was 157,258 tons, 18.6% more than last year, the total remains 58% under January 2007 (373,000 tons), just one year before the company's nationalization.  The company was inspected this week by military representatives on orders from the Vice President's office. The group was led by General Justo Noguera Pietri, head of the Central Planning Committee Control Office, but CVG and SIDOR President Rafael Gil denied it was an "intervention". (El Universal, 02-06-2013;, and more in Spanish:

Venezuela's grain output stagnant in 2012
Venezuela's grain output in 2012 failed to meet demand. The gap was 66% in corn, 42% in rice, and 96% in sorghum, according to estimates of the Venezuelan Farmers' Federation (FEDEAGRO). Private sector production estimates for 2012 were 1.31 tons of corn (white/yellow), 0.71% above 2011. Paddy rice gained 7.79% and stood at 695,232 tons. Sorghum output hiked 27% with respect to last year and accounted for 99,670 tons. The results reveal stagnation in cereal production despite joint efforts of the agriculture sector and the government. (El Universal, 02-06-2013;

International Trade

MOVISTAR invests strongly in Venezuela
The Spanish telecommunications giant, Telefónica, announced it would invest U$D 790 million in Venezuela this year, mostly in 4G technology in order to consolidate the smart phones segment. (Veneconomy, 02-06-2013;


Chavez reported improving, meeting with officials, but remains invisible
After two months since President Chavez told the nation his cancer had returned and required an emergency trip to undergo a fourth surgery, he remains invisible to all but very close relatives and associates. To date there have been 14 official communiqués read by the Information Minister, and recent ones speak of improvement. Foreign Minister Elías Jaua was recently written in his Twitter account that he, Vice President Maduro and Attorney General Cilia Flores have now had a "deeply human, lovely encounter with our Commander Chavez, and he is doing battle!". More in Spanish: (El Nacional, 02-08-2013;, AVN;

Corruption accusations, insults flying as Venezuela politics heat up amid Chavez’s absence
Corruption accusations and insults are flying between allies and opponents of President Hugo Chavez nearly two months after he disappeared from the political stage to undergo cancer surgery in Cuba. Analysts say the increasingly heated attacks between the two camps could be a preamble to a bruising campaign ahead of a possible new presidential election this year. National Assembly President Diosdado Cabello has accused three lawmakers in the Justice First party of involvement in corruption. Opposition leaders responded by saying that members of the party are totally innocent and that senior government officials are the ones who have enriched themselves during Chavez’s 14 years in office. (The Washington Post, 02-06-2013;

No date for presidential elections
National Electoral Council Vice President Sandra Oblitas denied rumors of a possible presidential election to be held on March 31 (Easter) or jointly with the local elections on July 14. She said the electoral body works from “concrete facts and not speculation;” consequently, they are based on a calendar and for this year only the municipal elections have been scheduled. (Veneconomy, 02-06-2013;

Brazilian FM to visit Venezuela
Brazilian foreign minister Antonio Patriota will visit Venezuela tomorrow to meet with his Venezuelan counterpart Elias Jaua, prior a visit to the United States. The meeting with Jaua is the only official event expected by the chief of Brazil's diplomacy in Caracas, according to the agenda released by the Brazilian Ministry of Foreign Affairs. (AVN, 02-06-2013;; Veneconomy,

Iranian Embassy to Venezuela disclaims any involvement with former official
Iran's Ambassador to Venezuela Hojattolah Soltani says that Tahmasb Mazaheri, an Iranian citizen detained in Germany over a U$D 70-million check, has nothing to do with the Government of Teheran.
Tahmasb Mazaher "is by no means an official of the Government (of Iran); neither has his name been affixed to the confiscated check", said the Ambassador in an interview. He stressed that Mazaheri is an advisor to Iranian company KAYSON, which is currently building some 17,000 homes in Venezuela and has already completed the construction of additional 10,000. (El Universal, 02-05-2013;;;; The Washington Post,; Fox News,

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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