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.

Tuesday, March 5, 2013

March 05, 2013

Economics & Finance

Experts lower GDP growth projection to 2% and more adjustments are on the way, according to Credit Suisse analysts who recently visited Caracas. Their conclusion is that "current political uncertainty seriously hinders economic policy making and there is growing pressure on FOREX supply". It adds: "Recent devaluation of the official exchange rate was timid, has not relieved pressures on the economy, and is unlikely that there will be other efficient and necessary fiscal and monetary policies". Credit Suisse says one of the mistakes made was not providing an alternate vehicle for FOREX transactions, which has raised the parallel market. More in Spanish: (El Nacional, 03-05-2013;

No FOREX relief in sight as long as Giordani remains
According to Credit Suisse experts there is no alternate system for legal FOREX sales in sight as long as Finance and Planning Minister Jorge Giordani remains in office. They believe "Giordani will remain at his post and keep his influence on key economic policy decisions, if and when Chavez remains President." It says his departure is "too great a risk for current equilibrium within chavismo". More in Spanish: (El Nacional, 03-05-2013;

FOREX allocation restricted on finished products
Requests for importing finished products have been restricted by the "Supreme Authority in charge of Optimizing the Exchange System", after Planning and Finance Minister Jorge Giordani demanded a review of applications pending from 2012 to determine which will receive the prior 4.30 per U$D rate. More in Spanish: (El Nacional, 03-05-2013;

Government and PDVSA consolidated debt rose to U$D 144.8 billion in 2012, according to figures from the Ministry for Finance and Planning. This is up from U$D 114.1 billion in 2011, an increase of 27%. These figures do not include Chinese loans or PDVSA's debt with the Central Bank, which would make the number considerably higher. More in Spanish: (El Universal, 03-05-2013;

Scarcities are due to lower productivity, not increased demand
According to DATANALISIS President Luis Vicente León says supply problems are not due to increasing demand but rather stem from lowered production by State controlled companies and fewer imports. The Government has been accusing private industry of lowering production in order to receive price adjustments, but private sector capacity is lower due to lack of raw material, FOREX scarcity, delays in permits and bottlenecks in port procedures. More in Spanish: (El Universal, 03-05-2013;

Inflation pressures Government to raise the minimum wage. Any such decision would also increase liabilities with State employees and have a negative impact on the nation's economy. More in Spanish: (El Mundo, 03-05-2013;

CORPOELEC debt rises, bills remain unpaid 18 months
According to Central Bank data, the National Electricity Corporation (CORPOELEC) indebtedness rose 25%. CORPELEC now owes local contractors U$D 8 billion at the prior exchange rate and some bills have gone unpaid for 18 months. More in Spanish: (El Nacional, 03-05-2013;


26 days with no aluminum production, and 7 with no iron
For 26 days VENALUM's aluminum plant has been unable to supply domestic metal transformers weeks; and SIDOR has now been 7 days without receiving iron ore from FERROMINERA ORINOCO,  and is eating up inventories. At VENALUM production is down to minimum service in order to avoid damages. Private transforming plants are now down to "zero". It is now reported that the strike FERROMINERA ORINOCO ended yesterday with an agreement between the company and workers; and that tensions are now lower at VENALUM as talks have begun. More in Spanish: (Tal Cual, 03-04-2013; and  Últimas Noticias;

Minister claims over 25,000 tons of alleged hoarded food is available to the public
Trade Minister Edmee Betancourt says a total 25,774 tons of food she claims was hoarded by private business have been seized and placed at the disposal of the public. (AVN, 03-02-2013;

International Trade

CASA imported 983 tons of frozen beef for PDVAL and MERCAL. The shipment arrived in Puerto Cabello from Puerto Limón, Costa Rica. 11 laden vessels remain at bay in Puerto Cabello. More in Spanish:  (Notitarde, 03-04-2013;; El Carabobeño,


Maduro boots U.S. attaché, suggests Chavez's cancer may have been "innoculated"
Venezuela accused its domestic and foreign enemies of "attacking" ailing President Hugo Chavez and expelled a U.S. Embassy attaché accused of seeking military support for a plot against the government, according to Vice President Nicolas Maduro. David Delmonaco, an Air Force attaché for the U.S. Embassy in Caracas, was expelled "for being implicated in (a) conspiratorial plan," the country's information ministry said.  A senior Obama administration official told CNN that the United States "denies the charge that the air attaché, or anyone else in our embassy or the U.S. government, was plotting against the Venezuelan government." US officials expressed sympathy for President Chavez. Maduro also said there are "strong indications" that Chavez himself, fighting a battle with cancer, was somehow infected by outsiders. Maduro's comments came after he met with the country's top officials about Chavez's worsening health condition. These are the "most difficult moments we have experienced" since Chavez' surgery on December 11, he said. Maduro said a more detailed report on the president's condition is forthcoming. (CNN, 03-05-2013;; El Universal, 03-05-2013;;

Chávez has new infection, breathing problems worsen
An official communiqué just out says President Chávez now faces a "new and severe respiratory infection” and his "general health remains critical". Communications and Information Minister Jesús Villegas dispatched written statement from the Military Hospital in Caracas saying "there is deterioration of the respiratory system" and adding that the President is receiving "high impact chemotherapy, among other treatment." (The Wall Street Journal, 03-04-2013;; and more in Spanish: AVN;; El Universal,

Venezuelans protest as Maduro says Chavez in chemotherapy
Venezuelans marched in Caracas and other cities yesterday; demanding more information on President Hugo Chavez’s health after the government said he’s undergoing chemotherapy following cancer surgery. Vice President Nicolas Maduro, who has been running the country in the self-declared socialist’s absence, said March 1 that Chavez is undergoing chemotherapy after surgery for an undisclosed type of cancer in Cuba more than two months ago. Maduro said Chavez is in “good spirits,” in spite of the severity of the treatment. (Bloomberg, 04-03-2013;; El Universal,; Reuters,; Latin American Herald Tribune,; The Washington Post,; Fox News,

Opposition discussing single ballot option, Capriles nomination
Talks are underway within the Democratic Unity Conference on conditions placed by some political parties before again endorsing Henrique Capriles Radonski as the only opposition presidential candidate. Sources within the Conference say it is "almost a done deed" that Capriles's party, Primero Justicia will now back the proposal for a single opposition presence on the ballot. Capriles himself is said to favor the proposal. The issue of no reelection depends on the mandate´s duration, and there seems to be a positive stance on creating a broader campaign command. More in Spanish: (El Nacional, 03-05-2013;

Venezuela says it’s tracking opposition leader in U.S.
The bruising and often bizarre world of Venezuelan politics would seem to be a long way from New York City, but a top official here said this weekend that the government of President Hugo Chávez was tracking the movements of a prominent opposition politician while he was on a trip to Manhattan. “We have him closely monitored,” Vice President Nicolás Maduro said of opposition leader, Henrique Capriles Radonski. “I have all the data, exactly where he is in Manhattan, in New York, at this moment,” Mr. Maduro said on government-run television, looking at his cell phone as if checking information sent to him in a text message or an e-mail. (The New York Times, 03-03-2013;

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.

No comments:

Post a Comment