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 12, 2013

March 12, 2013

Economics & Finance

Tougher exchange controls are on the way, according to Oil and Mining Minister Rafael Ramírez, who has announced acting President Maduro and Finance Minister Giordani will unveil new steps to fight speculation and "attacks on the Bolivar" More in Spanish: (El Mundo, 03-12-2013;

CITI forecasts more price controls, lower oil prices, weakened economy
A CITI report estimated the price of Venezuela's oil basket will drop to U$D 85 per barrel, which is far less than necessary to keep national accounts in balance and bring the country closer to bankruptcy. In addition, growing inflation and scarcities will lead the Government to far more radical steps, such as price controls and new takeovers. It adds that Chavez's successor will initially continue to fund social programs generously, and there will be short term increases in the minimum wage, but these steps will do little to meet the country's economic problems. More in Spanish: (El Nacional, 03-12-2013;

Maduro promises long term economic policies
Speaking to a meeting of the Communist Party, acting President Nicolás Maduro announced the creation of a new "mission" aimed at "industrializing". He said this "mission" does not now exist and will be inserted into government plans. The program was part of President Chavez's campaign platform last year. More in Spanish: (El Universal, 03-12-2013;

Maduro says PETROCARIBE and ALBA will stay their course following death of President Chavez. He said Venezuela will seek to turn PETROCARIBE into an "economic region" for industry and investments. He also said "the road to ALBA is confirmed".  Officials from nations benefitted by PETROCARIBE had voiced their concerns about the system - which allows them to pay their oil bills over 25 years. More in Spanish: (El Mundo, 03-12-2013;; El Nacional;

Markets on standby due to the political situation
Economist Victor Silva, director of KAPITAL Consultants, has recommended that anyone interested in investing in bonds wait a couple of months while the political situation becomes clearer. He says that while bonds may rise they may also drop at any moment, "risk / performance is not beneficial to an investor at this time," he said. More in Spanish: (El Mundo, 03-11-2013;

Business stretches inventories due to FOREX scarcity, and those who have not shut down operations are seeking protection by raising prices in some cases over 100%. More in Spanish: (El Mundo, 03-12-2013;

PDVSA policies to remain unaltered, says its President, Rafael Ramírez, who is also Oil and Mining Minister. Ramirez called this policy "one of the most important legacies" of the late President Chavez, and added "it was one of the most successful parts" of his administration. He says taxation of oil incomes has been completely successful: "Adjustments in this area raised tax income from oil from 45% to 96% of income per barrel." More in Spanish: (Ultimas Noticias, 03-12-2013;

Venezuela's oil basket down 2.23%; stands at U$D 101.57
Venezuela's oil basket plunged U$D 2.32 and ended last week at U$D 101.57 per barrel, according to the Petroleum and Mining Ministry. This is a 2.23% setback from results a week earlier, when the oil basket averaged U$D 103.89 per barrel. The oil price has slipped U$D 7.18 per barrel in the last three weeks. (El Universal, 03-11-2013;

SIDOR liquid steel production was up 30% in February, says company president Rafael Gil, who compared the month's output to the same time last year. More in Spanish: (AVN, 03-12-2013;; El Universal,

International Trade

Trade with Colombia expected to remain fluid, according to members of the Venezuela-Colombia Economic Integration Chamber (CAVECOL). CEO Luis Alberto Russián hopes that "relations continue fluidly and reconstruction. Step by step". More in Spanish: (El Universal, 03-11-2013;

Nicaraguan opposition leaders ask for FTA with Caracas
Nicaragua's opposition leaders insisted on demanding the government of President Daniel Ortega signed a Free Trade Agreement (FTA) with Venezuela to "institutionalize" trade relations between the two countries, which have grown steadily since 2007. Eliseo Nunez, an opposition lawmaker, insisted that after the death of President Hugo Chavez an FTA should be a priority for the Sandinista government to ensure the continuation of trade relations, DPA reported. More in Spanish: (El Universal, 03-11-2013 

Logistics & Transport

Puerto Cabello port administration is operating during the mourning period, according to General Henry Montilla, who manages the facility. He also said 22 vessels were processed during this period, and there are 15 ships at bay, More in Spanish: (Bolipuertos,; Notitarde,

Henrique Capriles decides to run for president in April vote
Opposition leader and governor of Miranda state Henrique Capriles addressed the nation to announce that he will be the presidential candidate of the opposition coalition. "Clinging to God, I will fight along with all of you. Nicolás (Maduro) I am not going to clear the way for you. We will defend our ballots, whatever it costs."
Capriles added that he will tour the country. "Let us seize this opportunity to unite. People with evil plans seek division, as they think they can keep power that way."
(El Universal, 03-11-2013;; Fox News,

Capriles, Maduro at each other's throats in Venezuela election
Presidential candidates Nicolás Maduro and Henrique Capriles have begun Venezuela's election race with scathing personal attacks even as mourners still file past the late Hugo Chavez's corpse. Maduro, who was sworn in as acting president after Chavez succumbed to cancer last week, is seen as the favorite to win the April 14 election, bolstered by an oil-financed state apparatus and a wave of public sympathy over Chavez's death. (Reuters, 03-11-2013;;

Pro-Maduro mob blocks Capriles from reaching Elections Board
Democratic Unity presidential candidate Henrique Capriles Radonski was unable to enter the Elections Board headquarters, despite National Police efforts, as threatening pro-Maduro goon squads blocked all entrances after a Maduro rally earlier in the day. A representative was authorized to present the formal nomination. More in Spanish: (Tal Cual, 03-12-2013;

Chávez's remains to be taken to a museum and then to the National Pantheon
Nicolás Maduro, acting President, says the remains of President Hugo Chávez will be taken next Friday to the Museum of the Mountain, in west Caracas. He also said a proposal will soon be made to amend the Constitution in order to bury Chávez at the National. (El Universal, 03-11-2013;

Cuban president confident about continuity of Chavezism in Venezuela
Cuban President Raúl Castro told Cuban local press he is confident that Venezuela's president in charge Nicolás Maduro and the rest of the country's ruling party leaders will succeed in bringing forward the "great work" of late President Hugo Chávez. "We came back satisfied to see how Chávez's great work is taking hold and the great support of the people," Castro asserted after returning from Venezuela, where he attended Chávez's state funeral, EFE informed. (El Universal, 03-11-2013;; Reuters,; The Washington Post,

GLOBOVISIÓN majority stock (80%) to be sold to Juan Domingo Cordero, an insurance businessman with ties to the government. Guillermo Zuloaga, who holds 80% shared in the station, confirmed through his attorney that there is an offer to buy and a "compelled" sale underway due to sustained government political, economic and legal harassment. Zuloaga says the non negotiable condition is that the sale takes place after the April 14th Presidential elections. Attorney Asdrúbal Aguiar speaking for minority shareholder Nelson Mezerhane says he “won’t sell (his minor stake (20%)) to those who have persecuted him.” Mezerhane’s shares were confiscated by the regime three years ago. (Veneconomy, 03-11-2013;, and more in Spanish: Tal Cual;

Analysis: After Chavez, Latin America's ideological battle may ease
Hugo Chavez's exit from the world stage may take the sting out of an ideological battle that has enveloped Latin America since a new batch of leftists started taking power about 15 years ago to challenge U.S. "imperialism".
Fans say Chavez's hyperkinetic energy is irreplaceable, and even before his death last Tuesday the appeal of his boisterous, hard line approach to economic and foreign policy had faded. (Reuters, 03-11-2013;

US expel 2 Venezuelan diplomats, in reciprocity for the Venezuelan Government's ousting of two military attachés last week, following the death of President Chavez. Orlando José Montañez, a second secretary at the Embassy in Washington, and Víctor Camacaro Mata, a consular official, left the country last Sunday. (El Universal, 03-12-2013;; AVN;

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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