April 23, 2013

Economics & Finance

Central bank's Merentes named new Finance Minister

President Nicolas Maduro has replaced Venezuelan Finance Minister Jorge Giordani, appointing central bank chief Nelson Merentes in his place two days after being sworn in as the late Hugo Chavez's successor. It will be the third stint as finance minister for Merentes, a mathematician by training who is seen as a more pragmatic economist than his ideologically driven counterpart Giordani, a Marxist academic who was nicknamed "the Monk." "I've great faith in Nelson Merentes. We've known each other for many years," Maduro said. In his speech, he also confirmed Oil Minister Rafael Ramirez, Defense Minister Diego Molero, Foreign Minister Elias Jaua and Vice President Jorge Arreaza in their current roles. (Reuters, 04-22-2013; http://www.reuters.com/article/2013/04/22/us-venezuela-election-merentes-idUSBRE93L01S20130422; El Universal, 04-22-2013; http://www.eluniversal.com/economia/130422/venezuela-reshuffles-nine-economy-related-ministries; Bloomberg, http://www.bloomberg.com/news/2013-04-22/venezuela-s-maduro-names-merentes-as-finance-head-in-new-cabinet.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=756368&CategoryId=10717; The Washington Post, http://www.washingtonpost.com/world/the_americas/shortly-after-narrow-election-victory-venezuelas-nicolas-maduro-shuffles-cabinet/2013/04/22/e9a98cd6-ab29-11e2-9493-2ff3bf26c4b4_story.html)

Edmée Betancourt nominated as Central Bank President

President Nicolás Maduro Moros is nominating former Trade Minister Edmée Betancourt to be President of the Central Bank, replacing Nelson Merentes. Her nomination will go to the National Assembly for approval. More in Spanish: (AVN, 04-23-2013; http://www.avn.info.ve/contenido/ejecutivo-propone-edm%C3%A9e-betancourt-como-presidenta-del-bcv; El Universal, http://www.eluniversal.com/economia/130423/proponen-a-edmee-betancourt-para-presidir-el-banco-central; El Mundo, http://www.elmundo.com.ve/Noticias/Actualidad/Noticias/Maduro-designa-a-Edmee-Betancourt-como-presidenta-.aspx)

Increase in FOREX supply is expected

Financial circles see the return of Nelson Merentes to the Finance Ministry, replacing Jorge Giordani, as a sign that the Maduro regime will make more FOREX available to grow the economy and stave off inflation. Giordani has radicalized the system over the past three months, attacking "consumerism" through diminished FOREX supply. The result has been a sizeable increase in the black market rate, inflation, and an abrupt increase in scarcities. More in Spanish: (El Universal; http://www.eluniversal.com/economia/130423/esperan-mayor-oferta-de-divisas-con-merentes-en-finanzas)

Commodities

Venezuelan oil basket plummets to U$D 96.51

The Venezuelan oil basket plunged (U$D 4.96) last week and ended at U$D 96.51 per barrel, according to the Ministry of Petroleum and Mining. As a result, the oil basket average annual price is now U$D 103.14 per barrel. (El Universal, 04-22-2013; http://www.eluniversal.com/economia/130422/venezuelan-oil-basket-plummets-stands-at-usd-9651)

Military men will run the electric system

President Nicolás Maduro has announced the national electric system is to be a "national security service" and has named General Wilmer Barrientos to supervise the entire grid. He also named former Lieutenant Jesse Chacón as Minister for Electric Affairs. More in Spanish: (El Universal, 04-23-2013; http://www.eluniversal.com/economia/130423/disciplina-militar-para-el-sistema-electrico)

Union demands an end to land takeovers at SMURFIT

Luis Zerpa, President of the Forest Workers Union at SMURFIT KAPPA Cartón de Venezuela, which has been run by the Government since September 2011, is leading a group of over 50 union members protesting at the National Land Institute (INTI) to demand an end to land invasions at their installations. Zerpa says their work has been hindered by informal land takeovers and they fear for their jobs. More in Spanish: (El Universal; http://www.eluniversal.com/economia/120510/exigen-al-inti-solucion-a-invasiones-de-tierras-en-smurfit)

Politics

Poll audit stalls

Disagreements by Election Board members and a lack of information paralyzed the beginning of the auditing process on 46% of the polling stations that operated during the April 14th elections. Audits were scheduled to start yesterday (April 22). Ramón José Medina, spokesman for the opposition in this matter, has demanded a formal written response by the Board to all technical issues raised. "We will not accept a fake or partial audit. It must take place under technical rules. Results are not irreversible; this is precisely what the audit is about". Earlier, Election Council Vice President Sandra Oblitas threw the process into confusion by claiming the scheduled audit isn't about "reversing" the outcome and warning against "false expectations." She added that only the Supreme Court can change the outcome. At the same time, Council member Tania D'Amelio says the Council has not yet received any request to contest election results, and that there is nothing to sustain a claim of fraud. She said the election must be contested within 15 days after the President-elect is proclaimed by the Council, which is May 10th. In order to contest election results the claim must name specific cases, providing full details: stations, voting tables and poll log where a fraud is suspected. Finally, Council member Socorro Hernández says a timetable for audits is being set up and that the starting date will be announced on April 28th at the latest. (Fox News, 04-20-2013; http://www.foxnews.com/world/2013/04/20/venezuela-election-official-offers-confusing-prognosis-for-audit/#ixzz2REqmB5TW; AVN, 04-22-2013; http://www.avn.info.ve/contenido/election-results-contests-not-received-so-far; and more in Spanish: El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/130423/no-vamos-a-participar-en-una-auditoria-chucuta)

Henrique Capriles does not rule out repeating election

Opposition Presidential candidate Henrique Capriles hopes for the best scenario: a repetition of elections in the short term. He believes this would be the inevitable result an electoral audit to be conducted this week on 46% of the ballot boxes not audited on April 14 after the presidential vote. When asked what, in his view, would be the results of the audit, Capriles replied that "an election re-run" would be necessary. He added that, under the law, the vote has to be repeated when irregularities are found. According to Capriles, the election would be repeated at least partially, but the number of voters involved would be large enough "not only to close the gap, but to give us the victory." (El Universal, 04-22-2013; http://www.eluniversal.com/nacional-y-politica/130422/henrique-capriles-does-not-rule-out-election-re-run)

"In the matter of an audit, some countries defend the status quo"

Opposition leader Henrique Capriles rejected meddling by Argentine President Cristina Fernández de Kirchner in Venezuelan affairs and says she interferes in domestic affairs as "if she were part of the Chavista government."

Capriles says he is troubled by the position "some presidents" have taken regarding the audit requested on election results, according to which ruling party candidate Nicolás Maduro won the presidential vote held on April 14, DPA informed. (El Universal, 04-22-2013; http://www.eluniversal.com/nacional-y-politica/130422/stance-of-some-countries-about-audit-is-in-defense-of-status-quo)

Jaua warns the US against imposing sanctions

Venezuela threatened on Monday to take measures affecting energy and trade if the United States resorts to sanctions in a row over the disputed presidential election in Caracas earlier this month. "If the United States takes recourse to economic sanctions, or sanctions of any other kind, we will take measures of a commercial, energy, economic and political order that we consider necessary," Foreign Minister Elias Jaua warned in a television interview. US Assistant Secretary of State Roberta Jacobson was reported over the weekend to have urged a recount in order to give the public confidence in the outcome, which has been challenged by opposition candidate Henrique Capriles. Asked whether the United States would impose sanctions if Venezuela refused to recount the votes, Jacobson said she could not say one way or another, according to CNN en Español. (El Universal, 04-22-2013; http://www.eluniversal.com/nacional-y-politica/130422/venezuela-cautions-the-us-against-sanctions and AFP, http://www.channelnewsasia.com/news/world/venezuela-threatens-oil-trade-measures-i/647850.html)

NGO complains about "serious" attacks on detainees for political reasons

NGO Foro Penal Venezolano (Venezuelan Penal Forum) has collected documentary evidence to file a complaint with local and international organizations over "serious and systematic" violations of due process and human rights abuses against minors and youngsters captured for exercising their right to protest. NGO Director Alfredo Romero says there were attacks and torture, including degrading treatment –unprecedented action in the country- and pellets fired at point-blank at areas such as faces and arms. (El Universal, 04-22-2013; http://www.eluniversal.com/nacional-y-politica/130422/ngo-complains-about-serious-attacks-on-detainees-for-political-reasons)

Paraguay millionaire president-elect speaks highly of Venezuela

Paraguay’s president-elect, Horacio Cartes, said Monday that he’ll urge Congress to approve Venezuela’s entry into Mercosur. A millionaire businessman, Cartes said he transferred his interests in his dozens of companies before the campaign began to avoid conflicts of interests after he takes office Aug. 15. (The Washington Post, 04-21-2013; http://www.washingtonpost.com/business/paraguayans-elect-tobacco-magnate-horacio-cartes-returning-colorado-party-to-presidency/2013/04/21/9d9b7c9e-aae5-11e2-9493-2ff3bf26c4b4_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.