May 03, 2013

Economics & Finance

Finance Minister seeks to speed up FOREX supply

Finance Minister Nelson Merentes has said his office is working with the private sector to speed up FOREX allocations within the Currency Board (CADIVI). "They will not be delayed again", he said after a meeting with businessmen, Central Bank President  Edmee Betancourt, and Eudomar Tovar, President of CADIVI.  More in Spanish: (AVN, 05-03-2013; http://www.avn.info.ve/contenido/ministro-merentes-garantiza-que-cadivi-acelerar%C3%A1-entrega-divisas-empresas)

Effective new minimum wage of 2,457 bolivars

The new 20% increase in the monthly minimum wage for workers in Venezuela is now in force. On September 1 there will be a further increase of 10%, taking the minimum wage to 2,702.73 monthly bolivars, and on November 1 there will be another adjustment between 5 % and 10%, "based on the behavior of the National Consumer Price Index (INPC) during 2013." In the first quarter, inflation varied 7.9%. (AVN, 05-02-2013; http://www.avn.info.ve/contenido/effective-new-minimum-wage-2457-bolivars; El Universal, http://www.eluniversal.com/economia/130502/new-minimum-wage-rules-of-the-labor-organic-law-in-official-gazette; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=34535&idc=2)

Alimentos POLAR says hoarding is “impossible” as the company is not allowed to transport a single kilogram of pre-cooked corn flour without authorization from the government. Alimentos POLAR administers 4,200 SICA reports every month and only 1% of them is rejected. POLAR Operations Director José Anzola stresses they are willing to dialogue with the government. (Veneconomy, 05-02-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=34531&idc=3)

Commodities

PDVSA has no immediate plans for bond issue

State oil company PDVSA has no immediate plans to issue bonds, the company's finance director said on Thursday.

"Right now there are no instructions (to issue) and we are not working on any bond issues," Victor Aular told reporters on the sidelines of a PDVSA event in the eastern city of Cumana. Borrowing by PDVSA has been a key source of financing for Venezuela's government in recent years. The firm issued U$D 3 billion last year and more than U$D 10 billion in 2011. (Reuters, 05-02-2013; http://www.reuters.com/article/2013/05/02/venezuela-pdvsa-idUSL2N0DJ1NM20130502)

Politics

Opposition challenges Maduro's win in court, seeks new elections

Opposition leader Henrique Capriles has challenged President Nicolas Maduro's narrow election victory before the Supreme Court, prolonging what appears to be a futile effort to overturn last month's vote. Capriles refused to accept the results of the April 14 vote for a successor to late socialist leader Hugo Chavez, and called on supporters to take the streets. Few expect Capriles to win a favorable ruling from the court, which the opposition says is controlled by the ruling Socialist Party. He may also go to international tribunals. "This appeal seeks to annul the elections and request new presidential elections in Venezuela," said Gerardo Fernandez, one of the lawyers representing the opposition. He said that the complaint is contained in a paper of more than 180 pages.
The constitutionalist attorney explained that the opposition coalition impeached the whole election. "It is not only the event of April 14, but also all the stages of such event (...) the campaign, vices in the register of voters, the system through which it took place. Unbalance, misuse of public monies, all the irregularities that occurred on and after the Election Day," he specified. (El Universal, 05-02-2013; http://www.eluniversal.com/nacional-y-politica/130502/venezuelan-opposition-contests-election-of-april-14-at-the-high-court; Reuters, http://www.reuters.com/article/2013/05/03/us-venezuela-election-idUSBRE94118W20130503)

Political chaos grips Venezuela after legislative brawl and rival marches

Venezuela stumbled deeper into political chaos this week as legislators brawled in the National Assembly and government supporters and opponents took to the streets for rival marches amid continuing tensions over the narrow election victory of President Nicolás Maduro. A punch-up in Congress on Tuesday that put several opposition deputies in hospital. The deputies had raised a banner saying "Coup in Parliament" after the pro-government leadership of the legislature prevented them from speaking during the session unless they explicitly recognized Maduro as president. Maduro allies have in most cases said they regretted the violence, but blame the incident on provocation by opposition deputies who interrupted the sessions with whistles and air horns. Prisons Minister Iris Varela was less cautious. "They really deserved the beating that they got," she said. Government supporters and opponents held separate May Day marches in Caracas, the capital, on Wednesday that many had initially feared could turn violent. But the routes were changed to keep the rival bands apart — and attention focused instead on the violence that erupted in the National Assembly a day earlier. (The New York Times, 05-01-2013; http://www.nytimes.com/2013/05/02/world/americas/rival-marches-after-legislative-brawl-in-venezuela.html?_r=0 and Reuters, http://www.reuters.com/article/2013/05/03/us-venezuela-election-idUSBRE94118W20130503)

Opposition asks investigation of clash in congress

Opposition legislators have asked prosecutors to investigate a brawl on the floor of congress that injured several of its lawmakers and forced at least one of them to undergo surgery. Congressman Julio Borges, who suffered head injuries when ruling party member Michele Reyes repeatedly struck him in the face, met with federal prosecutors to demand the probe into who was responsible for Tuesday’s clash in the National Assembly. (The Washington Post; http://www.washingtonpost.com/world/the_americas/venezuela-opposition-asks-investigation-of-clash-in-congress/2013/05/02/0b42f350-b363-11e2-9fb1-62de9581c946_story.html)

OAS' Insulza calls for restoration of deputies' rights in Venezuela

Secretary General of the Organization of American States (OAS) José Miguel Insulza has expressed regrets about the violent events taking place inside the National Assembly. "Violence inside the Venezuelan Parliament "reflects, in a dramatic way, the absence of a political dialogue that could reassure the people and the public powers, so that all Venezuelans can solve the outstanding issues facing the country in a climate of peace," Insulza said, according to an OAS's press release. (El Universal, 05-02-2013; http://www.eluniversal.com/nacional-y-politica/130502/oas-insulza-calls-for-restoration-of-deputies-rights-in-venezuela)

....Foreign Ministry takes issue with OAS Secretary General

The Foreign Ministry immediately issued a communiqué to rebut the "interfering" remarks from José Miguel Insulza, the Secretary General of the Organization of American States (OAS). According to the notice, the OAS senior officer works "closely" with spokespersons of the US Department of State and the White House in an attempt "at forming the perception of a political crisis in Venezuela which requires mediation." (El Universal, 05-02-2013; http://www.eluniversal.com/nacional-y-politica/130502/venezuelan-fm-takes-issue-with-oas-secretary-general)

Following is based on an interesting summary of the Venezuelan political situation by analyst Enrique Ter Horst

Today’s two large marches did not meet and May 1 ended peacefully, but the afternoon before a group of PSUV deputies to the National Assembly brutally attacked their colleagues of the opposition, wounding Deputies Julio Borges, Maria Corina Machado, Ismael Garcia, Nora Bracho, Dinorah Figuera, Homero Ruiz, Eduardo Gomez Sigala and Americo de Grazia, while one of the PSUV deputies continued to speak as if nothing was happening and President Cabello looked on. The ANTV cameras had been turned to the roof of the Assembly, but one of the opposition deputies was able to register the melee on video (see http://www.panorama.com.ve/portal/app/push/noticia64605.php and http://www.noticias24.com/venezuela/noticia/165748/en-fotos-asi-fue-la-trifulca-hoy-en-la-asamblea-nacional/).

Deputies Borges and Machado suffered serious wounds on their faces, requiring surgery in the case of Machado, who had her nose fractured at four different points by PSUV Deputy Nancy Ascencio, and de Grazia has been hospitalized. Machado stated that during the attack she suffered at the hands and feet of Ascencio, who kicked her as she was lying on the floor in front of the podium of the Presidency while Cabello looked on with a smile. Machado also informed that the doors to the Assembly had been locked for the occasion, leading her to conclude that it was a premeditated attack. Machado is not a woman who would invent a story. For a closer look at this intelligent and courageous woman click on http://univision23.univision.com/noticias/americalatina/article/2013-04-17/venezuela-maria-machado-pide-permiso-raul-castro-recuento.  

Cabello, it will be recalled, had ruled he would not give the floor to any opposition deputy who refused to recognize Maduro as the President of Venezuela [1][1], and has also ordered the suspension of their paychecks as long as they persisted in their position. At one stage, after the PSUV majority approved a motion by Cabello confirming his ruling, the opposition unfurled a banner which read “Golpe al Parlamento” and started to honk and make other noises, which then led to the attack. Pedro Carreño, the head of the PSUV parliamentary fraction, surrounded by some of the attackers, held a press conference in which he stated that it was they who had been attacked, and that the PSUV deputies had only reacted to the provocation by the opposition. It is the third time that Julio Borges is physically attacked and it will be recalled that Deputy William Davila was recently hospitalized after a PSUV deputy hurled a microphone at his head.

Henrique Capriles will contest tomorrow the election at the Electoral Chamber of the Supreme Tribunal of Justice, while the CNE continues with the “audit” it has designed avoiding the review of the “cuadernos electorales” (voter registers), the extracts from the voters registry at each voting center, and voting table. In this regard it is interesting to see how Jorge Rodriguez, Maduro’s campaign manager and former President of the CNE, says why the “cuadernos de votacion” are essential for a true audit, when on the occasion of the opposition’s primaries in February 2012 he took exactly the same line of argumentation Capriles is taking now, and even goes as far as explaining how the fraud is done. Fascinating, (see http://www.youtube.com/watch?v=qEqhciete98). Rodriguez is the person credited with having stopped Maduro in his tracks when he initially agreed to a full recount.

Capriles has already said he is aiming at a fresh election, and that it will take the help of the international community to ensure that it is held, mentioning UNASUR, the OAS and the UN. “As we have said, we shall exhaust all national institutional possibilities, even if we are aware what the reality is”. He added that "when justice is denied to a people, the international community helps to get to the truth”). The intention is to seize the Inter-American Commission on Human Rights as soon as possible in order to then seek a ruling at the Inter American Court of Human Rights, but that will not happen the day after tomorrow. A new election would require the active participation of high credibility international observers, such as the United Nations and/or the European Union. UNASUR and the OAS have shown that they are not impartial.

The regime continues its repression, criminalizing dissent, even peaceful protest. General (Ret.) Antonio Rivero, formerly the head of the Natural Disaster Agency under Chavez and now a prominent member of Voluntad Popular, the political party led Leopoldo Lopez, and which is being singled out by the regime for particular attention, was detained and indicted on charges of “incitement to hatred” and “association to commit a crime”, all based on the recent Organic Law against Organized Crime and the Financing of Terrorism. It was his membership in Voluntad Popular which was used as a ground for his charge of “association to commit a crime”. Is Voluntad Popular now to be declared a criminal organization? Is that the next step?

Both the UN and OAS Secretaries-General have called on the two sides to solve their differences peacefully and engage in dialogue. Everything would be solved if a true audit were to be carried out, but the regime and the electoral authority it controls refuses to do so. Is it tacitly admitting that it stole the election?  What is urgently needed is a respected mediator, a creative and discreet Latin-American elder statesman.   

________________________________________

[1][1] Before turning over the floor to an opposition deputy he asks him or her “Do you recognize Nicolas Maduro as President of Venezuela?” and when the answer is “no”, as it always is, he gives the floor to the next PSUV deputy on the list of speakers.

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.