Economics &
Finance
Economic outlook remains bleak
President Nicolás Maduro says that the government's goal
for the second semester is to "raise
the economy up" He adds that: "The second semester has to be to recover the economy, consolidate it
and prepare for growth in 2014". Not everyone is as optimistic:
Economist Asdrúbal Oliveros says the outlook is not so good, and that even with
additional public spending the economy will not grow or remain under 1%. More
in Spanish: (El Universal, http://www.eluniversal.com/economia/130730/estiman-que-el-escenario-economico-aun-es-negativo)
Central Bank shut down SICAD auction registry due to
excess demand
Venezuela's Central Bank shut down registration for
participants in the upcoming FOREX auction after their system collapsed due to
an avalanche of requests. Although the bank tendered U$D 150 million for
companies and U$D 30 million for individuals in their second scheduled auction,
requests for FOREX by companies averaged U$D 350-400 million, and individuals
requested around U$D 100 million. (El Universal, 07-29-2013; http://www.eluniversal.com/economia/130729/central-bank-closes-registry-until-the-end-of-auction-sale-of-us-dolla; and more in Spanish: El Nacional; http://www.el-nacional.com/; (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/preven-mayor-demanda-en-el-sicad-por-bajo-precio-d.aspx#ixzz2aWOmd4Bo).
SICAD doesn't meet companies' urgent
need for FOREX
Jorge Roig, President of Venezuela's Federation of Trade
and Industry Chambers (FEDECÁMARAS), says the Ancillary Foreign Currency
Administration System (SICAD) "is
raising expectations that are impossible to fulfill" because the
amount of foreign currency put up for sale is not enough to supply the market. (El Universal, 07-29-2013; http://www.eluniversal.com/economia/130729/sicad-fails-to-meet-companies-urgent-need-for-us-dollars;
http://www.eluniversal.com/economia/130727/venezuelan-govt-sucks-up-the-dollars-required-by-the-private-sector)
Daily FOREX supply to private sector is U$D 125 million,
yearly demand is over U$D 120 billion
Central Bank Board member Armando León contradicted
private sector charges about restrictions in FOREX supplies needed to import
basic goods, and said that if one adds up the different channels used there is
a 6.8% increase in supply over last year. Economist Gustavo Rojas,, of
POLINOMICS, explains that given high liquidity demand for US dollars at a 6.30
VEB exchange rate is more than U$D 120 billion yearly. Rojas says: "It
would be necessary to raise the exchange rate gradually until it reaches the
parallel market"; but, he added: "There is not sufficient cash flow
to meet market demand. One must add the obligation to pay foreign debt within
that demand". More in Spanish: (El Nacional; http://www.el-nacional.com/)
Venezuela the only country where
inflation lashes the poor the most
Information disclosed by the UN Economic Commission for
Latin America and the Caribbean (ECLAC) in its Economic Survey of Latin America
and the Caribbean 2013 shows that broader distribution of the nation's income
has not been enough to solve imbalances within Venezuela's economy. The
organization compared the impact of inflationary adjustments between the poor and
the rich; and Venezuela comes up as the country where rampant inflation lashes
the poor the most, that is, the individuals whose largest expenses are in food,
particularly in products where inflationary adjustments hit the hardest. (El Universal, 07-29-2013; http://www.eluniversal.com/economia/130729/venezuela-the-only-country-where-inflation-lashes-the-poor-the-most)
"Inflation beats to the rhythm of the parallel dollar's drum",
says Guerrero
The Government claims devaluation through the Ancillary Foreign Currency
Administration System (SICAD) will have minimal implications because the
Foreign Exchange Administration Commission (CADIVI) is expected to cover 95% of
the currency market at preferential exchange rates. But economist Alexander
Guerrero, however begs to differ. "That
is an accounting approach, but prices develop differently.
Expectations and the public's trust in the currency-purchase process come into
play, and everyone knows that those factors fall short. The reciprocity between
inflation and the parallel FOREX market is perfect. Prices are not following CADIVI's
commands; inflation beats to the rhythm of the parallel dollar's drum."
(El Universal, 07-27-2013; http://www.eluniversal.com/economia/130727/inflation-beats-to-the-rhythm-of-the-parallel-dollars-drum)
Commodities
PDVSA forming a National Oil
Industrial Cluster
Rafael Ramírez, Minister for Petroleum and Mining, has
announced that PDVSA has registered 851 public and private companies in order
to set up a National Oil Industrial Cluster that will seek to meet the needs of
production units at the Orinoco Oil Belt and achieve a production of 4 million
barrels a day by 2019. Ramirez spoke at a meeting attended by representatives of
more than 400 companies in the state of Bolivar and other regions of country.
More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/pdvsa-conforma-conglomerado-nacional-industrial-pe.aspx)
PDVSA seeking new partnerships with
the private sector
Eulogio del Pino, Vice President of Exploration and Production of
Petroleos de Venezuela met in Maracaibo with the private sector related to a
project which seeks to revive over a thousand wells in Lake Maracaibo. Del Pino
explained that this is a pilot project aimed at increasing production, with a
new recruitment scheme, supported by a trust and payment assurance. More in
Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/pdvsa-presenta-nueva-forma-de-alianza-con-el-secto.aspx#ixzz2aQjylLHA)
International Trade
Investments by Venezuelans in
Colombia rose 261% in one year
Colombia's Bank of the Republic data shows investments by Venezuelans in
Colombia rose 261% in just one year, from U$D 20.2 million to U$D 72.8 million
in 2012. The figures come from PROEXPORT Colombia, the official investment
promotion agency, which is also showing a continued rise during 2013.
Venezuelans are investing in petroleum services, construction, tourism, real
estate and other sectors that offer government incentives in "strategic
areas". Companies such as ALFONSO RIVAS & CÍA., FARMATODO, LOCATEL, AB
MARINA GROUP, MUEBLES MADEMECO, EMPRESAS POLAR, TEC QUÍMICOS, BIENES RAÍCES
POLARIS, CISNEROS GROUP, SAMBIL, are already in Colombia. (El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/inversiones-venezolanas-en-colombia-subieron-261-.aspx#ixzz2aWPERRZd)
Logistics
& Transport
Over 137,000 tons of food remain at bay
Over 137,000 tons of soy and yellow corn remain stored in 11 grain ships
at bay in Puerto Cabello, waiting their turn to offload at dock. A total 21
cargo vessels are waiting to be notified when they can discharge their stores.
More in Spanish: (El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/69835/-ms-de-137-mil-toneladas-de-alimentos-permecen-en-baha)
Politics
Maduro's first 100 days in office
President Nicolás Maduro has reached 100 days in office
and is saying "This isn't easy...I
never sought any position and besides, beyond that, I was always
psychologically and politically prepared to be the support for him
(Chavez)...so that to fill his position is a huge personal challenge".
Maduro also called for unity in pro-government forced, and admitted he has
noted divisions leading to the upcoming municipal elections on December 8th. He
said these divisions were due to "chavista"
leaders who - he said - have sold out to "the enemy". He did not identify those his message was intended
for. Opposition leader Henrique Capriles called Maduro's rule "worse" and added "this cannot hold out much more....our people
have to open their eyes, when things don't work they need to be changed."
In his weekly column Capriles wrote that change will begin precisely in the
December elections which Maduro and "his
accomplices" know they will lose. More in Spanish: (INFOLATAM)
PSUV expert asks where Bolivarian
and pro-Chavez socialism has gone
Ruling party PSUV member, political expert and university
professor Nicmer Evans is asking:"After
five months, why does the clamor of the people focuses on a sense of nostalgia
for the absence (of late President Hugo Chávez) and not for his legacy?"
Evans says the relative success of President Nicolás Maduro in his 100 days in
office is due to the fact that he took office without the traditional "honeymoon" new administrations
enjoy. Evans launched a critique of the achievement of governance at the
expense of the "construction of the
Bolivarian and pro-Chávez socialism." (El Universal, 07-29-2013; http://www.eluniversal.com/nacional-y-politica/130729/expert-questions-where-bolivarian-and-pro-chavez-socialism-has-gone)
Venezuela prosecutor asks for freeze on assets of editor
of critical newspaper
Venezuela’s chief prosecutor said she has asked a court to freeze the
assets of the editor of one of the country’s two major opposition newspapers.
El Nacional editor Miguel Henrique Otero called the move an attack on freedom
of expression in statements published Sunday. Chief Prosecutor Luisa Ortega
Diaz said the case stems from an illegal-enrichment investigation against
former Caracas Mayor Alfredo Pena. The mayor had sued Otero, alleging he owes
him U$D 3.5 million. Ortega said she doesn’t know where the ex-mayor got the
money or what the loan was for, but she said her office will investigate
possible criminal activity, according to a statement posted on her agency’s
website. (The Washington Post, 07-28-2013; http://www.washingtonpost.com/world/the_americas/venezuela-prosecutor-asks-for-freeze-on-assets-of-editor-of-critical-newspaper/2013/07/28/5998c5ca-f7ab-11e2-a954-358d90d5d72d_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.
