Economics &
Finance
Public debt projected at U$D 219
billion
Increased public spending and stagnating income continue
to generate imbalances in public accounts here, forcing the government into added
indebtedness. This year it is issuing debt through government agencies, further
increasing its obligations. ECOANALÍTICA - a think tank - estimates public
sector debt (central government, state-run oil giant PDVSA, other agencies and
the Chinese Fund) will close the year at U$D 219.1 billion, slightly less than in
2012, but approximately 70.4% of Gross Domestic Product (GDP). (El Universal, 08-19-2013; http://www.eluniversal.com/economia/130819/venezuelan-public-debt-estimated-at-usd-219-billion-in-2013)
Maduro's plan is insufficient to
stabilize the economy
According to EL UNIVERSAL daily steps taken by President
Nicolás Maduro are headed in the right direction, but their implementation is
incomplete. Although there has been renewed dialogue with the private sector, a
system to increase FOREX availability has been established, and regulated
prices have been adjusted; all is hampered by barriers that weaken their effects.
(El Universal,
08-19-2013;
Bonds to be issued in the third quarter this year
Finance Minister Nelson Merentes has announced the
launching of the National Public Debt Bond Placement Program during the third
quarter this year in order to finance the national housing program, pay
pensions and social security and debt repayment. Long term, 10 year bonds will
be issued at fixed and variable rates in order to collect some VEB 1.6 billion
weekly. More in
Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/gobierno-anuncia-colocaci%C3%B3n-bonos-prevista-para-tercer-trimestre-del-a%C3%B1o; Ultimas
Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-anuncia-nueva-colocacion-de-bonos.aspx; El
Universal, http://www.eluniversal.com/economia/130820/manana-inicia-colocacion-de-deuda-publica-nacional)
MOODY’s concerned by power vacuum since
Chavez's death
MOODY's Investors Service says Venezuela’s B1 local
currency rating and B2 foreign currency bond rating take into account growing
macroeconomic imbalances and economic distortions, the result of the
government’s unorthodox and unpredictable policymaking. "These policies reflect the highly
discretionary exercise of governmental authority that very weak institutions
have enabled," says MOODY’s in a new report. MOODY’s negative outlook on
ratings since January 2013 points to the increased political uncertainty and
risks to the Venezuelan economy following the death of former President Hugo
Chavez. Moody’s explains the political transition in Venezuela has come at a
particular challenging time for the Venezuelan economy, which over the past
year has experienced marked deterioration in a number of key economic
indicators, notably in the public sector deficit, the balance of payments, and
the rate of inflation. (Latin American Herald Tribune, 08-16-2013; http://www.laht.com/article.asp?ArticleId=947701&CategoryId=10717)
Commodities
Uruguayan oil company mulls joint
venture with Venezuelan peer
Uruguayan state oil company ANCAP is looking into the
possibility of establishing a joint venture with Petroleos de Venezuela (PDVSA)
to operate two fields in the Venezuelan territory. ANCAP director Juan Gomez
said that they were close to deciding on the merger (60% for Venezuela and 40%
for Uruguay), adding that the issue will be defined during the year. "It's about working together to operate two
fields, Chopare Central and Oveja," said Gomez. (BERNAMA: http://www.bernama.com.my/bernama/v7/wn/newsworld.php?id=971312)
Venezuela and Ecuador plan El
Pacifico Refinery construction
Ecuadorian Foreign Minister Ricardo Patiño has arrived in
Caracas for talks with his Venezuelan counterpart Elías Jaua over the building
of El Pacífico Refinery, the largest in the Southern Pacific. More in Spanish:
(Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-y-ecuador-avanzan-acuerdo-sobre-construcci%C3%B3n-refiner%C3%ADa-pac%C3%ADfico;
http://www.avn.info.ve/contenido/gobierno-ecuador-prev%C3%A9-construir-refiner%C3%ADa-petrolera-apoyo-venezuela-y-china)
Venezuela oil rises to U$D 105.30
Venezuela's weekly oil basket rose 50 cents to U$D 105.30
as summer driving season and tensions in the Middle East increased oil prices
in international markets. According to figures released by the Ministry of
Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos
de Venezuela S.A. (PDVSA) during the week ending August 16 rose to U$D 105.30
from the previous week's U$D 104.80. (Latin American Herald Tribune, 08-17-2013;
http://www.laht.com/article.asp?ArticleId=951003&CategoryId=10717)
Venezuelan government to increase
agricultural subsidies
Yvan Gil, Minister of Agriculture and Lands, has announced
an increase in subsidies to producers of white and yellow corn, soy, sorghum,
and sugar cane. He said a U$D 150 fund has been set up in order to procure
equipment for state-run enterprise AGROPATRIA and the Venezuelan Agrarian Corporation
(CVA). (El Universal,
08-19-2013; http://www.eluniversal.com/economia/130819/venezuelan-government-to-increase-agricultural-subsidies)
Government worried about heavy food
outflows
Rafael Coronado, Nutrition Policy Vice Minister at the Nutrition
Ministry says outbound border food contraband is hurting the supply of basic
products domestically. "What fuels this is the difference in exchange
rates between our currency and Colombia's, which creates a very large margin
that generates improper negotiations that hurt supply - not only in border
states but in all of Venezuela, when they take food out". More in Spanish:
(Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/al-gobierno-le-preocupa-la-fuerte-salida-de-alimen.aspx#ixzz2cVV5D6nh; El Mundo, http://www.elmundo.com.ve/noticias/negocios/consumo/valor-del-bolivar-anima-al-contrabando.aspx)
International Trade
"New debt has been incurred with Colombian exporters" says Luis Alberto Russián, executive
president of the Venezuelan-Colombian Economic Integration Chamber (CAVECOL).
He adds that "issues have deepened
because, instead of growing closer, we are drifting further apart".
Russian says steps taken by Colombia to increase competitiveness, along with
constant regulatory changes in Venezuela and "initiatives that fail to take into account economic efficiency,"
do not improve matters. (El Universal,
08-17-2013; http://www.eluniversal.com/economia/130817/a-new-debt-has-been-incurred-with-colombian-exporters)
Venezuelan socialism aids US rice
farmers
According to the US Department of Agriculture, during the first half of
this year US rice exports to Venezuela were U$D 94 million, an increase of 62%
from 2012. An article by Sara Schaefer published by The Wall Street Journal
indicates that the policies of Hugo Chavez's socialist revolution have become
"a source of income for capitalist
systems he used to criticize". The article shows how for 14 years
Chavez took the route of nationalizing large farms and controlling food prices
which took Venezuela from being a rice exporter to being a rice importer. More
in Spanish: (El Universal, http://www.eluniversal.com/economia/130820/socialismo-beneficia-a-productores-de-arroz-de-eeuu)
Logistics
& Transport
Several parties are responsible for port delays
General José Gregorio Rojas, current General Manager of
Puerto Cabello Port says "cosignatories,
customs agents and carriers are also responsible for delaying ships at bay",
and said an increase in bulk cargo is normal during the current season each
year. He said port infrastructure has increased efficiency in loading and
offloading operations, that there are now six precision scales operating, and
improved information technology which lets carriers and cosignatories request
vehicle passes, send loading orders and electronically monitor offloading. He
said importers should plan purchasing in order to gain operational
effectiveness: "without the support
of carriers, cosignatories, and the owners of in bulk products we cannot have
positive results in shipments." More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=7477;
El Carabobeño, http://www.el-carabobeno.com/impreso/articulo/72472/-rojas-permanencia-de-buques-en-baha--es-corresponsabilidad-de-todos;
El Universal, http://www.eluniversal.com/economia/130820/bolipuertos-solicito-a-los-importadores-planificar-sus-compras)
Nine REACHSTAKERS to increase La Guaira Port capability
Nine Swedish DRF 450 REACHSTAKER machines for container operations have
arrived at La Guaira Port in order to improve cargo loading and offloading. This
brings the number of RTG machines for Port operations to 26. More in Spanish: (Bolipuertos,
http://www.bolipuertos.gob.ve/noticia.aspx?id=7478)
Politics
Showdown looms over decree powers
plan
Venezuelan politicians traded insults over the weekend
with a showdown looming in the National Assembly over President Nicolas
Maduro's plans to ask for fast-track decree powers he says he needs to combat
corruption. Maduro says he is ready to change "all the laws" if necessary to stamp out widespread graft that
is denting his popularity with some core supporters. The opposition accuses
Maduro of turning a blind eye to major corruption by his allies and of trying
to use his campaign to distract voters from worries such as inflation, creaking
public services and violent crime. Maduro's coalition is one vote short of the
3/5 votes required to grant special powers. (Reuters, 08-18-2013; http://www.reuters.com/article/2013/08/18/venezuela-corruption-idUSL2N0GJ0B020130818)
Public debate on corruption
President Nicolás Maduro says he will ask the National
Assembly for an enabling law to combat corruption, and challenged the opposition
to participate in a public debate to discuss the government’s nationwide
anti-corruption campaign. The government has made over 100 corruption-related
arrests in the last month, including several political and media figures
associated with the opposition. Immediately, Julio Borges, the national
coordinator of Primero Justicia, said the opposition would participate in a
public debate on corruption, and called on the president to “tell us the time and location” for a
discussion on national TV and radio. According
to Henrique Capriles, opposition leader and governor of Miranda State, recent
anti-corruption efforts are a strategy to divert public attention from other
pressing problems such as insecurity and inflation. Capriles’ offices are
currently under investigation for corruption. (AMERICAS QUARTERLY: http://www.americasquarterly.org/content/monday-memo-venezuelan-corruption-%E2%80%93-chile%E2%80%99s-election-%E2%80%93-humala%E2%80%99s-popularity-drop-%E2%80%93-farc)
Venezuela and Palestine draw closer
Foreign Minister Elías Jaua has met with his Palestinian counterpart Riyad
Malki to discuss the situation in the Middle East, particularly the case of
Egypt since the overthrow of Mohamed Mursi. More in Spanish: (Agencia
Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-y-palestina-ratifican-lazos-hermandad-y-cooperaci%C3%B3n-binacional)
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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