Economics & Finance
FEDECÁMARAS: Government seeks to impose a failed economic model
FEDECÁMARAS President Jorge Roig, head of the nation's largest business organization told President Nicolás Maduro that the Government is "trying to impose an economic model that has failed around the globe", in reference to the totalitarian socialist political-economic structure. Maduro heard from both critics and supporters at a “peace conference” in Caracas, wihich the main political opposition group skipped. “Our country is not well, Mr. President,” said Roig. “We have economic indicators that show us with one of the highest inflation rates in the world, with enormous shortages.” Also attending was billionaire beverage magnate Lorenzo Mendoza, whom Maduro praised for suggesting the government create a commission to analyze the country’s economic situation. The commission will be headed by Vice President Jorge Arreaza, who says all productive sectors are invited to create working groups. (El Universal, 02-27-2014; http://www.eluniversal.com/economia/140227/fedecamaras-govt-seeks-to-impose-a-failed-economic-model; Bloomberg, http://www.bloomberg.com/news/2014-02-27/venezuela-peace-conference-begins-with-opposition-boycott.html; and AVN, 02-27-2014; http://www.avn.info.ve/contenido/productive-sectors-called-set-commission-truth-economy)
U$D 13 billion debt to private sector swells government FOREX reserves to U$D 17.8 billion
The ECOANALÍTICA think tank estimates FOREX available to the government has risen to U$D 17.8 billion, up 60% from U$D 11 billion at the same time last year, due to steady oil sales and holding back FOREX from the private sector, pending a redefinition of the system to be applied. Backed up debt to the private sector for unpaid past imports is now estimated around U$D 13 billion. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140226/el-estado-acumula-mas-fondos-externos-pero-crecen-sus-deudas)
Venezuela: A country with four exchange rates
- Venezuela's economy, under strict exchange
controls since 2003, now faces four different foreign exchange rates:.
Official rate: VEB 6.30/U$d, used for 82% of the FOREX the government received - mainly from oil sales - that is almost U$D 43 billion, strictly for priority areas such as food, health and education.
- SICAD rate: VEB 11,80/U$D. The Ancillary FOREX Administration System (SICAD) auctions out U$D 220 million weekly for non priority activities and tourism.
- SICAD 2 rate: A new system just announced which makes it possible for individuals and companies to freely trade dollars daily within a government established range, designed to bring down scarcity and inflation.
- Black market: Estimated at 13 times the official rate. It arose from strict government controlls and distrust of the Bolivar. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/analisis---venezuela--el-pais-de-los-cuatro-tipos-.aspx#ixzz2uQPZ2I00)
Companies must be one year old in order to participate in SICADThe National Foreign Trade Center (CENCOEX) keeps piling up conditions for companies that want to use the SICAD system. The call for this week's auction now specifies that for companies to enter the process they must be at least one year old. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/empresas-deben-tener-al-menos-un-ano-de-creadas-pa.aspx#ixzz2uQOsQ2IA)
Government established a Foreign Trade Corporation (CORPOVEX)
The Venezuelan Government has formally established a Foreign Trade Corporation (CORPOVEX), which will report to the Vice President for Economic Affairs and the Central Planning Commission. CORPOVEX will control foreign trade operations for a group of state-owned companies: AGROPATRIA, BARIVEN, CASA, CVG, SUVINCA, and VEXIMCA. (El Universal, 02-27-2014; http://www.eluniversal.com/economia/140227/venezuela-establishes-foreign-trade-corporation)
Brazilian exporters anticipate a drop in Venezuela trade
Brazil's Foreign Trade Association (AEB) expects "a U$D 1 billion reduction in exports to Venezuela this year". Brazil has a positive balance of payments relationship with Venezuela due to food exports. Bilateral trade was U$D 6 billion in 2013, with U$D 3.669 billion in Brazil's favor. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140226/en-brasil-temen-una-merma-del-comercio-con-venezuela)
Over 3,000 tons in scarce food staples have arrived at Puerto Cabello
- Over 2,324 tons of frozen beef in 44 containers, for the state Supply and Agricultural Services Corporation (CASA), from Nicaragua
- Over 1,121 tons of milk and cream milk in 48 vans, for CASA, from Costa Rica.
- 230 tons of milk in 10 containers for CASA, from Nestlé Argentina.
- Over 16 tons of baby milk formula, for CASA, from Nestlé Germany.
- Over 439 tons of raw soya oil in 20 containers, for CAA, from ALBALINISA Nicaragua.
- Over 267 tons of green coffee, for Café de Venezuela, from ALBALINISA Nicaragua.
Logistics & Transport
Heavy cargo land transport is about 70% paralyzed
Members of ASOTRACONTAINER, the Puerto Cabello Association of Cargo Transporters, is warning that heavy load transportation is on the verge of a complete stoppage due to scarcities and the excessive increase of supplies and spare parts, as well as the lack of road safety. They report that 70% of the fleet is and an increase in freightage will be announced next week. More in Spanish: (El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/94907/-sector-de-carga-pesada-advirti-paro-involuntario-de-actividades; Notitarde; http://www.notitarde.com/La-Costa/Transportistas-de-Asotracontainer-amenazan-con-paro-por-falta-de-autopartes-y-aumento-en-los-repuestos-2113631/2014/02/25/310773)
Business protests impact of higher port ratesThe Puerto Cabello Chamber of Commerce is concerned over rising rates of port services applied the National Port Authority (BOLIPUERTOS), following an 80% increase in rates at the port there. It is asking authorities to "reconsider" rates to lessen the economic impact. More in Spanish: (El Universal, 02-27-2014; http://www.eluniversal.com/economia/140227/alertan-impacto-por-alza-de-las-tarifas-de-bolipuertos)
Student protests in Caracas end in clashes again
Security forces in Venezuela used tear gas to break up a student demonstration in Caracas. Thousands of protesters were demanding the release of fellow students detained during two weeks of unrest, and called a fresh march for Sunday. Attorney General Luisa Ortega said 13 people had died in the violence, although President Maduro put the figure of protest-related deaths at more than 50 on Wednesday. Despite the start of the long holidays students again gathered in Caracas. "There's no Carnival for anybody here. Here we are still on the streets, committed to the fight," student leader Juan Requesens told EFE news agency. Their peaceful demonstration ended in clashes with security forces when some masked protesters tried to block a road. On Wednesday, Maduro held a "national peace conference" without the participation of the opposition. (BBC, http://www.bbc.com/news/world-latin-america-26376987)
Protests, barricades bring San Cristóbal to a halt
Piles of glass, a trashed refrigerator and the burned remains of a car litter the streets of the Pirineos neighborhood in San Cristobal, giving it the look of a community under siege. Residents of this middle-class area have created the disorder themselves as part of anti-government protests demanding President Nicolas Maduro resign. Open sewer grates expose gaping holes in the street. Debris piled across intersections blocks traffic. Residents set the rules as to which cars can pass through and when. "This barricade is a community effort. The neighbors held an assembly and we're all in agreement," said one burly man who asked not to be identified, as hooded teenager’s unloaded sacks of rocks from the back of a pick-up. "We call this resistance. We're not going to ease up no matter what the governor or the president says." Businesses are mostly shut and public transport suspended. The sporadic demonstrations that kicked off two months ago in San Cristobal have turned into a national opposition protest movement and shuttered this city of 250,000. (Reuters, 02-27-2014; http://www.reuters.com/article/2014/02/27/us-venezuela-protests-sancristobal-idUSBREA1Q1WA20140227)
CNN en Español, media under siege as unrest continues
The media remains under siege in Venezuela as anti-government street protests continue to escalate. CNN en Español anchor Patricia Janiot, abruptly left the country after receiving threats from the government. President Nicolas Maduro threatened on Thursday to expel CNN from Venezuela unless it “rectified its coverage” of the recent demonstrations and has ordered his administration to begin the process of blocking CNN’s signal in the country. In response, CNN en Español has countered that it has reported in an “accurate and balanced manner.” Colombian regional news network NTN24 was pulled off the air and its Internet feed blocked in Venezuela for its uncensored reports. Last Tuesday, a CNN crew was robbed at gunpoint while covering the street protests. As CNN’s Karl Penhaul described it, a group of armed thugs on motorcycles surrounded him and his crew after they rammed into a group of anti-government protesters. “Next thing I knew, I was staring down the barrel of a chrome-plated 9mm pistol and three armed men then proceeded to rob our crew of all the camera gear and all the transmission gear as well,” he reported. With local television networks, radio stations and even newspapers effectively stifled by the Maduro government, most Venezuelans have been relying on YouTube, Twitter, Facebook and other social media to get uncensored information. Newspapers not toeing the line have seen their paper supply restricted, forcing some to close down or in the case of broadsheet El Nacional, cut down the number of sections in the paper. Meanwhile, even the Internet is under siege. Twitter reported that Venezuela had blocked live images on it service on Friday while U.S. company Zello said that state-run CANTV had blocked access to its popular “walkie-talkie” app, widely used by protesters worldwide to organize their marches. (Variety, http://variety.com/2014/tv/news/cnn-en-espanol-media-under-siege-as-unrest-in-venezuela-continues-1201115632/)
Maduro bets 6-day holiday will diffuse protests
President Nicolás Maduro expanded annual Carnival festivities by decreeing February 27-28 as national holidays, in addition to the scheduled days off on March 3-4. Next March 5 will also be a holiday marking the first anniversary of the death of Hugo Chavez. While the extended vacation weekend may send some to the country’s beaches, Maduro will still need to offer concessions to extend any lull in the violence beyond the holidays, said Carlos Romero, a political analyst at the Central University of Venezuela in Caracas. (Bloomberg: http://www.bloomberg.com/news/2014-02-26/maduro-bets-6-day-holiday-will-diffuse-venezuela-protests.html; Reuters, http://www.reuters.com/article/2014/02/27/us-venezuela-protests-idUSBREA1Q1TQ20140227)
Kerry: The United States will not "sit around and be blamed for things we've never done".
US Secretary of State John Kerry says the United States looks forward to restoring relations with Venezuela, yet "we're not going to sit around and be blamed for things we've never done." The statement came in response to accusations made by Nicolás Maduro's Government, which blamed the US Administration for its alleged role in Venezuelan demonstrations. Kerry's words followed Venezuela's surprise move to name Maximilian Sánchez Arveláiz a possible new ambassador to the US. (El Universal, 02-26-2014; http://www.eluniversal.com/nacional-y-politica/140226/kerry-the-united-states-looks-forward-to-improving-ties-with-venezuela; Reuters, http://www.reuters.com/article/2014/02/27/us-usa-venezuela-kerry-idUSBREA1P1U520140227)
US Senate resolution targets Venezuelan rights violators
Senate Foreign Relations Committee Chairman Robert Menendez (D-NJ) and U.S. Senator Marco Rubio (R-FL) today introduced a Senate Resolution deploring the violent repression of peaceful demonstrations in Venezuela, calling for full accountability for human rights violations. “This action sends an unequivocal message by condemning the violence perpetrated against innocent Venezuelans by President Maduro, Venezuelan security forces, and armed pro-government supporters," said Chairman Robert Menendez. "Now is the time to pursue a course of targeted sanctions by denying and revoking visas, and freezing the assets of Venezuelan officials complicit in the deaths of peaceful protestors... This Resolution urges President Obama to immediately impose targeted sanctions that are already possible under existing law and encourage a process of dialogue between Venezuela’s government and the political opposition,” Rubio added. (Capitol Hill, http://www.capitolhillcubans.com/2014/02/senate-resolution-targets-venezuelan.html)
US expels Venezuelan diplomats in tit-for-tat move over unrest
The United States on Tuesday ordered three Venezuelan diplomats to leave in reprisal for President Nicolas Maduro's expulsion of three American embassy staff accused of fomenting unrest that has killed at least 13 people. The U.S. State Department said two first secretaries and a second secretary at the Venezuelan embassy in Washington had been declared personae non grata in response to Caracas' February 17 move against the three Americans. "They have been allowed 48 hours to leave the United States," it said. (The New York Times)
Washington responds coolly to Maduro's ambassadorial proposal
The State Department responded coolly to President Nicolás Maduro's surprise announcement that he would name Maximilian Sánchez Arveláiz as Venezuela's Ambassador to Washington. Venezuela expelled the last US Ambassador here in July 2010. Maduro announced his decision on television with no prior consultation. State Department spokesperson Jen Psaki responded that the US is open to improving relations with Venezuela, even appointing ambassadors, but indicated that Venezuela must first "show seriousness" in its intentions. "The exchange of ambassadors is a mutual decision. We have said for months that we are open to an exchange, but Venezuela must show seriousness on its aperture so that a positive relationship can move forward." More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140226/washington-reclama-seriedad-para-intercambio-diplomatico)
US government condemns attacks on human rights in Venezuela
The US State Department Country Report on Human Rights Practices for 2013, presented by Secretary of State John Kerry has condemned the absence of a balance of powers in Venezuela, saying "we will continue to support those without a voice in Venezuela, where the government had met peaceful demonstrators with a show of force in the streets and by jailing students...the resolution of Venezuela's problems will not come through violence, but through dialogue". "The principal human rights abuses" recorded in Venezuela included "corruption, politicization of the judicial system, and government actions to impede freedom of expression and restrict freedom of the press". It notes "practical limitations on freedom of speech and press" as a result "of the combination of laws and regulations governing libel and media content, as well as legal harassment and physical intimidation of individuals and the media." (El Universal, 02-27-2014; http://www.eluniversal.com/nacional-y-politica/140227/us-government-laments-politicization-of-venezuelan-judiciary; and more in Spanish: ABC Spain, http://www.abc.es/internacional/20140228/abci-eeuu-derechos-cubavenezuela-201402271858.html)
European Parliament holds regime responsible for violence in Venezuela
The European Parliament - by an ample majority vote - called on the regime of Nicolás Maduro to "immediately" disarm and dissolve "armed groups that are controlled by the government". The declaration calls for an end of impunity by these groups. It says that instead of promoting peace authorities "have threatened an armed revolution". It also reminded Maduro of his "duty to guarantee the safety of all citizens in the country, without regard to their political views or affiliations". The resolution calls for a parliamentary group to visit Venezuela urgently "to gage the country's situation as soon as possible". European Union Commissioner Algirdas Semeta told the European Parliament: “We are deeply concerned by the continuing unrest... We reject all acts of violence and intolerance from all side..."nobody should be detained for exercising their rights to freedom of speech and assembly". (El Universal, 02-27-2014; http://www.eluniversal.com/nacional-y-politica/140227/european-commission-alarmed-about-detention-of-students-in-venezuela; and more in Spanish: La Razón, http://www.larazon.es/detalle_normal/noticias/5696880/internacional/la-eurocamara-senala-a-maduro-como-responsable-de-la-violencia#Ttt1Xtv2y4ippJdk)
Pope pleads for 'end to violence' in Venezuela
Pope Francis says he is concerned about recent unrest in Venezuela, in which at least 13 people have died. The Pope said he hoped that "violence and hostility will cease as soon as possible". He called on the Venezuelan people "to promote reconciliation through mutual forgiveness and sincere dialogue". (BBC)
Colombia demands respect for former President Uribe from Venezuelan authorities
Colombian Foreign Affairs Minister María Ángela Holguín complained about consistent oral attacks by the Venezuelan regime on former Colombian President Álvaro Uribe, accusing him of being the mastermind of the ongoing crisis in Venezuela. "When one hears such unfortunate remarks as those made... by Foreign Minister (Elías) Jaua, it is time to ask Venezuela to abstain from speaking thus about former President Álvaro Uribe," Holguín said. (El Universal, 02-26-2014; http://www.eluniversal.com/nacional-y-politica/140226/colombia-wants-venezuelan-authorities-not-to-finger-uribe)
The OAS has postponed its debate on Venezuela
The Organization of American States temporarily postponed its call for a special session on Venezuela which had been requested by Panama "for administrative reasons". Venezuelan Foreign Minister Elías Jaua, who is on a regional support seeking tour of South America, objects to the OAS taking a position and would rather take the case to UNASUR, the Union of South American Nations. (Infolatam)
Russia seeks increased military presence in Venezuela and CubaRussian Defense Minister Sergei Shoigu has said the Kremlin intends to expand its military presence to other nations and is pursuing high level contacts in Venezuela, among other nations. More in Spanish: (ABC Spain, http://www.abc.es/internacional/20140228/abci-rusia-militares-cubavenezuela-201402271706.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.