March 04, 2014

Economics & Finance

Gap between official and parallel exchange rises to 1,200%

The exchange imbalance in Venezuela has smashed a record. By February 28, 2014 the gap between the official exchange rate of VEB 6.30 per U$D and the rate in the parallel market stood at 1,200%, the highest in the history of exchange controls. Such a difference means that demand for US dollars is virtually endless and access to FOREX is slow, difficult and liable to corruption. In addition, the parallel exchange rate is a guideline for companies in estimating replacement costs, thus boosting prices in a wide range of goods and services. (El Universal, 03-03-2014; http://www.eluniversal.com/economia/140303/gap-between-official-and-parallel-exchange-rate-up-to-1200)

Logistics & Transport

AVIANCA cuts sales in Venezuelan Bolivars on currency control

AVIANCA is limiting sales in Venezuelan bolivars as currency controls leave the airline unable to withdraw cash from the country valued at U$D 300 million, Chief Financial Officer Gerardo Grajales said. AVIANCA, Colombia’s biggest airline, has been reducing its passenger capacity in Venezuela since August and will cut sales in bolivars “to the minimum possible,” Grajales said on a conference call today. The carrier is looking for ways to use the bolivars stuck in Venezuela, including paying for services such as call centers and filming commercials, he said. The airline is waiting for “clarity” on how long the country will take to convert Bolivar earnings into dollars and the method it will use to pay them, he said. Airlines had the equivalent of U$D 3.3 billion in bolivars trapped in Venezuela, according to the International Air Transport Association. The lag for the government to convert the earnings into dollars has increased as a dollar shortage deepens an economic crisis that’s stoked deadly street protests and calls from opposition parties for President Nicolas Maduro’s ouster. COPA has U$D 487 million trapped in Venezuela and last got dollars out of the country in October, Chief Executive officer Pedro Heilbron said last month. AMERICAN AIRLINES had U$D 710 million at the end of 2013 at an average rate of 6.04 bolivars to the dollar, with the period to exchange funds into dollars increasing to more than a year, according to a U.S. filing. (BLOOMBERG, http://www.bloomberg.com/news/2014-03-03/avianca-cuts-sales-in-venezuela-bolivars-amid-currency-controls.html)

Airliners excluded from Venezuelan government roundtables

Airliners "were not invited" to take part in roundtables on the economy convened by the government within the framework of the National Peace Conference, despite being the sector which "has the largest due and payable amount, that is U$D 3.5 billion," says Humberto Figuera, CEO of the Venezuelan Airlines Association (ALAV). "The effort of international and national airlines at continuing operating is not appreciated," he said, and denied they received any advance payment by the exchange administrator. "Last week, they exceptionally resolved the requests of IBERIA... and ALITALIA... However, we don't have any sign of an attempt at going back to regular settlement. That was merely the result of diplomatic steps." (El Universal, 03-03-2014; http://www.eluniversal.com/economia/140303/airliners-excluded-from-venezuelan-government-roundtables)

Politics

Opposition musters thousands for march despite Carnival holiday

While some Venezuelans went to the beach to enjoy the Carnival holiday, thousands of anti-government demonstrators marched in the capital on Sunday, trying to keep up the momentum from weeks of protests demanding President Nicolas Maduro resigns. Government leaders have urged Venezuelans to skip the protests and make their traditional trips to the beach during the Carnival holiday. State television was filled with images of packed beaches and smiling holidaymakers. Opposition marchers that ranged from students to middle-aged professionals and senior citizens filled a square in the east of Caracas to protest problems including 56% annual inflation and one of the world’s highest murder rates. (Reuters, 03-03-2014; http://www.reuters.com/article/2014/03/03/us-venezuela-protests-idUSBREA210T620140303; Bloomberg, http://www.bloomberg.com/news/2014-03-01/maduro-reaches-out-to-critics-as-venezuelan-death-toll-increases.html)

UN's Ban Ki-moon urges Venezuela to hear protesters' demands, dialogue

United Nations Secretary General Ban Ki-moon has urged Venezuelan authorities to "listen carefully to the aspirations" of protesters and engage in dialogue with the opposition. His comments came before a meeting in Geneva with Venezuelan Foreign Minister Elias Jaua. Ban said protesters "must resort to peaceful means in delivering and conveying their messages". Jaua, who is in Geneva for a meeting of the UN's Human Rights Council, said Venezuela was the victim of a "psychological war" perpetrated by the media. After the meeting with Jaua, the UN issued a statement saying that Ban had "reiterated his hope to see reduced tensions and the necessary conditions to engage in meaningful dialogue". (BBC, http://www.bbc.com/news/world-latin-america-26424779; Reuters, 03-01-2014; http://www.reuters.com/article/2014/03/02/us-venezuela-protests-idUSBREA200QV20140302; Bloomberg, http://www.bloomberg.com/news/2014-03-03/venezuelan-opposition-vows-to-maintain-pressure-on-government.html; El Universal, http://www.eluniversal.com/nacional-y-politica/140302/venezuelan-fm-elias-jaua-to-meet-with-un-secretary-general-in-geneva; CNN español; http://cnnespanol.cnn.com/2014/03/03/tension-en-venezuela-3m-minuto-a-minuto/?iref=allsearch)

Capriles: We ask the UN to let us tell the truth on Venezuela

Opposition leader and Miranda state governor, Henrique Capriles Radonski reports that Venezuela's opposition has asked the United Nations to let itself be briefed on actual events in Venezuela instead of listening only to "the government tales full of lies". Capriles Radonski twitted after challenging remarks made by Venezuelan Minister of Foreign Affairs Elías Jaua in Geneva during a session at the UN Human Rights Council. According to Jaua, there is no social unrest in Venezuela. (El Universal, 03-03-2014; http://www.eluniversal.com/nacional-y-politica/140303/capriles-we-ask-the-un-to-let-us-tell-the-truth-on-venezuela; Fox News, http://www.foxnews.com/world/2014/03/03/venezuelan-opposition-leader-calls-for-citizens-to-organize-popular-defense/)

Opposition asks  the OAS to speak up on Venezuela

Speaking for the opposition Unified Democratic Conference (MUD) Caracas Metropolitan Mayor Antonio Ledezma filed a request with the local chapter of the Organization of American States (OAS) for the institution to speak up and issue an opinion on the current state of affairs in Venezuela. Accompanied by hundreds of demonstrators, deputies María Corina Machado, Ismael García and Delsa Solórzano, and El Hatillo Mayor David Smolansky, he expressed their annoyance at the attitude of neighboring countries, and cautioned the OAS against a breach of agreements signed by Venezuela. (El Universal, 03-03-2014; http://www.eluniversal.com/nacional-y-politica/140303/caracas-mayor-oas-is-not-set-to-defend-governments)

Jailed opposition leader calls for more protests

Jailed opposition leader Leopoldo Lopez urged sympathizers to maintain street protests against President Nicolas Maduro. Lopez, who was arrested on February 18 after helping launch a nationwide protest movement, demanded top officials including the Interior Minister resign over the use of force against demonstrators in violence that has killed at least 18 people. "We must continue the peaceful struggle. There is no reason to give up our fight," said Lopez in a message read in a video posted online from an undisclosed location by a party colleague who is also wanted in connection with the unrest. (Reuters, 03-03-2014; http://www.reuters.com/article/2014/03/03/us-venezuela-protests-idUSBREA221M220140303)

Brazilian FM calls for dialogue in Venezuela

Brazilian Minister of Foreign Affairs Luiz Alberto Figueiredo has lobbied for dialogue between the Venezuelan government and the opposition to seek a democratic outcome to the political standoff in Venezuela.

Figueiredo said that his government is in aligned with the Common Market of the South (MERCOSUR), and pointed out that the regional trade bloc repudiates violence "from whatever source" and encouraged parties to dialogue.

He said the remark "is not a message" for President Nicolás Maduro, but "reaffirmation" of the need for a democratic resolution of the crisis (El Universal, 03-03-2014; http://www.eluniversal.com/nacional-y-politica/140303/brazilian-fm-advocates-dialogue-in-venezuela)

Bill supporting Venezuela protests debated in US Congress

After passing unanimously in the Western Hemisphere Subcommittee, a resolution supporting the protesting people of Venezuela will now be debated with the full U.S. House of Representatives. U.S. Rep. Ileana Ros-Lehtinen (R-FL) introduced a resolution supporting the people of Venezuela as they protest peacefully for democracy, for respect for the rule of law and an end to the violence perpetrated by Nicolas Maduro's thugs. "I'm optimistic that the U.S. House will pass my bill expressing support for the people of Venezuela as they protest peacefully for democracy," said Ros-Lehtinen. "I hope it will pass so that we send a swift and strong message to Maduro that the United States House of Representatives has taken notice of the developments in Venezuela, and we will not allow these transgressions to pass quietly." (Latin American Herald Tribune, 03-02-2014; http://www.laht.com/article.asp?ArticleId=1685210&CategoryId=10717)

Italian, Portuguese photojournalists released

Italian photojournalist Francesca Commissari was released by a Caracas judge who heard her case and those of a Portuguese citizen and 39 Venezuelans arrested late last week during anti-government protests here. “I’m free,” tweeted Commissari, and thanked – among others – her country’s consulate and the lawyers from the NGO Foro Penal Venezolano and the SNTP journalists’ association of Venezuela for helping obtain her release. In addition to Commissari, there have been “76 journalistic victims of the repression in Venezuela” says the SNTP. (Latin American Herald Tribune, 03-02-2014; http://www.laht.com/article.asp?ArticleId=1686875&CategoryId=10717)

Maduro to attend Bachelet's inauguration in Chile

Venezuela's Ambassador to Chile, General Arévalo Méndez, has confirmed that President Nicolás Maduro plans to attend next the inauguration of president-elect Michelle Bachelet on March 11. (El Universal, 03-03-2014; http://www.eluniversal.com/nacional-y-politica/140303/venezuelas-maduro-to-attend-bachelets-inauguration-in-chile)


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.