International Trade
CENCOEX presents plan for FOREX use in import
requirements in 2015
The National Foreign
Trade Center (CENCOEX) has prepared a General FOREX Plan for the Nation, in
order to organize and plan FOREX requirements by private companies during 2015.
Participants must register a sworn statement on what goods they produce and
their FOREX plan for 2015. More in Spanish: (AVN; http://www.avn.info.ve/contenido/plan-divisas-optimirzará-atención-requerimientos-para-importaciones)
Oil &
Energy
Oil prices dropping in global markets, analysts
believe it could drop a further US$ 10 or more
Brent oil prices dropped yesterday by more than US$ 2
per barrel to their lowest level since 2010, after major Middle East suppliers
said they will maintain production levels even if this means lower prices.
Prices have dropped around 25% since June. Saudi Arabia has privately said it
can accept prices between US$ 80-90 per barrel. Oil ministers from Kuwait and Algeria dismissed possible production cuts as crude’s slump to a
four-year low prompted Venezuela
to call for an emergency meeting of the Organization of Petroleum Exporting
Countries. Kuwait hasn’t received an invitation for any urgent OPEC meeting to
discuss a reduction in output, says Oil Minister Ali Al-Omair. His Algerian
counterpart Youcef Yousfi said yesterday he knew of no plans for any emergency
session and was unconcerned by current price levels. (Bloomberg, http://www.bloomberg.com/news/2014-10-13/oil-bear-market-strains-opec-unity-as-venezuela-seeks-meeting.html;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2355986&CategoryId=10717;
and more in Spanish: El Universal, http://www.eluniversal.com/economia/141013/precios-del-petroleo-caen-en-los-mercados-internacionales)
Minimum oil quotas for repayment of Chinese loans were eliminated from the Chinese Fund Agreement in a
fourth amendment to the Venezuela Fund Protocol. Minimum oil dispatches will
now be made “via the exchange of
diplomatic notes in compliance with the laws.” Also, the three-year
deadline to honor the loans was eliminated. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41443&idc=4)
Central Bank's funding of PDVSA rose 127%
Venezuela's Central Bank has loaned PDVSA VEB 578.025
billion, an increase of 127% over the past year, and analysts say this brings a
new distortion into the economy by creating more inflation. According to a JP
Morgan report Central Bank loans to PDVSA are now 16% of GDP, more than twice
what they were the year before. Although oil prices remain above official
budget estimates for the year, PDVSA has continued to seek funding for special
programs in housing, subsidies to the general population, labor costs, mining and
investment in basic industries as a result of the government's growing fiscal
deficit. Economist Richard Obuchi, of ODH Consultants says: "Over the past decade the nature of the
Central Bank has changed away from being the monetary authority in charge of
preserving the value of our currency...now the government has gained control
over both the Central Bank and PDVSA and uses them to maintain a high level of
public spending". Credit to the oil company jumped 2,521% between
January 2010 and May 2014, and accelerated in 2013 and 2014. More in Spanish:
(El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/asistencia-crediticia-del-bcv-a-pdvsa-aumento-127-.aspx#ixzz3G7jMthdx)
Legislator says domestic fuel prices
could be adjusted before the end of this year
Pro government legislator Fernando Soto Rojas,
Chairman of the Energy and Oil Committee at the National Assembly believes
there will "probably is a decision"
in raising gasoline prices before Christmas. He said the Committee has received
many proposals on the matter which are being organized in order to present them
to President Nicolás Maduro for a final decision, and added that "there is a majority consensus in Venezuela
that we are practically giving gasoline away". More in Spanish: (Noticia
al Día, http://noticiaaldia.com/2014/10/soto-rojas-aumento-del-precio-de-la-gasolina-podria-decidirse-antes-que-finalice-el-ano/)
ConocoPhillips files new multi-billion dollar arbitration
against Venezuela's PDVSA
ConocoPhillips (NYSE: COP) has filed for arbitration
under the rules of the International Chamber of Commerce (ICC) against
Petroleos de Venezuela (PDVSA), the Venezuela state oil company, for
contractual compensation related to the Petrozuata and Hamaca heavy crude oil
projects. ICC arbitration is a separate and independent legal action from the
investment treaty arbitration against the government of Venezuela, which is
pending before an arbitral tribunal under the World Bank's International Centre
for Settlement for Investment Disputes (ICSID). In September 2013, the ICSID
tribunal ruled that Venezuela unlawfully expropriated ConocoPhillips'
significant oil investments. The arbitration process to determine compensation
owed by Venezuela under the investment treaty for ConocoPhillips' expropriated
investments is progressing as planned. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2356054&CategoryId=10717)
Commodities
SIDOR's production now projected at 18% capacity this
year
Union leader José Luis Alcocer says that by October
6th this year the state owned steel complex Siderúrgica del Orinoco (SIDOR)
"will have produced an total of
697,340 tons of liquid steel, which is a mere 29% of the low goal of 2.4
million set for 2014." According to monthly results this year's
production will be only 18% of plant capacity. Alcocer says that monthly
production has dropped from 360,000 to 77,000 tons between 2007 and 2014, due
to lack of investment and inactivity. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/sidor-producira-este-ano-18--de-su-capacidad-insta.aspx#ixzz3G70SyIGw)
Workers demand investment in BAUXILUM and CARBONORCA,
operating far below capacity
Workers are on strike at CVG BAUXILUM, the first stage
in Venezuela's aluminum industry, demanding payment of a special bonus and
investments in the industry. Unofficial reports indicate alumina production is
at less than half capacity, as is bauxite production at 25% capacity. The anode carbon plant CVG CARBONORCA has
been in operation only two months this year and it no longer exports its
products. It is estimated their production this year will be 30,000 tons, one quarter
of its installed capacity of 120,000 tons. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141013/exigen-inversiones-para-bauxilum-y-carbonorca)
Car sales in Venezuela hit rock bottom
Venezuela's automobile sector is having one of its
worst years ever. Between January and September, only 13,419 vehicles have been
sold, according to the Venezuelan Automobile Chamber (CAVENEZ), with a monthly
average of 1,491 cars. Sources in the automobile sector estimate that barely
20,000 units will be sold by the end of the year, not including state-run car
assembling plants or imports by the public sector. A few years ago, such low
sales were unimaginable. Back in 2007, the car industry recorded record highs,
as it sold almost 500,000 units, including locally-assembled and imported cars.
However, two main hurdles have arisen ever since: declining car assembly and
virtually frozen imports. Over the first nine months of the year, only 10,286
cars have been assembled, an 82.29% decline from the same period in 2013,
according to CAVENEZ. (El Universal, http://www.eluniversal.com/economia/141013/car-sales-in-venezuela-hit-rock-bottom)
Local potato growers are in a state of emergency
Potato grower associations in Venezuela have called a
state of emergency due to lack of information on yearly seed imports from
Canadian suppliers. "Time has run
out, we need to have the seeds in Venezuela November 15-20 in order to begin
the first planting cycle", says Aldemaro Ortega, Director of the
National Potato Growers Federation. He said the group travels each year at the
start of October to negotiate with Canada's Potato Board, and adds they have no
information whether a contract to acquire seeds has been signed, for what
quantity and quality, which signed it, and estimated arrival. Imports are now
controlled by the government. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/productores-de-papas-se-declaran-en-emergencia.aspx#ixzz3G1Pf3100)
Economy
& Finance
IMF believes Venezuela will continue servicing public
debt
Robert Rennhack, Assistant Director of the Western
Hemisphere Department at the International Monetary Fund (IMF) says Venezuela
will continue servicing its public debt through 2015 despite the difficult
economic situation here. "It's hard
to predict the ability to honor debt next year", but that "evidence so far is that they will continue
paying, but it is a very difficult economic situation". More in
Spanish: (El Nacional; http://www.el-nacional.com/)
Venezuela default almost certain, Harvard economists say
Venezuela should
default on its foreign debt as a shortage of dollars makes it impossible for
the government to meet its citizens’ basic needs, Harvard University economists
Carmen Reinhart and Kenneth Rogoff said. The economy is so
badly managed that per-capita gross domestic product is 2% below 1970 levels,
the professors wrote in an opinion
piece published by Project Syndicate today. A decade of currency
controls has made dollars scarce in the country with the world’s biggest oil
reserves, causing shortages of everything from deodorant to airplane tickets. (Bloomberg, http://www.bloomberg.com/news/2014-10-13/venezuela-default-almost-certain-harvard-economists-say.html)
Venezuelan international reserves are at their lowest
level in the last 11 years, at US$ 19.7
billion last week, down over 8% from the start of 2014 when they were around US$
21 billion. Economist José Guerra claims the reasons are threefold: An increase
of imports, a decrease in the price of gold and lower oil prices. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41434&idc=2;
More in Spanish: El Nacional; http://www.el-nacional.com/)
Politics and
International Affairs
Opposition charges harassment against legislators
The opposition Democratic
Unity Conference (MUD) has charged that the government "is promoting chaos
and conflict" by acting "irresponsibly" toward national
institutions, and accused it of "harassment and threats" against
National Assembly members Ismael García, Juan Carlos Caldera and Carlos
Berrizbeitia through "legal subterfuges to try to deprive them of legislative
privileges". MUD Secretary General Jesús Torrealba explained that by doing
so the government is seeking to alter the Nominations Committee that should
designate members of the National Elections Board and the Supreme Court.
"This is a fraudulent way of fabricating a majority they do not
have", he said. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/141014/la-mesa-denuncio-acoso-contra-diputados-opositores; El Nacional, http://www.el-nacional.com/politica/MUD-asegura-gobierno-busca-delante_0_500350102.html)
84% of the Venezuelans polled believe the country is
facing an economic crisis while 81.3%
think the crisis is political, according to the most recent poll by IVAD on
government management and Venezuela’s political context carried out in September.
Only 28.6% is confident Nicolás Maduro and his government can solve the
country’s economic problems. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41441&idc=1;
El Universal, http://www.eluniversal.com/nacional-y-politica/141013/poll-75-think-venezuela-goes-in-the-wrong-direction;
More in Spanish: El Nacional; http://www.el-nacional.com/)
Two arrested over lawmaker Robert Serra murder
Venezuela's Supreme Court says two people have been
arrested on suspicion of killing Robert Serra, a lawmaker from the governing
PSUV party. The socialist member of the National Assembly and his partner,
Maria Herrera, were stabbed to death earlier this month at Serra's home in the
capital, Caracas. Serra was a rising star in the party known for his passionate
speeches. In a statement, the Supreme Court named the suspects as Eduwin Torres
and Carlos Garcia, but did not give any further details about who they were or
their possible motive for allegedly killing Serra. The court's statement did
not say whether the suspects had denied the allegations. If convicted, they
could face up to 30 years in jail. Government officials said evidence suggested
the murder had been planned and was not a robbery gone wrong. President Nicolas
Maduro has blamed opposition groups in Venezuela and elements in neighboring
Colombia for Serra's murder. (BBC News, http://www.bbc.com/news/world-latin-america-29593513?utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief%20War%20Dogs%20PROMO%2010%2014%2014%20FINAL)
Second request in less than a week
The United Nations Council on Human Rights’ Work Group
on Arbitrary Detention asked the Venezuelan government to immediately release
Voluntad Popular leader and former San Cristóbal Mayor Daniel Ceballos, in
prison since last March 19. It also asked for comprehensive compensation for
the damages caused by his arbitrary detention. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41437&idc=1;
El Universal, http://www.eluniversal.com/nacional-y-politica/141013/opposition-mayor-un-calls-for-release-of-deposed-mayor-daniel-ceballos;
More in Spanish: El Nacional; http://www.el-nacional.com/)
Venezuelan foreign minister rejects UN "meddling"
"As we have
told the Department of State not to meddle with our affairs, we are saying the
same to any working group of any organization," says Venezuelan
Foreign Minister Rafael Ramírez. He was referring to the communiqué issued by
the Working Group on Arbitrary Detention of the United Nations (UN) on
Wednesday, urging Venezuela to release opposition leader and founder of the
Voluntad Popular party, Leopoldo López, for considering he has been subject to
an "arbitrary detention"
since February. "The trials related
to the violent actions occurred earlier in the year is provided for within our
legal framework and under our Constitution," he argued. (El
Universal, http://www.eluniversal.com/nacional-y-politica/141013/venezuelan-foreign-minister-rejects-un-meddling)
Guyanese FM, Ban Ki-moon hold meeting on
Guyana-Venezuela controversy
Guyanese Foreign Minister Carolyn Rodriguez-Birkett
and US Secretary General Ban Ki-moon met two weeks ago to hold talks on the
Venezuela-Guyana border dispute. The Guyanese Ministry of Foreign Affairs
reports the meeting took place on September 26. "Their discussions focused on the continued involvement of the United
Nations Secretary General in the solution of the controversy which arose as the
result of the Venezuelan contention that the Arbitral Award of 1899 that
definitively settled the land boundary between Guyana and Venezuela, is null
and void," Georgetown informed. (El Universal, http://www.eluniversal.com/nacional-y-politica/141013/guyanese-fm-ban-ki-moon-hold-meeting-on-guyana-venezuela-controversy)
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