Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Tuesday, December 29, 2015

December 29, 2015

International Trade


Japanese Chamber President says companies to spur projects in Venezuela

According to Erwin Miyasaka, the President of the Venezuelan - Japanese Chamber (CAVEJA), Japanese companies are contemplating to resume commercial projects in Venezuela in 2016, particularly in the areas of energy, petrochemicals, the automotive industry and technology. "We hope to take in many off track activities in the Energy Cooperation Committee set up by both nations," he says. "Biannual meetings provide a forum for sharing common interests and open up a whole world of opportunities." In Miyasaka's opinion, Venezuela is one of the few attractive countries to invest in the region. "Even with prices of US$ 40 a barrel the business of hydrocarbons and derived products is profitable on the basis of domestic costs," he says. "With the current Organic Law of Hydrocarbons, according to experts in the field, there would be no need to change." (El Universal,



Economy & Finance


Guerra says economy could further deteriorate in 2016

Economist José Guerra, recently elected as an opposition legislator to the National Assembly, says the nation is undergoing an economic tragedy due to a severe contraction along with inflation that is destroying wages. He says GDP shrank 11%, inflation rose 200% and food prices increased 250% as scarcity of regulated food reached 80%. “All of this lead to a 40% drop in wages and pensions, only a nation devastated by war has such statistics. The Central Bank’s monetary policy played a large role in price trends, by financing the deficit by printing money.” More in Spanish: (El Nacional,


2015 was the worst economic crisis in 100 years

According the ECOANALITICA think tank, 2015 has seen the worst economic crisis in a century, due to scarcities and lower buying power, which have diminished the quality of life for middle and lower class Venezuelans as a result of FOREX cuts for private imports and individuals which hurt food subsidies as well as remittances, Internet operations, travelers and students. FOREX allocations to these activities dropped 66% from US$ 137.5 million daily in January-November 2014 to US$ 46 million daily in the same time frame during 2015. More in Spanish: (El Nacional,


Majority in the National Assembly will call for economic reform

Re-elected legislator Julio Borges says the role of the majority in Parliament is to demand that the government take steps on the economy to meet the needs of Venezuelans. He said “the regime must decide if it will be a part of those changes the nation is demanding, or if it continues paralysis”. More in Spanish: (El Mundo,


PSUV economists say 6.30 FOREX dollar rate must disappear

Economists within the pro-government United Socialist Party (PSUV) met recently to seek proposals for the government on economic policy. One of their suggestions was to modify exchange policy, and legislator Jesus Faría spoke of an option to reach a single exchange rate by doing away with the 6.30 rate. Other economists called this rate “unsustainable”. More in Spanish: (Ultimas Noticias,


International reserves rose US$ 1.830 billion

According to Central Bank data published December 23rd, Venezuela’s total FOREX reserves rose US$ 1,830 billion to US$ 16.518 billion, up to October levels. More in Spanish: (El Mundo,; Ultimas Noticias,



Politics and International Affairs


Opposition will call for “change in government” if National Assembly work is blocked

Re-elected legislator Julio Borges, coordinator of the PRIMERO JUSTICIA party, supported statements by Henry Ramos Allup, Secretary General of ACCIÓN DEMOCRÁTICA, also re-elected to the National Assembly, on “changing the government” in six months, and specified that seeking the constitutional means for it will depend on whether the government “sabotages the changes for which millions of Venezuelan’s voted for”. Ramos has written that the coalition will “honor” all proposals made during the campaign among them “the commitment to seek within the six months following the inauguration of the new National Assembly a constitutional, democratic, peaceful and electoral way to change the government”. He added that the coalition proposals were “signed and ratified by all of those who are part of democratic unity, and they are still in force and unscathed and we will honor them”, and said no matter will be prioritized because they are all “dramatically urgent”. Earle Herrera, a re-elected pro-government legislator, says his side is prepared in case the opposition wants to invoke constitutional means against the President, such as a referendum to revoke his mandate: “The Constitution…has answers for each of the constitutional options the opposition calls for”, he says. Ramos and Borges are currently the leading contenders to preside the incoming National Assembly. More in Spanish: (El Universal,


Opposition seeks to elect new National Assembly president by consensus

The leaders of parties within the Democratic Unity Conference (MUD) that have elected legislators are meeting to discuss a proposal by PRIMERO JUSTICIA to seek a consensus on rules to guide the work of the full opposition caucus, including choosing Assembly authorities and committees. If no consensus is reached, it seems probable the new authorities, including the President, will be elected through a vote on January 3rd. After the New Assembly takes office on January 5th, the coalition will announce its agenda. In a statement published on the Internet, the group again called for “freeing political prisoners, the return of exiles and the end of persecution against thousands of students and young people”. The statement emphasizes that “what is at stake is the viability of the nation itself, beyond the stability of a government”. (El Nacional,; Ultimas Noticias,


Audits discard fraud claims in December 6th elections

Two audits carried out after the December 6th elections show the system performed correctly with few election infractions, which throws out fraud arguments alleged by authorities. More in Spanish: (El Nacional,


Supreme Tribunal endorses outgoing National Assembly decisions

The Constitutional Chamber within the nation’s Supreme Justice Tribunal has decided that all decisions taken by the outgoing National Assembly during the special sessions called by outgoing Assembly President Captain Diosdado Cabello, are legal and there is no limitation on the matters they can decide. In this way they intend to reinforce the appointment of 13 new Tribunal justices despite charges that their designation is unconstitutional. More in Spanish: (El Nacional,


Designation of Supreme Tribunal justices published

On December 23rd, the official Gazette published the designation of 13 Supreme Tribunal justices made by a simple majority of the outgoing National Assembly during a special session. The new members of the powerful Constitutional Chamber are Calixto Ortega, Luis Damiani-Bustillos, and Lourdes Suárez-Anderson. More in Spanish: (El Universal,; Ultimas Noticias,


Venezuelans in U.S. linked to US$ 1 billion in PDVSA bribes

The U.S. accused two men of taking part in a US$ 1 billion bribery scheme to secure contracts with Venezuela’s state oil company and linked one of the duo to a former head of Venezuelan military intelligence wanted for alleged cocaine trafficking. Roberto Rincon-Fernandez, a Venezuelan national, was ordered held without bail on charges of conspiring to launder money and violating the Foreign Corrupt Practices Act in connection with Petroleos de Venezuela SA, according to an order signed Dec. 19 by U.S. Magistrate Judge Nancy K. Johnson citing an indictment.  Abraham Jose Shiera-Bastidas, a Venezuelan living in Florida, was jailed in Miami on the same charges. The bribes included monetary gifts, travel, hotel reservations, meals, liquor, car rental, a yacht, a US$ 14,000 stay at the Fontainebleau Hotel on Miami Beach, and other gifts to obtain “business on behalf of Rincon’s and Shiera’s companies,” according to the joint indictment filed in Miami. In her order to keep Rincon behind bars, Johnson said he “has significant assets which could fund a fugitive life-style” and there’s a “serious risk” he could flee. Rincon, with homes in Aruba and Spain, has a “close personal friendship” with retired Venezuelan General Hugo Carvajal, who was arrested in Aruba on Rincon’s private aircraft and later released, according to the order. Carvajal – recently elected to the National Assembly on the government party ticket - is wanted in the U.S. for drug trafficking and Aruba has declined to extradite him, according to Johnson’s order. The case is U.S. v. Rincon-Fernandez, 15-cr-654, U.S. District Court, Southern District of Texas (Houston). (Bloomberg,


Venezuela reached homicides record in 2015

According to the Venezuela Violence Observatory (OVV) non-government organization, violent deaths in this nation were up to 27,875 this year, a 12% increase over last year – up to 90 for every 100,000 inhabitants, which makes Venezuela one of the most violent nations in the Hemisphere. At mid-year the government was admitting to only 66 homicides per 100,000 inhabitants. More in Spanish: (Infolatam,


Venezuela ceases mediator role in talks with Colombia’s ELN

Venezuela has allegedly abandoned its role as a mediator in the rapprochement efforts that have been under way for two years between the Colombian government and the guerrilla National Liberation Army (ELN) intended to start a peace process similar to that taking place since 2012 in Cuba with the Revolutionary Armed Forces of Colombia (FARC). The digital edition of Colombian newspaper El Tiempo reported that "according to sources close to the rapprochement," the government of Venezuelan President Nicolás Maduro has "decided to freeze its mediation". (El Universal,


Two hurt when Venezuelan police chopper crashes in Colombia

Both occupants were injured when a helicopter of Venezuela’s national police crashed just across the border in the northern Colombian province of La Guajira, Colombia’s defense minister said. The aircraft crashed onto a parking lot in the village of Paraguachon in the Colombian municipality of Maicao, but did not catch fire, Luis Carlos Villegas said.
According to the minister, the two crew members flying the Bell helicopter were injured and were taken to medical centers in Venezuela. “Our presence at the site was a humanitarian effort to see if the crew members were being well looked after, and through diplomatic channels we will proceed to establish with the Venezuelan government what should be done with the helicopter wreckage that is left on this side of the border,” the minister told reporters. (Latin American Herald Tribune,


Samper: Changes of course in Argentina, Venezuela are normal in democracy

Ernesto Samper, Secretary General of the Union of South American Nations (UNASUR), says political changes in Argentina and Venezuela are a "normal change in direction" within a democratic system, and he refused claims that the region is in the middle of ideological confrontation. "There is no need for drama over these changes," he added. (El Universal,


Fourth CELAC Summit to be held in Quito on January 27, 2016

The Fourth Summit of the Community of Latin American and Caribbean States (CELAC) will be held on January 27 next year in Quito, Ecuador. Cuban Vice-Foreign Minister Abelardo Moreno said that the 33 countries comprising the CELAC would seek to establish new ways to reduce inequality in the region. "There are great expectations. CELAC is our mechanism for political agreement, which has consolidated upon the summits held so far," Moreno said. (El Universal,



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.

Thursday, December 17, 2015

December 17, 2015

International Trade


Cargo that has arrived at Puerto Cabello:

  • 9,058 tons of steel parts from China for PDVSA
  • 1.944 tons of powdered milk
  • 360 tons of beef
  • 756 tons of black beans
  • 180 tons of refined oil
  • 252 of medicines from Brasil for state agency CASA
More in Spanish: (Notitarde;


Cargo that has arrived at Bolipuertos Maracaibo

  • 5,000 tons of wheat from Canada for CARGILL Venezuela
  • 30,000 tons of yellow corn
  • 41 containers of beef, pork, rice, pasta and long-lasting milk for state agency CASA
More in Spanish: (Bolipuertos,



Logistics & Transport


Dynamic Airways will open Maracaibo-Southern Florida route, as of December 18. This is the third route the air carrier has opened in its six months of operation. The other two are Caracas-Fort Lauderdale and Caracas-New York. (Veneconomy,



Oil & Energy


Maduro: Oil price hits US$ 29 per barrel

President Nicolas Maduro has that Venezuela’s oil price hit US$ 29 per barrel adding that funds for social programs or missions would remain unchanged. "I will repeat it a thousand times: there are now many people thinking twice about what they did on December 6," adding the Revolution secures welfare for the people.
He mentioned the four minimum wage raises he has decreed this year to defend the country from what he calls "economic warfare."
(El Universal,



Economy & Finance


NOMURA says “Venezuela has little chance of economic recovery

Japan’s NOMURA agency believes Venezuela has little chance of overcoming its economic crisis because US$ 13.5 billion are needed to cover this years’ deficit, and in addition the nation will receive US$ 12 billion less due to oil prices dropping down to around US$ 30 per barrel. Their report adds that if the regime were to decide to use up all of its’ gold reserves, that would only bring US$ 11 billion, which covers only 6 months financing. The big question, according to NOMURA is: “How quickly can the opposition work to eliminate economic distortions and correct macro-economic imbalances, before consolidating its power bases?” The report adds that if it is able to do so it can eventually go to work on the economic agenda. NOMURA says the next week weeks will be important to determine whether the opposition can resist Chavista opposition: “If there is progress on economic reports, there will then be quicker relief with slow reduction of dependence on imports through gradual increases in production”. More in Spanish: (El Nacional,


Venezuela´s gold reserves down 24% in value in Jan-Oct

Central Bank gold holdings declined in value by 24% between January and October, according to a bank statement released this week. The value of the country's monetary gold decreased to 69.9 billion bolivars in October from 91.4 billion bolivars in January, according to the statement. That means a reduction of US$ 3.4 billion, based on the strongest official exchange rate of 6.3 bolivars per dollar, which the central bank uses to value these holdings. Reuters reported in March that the Central Bank was in talks with Wall Street banks for US$ 1.5 billion gold swap operation, a transaction that the bank did not confirm at the time. (Reuters,


Expert calls level of Venezuelan international reserves “worrisome

Tamara Herrera, director of the SINTESIS FINANCIERA economic consultant firm, has warned that in 2016 Venezuela will face "something more than the continuation of scarcity and woe the Venezuelan economy and population are going through." Her concerns are low oil prices and dwindling international reserves, since the current level of reserves available for imports and debt payments, "are lower than after the oil strike in 2002 (...) The current level looks modest; out of those US$ 14.5 billion, only US$ 2 billion are cash, immediately available reserves…The bulk of the reserve stands at US$ 11 billion in gold. Moreover, the government may withdraw US$ 1.3 billion from the International Monetary Fund (IMF) without conditions," she explained. (El Universal,


Industrial activity has dropped 47% in Q3 2015

Juan Pablo Olalquiaga, President of the National Council of Industries (CONINDUSTRIA) reports industrial activity dropped down 47% during the third quarter of 2015, as compared to the same period in 2014. And adds that 2014 shrank down from 2013, and from 2012. “We have had a progressive drop in production and it became sharper this year”, he said; adding that FOREX availability is needed to bring in supplies and fuel the industrial system. More in Spanish: (El Nacional,


Venezuela down four spots in Human Development Index

The United Nations Development Program (UNDP) has published its 2015 Human Development Report, in which Venezuela (0.761 points) ranked 71 among 188 countries in the Human Development Index (HDI) ranking.
Despite this decline, Venezuela remains in the group of countries with a "high human development," below Latin American and Caribbean countries such as Argentina, Chile, Uruguay, Barbados, Antigua and Barbuda, Panama, Trinidad and Tobago, Cuba, and Costa Rica.
(El Universal,



Politics and International Affairs


Opposition wants to free prisoners, push Maduro

After 16 years of rubber-stamp impotence, Venezuela’s opposition plans to use its overwhelming electoral victory to free political prisoners -- including its most charismatic leader -- and offer President Nicolas Maduro six months to take painful economic steps or face removal. Moving to take advantage of the two-thirds supermajority they won in congressional elections this month, opposition leaders say a top goal when they take office in January is removing fear from millions who depend on the socialist government for work or housing. In a first step, lawmakers say they want to give state-housing residents deeds to their apartments so that they won’t face political expulsion. “We’re going to legislate so that state policies stop being a mechanism of extortion and blackmail,” Jesus “Chuo” Torrealba, leader of the opposition alliance, said in an interview. “We don’t want beneficiaries of social missions to be able to be blackmailed by any government.” But Maduro said he will refuse to sign the opposition's first priority when the new legislature starts on Jan. 5: an amnesty law for jailed activists. (Bloomberg,; Reuters,


Outgoing National Assembly calls special meeting to appoint top court justices, opposition protests move

Fidel Vasquez, Secretary of the outgoing National Assembly, has announced a special meeting of the body to appoint a number of justices of the Supreme Tribunal of Justice where any conflict of powers will play out. Opposition leader Henry Ramos Allup, recently re-elected to the Assembly says the move is a flagrant violation of the Constitution and a “declaration of war”. (El Universal,; (Veneconomy,


Regime supporters seek to curtail opposition advantage

Venezuela's ruling “Socialists” have set up a grassroots assembly in the same building as the national legislature in a further effort to minimize impact of an opposition election win that has shaken the government. The outgoing National Assembly’s President, Captain Diosdado Cabello has set up the “National Communal Parliament,” which can rule itself according to the Communes Act. Constitutional expert Herman Escarra, a regime ally, claims no group, including this one, can replace the authority of the National Assembly. (Reuters,; Veneconomy,; El Universal,; and more in Spanish: Ultimas Noticias,


Maduro says probe underway on 1.5 million null votes in Dec. 6 elections

President Nicolas Maduro has announced that an inquiry is underway to probe the over 1.5 million null votes in the Dec. 6 parliamentary elections. "There are some null votes, almost 1,500,000, which are being investigated," he told his supporters. "For example, in one state of an electoral circuit, traditionally a Chavismo stronghold, one of our assembly women loses by 82 votes and there are 15,000 null votes...she is going to seek an in-depth probe into the matter, so that the truth is determined and constitutional corrective measures undertaken," he said. (Latin American Herald Tribune,; El Universal,


US prepares charges against top Venezuelan officials

U.S. Justice is filing a lawsuit against two top Venezuelan officials for allegedly receiving money from drug traffickers, says The New York Times. The two accused are Venezuelan National Guard head, Nestor Reverol, and Edilberto Molina, a former officer of the antidrug unit of Venezuela, both of whom will be charged soon in a federal court in Brooklyn.
The charges "will mark the latest in a series of charges by United States prosecutors against powerful Venezuelans who the prosecutors say have assumed a large role in the narcotics trade." Reverol's indictment is likely to be announced in December and will represent a high profile case that could involve the Venezuelan political elite, said The Times. (Latin American Herald Tribune,; Reuters,; Veneconomy, After 16 years of rubber-stamp impotence, Venezuela’s opposition plans to use its overwhelming electoral victory to free political prisoners -- including its most charismatic leader -- and offer President Nicolas Maduro six months to take painful economic )


New Venezuelan Defender General sworn in by outgoing National Assembly President

Captain Diosdado Cabello, incumbent Speaker of the National Assembly, has sworn in Virginia Susana Barreiros Rodríguez as the new Public Defender General and her alternates Ignacio Ramírez Romero and Carlos Alfredo Medina Rojas. The move was rejected by the opposition lawmakers, who left the assembly hall of the Federal Legislative Palace and then returned to their seats to address other issues during the regular meeting of the National Assembly.
According to Cabello, Barreiros "has shown courage to face all the pressures, including death threats." Reference was made to the 14-year jail sentence Barreiros rendered against opposition leader Leopoldo López, even though Cabello would not mention any names.
(El Universal,



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.


Tuesday, December 15, 2015

December 15, 2015

Oil & Energy


Venezuela oil price collapses to 11-year low

Venezuela's mix of heavy oil continued tumbling this week, hitting an 11-year low as oil prices around the world collapsed on slowing demand and oversupply in the wake of OPEC's decision not to cut production. Instead, OPEC raised quotas to reflect current over-production levels. 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 December 11 was US$ 31.24, down US$ 2.81 from the previous week's US$ 34.05. (Latin American Herald Tribune,; El Universal,


Venezuela losing out on oil exports to Cuba, PETROCARIBE and others

Economist Luis Oliveros says Venezuela should review its oil supply agreements with PETROCARIBE, China, Russia and Cuba, which cause the nation to lose out on hard income. He says oil shipped to PETROCARIBE and CUBA have been deleterious to Venezuela since they have barred PDVSA from selling its product to markets that pay in cash and promptly. Reelected legislator William Davila, of the Foreign Policy, Sovereignty and Integration Committee says all these agreements must be reviewed because “we are not in such a privileged position that we can subsidize other countries.” He said members of his Committee and of the Comptroller Committee have not had access to the agreements. Legislator Vestalia Sampedro of the Finance Committee says they too have sought to see the agreements and have gone unheeded: “There is very little transparency, they need to be reviewed, there needs to be accountability.” International affairs specialist Felix Arellano says “it is not smart to tear up international agreements, it’s irrational and inconvenient. The important thing is to review them, and understand how they have been carried out”. Congressman Davila says they do not mean to go against regional integration but adds that “what the government wanted was to gain support in international organizations such as CARICOM. Geopolitical interest prevailed over the need to integrate”. Economist Oliveros says one of the most damaging agreements over the past 10 years is PETROCARIBE due to the conditions it sets up: Oil purchases can be financed up to 80%, payable over 25 years at 1-2% interest rates and with a 2-year grace period. In addition, the part of the bill that is due in cash has been paid for in kind, such as rice and beans. Oliveros says that between 2006 and 2014 Venezuela sent PETROCARIBE an average 186,000 barrels of oil per day, for a total US$ 50 billion and has barely collected on it. “That crude could have been sold to any other customer for cash”, he says. Cuba received crude oil deliveries in exchange for health, education, culture and sport services, and analysts have not been able to find out what price oil is used for these exchanges which would add up to US$ 14 billion at market process.  Carlos Alvarez, of ECOANALÍTICA, says that although agreements with China may be positive, they are plagued by opacity in all that is being done in this area. More in Spanish: (El Nacional,



Economy & Finance


CREDIT SUISSE: Venezuela on the ropes 

2016 could be a pivotal year for Venezuelan politics and economics. The opposition’s recent landslide victory in legislative elections and slim two-thirds majority in the incoming National Assembly will likely increase pressure on an already battered President Nicolas Maduro. His popular support has fallen as Venezuela has the poorest outlook for economic activity, the highest inflation and the largest fiscal deficit in our Emerging Markets coverage universe. The risk of political instability has risen. The loss could fuel greater divisions within Chavismo since it is no longer the strongest political force in the country and Venezuelans appear to be holding President Maduro more responsible for the country’s problems than they did President Hugo Chavez. Do not expect economic policy to improve in an environment of political gridlock or with the possibility of a presidential recall referendum on the horizon. Additionally, low oil prices and continued erosion of public sector assets still suggest considerable risk of a credit event in the fourth quarter of 2016, while PDVSA has another large maturity in April 2017. Frustration with economic conditions continues to wear on the population. CREDIT SUISSE is not optimistic that Venezuela’s macroeconomic imbalances will be corrected in the near term. The executive branch will probably remain empowered to make most economic decisions, and although the official exchange rates could be weakened somewhat, substantive modifications are unlikely against a more confrontational political backdrop, in our view. Both Chavismo and the opposition could be reluctant to take responsibility for enacting unpopular measures, especially with gubernatorial elections and a potential presidential recall referendum looming in 2016. Moreover, there appears to be a lack of consensus among opposition leaders regarding how to deal with the economy and the dollar-denominated debt service burden.  (CREDIT SUISSE: Full report ATTACHED.)


Reserves fall to lowest level in 15 years

The Central Bank’s international reserves have fallen to their lowest level of the past 15 years, at an average US$ 14.5 million, according to data published by the bank on December 10th. This level is lower than that reached after the 2002 oil strike, when it fell to US$ 14.8 billion. According to ECOANALÍTICA projection, considering liquid and non-liquid reserves, current levels can cover only 5.1 months of imports. More in Spanish: (El Nacional,


Shortages in Venezuela can be solved with 10% of incoming foreign currency

Manuel Felipe Larrazabal, President of the Venezuelan Food Industry Chamber (CAVIDEA), says that the main problem the Venezuelan food industry faces is that the supply chain "is weak, which means the industry is producing intermittently." He reports that all international suppliers have stopped granting credit lines to Venezuelan food companies, and that the State, which is "the great supervisor of the economy" still has not settled the debt food industries have accrued with international suppliers for raw material procurement. "Something that needs to be understood is that per every finished product that is imported to Venezuela, the country can manufacture five times more products, there is also employment generation, and a virtuous circle begins," he explains. (El Universal,



Politics and International Affairs


Venezuela: The fall of the myths 

The final count of the votes confirmed a super-majority (two-thirds of the seats) in the National Assembly for the opposition. The result exceeded expectations of a simple majority and proves that the market has been underestimating the probabilities of a political transition. It is now clear that it is not easy for the government to avoid an election even knowing that it will lose it. The results show that the capacity to manipulate the electoral results is limited. The campaign was neither fair nor balanced, but the government cannot disown the result. And the armed forces have proved they are not completely controlled by the government. At a tipping point, they adopted an institutional position and swung to the clearest alternative of power. Venezuelans have also demonstrated a strong pacifist attitude.   The election result vindicates the pro-vote wing of the opposition that has been consistently calling for following the electoral path and building a popular majority. This faction will likely assume the leadership of the new National Assembly.  The opposition is waiting for the government to make its move first. So far, it has not given any signal of moderation or intention to negotiate. A radicalization of the government could deepen the political crisis and precipitate the transition. The opposition will not be an obstacle if the government decides to take economic adjustment measures, but it will likely not look proactively for an economic adjustment because it will not be willing to share in its political cost. The idea of a constitutional amendment to shorten the presidential term and force a presidential election in 2016 and a political transition is gaining support. Which are the transition channels?  There are two options: one in which the institutions remained aligned with the government and move into a more radical scenario and one in which a rebalancing of the institutions open the doors for a transition scenario. After the breaking of the myths previously discussed, the most likely outcome will be the latter option. In that sense, there are three transition channels: a recall referendum, a constitutional amendment and the resignation of the president. Maduro has so far not given signals that he would resign. The recall referendum and the constitutional amendment both imply some risks, but the idea of the amendment seems to be gaining support, since it can be approved by the National Assembly if the opposition has a super-majority; and reduces the vote threshold to just 50% to validate the constitutional change. The idea is to shorten the presidential term from six to four years to eliminate the indefinite re-election cycle and put in a transitory clause to force a presidential election in 2016 to adapt the mandate of the president to the new rules, as happened in 2000 after the approval of the 1999 Constitution and in 2009 after it was amended.  If the government becomes radicalized and the constitutional transition mechanisms are blocked, we see risks of a non-constitutional exit. In such a scenario, episodes of violence cannot be discarded. We believe this type of event would lead the military to intervene and impose order. If the fourth myth again proves false, they will swing to the clearest alternative of power. (BARCLAY’s:


Maduro orders military out of public administration jobs

President Nicolas Maduro has ordered all military personnel working in public administration jobs to return to their units immediately, after the country’s opposition party earlier this month won a majority in congress for the first time in 16 years. “I have ordered all components of the armed forces, that all military working in public administration, must return to their forces,” Maduro said. “It’s time to bring more unity and to strengthen the armed forces.” Maduro said Dec. 9 that he would seek a “revolutionary strategy” to deal with the crisis, including changes in his cabinet. Maduro remains president until 2019, and the Supreme Court and Central Bank are still packed with his appointees. (Bloomberg,; Reuters,


Ministries managed by military officers control 54% of the Budget

The nine ministries headed by military officers managed 54% of this year´s budget. This includes the following ministries: Economics, Finance and Public Banking; Interior and Justice; Defense; President’s Office; Nutrition; Electric Energy; Air and Water Transportation; Industries; Eco-Socialism; and Habitat and Housing. President Maduro has announced that most officers currently in the administration will return to their quarters. More in Spanish: (El Nacional,


Analyst: Venezuelan parliament vote will weaken Maduro's leadership

Luis Vicente León, President of Venezuelan pollster DATANÁLISIS, says the “Chavista” movement "has been shrinking, but still is very representative," and feels that the Venezuelan government "is not appropriate, does not solve problems, and does not represent Chávez's legacy either. Chávismo diminished. In addition, inside what remains, the sector that supports President Nicolás Maduro was also reduced." León says "this is the hardest moment Chavismo has ever experienced, with the highest inflation rate in the world and in the history of the country"; and adds that with the past election Maduro loses politically and also loses legal control. There will be a crack inside Chavismo that will seek a scapegoat, and the only guilty one is Maduro. This will weaken his inner leadership and create pressure inside the government. It will weaken President Nicolás Maduro's control relationship in other institutions that will see that there is an unhappy majority. (El Universal,


Opposition says "ideological manipulation will come to an end" in Venezuela

After meeting with the 112 National Assembly deputies-elect of opposition United Democracy Coalition (MUD), the groups’ Secretary General Jesús Torrealba announced their priorities for the incoming legislature in 2016. He said the opposition would work on social problems, “particularly amid the current economic and social ordeal” and added that "There will not be power struggle."  He further explained that the opposition will raise the issue of a law to benefit all Venezuelans through the country's welfare policies "without having to dress in red or flattering political parties. That is immoral and unfair." (El Universal,


Incumbent National Assembly will decide Supreme Court appointments

The incumbent National Assembly, with a pro-regime majority, intends to fill 13 vacancies in Venezuela´s Supreme Court. Assembly President Captain Diosdado Cabello has called a special session with this purpose. The Finance Committee will also discuss several new credit authorizations requested by the government. More in Spanish: (El Universal,


Capriles suggests “Padlock Law” to avoid international giveaways

Two time Presidential candidate Henrique Capriles has suggested that the new National Assembly pass a “Padlock Law” to keep President Maduro’s regime from “giving away” national resources to “buy international loyalty”. “Oil diplomacy must be stopped. The regime uses national resources to buy allies, not to benefit Venezuelans. A Padlock Law will stop them from signing costly international agreements to the detriment of the nation…Dollars that are given to other countries out of political convenience must be directed to buy food and medicine for the people due to the difficult situation we are undergoing”, he said. More in Spanish: (El Mundo,; El Nacional,


Spain's Rajoy grants López's parents Spanish nationality

The Spanish government has granted Spanish nationality to the parents of Venezuelan opposition leader Leopoldo López as a guarantee "against the political and judicial prosecution they go through" due to the current situation of their son, sentenced to a 14-year prison term. López's father "is facing a special family and personal situation as a consequence of the political and judicial prosecution his son is involved in," the Spanish Ministry of Justice said.
López Sr. was served with a subpoena to appear before a Venezuelan court and an arrest warrant for being abroad when he was submitted to a judicial proceeding, which banned him from leaving the country, DPA reported.
(El Universal,


Guyana rejects Venezuela's explanation for landing of aircraft

Guyanese Minister of State Joseph Harmon refused to accept the explanation given by Venezuelan authorities after one of its military aircraft landed in Kaikan, very close to the border with Venezuela's Bolívar state on December 3.
At a press conference on Thursday, Harmon said that it was unacceptable for trained Venezuelan military men to be unaware of their coordinates, Guyana Times reported. "Sometimes you can actually say these things happen because when you are flying across jungle territory, sometimes the definition of the border is not clear... but we cannot accept this explanation because a Venezuelan military pilot must know where he is going, he must see that this is not Venezuelan territory. I can understand maybe if it was a civilian aircraft and it was disoriented, but we cannot accept that to be a mistake," Harmon posited.
(El Universal,



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.