July 30, 2015

International Trade

 

Less FOREX available for imports as oil income drops by US$ 3 billion in 2015

According to a report by the SÍNTESIS FINANCIERA think tank, a severe drop in oil income will further shrink FOREX allocations for imports. The study says that if oil prices continue at the current rate, this year's average would be around US$ 49.1 per barrel, which means an estimated US$ 3 billion oil income reduction in 2015. "This is an element that points to the persistent FOREX drought we have seen throughout July, unless until there is an inflow of US$ 1.5 billion from the sale of Jamaica's outstanding oil debt"...at a 50% discount. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

 

Logistics & Transport

 

Shortage of spare parts hampers timely repair of vehicles in Venezuela

Repairing any type of vehicle in Caracas can take from six months to one year due to shortages of spare parts and other supplies. José Manuel González, President of the Venezuelan Chamber of Mechanical Workshops, says that one of the difficulties to properly maintain vehicles is the high cost of spare parts, as a result of the increase in customs tariffs.
He explained that so far this year, 47 car shops have gone out of business nationwide. (El Universal, http://www.eluniversal.com/economia/150729/shortage-of-spare-parts-hampers-timely-repair-of-vehicles-in-venezuela)

 

 

Oil & Energy

 

Venezuela seeks light crude contracts to make blends

Petroleos de Venezuela (PDVSA) has asked oil suppliers to submit offers for up to 70,000 barrels per day of ultralight sweet crudes through contracts of one to five years. If successful, the move would mark the most definitive step state-owned PDVSA has taken to obtain longer-term supplies of ultralight crude, which it needs to use as a diluent for its growing output of extra heavy oil. PDVSA bought some 4 million barrels of Algeria's Saharan Blend light crude from October 2014 through January of this year under an agreement with state-run Sonatrach. That deal ended after disagreements over prices and delivery terms, forcing PDVSA to resume production of less attractive blends made with imported naphtha. (Reuters, http://www.reuters.com/article/2015/07/27/oil-venezuela-imports-idUSL1N1041K620150727; El Universal, http://www.eluniversal.com/economia/150728/venezuela-seeks-light-crude-contracts-to-make-more-attractive-blends)

 

40% of domestic liquid gas transportation is paralyzed due to lack of spare parts

40% of all vehicles that provide primary transportation for liquid gas to plants that fill and distribute containers for domestic use by 1.8 million Venezuelan families are paralyzed due to lack of spare parts.  Operators say "the situation tends to become worse as we cannot cover operating costs as rates have not been adjusted for the over 26 months for services they provide PDVSA Gas". More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

 

Economy & Finance

 

ECLAC: Venezuela's economy will contract by 5.5% in 2015, worst in the region

The UN's Economic Commission for Latin America and the Caribbean (ECLAC) estimated Venezuela's GDP will contract 5.5% by the end of this year, and will suffer the most severe contraction in the entire region. Panama is leading regional expansion with 6% growth, according to the 2015 study presented by ECLAC Executive Secretary Alicia Bárcena. More in Spanish: (2001, http://www.2001.com.ve/en-la-agenda/104908/cepal--economia-en-venezuela-se-contraera-5-5--a-finales-de-2015.html)

 

International reserves shrink even further, liquid reserves around US$ 900 million, asset sales recommended

Venezuela's international reserves were US$ 15.388 billion by 23 July, and pending debt repayments in 2015 and 2016 are US$ 15.461 billion. Morgan Stanley estimates that Venezuela's cash liquid reserves are now around US$ 900, a historic low, and is now burning reserves at a rate of some US$ 1.6 billion per month. The firm reports US$ 12.900 billion of reserves are held in gold bullion, and Venezuela's drawing rights with the IMF are now down to US$ 1.7 billion. The nation will also receive US$ 1.5 billion from Jamaica in advance payment - at a 50% discount - of that country's oil debt with Venezuela through PETROCARIBE. According to Bank of America, Venezuela faces a US$ 20 billion fiscal deficit, and the Morgan Stanley report doubts China will furnish new loans. Morgan Stanley believes President Maduro must now urgently start selling off assets, including the Chalmette refinery in the US. More in Spanish: (El Universal, http://www.eluniversal.com/economia/150729/que-esta-pasando; El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/bonos-soberanos-cierran-jornada-con-poco-movimient.aspx; Summarium, http://sumarium.com/reservas-liquidas-de-venezuela-rondarian-los-900-millones-de-dolares-segun-morgan-stanley/)

 

 

Politics and International Affairs

 

Maduro signals he won’t allow election monitoring, Capriles terms statements "unacceptable, suspicious"

President Nicolas Maduro has indicated he won’t allow international observers to monitor December’s congressional elections, as opinion polls show the ruling party losing its majority. “Venezuela is not and will not be monitored by anyone,” Maduro said at the United Nations in New York on Tuesday in response to a reporter’s question about whether the UN could “monitor” the Dec. 6 vote. “Our country won’t accept it ever.” Maduro’s ruling United Socialist Party of Venezuela, known as PSUV, is forecast to lose its congressional majority for the first time in 16 years. Opposition candidates are backed by 56.2% of voters, compared with 29.8% for the PSUV, according to the latest available DATANALISIS poll taken between May 18 and 30. Opposition leader Henrique Capriles, who recently met with OAS Secretary General Luis Almagro to request monitoring, quickly called Maduro's statement "unacceptable" and "very suspicious", adding that "it is a contradiction to claim you are a majority and not accept observers". He said that according to law, the decision to accept observers in parliamentary elections is up to the Elections Council, "it is not up to him to decide who can come and who cannot". Capriles added that a document is being drawn up for the government to sign it will accept election results.  (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-28/venezuela-s-president-signals-he-won-t-allow-election-monitoring; El Universal, http://www.eluniversal.com/nacional-y-politica/150728/maduro-rules-out-accepting-international-observation-in-6d-vote; and more in Spanish: El Universal: http://www.eluniversal.com/nacional-y-politica/150729/capriles-es-contradictorio-decir-que-eres-mayoria-y-no-aceptar-observa)

 

19, 504,106 Venezuelans are registered to vote on December 6th

Preliminary voter registration for parliamentary elections next December 6th shows 19,504,106 citizens will be able to vote, and reflects 887,278 new voters as well as 223,970 people dropped from the rolls due to death or disqualification. The registry will be audited starting August 5th. (El Universal, http://www.eluniversal.com/nacional-y-politica/150728/venezuelan-voters-register-to-be-audited-on-august-5; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/150729/19504106-electores-estan-habilitados-para-el-6d)

 

Maduro requests U.N. mediation in Guyana border dispute

President Nicolas Maduro said he asked U.N. Secretary-General Ban Ki-moon for U.N. mediation in his country's century-old border dispute with neighboring Guyana. The controversy was discussed by Maduro and Ban at a meeting Tuesday morning in New York. "We will continue to work through diplomatic means," Maduro told reporters after the meeting. "We will overcome the provocations and aggressions of (Guyanese president David) Granger." (Reuters, http://www.reuters.com/article/2015/07/28/venezuela-guyana-idUSL1N1081S520150728; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393293&CategoryId=10717; http://www.laht.com/article.asp?ArticleId=2393217&CategoryId=10717)

 

Guyana publishes maritime coordinates in official gazette

Guyanese Minister of Foreign Affairs, Carl Greenidge has announced that Guyana has published the coordinates of its maritime space coordinates in the Official Gazette. The move comes about two months after Venezuela unilaterally extended its maritime border, leading to a new border dispute between the two countries. Minister Greenidge said that the coordinates of Guyana's maritime borders were published to reassert Guyana's stance regarding the ownership of the territorial sea, the Exclusive Economic Zone (ZEE) and the continental shelf. (El Universal, http://www.eluniversal.com/nacional-y-politica/150729/guyana-publishes-maritime-coordinates-in-official-gazette)

 

Attorney General: UN report is based on "false assumptions"

Venezuela´s Prosecutor General Luisa Ortega Díaz says she regrets the fact that the United Nations Human Rights Committee echoed "false assumptions" when it comes to crime in Venezuela. She said the Committee based its investigation on "false assumptions, because not all violent deaths can be regarded as crimes, as if they were all murders. A car accident is a violent death, but it is not a crime (...) a suicide (...) is a violent death, but it does not constitute a crime," she commented. (El Universal, http://www.eluniversal.com/nacional-y-politica/150729/attorney-general-un-report-is-based-on-false-assumptions)

 

Spanish FM: "Venezuela has a long way to go in human rights"

Spain´s Minister of Foreign Affairs, José Manuel García-Margallo, says Venezuela "has a long way to go in the matter of human rights, as many pronouncements issued by the United Nations have made public." The foreign minister's remarks came in reply to criticism from Venezuelan President Nicolás Maduro of a controversial law on security and public order passed by the conservative government of President Mariano Rajoy, whom Maduro labeled an "assassin of the people". Minister García-Margallo had summoned the Venezuelan ambassador to Madrid for the second time in three months. The first time was in April, following President Maduro's statements calling Rajoy "a racist." (El Universal, http://www.eluniversal.com/nacional-y-politica/150728/spanish-fm-venezuela-has-a-long-way-to-go-in-human-rights)

 

 

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.

 

July 28, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello:

• 60,000 tons of white corn from Mexico for state agency CASA
• 30,000 tons of raw sugar from Brazil for CASA.
• Over 16,852 tons of soy oil from Aceitera General Deheza and Cargill Saci for ALIBAL and CARGILL Venezuela.
• 12,000 tons of soy oil from Argentina for Consorcio Oleaginoso Portuguesa (COPOSA).  

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Gobierno-Nacional-recibe-mas-de-90-mil-toneladas-de-alimentos-2470610/2015/07/27/565498)

 

Government imports 27,600 tons of coffee to meet scarcity

Víctor Pérez, who heads the coffee section of the national agricultural association FEDEAGRO, reports the government has imported some 27,600 tons of coffee from Nicaragua and Brazil in order to meet scarcities. He says this volume could cover 5 months of consumer demand under norma conditions. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/importan-600-mil-quintales-de-cafe-para-paliar-las.aspx#ixzz3hBELZzoB; El Nacional; http://www.el-nacional.com/)

 

 

Logistics & Transport

 

AVIOR Airlines launching flights Valencia to Bogota and Medellin in Colombia tomorrow. Its marketing vice president Gibson Preziuso said there will be five weekly flights to each destination. Tickets will be Bs.60,000-80,000. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44799&idc=3)

 

Domestic flights are down 30% in the past 16 months, according to José Antonio Yapur, head of the Tourism Council. He says the number of flights are down to key vacation destinations such as Margarita, Carúpano, Canaima, Coro, Los Roques and Mérida. (El Nacional; http://www.el-nacional.com/)

 

 

Oil & Energy

 

Venezuela seeks light crude contracts to make blends -sources

Petroleos de Venezuela (PDVSA) has asked oil suppliers to submit offers to sell the nation up to 70,000 barrels per day of ultralight sweet crudes through contracts of one to five years. If successful, the move would mark the most definitive step state-owned PDVSA has taken to obtain longer-term supplies of ultralight crude, which it needs to use as a diluent for its growing output of extra heavy oil. PDVSA bought some 4 million barrels of Algeria's Saharan Blend light crude from October 2014 through January of this year under an agreement with state-run Sonatrach. That deal ended after disagreements over prices and delivery terms, forcing PDVSA to resume production of less attractive blends made with imported naphtha. (Reuters, http://www.reuters.com/article/2015/07/27/oil-venezuela-imports-idUSL1N1041K620150727)

 

Venezuelan oil continues to "weaken"

Venezuela's Ministry of Petroleum and Mining reports that the price of Venezuelan oil continues to "weaken" in the international market. The Ministry points out that during the week of July 13-17 Venezuelan oil averaged US$ 49.89 per barrel, while in the week of July 20-24 it ended at US$ 47.89, losing US$ 2 per barrel. "The price of oil continued to weaken during the week amid concerns grounded on oversupply of crude oil on the main markets," the Ministry noted. (El Universal, http://www.eluniversal.com/economia/150727/venezuelan-oil-continues-to-weaken)

 

Guyana considers alternatives as Venezuela oil program wobbles

Guyana is considering energy alternatives to the PETROCARIBE program as Venezuela fails to meet export quotas and tensions flare between the neighboring countries. “We are actively considering other options,” says Guyanese Finance Minister Winston Jordan. The small South American nation receives about half its fuel supply from the PETROCARIBE program, but fears the agreement could be affected by a diplomatic spat with Venezuela over a longstanding border dispute, Jordan said. Guyana currently receives about 5200 barrels of fuel a day under the PETROCARIBE program, though Venezuela has been unable to meet some delivery quotas, he said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-24/guyana-considers-alternatives-as-venezuela-oil-program-wobbles)

 

Spain’s REPSOL said to weigh sale of assets including Venezuela

REPSOL is considering selling assets in countries including Venezuela as the Spanish oil company seeks to reduce debt after its US$ 13 billion purchase of Talisman Energy Inc. last year, people familiar with the matter said. As part of its plan to reduce peripheral assets, Madrid-based REPSOL may also look at divestments in Alaska, Bolivia and the Gulf of Mexico. No final decision has been made and the company is still deciding which units to sell, or whether to keep the assets, they said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-23/spain-s-repsol-said-to-weigh-sale-of-assets-including-venezuela)

 

PETROVIETNAM ponders investments in Orinoco Oil Belt

A delegation from Vietnamese state-run oil company PetroVietnam visited areas of the Ayacucho Division of the Orinoco Oil Belt in Anzoátegui state, northeast Venezuela. The delegation was headed by the Vice-President of PETROVIETNAM, Cao Huu Binh. Part of the board of the Ayacucho Block received the delegation during the visit to the Basic Unit of Production Construction (UBCP) and the PDV-71 drill. (El Universal, http://www.eluniversal.com/economia/150727/petrovietnam-ponders-investments-in-orinoco-oil-belt)

 

 

Economy & Finance

 

Venezuelan currency enters free fall mode

Having tumbled beyond the 500 per dollar mark in the black market at the start of the month, and then the 600 mark just eight days later, the bolivar is now within sight of crashing through the 700 barrier. The so-called bolívar "fuerte" - or strong bolivar - hit a new low of 683.26 per dollar on the black market last week, according to a rate tracking website. This means the bolivar's value on the black market is now less than a hundredth of the main government rate of 6.3 bolivares to the dollar - and underscores the growing inability of Nicolas Maduro, Venezuela's president, to stabilize the country's fast deteriorating economy. The currency has lost 43% of its value over the past month, as a fresh dive in global oil prices squeezes government finances and drains foreign reserves. It is worth a thousandth of what it was in 1999, when Hugo Chávez came to power. Meanwhile, price increases are seen by economists to be approaching hyperinflation territory as the government cranks up the printing press to pay its expenses. Most economists reckon that the inflation rate is already 120% a year (the central bank stopped publishing price data, so no one is sure). Some expect it to reach 200% by the end of 2015. The bolivar's implosion has been wreaking havoc on big multinationals that are still doing business in the country. American Airlines and Coca-Cola FEMSA, the Mexican bottler, became the latest to sound the alarm last week. The US airline, which has already been cutting its service to Venezuela, warned that there's a risk of further losses on the US$ 629 million in cash it has in bolivars. FEMSA meanwhile said a move to reduce the value of its revenue from Venezuela by 95% has wiped out its sales and profit gains for the year to date. (Financial Times, http://www.ft.com/fastft/366271/venezuela-bolivar; The Economist, http://www.economist.com/blogs/freeexchange/2015/07/chinas-wild-stockmarket?fsrc=permar|image1)

 

Harvard Professor now says Venezuela won’t escape default in ’16

Harvard University Professor Ricardo Hausmann last year questioned Venezuela’s decision to keep paying bondholders as the country sank deeper into crisis and suggested it stop honoring the debt. Now, he’s saying Venezuela will have no choice but to default next year. Hausmann’s comments come as a deepening collapse in oil prices and a shortage of dollars stoke concern Venezuela is fast running out of money to stay current on debt. The country’s bonds plunged last year after Hausmann, who served as Venezuelan planning minister in 1992 coup, raised the specter of default, saying he found “no moral grounds” for the government to pay debt at a time when Venezuelans were facing shortages of everything from basic medicine to toilet paper. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-27/harvard-professor-now-says-venezuela-won-t-escape-default-in-16)

 

Venezuela bonds worth holding to Morgan Stanley as reserves fall

Venezuela is blowing through its reserves at a pace of about US$1.6 billion a month, Morgan Stanley estimates. Even so, the country can probably hold out long enough that investors can still profit from holding the government’s bonds. President Nicolas Maduro needs to start selling assets urgently, writes strategist Robert Tancsa. He thinks the country is unlikely to default this year after local buyers bought up large chunks of the Petroleos de Venezuela bonds coming due in the fourth quarter. Morgan Stanley recommends holding the country’s bonds, especially Petroleos de Venezuela SA’s bonds due in 2022, which yield 34%. Prices are so low that the odds of a default are arguably priced in, Tancsa wrote. The oil company is a better credit than the sovereign, he wrote. (Bloomberg, http://www.bloomberg.com/news/articles/2015-07-24/venezuela-bonds-worth-holding-to-morgan-stanley-as-reserves-fall)

 

Venezuela’s fiscal deficit will be $20.2 billion by the end of 2015 if there are no more cuts in imports and other adjustments are not made, according to estimates from Bank of America Merrill Lynch. The financial institution explained that even if Venezuela can sustain this for two years, this economic course is “clearly unsustainable.” In a year, imports have been cut by 24.1%. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44803&idc=2)

 

Pro-government legislators propose dual FOREX rate

Rodrigo Cabezas, Vice-President for Foreign Relations of the ruling United Socialist Party of Venezuela (PSUV), is the first government ally to suggest the idea of a foreign exchange simplification and a dual foreign exchange rate. Other pro-government legislators have supported the initiative, including José Alfredo Ureña, Jesús Faría, and Alexander Dudamel. Ureña, a member of the National Assembly Finance Committee, says that a dual foreign exchange rate could be adopted in the upcoming days, as the current system in place creates market distortions. (El Universal, http://www.eluniversal.com/economia/150727/pro-government-deputies-propose-dual-forex-rate)

 

Central Bank drains liquidity by VEB 25.90 billion

As part of its monetary policy, the Central Bank of Venezuela (BCV) has been combining liquidity-absorbing operations with the issuance of an investment instrument designed to cut excess liquidity that could put counterproductive pressures on the economy. The amount involved in the operations is VEB 25.90 billion (US$ 4.07 billion at the official exchange rate of 6.30 VEB per US dollar.) (El Universal, http://www.eluniversal.com/economia/150727/venezuelas-central-bank-drains-liquidity-by-veb-2590-billion)

 

 

Politics and International Affairs

 

Capriles meets OAS Secretary General to seek OAS observers in elections, Maduro slams OAS

Henrique Capriles, two-time Venezuelan opposition presidential candidate, has met with OAS Secretary General Luis Almagro, to present a "proposal of an OAS election observation mission in the upcoming parliamentary elections and to also explain the human rights and economic situation”. Almagro reported he met with Capriles "using Venezuela's constitution and institutions as the axis". Venezuela´s electoral authority has invited experts from the Union of South American Nations, or UNASUR, to be part of a so-called “electoral accompaniment” and has not responded to requests to include observers from other organizations. But President Nicolás Maduro later said Almagro must be asked "whether he will work for Latin America and the Caribbean or for Washington". He added that "The OAS is 67 years old and useless" and said there is a "jinx" on the Secretary General's office that "turns it into a den of conspiracy" against popular movements. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393125&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/150727/oas-observation-requested-in-december-election; and more in Spanish: El Nacional; http://www.el-nacional.com/; Infolatam, http://www.infolatam.com/2015/07/27/maduro-ataca-a-la-oea-y-pide-a-eeuu-colombia-y-al-papa-apoyar-plan-de-alba/)

 

Regime bars foreign lawmakers’ visit to jailed opposition leader

Authorities of the jail near Caracas where Venezuelan opposition leader Leopold Lopez is being held have refused to allow a group of foreign lawmakers to visit him. “I wish to tell the Venezuelan people and above all the political leaders who are unjustly imprisoned that we will not abandon them in this struggle... we will press on,” said Spanish Sen. Ander Gil. The group, which also included Gil’s colleagues Dionisio Garcia, Iñaki Anasagasti and Josep Maldonado, along with Uruguayan Sen. Pablo Mieres, was frustrated in its attempt to see an opposition politician behind bars. The foreign legislators, accompanied by Lopez’s wife, Lilian Tintori, were in possession of a document with the seal of the Interior Ministry allowing them to visit opposition leaders. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393068&CategoryId=10717)

 

Chavismo comes in third place in poll

A recent poll by IVAD'S VENEBARÓMETRO shows the opposition holding first place in voter preference, with 32.6%, independents taking 27.6%, and pro regime "chavistas" coming in third with 20.8% support. The remaining voters said they were undecided. Given a choice between two options, opposition support rises to 41.8%, "chavistas" to 22.1% and undecided voters show at 20.6%. The remaining 15.6% say they will not vote. (El Nacional; http://www.el-nacional.com/)

 

MUD: This is the best electoral structure we have had in 16 years

Jesús Torrealba, Secretary General of Venezuelan opposition coalition Unified Democratic Conference (MUD), says the opposition alliance has the best electoral structure in the last 16 years for the upcoming parliament vote in December "not only to protect the votes where it is clear that we are a majority" but also in rural balloting centers with few polling stations "because there is where tricks are focused, there is where, statistically speaking, we have seen balloting stations with an irregular behavior." Torrealba stressed the MUD had enough poll workers to accomplish that, and that, since work is being done five months ahead of the election, opposition electoral witnesses will be supported by the residents of rural areas. He remarked that people who voted for late president Hugo Chávez in the past would not vote for the current government. (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/mud-this-is-the-best-electoral-structure-we-have-had-in-16-years)

 

Spanish government summons Venezuelan ambassador to Madrid

The Spanish Ministry of Foreign Affairs has called in Venezuela´s ambassador to Spain Mario Ricardo Isea to present a formal complaint over recent remarks by President Nicolás Maduro against Spanish Head of Government Mariano Rajoy, whom Maduro "has labeled by publicly and repeatedly as an assassin". Back in April, Madrid also summoned Ambassador Isea following President Maduro's statements accusing Rajoy of being a "racist." Spain described those remarks as "intolerable." (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/spanish-govt-summons-venezuelan-ambassador-to-madrid)

 

US blacklists Venezuela for human trafficking for the second time

For the second year in a row, the United States Department of State kept Venezuela on its blacklist of trafficking in persons, by considering that Caracas has no met the minimal standards and does not engage in "significant efforts" to fight this crime. Venezuela joins Russia, Thailand, Libya, Algeria, Syria, Yemen, North Korea, and other 16 countries on the lowest ranking, "tier 3," according to the assessment conducted by the US Department of State. (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/us-blacklists-venezuela-for-human-trafficking-for-the-second-time)

 

The US calls for peaceful settlement of Venezuela-Guyana dispute

The United States government says it is "imperative" that the territorial dispute between Venezuela and Guyana be settled in a "peaceful" manner and in compliance with international law. A US Department of State spokesperson, who asked not to be named, explained that any effort to solve that border dispute had to be undertaken through peaceful measures consistent with international law, either through the United Nation process or any other mechanisms. (El Universal, http://www.eluniversal.com/nacional-y-politica/150727/the-us-calls-for-peaceful-settlement-of-venezuela-guyana-dispute)

 

Maduro to meet with UN Secretary General Ban Ki Moon over Guyana dispute

President Nicolás Maduro plans to travel to New York to meet with UN Secretary General Ban Ki Moon over what his government calls Guyanese "aggressions" in the Essequibo disputed territory. More in Spanish: (AVN; http://www.avn.info.ve/contenido/presidente-maduro-sostendr%C3%A1-reuni%C3%B3n-especial-secretario-general-onu; El Universal, http://www.eluniversal.com/nacional-y-politica/150728/maduro-viaja-a-la-onu-para-exponer-litigio-con-guyana)

 

 

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.

July 23, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello:

• 14,411 tons of chicken and beef in 434 containers from JBS Brazil for state agency CASA.
• 3,500 tons of whole milk and margarine in 113 vans from JBS Brazil for state agency CASA.
• 357 tons of spare auto parts in 34 containers from FORD and Kuehne Nagel in the US for their local affiliates.

19 ships are offloading cargo, 13 of them carrying bulk and 2 of them containers. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-17-mil-toneladas-de-alimentos-llegaron-a-Puerto-Cabello-2467646/2015/07/22/561679)

 

 

Oil & Energy

 

Oil prices drop following Iran nuclear deal and excess supply

West Texas intermediate oil prices (WTI) dropped 3.31% to US$ 49.19 per barrel after it was announced that US reserves rose to 2.5 billion barrels - the highest level for this time of the year in 8 decades.  More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/industria/petroleo-cae-tras-pacto-nuclear-con-iran-y-exceso.aspx#ixzz3gi6zzDXq)

 

 

Commodities

 

Diverting food shipments violates consumer rights

Roberto León Parilli, President of the National User and Consumer Alliance charges "the government is admitting that its own food companies are not producing at 100% capacity and not meeting demand", and says that the latest order to divert 30-100% of priority products from private markets to public facilities violates citizen rights to chose. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Desvio-alimentos-viola-derecho-consumidores_0_669533265.html)

 

 

Economy & Finance

 

BOFA projects Venezuelan fiscal deficit at US$ 20.2 billion this year

Bank of America Merrill Lynch now estimates Venezuela's fiscal deficit will be US$ 20.2 billion at the close of 2015.

The bank estimates national income is down by US$ 43.1 billion in the past two years, and that "the adjustment in imports and PETROCARIBE dispatches, as well as capital outflows, will have a cutback of US$ 31.7 by the end of the year", but despite it all Venezuela will have to finance a US$ 14.1 billion gap and that although the country may be able to hold out for two years this economic trend is "clearly unsustainable". More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Calculan-deficit-millardos-ano_0_669533194.html)

 

International reserves down nearly 4% since July 1st

International reserves have dropped to a new low of US$ 15.611 billion this year, almost 4% since the start of this month, The drop in the price of gold is driving the trend further since most of Venezuela's reserves are held in gold. More in Spanish;  (El Universal;http://www.eluniversal.com/economia/150722/que-esta-pasando)

 

What lies behind secrecy in Venezuela's economic data 

The Central Bank of Venezuela (BCV) has broken with the routine of releasing monthly national economic data, as required by law, and turned it into a matter of total secrecy. Beginning in 2013, the BCV started to delay the release of economic figures, ending the year with the blatant omission of its Annual Report.  Delays have become more usual and prolonged ever since, and now in 2015 there is a total absence of information about the performance of the economy, to such an extent that official figures are some of the greatest enigmas in Venezuela today. This silence on the part of the Central Bank has led analysts to find alternative sources. One of these is the Center for Documentation and Social Analysis of the Venezuelan Federation of Teachers (Cendas-FVM), which for over 20 years has been releasing the cost of the basic basket of goods for a household comprised of five individuals on average incomes. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2392700&CategoryId=10717)

 

Venezuela could fall into hyperinflation before the end of the year, according to CENDAS-FVM’s Chief Oscar Meza. Meza explained this takes place when the monthly inflation rate is higher than 50% or when it’s 200% one year and 400% the next. CENDAS also reported the average family basic food and consumer goods basket skyrocketed to Bs.54,204.69 in June, up Bs.11,357.78 (26.5%) from May. Annualized variation for the June 2014-June 2015 term is 163.6% or Bs.33,643.84. A five-member family needs eight minimum wages to cover the cost. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44780&idc=2; http://www.veneconomy.com/site/index.asp?ids=44&idt=44770&idc=2)

 

The Central Bank (BCV) has called a US$ 600 million bond bid for individuals, savings funds and similar savings associations from the public sector to participate via commercial and universal banks. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44779&idc=2)

 

 

Politics and International Affairs

 

Poll shows opposition candidates 17% ahead of regime in voter intentions

DATANALISIS President Luis Vicente León says that opposition candidates are 17 points ahead of government candidates in voter intentions on December 6th parliamentary elections. "47.5% of the population is sure to vote in these elections, and 73% say they will evaluate doing so", he adds. Polls show 84% believe the country is in bad or very bad shape, which "discourages people, above all the younger people who do not feel a part of it and start to seek alternatives." More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Luis-Vicente-Leon-Intencion-oficialismo_0_669533161.html)

 

Opposition will present a united ticket on December ballot

Chuo Torrealba, Executive Secretary of the opposition Democratic Unity Conference (MUD) has announced that all opposition parties finally agreed to present candidates for the upcoming December 6th parliamentary election on a united single ticket on the ballot, as well as coordinate all election strategies under a unified command. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/MUD-Tarjeta_Unica_0_669533254.html)

 

Maduro's triple strategy to win the upcoming parliamentary elections

President Nicolás Maduro is displaying a three pronged strategy to win the upcoming legislative elections on December 6th, with which he seeks to avoid an opposition takeover of the National Assembly. In the first place, the entire government apparatus is being used to block and discourage opposition participation, through such devices as disqualifying candidates already selected in primary elections. Second, by distracting attention through an inflammation of border tensions with Guyana and calling opposition leaders such as Henrique Capriles "traitors"; and third, by trying to hide the national economic crisis and evading any sort of economic adjustment that could further take away support even if this is pushing the nation into hyperinflation. More in Spanish: (INFOLATAM, http://www.infolatam.com/2015/07/22/esta-es-la-triple-estrategia-de-maduro-para-ganar-las-elecciones-legislativas/)

 

Guyana opposes Venezuela’s Plan to Issue IDs in Contested Region, will not halt investments in the area

The government of Guyana said it would resist any effort by Venezuela to issue identification cards to residents of the contested Essequibo region. “We will stoutly resist any effort to have our people issued with cards and things like that, and whatever we need to do as a nation to ensure that we are not distracted in any way from our path of development we are going to do it,” said Minister of State Joseph Harmon. He was reacting to comments from the head of Venezuela’s Office for the Rescue of the Essequibo, Pompeyo Torrealba Rivero, who said efforts would soon be made to issue Venezuelan identification cards to an estimated 200,000 people born in the region. At the same time, Guyanese Foreign Minister Carl Greenidge said his country would not halt investments in the 159,000 square kilometer region, and again stated an International Court decision in the dispute since the other routes for a solution have been exhausted.(Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2392726&CategoryId=10717; and more in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Guyana's president visits the US to discuss dispute with Venezuela

The President of Guyana, David Granger, has traveled to Washington to discuss the border dispute between his country and Venezuela over the region of the Essequibo, against the backdrop of the US Conference on Hemispheric Security and Defense. Granger will meet with representatives of the US Department of State. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/guyanas-president-visits-the-us-to-discuss-dispute-with-venezuela)

 

Kerry hopes aperture toward Cuba will propel US-Venezuela talks

At a joint press conference with Cuba's Foreign Minister Bruno Rodríguez, US Secretary of State John Kerry has expressed the hope "that our diplomatic relations with Cuba could encourage not only a greater dialogue with Venezuela, but also efforts to help Colombia put an end to 50 years of warfare." More in Spanish: (El Nacional; http://www.el-nacional.com/

 

Shannon: Venezuela-US dialogue was Maduro's initiative

US State Department of State Counselor, Thomas Shannon, has said that the dialogue between the US and Venezuela began at President Nicolás Maduro's request, and described the situation of talks as "hopeful," but noted that they are were just beginning. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/shannon-venezuela-us-dialogue-was-maduros-initiative)

 

Spanish senators to visit Mayor Ledezma

Spanish senators Dionisio García Carnero (PP), Ander Gil (PSOE), Iñaki Anasagasti (PNV), and Josep Maldonado Gil (CiU), have arrived here on a human rights mission at the invitation of the opposition umbrella group Unified Democratic Conference (MUD). They were met by María Corina Machado, the leader of political movement Vente Venezuela who was recently disqualified to run for Congress, as well as Mitzy Capriles de Ledezma and Lilian Tintori, the wives of detained opponents Antonio Ledezma and Leopoldo López. The legislators met with Caracas Metropolitan Mayor Antonio Ledezma, who is under house arrest, and will try to meet with the other political prisoners. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/spanish-senators-to-visit-mayor-ledezma)

 

UN welcomes Venezuela's human rights plan

The representative of the United Nations Development Program (UNDP), Niky Fabiancic, welcomed the decision of the Venezuelan government to prepare a draft Human Rights National Program, which he called "a great opportunity, as a call to peace, to dialogue," and invited the Venezuelan people to take part in that effort and make their comments and suggestions. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/un-welcomes-venezuelas-human-rights-plan)

 

Venezuelan National Assembly deplores Spain's "gag law"

The Venezuelan National Assembly passed a draft agreement rejecting a new Spanish Citizen Security Law, labeled by its opponents as "gag law" and in force since July 1. The bill was passed with only the votes of the pro-government majority. (El Universal, http://www.eluniversal.com/nacional-y-politica/150722/venezuelan-national-assembly-deplores-spanish-gag-law)

 

Venezuela arrests 2 military officers for drug trafficking

Two retired Venezuelan military officers sought on drug trafficking charges have been arrested, authorities announced. An anti-narcotics task force arrested former National Guard Capt. Vassyly Villarroel Ramirez, according to a statement released by the Interior Ministry. Ramirez has long been a wanted man. He was named in an Interpol alert and was classified as a drug kingpin in 2013 by the U.S. Treasury Department. U.S. officials say he has ties to Mexican and Colombian cartels and has been involved with cocaine trafficking. The task force also arrested former National Guard Lt. Robert Alexander Pinto Gil. The ministry accuses him of leading local drug trafficking gangs. He previously escaped from prison. National Guard commander Nestor Reverol said Tuesday that the two will be brought before the courts soon. (New York Times, http://www.nytimes.com/aponline/2015/07/21/world/americas/ap-lt-venezuela-drug-arrests.html?ref=americas&utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=New%20Campaign&_r=0)

 

 

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.