International Trade
62,300 tons of basic foods have been imported,
government imports do not meet Q4 demand
According to Port Authority reports, the Venezuelan
government has imported around 62,300 tons of food during August and September,
but this does not cover consumer needs for the last quarter of 2015.
BOLIPUERTOS reports over 2,100 containers laden with beef, chicken, milk,
cooking oil, butter, margarine, coffee, rice, wheat, white and yellow corn,
plus 16,000 heads of cattle have arrived from Canada, Mexico, Argentina,
Nicaragua, Colombia and Brazil, Yet Nutrition Minister General Carlos Osorio
has reported that 11,484 tons were distributed in 1,202 open market operations
nationwide last Saturday, which means imports can only supply 5.4 of such
operations. Aquiles Hopkins, Vice President of FEDEAGRO, says rice imports can
only supply 16% of consumer needs in Q4 2015. He adds that 65,640 tons of wheat
were imported, but 77,000 tons per month are required to meet market demand. In
addition, Venezuela used to export coffee, domestic production is down to 30%
and the product cannot be found in stores. As to beef imports, they cover only
4.2% of normal monthly consumption. More in Spanish: (El Nacional; http://www.el-nacional.com/)
348 tons of parts for vehicles for FORD Venezuela have
arrived at Puerto Cabello
Health Ministry reports 150 containers of medical and
surgical supplies from China and Cuba, have arrived at the port of La Guaira. A total 500
million units are expected through the end of the year, to supply the public
health system. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/node/322071;
El Nacional; http://www.el-nacional.com/)
Oil &
Energy
Kuwait downplays OPEC
meeting suggested by Venezuela
Kuwait's oil minister Ali al-Omair rejected the
idea of a meeting between the Organization of Petroleum Exporting Countries
(OPEC) and non-OPEC nations, as requested by Venezuela. Since independent
producers have no obligation to drop their output, any such meeting would make
no sense, the minister said. "The
problem is that there is no commitment by non-OPEC countries on what to offer
to stabilize prices. It (Venezuela) has requested OPEC members to reduce the
output while others keep on pumping and then we lose our market share,"
he elaborated. (El Universal, http://www.eluniversal.com/economia/150928/kuwait-downplays-opec-meeting-suggested-by-venezuela)
VenEconomy: A train of
opportunities that the Bolivarian revolution missed
Without a doubt, the handling of oil affairs in
Venezuela will go down in history as one of the most notorious failures of the
revolution of the so-called "socialism
of the 21st century." It’s not only that state-owned oil company PDVSA
has become inefficient, since a new management could have made it efficient
again. Much more important is that the development of the Orinoco Belt is no
longer profitable, as neither is gas production overseas. Major projects that
are history today. There are no excuses for having let slip away a golden era
in terms of high oil revenues, without taking advantage of those resources to
promote the development and progress of Venezuela, to promote research and
technology, while ensuring good healthcare, education and housing systems for
all Venezuelans. Much less when those resources were squandered in a desire to
impose in the country and extend across the region a political project that has
proven obsolete and unsuccessful at global level, and to enrich a few national
and regional elites supporting the said project. (Latin American Herald
Tribune, http://www.laht.com/article.asp?ArticleId=2397182&CategoryId=10717)
A "Regional
Confederation of Oil Goods and Services” was created in
Bogota to share experiences that help
boost the oil sector.
It is made up of the Venezuelan Oil Chamber, the Argentinean Chamber of
Suppliers of the Oil-Energy Industry (CAPIPE), the Colombian Chamber of Oil
Goods and Services (CAMPETROL), and the Mexican Association of Oil Service
Companies (AMESPAC). (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45616&idc=4)
Commodities
Closure of the Colombian border complicates production
of detergents and medicines, claimed
Fedecámaras’ Chief Francisco Martínez, who added they were resisting “the best
they can” over the declaration of state of emergency in several districts. He
explained the products that passed through the border earlier must now be
transported either by sea or by air which increases operation costs and times.
(Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45625&idc=3)
Economy
& Finance
BARCLAYS: Venezuela
economic crisis to only get worse
Venezuela is suffering the deepest economic
crisis in its history with output expected to contract 9.1 percent this year,
Barclays wrote in a note to clients. The economic contraction will likely reach
16.5% between 2014 and 2016, while inflation over that period will exceed 1,000%.
“It is impossible to understand why the
government is not reacting to this reality, why it has not taken measures to
alleviate the economic distortions that are destroying the real income of
Venezuelans,” Barclays said. President Nicolas Maduro will not likely
announce any changes in economic policy before congressional elections Dec. 6,
the bank said. With support for the ruling Socialist party at around 19%, the
country is politically divided as it also battles low prices for oil, which
accounts for 95% government export revenue. “A weak president who will have lost an election in the middle of a very
strong economic crisis will not be able to take any fiscal measures,”
Barclays said. “The probability of a
political transition in Venezuela seems to be much higher than what the market
has been pricing.” Instead of taking fiscal measures, the government is
selling all its liquid assets to maintain an “extremely inefficient” exchange rate system and pay the external
debt, Barclays said, adding that it would likely have enough money to pay its
foreign debt at least through the first quarter of next year with a moderate
increase in oil prices and further cut in imports. “All the main political actors appear to be thinking only of the near
term, and there is no clarity about what they will do after the elections,
leaving a very uncertain scenario for 2016,” the bank said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-09-25/venezuela-economic-crisis-to-only-get-worse-barclays-says)
CREDIT SUISSE:
Venezuela - The biggest loser
"Venezuela’s
dreadful macroeconomic conditions are unlikely to improve following the
legislative elections on 6 December, in our view. Venezuela has the worst
outlook for economic activity, the highest projected inflation and the largest
fiscal deficit in our Emerging Markets coverage universe in 2015 and 2016.
Specifically, we now expect real GDP to contract 5.9% this year and 4.0% in
2016. We have also revised our inflation forecasts significantly higher to
roughly 180% by year-end 2015 and nearly 215% by the end of next year. We do
not expect the government address these massive distortions in a meaningful way
before or after the upcoming elections. Meanwhile, lower oil prices and the
ongoing depletion of the public sector’s foreign assets suggest substantial
risk of default over the next 12 to 24 months, according to our estimates."
(CREDIT SUISSE: Click here to view document (9 pages, 663KB))
General Marco Torres reports he met with
investment bankers in New York
General Rodolfo Marco
Torres, Venezuela's Vice President for Economic Affairs and Minister of Finance
reports he met with investment bank representatives in New York and repeated
the nation's commitment to honor international debt. He adds they were invited
to invest in Venezuela's oil sector. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/marco-torres-se-reunio-con-bancos-de-inversion-en-.aspx#ixzz3n7TGEEvM; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/marco-torres-se-reunio-con-bancos-de-inversion-en-.aspx)
Venezuela PDVSA's US$5
billion loan from China only to be available by year-end
A US$5 billion loan that Venezuelan state oil
company PDVSA negotiated with China will be available by year-end, but the
funds will go directly to contractors rather than into company coffers, a
senior PDVSA source told Reuters. President Nicolas Maduro announced the loan
during a trip to Beijing in September, saying the funds would be put toward
boosting oil production. "The money
will begin flowing at the end of this year," said the source, who
asked not to be identified. "(It)
will be paid directly to the companies that execute the projects."
(Reuters, http://www.reuters.com/article/2015/09/25/venezuela-china-idUSL1N11V2E520150925)
Harvard’s Hausmann calls
Chinese loans to Venezuela a ‘disgrace’
The billions of dollars China loans to
Venezuela in exchange for oil are a “disgrace”
and used for corrupt purposes that go undisclosed to the general public, says
Harvard professor Ricardo Hausmann. Venezuela has tapped China for more
than US$ 45 billion over the last decade and is increasingly reliant on
the world’s second-biggest economy for cash because of its unwillingness to
comply with the requirements of the International Monetary Fund, Hausmann
wrote. Those loans have become more important than ever as the nation’s
international reserves tumbled with oil prices to a near 12-year low. “The Chinese have not required that Venezuela
do anything to increase the likelihood that it regains creditworthiness,”
wrote Hausmann, a former Venezuelan planning minister. “They merely demand more oil as collateral. Whatever the IMF’s faults,”
China Development Bank “is a disgrace.”
(Bloomberg, http://www.bloomberg.com/news/articles/2015-09-28/harvard-s-hausmann-calls-chinese-loans-to-venezuela-a-disgrace--if47489t)
BANCTRUST reports companies and individuals
rely on credit to face inflation here
A report by BancTrust indicates private
companies and individuals are using bank credits to meet inflation costs. It
shows the massive explosion in monetary liquidity and high inflation have
strongly impacted credit in the financial sector, specially use of credit
cards. Official data confirms an 148.2% increase in commercial credit in August
2015, as compared to August 2014. Credits in agriculture rose by 102.1% at the
same time. More in Spanish: (El Nacional; http://www.el-nacional.com/)
Venezuela's
Ambassador to Cuba advocates economic adjustment in Venezuela
Alí Rodríguez Araque, a former Chávez Minister
of Finance and Petroleum and Venezuela's current to Cuba, says it is necessary to
adjust and reorient the domestic economy in view of the plunge in oil prices. The
expert maintains that the shrinking revenues "are fairly above 30%," which imposes economic adjustment right
now. "Now, we have to make an
adjustment downwards," Araque said. He suggested a cut in public
spending and setting priorities in order. Rodríguez argues that "such rearrangement" of the local
economy "must be made and this
begins with the public budget, which is the first component of income
distribution in Venezuela." "I
think that further adjustments are coming," he added. "Let's forget that Venezuela will have a
strong momentum in the field of industry and other sectors," he
insisted. "Since 1936, we have had
an overvalued bolivar. All the currencies in the world devalued at that time."
(El Universal, http://www.eluniversal.com/economia/150928/ali-rodriguez-advocates-economic-adjustment-in-venezuela)
Planning Vice President claims 2016 budget will
meet social goals
Ricardo Martínez,
Vice President for Planning, claims Venezuela's draft 2016 budget anticipates
allocating the necessary resources to maintain social investment in education,
health, housing, transportation, roads, sports and recreation. He says despite
lower resources, the key "is greater
efficiency and greater experience" More in Spanish: (AVN; http://www.avn.info.ve/node/322132; El Universal, http://www.eluniversal.com/economia/150929/estiman-mantener-metas-sociales-con-menos-recursos; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/menendez--presupuesto-nacional-para-2016-mantendri.aspx)
Politics and
International Affairs
Guyana and Venezuela restore ambassadors despite
border row
UN Secretary General Ban Ki-moon mediated a Sunday meeting
in New York between Guyanese President David Granger and Venezuela's Nicolas
Maduro, who agreed to restore their respective ambassadors despite a continuing
border dispute. After the meeting, Maduro said that Venezuela would restore its
ambassador to Georgetown "immediately"
and accept Guyana's nominee. He described his meeting with President Granger as
"complex, tense, difficult".
President Granger thanked UN Secretary-General Ban Ki-moon for mediating at the
meeting, which he said "afforded
both sides the opportunity to explain their individual positions". Granger
denounced Venezuelan "aggressions"
at the UN General Assembly, and asked the organization to reach a final
solution to the border dispute: "We
want to put an end to Venezuelan aggression. We want to develop our country,
all of our country, under international law"..."We believe this
process (good offices) has come to an end", but did not back off his
announcement that Guyana will seek a solution with the International Court of
Justice. Guyana Defense Force Commander Brig. Gen. Mark Phillips Guyana has
1,000 troops ready for deployment to border with Venezuela in case of aggression
by Caracas amid the territorial dispute over Essequibo region and the Cuyuni
River. (BBC News, http://www.bbc.com/news/world-latin-america-34378631;
Reuters, http://www.reuters.com/article/2015/09/28/venezuela-guyana-idUSL1N11Y01920150928; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397276&CategoryId=10718;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45629&idc=1;
El Universal, http://www.eluniversal.com/nacional-y-politica/150928/united-nations-to-mediate-in-venezuelas-essequibo-claim;
http://www.eluniversal.com/nacional-y-politica/150927/un-committee-to-visit-venezuela-to-assess-claim-over-the-essequibo;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397199&CategoryId=10717;
and more in Spanish, http://www.eluniversal.com/nacional-y-politica/150929/guyana-denuncia-agresiones-de-venezuela-y-pide-a-onu-un-arreglo-defini)
Venezuela to allow return of deported Colombians
Following a meeting between President Nicolas Maduro
and UNASUR Secretary-General Ernesto Samper, Venezuela agreed to allow the
deported Colombians back as long as they agreed to "legalize their status". Last week, Maduro and his Colombian
counterpart, Juan Manuel Santos, met in the Ecuadorean capital Quito and agreed
on a "normalization of ties".
However, the border has remained closed and President Maduro says it will take
months to "create a border of peace". Since Venezuela declared a
state of emergency in three border states, an estimated 22,000 Colombians have
left the area on top of the 1,700 who were expelled. (BBC News, http://www.bbc.com/news/world-latin-america-34389806;
Reuters, http://www.reuters.com/article/2015/09/28/us-venezuela-colombia-idUSKCN0RS2L020150928;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397269&CategoryId=10717;
El Universal, http://www.eluniversal.com/nacional-y-politica/150928/unasur-agrees-to-regularize-status-of-deported-colombians)
IACHR denounces "humanitarian crisis" of Colombian deportees
The Inter-American Court of Human Rights (IACHR) has denounced
a "humanitarian crisis"
hitting Colombian deportees and people who returned to Colombia from Venezuela.
"The IACHR saw for itself the
humanitarian crisis that is affecting the deportees and people who returned out
of fear and because of the grave situation in which they found themselves in Venezuela,"
the IACHR said in a press release. "The
IACHR received troubling reports about the way in which the deportations from
Venezuela were carried out, suggesting that those individuals suffered multiple
human rights violations and were subjected to collective expulsion,"
the IACHR reported. (El Universal, http://www.eluniversal.com/nacional-y-politica/150928/iachr-denounces-humanitarian-crisis-of-colombian-deportees)
Maduro calls for transformation of economic systems to
spur development
President Nicolas Maduro has called for “a resounding transformation of economic
systems” as a condition for the implementation of the United Nation’s new
development agenda. He made his proposal in a speech to the UN General Assembly
during the 2015 Sustainable Development Summit. (Latin American Herald Tribune,
http://www.laht.com/article.asp?ArticleId=2397206&CategoryId=10717)
UNASUR readies observers for parliamentary elections
here on December 6th
Wilfredo Penco, Vice President of Uruguay's National
Elections Council says the observers group being organized by the Union of
South American Nations (UNASUR) will have 4 representatives from each of the
election authorities in the 12 member nations. He says they await the signing
of agreements between representatives of Venezuela's National Elections Council
and the UNASUR pro tem presidency, which is Uruguay. More in Spanish: (El
Nacional; http://www.el-nacional.com/)
Grenades used against police checkpoints, opposition
demands explanations
There have been five attacks with grenades against
police checkpoints or stations in the last 48 hours. The most recent ones
occurred on Sunday; first, in Las Mercedes where eight Baruta policemen and
four civilians were wounded and then one against a police station in San Juan de
Los Morros in Guárico. There was also a shoot-out against a National Police’s
(PNB) patrol car in Sucre in Miranda state. Opposition leader and Miranda state
Governor Henrique Capriles has demanded an explanation from the Maduro regime: "There were 5 similar attacks that show us
that violence in Venezuela is growing and that national security has escaped
the national government's control....We hope this is not part of a political
plan to injure the December 6th elections. He added: "One has to ask the
Defense Minister why there are grenades on the street. Grenades should be under
the exclusive control of the Armed Forces. This gentleman must explain why
grenades are in the hands of individuals. General Padrino must explain to
Venezuelans." (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45628&idc=1;
and more in Spanish: El Nacional, http://www.el-nacional.com/politica/Capriles-rechazo-ataques-modulos-policiales_0_710329059.html)
The following brief is a synthesis of the news
as reported by a variety of media sources. As such, the views and opinions
expressed do not necessarily reflect those of Duarte Vivas & Asociados and
The Selinger Group.
