March 31, 2016

International Trade

 

SPECIAL REPORT: Legislature investigates US$ 300 billion dollar frauds in food and medicine imports

Analysts may have been overly affixed on Venezuela’s debt liabilities and given not enough attention to the web of organized corruption behind the 60% drop in imports here. Foreign currency supply within Venezuela’s exchange control system has collapsed over the past months, while phantom companies and corrupt public officials are quickly leading the nation into default by distorting food import transactions through arbitrage and overpricing. During 2014, the Central Bank allocated US$ 45.529 billion for public and private imports; this amount dropped down to US$ 17.529 billion in 2015, as allocations to the private sector fell from US$ 14,410 billion to US$ 5.104 billion. Former congressman Ricardo Sanguino of the ruling party says “a large part of the funds allocated did not enter the country in the form of goods, they went into overpricing and in many cases the products were not even imported…The exchange control system must be dismantled because it didn’t work, it is a perverse system, perforated by mafias”. Experts agree that nepotism has backed the growth of corrupt companies involved in FOREX operations for food imports. A high bank executive reports that there are 59,000 companies registered with the National Foreign Trade Center (CENCOEX), and only 9,000 of them are legal. Phantom companies profit through an organized arbitrage system that exploits the differences between the preferential FOREX rate, the floating rate, and the black market rate. Sanguino estimated that overpricing in food imports alone accounts is around US$ 118 billion. Last month, the National Assembly’s Comptroller Committee launched an investination into the FOREX allocation system, reviewing “suspicious” food and medicine imports for a total US$ 230 billion under the CADIVI (now CENCOEX) system from 2003 to 2014, Committee Chairman Freddy Guevara says “the closest estimate is that phantom companies have stolen up to US$ 300 billion…in PDVSA alone we have estimated over US$ 10 billion; and we calculate US$ 25 billion in CENCOEX, as was reported by former Chavez Planning Minister Jorge Giordani…the issue within the electricity sector we believe is over US$ 60 billion. Also in the Economic and Social Development Bank, the Sino-Venezuelan Fund, and the National Development Fund it is estimated that fraudulent operstions can be more tan US$ 100 billion”. The committee published a list of officials and former officials that will be investigated, among them several military officers that have been in charge of food imports and distribution, and government contractors in this área. Among those investigated are former Nutrition Minister General Carlos Osorio, and Tomás Gonzáles, an operator identified by Congressman Ismael García as the intermediary for food imports by PDVSA and its affiliate BARIVEN, a front man for General Osorio. Experts say recent changes in foreign exchange policies made by President Maduro will not facilitate access to FOREX, but will only fill government coffers as it obtains more bolívars per US dollar. A more expensive dollar will be close to the 200% inflation rate but will not stop the multi-million dollar frauds that are rampant in a distorted exchange system. More in Spanish: (Portafolio: http://www.portafolio.co/internacional/millonario-robo-juego-arbitraje-venezolano-493217)

 

 

Oil & Energy

 

Maduro: Oil price average is "slightly" above output cost

“The average price of the oil barrel hit US$ 26 this year, slightly higher than the output cost,” President Nicolás Maduro has said in connection with the downward trend shown by Venezuelan crude oil prices in recent months. He further reported that the local oil basket on Wednesday ended at US$ 29.21 per barrel, a US$ 1.15 contraction. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-maduro-oil-price-average-slightly-above-output-cost_247294)

 

PDVSA repeats it is a victim of a corruption smear campaign

Venezuela's state-owned oil company PDVSA has said it is the target of a smear campaign after the U.S. Justice Department announced that three of the firm's former employees had pleaded guilty to charges over a scheme to corruptly secure energy contracts. The former officials at Petroleos de Venezuela S.A. (PDVSA) pleaded guilty under seal in December to conspiracy to commit money laundering. Their pleas were unsealed by a federal judge in Houston last week. The three are Jose Luis Ramos Castillo, 38, Christian Javier Maldonado Barillas, 39, and Alfonzo Eliezer Gravina Munoz, 53. (Reuters, http://www.reuters.com/article/us-venezuela-usa-corruption-idUSKCN0WV06V)

 

Government admits failure of Holy Week energy-saving plan

The government has acknowledged the failure of its plan to save water and electricity by prolonging the Holy Week holidays in order to minimize the effects of the drought caused in the region by the El Niño weather phenomenon. “I have to be very sincere – it didn’t have the hoped-for results, which is to say, we believed and calculated that during Holy Week we would have a considerable reduction” of energy use, but it didn’t turn out that way, said the deputy minister of electrical energy, Freddy Brito. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408772&CategoryId=10717)

 

National Electric Company cannot print receipts for lack of paper

The National Electric Company (CORPOELEC) has urged clients to use its electronic billing service since it has no paper on which to print receipts. A union source within the government company says “the problem is that they have no funds to pay for paper on which to bring bills”. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Corpoelec-envia-recibos-falta-papel_0_820118289.html)

 

 

Economy & Finance

 

Venezuela seeks US$ 5 billion credit

Central Bank President Nelson Merentes claims a new US$ 5 billion credit is about to be signed, but that creditors are demanding that a joint venture between Venezuela and Canada, aimed at exploiting the Orinoco Mining Arc gold reserve, must be established within 30 days. He says the 111,000 kilometer area is one of the best guarantees the nation has to offer. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/venezuela-negocia-credito-por-5000-millones_11122)

 

China conditions further aid to Venezuela on coherent policies by Maduro

David Osio, of the DAVOS Financial Group reports: “The Chinese government has indicated its dissatisfaction with recent economic changes in Venezuela, and would like to see more political stability before they consider renegotiating this country’s debt”. Venezuela has been asking China to extend payment, invest more in mining and other projects. In February, it asked China to extend the grace period on preferential price oil shipments in order to sell the oil on the open market, but China not only refused – it asked for an increase in shipments.  More in Spanish: (El Nacional, http://www.el-nacional.com/economia/China-condiciona-Venezuela-Maduro-coherentes_0_820118211.html)

 

A mystery bond in Venezuela has traders scratching their heads

Bond investors in Venezuela have made a dispiriting discovery. Last week, traders started quoting prices on a US$ 3 billion note issued by the nation’s state-owned oil company. While the eight-year securities were first sold in October 2014 under New York law not much else is known. The bonds don’t trade on any U.S. exchange, aren’t rated by any major credit-ratings firm and no term sheet has been made public.  Concern that new Petroleos de Venezuela securities were being sold to investors has sparked a 6.2% drop in its other notes due in 2022. The benchmark bonds due in November 2017 fell 5.4%. Investors are dismayed that the securities represent yet another obligation for the cash-strapped nation, which has been hounded by speculation it may default in the coming year. PDVSA, as the company is known, issued the bonds to the Central Bank, which may look to unload them on the market to generate much-needed revenue. At Monday’s price of 29 cents on the dollar, they’re actually worth less than US$ 1 billion. The Central Bank may decide to use the notes to supply Venezuela’s new currency market, known as the DICOM. Central Bank data show the government is selling less than 10% of the available dollars at the market-based DICOM rate, with over 90% being sold at the official exchange rate of 10 bolivars per dollar. That suggests there is a shortage of hard currency, said Siobhan Morden, of NOMURA Holdings Inc. in New York. “Just the fear of new supply, and look what happens to pricing,” she said. “We don’t need new bonds that no one wants to buy.” (Bloomberg: http://www.bloomberg.com/news/articles/2016-03-29/a-mystery-bond-in-venezuela-has-traders-scratching-their-heads)

 

DICOM has greatest increase since its creation and closes at VEB 262.74/US$1

The Central Bank reports the DICOM floating exchange rate closed Tuesday at VEB 262.74/US$1, an increase of VEB 11,93 from Monday. It adds that the system covered 7.24% of all FOREX transactions, with the remaining 92.76% at the protected rates. (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/simadi-registra-mayor-alza-desde-su-creacion-y-cie.aspx#ixzz44NXqStdP; El Nacional, http://www.el-nacional.com/economia/Dicom-cierra-martes-Bs-dolar_0_820118275.html; http://www.el-nacional.com/economia/Dolar-flotante-subio-bolivares-martes_0_820118218.html)

 

 

Politics and International Affairs

 

National Assembly passes amnesty bill; Supreme Tribunal could nullify it

The National Assembly has passed an amnesty bill which could free dozens of jailed opposition leaders. The opposition-controlled assembly passed the bill after a heated discussion. President Nicolas Maduro said he would block the bill, which he argued would benefit "criminals and terrorists". Among the more than 70 detainees who could be freed if the bill becomes law is Leopoldo Lopez, who was sentenced to 13 years and nine months in prison last year for inciting violence during mass protests. The prosecutor in the case later fled Venezuela and told media abroad that Lopez's conviction had been a political show trial. But government officials maintain Lopez is responsible for the violence which erupted during the 2014 protests in which 43 people on both sides of the political divide were killed. Lopez's wife, Lilian Tintori, welcomed the passing of the bill, saying it was "felt in all of Venezuela, like a fireworks rocket going off in Caracas, full of emotion, freedom and strength". Other political leaders who could be freed are the former mayor of Caracas, Antonio Ledezma, who is under house arrest, and the former mayor of San Cristobal, Daniel Ceballos. But members of the governing PSUV party said the amnesty was a carte blanche for "murderers". President Maduro spoke on national television while the debate was still under way to say he would veto it. "You can be certain that that law will not be making it through here," he said.  President Maduro could send the bill to the Supreme Court if he has doubts about its constitutionality. National Assembly President Henry Ramos Allup was warned that the Constitutional Chamber of the Supreme Tribunal is cooking up a sentence annulling the Amnesty Law, even without receiving the final text. He wrote “If Maduro, his lawyers and the high command are so sure of popular support: Why do they obstruct all electoral and constitutional ways out?”.  (BBC, http://www.bbc.com/news/world-latin-america-35924647?utm_source=Sailthru&utm_medium=email&utm_campaign=New%20Campaign&utm_term=%2AMorning%20Brief; Bloomberg, http://www.bloomberg.com/news/articles/2016-03-30/venezuela-congress-passes-amnesty-law-to-free-jailed-politicians: El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-congress-approves-amnesty-and-national-reconciliation-law_247234; and more in Spanish: (El Nacional: http://www.el-nacional.com/politica/Ramos-Allup-planea-TSJ-amnistia_0_817118315.html)

 

Spanish FM regrets opposition has a narrow leeway to "straighten out" Venezuela

Spanish Foreign Minister José Manuel García-Margallo voiced concern over the narrow leeway the Venezuelan opposition has to improve the country’s situation through lawful means. García-Margallo said that “disregarding the law frustrates all the possible solutions,” in reference to recent remarks made by President Nicolas Maduro, refusing to sign the Amnesty and National Reconciliation Law, passed on by the National Assembly, as he claims the law aims at “protecting” criminals. (El Universal, http://www.eluniversal.com/noticias/daily-news/spanish-regrets-opposition-small-leeway-straighten-out-venezuela_247241)

 

Supreme Court reform law passed in initial vote by National Assembly

The opposition majority within the National Assembly has passed in a first discussion the Partial Reform of the Supreme Justice Tribunal Constitution Law, which seeks to increase the number of justices. National Assembly President Henry Ramos Allup has ordered the first draft sent to the Domestic Policy Committee. It will subsequently move on to a second and final vote. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/aprobada-en-primera-discusion-proyecto-de-reforma-.aspx#ixzz44NZRUgWJ)

 

Venezuela welcomes Colombian delegation, ELN may start negotiations

The Colombian Government and the National Liberation Army (ELN), the country’s second largest guerrilla group, have begun a formal peace negotiation as part of the efforts to stop the oldest armed conflict in Latin America. A delegation of the Colombian government and ELN members appeared at the Ministry of Foreign Affairs in Caracas, where they would elaborate on the upcoming deals. President Nicolas Maduro later met with both delegations and expressed satisfaction at hosting the talks. Colombian President Juan Manuel Santos, however, made it clear talks would begin only when “humanitarian affairs” are resolved, adding that “it is not acceptable for the Colombian government to move forward in a peace conversation with the ELN while it holds kidnapped captives”. For his part, former Colombian President and current Senator Álvaro Uribe Vélez referred to the talks as “uncertain” and said “the mediator (Maduro) is the least suitable”. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-welcomes-colombian-delegation-eln-start-negotiations_247274; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/internacional/maduro-paz-colombia-paz-venezuela_247343; http://www.eluniversal.com/noticias/internacional/santos-confirma-negociacion-con-eln-cuando-haya-secuestrados_247304; http://www.eluniversal.com/noticias/internacional/uribe-considera-incierto-dialogo-con-eln-cuestiona-mediacion-venezuela_247340)

 

Lawmakers report 10 more miners slain

The legislative commission investigating the disappearance of a group of gold miners this month in Southeastern Venezuela has received reports that another 10 miners were apparently slain as well. “We have received 10 reports about 10 different missing persons from 10 different mining areas” in Bolivar state, where murdering miners “is a common practice,” opposition lawmaker Americo de Grazia said.
He told reporters about the new reports by family members and witnesses after they heard that Bolivar Gov. General Francisco Rangel had ignored a summons to appear before the congressional investigative committee. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408859&CategoryId=10717)

 

Two police officials killed at protest

A policeman and a policewoman were killed and four other officers injured during a violent protest in San Cristobal, the capital of Tachira state in the Venezuelan Andes during a protest against a nationwide increase in bus fares.
The officers died during disturbances at the La Concordia bus terminal in the city of San Cristobal, police said on Twitter. The police officers were run over by a bus that had been commandeered by hooded protesters known as “encapuchados”, according to a tweet from Tachira state police. “Police were cordoning off the area to prevent encapuchados from attacking private vehicles,” one Tachira police tweet read. Local media however disputed that version, saying the pro government bus driver was trying to break through students’ picket lines. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408849&CategoryId=10717)

 

 

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.

March 29, 2016

Logistics & Transport

 

PDVSA claims operations are normal at main oil port

State oil company PDVSA says it guarantees that operations are normal at its main oil port, adding it had provided "uninterrupted" services to an average of 56 tankers per month. Reuters had reported heavy backlogs in tanker loadings at the port of Jose, which a union leader and a legislator said were the result of technical problems with loading arms. "PDVSA guarantees normal loading and dispatch at the (port of Jose)," the company wrote on its Twitter account. The company said that 70% of the production exported from Venezuela, equivalent to around 1.5 million barrels per day, are loaded at Jose. Reuters had reported that some 70 tankers were anchored around state-run PDVSA's ports in Venezuela and the Caribbean, most of them waiting to load oil for exports and also to discharge imported crude and products, according to Thomson Reuters vessel tracking data. (Reuters, http://www.reuters.com/article/us-oil-venezuela-backlog-idUSKCN0WS00V; http://www.reuters.com/article/oil-venezuela-backlog-idUSL2N16W1C7)

 

 

Oil & Energy

 

Ex-officials at Venezuela's PDVSA pleaded guilty in bribe case: U.S.

Three former officials at Venezuela's state oil company have pleaded guilty to U.S. charges related to a scheme by two businessmen to corruptly secure energy contracts, the U.S. Justice Department announced. The former officials at Petroleos de Venezuela S.A. (PDVSA) pleaded guilty under seal in December to conspiracy to commit money laundering. Their pleas were unsealed by a federal judge in Houston on Tuesday. The ex-PDVSA officials are Jose Luis Ramos Castillo, 38; Christian Javier Maldonado Barillas, 39; and Alfonzo Eliezer Gravina Munoz, 53. The U.S. Justice Department said each has admitted to accepting bribes from two Venezuelan businessmen, Roberto Rincon and Abraham Jose Shiera Bastidas, who were charged in December with violating the Foreign Corrupt Practices Act. (Reuters, http://www.reuters.com/article/us-venezuela-usa-corruption-idUSKCN0WP1YC; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408655&CategoryId=10717)

 

 

Commodities

 

Guayana basic industries at minimum operations due to energy crisis

According to union leaders, Guayana’s basic industries had never reached a level of activity as low as they currently operate at, due to lack of spare parts, maintenance, and the Guri dam’s inability to generate electricity due to the severe drought. Henry Arias, Secretary General of the union at the ALCASA aluminum works reports the plant is working at 15.5% capacity. More in Spanish: (El Nacional, http://www.el-nacional.com/mundo/Empresas-basicas-Guayana-trabajan-energetica_0_818918182.html)

 

Debt with TETRA PAK curbs liquid milk supply

Roger Figueroa, President of the Venezuelan Dairy Chamber (CAVILAC) reports that a US$ 70 million long overdue debt with TETRA Pak is limiting the supply of packing material. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/deuda-con-tetra-pak-frena-abastecimiento-de-leche.aspx#ixzz44HmnEx9O)

 

GENERAL MILLS exits Venezuela

GENERAL MILLS, the company behind Cheerios and Häagen-Dazs ice cream, has called time on its operations in Venezuela.  The US company said it has sold its subsidiary in the country to an unnamed third party in a move that will leave it with a US$ 35m charge. GENERAL MILLS’s exit follows that of bleach maker CLOROX, which took a charge of more than US$ 600m to end its operations there. Venezuela’s controls and the government’s frequently shifting currency policy has proved a headache for US multinationals, who have struggled to take cash out of the country. Venezuela, which is grappling with runaway inflation, a weak oil price and crumbling tax revenues, accounted for less than 1% of GENERAL MILLS’s net sales, the company said in its annual report. (Financial Times: http://www.ft.com/fastft/2016/03/23/cheerios-maker-general-mills-exits-venezuela/)

 

 

Economy & Finance

 

CREDIT SUISSE projects Venezuela’s 2016 inflation at 326.5%, GDP contraction at 6.5%

CREDIT SUISSE is currently projecting that Venezuela’s 2016 inflation rate will hit 326.5% and social conditions here will worsen over the next months. It also says the contraction in Venezuela’s GDP – projected by them at 6.5% - will be one of the worst in the world, hit by FOREX scarcity, three-digit inflation, and an environment of political and economic uncertainty. More in Spanish: (Notitarde, http://www.notitarde.com/Economia/Proyectan-inflacion-de-3265-para-Venezuela-este-ano-2016-2642351/2016/03/27/924468/; El Nacional, http://www.el-nacional.com/economia/Credit-Suisse-proyecta-inflacion-Venezuela_0_818318297.html)

 

Total Venezuelan revenues at US$ 147 million in January-February 2016

President Nicolas Maduro has reported that US$ 147 million entered this year in January and February.  He explained that before the drop in oil prices, US$ 3.5 billion used to flow in the country. He spelled out that revenues last January amounted to US$ 77 million, down to US$ 70 million in February. (El Universal: http://www.eluniversal.com/economia/160324/venezuelan-revenues-at-usd-147-million-in-january-february-2016)

 

Venezuela continues to raid its reserves to pay its debts, political transition anticipated

Venezuela has not released its gold holdings since November of last year when they were US$ 10.97 billion, but a Swiss Federal Customs Administration Report reveals that Venezuela shipped 11,982 kilograms of gold worth US$ 456 million to Switzerland in February. And a Caracas online newspaper managed to get ahold of an Air France bill of lading showing that another 12, 561 kilograms of gold bars were flown out of Venezuela just two weeks ago on March 8, meaning at least another half-billion has left the country this month. The famed market watcher Dennis Gartman writes that “there is news that Venezuela…a country that is obviously in very, very serious financial straits… has been an aggressive and consistent seller [of gold].” He continued, “Venezuela has been selling gold since mid-year last year, but the pace of its selling…as evidenced by the decline in its official reserves…has accelerated of late. The recent run-up in prices has given the Central Bank there and the lunatic government in Caracas a wind-fall that they have apparently not been willing to pass up.” While March was a light month in terms of interest on its foreign bond debt – under US$ 300 million – April’s bond payments ramp up to US$ 782 million, with just under US$ 1 billion in May. The Central Bank president has confirmed it had been carrying out gold swaps. "It's normal, all central banks do this," said Nelson Merentes, adding that the operations have time frames of three to four years with multiple banks, which he did not identify. "As part of our strategy, the (central bank's) board of directors has decided to carry out swaps." Siobhan Morden, of NOMURA Securities, says today that evidence of continued economic stress is the leading indicator of “an irreversible process toward political transition.” She notes February’s 514% year-over-year increase in inflation, and adds: “We continue to reiterate that it has to get worse before it gets better but the intensity of the crisis reaffirms our view of a political transition and an economic transition that would argue for much higher potential recovery value.” (Reuters, http://www.reuters.com/article/venezuela-gold-switzerland-idUSL2N16U1UR; BARRON’s: http://blogs.barrons.com/emergingmarketsdaily/2016/03/24/2-venezuela-experts-on-gold-sales-bond-risk-whats-next/; Latinvest: http://www.scribd.com/doc/286044491/Latinvest-Venezuela-Report-Bond-Debts-20-October-2015; Kitco News: http://www.kitco.com/news/2016-03-23/Venezuela-s-Woes-Weighing-on-Gold-Dennis-Gartman.html)

 

Switzerland to hand Venezuela oil firm bank records to U.S.

In a widening corruption probe into Venezuela's state oil company by U.S. authorities, Swiss regulators have agreed to provide U.S. prosecutors with records from at least 18 banks relating to the oil firm. The requests for information from two separate U.S. authorities were part of their investigations into alleged money laundering and corruption in connection with the conclusion of energy contracts with Petroleos de Venezuela SA (PDVSA), Switzerland's Federal Office of Justice (FOJ) said. U.S. authorities say they have traced over US$ 1 billion to a conspiracy involving a Venezuelan magnate who allegedly paid bribes to obtain contracts from PDVSA. They are separately investing representatives of Venezuelan energy company DERWICK Associates, which has done business with PDVSA, based on the FOJ's statements. (Reuters, http://www.reuters.com/article/us-pdvsa-corruption-switzerland-idUSKCN0WR0X0; Bloomberg, http://www.bloomberg.com/news/articles/2016-03-24/swiss-banks-land-in-middle-of-money-laundering-probe-again)

 

Central Bank places securities for VEB 15 billion to drain more liquidity

The Central Bank of Venezuela (BCV) has placed VEB 15 billion (US$ 1.5 billion at the official exchange rate of VEB 10 per US dollar) in special absorption operations. The term for placement of securities is 56 days at a 7% interest rate and a minimum negotiated amount of VEB 10,000 (US$ 1,000). The auction (at 100%), which was scheduled for March 22 this year for public and private sectors, aimed at freezing a part of excess liquidity of the market to help control inflationary effects. Venezuela's financial bodies have been conducting non-stop this kind of operations to control over the currency in circulation in the country. (El Universal, http://www.eluniversal.com/economia/160328/bcv-places-securities-for-veb-15-billion-to-drain-more-liquidity)

 

 

Politics and International Affairs

 

63.6 % polled say Maduro must leave office this year, 90.9% call economic situation negative.

The most recent poll by DATANALISIS reveals that 63.4% of all Venezuelans polled disapprove of President Nicolás Maduro’s administration and believe his term should end in 2016; 29.3% want him to serve his full term to 2019. 90.9% of those polled see the economic situation as negative. 52.1% of those consulted say they would vote to revoke Maduro´s mandate in a referendum while his total approval rating was 33.1%. A recall referendum must be formally requested by at least 20% of almost 19 million voters and votes for him to leave must be more than almost 7.5 million votes for him in the 2013 election. DATANALISIS projects estimate at least 7.49 million people would vote to dismiss Maduro. Henrique Capriles, who lost to Maduro in the 2013 presidential elections and is leading the drive for the President’s recall, heads the opposition in popular support. More in Spanish: (Infolatam, http://www.infolatam.com/2016/03/27/un-636-de-venezolanos-encuestados-dice-maduro-debe-dejar-el-poder-este-ano/; Notitarde, http://www.notitarde.com/Economia/909-percibe-la-situacion-economica-como-negativa/2016/03/27/923333)

 

Pope Francis calls for talks, mutual respect in Venezuela

Pope Francis urged Venezuelans to hold talks and collaborate with each other. During the delivery of his paschal message from the central balcony of Saint Peter's Basilica, Vatican, the pontiff requested that Jesus Christ's love message "be conveyed even more to the Venezuelan people, amid the hard times facing them, as well as to those who have in their hands the country's destiny, to work for the common good through dialogue and collaboration".
Francis expects that "the culture of joining, justice and mutual respect be promoted, which is the only thing that may guarantee the spiritual and material welfare of (Venezuelan) citizens." (El Universal, http://www.eluniversal.com/nacional-y-politica/160328/pope-francis-calls-for-talks-mutual-respect-in-venezuela)

 

Maduro claims Obama heads plan to dominate Latin America again

Following US President Barack Obama’s visits to Cuba and Argentina, Venezuela’s President Nicolas Maduro is claiming that Obama heads up an “imperial strategy” to once again dominate Latin America and the Caribbean by “overthrowing” governments such as that of Dilma Rousseff in Brazil or seeking to change others, like Venezuela. He claims that the “strategy” includes “combating” “honest leaders” such as Rafael Correa in Ecuador, conducting smear campaigns against Nicaragua’s Daniel Ortega and Argentina’s former president Cristina Fernández. But, he added, “we must all make great corrections within the wear and tear of governing Venezuela for 17 years.” More in Spanish: (Infolatam, http://www.infolatam.com/2016/03/25/maduro-afirma-que-obama-encabeza-plan-para-volver-a-dominar-america-latina/)

 

Top court reviews the constitutionality of Central Bank Law reform, a new clash looms with legislature

President Nicolas Maduro has sent the reform of the Law of the Central Bank of Venezuela (BCV) to the Constitutional Chamber of the Supreme Tribunal of Justice (TSJ) so that the country's top court may assess the constitutionality of the bill, passed on March 3 by the National Assembly (AN). The Congress' move came three months after Maduro enacted, via enabling law, the BCV's law reform. National Assembly authorities have ordered publication of the approved bill in light of no response from the Executive within 10 days.  (El Universal, http://www.eluniversal.com/nacional-y-politica/160328/venezuelas-top-court-assesses-constitutionality-of-bcv-law-reform; and more in Spanish: El Nacional, http://www.el-nacional.com/politica/Parlamento-promulgo-Ley-BCV-Ejecutivo_0_819518327.html)

 

Ruling party politician slain, Colombia rejects baseless charges

A supporter of Venezuela’s ruling leftist PSUV party who served as an alternate in the legislature of the western state of Tachira was gunned down in a town on the Colombian border and his associates are pointing the finger at paramilitaries based in the neighboring country. Tachira’s PSUV governor, Lieutenant Jose Vielma Mora, was quick to refer to the gunmen who killed Cesar Vera as “assassins, terrorists who hate the people” and linked the shooters to former Colombian President Alvaro Uribe. The security commissioner in Tachira, Ramon Cabeza, said Vera, 40, was the victim of a “paramilitary group.” Colombia’s Foreign Ministry has issued a statement rejecting the accusation and asked Vielma to show proof and refrain from branding inhabitants of the border area. William Villamizar, Governor of Colombia’s adjoining Norte de Santander department said the Tachira Governor should not issue charges “without prior investigations”. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408609&CategoryId=10717; and more in Spanish: Caracol: http://caracol.com.co/emisora/2016/03/27/cucuta/1459104042_087851.html)

 

Dominican Republic antinarcotics authority slams judge for ordering release of suspects

The Dominican Republic’s National Drugs Control Agency (DNCD) has lashed out at an interim judge there for releasing five Venezuelans arrested at La Romana International Airport, with 359 kilos of cocaine. The surprising release order for the Venezuelans is the latest scandal involving an interim judge in drug trafficking and money laundering cases, where bribes are suspected. The defendants were arrested by National Investigations Dept. (DNI), Justice Ministry officials and antinarcotics (DNCD) agents, which confiscated a Cessna C404, Barquisimeto, Venezuela registry YV2708. The drug was in 349 bricks in three suitcases and two bags hidden on the plane. The DNCD said it was "outraged" by the ruling handed down by La Romana (east) interim judge Aristida Mercedes to release the suspects without bond. The La Romana Office of the Prosecutor on Monday said the five Venezuelans charged with are still in custody. Venezuela’s Prosecutor General has announced that three Bolivarian National Guard sergeants have been detained at Barquisimeto’s airport in connection with the shipment. And Miami’s El Nuevo Herald journalist Antonio María Delgado reports that diplomatic pressure by Venezuelan President Nicolás Maduro was behind the release order in the Dominican Republic. (Dominican Today: http://www.dominicantoday.com/dr/local/2016/3/28/58712/Despite-judges-ruling-Venezuelans-in-369K-cocaine-case-still-in-jail; and more in Spanish: http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article68531672.html#storylink=cpy; Acento, http://acento.com.do/2016/actualidad/8335531-periodista-afirma-que-maduro-presiono-por-libertad-de-venezolanos-acusados-de-narcotrafico-en-rd/)

 

Police capture 3 for airport murder of Egyptian visitor

Interior Minister General Gustavo Gonzalez has reported the capture of three people suspected in the shooting death of an Egyptian man at the Maiquetía International Airport. The Prosecutor General’s Office said in a communique that the three suspects would appear in court later on Thursday. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408531&CategoryId=10717)

 

Increased violence against minors reported in Venezuela

A rise in violent acts -including frequency and intensity- against minors in Venezuela was reported by organizations in charge of protecting human rights of children and teenagers. In fact, on March 15-18, three minors were murdered: one during an alleged shootout with police officers; other was kidnapped and killed; and a third one was mistreated and molested by his stepfather. Add to this the case of a two-month old baby who was left under a bridge by his own 18-year old mother. Carlos Trapani, a representative from the Network of Children and Teenagers' Human Rights of NGO Community Centers of Learning (CECODAP), warned that "nowadays, there is much violence and cruelty against minors." In his words, this shows the risk facing childhood and adolescence in the country. (El Universal, http://www.eluniversal.com/nacional-y-politica/160326/increased-violence-against-minors-reported-in-venezuela)

 

Isturiz reveals there were almost 3 lootings daily during Easter week

Executive Vice President Aristóbulo Istúriz has revealed that there were 21 lootings, 22 kidnappings and 20 robberies at hospitals, which means there were 3 lootings and 2 robberies daily during the Easter holidays. More in Spanish: (Tal Cual Digital: http://www.talcualdigital.com/Nota/124577/aristobulo-revela-que-en-semana-santa-hubo-casi-3-saqueos-al-dia-video)

 

 

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.

 

March 22, 2016

International Trade

 

Cargo that has arrived at Puerto Cabello:

• 561,44 tons of coffee for Café Venezuela
• 74,04 tons of female sanitary napkins for Corporación Venezolana de Comercio
• 23 tons of linseed for Comercializadora Tulipán 2014
• 2 tons of onion seed for Excel Servicios Logísticos
• 770 tons of detergent and cleaning products for Corporación Macex
• 25.000 tons of corn for grupo Souto
• 14.999 tons of soybean food for grupo Souto
• 38 containers of air conditioners for importadora Champi
• 4 auto parts containers for FCA Venezuela
• Similarly, products such as shoes, slippers, sandals, clothing, fabric rolls, etc. have arrived

More in Spanish: (El Nacional; http://www.el-nacional.com/economia/Llegaron-semillas-cafe-productos-limpieza_0_813518962.html)

 

90.000 tons of rice, durum wheat and soy have arrived at ports here, according to Nutrition Minister General Rodolfo Marco Torres. He said another 30,000 tons of baking wheat are about to arrive, and added that 60,000 tons of white and yellow corn are also scheduled to arrive. He said US$ 27 million have been allocated for seed imports for future crops. More in Spanish: (AVN; http://www.avn.info.ve/contenido/90000-toneladas-entre-arroz-trigo-duro-y-soya-llegaron-puertos-del-pa%C3%ADs)

 

New technology announced for ports here

Foreign Trade Minister Jesús Farías reports new equipment has been installed at La Guaira and Puerto Cabello ports to improve export-import activities here. Both these ports carry out 80% of all transactions, and he says an investment of US$ 60 million can eliminate 60% of former procedures. Farías also claims a new FOREX credit line will be available to local exporters at the protected rate, in order to acquire supplies. More in Spanish: (AVN; http://www.avn.info.ve/contenido/gobierno-venezolano-activa-equipos-tecnol%C3%B3gicos-para-agilizar-actividades-puertos-del-pa%C3%ADs; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/activan-sistema-tecnologico-para-agilizar-tramites.aspx;Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/activan-equipos-tecnologicos-para-agilizar-activid.aspx)

 

 

Oil & Energy

 

PDVSA to import light crude from BP, China Oil

British oil major BP and China Oil have been awarded a tender launched by Venezuela's PDVSA to buy some 8 million barrels of Nigerian and U.S. light crude for delivery during the second quarter, traders told Reuters. The deal, which will significantly increase PDVSA's crude purchases, could in exchange give BP access to Venezuelan oil to process or resell, while increasing the volume that Chinese firms take from PDVSA under loan-for-oil agreements.

China Oil, a unit of state-run China National Petroleum Corporation (CNPC), must deliver 2.7 million barrels of U.S. WTI crude in April at PDVSA's terminal in Curacao at a price of NYMEX WTI plus US$ 1.58 per barrel, according to a Platts report published earlier. (Reuters, http://www.reuters.com/article/us-oil-venezuela-tender-idUSKCN0WK2PC)

 

Venezuela has shut down for a week to cope with electricity crisis

Venezuela has shut down for a week as the government struggles with a deepening electricity crisis. President Nicolas Maduro gave everyone an extra three days off work this week, extending the two-day Easter holiday, Maduro had originally said over the weekend that the extended holiday would only apply to state employees. The government has rationed electricity and water supplies across the country for months and urged citizens to avoid waste as Venezuela endures a prolonged drought that has slashed output at hydroelectric dams. The ruling socialists have blamed the shortage on the El Nino weather phenomena and “sabotage” by their political foes, while critics cite a lack of maintenance and poor planning. (Bloomberg, http://www.bloomberg.com/news/articles/2016-03-16/venezuela-to-shut-down-for-a-week-as-electricity-crisis-mounts)

 

Venezuelan crude oil price hits US$ 30.53

The Venezuelan oil price this week ended at US$ 30.53 per barrel, a US$ 0.93 surge from the previous term.
The local Ministry of Petroleum and Mining explained through its website that "crude oil prices recorded an upward trend this week due to dollar depreciation compared to other currencies, and due to more optimism over a meeting a number of large world (oil) producers will hold next month to agree on measures to stabilize the market." (El Universal, http://www.eluniversal.com/economia/160318/venezuelan-crude-oil-price-hits-usd-3053)

 

 

Commodities

 

Food distribution in public system dropped 24.72% during 2015, according to the 2015 yearly report from the Nutrition Ministry, which shows that the MERCAL, PDVAL and Bicentenario systems dropped from 1.8 million tons to 1.3 million tons. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Distribucion-alimentos-redes-publicas-cayo_0_815318673.html)

 

Labor leader charges JOHNSON & JOHNSON with sabotaging sanitary napkin production

Jaime Guevara, secretary general of the company union at JOHNSON & JOHNSON, charges that the company has stopped producing personal care products that have regulated prices in favor of others that are sold at higher prices. Guevara made his claim in a telephone call to the government news agency AVP. More in Spanish: (AVN; http://www.avn.info.ve/contenido/johnson-amp-jhonson-sabotea-producci%C3%B3n-toallas-sanitarias; El Nacional, http://www.el-nacional.com/economia/Sindicato-denuncia-irregularidades-produccion-Johnson_0_815318531.html; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/denuncian-saboteo-de-johnson-johnson-en-produccion.aspx)

 

 

Economy & Finance

 

Supreme Tribunal has extended the Economic Emergency Decree for another 60 days starting March 11th, after authorization to renew it was voted down by the National Assembly. Pollsters Félix Seijas of DELPHOS and Luis Vicente León of DATANALISIS, along with political analyst Nicmer Evans, believe that actions by the regime and the Supreme Tribunal over the past 60-days show that the purpose of the Economic Emergency Decree was political and not economic, aimed at evading legislative control and showing strength, and that none of the formal objectives were reached during the first 60 days, More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/160318/tsj-prorrogo-el-decreto-de-emergencia-economica; El Nacional, http://www.el-nacional.com/politica/TSJ-prorroga-emergencia-economica-constitucional_0_812919022.html; and (El Nacional, http://www.el-nacional.com/politica/Evadir-AN-mostrarse-objetivos-emergencia_0_814718653.html)

 

Regime aims at unifying the FOREX rate, says Jesús Faría, Minister for Foreign Trade and International Investments. Faría has stated “the distortions within the economy are so marked, particularly those arising from the brutal drop in oil prices, that we will gradually seek to unify the exchange rate”. More in Spanish: (El Universal, http://www.eluniversal.com/economia/160317/gobierno-mantiene-meta-de-unificacion-cambiaria; Ultimas Noticias: http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/faria-con-dolar-today-se-explica-70-de-la-inflacio.aspx

 

Venezuelan bolivar loses ground

Venezuelans are feeling their lower purchasing power due to the domestic inflation index. By the end of 2015, this index totaled 180.9%, according to the Central Bank of Venezuela (BCV). Nelson Merentes, President of Venezuela’s Central Bank has admitted that the existing family of bills and is insufficient and adds that the bank is pondering on printing notes of 500 (USD 50) and 1,000 (USD 100) bolivars this year. He did not specify an exact date. The projected skyrocketing prices in Venezuela over the following months puts a big question mark as to the successful implementation of a new group of notes with a top value of 1,000 bolivars. (El Universal, http://www.eluniversal.com/economia/160319/venezuelan-bolivar-loses-ground)

 

DICOM FOREX rate up to VEB 249.03/US$1, according to Central Bank data, which reports that 7.11% of all official FOREX transactions have been made at this “floating” rate, while 92.89% of all transactions are made at the “protected” DIPRO rate of VEB 10/US$1. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Dicom-cerro-lunes-bolivares-dolar_0_815318656.html; El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/tasa-simadi-sube-bs--42-11-desde-anuncio-del-dolar.aspx)

 

Government to retain control of housing in Venezuela

The Venezuelan government will retain control over housing, according to Manuel Quevedo, Minister of Housing and Habitat, who has disregarded the enforcement of the ownership law proposed by the National Assembly. He claimed that the cost of a dwelling for the middle class is quoted at US$ 20,000, a price deemed by him as out of Venezuelans' reach. (El Universal, http://www.eluniversal.com/economia/160321/gmvv-to-retain-control-of-building-in-venezuela)

 

 

Politics and International Affairs

 

Obama and Raul Castro mention Venezuela in joint press conference

During their joint press conference in Havana, US President Barack Obama and Cuban President Raúl Castro both referred to Venezuela. Castro said: “it was planned, and there was no time to finish it, to talk about our concern over the destabilization situation that is being attempted in Venezuela, which is counterproductive to the continent’s environment”. Obama, in turn, said: “We spoke about Venezuela. I think the entire region has an interest in a country that faces up to its trade challenge, that responds to the aspirations of its people, and that is a source of stability in the region. That is an interest I believe we should all share.” More in Spanish: (Venevision: http://www.noticierovenevision.net/internacionales/2016/marzo/21/152386=barack-obama-y-raul-castro-hicieron-mencion-en-sus-discursos-sobre-la-situacion-en-venezuela)

 

Maduro meets with Castro brothers on eve of Obama’s arrival in Cuba

Former Cuban President Fidel Castro received Venezuelan President Nicolas Maduro for a meeting in Havana that came on the eve of the arrival on Sunday of U.S. President Barack Obama. Castro and Maduro held a two-and-a-half-hour meeting on Saturday, the Venezuelan president told Cuban state media, adding that he found the former Cuban leader writing and editing articles, “full of optimism and tremendous force.” He also said that 89-year-old Castro – who stepped down from power in 2006 – was the “most informed man on the planet” and remains attentive to the plans for cooperation between Cuba and Venezuela, especially those related to food production. President Maduro reportedly also met with Cuban President Raúl Castro, to review joint programs, and was decorated with the “José Martí Order”. (Latin American Herald Tribune,http://www.laht.com/article.asp?ArticleId=2408164&CategoryId=10717; El Universal, http://www.eluniversal.com/nacional-y-politica/160321/venezuelas-maduro-satisfied-with-results-of-visit-to-cuba; and more in Spanish: Venevisión: http://www.noticierovenevision.net/politica/2016/marzo/18/152183=presidente-maduro-se-reunio-con-raul-castro-para-consolidar-acuerdos-entre-ambas-naciones)

 

Ramos Allup accuses the Comptroller General of obstructing legislative oversight

National Assembly President Henry Ramos Allup has rejected an order by the Comptroller General demanding that all legislative request should be sent to the CG office. Ramos Allup says: “Not only is the Comptroller General’s office remiss in its duties by pimping for regime corruption but also obstructs investigations by the National Assembly”. More in Spanish: (Venevisión: http://www.noticierovenevision.net/politica/2016/marzo/18/152198=ramos-allup-denuncia-obstruccion-de-la-contraloria-general-en-las-investigaciones-del-parlamento)

 

Editor jailed as another paper closes

The director of a major newspaper, "Correo del Caroní", was thrown in jail for four years and another paper, "El Carabobeño", had to close down because it couldn’t get newsprint. Those two incidents took place in Venezuela within days.  “These are Maduro’s contributions to the destruction of democratic media, which Chavez started by shutting down Radio Caracas Television,” said Luis Salamanca, a political consultant in Caracas, on the recent developments. “Maduro is adding a new element: manipulating the supply of newsprint. He is just letting newspapers die. Several newspapers have closed because of the very same problem,” Salamanca said. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408191&CategoryId=10717)

 

92% of all Venezuelans believes the economic crisis has become worse recently

A poll taken in 20 states by Keller and Associates shows that 92% of all Venezuelans believe scarcity has become worse recently, and only 8% say “things are going very well”. 92% called the situation “grave”, 82% consider the general situation, including crime, corruption, cost of living, poverty, housing and the economy has become worse; and 80% say the government is inefficient in solving national problems. More in Spanish: (El Nacional, http://www.el-nacional.com/sociedad/venezolanos-crisis-economica-empeorado-recientemente_0_812918893.html)

 

Oscar Schemel says 58% of all Venezuelans believe Maduro’s exit is the solution

Oscar Schemel, of HINTERENLACES, a pollster widely regarded as pro-regime, says 58% of all Venezuelans believe Maduro’s exit is the solution to economic problems here. Schemel spoke during an interview program conducted by former Chavez Vice President José Vicente Rangel, and said “the national government is reviving confrontation amid a fantastic revolutionary epic”. State media cancelled a previously announced retransmission of the program. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Oscar-Schemel-venezolanos-Maduro-solucion_0_814718561.html)

 

Small protests proliferate in simmering Venezuela

Frustrated neighbors block a road with trash after days without water. Placard-waving nurses halt traffic to demand uniforms and medicines. Women bang pots on balconies when the lights go out. Venezuela is simmering with small-scale street protests as water and electricity services stutter, labor disputes mount, and basic food items become more scarce and expensive amid a worsening economic crisis across the nation. (Reuters, http://www.reuters.com/article/us-venezuela-politics-protests-idUSKCN0WJ1CU)

 

US$ 350 billion would make Venezuela the nation with the most stolen money on earth.

Peru’s Oscar Solórzano, an expert on recovering embezzled funds within the Basel International Institute for Asset Recovery, if it is proven that the amount “looted” by corruption here is above US$ 350 billion, Venezuela would top the list of nations with most stolen money on earth. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Freddy-Guevara-millones-convertiria-Venezuela_0_815318654.html)

 

Two more massacred miners identified in Venezuela

Prosecutor General Luisa Ortega Diaz has announced that two more bodies from among the group of 17 found in a mine in the southeastern town of Tumeremo have been identified. “Just one person remains to be identified of the ... 17 who were executed with firearms and later found in the Nuevo Callao sector (in Bolivar state),” Ortega Diaz said, adding that the two bodies have been turned over to relatives. She said that her office is working the hypothesis that criminal bands carried out the killings, and police have made progress in gaining “control of the ... illegal mining exploitation” in the zone, which is rich in gold. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408200&CategoryId=10717)

 

Egyptian murdered during robbery attempt at Caracas’ international airport

An Egyptian man was shot and killed when he resisted a robbery attempt at Maiquetia’s Simon Bolivar International Airport, Venezuela’s largest airport, a few minutes after arriving in the country, the Prosecutor General’s Office announced. Abdelrahman Ismail Elsayeb Hassan Abdelaziz was murdered on Saturday at the airport, which serves Caracas. The 30-year-old man arrived at approximately 4:30 p.m. on Saturday “on a flight from Frankfurt (Germany) and was intercepted by two men on motorcycles who tried to steal his belongings as he made his way through the national air terminal via an outside path,” the report said. “The man resisted the robbery and was hit by a shot that killed him instantly,” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2408195&CategoryId=10717)

 

Venezuela condemns “coup” activity in Brazil

President Nicolas Maduro says right wing forces in Brazil are reactivating a “coup d’etat” there against Brazilian President Dilma Rousseff and former President Luiz Inácio “Lula” da Silva, Maduro said: “Venezuela condemns the “coup d’etat” which is announced and executed by media and parts of the judiciary. It is very dangerous that these paths are taken to snatch away what has been gained in the streets over decades of resistance fighting”, More in Spanish: (AVN; http://www.avn.info.ve/contenido/venezuela-condena-reactivaci%C3%B3n-golpe-estado-brasil)

 

 

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.