Venezuelan Daily Brief

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

Thursday, April 28, 2016

April 28, 2016

International Trade

Container handlers announce 50% increase in freight charges

The Puerto Cabello Association of Small Business and Carriers of Containers has announced a 50% increase in freight charges starting May 1st, despite a lack of response from authorities, due to rising expenditures for supplies and maintenance. More in Spanish: (Notitarde;


Oil & Energy

Regime imposes two-day work week to deal with energy crisis

Venezuela's government has imposed a two-day working week for public sector workers as a temporary measure to help it overcome a serious energy crisis. Vice-President Aristobulo Isturiz announced that civil servants should turn up for work only on Mondays and Tuesdays until the crisis was over. The measures announced on national television by Isturiz affect two million public sector workers. President Nicolas Maduro says Venezuela has been badly hit by the El Nino weather phenomenon and will return to normal when it starts raining again. "We are requesting international help, technical and financial aid to help revert the situation," he said. "We are managing the situation in the best possible way while we wait for the rains to return." But the opposition has accused the government of mismanaging the crisis. (BBC News:; Latin American Herald Tribune,; Reuters,; Bloomberg,


Venezuela oil refineries face operating woes, PDVSA launches tenders

Venezuela's key Paraguana oil refining complex was this week operating around half capacity, prompting state-run oil company PDVSA to launch purchase tenders for products as it tries to offset power outages and equipment failures. While Amuay's fluid catalytic cracker (FCC) restarted on Monday, the 645,000 barrel-per-day refinery was operating at only around 360,000 bpd as its flexicoker remained down, union boss and fierce government critic Ivan Freites said on Tuesday. The adjacent 310,000 bpd Cardon facility was processing around 110,000 bpd, added Freites, citing Monday's internal report of Venezuela's top refineries in the wind-swept Paraguana peninsula.

Output has dropped at the crisis-hit OPEC country's refineries in recent months, with critics blaming shortages of spare parts, lack of maintenance, and a shaky electrical grid. (Reuters,


Venezuela proposes non-OPEC oil producers attend Vienna meeting

Venezuela has proposed that non-OPEC oil producers attend the group's June meeting in Vienna to continue "dialogue and coordination," according to a letter from the country's oil minister to the Qatari energy minister, who is also the current OPEC president. A deal to freeze oil output by OPEC and non-OPEC producers fell apart in Doha this month. Price hawk Venezuela had been pushing for a deal to boost prices and is now trying to revive negotiations. In a letter to Qatar's Mohammed al-Sada dated April 21, Del Pino floats the idea that major oil producers who attended the Doha conference attend the Vienna OPEC Ministerial Conference as observers.  (Reuters,



POLAR Breweries are entering a “critical financial stage, according to company director Marisa Guinand, who announced their fourth brewery is suspending operations for lack of barley and other supplies. "The situation is critical since malt barley stock, which is the basic ingredient for beer and malt, has run out”, she said. Guinand recalled that the Beer Manufacturers Chambers had issued a warning in February that stocks were running out and that FOREX had not been allocated for requisite imports. She said the plants will be having no income, and this will hurt profits. Stockholders will provide their own capital to honor the company’s labor commitments and social benefits. Without referring directly to POLAR, President Nicolas Maduro is threatening to have security forces and workers take up any plants that come to a halt, calling it a “a serious crime against the nation amid an emergency”. Foreign Trade and Investment Minister Jesús Faría has added that POLAR CEO Lorenzo Mendoza will not be “so inept” as to “close down his plant”, in which case “workers will do what they have to do, they have a right to work”. He termed Mendoza’s demands for FOREX “cynical … when one can see an extreme FOREX scarcity because oil prices dropped.” More in Spanish:  (El Nacional,;,; Notitarde:


Economy & Finance

Venezuela doesn't have enough money to pay for its money

Venezuela is scrambling to print new bills fast enough to keep up with the torrid pace of price increases. The first signs of the currency shortage date back to 2014 when the government began increasing shipments of bank notes as wads of cash were already needed for simple transactions. Most of the cash, like nearly everything else here, is imported; so ahead of the 2015 congressional elections, the central bank tapped the U.K.’s DE LA RUE, France’s OBERTHUR FIDUCIAIRE and Germany’s GIESECKE & DEVRIENT to bring in more than 10 billion bank notes, surpassing the 7.6 billion the U.S. Federal Reserve requested this year. But currency companies were experiencing delays in past payments, so when the tender was offered, the government only received about 3.3 billion in bids. The cash arrived in dozens of 747 jets and chartered planes. Under cover of security forces and snipers, it was transferred to armored caravans where it was spirited to the central bank in dead of night. The currency makers complied, only to find payments not fully forthcoming. Last month, DE LA RUE, the world’s largest currency maker, sent a letter to the central bank complaining that it was owed US$ 71 million and would inform its shareholders if the money were not forthcoming. Now companies are backing away. With its traditional partners now unenthusiastic about taking on new business, the central bank is in negotiations with others, including Russia’s GOZNACK, and has a contract with Boston-based CRANE Currency. “It’s an unprecedented case in history that a country with such high inflation cannot get new bills,” said Jose Guerra, an opposition law maker. Venezuela, in other words, is now so broke that it may not have enough money to pay for its money. (Bloomberg:


IMF terms Venezuelan mid-term outlook unsustainable

Alejandro Werner, IMF director for the Western Hemisphere, says Venezuela faces a situation that is “not sustainable in the mid-term” as a result of macro- and micro-economic factors, such as drop in oil prices of about 20% of this country’s GDP, the loss of productivity and inflation risk. "Given the deteriorating productive capacity, the deterioration of microeconomic policy and macroeconomic imbalances in Venezuela, which have deteriorated further amidst the current oil shock, clearly the situation is not sustainable in the middle term," he says. According to forecasts presented this month by the IMF, the country's economy will shrink by 8% this year, following a decline of 5.7% in 2015, although in 2017 recession will fall to 4.5%. The Venezuelan economy "had already showed signs of deterioration in productive capacity" even when oil prices were high, he added. (El Universal,; and more in Spanish: El Nacional,


…and minister admits “difficult” situation

Foreign Trade and Investment Minister Jesús Faría has admitted Venezuela is going through a difficult macro-economic scenario, and blames it on dropping oil process, which the government cannot control. More in Spanish: (Notitarde;;; El Mundo,; Ultimas Noticias,


Venezuela economic crisis means fewer meals, more starch

Recession and a dysfunctional state-run economy are forcing many here to reduce consumption and eat less-balanced meals. Soaring prices and chronic shortages have left 65-year-old homemaker Alida Gonzalez struggling to put meals on the table. She and her four family members in the Caracas slum of Petare now routinely skip one meal per day and increasingly rely on starches to make up for proteins that are too expensive or simply unavailable.

"With the money we used to spend on breakfast, lunch and dinner, we can now buy only breakfast, and not a very good one," said Gonzalez in her home, which on a recent day contained just half a kilo of chicken (about a pound), four plantains, some cooking oil, a small packet of rice, and a mango. The family did not know when they would be able to buy more.  (Reuters,


Crisis compels Venezuelans to resell poor-quality goods

As unusual as selling a worn-out toilet bowl is the market of damaged objects, useless electrical appliances, shoes, and reused clothes that has emerged in Caracas. In the sellers’ view, this is a practice which originated in the city’s poorest areas and managed to install amid crisis in other places. For instance, the surroundings of the Attorney General’s Office, the National Assembly, other important institutions and, particularly, entrances of subway stations are some of the places where sellers offer their goods. Passers-by have denounced that few spaces are free from scrap merchants, many of whom lack a formal job and are extremely poor. (El Universal,


Military register 69% product scarcity in 4 states

The Armed Forces’ Western Strategic Defense Region has detected a “low availability of items in stores” (a military euphemism for scarcity), in 4 states, according to its monthly report to the Strategic Operating Command, which monitors reports on product availability and the number of people in line to but them. More in Spanish: (El Nacional,


Politics and International Affairs

Opposition kicks off petition drive to oust President Maduro, Capriles aims for November vote

Parties comprising the MUD opposition coalition are collecting the signatures of some 198,000 people – 1% of the country’s 19.8 million registered voters – and later present about another 4 million for the CNE to set a date for a referendum to recall President Nicolas Maduro. Opposition leader and former presidential candidate Henrique Capriles redirected scheduled marches on the National Election Council (CNE) offices in all cities towards efforts to collect the necessary signatures in a drive conducted by the Democratic Unity all around the country. He estimates the recall vote could be held in November or December this year. If the opposition wins the recall vote this year, new elections must be held. But if it takes place in 2017, Maduro would be replaced by Vice President Aristobulo Istúriz until the term ends in 2019. Capriles says: “if the recall referendum is not held this year it will make no sense. We are not interested in the same regime. It is this year or not at all”. Capriles added that much more than the almost 200,000 necessary signatures will be collected within two days and hopes to deliver them to the CNE by next Monday, as hundreds lined up to sign nationwide. Maduro claims opposition efforts to shorten his term are “not viable” and terms them “coup attempts”. (The Wall Street Journal:; Latin American Herald Tribune,; Reuters,;; Bloomberg,; and more in Spanish: Infolatam:;; El Universal,; ABC:


Poll shows 60,3% support the recall of Nicolas Maduro

If the recall referendum were to be held next Sunday, 60.3% would vote to eject Nicolas Maduro from the Presidency, and only 28.3% would vote to keep him. The latest poll by VENEBARÓMETRO shows support for a recall has grown since February, when it was 59.5% More in Spanish: (El Nacional,


Protests in Venezuela over shortages and blackouts

Protesters and looters took to the streets of Venezuela on Wednesday as citizens suffered another day with prolonged shortages of water, power and food. Strong rioting has taken place in Venezuela’s second city, Maracaibo (Zulia state, where temperatures average 34 centigrade), protesting 20-hour blackouts there.  The National Guard reported over 121 people were arrested during protests and looting by hundreds at around 73 groceries, apparel and appliance stores. There were also protests reported in Maracay (Aragua state) and La Guaira (Vargas State) involving blocked streets and burning tires. Local media reports violence arises due to blackout, cuts in water supply and food scarcity. The local Social Conflict Observatory reports 170 lootings nationwide during the first quarter this year. While the government claims the El Niño drought has limited electricity generation capacity, the opposition has charged the regime with inefficiency and corruption in managing the system. President Nicolas Maduro condemned the protests and claims his political enemies are trying to create chaos and sabotage him. “They are trying to create a violent situation”, he claims. (The Wall Street Journal:; and more in Spanish: El Universal,


The country is in gridlock, while the opposition attempts to oust the president.

The main political challenge for the country is the fight to remove the president from power. Despite several attempts by the opposition, nothing has worked so far and Venezuela has seen serious economic and social implications arise from this gridlock. The government and opposition each have their own strategic approach to gaining and maintaining power. Three potential paths have been seriously pursued by the opposition coalition, which does not control the other branches of government. First, the opposition sought to amend the constitution to shorten terms in office, but the Supreme Court ruled that any such amendment could not be applied to current terms. Impeachment by the National Assembly is the second legal option for ousting Maduro, but although the opposition achieved this threshold in election results, three opposition candidates from Amazonas have been prevented from assuming office, so the opposition does not have the necessary supermajority to impeach the president. The third option is to hold a national referendum calling for a new president. The opposition is under pressure to hold the referendum this year. If it is held next year, the government would remain in power, even if people vote with the opposition, and Maduro would simply be replaced by the vice president. This scenario makes it very difficult for the opposition to successfully remove Maduro from office by constitutional means. An emerging alternative option for the opposition involves the democratic clauses contained in Article 20 of the OAS Charter and Mercosur’s Ushuaia II protocol, but diplomatic measures often do not produce tangible results. Political unrest appears to once again be on the rise, but protesters need to be organized and use these social movements strategically. Otherwise, random acts will be much less effective against the government.  One advantage Maduro has over the opposition is that he abides by a more dictatorship-like model, while the opposition favors a democratic model – which provides Maduro with more maneuverability. The elephant in the room is Venezuela’s military and the possibility of a coup. Much of the top military brass subscribes to Chavismo, and those who entered the military in 1999 or later were indoctrinated with the Bolivarian revolution mentality. Political actors on both sides in Venezuela have proved they all possess high levels of resilience and resourcefulness. These are essential elements for success in Venezuelan politics despite their abstract nature. For this reason, it is difficult to pinpoint a rupture in the current gridlock, which at this point looks like it will most likely be broken when one player loses focus and makes a poor calculation or fumble. (Geopolitical Futures:


National Assembly to ask OAS to debate Venezuelan situation

An opposition delegation of National Assembly legislators, headed by Foreign Affairs Committee Chairman Luis Florido, is in Washington to formally present a request to OAS Secretary General Luis Almagro for “the OAS to urgently debate the situation in Venezuela, and move toward a resolution that points to the political crisis, political prisoners, and allows the Venezuelan people to vote for President Nicolas Maduro’s recall”. More in Spanish:


Defense minister deplores "systematic" attacks against the Armed Forces

Defense Minister General Vladimir Padrino has condemned systematic attacks against the Bolivarian National Armed Forces (FANB) by what he calls a number of groups who have particular interests and are driven by their thirst for power. In a communiqué, he rejected some sectors’ attempts to tarnish “the honor and dignity of those who have promised to defend the country and its institutions to death if necessary.” (El Universal,


Senator Rubio calls for further sanctions on Venezuela

U.S. Senator Marco Rubio (R-FL) took to the Senate floor Wednesday to highlight the widespread corruption in the institutions of the government in Venezuela. He warned of the serious consequences of failed leadership, failed economic policies, a societal breakdown, human rights abuse, and a de facto political coup that is currently taking place in Venezuela. Rubio said: “The first thing we should do is we should be active at the Organization of American States (OAS) as it considers the situation in Venezuela and they should be asked that voting members recognize the humanitarian and political crisis in Venezuela … What’s happened in Venezuela is nothing short of a coup d’etat, a de facto coup”. In reference to sanctions, he said: “we have imposed sanctions on human rights violators, not sanctions on the people of Venezuela, not sanctions on the government, on human rights violators. Many of whom steal money from the Venezuelan people and invest it in the United States. … And that’s why we impose sanctions on them. There will be an effort here, I hope, in the next day or so, to extend those sanctions for another three years”. (Latin American Herald Tribune:


FREEDOM HOUSE says the regime is the main source of pressure on media in Venezuela

According to the recently published FREEDOM HOUSE annual report, Venezuela is one of the countries in the Hemisphere were the government is the main source of pressure on independent media, and there is no free press here.  More in Spanish: (El Universal:



The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

Tuesday, April 26, 2016

April 26, 2016

International Trade

Venezuela runs up US$1 billion debt for late shipping containers

Venezuelan state agencies have run up close to US$1 billion in debts with shipping firms due to delays in returning containers, potentially boosting the cost of importing staple goods as the country struggles with product shortages and an economic crisis. The agencies have held containers for months or simply never returned them, at times leaving the truck-sized steel boxes for years in oil industry facilities or on provincial farms even though this costs US$ 100 per day per container, according to industry sources. The debts have piled up over the last six years, coinciding with a steady rise in the role of state agencies in importing goods to Venezuela, particularly food. The country is served by industry giants such as MAERSK of Denmark and HAMBURG SUD of Germany. The container debts put shipping lines on a long list of industries ranging from international airlines to telecommunications giants that have complained of being unable to collect on billions of dollars in unpaid Venezuelan bills. (Reuters,


Three ships have arrived bearing wheat for bakeries, according to Tomas Ramos, President of Venezuela’s Bakery Industry Federation. More in Spanish: (Notitarde;


Arreaza reports medical supplies and medication are arriving at ports

Social Affairs Vice President Jorge Arreaza says medication and medical supplies are arriving here for the National Health Service and private services. “We are starting to receive medications”, he claims. More in Spanish:  (Ultimas Noticias,;El Nacional,



Oil & Energy

HALLIBURTON curtailing business activity in Venezuela

U.S. oil services firm Halliburton Co has decided to begin curtailing activity in Venezuela, the company said on Friday, less than two weeks after SCHLUMBERGER Ltd announced a similar decision as a result of payment difficulties. Venezuelan state oil company PDVSA has struggled to settle unpaid bills to service firms as a result of low oil prices and heavy bond payments that the company must make this year. "During the quarter we made the decision to begin curtailing activity in Venezuela," HALLIBURTON said in an earnings release. (Reuters,


Blackouts in parts of Caracas Excluded from Electricity Rationing

Vast areas of the Venezuelan capital report electricity blackouts, even though Caracas was excluded from the 4-hour-a-day ration ordered by the government and which is being imposed on the rest of the country for at least 40 days. With no official reports on the power cuts made public, the media were quick to notice that the blackouts chiefly affect the capital’s densely populated east side. The daily El Nacional said that the cuts began shortly after sunrise. The power cuts announced last week by the government exclude Caracas, the neighboring state of Vargas and a northeastern region of Venezuela that includes the touristic island of Margarita, as well as urban areas where hospitals, airports and security forces’ headquarters are located. (Latin American Herald Tribune,; Bloomberg,; Latin American Herald Tribune,;


FEDECAMARAS says electricity crisis is due to poor planning, mismanagement of US$ 95 billion

Francisco Martínez, President of the nation’s largest business federation (FEDECÁMARAS) has charged the government with poor planning on electricity here. “The electricity problem is a consequence of poor management, poor planning”, he said. He also said this problem involves corruption: “Venezuelans need to know what they have done with US$ 95 billion invested into the electricity system in order to have the disaster we have in Venezuela” More in Spanish: (El Universal,


Venezuela oil price rises for 2nd week

The price Venezuela receives for its mix of medium and heavy oil rose slightly as oil prices around the world also rose on a strike in Kuwait. According to figures released by the Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending April 22 was US$ 32.39, up 29 cents from the previous week's US$ 32.10. According to Venezuelan government figures, the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 27.03 for the year to date. (Latin American Herald Tribune,




Regime strangles POLAR in FOREX allocations, plants grinding to a halt

Omaira Sayago, executive director of the Beer Manufacturers Chamber, reports that the only manufacturer not receiving FOREX is POLAR, which has a US$ 200 million in debts with suppliers dating back to 2014 and has run out of inventories. The company had planned to migrate to the DICOM (controlled official FOREX rate) system rival manufacturers are using, but has received no reply from the government. Four of its plants will shut down this week, impacting 80% if the population. POLAR union leader Arquímedes Sequera has reported that the Labor Inspector’s Office has confirmed the lack of supplies to produce beer and malt at their San Joaquin plant, and 1,340 workers are at risk of being suspended if it closes. Marisa Guinand, POLAR’s Personnel Director, reports that the standstill of beer manufacturing plants will take place gradually, for not all facilities have the same storage capacity. She stressed the government has failed to give the company an equal treatment over foreign currency access compared to rival enterprises. (El Universal,; and more in Spanish; (Ultimas Noticias,;El Nacional,;; Notitarde;



Economy & Finance

IMF warns that Venezuela’s economy could collapse entirely in 2017

Robert Rennhack, Deputy Director in the Western Hemisphere Department of the International Monetary Fund, has issued a statement warning that Venezuela’s economy could collapse completely in one and a half years of government financial policies are not corrected. This could happen in 12 to 18 months. He also warns that inflation will reach 2,200% in 2017, and believes annual inflation could be up to 13,000%, which is what experts call full hyperinflation. More in Spanish: (El Nacional,


ICSID orders Venezuela to pay for VESTEY expropriation

The World Bank’s International Center for the Settlement of Investment Disputes (ICSID) has ordered Venezuela to pay almost US$ 100 million to Britain’s VESTEY cattle group for taking over a number of the company’s estates here. The late President Hugo Chavez ordered a takeover of VESTEY properties in 2005. ICSID has now ordered Venezuela to pay up US$ 98 million plus interest. More in Spanish: (Notitarde;; El Universal,; El Nacional,


FEDECÁMARAS says President Maduro’s “productive motors” have had no results

FEDECÁMARAS President Francisco Martínez reports that the launching of “productive motors” announced by President Nicolas Maduro to reinvigorate the economy has been ineffective.  He said that a few independent businessmen have attended the established working groups in order to talk to Economic Vice President Miguel Perez Abad, but have received no answers about FOREX allocations to suppliers; “All we have seen is frustration because the business sector continues to be under government attack”. More in Spanish: (El Nacional,


…and Isturiz tells business to break open their FOREX “piggy banks

Venezuela’s Executive Vice President Aristobulo Isturiz says any Venezuelan businessman who has FOREX abroad should repatriate it to propel the nation’s economy. “At Venezuela’s current situation, all those who have dollars abroad should break open their “piggy bank”, He criticized Lorenzo Mendoza for saying POLAR cannot produce food and beverages for lack of FOREX: “It cannot be that one who has most dollars abroad says he does not produce because the government does not allocate dollars, when there are businessmen who have far less than he and are contributing in order to move forward”. More in Spanish: (El Mundo,; Ultimas Noticias,


Cattlemen report that their productivity is down 50%

Carlos Albornoz, head of the National Cattlemen’s Federation, reports that agricultural production has dropped by more tan 50%, Last Thursday, Venezuelan rural producers demonstrated in the city of Valle de la Pascua to demand better working conditions from the government. “We are barely producing 31% of the beef we eat, a Little over 35% of milk, merely 32% of White corn and 22% of yellow corn, and 60% of rice…we have no machinery, security or profitability”. He reported a lot of cattle is perishing due to lack of food and supplies. More in Spanish: (Notitarde;


70% of all industries report drops in their production levels, according to Juan Pablo Olalquiaga, President of the Venezuelan Confederation of Industries (CONINDUSTRIA). He reports that manufacturing is operating at 43.87% capacity “and the trend is for it to continue dropping if emergency measures are not taken.” More in Spanish: (Notitarde;; El Universal,; El Mundo,


All you need to know about Venezuela's looming implosion

It now seems inevitable that Venezuela, for decades touted as a “socialist paradise”, will disintegrate by the end of the year. It’s the ultimate case of “Dutch disease”, a country now rotten from depending far too much on the export of a primary product and, as a result, facing a currency so bloated it can’t maintain productivity and competitiveness. Venezuela’s problem is the crashing price of oil, its major export commodity. About 95% of the country’s exports, in fact. Because of that, it’s considered to be burdened with the riskiest debt in the world. Revenue from oil exports is said to have plummeted from US$37.2 billion in 2014 to US$ 12.6 billion. Compounding the problem, it also has to import roughly half of the food its people consume. In the middle of Chavez’s reign, the government seized control of some 3 million hectares of agricultural land in an effort to control production and prices. Now it sits idle, because the overvalued currency means it’s cheaper to import food than grow and distribute it. While the Venezuelan government still denies it, for nearly two years now, people have been saying they must wait several days in lines to enter government grocery stores for basic essential items which may not even be on the shelf when they finally get through the door. The other edge of the sword is that when Venezuelans eventually get inside the stores, they’re leaving with much more than they need, because reselling it across the border into Colombia and Brazil is extremely lucrative. There’s huge pressure on the government to maintain the subsidies or face a political backlash from the country’s significant chunk of voters beset by poverty. In February, Venezuela topped the “Misery Index,” an annual list compiled by The Cato Institute. For the second year in a row, it was considered the most miserable country in the world based on data about a country’s inflation rate, interest rates, and unemployment.  Poverty levels are now approaching 90%. Now, the inevitable violence and chaos is starting to spill over. There’s been no official homicide data from Venezuela since 2006, but one local think tank puts the rate at 92 killings per 100,000 citizens. It’s almost five times the rate in the year before Hugo Chavez came to power. Now death, lynching, prison breakouts, deadly student protests and mafia executions dominate the pages of national newspapers. The latest note from Deutsche Bank says even a return to US$ 100 a barrel for oil won’t help Venezuela. It needs closer to US$ 200 just to balance its budget. Communications services are now being cut. The government owes some US$ 700 million to private telecoms and cable firms, one of which, the giant Telefonica, has suspended long distance calls to the US, Europe and crucial partners Colombia, Brazil and Panama. And now Venezuelans face the next stage in their seemingly inevitable decline – switching off the lights. Venezuelan society is well past the stage of being three square meals away from revolution.  Now, as the FT notes, “the economic crisis risks turning into a humanitarian one”. (Business Insider Australia:



Politics and International Affairs

Venezuelan high court rules amendment to shorten term does not apply to current president term

Venezuela’s Supreme Tribunal of Justice (TSJ) has ruled that any amendment to the Constitution intended to make President Nicolas Maduro step down is not applicable in his presidential term. According to the high court, the amendment would apply in subsequent presidential terms. In the judgment, the TSJ Constitutional Chamber affirmed that, following a review of a petition for construction of Article 340 of the Constitution, any attempt to use of the amendment to cut the current presidential term would be fraud of the Constitution. (El Universal,


National Elections Council delays approval of official recall form

The National Elections Council (CNE) has continued to delay providing the opposition Democratic Unity coalition with the official form required to collect signatures calling for a recall referendum against President Nicolas Maduro. Opposition leader Henrique Capriles announced demonstrations at all CNE offices nationwide to demand action. “No CNE director has the right to block our recall. We are going to go for our form, it’s out right to do so”, he said. He complained that the CNE has not acted even after receiving four letters requesting an approved form. Last week seven opposition legislators chained themselves to CNE railings along with a group of demonstrators to demand the forms, and were violently removed by National Guard officers, who also manhandled newsmen covering the activity. The CNE subsequently threatened legal action against the legislators who “seek to destroy” the institution. More in Spanish: (El Nacional,;; El Universal,


National Assembly to move on OAS Democratic Charter against Maduro regime

Venezuelan National Assembly President Henry Ramos Allup told CNN-E that the legislature may ask the Organization of American States (OAS) to apply the Hemispheric Democratic Charter against the Maduro regime “as a last step, because it is necessary to previously ensure the indispensable votes for the Charter to be applied, and this requires overcoming obstacles at the OAS since CARICOM nations are there that have permanently received aid from the Venezuelan government and have committed their votes”. He says the opposition has had the “receptivity, balance and responsability” of OAS Secretary General Luis Almagro, and we have gone to other legislatures in friendly nations. He says that although they will make a formal petition to the OAS they are trying to fine tune instruments in order “to avoid setbacks, we know anything we try and fail at will be used by the Venezuelan government as a victory”. A delegation of legislators, headed by Foreign Affairs Committee Chairman Luis Florido, is travelling to Washington to meet with OAS Secretary General Almagro, to analyze ways to proceed. Article 20 of the Democratic Charter, which was approved in 2001, authorizes Almagro or a member State to convene the Permanent Council “in the event of an unconstitutional alteration of the constitutional regime that seriously impairs the democratic order in a member State” (El Universal,; and more in Spanish: (El Universal,; Infolatam:; Informe21:


The National Assembly’s positive rating has dropped down from 64% to 55% since the start of the year, according to a study by the Catholic University’s Political Science Center, and has fallen behind the universities, students, Catholic church, business, and private media. Experts believe the change is due to overblown expectations after Parliamentary elections and the fact that legislative action has been blocked by the Supreme Court, the regime or the National Elections Council. More in Spanish: (El Nacional,


Former Chavez VP slams Maduro for generating “loss of hope”.

Journalist Jose Vicente Rangel, a former Chavez Vice President and minister, has criticized economic policy and the hopeless message projected by President Nicolas Maduro and those responsible within the regime. He says: “The government’s key weakness is the economic crisis, mainly because of shortages and inflation; the lack of a hopeful discourse and a clearer economic outlook accentuates uncertainty, defenselessness, and sadness”.  He showed results of a poll by pro-government pollster HINTERENLACES, which reveals a drop in public confidence down to 24%. More in Spanish: (Infolatam:


Joel Hirst: The Suicide of Venezuela

Venezuela is slowly, and very publically, dying; an act that has spanned more than fifteen years. National suicide is not product of any one moment. But instead one bad idea, upon another, upon another and another and another and another and the wheels that move the country began to grind slower and slower; rust covering their once shiny facades. Revolution – cold and angry. Hate, as a political strategy. Law, used to divide and conquer. Regulation used to punish. Elections used to cement dictatorship. Corruption bleeding out the lifeblood in drips. Good men and women stuck in a two-decade old debate from which there is no escape. Videos of nightly sacking of supermarkets that are fortuitous enough to have had a supply of something. Tonight there are no lights. They blame the weather – the government does – like the tribal shamans of old who made sacrifices to the gods in the hopes of an intervention. There is no food either; they tell the people to hold on, to raise chickens on the terraces of their apartments. There is no water – and they give lessons on state TV of how to wash with a cup of water. The money is worthless; people now pay with potatoes, if they can find them. Doctors operate using the light of their smart phones; when there is power enough to charge them. Without anesthesia, of course – or antibiotics, like the days before the advent of modern medicine. The phone service has been cut – soon the internet will go and an all-pervading darkness will fall over a feral land. The marathon of destruction is almost finished; the lifeblood of the nation is almost gone. No, there is nothing heroic or epic here; ruins in the making are sad affairs – bereft of the comforting mantle of time which lends intrigue and inevitability. (World Press:


The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

Thursday, April 14, 2016

April 14, 2016

International Trade

Venezuela-Colombia trade dropped 44% in 2015

The Colombia-Venezuela Integration Chamber (CAVECOL) reports that trade between Venezuela and Colombia contracted 44% during 2015, down to US$ 1.352 from US$ 2.427 billion the year before. It shows Venezuelan exports to Colombia shrank by 34%, and Colombian exports to Venezuela were 47%. The information was supplied by Colombia’s National Statistics Department (DANE). More in Spanish: (Notitarde:


30,000 tons of wheat have arrived from Canada into Zulia state for bakeries, according to Luis Caldera, president of the Bolivarian Mayors Association. He said the wheat was assigned to MONACA and CARGILL for processing. More in Spanish: (Agencia Venezolana de Noticias;; El Mundo,



Oil & Energy

Schlumberger to limit Venezuela operations on payment problems

Oilfield services provider Schlumberger Ltd said it would reduce its operations in Venezuela due to payment problems, a further sign of the cash crunch facing this nation because of weak oil markets. State oil company PDVSA, the exclusive operator of the country's oilfields, has built up billions of dollars in unpaid bills to service providers as a result of cash-flow problems. "Schlumberger appreciates the efforts of its main customer in the country to find alternative payment solutions and remains fully committed to supporting the Venezuelan exploration and production industry," the company said in a statement. "However, Schlumberger is unable to increase its accounts receivable balances beyond their current level." (Reuters,; Bloomberg,; Latin American Herald Tribune,


Drought-hit Venezuela awaits rain at crucial Guri dam

Drought has turned parts of the area behind Venezuela's Guri dam, one of the world's biggest, into a desert, but the government is optimistic of rain within weeks to drive the vast installation that provides the bulk of this nation's power. On a tour of the hydroelectric complex on the Caroni river, Electricity Minister General Luis Motta told Reuters that forecasts showed a 70 to 80% chance of rain toward the end of April or in May to stop the waters behind the dam falling to a critical depth of 240 meters (790 feet). Driving, hiking and rafting round the 4,600 square km (1,780 square miles) area, General Motta, 57, pointed to unprecedented scenes revealed by the receding waters: long-sunken boats now visible; sand-dunes in previously submerged areas; cattle wandering across parched earth. The reservoir in southern Bolivar state, which provides about 60% of the nation's 16,000 megawatt power demand, hit a historic low of 243 meters (797 feet) this week. (Reuters,




Industrialists: shortage of basic food basket hits 83% in Venezuela

At a meeting with the Special Subcommittee of the National Assembly (AN) assessing the Law on Domestic Production, Juan Pablo Olalquiaga, president of the Venezuelan Confederation of Industries (CONINDUSTRIA) reported that 83% basic basket products are unavailable in the country. (El Universal,


Venezuelan hospitals make do with barely 5% of supplies needed

Douglas Leon Natera, President of Venezuela’s Medical Association, says that hospitals are operating with 4-5% of all materials and medicines they need due to supply difficulties, and called the government “irresponsible” for abandoning them. “All of the doctors are trying to solve problems in our hospitals with barely 4-5% of supplies and medication needed.” He added that “the government has abandoned hospitals, has automatically closed them down, and doors remain open because the health workers are trying to face” the situation. He also said the government “has been hiding epidemiology information for 17 months”. Natera reported that the Latin America and Caribbean Medical Federation, the World Medical Association, and the World Medical Council are willing to help out with donations if local authorities authorize shipments, The government, however, denies there is a “health crisis”, More in Spanish: (Infolatam:


Kimberley Process starts diamond certification in Venezuela

A delegation of the Kimberley Process Certification Scheme is in Venezuela to continue the certification process of diamond mining, as part of the so-called Mining Engine, one of fourteen areas intended to boost the Venezuelan economy. José Khan, president of the Venezuelan Mining Corporation (CVM) and director of the Central Bank of Venezuela (BCV), reported that the technical delegation consists of representatives from China, Angola, South Africa, Canada and other member countries of the Kimberley Process. He explained that the party will remain in the country until Sunday 17. (El Universal,



Economy & Finance

IMF projects 1600% inflation for Venezuela in 2017

The International Monetary Fund (IMF) has adjusted its projections for Latin America, showing that Venezuela’s economy will contract 8% this year and 4.5% in 2017, following a 5.7% contraction in 2015. The IMF projects the drop in oil prices makes existing macroeconomic distortions worse, and will bring 500% inflation in 2016 and 1600% inflation in 2017. More in Spanish: (El Nacional,


Venezuela paid out US$ 199.6 million in 2019 and 2024 bond interst this week

This week Venezuela paid up US$ 199.6 million in interest for its 2019 and 2024 sovereign bonds. In 2016 and 2017 the nation and state oil company PDVSA must still repay US$ 9.6 billion, of which US$ 8.1 billion pertain to PDVSA. President Nicolas Maduro has said Venezuela has paid out “US$ 30 billion in debt, a powerful amount”, and denies any default projections. More in Spanish: (El Mundo,;; Ultimas Noticias,;



Politics and International Affairs

Opposition presses push for Presidential recall

Opposition representatives have gone before Venezuela's electoral board, the CNE, for the fourth time, to ask that a recall referendum process against President Nicolas Maduro be initiated. Jesús Torrealba, head of the Opposition's united political platform MUD, along with several deputies delivered the document to the CNE. The opposition points out that the new document, according to the CNE new instructions, is the proper requirement to request the form that will allow the collection of signatures to activate the process towards the recall referendum. “Now, instead of advocating participative and protagonist democracy, they (CNE authorities) turn to conventions and technicalities to interrupt the people’s involvement (in democratic events). Last week, you (CNE) requested new requirements from us; here they are,” Torrealba twitted. (Latin American Herald Tribune,; El Universal,


Maduro says no opposition action is politically viable

President Nicolas Maduro has once again emphasized that no initiative coming from the National Assembly is politically viable or has a future in Venezuela. “None of the options and actions announced by the right, the oligarchy and the coup mongers in Venezuela is politically viable or has a future in our country. The revolution will continue to rule here in this year 2016, 2017, 2018 and all that remains of this decade and the next”, he said. More in Spanish: (El Nacional:


Legislator charges that the regime promotes chaos because it knows it will lose any election

The National Assembly’s First Vice President, opposition legislator Enrique Marquez, says “the government is promoting anarchy, violence and chaos because it knows it will lose any election”. He added: “There will be a recall referendum this year and we will be able to tell the government we are tired of scarcity, violence and crisis. There is no way they can block the recall initiative”. More in Spanish: (El Universal,


Maduro, UNASUR install a so-called Truth Commission

President Nicolas Maduro urged the political opposition to engage in the Presidential Commission of Truth, Justice and Reparation of Victims installed on Tuesday. Maduro said: “I hope the opposition may take a step forward. I know it is difficult. A coup d’ètat is being planned again in Venezuela. I believe we can neutralize it, for most people advocate peace, coexistence and respect, beyond differences,” While attending the ceremony, Ernesto Samper, Secretary General of the Union of South American Nations (UNASUR) said that the main goal of the Truth Commission is “to give Venezuelans the possibility of a sincere path for dialogue” and claims it is a group where “any question may be raised. This is essentially a commission for peace, not war”. Samper also announced that he, along with former presidents Martin Torrijos of Panama, Leonel Fernandez of the Dominican Republic and Spain’s former Prime Minister Jose Luis Rodriguez Zapatero will accompany the truth commission looking into the political violence in Venezuela in recent years. (El Universal,;;; (Latin American Herald Tribune,


Opposition denies it is taking part in so-called “Truth Commission”, seeks to meet with Samper

Julio Borges, leader of the opposition caucus in the National Assembly denied that any opposition representatives will participate in the newly installed Presidential “Truth Committee”, and requested an official meeting with UNASUR Secretary General Ernesto Samper, who is in Venezuela to set it up. “We deny (a report) that for members of the Unity coalition will take part in an alleged Truth Commission”, he said, and added “we will not attend a meeting we were summoned to on television and have no idea what it is all about”. More in Spanish: (El Universal:


Ramos tells Maduro: “refrain from making fraudulent offers on prisoner exchanges

National Assembly President Henry Ramos Allup told President Maduro: “We will not enter any barter agreement”, in response to an offer by the regime to Parliament on freeing 3 jailed elected legislators in exchange for the opposition taking part in the so-called “Truth Committee”. Accompanied by lawyers and relatives of the jailed legislators, Ramos said: “We are not about to leave some political prisoners behind bars to free others. The goal of freeing all political prisoners and having exiles return is a common cause. We are not seeking any barter. The government must abstain from making such fraudulent offers that seek to divide the opposition”. More in Spanish: (El Nacional:


US decries the absence of an independent judiciary in Venezuela

The US State Department has issued its annual 2015 human rights report pointing to partisanship and lack of judicial independence in Venezuela. The report charges that the judiciary in Venezuela is used “to intimidate and selectively judge government critics”. It also denounces “indiscriminate police action against civilians” and “arbitrary mass detentions”. More in Spanish: (El Universal,


THE WASHINGTON POST EDITORIAL: Venezuela is in desperate need of a political intervention.

An opposition victory in parliamentary elections in December gave Venezuela a fragile opportunity to arrest what has been an accelerating spiral toward an economic and political crash. Had it chosen to accommodate and negotiate with opposition leaders, the deeply unpopular government of Nicolas Maduro might have been able to ease mounting political tensions and build consensus around desperately needed economic stabilization measures. It was urged to pursue this course by the Obama administration and most Latin American governments, with the notable exception of its closest ally, Cuba. Unfortunately, the regime has pursued scorched-earth warfare with the National Assembly, even as the hardships suffered by ordinary Venezuelans mount. Having been illegally packed with government supporters before the legislature took office, the Supreme Court has proceeded to strip the opposition majority of its constitutional powers and reject every measure it has passed. The latest was an amnesty bill that would have freed76 opposition activists, including three senior figures whose release is the essential starting point for political reconciliation. Like every other ruling it has issued, the court’s rejection of the prisoner release was ludicrous in its lack of legal sense. The justices claimed that the prisoners’ release would be unfair to victims of violence in anti-government demonstrations two years ago. But as human rights groups have extensively documented, most of that bloodshed, including 43 deaths, was committed by the regime’s security forces; far from engaging in violence, opposition leaders made speeches against it. Apart from the crude violation of the rule of law, Maduro’s commitment to confrontation matters because Venezuela, a country of 30 million people with some of the world’s largest oil reserves, is approaching a calamitous breakdown. Shops are empty of basic foods and medicines, and the government is within months of a foreign debt default. Severe water and electricity shortages have spread in recent weeks; inflation is in triple digits, and violent crime is soaring. The government’s only response has been nonsensical measures, such as decreeing a four-day workweek for all public employees. Opposition leaders are now pursuing the strategy of trying to legally unseat the government by collecting signatures for a recall referendum or passing a law shortening Mr. Maduro’s term. Almost certainly the regime’s minions on the Supreme Court and electoral authority will declare the initiatives void, regardless of their legality. Considering the people’s extreme privation, the chances of mass disorder are high. Venezuela is desperately in need of political intervention by its neighbors, which have a ready mechanism in the Organization of American States’ Inter-American Democratic Charter, a treaty that provides for collective action when a regime violates constitutional norms. But the region’s leaders are distracted: Brazil is suffering its own political crisis, while the Obama administration is preoccupied with its outreach to Cuba. While the White House courts the Castros, they are using their control over Venezuela’s intelligence and security forces, and longtime acolyte Maduro, to foment his kamikaze tactics. An explosion is probably not far off.” (The Washington Post:


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.