Venezuelan Daily Brief

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

Tuesday, April 12, 2016

April 12, 2016

Logistics & Transport


Venezuelan government owes AVIANCA US$ 236 million

Colombia’s AVIANCA airline has announced that it will take all necessary steps to collect an estimated US$ 236 million in ticket sales held back by Venezuela. Germán Efromovich, Chairman of the Board of AVIANCA says he hopes this country will become “stable and able to honor its commitments”. More in Spanish: (El Nacional,



Oil & Energy


LatAm oil producers discuss output freeze, Mexico reluctant

Delegations from Latin American oil exporters Colombia, Ecuador, Mexico and Venezuela have met in Quito to discuss a proposed output freeze and other methods to bolster international crude prices. The Ecuador meeting is the first significant sign non-OPEC producers Colombia and Mexico may be involved in an effort to bolster prices amid the global glut. But Mexico's government stressed it was only participating as an "observer" to share information. Its energy ministry emphasized in a statement that crude output has already declined by more than a million barrels per day in the last 12 years. Suffering more than most producers from the 60% plummet in oil prices since mid-2014, leftist-ruled Venezuela and Ecuador have pushed hard for the meeting in Doha. Russian Energy Minister Alexander Novak said Friday he hoped producers will agree to freeze output in Doha. Russia, Saudi Arabia, Venezuela and Qatar agreed in February to freeze production at January levels, but said at the time the deal was contingent on other producers joining in. (MSNBC:


Istúriz speaks of new gradual increase for domestic gasoline prices.

Venezuela’s Executive Vice President Aristóbulo Istúriz has said he believes it “convenoent to have another gradual gasolina price increase, since an adjustment has not been made on Diesel gasoline.” More in Spanish: (Ultimas Noticias,


Venezuela oil price falls for 3rd week

The price Venezuela receives for its mix of medium and heavy oil fell for the third week in a row as prices around the world slipped on oversupplied markets and doubts about a OPEC deal to freeze oil production. 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 8 was US$ 27.90, down US$ 1.85 from the previous week's US$ 29.75. (Latin American Herald Tribune,



Economy & Finance


Venezuela received US$ 100 million from oil sales in March, according to President Nicolás Maduro – who said that two years ago oil revenues were at US$ 3.5 billion – which is a 97% drop in revenue from this source. More in Spanish: (Agencia Venezolana de Noticias;; Ultimas Noticias,


Foreign tourists to pay for local services in FOREX


DIGITEL, TELEFONICA subsidiary halt international calls from Venezuela

Spain's TELEFONICA this month will suspend international phone service from Venezuela, the firm's local subsidiary said, amid a growing shortage of foreign exchange that has limited telecom investments. The subsidiary MOVISTAR, Venezuela's second largest mobile phone provider, last year restricted international calls to only 10 countries following chronic difficulties in obtaining dollars through the OPEC nation's 13-year-old currency control system. DIGITEL will also suspend roaming and long distance service after not being able to get extended debt service terms from service providers. (Reuters,; and more in Spanish: (El Nacional,


Local telecom authority asks telephone firms to be "proactive"

Venezuela’s National Telecommunications Commission (CONATEL) has urged telephone operators to take “a proactive stance.” Earlier, the companies had reported that they would limit or discontinue their services due to debts in foreign currency. According to CONATEL, such decision is an “undesirable situation” arising from the country economic crisis, “particularly, a drastic reduction of the FOREX budget.” (El Universal,


Impoverished Venezuela still finances nations with stronger economies

According to Alejandro Grisanti, formerly Barclay’s chief for Latin America, while Venezuela goes through the worst economic contraction in the region – 5.7% at the close of 2015 – it continues to fund oil sales to PETROCARIBE partner nations with growing economies. According to Grisanti, the Dominican Republic’s GDP grew 7%; Panama’s, 6%; Guatemala’s 3.9%; Costa Rica’s 2.9% and El Salvador’s 2.3%. More in Spanish: (El Nacional,


Maduro creates new Ministry for Basic, Strategic and Socialist Industries



Politics and International Affairs


Venezuela's Supreme Court overturns amnesty bill

Venezuela's Supreme Court has overturned an amnesty for jailed opposition leaders approved by the opposition-controlled parliament. About 70 activists opposed to President Nicolas Maduro's socialist government had been due for release under the law approved last month. But the court declared the amnesty law unconstitutional. Maduro had condemned the law as an attempt to destabilize his leadership of the country. The Supreme Court has consistently backed the Venezuelan government since the opposition triumphed in congressional elections in December.  In a statement, the court said the amnesty law was unconstitutional because it covered offences "that are acts of organized crime, which are not related to crimes of a political nature". Among the detainees is Leopoldo Lopez, a prominent opposition leader 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. Government officials maintain that Lopez is responsible for violence that erupted during protests in which 43 people were killed in 2014. Other political leaders who were set to be freed include the former Caracas Mayor Antonio Ledezma, who is under house arrest, and the former mayor of San Cristobal, Daniel Ceballos. President Maduro last week told supporters that he had decided to ask the court to invalidate the "criminal" bill. After the Supreme Court's ruling, he said he would set up a truth commission to deal with jailed opposition activists' cases and that opposition members would be invited to join. Critics of the government say the top court is stacked with supporters of the president. (BBC News:


UN Human Rights High Commissioner slams Venezuela´s Supreme Court anti-amnesty ruling

UN Human Rights High Commissioner Ravina Shamdasani has issued an official statement saying “We are very surprised with the ruling yesterday by the Constitutional Chamber of Venezuela’s Supreme Court against the Amnesty and National Reconciliation Bill. The Bill, which was approved by the National Assembly on 29 March this year, could have served as the basis for a path of dialogue and reconciliation in Venezuela…Upon the request of the Government, the High Commissioner had sent a legal analysis of this bill to Venezuela, advising that the text was generally in conformity with international human rights standards. We call on the Government of Venezuela and the political opposition to open up avenues for a process of dialogue that could contribute to reaching the crucial political agreements that are necessary to tackle the multiple human rights challenges that the people of Venezuela are facing. We also call on the Government of Venezuela and all State entities to ensure full respect for the basic rights and freedoms to which all the people of Venezuela are entitled - including human rights defenders and civil society actors - in line with the country's obligations under the international human rights treaties it has ratified, as well as the commitments it made during its Universal Periodic Review before the UN Human Rights Council.” (UN HRC Commission:


Maduro seeks to unseat Assembly bent on ousting him, threatens insurrection if opposition prevails

Venezuela's constitutional crisis took a turn towards the bizarre this week, when President Nicolas Maduro said he would consider a move to shorten the term of the National Assembly, which is trying to initiate a recall vote to oust the President. “If I see this [the initiative] as the possibility to clear the way of coup d’etat attempts by using the National Assembly, I will activate it, if the people accompany me. I promise you that,” said Maduro, live on state television. In a country becoming used to the even most bizarre, even the opposition was shocked by Maduro's move to cut the Assembly’s term -- which runs until January 6th, 2021 -- to just 60 days. Maduro has also warned that if the opposition were to reach full power someday “the revolutionary movement, the people of Venezuela” would take to the streets in a “general civil-military insurrection and “start another revolution”. “I say thus to the oligarchy, and I would be at the head of that revolution”. He added: “if someday they do something to me…you head up a popular, revolutionary, Bolivarian and socialist civil-military insurrection”. Maduro went on to charge that imprisoned opposition leader Leopoldo Lopez and former Presidential candidate Henrique Capriles are “behind paramilitary crimes against community leaders.” (Latin American Herald Tribune,; and more in Spanish: Infolatam:


National Assembly votes to reform Supreme Justice Tribunal law

The opposition majority in the National Assembly has passed a law to reform the Supreme Justice Tribunal’s Constitutional Law, increasing the number of magistrates in the Constitutional Chamber from 7 to 15 within approximately 5 months. The new law calls for a new Judicial Nominations Committee to call for new candidates. In passing the law, the opposition coalition cited Article 204 in the Constitution, and presented the documents with which pro regime legislators reformed the same law in 2004 and 2009. More in Spanish: (El Nacional,


Public prosecutors to investigate Venezuelans regarding Panama Papers

We have appointed a team of public prosecutors to investigate the Venezuelans mentioned in the Panama Papers,” says Prosecutor General Luisa Ortega Diaz. She says that the offenses include money laundering and corruption. Likewise, she added that four public prosecutors with national authority were entrusted with the appropriate inquests. (El Universal,


Defense Minister speaks out against April 11 events in Venezuela

April 11 remains in history as a mark of betrayal, deception, media manipulation, and thirst for power,” twitted Defense Minister General Vladimir Padrino López in rejection of the events occurred back on April 12, 2002, which led to the removal from power for several hours of late President Hugo Chávez Frías. The official said that this date “also left lessons of rejection to violence, of civic-minded and constitutional conscience, and civil-military union.” (El Universal,


Venezuelan assembly's foreign policy chief ashamed of treatment of Rajoy, OAS

The head of the Foreign Policy Committee in Venezuela's unicameral National Assembly, opposition politician Luis Florido, said Sunday that the treatment by his country's government of Spain's acting prime minister, Mariano Rajoy, and OAS chief Luis Almagro was shameful. "This week has been shameful and unprecedented for Venezuelan diplomacy," declared Florido in rejecting "the insults and disqualifications" on the part of (Venezuelan President) Nicolas Maduro and the foreign minister of Venezuela, Delcy Rodriguez" against Rajoy and the secretary general of the Organization of American States. "We repudiate the verbal attack" by both authorities of a government that, "instead of insulting Spain, should accept the help offered by the Spanish government to handle the serious humanitarian crisis that Venezuela is suffering, where the scarcity of medicines exceeds 80%," said Florido in a statement. Maduro on Saturday called Rajoy a "racist, corrupt trash and colonialist trash." The Rajoy government responded by calling its ambassador to Caracas home for consultations, and Spain’s Popular Party has termed Maduro a “disgraceful madman”. Rodriguez, meanwhile, said that Almagro "reaffirms his hatred for Venezuela," "violates all the operating norms for the OAS secretary generalship" and has joined "the interventionist zeal of the stateless right" against Caracas. (Fox News, and more in Spanish: (El Nacional:


IAPA asks Venezuela to halt "newspaper closures due to newsprint shortage

The Inter-American Press Association (IAPA) has asked the Venezuelan government to stop its “strategy of closing media outlets” and allow “immediate access” to newsprint “without discrimination.” The NGO made a special reference to El Carabobeño and El Impulso dailies and other newspapers which “have had to stop working” due to lack of paper. (El Universal,

STRATFOR: Looking for a way out of Venezuela's crisis

As Venezuela slouches toward a potentially catastrophic default on foreign debt and wider social unrest appears more and more likely, individuals in the ruling United Socialist Party of Venezuela (PSUV) are looking for a way out of the crisis, largely motivated by self-interest. After all, if the crisis in Venezuela continues unabated, the country's elites are sure to lose political status, and with it, the security it brings them. Of these factions, the ruling clique — represented by Maduro and his wife, Cilia Flores, legislator Diosdado Cabello, and, to a lesser extent, Aragua State Gov. Tareck el Aissami and National Guard Commander Nestor Reverol — is the most resistant to economic reform and political dialogue with the opposition. In light of ongoing criminal investigations of Cabello and Flores, losing political sway in the country could jeopardize their futures. Similarly, swift economic adjustments — no matter how necessary — could threaten Maduro's presidency, further driving up inflation that already totals around 300% annually. Consequently, Cabello and Maduro have chosen a path of inaction on the economic front, while continuing to deflect political challenges from the opposition coalition. Several state governors, ostensibly led by Zulia State Gov. Francisco Arias Cardenas, represent the other major faction to emerge in the United Socialist Party. Based on growing public dissatisfaction with the ruling party, even within the party, the governors in this faction oppose holding gubernatorial elections later this year. They would sooner support Maduro's departure from office, whether by referendum or resignation, than risk holding elections they could very well lose. In removing Maduro and transitioning toward a new government, the governors likely hope to mitigate public anger at the ruling party and avert a major electoral defeat. Among those in favor of holding a referendum to remove the president is former Interior Minister Miguel Rodriguez Torres. Rodriguez Torres — whom Maduro ousted in 2014 — has the support of a few unspecified dissident allies, but it is unclear whether he falls in Arias Cardenas' camp. Now the question becomes whether they can convince key individuals and constituencies to back a transition away from Maduro. Although Maduro's circle of elite supporters has been shrinking, one of its most important members, Defense Minister Gen. Vladimir Padrino Lopez, has not overtly proposed Maduro's removal. As long as Padrino Lopez, accompanied by a segment of the country's military and political elite, is allied with the president — or at least not actively working against him — Maduro stands a chance of retaining his office until his term ends in 2019. If the governors prevail and Maduro is forced to resign before January 2017, the outcome will be quite different. New elections would have to be held within 30 days of his resignation, and the opposition would have a realistic shot at victory. But if Maduro were to resign after January, the presidency would go to the standing vice president until the next presidential vote in 2019. (STRATFOR,


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.


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