June 02, 2016

International Trade

 

Venezuelan exports drop the most within Latin America

Latin America’s exports shrank 9% during Q1 2016, according to the Inter-American Development Bank (IABD), which reports the strongest contraction in exports took place on oil producing nations such as Venezuela, Ecuador and Colombia. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Venezuela-paises-mayor-contraccion-exportacion_0_857914349.html)

 

 

Logistics & Transport

 

International flights to and from Venezuela have dropped almost 70% since 2013

Humberto Figuera, Executive President of Venezuela’s Airline Association reports that international flights to and from Venezuela have dropped 70% since 2013, from 370 per week to 115. The government owes international airlines servicing Venezuela are owed almost US$ 3.8 billion in ticket sales at the official exchange rate. At the same time, Dante Salvatorelli, National Director of Venezuela’s Travel and Tourism Agency Association, warns Venezuela may become isolated from international air travel. His remarks came after LATAM and LUFTHANSA announced they are temporarily suspending service to this country. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/la-oferta-de-vuelos-internacionales-ha-caido-casi-.aspx#ixzz4AJy6o2d5; Notitarde; http://www.notitarde.com/Economia/Temen-que-Venezuela-quede-aislada-internacionalmente-2688230/2016/05/31/986106/; El Nacional, http://www.el-nacional.com/economia/Avavit-Tememos-quedar-aislados-Venezuela_0_857914235.html)

 

 

Oil & Energy

 

Oil tankers in limbo as Venezuela's PDVSA fails to pay BP

Four tankers carrying over 2 million barrels of U.S. crude are stuck at sea and cannot discharge at a Caribbean terminal because Venezuela's PDVSA has not yet paid supplier BP Plc, according to two sources and Thomson Reuters vessel tracking data. The cargoes are part of a tender Petroleos de Venezuela awarded in March to BP and China Oil. The deal was to import some 8 million barrels of West Texas Intermediate (WTI) crude so Venezuela could dilute its extra heavy crudes and feed its Caribbean refineries. While three cargoes for this tender were delivered in April, seven other vessels, including BP's four hired ones, are waiting to discharge, leaving up to 3.85 million barrels of WTI in limbo. (Reuters, http://www.reuters.com/article/us-oil-pdvsa-bp-idUSKCN0YM2OX)

 

 

Commodities

 

POLAR to restart beer production in July

The POLAR group of companies says it will resume beer production in July after halting operations in April for lack of malted barley amid chronic shortages here. POLAR said it has been unable to obtain dollars for imports through the socialist government's currency controls, which economists widely describe as the cause of shortages of consumer goods ranging from vital medicines to staple food products. The company, a frequent target of criticism by President Nicolas Maduro, said it had obtained a US$ 35 million loan from Spanish bank BBVA that will allow it to import barley and hops needed for brewing. (Reuters, http://www.reuters.com/article/venezuela-polar-idUSL1N18T1EQ; and more in Spanish: (Notitarde; http://www.notitarde.com/Economia/Polar-reiniciara-su-produccion-de-malta-y-cerveza-el-proximo-mes-2689093/2016/06/02/986294/; http://www.notitarde.com/Economia/Polar-recibe-credito-de-BBVA-para-reactivar-produccion-de-cerveza/2016/06/01/986170/; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/polar-recibe-prestamo-por-35-millones-para-reactiv.aspx)

 

 

Economy & Finance

 

Venezuelan credit dashboard: short-term default concerns ease

Venezuela, which has the largest crude reserves on the planet, has defied predictions of default since the oil collapse started in 2014 and analysts are split as to how long the nation of 30 million can hold out. The government and state oil company Petroleos de Venezuela SA have to pay a mere US$ 45 million in principal and interest on debt in June and only US$ 70 million in July. A bigger test comes in August, when the country has to pay US$ 1.2 billion (that amount falls to US$ 726 million when dual-currency, government TICC bonds denominated in dollars and payable in bolivars are excluded). The nation’s international reserves continued to tumble in May, falling US$ 712 million to a 13-year low of US$ 12 billion. Reserves declined US$ 523 million in April and US$ 331 million in March, according to data compiled by Bloomberg. The nation also cut its gold reserves by 16% in the first quarter, according to International Monetary Fund data. (Bloomberg, http://www.bloomberg.com/news/articles/2016-06-01/venezuelan-credit-dashboard-short-term-default-concerns-ease)

 

Venezuela’s currency has devalued 60% in 3 months

Analysts report that a 60% devaluation over the past three months is the result of a government strategy to adjust the FOREX rate to real terms, with a high inflation. The “floating” official rate DICOM has been steadily increasing and now stands at VEB 543.30/US$ 1. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Moneda-venezolana-devalua-realidad-economica_0_857914389.html)

 

 

Politics and International Affairs

 

OAS assembly votes to back talks between government and opposition in Venezuela

Following a heated 12-hour session, the 34-member nation Permanent Council of the Organization of American States has unanimously offered to help Venezuela “identify, through common agreement, a course of action that promotes seeking solutions to its situation through an open and inclusive dialogue between the government, other Constitutional authorities and all of the nation’s political and social stakeholders in order to preserve Venezuela’s peace and security with full respect for its sovereignty” and its support for “the different initiatives that seek national dialogue that in a timely, prompt and effective manner, abiding by Constitution and fully respecting human rights, lead to resolving differences and consolidating representative democracy”. The resolution does not reject a request by OAS Secretary General Luis Almagro for a Permanent Council meeting of member states to determine the need to apply the Hemispheric Democratic Charter in the case of Venezuela. At the same time, the OAS resolution supports efforts by former Presidents José Luis Rodríguez Zapatero (Spain), Leonel Fernandez (Dominican Republic) and Martín Torrijos (Panama), seeking to establish talks between the Maduro regime and the opposition to “find alternatives to promote Venezuela’s political stability, social development and economic recovery”. President Nicolas Maduro said yesterday that his regime will continue to take part in talks begun in the Dominican Republic under the auspices of the three former presidents. Henry Ramos Allup, President of Venezuela’s National Assembly says that “the mere fact that the OAS is debating Venezuela’s horrific situation is a defeat which strips the Maduro regime bare to the world”. Venezuela’s opposition coalition has asked the OAS to apply the Democratic Charter as it presses local election authorities to move forward on a recall referendum to oust President Nicolas Maduro. After the OAS meeting, President Nicolas Maduro called for nationwide demonstrations in Venezuela against “Secretary General Almagro and against imperialism”, and said “if some day we have to take up a rifle we will do so” to defend Venezuela’s sovereignty. Foreign Minister Delcy Rodríguez echoed his words and claimed a possible intervention by the OAS and the US is close at hand. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2413353&CategoryId=10718; http://www.laht.com/article.asp?ArticleId=2413391&CategoryId=10717; http://www.laht.com/article.asp?ArticleId=2413385&CategoryId=10717; Reuters, http://www.reuters.com/article/us-venezuela-politics-oas-idUSKCN0YN5NT; and more in Spanish: CNN Español: http://cnnespanol.cnn.com/2016/06/01/la-oea-discute-dos-propuestas-para-una-resolucion-de-ayuda-a-venezuela/#0; Ultimas Noticias: http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/rodriguez-venezuela-logro-victoria-en-la-oea.aspx#ixzz4AOyDttHM; El Universal: http://www.eluniversal.com/noticias/politica/maduro-algun-dia-nos-toca-tomar-fusil-tomaremos_312917; http://www.eluniversal.com/noticias/politica/delcy-rodriguez-avecina-una-intervencion-armada-pais_312872)

 

OAS Secretary General calls special meeting of OAS Council on Venezuela

OAS Secretary General Luis Almagro has published a 132-page report citing Article 20 of the Charter to call for a Permanent Council meeting of member states to determine whether there has been an "unconstitutional alteration of the constitutional regime that seriously impairs the democratic order" in Venezuela. Venezuelan opposition politicians had urged the OAS to call the meeting. The move could lead to Venezuela being suspended from the OAS. "The secretary general considers that the institutional crisis in Venezuela demands immediate changes to the Executive power," a statement by Almagro read. He thus becomes the first OAS secretary general to invoke the Democratic Charter against a member state contrary to the will of its government. The full report was delivered to the Chairman of the OAS Permanent Council. The meeting is expected to be held sometime between the 10 and 20 of June and is expected to coincide with the meeting of the OAS General Assembly in the Dominican Republic between 13 and 15 June. In his report, Almagro called on Venezuela to carry out the requested recall referendum during 2016, free political prisoners, provide security for its population, respect the constitution and separation of powers, fight corruption and incorporate the UN Commissioner for Human Rights into a recently established Truth Commission”. He also asked the Maduro regime and the National Assembly to work together to immediately solve basic human rights violations against the people, such as access to food and health services. Maduro rejected Almagro’s report and told the OAS Secretary General to put the Hemispheric Democratic Charter to a “better use” by “rolling it up in a thin tube….and sticking it up wherever you can” (BBC, http://www.bbc.com/news/world-latin-america-36416116; and more in Spanish: El Nacional: http://www.el-nacional.com/politica/Maduro-Almagro-Metase-democratica-quepa_0_857914351.html)

 

Ramos Allup chides Argentina’s Macri for about-face on Venezuela at OAS Assembly

Henry Ramos Allup, President of Venezuela’s National Assembly, has lambasted Argentina’s President Mauricio Macri for reneging on a campaign promise to apply the Democratic Charter in the case of Venezuela. In what Ramos terms an about face, Macri’s Foreign Minister Susana Malcorra – a candidate to be elected UN Secretary General – now says Argentina’s priority is to promote dialogue, and that “there is no way to solve a nation’s problem by importing an outside solution”. Ramos called the Argentine government’s position hypocritical and wrote that “at least Cristina Kirchner was sincere” in her support for the chavista regime. (El Nuevo Herald: http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article81273732.html#storylink=cpy)

 

Maduro threatens to sue National Assembly officials for requesting application of the Democratic Charter

President Nicolas Maduro says he will sue the officials of the National Assembly, headed by Henry Ramos Allup, for usurping his authority after the legislature voted to ask the OAS to apply the Hemispheric Democratic Charter on Venezuela. He accused Ramos of calling “for foreign intervention into Venezuela’s international affairs and has tried to undertake the nation’s foreign affairs which are constitutionally exclusive to the head of state, who is called Nicolas Maduro”.  He called for a broadcast trial for what he called usurping powers as well as “treason”, and said that Ramos’ initiative is “criminal”.  More in Spanish: (Infolatam, http://www.infolatam.com/2016/05/31/maduro-demandara-a-parlamento-venezolano-por-pedir-activar-carta-democratica/)

 

Almagro says OAS and other former Presidents should join UNASUR efforts on Venezuela

OAS Secretary General Luis Almagro has suggested that the organization he heads, as well as some other heads of state, should be involved in the talks between the Maduro regime and his opponents, that are being promoted by the Union of South American Nations (UNASUR) and the former presidents of Spain, the Dominican Republic and Panama. Almagro mentioned former Spanish presidents José María Aznar and Felipe González, Uruguay’s Luis Alberto Lacalle, Colombia’s Andrés Pastrana, Chile’s Sebastián Piñera, and Bolivia’s Jorge Quiroga. He suggests that “two or three” of these former heads of state and the OAS join in the efforts already begun by UNASUR. More in Spanish: (Infolatam: http://www.infolatam.com/2016/05/31/almagro-pide-sumar-a-la-oea-y-mas-expresidentes-a-dialogo-unasur-en-venezuela/)

 

IDEA backs OAS Almagro's move on Venezuela

A number of Latin American ex-presidents who signed a statement by the Democratic Initiative of Spain and the Americas (IDEA) have reiterated their concern “over the disruption of the constitutional and democratic order (in Venezuela) by the Executive Power and the Supreme Tribunal of Justice (TSJ) when disregarding a National Assembly (AN) that has been legally entrusted with the people’s sovereignty.” The former Heads of State urged the Electoral Power to observe the Constitution and set the conditions for a recall vote against the mandate of President Nicolas Maduro this year, a move that may help give peaceful, democratic, constitutional and electoral solutions to the serious institutional, political and humanitarian crises facing the country. They also asked the government “to release political prisoners, guarantee the people’s right to take part democratically in referendums, and respect the decisions of the National Assembly.” (El Universal, http://www.eluniversal.com/noticias/daily-news/idea-backs-oas-almagros-move-venezuela_312834)

 

Cardinal Urosa urges Maduro to revoke state of emergency and enter talks

Caracas Archbishop Cardinal Jorge Urosa has publicly asked President Nicolas Maduro to revoke the state of emergency and enter talks with the opposition, He said the emergency powers Maduro invoked last month “do nothing to solve the problems of the Venezuelan people” and “make the political, social and economic situation worse”.  More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/urosa-pidio-maduro-derogar-estado-excepcion-recurrir-dialogo_312927)

 

IAHRC fears state of emergency threatens democracy

The Inter American Human Rights Commission says it is concerned that the state of emergency decreed by Venezuelan President Nicolás Maduro can “endanger respect for the rule of law and the independence of powers”, “grants the executive power discretionary powers” and “through broad and ambiguous wording” can open the door to abuses. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/cidh-teme-que-estado-excepcion-atente-contra-democracia_312949)

 

Drive to oust Venezuela's Maduro returns old foe to front line

Sweating, hoarse and jostled at every turn, opposition leader Henrique Capriles is back pounding Venezuela's streets, exhorting crowds and fuming about corruption and shortages. Capriles' profile faded after his failed presidential runs in 2012 and 2013 but the Miranda state governor is again on the political front line, this time driving an opposition push for a referendum to remove President Nicolas Maduro. "The only way to fix Venezuela's crisis is asking Venezuelans," he told Reuters after a day campaigning in the pressure-pot nation reeling from economic hardships, protests and viciously polarized politics. (Reuters, http://www.reuters.com/article/us-venezuela-politics-capriles-idUSKCN0YN4W2)

 

National Assembly President warns Supreme Tribunal may block recall vote

National Assembly President Henry Ramos Allup says he has information that the Venezuela’s Supreme Tribunal will issue a sentence against the recall referendum that is being requested to revoke President Nicolas Maduro’s term of office this year. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/ramos-allup-inminente-sentencia-del-tsj-para-que-haya-revocatorio_312682; El Nacional, http://www.el-nacional.com/politica/Ramos-Allup-TSJ-maniobra-revocatorio_0_857914450.html)

 

Opposition to meet with election officials on Thursday about recall

A commission of opposition lawmakers who visited the offices of Venezuela’s National Electoral Council, or CNE, to press for a recall referendum against socialist President Nicolas Maduro has been granted a meeting with election officials on Thursday. “We’ve been officially informed by the National Electoral Council that a meeting will be held tomorrow with the Democratic Unity coalition (MUD) to review the report” on the signature-gathering stage, lawmaker Enrique Marquez said. Marquez, who is the first vice president of the opposition-controlled National Assembly, visited the CNE along with seven other anti-government lawmakers to demand that the electoral authority’s president, Tibisay Lucena, “remove the barriers preventing the recall referendum from being held this year.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2413464&CategoryId=10717)

 

Spain’s Foreign Minister says “lawfulness and Maduro are contradictory terms”

Spain’s Foreign Minister José Manuel García-Margallo says “lawfulness and Maduro are contradictory terms”, after it was reported that Venezuela’s President will take legal action against Spain to put a stop to a “psychological warfare campaign” he claims is being waged against his country. García-Margallo said is “not much” worried over any action and added that if Maduro “wants to apply lawfulness the best thing he can do is apply it in his country, admitting his citizens constitutional right to call for a recall referendum”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/canciller-espanol-legalidad-maduro-son-conceptos-contradictorios_312905)

 

 

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.