August 09, 2016

International Trade

MERCOSUR crisis continues as Venezuela holds onto chair, suspension or exclusion possible. MERCOSUR’s key founding members (Argentina, Brazil and Paraguay) are compiling a list of Venezuela’s compliance and non-compliance with requirements for qualifying an “associate member state”, and will review it later this week. Paraguay’s Foreign Minister Eladio Loizaga says there will be a new meeting of country coordinators on this matter with Uruguay on August 23^rd; and added that Venezuela will have until then “to gain full membership into MERCOSUR”. He says Venezuela has failed to sign onto the MERCOSUR Protocol on Human Rights and comply with other economic requirements; and reported that the agenda for the next steps was set during a meeting of the Presidents of Argentina (Macri), Brazil (Temer) and Paraguay (Cartes) during the Rio Olympics. After that, Uruguay’s President Tabaré Vásquez said that Venezuela remains a member “as long as the democratic clause is not applied”, He added that his government will continue to bolster dialogue as "the best tool to find solutions” to the problems facing the Common Market of the South (MERCOSUR). At the same time, Paraguay has recalled its ambassador to Caracas after President Nicolas Maduro made disparaging remarks about Paraguay. Previously, Venezuelan Foreign Minister Delcy Rodriguez had unilaterally raised the MERCOSUR flag in Caracas and said her country will not allow Argentina, Brazil and Paraguay, the so-called “the triple alliance,” to “take by assault” the pro tempore presidency, which she claims is now to be fully exercised by Caracas. She quoted a statement by the chair of the Committee on Economic Affairs of the Brazilian Senate, a supporter of deposed President Dilma Rousseff, who rejected the decision by that country’s interim government. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418177&CategoryId=10717; Reuters, http://www.reuters.com/article/us-paraguay-venezuela-idUSKCN10G1W9; (El Universal, http://www.eluniversal.com/noticias/daily-news/uruguay-advocates-dialogue-overcome-mercosur-crisis_430850; http://www.eluniversal.com/noticias/daily-news/brazilian-senates-economic-committee-backs-venezuelas-mercosur-presidency_430786; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/sin-acuerdo-entre-coordinadores-mercosur-sobre-traspaso-venezuela_430333; Infolatam; http://www.infolatam.com/2016/08/09/crisis-de-mercosur-a-espera-de-cumplimientos-e-incumplimientos-de-venezuela/; El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/uruguay--venezuela-estara-en-mercosur-mientras-no.aspx#ixzz4GpY6hGq1)

 

Venezuela-Colombia continue discussing reopening binational border. Venezuela’s Foreign Minister Delcy Rodríguez and her Colombian counterpart María Ángela Holguín met in Caracas and announced that the Presidents of both countries may announce a date for reopening of the binational border. Rodríguez explained “We have agreed upon some preliminary actions that can help create the atmosphere for a gradual and progressive reopening of the border”. She said that Colombia has suggested creating a border ID document so that citizens on both sides can transit through the border between 5 AM and 8 PM, which was accepted by Venezuela. Táchira state governor, Lieutenant José Vielma Mora added that Venezuela has proposed a “special customs system” for the border to deal with a basic group of products. The Defense Ministers from both nations are scheduled to meet over the next couple of months. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Cancilleres-Colombia-Venezuela-proponen-frontera_0_896910602.html; Noticiero Venevisión: http://www.noticierovenevision.net/politica/2016/agosto/4/164938=cancilleres-de-venezuela-y-colombia-se-reunieron-para-analizar-la-reapertura-de-la-frontera;; El Universal, http://www.eluniversal.com/noticias/economia/venezuela-propone-regimen-especial-aduanas-frontera-con-colombia_430882)

 

30,000 tons of sugar from Guatemala arrived at Puerto Cabello, according to local Port authority chief General Rafael Aguana. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Arribaron-toneladas-guatemalteca-Puerto-Cabello_0_898110303.html)

 

1.632 tons of tuna arrive into Cumaná’s port, according to Fisheries and Aquaculture Minister. More in Spanish: (Notitarde, http://www.notitarde.com/Llegaron-1632-toneladas-de-atun-a-Cumana/Economia/2016/08/08/1014882/)

 

Logistics & Transport

CONVIASA cuts daily flights from 20 to 16 due to a pilot shortage after over 80% reportedly have resigned. Sources within the airline report that there are only 6 pilot and co-pilot crews left. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Conviasa-reducido-vuelos-diarios_0_898710195.html)

 

AVIOR Airlines adds third direct route to Panama, operating from Maracaibo in Western Venezuela. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/avior-airlines-abrio-tercera-ruta-directa-a-panama.aspx#ixzz4GS3IIVVA)

 

Oil & Energy

Venezuela oil price falls back to April lows. The price Venezuela receives for its mix of medium and heavy oil fell for a sixth consecutive week as world oil stocks remained high and U.S. oil and gasoline stocks continued be in surplus. 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 August 5 was US$ 33.36, down US$ 1.64 from the previous week's US$ 35.00. 

According to Venezuelan government figures, the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 32.09 for the year to date. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418266&CategoryId=10717)

 

OPEC plans informal talks next month, sees oil dip temporary. The Organization of Petroleum Exporting Countries will hold informal talks at a conference in Algiers next month and considers the recent decline in oil prices temporary, the group’s president said. “Expectation of higher crude oil demand in the third and fourth quarters of 2016, coupled with decrease in availability, is leading the analysts to conclude that the current bear market is only temporary” and prices will increase later this year, Mohammed Al Sada, Qatar’s energy minister and holder of OPEC’s rotating presidency, said in a statement on the group’s website. Members constantly discuss ways to stabilize the market, he said. West Texas Intermediate crude rose to the highest level in almost two weeks, gaining as much as 2.8% to US$ 42.97 a barrel as of 10:26 a.m. on the New York Mercantile Exchange. OPEC ministers, who rejected a proposal to adopt a new output ceiling when they last met in June, had always planned to continue discussions at the International Energy Forum Ministerial Meeting in Algeria next month, two delegates from the group said Friday.  OPEC Secretary-General Mohammad Barkindo met with Venezuela’s Oil Minister Eulogio del Pino about holding a meeting with non-member countries, but Russia sees no need for renewing discussion of an oil-output freeze at current crude prices, while leaving open the possibility for the future, Iran will probably raise production to pre-sanctions levels by the end of the year, while Saudi Arabia will also be selling more crude as domestic use of fuel during the country’s summer months slows. (Bloomberg: http://washpost.bloomberg.com/Story?docId=1376-OBKZ146JTSES01-7PC3UU145ETJ1SELR8MJ57V5JA; Reuters: http://www.reuters.com/article/venezuela-oil-idUSL1N1AL1QT)

 

Venezuela's crude sales to the United States up 25% in July. Venezuelan crude sales to the United States increased to 817,806 barrels per day (bdp) in July, the highest level since November, due to larger exports of grades produced in the vast Orinoco Belt. This country’s July shipments to the United States were 25% higher than in June and 12% more than in the same month in 2015. Falling output and delays at Venezuela's main oil port had kept exports low in recent months. The United States received 50 crude cargoes from state-run oil firm PDVSA and its joint ventures in July, versus 39 the previous month. Valero Energy was the largest recipient, followed by PDVSA refining unit CITGO Petroleum, PHILLIPS 66 and CHEVRON Corp. Occasional buyers of Venezuelan oil including LUKOIL Panamericas and MARATHON Petroleum also received shipments in July, according to the data, which is based on preliminary figures. (Reuters, http://www.reuters.com/article/venezuela-usa-exports-idUSL1N1AL275)

 

China’s Development Bank grants US$ 5 billion to Venezuela, earmarked for joint ventures, says Oil Minister and PDVSA President Eulogio del Pino. He adds that Venezuela is sending China 600,000 BPD of crude oil and the plan calls for the amount increasing to 1 million BPD over the next few days. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/economia/2016/agosto/8/165269=venezuela-recibira-5-mil-millones-de-dolares-mediante-credito-acordado-con-banco-de-desarrollo-chino)

 

PDVSA’s Del Pino backtracks on statements about errors, private sector participation. A few days ago Venezuela’s Vice President for Energy Affairs and PDVSA President Eulogio Del Pino, an engineer graduated at Stanford University, said publicly that “we must move toward a new model with a private sector majority, and this means admitting mistakes”. The response from regime hardliners was immediate. Former PDVSA President, Rafael Ramírez, currently Venezuela’s UN Ambassador tweeted “Commander Chavez’s oil policy is correct. Nationalization brought oil back to the people. It is his legacy”. Then Lieutenant Diosdado Cabello, Vice President of the ruling PSUV party said “they will not privatize PDVSA because the revolution will rule there until oil runs out”. And former Vice President Elías Jaua wrote: “Has he forgotten there is a Plan for the Fatherland that was approved in popular voting and is now the law of the land?”. Days later, Del Pino backtracked at a rally where he was flanked by Cabello and Jaua: “They have taken some statements in a squalid media, and have set it up trying to indicate that we are trying to privatize the (oil) industry. How can they go to such extremes?”, he said. Analysts wonder why didn’t President Maduro ask for Del Pino’s resignation along with that of Trade and Industry Minister Miguel Pérez Abad? The answer seems to be that PDVSA is preparing a bond swap and financing outstanding debts with suppliers, all of who trust only Del Pino, who may be replaced after such transactions take place. (Analítica: http://www.analitica.com/economia/de-como-el-estatus-quo-puso-de-rodillas-al-presidente-de-pdvsa-por-blanca-vera-azaf/)

 

This could be the last straw for Venezuela's oil sector. Oilfield union officials in Venezuela’s Lake Maracaibo region leaked news to Platts that all is not well in the drilling sector here. With sources saying that major international operator SCHLUMBERGER has halted the majority of its operations.  Union leaders said that SCHLUMBERGER has shut down four of six rigs it was operating for offshore oil production in Lake Maracaibo. The reason being — a lack of payment for drilling services from PDVSA. This shutdown looks to be somewhat of a “last straw” for PDVSA’s operations. After funding for drilling here appeared to come under stress earlier this year — when both SCHLUMBERGER and HALLIBURTON said they were reducing rigs in Venezuela due to non-payment. At the same time, fellow drillers SAN ANTONIO and PETREX suspended a total of 36 rigs across Venezuela. But PDVSA had appeared to be making headway — with SCHLUMBERGER saying in June it had reached an agreement with the oil major to keep six rigs operational in the Lake Maracaibo area.  The fact that most of those drills have now been idled suggests that PDVSA’s last-ditch contract efforts have failed. Possibly signaling a significant cliff ahead for drilling across Venezuela — which could foreshadow an accelerated decline in production. Such a downturn would have big implications for a) global oil supply, b) Latin American oil trade (including the U.S. Gulf Coast), and c) Venezuela projects, national finances, and politics. Watch to see if PDVSA can find a way to get the idled rigs restarted — and for news on further drilling shutdowns in the country. (Business Insider: http://www.businessinsider.com/this-could-be-the-last-straw-for-venezuelas-oil-sector-2016-7)

 

Commodities

Gold Reserve shares surge on US$ 770 million Venezuelan settlement. Gold Reserve Inc. will get about US$ 770 million as part of a settlement with Venezuela for the 2008 seizure of its Brisas gold and copper project in an arrangement that depends on the country securing financing. Shares surged. Payment is expected to be made in two installments: US$ 600 million by the end of October and the rest by year-end, the Spokane, Washington-based company said. Venezuela also agreed to buy the company’s mining data for US$ 240 million and enter into a jointly owned company with Gold Reserve for a 18,000-hectare claim including the Brisas Cristinas deposit. The statement didn’t say where Venezuela, whose oil-dependent economy has been pummeled by slumping energy prices, would obtain the funding. “Venezuela will use the proceeds from any financing it closes after the execution of this agreement to pay Gold Reserve the amounts owed under this agreement in preference to any other creditor,” Gold Reserve said. (Bloomberg, http://www.bloomberg.com/news/articles/2016-08-08/gold-reserve-shares-surge-on-770-million-venezuelan-settlement)

 

TOYOTA is restarting operations, will produce 150 vehicles per month. TOYOTA has restarted operations at their plant in Cumaná (Sucre state), and expect to produce 150 vehicles per month, for a total 750 assembled units by the end of this year. Their record production was 33,240 units ten years ago. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Toyota-reanudo-produccion-ofrecera-vehiculos_0_896910604.html)

 

Telefonica opens rate talks in Venezuela after Maduro’s threat. Telefonica SA is holding talks with the Venezuelan government to adjust phone-service rates after President Nicolas Maduro blocked an attempt to increase prices and said the state was open to taking over carriers if necessary. The company is in “talks with the authorities to define new prices," according to a statement on its Venezuelan website Friday. The Madrid-based company also plans to reimburse customers who already paid bills after a July price increase, which was later overturned by the government. As Venezuela struggles with the world’s fastest inflation, Telefonica and rivals had raised prices to stay afloat and be able to pay interconnection fees for international data and call traffic. Nobody can “set prices just like that," Maduro said Aug. 1 on national television, and warned that he was open to taking control of phone carriers if they can’t manage their businesses amid the country’s worst economic recession in decades. (Bloomberg, http://www.bloomberg.com/news/articles/2016-08-08/telefonica-opens-rate-talks-in-venezuela-after-maduro-s-threat)

 

Economy & Finance

Maduro looks to a Marxist Spaniard for an economic miracle. President Nicolás Maduro, hoping for an economic miracle to salvage his country, has placed his trust in an obscure Marxist professor from Spain who holds so much sway the president calls him “the Jesus Christ of economics.” Alfredo Serrano—a 40-year-old economist whose long hair and beard have also elicited the president’s comparison to Jesus—has become the central economic adviser to Maduro, according to a number of officials in the ruling United Socialist Party and other government consultants. His rise has come at the expense of advisers who, though also leftist, have urged the president to undertake more conventional steps to address Venezuela’s dysfunctional economy, such as liberalizing the country’s tightly controlled currency, these people say. Instead, Serrano’s calls for even more state controls on manufacturing and food supply have largely shaped the president’s response to the country’s economic crisis. Such moves risk prolonging the deepest recession in the nation’s history—as well as the hyperinflation and severe food shortages that have accompanied it. “All the attempts to reform, to coordinate with the private sector, have been blocked by him,” a senior ruling-party lawmaker said. Serrano arrived in Latin America in the mid-2000s with a group of anti-capitalist Spanish intellectuals who would later go on to form Spain’s leftist PODEMOS party. Among his more unorthodox ideas are that inflation is caused by class struggle and that government bureaucracy should be replaced by revolutionary communes that would handle everything from health care to food production. “The communes must be at the center of gravity of the new state,” Serrano said in a July speech in Caracas. (The Wall Street Journal: http://www.wsj.com/articles/venezuelas-nicolas-maduro-looks-to-a-marxist-spaniard-for-an-economic-miracle-1470678805)

 

Venezuela: Trench cabinet. The latest cabinet changes announced by President Maduro are a negative signal, as they reduce the presence of moderate factions within the government while Maduro surrounds himself of loyalists and radicals in what has the appearance of a preamble to radicalization. With the exit of Vice President of Economics Miguel Perez Abad from the cabinet, Eulogio Del Pino, President of PDVSA, is left practically alone in an uncomfortable position on the pragmatic side of the government. In terms of economic policies, the more immediate implication is drifting further away from exchange rate market unification. A possible widening of economic distortions and radicalization of the government also make a successful PDVSA debt swap more difficult. In the current situation, a debt swap of short-maturity bonds that PDVSA has said it is considering would be mainly encouraged by political reasons. PDVSA had not done this swap before because of its high cost, and these conditions have not improved. The government could be changing its mind and be willing to have a transaction, even if it is at the expense of a significant increase in the debt stock and/or the debt service, as long as it increases its margins to maneuver the political situation. A successful debt swap could have a bigger political than economic effect. While cash flows would likely remain tight, it could significantly reduce the probability of a political transition: US$ 6 billion less in debt payments over the next 16 months could be used by the government to increase imports almost 30%, helping it to calm the political situation. Although PDVSA is supposed to be able to issue debt without approval of the National Assembly, the conditions in which this transaction could take place are likely to generate political noise and could give any new administration arguments to question the legitimacy of this debt. A successful swap could have mixed implications for Venezuelan/ PDVSA debt. While it would support the view of the investor base that has maintained a strong confidence in the short-term willingness and capacity to pay of the country, it could weaken the arguments of those who have been expecting a political transition to lead to a more market-friendly government. Perhaps unintentionally, with a successful swap, the market could end up helping the government to prevent the scenario that would be better for the market itself. (Barclay’s: Full Report Attached).

 

July inflation pegged at 23.2% according to sources within Venezuela’s Central Bank; and year to date inflation is now 240%. Inflation for the past full year was 565.2%, only in products under price controls. Central Bank experts say these levels of inflation are unprecedented in Venezuela. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Inflacion-julio-cerro_0_896910608.html)

 

Lorenzo Mendoza willing to meet with Venezuelan government. Lorenzo Mendoza, the head of Venezuela’s major food producer Empresas Polar, says he is willing to meet with President Nicolas Maduro. “Should President Maduro call me to meet, I will go, just the way I did the other times when I was called,” Mendoza said in an interview. About dialogue, the businessman termed it necessary, but he discouraged dividing dialogue into political or economic. “In today’s civilization and world, communication and dialogue are a coexistence rule. I think sectorizing things (…) removes a natural structure from dialogue. Let’s talk about the relevant topics,” Mendoza added. (El Universal, http://www.eluniversal.com/noticias/daily-news/lorenzo-mendoza-willing-meet-with-venezuelan-govt_430793)

 

Politics and International Affairs

Presidential recall unlikely this year amid new tentative timeline. President Nicolas Maduro is highly unlikely to face recall this year, as authorities provided a detailed electoral calendar suggesting a vote might not happen until early 2017.  If the recall were to happen before Jan. 10, 2017, it would trigger new elections. However, If Maduro were to lose a recall vote after that date, his hand-picked vice president would finish out his term through 2019. The opposition has been accusing the electoral body of dragging its feet on the process to protect the unpopular Maduro. And opposition leaders are planning a massive Sept. 1 march on Caracas to demand the vote. National Electoral Council President Tibisay Lucena said the opposition was “wasting its time.” “This electoral power does not accept pressure from anyone,” she told an audience of administration officials. According to her timeline, the opposition might be asked to collect 3.9 million signatures — or 20% of voter rolls — at the end of October. The body would then have 28 or 29 days to review those signatures and call a referendum. But the CNE can schedule that vote anytime during the next 90 days, making a January or February vote a possibility. (The Miami Herald: http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article94596437.html; Summarium:

http://sumarium.com/oposicion-fijara-posicion-tras-el-pronunciamiento-del-cne/)

 

Independent CNE member refutes Lucena’s presentation. Luis Emilio Rondon, the sole independent member of the 5 member National Elections Council (CNE) says he did not attend Tibisay Lucena’s press conference today because he disagrees with the decision to delay the 20% signature collection to late October. He said an earlier date could be set if technical and logistic preparations begin during the second half of August. He condemned his colleagues for delaying timetables for executing the recall process, which was established in September 2007, and charges that the 5 days needed to check signatures in the first stage were turned into over 30 days. Rondón adds that “there is no legal, technical or logistic obstacle to carry out recall request procedures once requirements are complied with” and says the absence of a timetable since the time the request was accepted “has damaged the principle of impartiality that the institution must maintain” He says the national crisis should lead the CNE to respect the timetables that were established, and must comply with the requisite of “speed in complying with its constitutional duty.” (Prodavinci: http://prodavinci.com/2016/08/09/actualidad/esta-fue-la-respuesta-del-rector-luis-emilio-rondon-al-anuncio-de-tibisay-lucena-sobre-el-revocatorio/)

 

Opposition coalition calls for massive demonstration on September 1st to demand recall timetable. Opposition leader Henrique Capriles Radonski, a former presidential candidate and current governor of Miranda states, if there the National Elections Council (CNE) does not provide a timetable for a recall process against President Nicolas Maduro, the Democratic Unity opposition coalition call for a massive nationwide mobilization to occupy the entire city of Caracas. In reference to today’s statements by CNE Chair Tibisay Lucena, Capriles said “the nation does not accept (the word) “could”(Lucena referred to all possible recall dates in tentative terms) … “it is our constitutional right and we will make it stick” He called Lucena’s press conference was “an exercise in cynicism and lies”, and said Lucena “believes we Venezuelans are fools”. He added that Lucena’s statements aimed at demoralizing voters. (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/agosto/6/165093=mud-convoca-gran-movilizacion-el-1°-de-septiembre-si-el-cne-no-da-fecha-del-20)

 

National Assembly moves to replace National Elections Council board members. Congressman Julio Borges, who heads the opposition majority in the National Assembly, has announced that the Legislature will appoint members of the Nominating Committee that will elect new members of the National Elections Council as is required this very same year - when their terms expire. He said they would also call upon the CNE to honor the rights of Venezuelans to a recall referendum and regional elections. “This is a right that cannot be negotiated, changed, or manipulated by the government as it tries to remain in power.” More in Spanish: (Ultimas Noticias: http://www.ultimasnoticias.com.ve/noticias/politica/borges-anuncia-creacion-del-comite-elegir-nuevos-rectores-del-cne/; Analítica: http://www.analitica.com/actualidad/actualidad-nacional/julio-borges-vamos-a-constituir-los-comites-de-postulaciones-para-sustituir-al-cne/)

 

Gubernatorial elections remain on hold. The last regional elections to elect state governors and state legislators were held in Venezuela on December 16 2012. The result was a victory for the ruling United Socialist Party (PSUV), which won the governorships of 20 of the 23 states. The term of incumbent governors expires in December of this year. According to Constitution, governors are elected for four-year terms. The National Electoral Council (CNE) has yet to release a decision or a date for these elections, (El Universal, http://www.eluniversal.com/noticias/daily-news/would-be-candidates-for-governors-await-decision-from-the-mud-and-the-gpp_430433)

 

Slow motion coup in Venezuela? In recent weeks Nicolás Maduro appears to have taken a back seat to Venezuela’s top general, defense minister Vladimir Padrino López, who also – unusually – holds the post of operational commander of the armed forces. The prominence of the military in determining Venezuela’s political future was illustrated once again last week by the appointment of Néstor Reverol as interior minister. Unlike Padrino, who rose through the army, Reverol hails from the National Guard. His alleged criminal connections suggest that different factions in the military may now be jostling for shares of influence in the state. The gradual expansion of military powers in response to the regime´s loss of legitimacy is starting to resemble a slow-motion coup. What is in doubt is the army’s ability to improve the situation. General Padrino has said that he does not want to “militarize” the administration but to “restore order” in the face of a “lack of governance” – a strange choice of words, given that any such lack must be attributed to his commander-in-chief. With so much power concentrated in the hands of the military, understanding what their goals are is paramount. Rather than merely shoring up an increasingly unpopular president, the aim of the generals may be to control the transition in a way that protects their own interests. The defense minister’s new role means “the dialogue [over] transition will be with the military”, as one defense expert put it. But if the army cannot halt the slide into economic and social chaos, the crisis could take the generals with it too. So far, there is no sign of a workable plan in that regard. (The Crisis Group: https://www.crisisgroup.org/latin-america-caribbean/andes/venezuela/slow-motion-coup-venezuela)

 

Venturing Into Caracas' Chavismo bastion.

Traditionally, colectivos are known to be radical, left-wing armed groups that support Venezuela's ruling party in exchange for patronage. But they are also individual clans, each seeking to serve as a counterbalance to the others as they vie for resources, territory and power.  According to one source: "There are more than 60 colectivos, some of them have their own personal objectives, like education, where others are inherently linked with government officials, and others, yet the smallest and newest self-label themselves as colectivos, just to inspire fear, but in reality they are criminal bands." Colectivos gained what power they have by aligning with Chavez and still have reason to serve the government to keep its patronage flowing. But they are angry and are frustrated with Maduro's economic policies. Even if his administration sticks to Chavez's model of supporting the groups with money and government aid, there is no guarantee that it will be enough to stop them from protesting his measures. Should the president's plummeting popularity give the Venezuelan opposition room to unseat the ruling party, the next government could seek to rein in the colectivos by reducing their power and autonomy. Such an outcome would provoke heavy resistance, whether through violence or protests. (Stratfor: https://www.stratfor.com/analysis/venturing-caracas-chavismo-bastion).

 

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.