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, March 30, 2017

March 30, 2017

International Trade

Cargo that has arrived at Puerto Cabello:

  • 30,000 tons of corn
  • 47 containers of wood
  • 40 containers of metal doors
  • 27 containers of beef
  • 21 containers of toilet paper
  • 10 containers of powdered milk
  • 2 containers of medication


Venezuelan imports fell 24.5% in January 2017

Venezuela’s imports slid US$ 800 million in January 2017, a decline of 73.9% from the 2012 peak and down 24.5% from January of last year, financial firm Torino Capital reported on Monday. They said Venezuela’s imports continued contracting in January, reaching “their lowest level observed” since the start of their probe in 2007. The economists affirmed that the series showed a 17.9% plunge with respect to the previous month (December 2016) and is 5.3% lower than the previous low (October 2016). (El Universal,


Wheat and soy arrived at Maracaibo’s port

Over 11,000 tons of cereal, wheat and soy, arrived at the port of Maracaibo, consigned to state agency GMAS, for distribution to PROPORCA, INVERAVICA, Avícola Aeropuerto and Alimentos Balanceados Lamar, according to the local port authority. More in Spanish: (El Mundo,


Oil & Energy

PDVSA said to be preparing for exit of President Del Pino, investors wary

Petroleos de Venezuela SA is preparing for the departure of its president Eulogio Del Pino in what would be the biggest management shift in years for the state-owned oil producer, people familiar with the plans said. Del Pino, 61, may depart by July and will be replaced by Nelson Martinez, Venezuela’s oil minister. Martinez, 65, would remain in his role as oil minister in addition to becoming head of PDVSA. The move would come after a board shakeup in January and the recent replacement of some refining managers. Del Pino has been in charge of PDVSA since 2014 and has worked at the company for about 30 years. He previously ran the energy producer while also serving as Venezuela’s oil minister, but in January the roles were split and Martinez, previously the head of U.S.-based unit CITGO Petroleum Corp., was named minister. For bond investors, the timing of a management changes is bad with oil prices slipping below US$ 50 and Venezuela’s April 12 amortization payment of US$ 2 billion due, writes Nomura Securities‘ Siobhan Morden, head of Latin America fixed-income strategy. The departure “bodes poorly for the company, given del Pino’s more pragmatic stance and close relationships with joint venture partners that are key to boosting [oil] output. While del Pino’s apparent replacement Nelson Martinez is closer to President Nicolas Maduro, Martinez will struggle to improve PDVSA’s outlook amid competing demands for scarce resources and severe political constraints. Del Pino’s departure is unlikely to shift the government’s near-term debt service commitment or affect its April payments, but it does remove a strong advocate for avoiding default should that strategy be revisited … the government will likely make its April payments and continue to mobilize all available resources to avoid a default this year, with the main risk to debt service not willingness, but capacity. The latter is becoming more difficult given diminishing assets that can be made liquid.” (Bloomberg,; Barron’s:


PDVSA manager arrested in Venezuela fuel corruption probe

Venezuela has arrested a senior manager of state oil company PDVSA on suspicion of "irregularities" in contracts to supply fuel to the domestic market, authorities said on Wednesday. The detention of international commerce manager Marco Malave, 47, followed a shakeup of personnel at PDVSA's trade department since January and amid gasoline shortages around the nation last week. "PDVSA representatives denounced a series of irregularities in the protocol for contracting companies with vessels to supply the referred hydrocarbon to the Venezuelan market," the state prosecutor's office said in a statement. The situation affected fuel distribution in seven states, including the capital Caracas, it said. Malave was arrested last week in Caracas and his bank accounts have been frozen. President Nicolas Maduro's socialist government and PDVSA, have repeatedly vowed to take steps to combat corruption, which has affected Venezuela and its oil industry for decades. (Reuters,


Venezuela’s main crude oil port hit by spill

Venezuela’s main oil terminal, Jose, suffered disruptions in operations on Tuesday after a break in a pipeline had led to a crude spill. As per Reuters’ sources, the spill was likely caused by a break in the pipeline connecting the Jose oil terminal and a single buoy mooring (SBM) facility that is being used by crude tankers to load oil for exports. The pipeline has the capacity to ship 32,000 bpd of crude to the SBM facility. Operators have told the agency that no tankers had been docking at the SBM facility at the time when the incident occurred. It is unclear how loading and unloading of oil have been affected. Referring to Tuesday’s spill, one shipping operator told Reuters that “the spill on the coast is complex”. The Jose terminal has suffered delays in loading of crude in recent weeks, due to unscheduled maintenance at one of the docks, which has surely added further pressure on struggling cash-strapped Venezuelan oil company PDVSA that has been barely avoiding default. PDVSA on Wednesday confirmed reports of a crude spill from a pipeline connecting its main oil-exporting complex with a tanker loading facility, but said shipments have not been affected. "PDVSA on Tuesday activated a contingency plan to address a crude leak ... A temporary staple was installed in the pipeline to stop the leak," the company said in a statement. It added it was expeditiously cleaning up the area. "Operations of production and shipment of crudes from the Hugo Chavez Orinoco Belt were not compromised and continue with absolute normality," it said in a statement. (Oil Price:; Reuters:;


Economy & Finance

Venezuela announces a new exchange rate — but this one probably won't help, either

Venezuela's latest effort to curb its economic free fall is one it's tried before, and it will probably yield the same results. President Nicolas Maduro announced Monday night that his oil-exporting nation will put a new currency exchange rate in place next week. The new rate will replace the DICOM exchange rate, one of Venezuela's two official rates. The problem is that nobody pays attention to the official exchange rate in Venezuela, a country wracked by inflation and whose people survive by buying food and other necessary items mostly on the black market. "Ultimately, this is a fool's errand, because the government fails to address the major economic issues facing Venezuela," said Jason Marczak, director of the Latin America Economic Growth Initiative at the Atlantic Council's Adrienne Arsht Latin America Center. "Venezuela has launched a number of exchange rates over the years, and none of them have kept pace with the black market."  The Venezuelan bolivar currently trades around 710 per U.S. dollar under the DICOM exchange rate and at 10 under the DIPRO rate, Venezuela's other official rate.  On the black market, however, a dollar can fetch around 3,000 bolivars. (CNBC:


Supreme Tribunal rules that the government can bypass legislature in joint ventures

The Constitutional Chamber of the Supreme Tribunal has ruled that the Executive branch of government can now set up joint ventures without the approval of the National Assembly, which the Tribunal has rules is in contempt. It added that the legislature cannot “modify proposed conditions or pretend to establish other conditions.” More in Spanish: (Agencia Venezolana de Noticias;


Politics and International Affairs

OAS pushes Venezuela to engage in dialogue as tensions flare

Members of the Organization of American States urged Venezuela's government and opposition to settle their differences through dialogue Tuesday, backing off from threats to suspend the socialist-run country and providing President Nicolas Maduro some short-term relief as he struggles to rescue the polarized nation from crisis. The contentious special meeting at the OAS headquarters in Washington underscored the difficulty that regional governments increasingly concerned about Venezuela's crisis face as they try to force the unpopular Maduro to cede some power to his opponents and restore badly damaged democratic norms. The outcome also showed the degree to which Venezuela, even crippled by triple-digit inflation and widespread shortages of basic goods, can still count on an alliance with a few small Caribbean nations whose support was won through years of subsidized oil shipments. The meeting was called to debate a 75-page report issued two weeks ago by OAS Secretary General Luis Almagro in which he characterized Venezuela as a country where rule of law no longer exists and called on member nations to suspend Venezuela unless elections are held soon. Hours before the meeting began, Maduro's opponents decried what they see as another power grab: a surprise ruling by the government-stacked Supreme Court threatening to impose limits on the immunity enjoyed by opposition members of congress. "Once aberrations of this gravity begin we do not know where they will end," the U.S. representative at the OAS, Michael Fitzpatrick, said about the ruling. He said that it was essential for Venezuela's government accept the hand being extended by the OAS and that further delays in restoring democratic order meant the region's solidarity with "the suffering people of Venezuela only grows deeper and stronger." The three-hour meeting ended with a declaration on behalf of 20 nations pledging to take concrete steps toward a diplomatic solution, but provided few details on what that would involve. Representatives from the Dominican Republic, El Salvador and Haiti voted with Venezuela in trying to cancel the meeting altogether, despite a warning from Sen. Marco Rubio, the Republican chairman of the U.S. Senate subcommittee that deals with Latin America, that U.S. aid to them could be cut off if they don't stand up for democracy.  International pressure is building on Maduro, especially from the Trump administration, which recently slapped drug sanctions on Venezuela's vice president and has forcefully called for Maduro to release political prisoners. Luis Almagro, the OAS secretary-general, says “The continent is telling the [Maduro] regime to release political prisoners. It is saying it wants democracy for the country. That is essential, it is fundamental.”  Tuesday’s session at the OAS coincided with a US Congress hearing on Venezuela and fresh democratic calls from Federica Mogherini, the EU’s foreign policy chief. Vatican-sponsored talks between officials and the opposition have failed to make meaningful gains and many Venezuelans fear next year’s presidential elections will be cancelled. The more drastic action could mean Venezuela’s suspension from the organization. To suspend Venezuela, two-thirds of the 34 active member states of OAS would have to agree in a vote set for June. Venezuela can count on the support of a handful of leftwing governments, such as Bolivia, and small Caribbean states to which it has provided subsidized oil over the years. “Sanctions against a country should be the last resort, after there has been no answer” from the government, said Almagro. A suspension from OAS could also threaten disbursements from multilateral lenders. However, some analysts said the move by OAS would “have little impact” in Venezuela and that the government will continue to do everything in its power to avoid regime change and can depict the OAS actions as part of a broader imperialist attack on Venezuela. (Financial Times:; ABC News:


Crisis upon crisis in Venezuela

Venezuela was once one of Latin America’s economic powerhouses and a regional diplomatic heavyweight. To grasp how precipitously its global standing has eroded under President Nicolás Maduro, consider these two recent developments. Last month, the United Nations announced that Venezuela had lost its right to vote in the General Assembly for a second year because it owes tens of millions of dollars in dues. And on Tuesday, against Venezuela’s ardent protests, diplomats from across the hemisphere convened a rare meeting in Washington to discuss what it would take to restore democracy and a semblance of order in the autocratic, impoverished and dysfunctional nation. Tuesday’s hearing at the Organization of American States did not result in a clear plan to address Venezuela’s political and humanitarian crisis. But the fact it was held at all was deeply embarrassing to Venezuela, which just a decade ago aspired to become a counterbalance to United States power and policy in the region. Venezuelan diplomats have sought to characterize growing regional opposition to Maduro’s rule as part of an underhanded effort by the United States to justify military intervention. A coalition of O.A.S. members, currently led by Mexico, isn’t buying that excuse and is trying to find and broker solutions to the crisis. One proposal being floated is to expel Venezuela from the organization. While this would be fully justified, given that the government’s repression of the political opposition and its dismal human rights record violate the O.A.S. charter, it’s hard to see what this would accomplish. Furthermore, it could prompt Maduro to act even more rashly. (The New York Times:


Venezuela's government hopes for international sanctions

Venezuela's government is moving further and further away from democracy, sparking criticism from former political partners. The socialists in Caracas portray the criticism as proof of their own integrity. Fourteen countries from North and South America have urged Venezuela's Socialist Unity Party (PSUV) to restore democracy in Venezuela. In a joint statement, they have asked the government in Caracas to release their political prisoners and recognize the legitimacy of parliamentary decisions. In the middle of March, OAS Secretary General Luis Almagro published a painfully blunt report detailing the social, economic, political and humanitarian situation here. Opposition politicians and critical journalists are being threatened; some have been imprisoned or even murdered. Since the end of 2015, the opposition has held a majority in Venezuela's congress. However, it is virtually unable to act because the government refuses to implement its resolutions or the PSUV-dominated constitutional court blocks them. Almagro accuses President Nicolas Maduro and his government of violating all 28 articles of the Inter-American Democratic Charter. In response, Maduro demanded Almagro's dismissal and insulted him in his usual manner - calling him a "clown" and saying, "Almagro's stupidity in the OAS does not upset me for a second." The OAS has initially refrained from imposing sanctions. But General Secretary Almagro is likely to further pursue the issue. Some analysts believe it is possible that international pressure may make Caracas restore the rule of law; others consider this to be unlikely and compare the Venezuelan government to Fidel Castro's communist regime in Cuba, which was effectively expelled from the OAS in 1962 and hit with an expanded trade embargo. In fact, former Venezuelan vice-president Diosdado Cabello had announced before the OAS meeting: "They would do us a favor."  Yesterday, President Nicolás Maduro called for a domestic and international debate on the “usefulness” and “relevance” of the OAS; and claimed his regime has won an important “victory” this week. Several analysts in Caracas report that the Supreme Tribunal is laying the groundwork for withdrawing Venezuela from the OAS immediately. (DW:; and more in Spanish: (Infolatam:; 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, March 21, 2017

March 21, 2017

International Trade

Cargo that has arrived at Puerto Cabello: 448 containers bearing food, spare parts, medicine and other supplies from Cartagena, Colombia. The shipment includes 39 containers of powdered whole milk, 31 with methionine animal feed, 25 with corn seeds, 20 containers of beef, 17 with yellow corn, one with frozen chicken and another with medicine. Also, 32 containers with turbines and other equipment, parts and spare parts; 2 with valves and fuses; 172 with corrugated roofing; 40 with metal doors; and 20 with tires. All of this consigned to state agencies CAA, CORPOELEC, HIDROVEN, CORPOVEX, Barrio Adentro, and PDVSA. Another shipment of 30,000 tons of wheat was received for CASA. More in Spanish: (Bolipuertos,; Noticiero Venevisión,; El Mundo,


15O00 tons of baking wheat arrived at La Guaira port, as per the local port authority. More in Spanish: (Bolipuertos,


627 tons of food and electrical equipment have arrived at Guanta Port, in Eastern Venezuela. The shipment includes rice, pasta, mayonnaise, baby diapers, and surgical gloves. More in Spanish: (Bolipuertos,; El Universal,


Business group claims debt with Panama has been paid

The Venezuela-Panama Integration Chamber (CIVENPA) claims that Venezuela’s US$ 500 million outstanding debt to Panamanian businessmen has been paid up. More in Spanish: (El Mundo,


Oil & Energy

Venezuela oil price tumbles for 3rd week

The price Venezuela receives for its mix of medium and heavy oil fell for a third straight week as inventories continued to build and production increased in the USA, Russia and Brazil. As per 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 March 17 fell to US$ 41.78, down US$ 3.39 from the previous week's US$ 45.17.
According to Venezuelan government figures, the average price in 2017 for Venezuela's mix of heavy and medium crude is US$ 45.38. (Latin American Herald Tribune,


Venezuela's troubles put US heating oil charity in limbo

Venezuela's economic turmoil has placed in limbo that country's participation in a free heating oil program run by a Massachusetts-based nonprofit that has helped hundreds of thousands of people, signaling that the program may be kaput. This marks the second consecutive winter that Venezuela's CITGO Petroleum Corp. has not contributed to the "Joe-4-Oil" program, part of the nonprofit Citizens Energy created by businessman and former Democratic Massachusetts Congressman Joseph P. Kennedy II. The decision by the subsidiary of the Venezuelan national oil company coincides with plummeting oil prices and corresponding economic problems in oil-rich Venezuela. Citizens Energy continues to operate other programs. The nonprofit was created in 1979 to channel revenue from commercial enterprises to charitable programs. But the heating oil program may cease to exist. "Joe-4-Oil" did not run this year or last, and a message online said that applications for winter heating oil help were not being accepted. (The News Observer:


Guyana oil prospects stir friction between Venezuela and ExxonMobil

Guyana has emerged as one of the world’s most promising areas for offshore oil exploration, following significant discoveries made by ExxonMobil of the US that have started a wave of excitement in the global industry. However, the new-found oil wealth of Guyana has heightened tensions with its neighbor Venezuela, which is in the throes of an economic crisis caused in part by falling oil production and weak prices. It has also created further friction between Venezuela and ExxonMobil, which have been fighting a decade-long legal battle over compensation for oil projects expropriated by the government of the late Hugo Chávez in 2007. Since it started drilling in Guyana in 2015, Exxon has discovered an estimated 1.4 - 2-billion-barrel equivalent of recoverable oil and gas on its Stabroek exploration block in deep water about 120 miles offshore. John Hess, chief executive of Hess, the US oil group which is a junior partner of Exxon in Stabroek, told the Financial Times he saw “multibillion-barrel potential” for additional discoveries there. Exxon expects to take a final investment decision this year to develop its Liza discovery, starting production in 2020. However, Venezuela lays claim to the Essequibo region that covers about two-thirds of Guyana’s territory, and the waters off its coast including part of the Stabroek block.  Elías Matta, a Venezuelan opposition lawmaker and deputy president of the legislature’s energy and oil committee, said it suspected that some of Exxon’s wells are in disputed waters. Exxon said in a statement that the Liza wells were in the eastern portion of the block, which is the section furthest from Venezuela. António Guterres, secretary-general of the UN, in February announced the appointment of Norwegian diplomat Dag Halvor Nylander, who was successful in brokering a peace deal in Colombia, as his personal representative to work on resolving the dispute. (Financial Times:


Venezuela indicts two PDVSA subcontractors in Jose port graft case

Venezuela has charged the presidents of two subcontractors with corruption for overbilling in equipment sales at the OPEC country's main oil-exporting port, the public prosecutor's office said on Monday. The former manager of state oil company PDVSA's Jose terminal has already been jailed over the purchase of two monobuoys costing US$ 76.2 million. A monobuoy is a floating platform where vessels, especially oil tankers, too large to get into port can moor and unload. The presidents of Venezuela-based Castillo Max and Guevara Training, Miguel Castillo and Hernan Guevara respectively, have been arrested and charged with graft over equipment sales in a tribunal in the eastern oil-producing state of Anzoátegui, according a statement from the public prosecutor's office. (Reuters,


PDVSA said to replace refining managers as shakeup deepens

Venezuela’s state oil company is replacing high-level managers at refining complexes and other divisions as it deepens a shake-up that began in January. Managers at several of PDVSA’s major refineries have been replaced in the past weeks, Ivan Freites, a union leader, said Monday in a telephone interview. Widespread staffing changes across PDVSA were confirmed by another person who works with PDVSA but isn’t authorized to speak about the matter publicly. The managerial changes come months after President Nicolas Maduro added two board members and installed new executives at PDVSA, including a rear admiral. In January, Maduro gave the job of oil minister -- a position that was formerly held by PDVSA President Eulogio Del Pino -- to Nelson Martinez, head of PDVSA’s Citgo Petroleum Corp. unit in the U.S. (Bloomberg,



Venezuela's no-bread zone: week one of Maduro’s war on bread

One week after President Nicolas Maduro launched “la Guerra del pan”, there is no bread in downtown Caracas. Most bakeries are just closed -- their owners avoiding government intervention or just going out of business altogether, according to the federation that groups bakery owners -- even after the government ordered them to make bread and sell it at controlled prices round the clock. Only one bakery, El Guanabano, is selling, but to buy it, you have to endure a long line plus orders from “milicianos”, the auxiliary body of the Armed Forces created by Hugo Chavez, Maduro’s mentor and predecessor. The oven at “Minka” (formerly “Mansion’s Bakery”, the first expropiated “panaderia”), is not in use, said an old man. “They burned the oven”, he tells us. “You mean they burned the bread?” we ask back, in incredulity. “No! The oven, they (the occupiers), burned the oven!” he repeats. (Latin American Herald Tribune,


Printing industry production dropped 80% during second half of 2016

Edgar Fiol, Executive Director of Venezuela’s Graphic Arts Industry Association (AIAG), reports that “The production drop in the printing industry during the second semester of 2016 is approximately 80%”. He said some industries had paralyzed production and none is operating under “even remotely normal” conditions.  More in Spanish: (El Universal,


Online bartering for food, medicines is the new shopping in Venezuela

Keila, a Venezuelan housewife who lives in the western town of Trujillo, is able to get the precooked corn flour she needs on the Internet in exchange for some toothpaste, a product that normally costs less than corn flour but is even harder to find in her country. Like Keila, thousands of people have joined groups created on the social network Facebook to obtain, by paying money or bartering, the food products and medicines that grow scarcer every day in this oil-producing nation plunged in a severe economic crisis. These groups are established by area, organization and even city by city to facilitate the meetings between those taking part in the bartering process. The exchange of one product for another is not ruled by their official sales prices but by supply and demand. (Latin American Herald Tribune,


Economy & Finance

Real per capita income is down 28% over the past 4 years, as per the Torino Capital research firm, which faults “mistaken” economic policies applied since 1999: “nationalizations, absence of property rights, protectionism, excess regulations and barriers to a functioning price system”. In addition, it says Venezuela is “undergoing a massive external impact, which forces this or any other government to cut down on imports to ensure external sustainability”. More in Spanish: (El Universal,


Venezuela taps small banks to handle dollar deals

Venezuela's government is using little-known banks, including a small Puerto Rican lender, as intermediaries for some international trade operations after CITIGROUP last year stopped providing such services. The government has turned to relatively unknown institutions to provide a service known as correspondent banking, as international banks are increasingly concerned about the risks of doing business with socialist-ruled Venezuela amid investigations into corruption and drug trafficking. Correspondent banks provide an essential service that allows countries to import goods and maintain links to the global financial system. ITALBANK, the Puerto Rican lender owned by Venezuelan entrepreneur Carlos Dorado, has served as one for Venezuela since 2016. Dorado told Reuters that ITALBANK offers correspondent services to state-owned Banco de Venezuela, which is the country's largest bank, and handles part of the government's offshore business transactions. He said about 10 or 15% of the dollar transfers from Banco de Venezuela go through ITALBANK. He added that another bank being used for correspondent services include southern Florida-based Eastern National Bank, partly owned by Venezuelan bank regulator SUDEBAN. "Thanks to Dorado we have been able to pay for food imports," said a person close to the Venezuelan government who asked not to be identified, adding that the bank "has processed hundreds of millions of dollars in payments." (Reuters:


PDVSA prepares to make debt payments for US$ 3.1 billion

In March and April, the Republic, PDVSA and ELECAR must make US$ 3.16 billion in capital and amortization, around one-third of the total US$ 9.7 billion due to be paid this year, as per financial firm Torino Capital. The think tank, says a “key date” is April 12. Then PDVSA must pay US$ 2.23 billion of interest and principal on the PDVSA 5.25% 2017, 5.375% 2027 and 5.5% 2037 bonds. “Although the market is expecting the payment to be made, the current 56% yield on the 5 Œ PDVSA 2017s suggests that concerns about a default event remain among some participants,” Torino Capital indicated. “PDVSA still has available for use most of the US$ 1.5 billion ROSNEFT loan signed last year, and we expect it to be able to cover the remainder of the payments from its own cash flow,” says the Torino. (El Universal,


Misery seen from space too much for this Venezuela bonds fan

There are plenty of reasons why BlueBay Asset Management LLP cut its holding in Venezuelan bonds, from the empty shelves in the supermarkets of Caracas to a nationwide dearth of spare auto parts. But few were more compelling than the satellite photograph of Puerto Cabello on the Caribbean coast, home to the country’s biggest port, which shows a once-vibrant terminal bereft of vessels. “If you can see a country’s economic decline from space, you know it’s in big trouble,” said Graham Stock, the head of emerging-market sovereign research in London at BlueBay, which reduced its holdings of the nation’s debt to below-benchmark levels. He estimates Venezuela’s imports have declined by as much as 50% in the last two years. (Bloomberg,


Supreme Tribunal again validates extension of Emergency Economic Decree

Venezuela’s Supreme Tribunal has once more validated President Nicolas Maduro’s latest extension of the Economic Emergency Decree for yet another 60 days. More in Spanish:  (Agencia Venezolana de Noticias;; El Mundo,


Politics and International Affairs

Regime's greatest threat comes from within

In the face of troubles that seem to never end, the Venezuelan government has fended off challenges from its political opponents in the Democratic Unity coalition by using offers of conciliation to drive a wedge between them. Caracas' biggest concern, however, is not what the opposition might do next, but what its own armed forces are capable of. As per unnamed STRATFOR sources, the Venezuelan government has taken to keeping a closer eye on its troops. The General Directorate of Military Counterintelligence has reportedly begun to monitor midranking military officers deployed to the country's Strategic Defense Regions (REDI) and Strategic Defense Zones (ZODI). Venezuela's eight REDI, which are administered by major generals appointed by the president, contain dozens of ZODI commanded by additional officers. And it is apparently these figures' loyalty that has Caracas worried. The government's primary concern lies in the fact that REDI and ZODI officers have room to act — and encourage their subordinates to follow — without their superiors' immediate knowledge. REDI and ZODI commanders have the authority to issue direct orders to the units under their control, and in theory they could lead military action against the state while keeping the defense minister and Strategic Operational Command in the dark as to their intentions. In hopes of preventing an uprising from someday unfolding, the government has begun to scrutinize the comings and goings of these units' lower ranks. Even if the threat of military insurrection is presently low, the possibility of soldiers unhappy with their country's direction mounting a coup cannot be ruled out. Food shortages and high prices, after all, affect soldiers as much as they do civilians, particularly as imported goods become few and far between for the average Venezuelan citizen. But though most of the rank and file are suffering alongside the rest of the population, the armed forces' midlevel and senior leaders probably aren't. Either way, Caracas will continue to keep a wary eye on its military officers as its economic straits grow dire. The Venezuelan government is no stranger to surveilling those who might pose a threat to its rule, including opposition figures and political activists. And as hardship breeds popular frustration with Caracas, the ruling administration will continue to keep its gaze fixed on its own forces for fear of the threat rising within. In a recent speech, President Nicolas Maduro said a group of “traitors” – which he did not identify – was working on a “reform plan” against his regime and against socialism. “Be alert, “chavistas”, they want to stab Nicolás Maduro in the back, a new brand of traitors to take over a reform plan to deliver the Bolivarian revolution to international capitalism”. He said they should e “unmasked”. At the same time, Defense Minister General Vladimir Padrino, announced that the Armed Forces Operating Strategic Command was holding a videoconference with all operating military commanders to “evaluate all threats” to “political stability” and “territorial integrity”,whatever their instruments or mechanisms may be”. (Stratfor:; and more in Spanish: (Infolatam:;


Chilean president says Trump concerned about Venezuelan crisis

U.S. President Donald Trump expressed concern about the political and humanitarian situation in Venezuela in a call on Sunday with Chilean President Michelle Bachelet, the Chilean president told reporters on Monday. Bachelet said she talked with Trump about the actions regional leaders were taking with regard to Venezuela, which has been wracked by an economic crisis in the last three years and is facing external pressure to make political reforms. "(President Trump) presented to me his worries about the situation in Venezuela," Bachelet told reporters at the La Moneda presidential palace in Chile's capital, Santiago. "I told him about the actions (Chile's) foreign ministry is carrying out together with other foreign ministries, and we are staying in contact to see how we can help Venezuela have a peaceful exit from its domestic situation." Trump also discussed Venezuela with Brazilian President Michel Temer this week. (Reuters:; Latin American Herald Tribune,; El Universal,


Perú calls for applying the Democratic Charter in Venezuelan crisis

Peru’s Foreign Minister Ricardo Luna says the Organization of American States should call out the Democratic Charter to deal with the crisis in Venezuela. Doing so “does not mean suspending and isolating a country, but rather using the options it offers to get it to commit to solving the problem”, he said. More in Spanish: (El Universal,


Costa Rica calls for solving Venezuela’s problems is through “voting

When asked about OAS Secretary General Luis Almagro’s proposal to apply the Democratic Charter and suspend Venezuela, Costa Rican President Luis Guillermo Solís said he “would not endorse any specific action, I believe the way out of the process in Venezuela is through elections”. He added: “We believe we should not move ahead on matters until we have enough evidence to determine if voting has been sufficiently developed” but did not elaborate on what type of elections he was referring to. More in Spanish: (El Mundo,


Relatives of Venezuelan political prisoners beg OAS for help

Relatives of three prominent Venezuelan political prisoners Monday joined the leader of the Organization of American States in pleading for action to free the country from what they described as the repressive regime of President Nicolas Maduro. Patricia de Ceballos called for the release of her husband, Daniel Ceballos, imprisoned since August. The former mayor of the western city of San Cristobal had been under house arrest in Caracas since 2014, when he was accused of fomenting political unrest — a charge he denied. Also at the news conference was Oriana Goicoechea, sister of Popular Will youth leader Yon Goicoechea, who was arrested in August and charged with carrying explosives. Yon Goicoechea won a 2008 prize from the Cato Institute, a Washington-based libertarian organization, for purportedly advancing democracy in Venezuela. Lilian Tintori, married to former Chacao mayor Leopoldo López, called on OAS members to intervene and “help us to rescue democracy in Venezuela. … The Venezuelan people have … to fight for elections, humanitarian aid and the freedom of political prisoners.” Venezuela’s ambassador to the OAS, Carmen Velasquez, interrupted the news conference to accuse Almagro of waging a “provocative media [and] political campaign against the legitimate and constitutional government. …” Meanwhile, Monday in Caracas, Maduro again dismissed Almagro as “a bandit, a traitor” for recommending the country’s suspension from the regional organization. But a group of opposition leaders went to OAS offices in the capital city to show support for the suspension. (VOA:


Venezuela rebuffs UN recommendations to release political prisoners

The Venezuelan government has rebuffed a number of recommendations by the United Nations Human Rights Council, including the release of political prisoners or the visit of UN experts to assess the situation on site. In a paper recently released, Venezuela addressed 274 recommendations made last November; explicitly rejected 53 and “took note” of other 28, a term considered by the UN as a “refusal.” In a document, the Venezuelan government labeled all the suggestions as “biased, confounding, politically wicked, prepared on false grounds, contrary to the spirit of cooperation and respect.” The UN paper was the result of the Universal Periodic Review (UPR), an examination on human rights that should be passed by all UN Member States. (El Universal,


Venezuelans getting grumpier faster than any nation on earth, happiness report says

Venezuela’s food shortages, rampant crime and hyperinflation are taking their toll. As per the 2017 World Happiness Report released Monday, Venezuelans are getting grumpier faster than any country on the planet. The plummeting numbers come even after President Nicolás Maduro in 2013 created the “Vice Ministry of Supreme Happiness for the Socialist People” to try to improve the national mood. Comparing the periods 2005-2007 to 2014-2016, the study found that Venezuelan’s level of contentment fell faster than any of the 126 countries studied, including Central African Republic, Botswana and Greece. (The Miami Herald:


Investigators find three headless corpses in mass grave of 15 at Venezuela prison

Fifteen corpses, three of them headless, have been found in a mass grave at a Venezuelan prison and more may be discovered. The grisly find at the General Penitentiary in central Guarico state has thrown a spotlight on this nation’s crowded, violent and gang-dominated prisons where scores of inmates die each year. The public prosecutor’s office said 20 forensic experts combing the site at a prison stable had found the remains of at least 15 people, three missing skulls. “We presume there are more corpses,” it said in a statement. Authorities have given no explanation for the deaths and there has been little national outcry given the litany of horror in Venezuela’s prisons in recent decades. The country’s more than 30 facilities house about 50,000 people but were built for a third of that, rights groups say. Prisons in Venezuela are notorious for ease of access to weapons and drugs as well as mobile phones and computers hooked up to the internet, allowing inmates easy access to the outside world, often to run criminal activities. Some prisons have discos and even swimming pools. (The Guardian:


Venezuela's spiraling mental healthcare crisis

The country's economic strife has left the healthcare system struggling to cope with a growing mental health crisis. In 2013 Venezuelans had access to 70 types of anti-psychotics; today there are only five, says Adalberto Rodriguez, president of the Venezuelan Society of Psychiatry. "There's a 95% shortage of anti-psychotics," said Dr. Rodriguez. "It's an extremely complex situation because one anti-depressant cannot cure a variety of depressions." As is the case with staple foods, many Venezuelans are often forced to turn to the black market to buy medication at exorbitant prices. "All patients are receiving the same kind of treatment, which means that many of them aren't getting any better and the symptoms then become chronic," explained Rodriguez. The steep reduction in anti-psychotics in Venezuela is partly a result of the country's financial strife. Rodriguez reports that President Nicolas Maduro's socialist government has often been unable to pay the foreign companies providing Venezuela with medication. Thus, many mental health patients in Venezuela are regressing to a state of psychosis and anguish that cannot easily be treated. And although helplines and counselling groups have become increasingly common, this has not halted the rising suicide rate. While there are no accurate figures yet, psychologist Dr. Yorelis Acosta is adamant that there has been a stark rise in suicides. The shortage of drugs, which began in mid-2016, has resulted in many patients being re-admitted into under-equipped hospitals. Despite a surge in people needing to be hospitalized, doctors have been forced to turn away desperate cases owing to lack of food, water, medical equipment and even staff. Working to take care of the mentally ill has become an ordeal in Venezuela's understaffed hospitals. With sedatives, no longer readily available, physical restraint has become a common practice, which also has its hazards for the staff. While patients and their dwindling access to drugs is a prime concern in a country where mental health problems are on the rise, family members have also become victims of scarcity, forced to supervise patients in an almost oppressive manner in the hope that they will not slip into psychosis and harm themselves or others. (Al-Jazeera:


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.