International Trade
Venezuelan exports to the US drop to US$ 9.202 billion, which
is a 75% decrease since 2006, according to a report from the Latin American
Economic System (SELA). US exports to Venezuela dropped down to US$ 5.009
billion, a reduction of 41% since 2006. More in Spanish: (El Universal; http://www.eluniversal.com/noticias/economia/exportaciones-venezolanas-estados-unidos-descienden-9202-millones_667523)
Recent cargo arrivals:
- 88,000 tons of white corn and rice, at Puerto
Cabello, aboard the ERHAN, AEC ABILITY II and the
- y UBC TARRAGONA
- 557 containers bearing oatmeal, beef, beans, white
rice, vehicle tires, toothpaste, corn flour, wheat flour, milk, medicine,
shampoo and diapers, arriving from Colombia on the NIKOLAS, at Puerto
Cabello.
- 140 tons of fertilizer for state agency
AGROPATRIA, aboard the SUDKAP, at Puerto Cabello.
- 2477 pieces of steel tubing, aboard the QING HUA
SHAN, also at Puerto Cabello
- 6,101 tons of food packages for the government’s
CLAP food distribution program have arrived at La Guaira port in 289
containers aboard MV VIKING MERLIN from Veracruz – México. Food items
received include pasta, rice, beans, cooking oil, canned tuna, and
powdered milk.
- 2.878 tons of food, medicine and personal care
products arrived at La Guaira port aboard the CONTSHIP PRO from Jamaica,
and the MELBOURNE STRAIT, from Curazao. The products received include
rice, milk, pasta, tuna, beans, kits for dialysis, disinfectants,
cosmetics, detergents, soap and children’s products.
Oil & Energy
Oil Minister and state oil firm chief switch roles, Del Pino heads for
Russia ahead of OPEC meeting
Venezuelan oil
minister Nelson Martinez and state oil company president Eulogio Del Pino will
switch roles as the country’s production wanes and money dries up. Del Pino
will soon go on a series of foreign trips to strengthen alliances ahead of a
meeting of heads of state which will seek accords on oil and gas prices,
President Nicolas Maduro said on state television. Maduro’s moves come after
the almost 90% drop in profits at Petroleos de Venezuela SA last year amid
declining output and a plunge in oil prices. Venezuela and PDVSA are under
intense scrutiny from investors as U.S. sanctions against key government
officials and a power grab by President Nicolas Maduro threaten to disrupt
financial flows. Maduro said Martinez as head of PDVSA will seek to strengthen
partnerships with foreign companies operating in the Orinoco Belt by improving
their stakes, while increasing refining capacity and boosting production. Del
Pino will visit Russia and Saudi Arabia ahead of a joint OPEC, non-OPEC
monitoring ministerial committee meeting in Vienna set for Sept. 22, the TASS
news agency cited the minister as saying on Monday. During his meeting with
Russian counterpart Alexander Novak, the Venezuelan oil minister will discuss
the implementation of the OPEC+ global oil output cut deal, and “the
introduction of changes, if need be”, the agency reported, giving no detail. (Bloomberg: https://www.bloomberg.com/news/articles/2017-08-25/venezuela-oil-minister-pdvsa-head-to-switch-roles-maduro-says; Reuters,
http://www.reuters.com/article/us-opec-meeting-venezuela-russia-idUSKCN1B80PP)
PDVSA
negotiating Curacao refinery lease, open to China partners
Venezuelan
state oil company PDVSA on Thursday said on Friday it was negotiating the
continuation of its lease of Curacao’s Isla refinery but was open to Chinese
partners following a preliminary deal between the island and China’s Guangdong
Zhenrong Energy to operate the complex. PDVSA has for decades operated the
refinery, which opened in 1918, under a lease agreement. But the cash-poor
company has been reluctant to invest some US$ 1.5 billion that Curacao
authorities requested several years back to modernize the 335,000
barrels-per-day facility. (Reuters, http://www.reuters.com/article/us-venezuela-refinery-curacao-idUSKCN1B52GM)
OP-ED: Why the oil market should not misread Venezuela
For trading markets
every tragedy is a business opportunity. That is the spirit in which parts of
the oil market are viewing the continuing trauma in Venezuela. The country is
on the verge of becoming a failed state. But are these events likely to trigger
the rise in oil prices that bulls in the market have long been hoping for? Will
the implosion of the regime of President Nicolas Maduro and the open civil
conflict that could follow push oil prices up to US$ 60, US$ 70 a barrel or
even more? I don’t think so. There are good reasons, however, why the reality
might be rather different. First, a complete cessation of production and
exports is extremely unlikely. Venezuela depends on oil for 95% of its export
revenues. Protecting that trade and maintaining production will be the absolute
priority for any government. Oil installations will be guarded by troops if
necessary and production will continue. If any of the producing facilities do
grind to a halt the impact is likely to be limited. There could be a spike in
prices but that is likely to be temporary. Venezuela is no longer the power in
the oil market it was a decade ago, when it produced and exported around 2.5m
b/d. Its crudes were an important part of the mix for refineries on the US Gulf
coast. A loss of production of say half a million barrels a day would be
inconvenient for the refiners accustomed to relying on the country’s supplies
and damaging to the international companies involved, such as REPSOL and
CHEVRON, but globally, any such shortfall could soon be matched by increased
supplies from elsewhere. Nor would production stay cut off. Any government will
need the export revenue and those who have invested in Venezuela or made loans
in return for oil supplies also have a direct interest in seeing production
maintained. That includes both China, which has stopped lending Venezuela new money
but in 2016 still had a reported US$ 20 billion of loans outstanding, and
Russia, which has recently increased its lending through the state-controlled
oil company ROSNEFT. That debt is secured against the trading subsidiary of
PDVSA, Citgo. No government can afford to alienate such powerful creditors.
Venezuela could easily sustain production of 3m b/d or more and, given the
existing infrastructure and the experience in what remains of the PDVSA, could
probably reach that level within 18 months of a new administration. In
countries dependent on oil revenue, production and exports become the
imperatives of an incoming government — the way new leaders can secure power.
Venezuela today is a sad and miserable place, its population the victims of
dictatorship and mismanagement of the economy. But the market would be wrong to
see what is happening on the streets of Caracas as a leading indicator of the
next upward wave in oil prices. (By Nick Butler: Financial Times: https://www.ft.com/content/38c15c42-74e6-3410-9c70-eacc4b0fd449)
Commodities
35,000 hectares of citrus are endangered by spreading
bacteria
The
National Agriculture Producers Federation has called for a sanitary emergency
due to the spread of a bacteria named HLB, which is endangering around 35,000
hectares of citrus. Carlos Romero, President of the National Fruit Growers
Federation says the bacteria needs to be controlled through fumigation every 25
days, but it cannot be donet due to lack of pesticides at state agency
AGROPATRIA. More in Spanish: (Ultima Hora Digital, http://ultimahoradigital.com/2017/08/una-bacteria-pone-en-riesgo-35-mil-hectareas-de-citricos-en-venezuela/)
ALCASA says it has been allocated US$ 403 million for
projects
State
company ALCASA reports the Maduro regime has given them US$ 403 million that it
has invested in transforming, distributing and rolling aluminum, and will soon
become the first transformation facility in Latin America. More in Spanish: (El
Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/alcasa-recibio--403-millones-para-seguir-desarroll.aspx#ixzz4r91pzzBv)
The
state run SIDOR steel complex says it has delivered 1804 tons of tin foil to be
processed into cans for tuna and sardines. It made a previous delivery in March
to 27 processing companies. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/sidor-realiza-segunda-entrega-de-hojalata-para-env.aspx#ixzz4r92VnCNt)
Economy & Finance
Maduro now owns Venezuela’s economy—and its collapse
Venezuela’s
socialist regime has consolidated near-total political control after installing
an all-powerful constituent assembly. Resolving the economic crisis and coming
up with US$ 3.5 billion for bond payments through November however will prove
trickier. President Nicolas Maduro has thrived in the face of vicious street
demonstrations, talk of military force by the U.S. and several rounds of
sanctions. His new constituent assembly is bypassing congress and is expected
to start rewriting the nation’s charter this week. But the result may be that
Maduro has sole ownership of the once-rich nation’s terminal financial
collapse. Maduro has been hunting for new financial lifelines in Russia as he’s
slashed imports, called in debts and sold or mortgaged assets at a deep
discount. As of July 31, the government had amassed US$ 2.8 billion for its
November payments, according to Caracas-based consultancy ECOANALITICA. Beyond
this year, however, director Asdrubal Oliveros was skeptical the government
could make good if it continues to alienate investors and regional leaders. “The government remains trapped in the same
dynamic,” he said. “It’s sustaining
an unsustainable system.” The noose keeps tightening. Last week, the Trump
administration barred trading of new debt issued by the Venezuelan government
and state oil company PDVSA, and blocked dealing in some existing bonds owned
by the country’s public sector. The ban is meant to keep Venezuelan government
entities from selling bonds into the secondary market. As Venezuela has become
economically isolated, inflation has spiked and the nation has been wracked by
shortages of everything from car parts to basic medicines. Infant mortality and
diseases like malaria have soared, while shaky services and unreliable food
programs have fueled violent unrest among those once loyal to Maduro. Maduro
has been vague about how he will improve Venezuela’s penury. He has hinted he
may be tapping his Russian counterpart, Vladimir Putin -- whom he referred to
as the world’s principal leader -- for even more financing, saying he would
visit Russia soon to discuss accords. Still, Moscow’s aid hasn’t been enough.
Venezuela’s ruling socialists have turned to printing money to maintain
spendthrift policies. The nation’s money supply increased almost 30% in July
alone, pushing prices even higher. Jose Manuel Puente, an economist at the
Institute of Advanced Studies in Administration in Caracas, said Venezuela
could be approaching hyperinflation. “It’s
impossible to have a coherent macroeconomic policy while internal politics are
in chaos,” he added. (Bloomberg: https://www.bloomberg.com/news/articles/2017-08-29/defying-logic-and-sanctions-venezuela-s-economy-slumps-alongIThe Trump administration’s ban on new Venezuelan debt could scare off so-called vulture investors by making it nearly impossible for the country to restructure its obligations. That means in the event of default -- which investors view as pretty much a certainty within the next five years -- the country and its creditors may struggle to come up with an agreement that would assign any value to its outstanding bonds. It also will make smaller debt swaps much more difficult to get done, possibly hastening the day of reckoning. Such restrictions may throw a wrench into the tried-and-true methods of so-called vulture investors, typically hedge funds that swoop into a country’s distressed debt shortly before or in the aftermath of a default with the goal of extracting value from bonds too toxic for most investors. These funds may now demand a much lower price if there’s no regime change that would prompt the U.S. to lift restrictions, largely because of the complications in negotiating a restructuring. Because a default with no hope of restructuring would expose the country to international lawsuits and seizures of its assets, it could increase the chances of a regime change in the aftermath of a missed payment. The same day the new sanctions were announced, Maduro asked holders of Venezuelan bonds to meet with Economy Minister Ramon Lobo this week to discuss the effects of the U.S. sanctions. U.S.-based holders of Venezuela bonds will be hurt the most by the penalties. The additional penalties strengthen Maduro’s argument that his nation is under attack from outside interests, likely pushing him toward lenders of last resort in China and Russia. The Treasury Department’s Office of Foreign Asset Control has traditionally interpreted sanctions broadly, so any attempt to circumvent their objective by clever structuring of a debt deal would be risky. The odds of a sovereign credit event over the next five years rose to 96% and Petroleos de Venezuela’s default probability hit 99%. (Bloomberg: https://www.bloomberg.com/news/articles/2017-08-28/white-house-sanctions-may-scare-off-venezuela-vulture-investors)
US sanctions to pile misery on moribund Venezuelan
economy
While
President Nicolas Maduro celebrates having calmed Venezuela’s streets after
months of deadly protests, the country’s imploding economy poses an ever more
severe threat. And the misery is likely to get even worse due to financial
sanctions imposed by the Trump administration in efforts to isolate Maduro for
taking the country down an increasingly authoritarian path. But while daylong
bread lines have eased, the newest scourge is the way galloping inflation has
reached even the basic staples whose prices were long controlled by rigid price
and currency restrictions. In recent months authorities have started allowing
companies to import everything from canned food to new cars and letting them
pass the dollar prices on to consumers at the black-market exchange rate, where
the greenback is worth 1,685 times more bolivars than it as at the strongest of
three official exchange rates. The result of the de-facto dollarization has
been a devil’s bargain: Shelves are fuller than Venezuela has seen for months,
but with prices that are out of reach for the poor Venezuelans. Inflation, which
has been running in the triple digits for more than two years, hit a record
last month and has risen to 650% over the past 12 months. That’s not to say
shortages have gone away. Most shelves contain a single variety of any given
product, much of it imported from China. Former Foreign Minister Delcy
Rodriguez, leader of the pro-government constitutional assembly whose creation
triggered the U.S. action, said Sunday that the “financial blockade” means Venezuela won’t be able to pay for
essential imports like food and medicine. The Trump administration denies it is
seeking to punish ordinary Venezuelans. The sanctions, enacted by executive
order last week, prohibit American banks from providing new money to the
government or state-run oil company PDVSA. They also bar PDVSA’s U.S.
subsidiary, CITGO, from sending dividends back to Venezuela. But they don’t
affect financing for most commercial trade, including the shipment of crude
oil, of which the U.S. is the OPEC nation’s biggest buyer. Still, by depriving
Maduro of badly needed hard currency, the sanctions make it more likely that
Venezuela will stop payment on its debt, or reduce what few goods it still
imports at the official rates. Worse, if Maduro doesn’t yield to Trump’s demand
to disband the constitutional assembly and call elections, even tougher
sanctions are likely to follow. To cope, Maduro says he will look to increase
commercial ties with China and Russia, although it’s not clear how generous its
allies will be, given Venezuela’s growing reputation as an international outlaw
in the mold of Cuba, Syria and North Korea. (AP: https://apnews.com/97841a2444b544fca6b4b3803f0e7d2c/US-sanctions-to-pile-misery-on-moribund-Venezuelan-economy)
Scraping the bottom of the barrel: Disposable reserves
down to US$ 700 million; Capriles calls emergency
International
reserves available for imports, debt service, contingencies and FOREX stabilization
were down to US$ 9.855 billion on August 22nd, the lowest level in
15 years. And the situation is even worse because the nation is now more
dependent on imports and has a heavier debt burden. Central Bank sources say
disposable reserves are only US$ 700 million because most reserves are being
held in gold bullion: This means even fewer imports and increased scarcity. The
is not much chance disposable reserves can increase in the short term because
PDVSA must pay US$ 2.900 billion in debt service during October and November.
The government is considering using gold bullion to leverage additional
resources. The ECOANALÍTICA think tank estimates gold reserves to be around US$
7.8 billion, some of which it has reexported to the Bank of England. The government
could sell some of this gold, or use it as collateral for loans, but this would
liquidate available options, or as ECOANALÍTICA describes it: “scraping the bottom of the barrel”.
Miranda state governor and opposition leader Henrique Capriles Radonski says “we are in an emergency. We are reaching a
crossroads where we either pay debt or get embargoed; and if they pay debt,
what will we do for imports?” More in Spanish: (Notiminuto: http://www.notiminuto.com/noticia/reservas-liquidas-caen-a-700-millones/#;
http://www.notiminuto.com/noticia/segun-capriles-venezuela-entre-el-defaul-o-importar-alimentos/)
Venezuelan
bonds drop sharply after sanctions
Venezuelan bonds dropped severely in secondary
markets after new financial sanctions were announced by the Trump
administration. PDVSA bonds were the hardest hit, dropping an average 4.3%. The
PDVSA 21 bond fell by 6.37%, Sovereign bonds also receded an average 4%, with
the Venezuela 2022 dropping 5.4%, The bonds were also hurt by an additional
drop in oil prices. More in Spanish: (El Nacional: http://www.el-nacional.com/noticias/economia/bonos-venezolanos-cayeron-mas-luego-sanciones-estados-unidos_201005)
Walls
close in on Venezuela with U.S. bond sanctions
Fresh
restrictions on trading Venezuelan debt have drawn the financial noose more
tightly around the neck of the struggling nation. The Trump administration on
Friday barred the purchase in U.S. markets of new securities issued by the
government and its state oil company and blocked dealing in some existing bonds
owned by the country’s public sector to further clamp down on President Nicolas
Maduro’s autocratic regime. Trump imposed sanctions designed to prevent Maduro
from carrying out a "fire sale"
of government assets. "We will not
stand by as Venezuela crumbles," White House press secretary Sarah
Sanders said Friday. "These measures
are carefully calibrated to deny the Maduro dictatorship a critical source of
financing to maintain its illegitimate rule, protect the United States
financial system from complicity in Venezuela's corruption and in the
impoverishment of the Venezuelan people, and allow for humanitarian assistance."
That move won Trump bipartisan praise on Capitol Hill. The U.S., which will
still allow the continued import of Venezuela’s lifeblood oil, acted in
response to Maduro’s moves to consolidate authority amid a crippling recession
and months of violent protests. The measures follow sanctions on top officials,
and decrease maneuvering room for a nation fast running out of money. Venezuela
has US$ 3.5 billion in bond payments coming due by November, which the
government will struggle to pay as reserves dwindle. The
Trump administration’s ban on new
Venezuelan debt could scare off so-called vulture investors by making it nearly
impossible for the country to restructure its obligations. That means in the
event of default -- which investors view as pretty much a certainty within the
next five years -- the country and its creditors may struggle to come up with
an agreement that would assign any value to its outstanding bonds. It also will
make smaller debt swaps much more difficult to get done, possibly hastening the
day of reckoning. Such restrictions may throw a wrench into the tried-and-true
methods of so-called vulture investors, typically hedge funds that swoop into a
country’s distressed debt shortly before or in the aftermath of a default with
the goal of extracting value from bonds too toxic for most investors. These
funds may now demand a much lower price if there’s no regime change that would
prompt the U.S. to lift restrictions, largely because of the complications in
negotiating a restructuring. (Reuters,
http://www.reuters.com/article/us-usa-venezuela-sanctions-idUSKCN1B5216; http://www.reuters.com/article/us-usa-venezuela-sanctions-market-idUSKCN1B52BD; Latin American Herald
Tribune, http://www.laht.com/article.asp?ArticleId=2442308&CategoryId=10718; Bloomberg, https://www.bloomberg.com/news/articles/2017-08-25/with-u-s-bond-sanctions-walls-close-in-on-venezuela-s-regime; https://www.bloomberg.com/gadfly/articles/2017-08-25/it-s-hard-to-quit-venezuela-s-debt-when-it-pays-so-well; https://www.bloomberg.com/news/articles/2017-08-28/white-house-sanctions-may-scare-off-venezuela-vulture-investors;)
....
and Goldman's hunger bonds dodge U.S. sanctions that bypass traders
The U.S. levied additional sanctions on Venezuela on Friday, but one of the nation’s largest
bondholders may be breathing a sigh of relief. Goldman Sachs Asset Management,
which bought US$ 2.8 billion of notes issued by the state oil company in May,
has faced sharp criticism for a deal that appeared to supply fresh funds to
President Nicolas Maduro. While observers thought the securities would be a
prime target for new penalties, they were exempt from the order. In fact, the
only bonds covered by the trading ban are notes due in 2036 that appear to
never have been sold outside Caracas. “That
was somewhat surprising,” said Francisco Rodriguez, the chief
economist at Torino Capital in New York. “I
guess the logic is that those bonds are already in the hands of bondholders, so
you wouldn’t be really blocking new financing.” (Bloomberg, https://www.bloomberg.com/news/articles/2017-08-25/goldman-s-hunger-bonds-dodge-u-s-sanctions-that-bypass-traders)
Hausmann says Venezuela needs US$ 100 billion to begin
recovery
Economist
Ricardo Hausmann, Venezuela’s former Planning Minister and currently teaching at
Harvard University’s Kennedy School of Government, estimates Venezuela will
require US$ 100 billion to begin recovery. Following the nation’’s
unprecedented collapse, with almost 40% reduction in GDP over the past 4 years
and an 88% reduction in purchasing power, and a severe health crisis: “To get the country moving we must restore
the ability to import, to a level of US$ 35 billion; and to do so we need to
restructure sovereign debt, there is no other way. Besides, we of course will
need specific international support. We
believe the documented debt is around US$ 118 billion, with another US$ 60
billion in unpaid commitments and delayed payments. All totaled, it is near US$
170 billion. And our exports have dropped by US$ 26 billion. We are the most
indebted nation in the world, as per the balance of debt and exports. We
believe we will need around US$ 100 billion, half because of liquidity shock
and the other half to restructure and reprogram our debt. Venezuela has unfortunately been devastated
and when the time to reconstruct comes it will be a terribly poor country”.
Hausmann says that thanks to sanctions such as those implemented by the Trump
administration US$ 500 million were located in accounts controlled by Vice
President Tareck El Aissami. Also, “the
latest sanction makes a lot of sense. Venezuela cannot now go to financial
markets and that gives the international community leverage it has not had.”
More in Spanish: (Clarin: https://www.clarin.com/mundo/venezuela-necesitara-100-000-millones-dolares-ponerse-marcha_0_rkvo6ryKZ.html)
Ramírez claims the US wants Venezuela to default,
faults regime’s FOREX policy
Venezuela’s
Ambassador to the UN, Rafael Ramírez, a former Vice President for Economic
Affairs, has said that US sanctions on Venezuela are seeking to bring about a
default, but he said sanctions are not the root of the crisis the nation has
been undergoing for the past 3 years, but that restrictions on letters of
credit will have an economic impact. He said the nation’s economy is afflicted
by “serious” structural exchange rate
problems. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/ramirez-eeuu-busca-que-venezuela-caiga-estado-default_667727)
Pro-regime legislator claims Venezuela is negotiating
bond sales to China
Juan Carlos
Alemán, a member of the pro-regime “Constitutional Assembly” has claimed that
the Maduro regime is negotiating with China for the resale of Venezuelan bonds,
and that there soon will be an announcement in this. More in Spanish: (El
Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/negocian-recompra-de-bonos-con-china.aspx#ixzz4r91jsi6A)
Cash scarcity now hits banks
Cash
shortages hurting Venezuela over the past few months have now left the banking
system with scarce tender available for clients, and in some cases with no cash
at all. Employees at six government held banks report that ATM operations are
now limited due to the cash shortage, and daily withdrawals at tellers are now
limited to 50,000 bolivars per person.
The banking superintendent’s office (SUDEBAN) is denying it has ordered
banks to cap withdrawals and cash transfers. More in Spanish: (Noticiero Venevisión,
http://www.noticierovenevision.net/noticias/economia/escasez-de-efectivo-deja-a-bancos-con-pocos-billetes-a-sus-usuarios;
http://www.noticierovenevision.net/noticias/economia/sudeban-desmintio-que-se-haya-limitado-los-montos-para-retirar-o-transferir-dinero;
El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/hasta-bs-50-000-es-el-limite-de-retiro-en-agencias.aspx#ixzz4r926ONp2;
http://www.elmundo.com.ve/noticias/economia/banca/sudeban-afirma-que-no-han-limitado-los-retiros-o-t.aspx;
El Universal, http://www.eluniversal.com/noticias/economia/sudeban-desmiente-limites-retiros-banca_667612)
Politics and International Affairs
Venezuelan lawmaker says hunger, not politics, will
drive Maduro from power
National
Assembly member Gaby Arellano has travelled to Bogotá to warn local lawmakers
about a looming humanitarian crisis across the border, as tens of thousands of
Venezuelans continue to head to Colombia every day looking for food and refuge.
She says the route to change will come through measures that “asphyxiate” the government,
diplomatically or economically. Arellano believes that President Nicolás Maduro
and the ruling United Socialist Party of Venezuela (PSUV) are on borrowed time.
“The dictatorship is incredibly weak,”
she said. “It’s only being propped up by
the military, which has lost its legitimacy, and the errors of the political
class — myself included — that opposes it. We had the dictatorship cornered,”
Arellano said of the recent demonstrations. In the middle of the bloodshed and
mass detentions, though, Maduro called for a National Constituent Assembly
(ANC) to draft a new constitution — superseding all other branches of
government. “It became clear that they
were going to impose the [ANC] whether they had one vote or 100, whether there
was one-person dead, or 1,000,” she says, adding that the opposition didn’t
plan for how to confront the assembly once it was functioning. Even as
Venezuela has quit seething with daily protests, Arellano says they’re lurking
just beneath the surface, waiting for a new outrage to fan them back to life.
She predicted the next “detonator”
might come when the administration realizes it will lose October’s regional
elections and postpones them or cancels them altogether. “Regardless of what the opposition does, or the dictatorship does, these
protests are a product of the people’s needs,” she explains, and adds: “The barbarity is at the end, the worst is at
the end, the most shocking is at the end.” (The Miami Herald: http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article169903307.html)Delcy Rodríguez, who heads the so-called National Constituent Assembly (ANC) says the group will begin rewriting Venezuela’s 1999 Constitution this week, focusing primarily on the justice and welfare systems. She announced that the group’s key operating rules have been approved, and that their work will be subject to approval by referendum, More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/anc-empezara-a-redactar-capitulos-de-la-nueva-constitucion-la-semana-proxima; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/politica/anc-empezara-el-lunes-a-redactar-una-nueva-carta-m.aspx; El Universal, http://www.eluniversal.com/noticias/politica/anc-aprobo-realizacion-del-referendum-aprobatorio-nueva-constitucion_667240)
The Maduro regime is considering banning messages that promote “hate” and “intolerance” on social media and messenger services, according to Delcy Rodriguez, the president of the country’s all-powerful constituent assembly. Rodriguez told reporters on Monday she is looking to limit messages that fuel bigotry and confrontation between Venezuelans in a so-called anti-hate law, which is currently being debated by the legislative super body, known as the “constituyente”. Rodriguez didn’t provide details on how the government plans to monitor social media and on penalties for offenders. The new assembly will meet again tomorrow. The anti-hate law comes as the government of President Nicolas Maduro has intensified a clampdown on the media, blocking the transmission of Colombian networks CARACOL and RCN last week. In a bid to consolidate power amid a crippling recession, Maduro installed the “consituyente” earlier this month with the mandate to rewrite the country’s constitution. The new legislative body has since bypassed the opposition-led congress and has been targeting the last strongholds of dissent in public institutions. Rodriguez singled out a growing practice among Venezuelan expats of publicly heckling top-ranking government officials on trips outside of the country. The practice, known locally as “escrache”, is filmed on smart phones and is wildly shared on services like Instagram, Twitter and WhatsApp. (Bloomberg: https://www.bloomberg.com/news/articles/2017-08-28/venezuela-eyes-censoring-social-media-in-wake-of-public-shaming)
Venezuela's exiled attorney general, Luisa Ortega, accused the government Monday of hiring contract killers to go after her and other justice officials denouncing alleged abuses committed under President Nicolas Maduro. "I have come specifically to lodge a complaint before the Costa Rican justice ministry and the Inter-American Commission on Human Rights," she told a news conference in Costa Rica's capital of San Jose alongside that country's chief prosecutor, Jorge Chavarria. "I have information that the persecution is continuing against me and that the government has contracted hitmen to end my life." Ortega, 59, is a fugitive from Venezuela. She fled with her husband on August 18, two weeks after a new loyalist assembly established by Maduro booted her from office. (AFP: https://www.yahoo.com/news/venezuela-ex-attorney-general-says-contract-killers-set-201550045.html)
Venezuela's
Mesa de Unidad (MUD) pro-democracy coalition spoke out Sunday in a statement in
which it set its sights on the decisions of President Donald Trump's government
over Venezuela. Following is the MUD statement:
1. Sanctions for violators of human rights and looting of public resources will always have our support, in the absence of impartial justice in Venezuela. 2. We will also support and solicit all the world's diplomatic support that contributes to the constitutional and democratic restoration in Venezuela. 3. We urge the entire international community to warn all citizens and companies in their respective countries that they should refrain from carrying out financial transactions or contracts of national interest with the Venezuelan government that are in violation of the National Constitution because they have not been approved by the only Constitutional body to authorize them as the National Assembly. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2442371&CategoryId=10717)
1. Sanctions for violators of human rights and looting of public resources will always have our support, in the absence of impartial justice in Venezuela. 2. We will also support and solicit all the world's diplomatic support that contributes to the constitutional and democratic restoration in Venezuela. 3. We urge the entire international community to warn all citizens and companies in their respective countries that they should refrain from carrying out financial transactions or contracts of national interest with the Venezuelan government that are in violation of the National Constitution because they have not been approved by the only Constitutional body to authorize them as the National Assembly. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2442371&CategoryId=10717)
On Friday, US President Donald Trump signed an executive order prohibiting Americans from dealing with new debt and equity issued by the Venezuelan government and by its state oil company PDVSA. Beijing says the sanctions won't work. Chinese Foreign Ministry spokeswoman Hua Chunying said on Monday at a daily news briefing that: “The experience of history shows that outside interference or unilateral sanctions will make the situation even more complicated and will not help resolve the actual problem”. China and Venezuela have extensive business links; oil being the largest, where the countries have a loan-for-oil deal. Venezuela owes China more than US$ 62 billion and is behind in the oil shipments. (RT: https://www.rt.com/business/401167-us-sanctions-against-venezuela-wont/; Reuters, http://www.reuters.com/article/us-usa-venezuela-sanctions-china-idUSKCN1B811D)
Russia accused President Trump's team of trying to set the stage for an invasion of Venezuela, in a condemnation of the latest U.S. sanctions on the Maduro dictatorship. "We are strongly against unilateral sanctions against sovereign states," Russian Foreign Ministry spokesperson Maria Zakharova said Monday. "We will carefully analyze the implications of the sanctions imposed by the United States, and their possible effect on the interests of Russia and Russian businesses. We can already say that they will not affect our willingness to expand and strengthen cooperation with the friendly nation of Venezuela and its people." That was just one salvo in an extended rebuke of U.S. policy, after Trump issued an executive order imposing new sanctions designed to cripple dictator Nicolas Maduro's regime. The Russians suggested that Trump is trying to destabilize Venezuela to provide a pretext for a U.S. invasion of the struggling country. "In these circumstances, the announced sectoral sanctions against Venezuela's financial and oil sectors are clearly aimed at further unbalancing the situation in the country, and exacerbating its economic problems," Zakharova said. Russia has now joined Cuba in defending Maduro and arguing that international powers should allow the new assembly to rewrite the constitution. (The Washington Examiner: http://www.washingtonexaminer.com/russia-us-setting-stage-for-venezuela-invasion/article/2632759#!)
Congressman Juan Guaidó, Chairman of the National Assembly’s Comptroller Committee, reports that the Venezuelan government has expended around US$ 22 billion on unfinished ODEBRECHT projects that are 11 years overdue. He says that these contracts point to extensive corruption with officials who cannot account for the funds. Guaidó adds that the Committee, along with the exiled Attorney General, are promoting investigations and legal action in Brazil. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/guaido-asegura-que-el-gobierno-gasto-22-mil-millones-de-dolares-en-contratos-de-odebrecht; El Nacional, http://www.el-nacional.com/noticias/politica/gobierno-malgasto-millardos-dolares-contratos-sobornos_200443)
One of the files that Venezuela’s exiled Attorney General Luisa Ortega has delivered to the CIA and INTERPOL, refers to a case of possible corruption in surcharges on a sale conducted in 2005 by Spain’s former Defense Minister José Bono to Venezuela’s Navy. The operation took place under the administration of former Spanish President José Luis Rodríguez Zapatero, who is now leading mediation efforts between the Maduro regime and the democratic opposition. The sale involved the construction of 4 coastguard vessels and 4 ocean patrols, for a total documented cost of 1.207 billion Euros. The Chavez regime in fact paid 1.246 billion euros, a 38.6 million overprice to an intermediary named RABAZVEN HOLDING, which took 3,5% of the total money paid. The shipping company commissioned was NAVANTIA, an 100% publicly owned company and it was Bono who directly conducted the negotiations, as a result of a deal struck by Zapatero and Venezuela’s deceased President Chávez. More in Spanish: (ES Diario: http://www.esdiario.com/amp/702199265/Un-documento-airea-un-posible-caso-de-corrupcion-de-Zapatero-y-Bono-en-Venezuela.html)
OAS Secretary General Luis Almagro reports that exiled Venezuelan Supreme Court justices will assist Attorney General Luisa Ortega Díaz, in investigating corruption charges made against President Nicolas Maduro and members of his regime. In 2004, the late President Chavez established an information sharing agreement with the United States designed to share “all cases and information in either country related to drug trafficking, money laundering, corruption, organized crime, illegal immigration, and all that which is inimical to the governments of both nations”, The flow of information was active up through 2007, when Luisa Ortega became Attorney General and no one advised her of the agreement. When she learned of it last year, information was gathered on government figures and business deals starting in 2004 and this is how the Attorney General’s office acquired all the information on ODEBRECHT, through the District Attorney and Federal Court in Brooklyn, N.Y. Information provided included accounts, front men, artificial schemes and cash deliveries for campaigns in each country. She was provided additional information in Brazil, and thus has ample information on Maduro’s imprisoned nephews and hundreds of other cases, including accounts with HSBC, and PDVSA and CITGO contractors. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/almagro-ortega-diaz-magistrados-venezolanos-investigaran-corrupcion_667244; http://www.eluniversal.com/noticias/politica/runrunes_667772)
Venezuela
held nationwide armed forces exercises on Saturday, calling on civilians to
join reserve units to defend against a possible attack after U.S. President
Donald Trump warned that a “military option” was on the table for the
crisis-hit country. “Against the
belligerent threats of the United States, all Venezuelans between the ages of
18 and 60 are required to contribute to the integral defense of the nation,”
said an announcement broadcast early on Saturday on state television. Maduro
used Trump’s threat to try to energize his political base, broadcasting images
of rifle-carrying civilians negotiating obstacle courses and learning
hand-to-hand combat. The government created the hashtag
#EsHoraDeDefenderLaPatria, which translates as “It’s Time To Defend The
Homeland,” to promote the exercises. (Reuters, http://www.reuters.com/article/us-venezuela-politics-idUSKCN1B60KA)
Colombia protests what it says was Venezuelan military
incursion over border
Colombia
has sent a letter of protest to Venezuela after it said security forces from
the socialist country crossed the border into the Colombian province of La
Guajira over the weekend. Sources told Reuters the Colombian Foreign Ministry
had given the letter to Venezuela’s embassy in Bogota, although the government
of Venezuelan President Nicolas Maduro denied on Sunday that the crossing into
Paraguachon, La Guajira, took place. The governor of La Guajira criticized the
crossing on Twitter over the weekend, saying the security forces came over the
border on Saturday night and stole money and cellphones from residents.
(Reuters: https://www.reuters.com/article/us-venezuela-colombia-idUSKCN1B82HZ)
Colombia sets up refugee camps due to the arrival of
thousands of Venezuelans
Juan
Carlos Restrepo, President Juan Manuel Santos’ National Security Advisor, has
been put in charge of organizing refugee camps for thousands of Venezuelans
fleeing the crisis here, and is seeking assistance from the government of
Turkey, due to their experience with Syrian refugees. More in Spanish: (El
Universal, http://www.eluniversal.com/noticias/politica/gobierno-colombiano-levanta-campos-refugiados-para-venezolanos_667687)
French President Macron says he is worried by
Venezuela 'dictatorship'
French
President Emmanuel Macron said on Tuesday he was worried by events in Venezuela
where he said that a “dictatorship”
was trying to survive. He said he was ready to work with regional actors to
prevent further escalations, including across the region. (Reuters: http://www.reuters.com/article/us-france-diplomacy-venezuela-idUSKCN1B915F?il=0)Let’s leave aside the near unanimous repudiation from U.S. allies in the region and the near-consensus view among analysts that Trump’s unfortunate suggestion of a military option was not only reckless but counterproductive. Instead, let’s focus on whether it makes sense for an over-extended military to use its finite resources to resolve Venezuela’s political turmoil. First, the Pentagon does not consider the Western Hemisphere a theater for planning and conducting conventional military operations. There are simply no military threats or competitors to the U.S. in a region considered to be a “zone of peace.” The 2017 Southern Command (SOUTHCOM) engagement statement highlights as part of its main efforts the need to counter threat networks, prepare for and respond to disasters and crises, build relationships to meet global challenges, and conduct detention operations—none of those involve or foresee direct military intervention in the region. Although it can certainly plan for one, SOUTHCOM is not in the business of planning military interventions or occupations in the hemisphere. There are only two goals for which the military instrument of power could be used: regime change or forcing a change in the behavior or policies of the Maduro government. If the goal is regime change, and assuming U.S. forces will not encounter much resistance, the Pentagon will have to plan for at least a force of 150,000 that can quickly overwhelm any conventional and irregular resistance during the intervention and subsequent occupation. The Maduro government is very likely to collapse almost immediately, leaving no government in place to assume the responsibilities of law and order. As a result, U.S. forces will have to remain until at least stability and a legitimate government is restored. Significant naval, air and ground forces and capabilities will have to be transferred from active theaters that are real threats to U.S. and global security, such as Syria, Iraq, North Korea and Afghanistan. If the political objective is to change the Venezuelan dictatorship’s behavior such that it will allow for elections and the restoration of the rule of law, it will at a minimum require a show of force that still requires the transfer of forces and equipment from much more vital conflict zones. Of course, when you go down this path, one must be ready to use force if the regime doesn’t change its behavior. Surgical air strikes are sure to create chaos, violence among competing political actors and a collapsed state, leaving the U.S. with no other option than to intervene. In short, from a strictly military standpoint, the last thing the U.S. armed forces want, already over-stretched and on high levels of alert in key conflict zones, is to have to plan and execute a military intervention and likely occupation of a country that does not represent a grave threat to U.S. security and that is likely to lead to strong anti-U.S. sentiment across a region where the US military has done much to build goodwill in the last decade or so. The last thing this administration needs is another empty threat. (By Frank O. Mora: The Global Americans: http://theglobalamericans.org/2017/08/military-option-venezuela-not-really-option-u-s-military/)
OP-ED: Who’s Saving Venezuela? The U.S.? The UN? The
Pope? No. But They Could. Here's How. The
list of international players that have wrung their hands about Maduro’s
tyranny, but failed to take effective action, is long and shameful. The U.S.
policy of incrementalism, gradually turning the screws on the dictatorship with
ever-broader unilateral sanctions is not enough. The EU needs to get on board
with the U.S. and Latin America, backing up its words with actions. Few doubt
the Maduro regime is heavily involved in drug trafficking, supporting terrorism,
and looting the country’s economy. The international community must treat the
regime as an active criminal enterprise, using criminal investigations to
pierce the veil of banking secrecy in places such as Andorra, Switzerland, and
the Cayman Islands to access the ill-gotten gains hidden there by Venezuelans
made wealthy by their corrupt dealings. Publicize who they are and how they
live in luxury abroad. Revoke their visas, freeze their assets and make it
clear that a comfortable exile will not be an option if democracy does not
return soon to Venezuela. That will drive a wedge among members of the regime
in a way that will hurt them, not the Venezuelan people. (By Antonio Mora.
The Daily Beast: http://www.thedailybeast.com/whos-saving-venezuela-the-us-the-un-the-pope-no-but-they-could-heres-how)
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.
