January 22, 2019

International Trade

Spain's tank, arms deals with Venezuela prop up Nicolas Maduro

Russia, China and Cuba are not the only ones propping up the leftist regime of President Nicolas Maduro in Venezuela. Spain, a NATO ally of the U.S. and important member of the European Union, has been selling military equipment to Caracas despite an EU arms embargo. Much of the international community, including 14 Latin American governments, joined the Trump administration in condemning Maduro’s inauguration for a second six-year term this month after calling his easy election win fraudulent. Spain’s response was muted. Analysts said Madrid’s reaction reflected a web of historical, commercial and political ties that it maintains with the rogue regime. (The Washington Times: https://www.washingtontimes.com/news/2019/jan/21/pedro-sanchez-venezuela-tank-deal-props-maduro/)

 

TORINO claims 27.6% increase in Venezuelan exports

TORINO Economics has updated its import and export data, showing a recovery in both fields during October. It shows sales at US$ 2.8 billion in exports, a 7% increase for October, and 27.6% more than last year, indicating that price increases are compensating dropping crude oil production. Exports were 58% lower over the first 10 months of 2018 than in 2012, mainly oil and derivates. More in Spanish: (El Universal; http://www.eluniversal.com/economia/30795/torino-revelo-un-aumento-en-276-en-las-exportaciones)

 

Oil & Energy

U.S. refiners scramble as White House eyes Venezuela sanctions

U.S. refiners are bidding up prices for scarce types of crude oil needed for their most sophisticated plants as the United States reconsiders harsher sanctions on Venezuela that could further reduce imports of the country’s oil. Trump administration officials in recent days met with U.S. oil company executives to lay out potential actions in response to the Jan. 10 inauguration of Venezuelan President Nicolas Maduro in an election it considered illegitimate. Among other steps, U.S. officials have recognized the opposition-run Venezuelan congress as the only legitimately elected authority. But the proposals that would most affect the energy industry involve banning U.S. exports of refined products to Venezuela or limiting oil imports - a move that, until now, the White House has not taken even after sanctioning individuals and barring access to U.S. banks. (Reuters, https://www.reuters.com/article/us-usa-refineries-venezuela/u-s-refiners-scramble-as-white-house-eyes-venezuela-sanctions-idUSKCN1PB2ZX)

 

Economy & Finance

Venezuela gold holdings in Bank of England soar on Deutsche deal

Venezuela’s gold holdings in the Bank of England have jumped after it closed out a gold swap deal with Deutsche Bank, according to two sources, as Britain remains reluctant to release gold held for the troubled nation. The government of Nicolas Maduro has since last year been seeking to repatriate about US$ 550 million in gold from the Bank of England on fears it could be caught up in international sanctions on the country. Its holdings at the bank more than doubled in December to 31 tons, or around US$ 1.3 billion, after Venezuela returned funds it had borrowed from Deutsche Bank AG through a financing arrangement that uses gold as collateral, known as a swap, one of the sources said. Under the deal struck with Deutsche Bank in 2015, Venezuela put up 17 tons of gold in exchange for a loan, according to one of the sources who asked not to be identified because they are not authorized to speak publicly about the issue. (Reuters, https://www.reuters.com/article/us-venezuela-gold/venezuela-gold-holdings-in-bank-of-england-soar-on-deutsche-deal-sources-idUSKCN1PF1Z8)

 

US$ 20 billion are needed to recover Venezuela’s industrial capacity

Juan Pablo Olalquiaga, President of Venezuela’s National Council of Industries (CONINDUSTRIA) presented a industrial recovery plan to National Assembly President Juan Guaidó, which calls for an investment of US$ 20 billion to recover the nation’s industrial capacity, including around US$ 12 billion through tax credits to match industry’s debt to foreign suppliers. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/olalquiaga-reactivar-la-industria-requiere-de-20-mil-millones; El Universal, http://www.eluniversal.com/politica/30958/presidente-de-conindustria-no-reconoce-a-nicolas-maduro)

 

Venezuela office of Norton Rose taken over by Maduro regime lawyers Dentons

Dentons, the largest law firm in the world, is absorbing Despacho de Abogados miembros de Dentons, S.C. -- formerly the Venezuela practice of Norton Rose Fulbright (and Macleod Dixon before that) as the law firm gears up to defend Venezuela against over US$ 65 billion in defaulted bondholder claims. Despacho de Abogados miembros de Dentons, S.C., is strong in the key practice areas of Energy and Natural Resources, Corporate, Labor and Employment, Litigation and Dispute Resolution, Banking and Finance, Tax and Public Law. It could provide robust synergies with Dentons’ strengths in each of these areas. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2473657&CategoryId=10717)

 

Politics and International Affairs

Country on brink as failed military coup sparks riots in Caracas

Venezuela plunged deeper into turmoil Monday as security forces put down a pre-dawn uprising by national guardsmen that triggered violent street protests, and the Maduro Supreme Court moved to undercut the opposition-controlled congress’ defiant new leadership.  Venezuela’s armed forces quelled a brief uprising at a military stockade, authorities said Monday, prompting protests in a poor Caracas enclave and heightening tensions ahead of antigovernment demonstrations planned for later this week. Twenty-seven members of Venezuela's National Guard have been arrested after they allegedly revolted against the government of President Nicolás Maduro, the defense ministry said. Videos posted on social media showed the officers calling for the removal from office of President Maduro. The men reportedly seized weapons from a National Guard command post in the Cotiza area of the capital, Caracas. The ministry of defense said a "small group" of National Guard members had stolen weapons from a security post in the Petare neighborhood of Caracas and taken four officers hostage before making their way to Cotiza in the early hours of Monday. A video sent to an opposition Twitter account shows a man in uniform saying he is acting "on behalf of the Venezuelan people" and encouraging Venezuelans to take to the streets in protest at the government. It is not clear whether they were overpowered or handed themselves in to the authorities. Anti-government protests erupted in the neighborhood where the alleged rebellion took place. Footage shows residents and security forces clashing in the area. The National Guard fired tear gas at residents. When government security forces surrounded the outpost, several dozen residents barricaded streets and set fire to a car and piles of rubbish as they chanted “don’t hand yourself in”. The residents complain about a lack of water and shout "we want Nicolás to go" as the security forces try to disperse them with tear gas. The new leader of the opposition-controlled National Assembly, Juan Guaidó, has called on those critical of the government to resume their protests once again and has called for anti-government marches to be held on Wednesday.  Ahead of the news of the rebellion, parliament chief Juan Guaido urged the military leaders to break ranks with Maduro. "We are not asking you to mount a coup. We are not asking you to shoot," Guaido said in an online video. "On the contrary, we are asking you not to shoot at us, but rather to defend together with us the right of our people to be heard." The parliament also offered amnesty to the members of the military and state officials if they abandoned Maduro. Guaido tweeted that Monday's events are a reflection "of the generalized feelings within the Armed Forces." "The National Assembly is committed to bring forward all the guarantees for those members of the Armed Forces who actively help restore the Constitution," Guaido tweeted. BBC: https://www.bbc.com/news/world-latin-america-46945690; DW: https://www.dw.com/en/venezuela-captures-troops-rebelling-in-caracas/a-47173723; The Wall Street Journal: https://www.wsj.com/articles/venezuela-says-it-foiled-military-uprising-11548105608; ABC News: https://abcnews.go.com/International/wireStory/signs-fraying-military-support-venezuela-president-60529693;  CNN: https://edition.cnn.com/2019/01/21/americas/venezuelan-government-military-uprising/index.html; Daily Express: https://www.express.co.uk/news/world/1076157/venezuela-news-military-coup-caracas-nicolas-maduro; VOA: https://www.voanews.com/a/venezuela-claims-to-foil-revolt-by-national-guardsmen-/4752762.html; The Star: https://www.thestar.com/news/world/americas/2019/01/21/venezuela-quells-soldiers-revolt-top-court-blasts-congress.html; Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuela-arrests-rogue-officers-after-military-revolt-in-caracas-idUSKCN1PF129; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2473656&CategoryId=10717; Bloomberg, https://www.bloomberg.com/news/articles/2019-01-21/venezuela-detains-rebel-guardsmen-sparking-protests-in-caracas)

 

On the anniversary of a coup, desperate Venezuelans demand change

If Venezuela’s opposition was looking for a provocative day to hold a protest, they couldn’t have done much better than Wednesday. Jan. 23 marks the 61st anniversary of the military uprising that toppled dictator Gen. Marcos Pérez Jiménez. And while history might not repeat itself this week, there are those who believe that Wednesday’s protests could be a turning point for the presidency of Nicolás Maduro. Since assuming the head of the National Assembly this month, 35-year-old opposition leader Juan Guaidó has been leading rallies nationwide to build support for Wednesday’s march. And the country has been responding. Juan Guaidó, the president of Venezuela’s National Assembly, has been holding rallies across the country to build support for the national march on Jan. 23. Maduro is intensely aware of the threat posed by the National Assembly and its new leader. On Jan. 13 Guaidó was detained on his way to a rally, only to be released — with handcuff welts still on his wrists — an hour later. And on Monday the Supreme Court, packed with Maduro cronies, ruled that Guaidó and the rest of the congressional leadership were occupying their positions illegally and that all the decisions congress had taken since Jan. 5 were null. Guaidó brushed off the ruling, but the decision could set the stage for a showdown. But the government will also have to tread carefully in dealing with the march: The street protests that broke out in support of the soldiers that rebelled on Monday should worry the government – and are likely to embolden those in the military who are unhappy. The Observatory for Social Conflict, which tracks protests, said there were at least 30 demonstrations Monday night in the capital alone, many in areas considered government strongholds. The National Assembly has also been trying to drive a wedge between Maduro and his commanders. Earlier this month, it passed a bill granting amnesty to military officials who help restore the constitutional order.  (The Miami Herald: https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article224892830.html)

 

Pence officially backs Venezuelan opposition, condemns President Maduro

US Vice President Mike Pence has issued a message to Venezuelans, condemning their “dictator” leader Nicolas Maduro and declaring official U.S. support for the country's legislature and its opposition leader, Juan Guaido. “On behalf of President Donald Trump and all the American people, let me express the unwavering support of the United States as you, the people of Venezuela, raise your voices in a call for freedom,” Pence said in a recorded video message. “Nicolas Maduro is a dictator with no legitimate claim to power. He has never won the presidency in a free and fair election and has maintained his grip on power by imprisoning anyone who dares to oppose him.” Maduro was sworn into another term as Venezuelan president this month, although his government is considered largely “illegitimate” by much of the international community, who deem the elections held last year to be a sham. Pence instead declared U.S backing for National Assembly leader Guaido, who he called the “last vestige of democracy.” “As you make your voices heard tomorrow, on behalf of the American people, we say to all the good people of Venezuela: estamos con ustedes,” Pence continued in the message, peppered with Spanish phrases. “We are with you, we stand with you, and we will stay with you until democracy is restored and you reclaim your birthright of libertad.” (Fox News: https://www.foxnews.com/world/pence-issues-official-backing-of-venezuelan-opposition-leader-condemns-maduro)

 

European Union representatives ask Maduro for new “free” elections in Venezuela

European Union chiefs of mission in Venezuela have called for “new and free elections” here, “in line with international standards”. They stated the EU’s position during a meeting with Nicolas Maduro in the presidential palace here last Friday, and with the leaders of the National Assembly, on Saturday. They stressed the EU’s position of “respect for democracy, the rule of law and basic freedoms”; and called for “recognition and respect for the authority and rights of the National Assembly, including immunity for its members”, as well as “freeing all political prisoners” and “urgently facing the pressing needs of the population”. The announcement was made through the office of the EU’s Foreign Affairs Commissioner Federica Mogherini. For his part, Maduro proposed to the European Union to establish a cooperation agenda aimed at consolidating relations effectively and strengthening political, economic and social ties; and urged the European authorities to maintain a position of greater respect and balance on the political, economic and social reality of Venezuela. (AVN, http://www.avn.info.ve/contenido/maduro-proposes-eu-set-agenda-political-and-economic-cooperation); and more in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/embajadores-de-ue-llaman-a-celebrar-nuevas-elecciones-libres-en-venezuela; El Universal, http://www.eluniversal.com/politica/30966/union-europea-reitera-llamado-a-elecciones-libres-en-venezuela)

 

National Assembly officially asks UN for humanitarian aid

Venezuela’s legislature has officially asked the United Nations for assistance in facing this nation’s health and food crisis. Congressman José Trujillo, who heads the National Assembly’s Social Development Committee made the announcement, blaming the communist system for the crisis. He added that they have also written to UN Human Rights High Commissioner Michelle Bachelet, asking her to come to Venezuela and witness the humanitarian crisis. More in Spanish: (El Universal, http://www.eluniversal.com/politica/30760/asamblea-nacional-solicito-oficialmente-a-onu-ayuda-humanitaria)

 

National Assembly names special representative to the OAS

Venezuela’s National Assembly has named its own representative to the Organization of American States (OAS) to coordinate efforts to reestablish democracy and constitutional rule with the international community. It named an experienced former legislator and constitutional lawyer, Gustavo Tarre, as its representative to the Hemispheric organization. The legislature also annulled Nicolás Maduro’s decision to withdraw from the OAS. More in Spanish: (El Nuevo Herald: https://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article224906045.html)

 

Curacao seeks aid from the Netherlands in dealing with Venezuelan migration

The government of Curacao has asked for help from The Netherlands in dealing with the impact of migrants who arrive by sea from Venezuela. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/curazao-pide-ayuda-a-los-paises-bajos-por-la-inmigracion-venezolana)

 

Ecuador to tighten controls on Venezuelan immigrants after murder

Ecuador is setting up new units to check Venezuelan immigrants’ legal status and may tighten entry requirements after a Venezuelan man murdered his pregnant Ecuadorian girlfriend, President Lenin Moreno said on Sunday. The killing in the northern city of Ibarra is the first reported murder perpetrated by a Venezuelan immigrant in Ecuador since hundreds of thousands have arrived there after fleeing an economic crisis in Venezuela. “I have ordered the immediate setting up of units to control Venezuelan immigrants’ legal status in the streets, in the workplace, and at the border,” Moreno said on Twitter. The government, he added, may create a new “special permit” for Venezuelans to enter the country. He did not give further details about the units or how they will operate. The Venezuelan man held his victim hostage on a busy street for about an hour on Saturday evening before stabbing her to death. He was then arrested by police. “Without generalizing, but with a firm hand, today we must differentiate between Venezuelans who are fleeing Maduro’s government and others who take advantage of the situation to commit crimes,” Vice President Otto Sonnenholzner said, referring to Venezuela’s socialist President Nicolas Maduro. The Maduro regime has demanded that Ecuador’s government “respect the human rights of Venezuelans living in this country and that stop the incitement to xenophobia and persecution”. (Reuters, https://www.reuters.com/article/us-ecuador-venezuela/ecuador-to-tighten-controls-on-venezuelan-immigrants-after-murder-idUSKCN1PE0X8; https://www.reuters.com/article/us-ecuador-venezuela/ecuador-to-demand-venezuelan-migrants-criminal-records-after-murder-idUSKCN1PF20E; AVN, http://www.avn.info.ve/contenido/venezuela-demands-government-ecuador-cease-incitement-xenophobia)

 

OP-ED: Could the Socialists United of Venezuela finally be falling apart?

Juan Guaido’ s National Assembly is the equivalent of the U.S. Congress. Only that body of government was stripped of its powers by PSUV roughly two years ago to form a so-called Constituent Assembly of leftist PSUV yes men and yes women who continue to run Venezuela into the ground. Recent events provide further evidence of internal frictions within the armed forces and of the fragility of the PSUV government. There is an increasing possibility of regime change, although who will replace Maduro remains unclear. It could be another member of PSUV, trying to preserve the legacy of the party created by the late Hugo Chavez. There’s been a qualitative change in the antigovernment protests. The protests are not being led by some middle-class bourgeoisie with summer homes on Margarita Island and in Miami. It’s happening in the low-income neighborhoods of Caracas where most people survive on government jobs—like those in the security forces—or on some form of social welfare program. The poor are PSUV’s base. They are starting to see the light. Meanwhile, serious crackdowns on opposition leaders leading to jail time, or the police busting heads at tomorrow’s scheduled protest, will only embolden Washington against PSUV. His vocal opposition against Maduro has led to more participation at town halls and other events across the country, which suggests tomorrow’s protest could be the biggest one since the anti-Maduro protests from September 2016 to April 2017. (FORBES: https://www.forbes.com/sites/kenrapoza/2019/01/22/could-the-socialists-united-of-venezuela-finally-be-falling-apart/#7c98c343389d)

 

OP-ED: Amid mounting coup threats in Venezuela, Maduro begs Trump for dialog

In the face of threats from sections of the military, upon which his government depends, sanctions and ever-escalating pressure from Washington and its Latin American allies, on the one hand, and a threat of social upheaval from the Venezuela working class, on the other, President Maduro has directed a call to Donald Trump to reach some form of accommodation. Maduro used an interview with a Fox News reporter to deliver the message, which appealed to Trump for a “frank, direct, face-to-face dialog.” Such a meeting, he insisted, would show Trump that “we are people with whom you can talk, negotiate, understand and agree.” This pathetic plea only underscores the character of the Maduro government, which for all its “Bolivarian” and “21st Century Socialist” rhetoric is a capitalist regime that ruthlessly defends private property and the profit interests of the financiers, corrupt government officials and military commanders that are its most important constituencies. The only way out of Venezuela’s desperate crisis lies in the independent mobilization of the Venezuelan working class in opposition to the government, the ruling PSUV and their trade union stooges, as well as to the right-wing opposition, whose rise to power through a military coup would signal a bloodbath against the country’s workers and impoverished masses. (World Socialist Web Site: https://www.wsws.org/en/articles/2019/01/22/vene-j22.html)

 

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.