May 28, 2019

International Trade

Shippers raise rates for cargo from U.S. to Venezuela: documents, sources

Two major shipping lines this month have raised their rates for transporting goods from the United States to Venezuela, as U.S. sanctions limit transit between the two nations. Washington on May 15 banned direct flights between the United States and Venezuela, citing safety concerns, as part of a broad package of sanctions meant to pressure Nicolas Maduro into resigning as president of the crisis-stricken country. Citizens and social service organizations often depend on air and sea shipments for basic food and medicine in the hyperinflationary nation where a monthly minimum-wage salary barely pays for a single meal. Shipping lines Hamburg Sud and King Ocean Services have added a surcharge of US$ 1,200 per container of cargo that leaves the United States for Venezuela after May 15. That service has in recent months been costing between US$ 3,000 and US$ 5,000, depending on the cargo. (Reuters, https://www.reuters.com/article/us-venezuela-politics-shipping/shippers-raise-rates-for-cargo-from-u-s-to-venezuela-documents-sources-idUSKCN1SX1TD)

 

Maduro claims sabotage prevents ships with gasoline, food from reaching Venezuela

Vessels carrying gasoline and food to the crisis-stricken Venezuela are being prevented from reaching the country's coast because of sabotage attacks, Nicolas Maduro says, adding that Caracas was trying to find a solution to the issue. "Last week, sabotage was committed against ten tankers [with gasoline] to prevent them from reaching the Venezuelan coast. In any case, this problem is being dealt with and we are stabilizing the situation," he said late on Monday as broadcast on Twitter; and added that ships carrying food for Venezuelan citizens have were facing similar challenges, without specifying where the vessels were coming from, and who could have been responsible for the sabotage. (SPUTNIK: https://sputniknews.com/latam/201905281075400834-maduro-sabotage-gasoline/)

 

Maduro regime receives 4th batch of humanitarian aid from China

The Maduro regime received 68 tons of humanitarian aid offered by China on Monday, the 4th such batch with a shipment of medicine and other medical items. The Maduro regime’s Health Minister Carlos Alvarado and Chinese Ambassador to Venezuela Li Baorong jointly hosted the handover ceremony of the shipment at the international airport in Caracas. "This fourth shipment consists of 68 tons of medicine brought as part of this technical humanitarian aid: antihypertensives, antibiotics and medication for cardiovascular ailments. We are also receiving analgesics," Alvarado said. The medicine "is going to be distributed immediately through the national public health network," he added. For his part, Li said "We are convinced this is going to help the Venezuelan people facing the serious harm caused by the foreign sanctions". (XINHUANET: http://www.xinhuanet.com/english/2019-05/28/c_138096906.htm)

 

Maduro announces investment in HUAWEI

Leftist incumbent Nicolas Maduro announced on Thursday an immediate investment in the Chinese telecommunications firm HUAWEI, which has been accused of espionage by the United States. The investment seeks to help Venezuela in installing a 4G mobile network technology, which currently functions only sporadically and in the major cities here. “I have ordered an immediate investment with our Chinese brothers, Chinese technology, that of HUAWEI, of ZTE, and of all the Chinese and Russian companies, so that we can enhance the capacity of the whole telecommunications system and make 4G a reality,” Maduro said at a military event. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479016&CategoryId=10717)

 

Oil & Energy

PDVSA tankers to be detained for lack of payment

Three PDVSA tankers that are late with payments to German operator Bernhard Schulte Shipmanagement (BSM) are being detained, as BSM gives up on waiting for payments while conducting business as usual with floundering state-run PDVSA. BSM operates almost half of PDVSA’s fleet of tankers and has made a move to “arrest” three tankers due to the outstanding debt PDVSA has amassed. The three tankers BSM arrested are the ARITA in Singapore, and the PARNASO and the RIO ARAUCA in Portugal. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/PDVSA-Tankers-To-Be-Detained-For-Lack-Of-Payment.html)

 

Aruba to form committee to decide fate of idled refinery

The government of Aruba said on Monday it will form an advisory committee to decide the future of a 209,000-barrel-per-day refinery that remains idled amid sanctions on operator CITGO Petroleum’s parent company, Petroleos de Venezuela (PDVSA). Prime Minister Evelyn Wever-Croes said there are three possible scenarios for the Aruba refinery: to continue working with CITGO on an overhaul, to negotiate a CITGO contract termination and continue with the plant, or to use the facility for a different activity. The committee should issue recommendations within two months of its formation, Wever-Croes said in a publicly broadcast message. Its members have yet to be announced. “Very possibly, we will not continue (working) with CITGO, but that is being evaluated, how to leave the contract without problems,” she said. (Reuters, https://www.reuters.com/article/us-refinery-aruba/aruba-to-form-committee-to-decide-fate-of-idled-refinery-prime-minister-idUSKCN1SX1NA)

 

Northern Brazil power line to avoid impact on tribe

The builders of a new power transmission line to the northern Brazilian state of Roraima have pledged to deploy 200 inspectors to reduce the environmental impact on an indigenous reservation where they will erect 250 pylons. It said they also had committed to keeping secret any geological information on the discovery of mineral resources to avoid drawing illegal mining interests that have long set their sights on the land of the Waimiri Atroari tribe. State-run utility Centrais Elétricas Brasileiras SA and private energy sector holding company Alupar Investimentos SA will build the 720-km (450-mile) line from Manaus to Roraima’s capital Boa Vista, connecting the state to the national grid. The companies won the contract in 2011 but the project, which became a priority after Venezuela suspended electricity supplies to Roraima last year, was delayed by environmental licensing and concerns over laying the line over 122 km (76 miles) of tribal lands. (Reuters, https://www.reuters.com/article/us-brazil-energy-roraima/northern-brazil-power-line-to-avoid-impact-on-tribe-document-idUSKCN1SX1X8)

 

Economy & Finance

Venezuela's economic crisis is now so bad that criminals can't afford to buy bullets

Venezuela's crippling economic spiral is having a negative impact on an unlikely group in society: criminals, who are struggling to afford bullets, and unable to find things to steal as the country's wealth declines rapidly. While bullets are widely available on the black market, many muggers cannot afford the US $1 price tag anymore, a criminal known as "Dog" told the news organization. The average Venezuelan only earns US$ 6.50 a month, and skyrocketing hyperinflation renders cash more worthless every day. Violent deaths have decreased since the Venezuelan economy started spiraling. In 2015, the South American country had a homicide rate of 90 people per 100,000 thousand inhabitants, according to the Venezuelan Observatory for Violence. That rate went down by nearly 10% last year— though Venezuela remains one of the most violent countries in the world. The non-profit, which aggregates the data from morgues and media reports, partly attributes this decrease to the reduction in muggings — because there is nothing to steal. As many Venezuelans struggle to pay for basics like food, medicine, or clothes, there are fewer cars or luxury items that criminals can take from them. And most people barely use cash anymore because of soaring inflation. Bank vaults are also mostly empty, the observatory's report said. Even if criminals were to steal cash from there, they would not be able to transport the mounds of bills it would take to get a substantial amount of money. Another reason violence is decreasing, according to the non-profit, is that many Venezuelans are leaving the crisis-stricken country. More than three million people have emigrated. Most of these migrants and refugees are young men — gangs' key recruitment demographic. Robert Briceño, the observatory's director, said the economic crisis is affecting every part of society. "These days, nobody is doing well — not honest citizens who produce wealth or the criminals who prey on them". But as a result of the chaos, crime has not so much disappeared as simply morphed in form. While assaults are down, reports of theft and pilfering of everything from copper telephone wires to livestock are surging. Meanwhile, drug trafficking and illegal gold mining have become default activities for organized crime. (NBC News: https://www.nbcnews.com/news/latino/venezuela-criminals-feel-pinch-economic-crisis-n1010696; INSIDER: https://www.insider.com/venezuela-crisis-so-bad-criminals-cannot-afford-bullets-2019-5)

 

Politics and International Affairs

Guaidó plays down prospects for Oslo mediation

Venezuelan interim president Juan Guaidó on Sunday played down the prospects for success at a new round of mediation with the government to be hosted by Norway next week, saying protests would continue until Nicolas Maduro resigned. Norway said on Saturday that representatives of Venezuela’s government and opposition will return to Oslo next week following an initial round of preliminary talks about how to address a long-running political crisis. “This is not negotiation. This is not dialogue,” Guaidó told reporters after a rally in the western Venezuelan city of Barquisimeto, adding that his team was simply responding to an offer from the Norwegian government to mediate. Guaidó reiterated that any solution to Venezuela’s crisis required Maduro to stand down, allowing a transitional government to steer the nation to fresh presidential elections. Nicolas Maduro said on Saturday his delegation was preparing to travel to Norway for a fresh round of negotiations with the opposition. The delegation which will represent the regime in the meetings in Norway is headed by Communications Minister Jorge Rodriguez, accompanied by Foreign Affairs Minister Jorge Arreaza and Hector Rodriguez, the governor of Miranda state, Maduro said. Norway said on Saturday that representatives of Venezuela’s government and opposition will return to Oslo next week following an initial round of preliminary talks about how to address the country’s political crisis.

“We announce that the representatives of the main political actors in Venezuela have decided to return to Oslo next week to continue a process facilitated by Norway,” the Scandinavian country’s foreign ministry said in a statement. “We reiterate our commitment to continue supporting the search for an agreed-upon solution between the parties in Venezuela,” it said.  (Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuelas-opposition-leader-Guaidó-plays-down-prospects-for-oslo-mediation-idUSKCN1SW0ZH; https://www.reuters.com/article/us-venezuela-politics/norway-says-venezuela-government-opposition-to-hold-new-round-of-talks-idUSKCN1SV0OT; https://www.reuters.com/article/us-venezuela-politics-norway/venezuela-government-opposition-will-return-to-norway-for-talks-oslo-says-idUSKCN1SV0P7Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479087&CategoryId=10717)

 

Russia says it is ready to play role in Venezuela crisis talks in Oslo

Russia’s Ministry of Foreign Affairs said on Monday that Moscow was ready to play a role in talks between the Venezuelan government and opposition in Oslo if the participants felt it was useful. The Russian foreign ministry said in a statement it welcomed the fact that the talks were continuing but warned against any external powers trying to foist ultimatums on the Venezuelan leadership. (Reuters, https://www.reuters.com/article/us-venezuela-politics-russia/russia-says-it-is-ready-to-play-role-in-venezuela-crisis-talks-in-oslo-idUSKCN1SX0RB)

 

Federica Mogherini appoints Enrique Iglesias as Special Adviser for Venezuela

In line with the European Union's firm commitment to contribute to a peaceful and democratic solution to the Venezuelan crisis and as a follow-up to discussions held in the context of the International Contact Group, High Representative/Vice-President Federica Mogherini decided today to appoint Enrique Iglesias as her Special Adviser for Venezuela. The appointment of Mr. Iglesias - a Spanish-Uruguayan economist who is a former secretary-general of the Ibero-American General Secretariat and was also President of the Inter-American Development Bank as well as Foreign Minister of Uruguay - will enable a more sustained and reinforced political and diplomatic engagement on the situation in Venezuela. Mr. Iglesias will support the work of the EU and of the ICG to help promote a peaceful, democratic solution to the crisis in Venezuela, through free and fair elections. (European External Action Service: https://eeas.europa.eu/headquarters/headquarters-Homepage/63282/federica-mogherini-appoints-enrique-iglesias-special-adviser-venezuela_en)

 

US balks as Maduro representative heads up UN-backed disarmament body

The U.S. ambassador to the United Nations' main disarmament body walked out of its session on Tuesday to protest that Venezuela had taken the chair. The move by Robert Wood, who insisted "a rogue state" was taking over, came shortly after the Maduro regime’s Ambassador Jorge Valero began hosting a public plenary session of the Conference on Disarmament. Wood said that nothing that comes out of the current session will be legitimate and said the United States will boycott Venezuela's four-week presidency starting this week. He said a dozen members of the so-called Lima Group of countries from Latin America also decided not to take part. The walkout and boycott appeared mostly to be political theatrics, however. Wood acknowledged that the conference "isn't doing very much right now." Venezuela's turn as the conference's president follows a regular rotation by alphabetical order. (FOX News: https://www.foxnews.com/us/us-balks-as-venezuela-heads-up-un-backed-disarmament-body)

 

Leopoldo López Sr. elected to European Parliament

Leopoldo López Gil, father of Venezuelan leader and political prisoner Leopoldo López, has been elected to the European Parliament elections on May 26th. López Gil, who was nominated by the conservative People’s Party (PP) has said that he hopes “to speak faithfully not only for the Kingdom of Spain, but also for Latin American countries and especially Venezuela before the European Parliament.” López Gil received the Spanish nationality in December 2015, when former PP leader Mariano Rajoy was head of government. More in Spanish: (El Universal; http://www.eluniversal.com/politica/41132/leopoldo-lopez-gil-fue-electo-al-parlamento-europeo-por-el-pp-espanol)

 

Venezuelan Ambassador publishes video of trash left by communists in Washington embassy

Venezuelan Ambassador to the United States Carlos Vecchio published a video Monday showing the extensive state of disrepair in which a small group of communists left the U.S. embassy after illegally occupying it for days. Vecchio, appointed by legitimate Venezuelan President Juan Guaidó, published a video on Twitter that showed the building full of trash, loose cables, unwashed dishes, and in a state of general disrepair. This month, local police evicted a group of communist protesters identified as Code Pink agitators working in tandem with the Maduro regime to occupy the building after Maduro’s representatives returned to Caracas. The protesters attracted dozens of Venezuelans who surrounded the building demanding the return of their embassy to their people. Vecchio, whom Guaidó appointed in January following his presidential inauguration by the National Assembly, said the state of the building reflects what the Maduro regime has done to Venezuela as it experiences the worst economic and humanitarian crisis in the country’s history. Now that the embassy has returned to the hands of the Venezuelan government, Vecchio and his team will have the opportunity to use the building as the diplomatic headquarters for relations between the U.S. and Guaidó’s administration. (Breitbart: https://www.breitbart.com/national-security/2019/05/27/venezuelan-ambassador-publishes-video-piles-trash-communists-left-u-s-embassy/)

 

Venezuela called to appear in Canberra court over missed embassy rent payments

The Maduro regime has been taken to court by a Canberra family who alleges the country owes them thousands in unpaid rent money. The regime sought to have the claim dismissed but failed. The Rosa family claimed the South American nation had missed more than $50,000 in rent payments for two properties in O'Malley it had previously used as an embassy. In documents seeking a hearing in the ACT Civil and Administrative Appeals Tribunal, the family claimed that from 2017 the republic began to fall behind in payments, and eventually vacated under contentious circumstances. "I do appreciate that the respondent may be placed in a difficult, and perhaps even diplomatically embarrassing, situation by being required to respond to proceedings in this tribunal," senior tribunal member H Robinson said in his decision. "That alone is not a basis upon which this tribunal can or should dismiss these proceedings." Mr. Robinson conceded that, even if a ruling could be made against the Republic of Venezuela, it was questionable whether that could be enforced.  (ABC: https://www.abc.net.au/news/2019-05-28/venezuela-called-to-appear-in-canberra-court-over-missed-rent/11151010)

 

Maduro approves machine gun manufacture plan despite firearm ban

Socialist dictator Nicolas Maduro approved a plan on Thursday to manufacture machine guns across Venezuela despite a nationwide ban on the use of firearms. In a video streamed by Venezuelan state propaganda outlet VTV, Maduro announced the approval of funds for a new line of machine guns to be produced in Venezuela. As Maduro openly admitted, the use of such weapons would only be for the military and state security services, allowing them to step up their repression and control of the country’s population to create a Cuba-style communist dictatorship. (Breitbart: https://www.breitbart.com/national-security/2019/05/24/venezuela-maduro-approves-machine-gun-manufacture-plan-despite-firearm-ban/)

 

29 die in disturbance at Venezuelan jail

Twenty-nine prisoners were killed, and 19 police wounded on Friday in a disturbance at a pre-trial detention facility in the central state of Portuguesa, a source in the Venezuelan Attorney General’s Office told EFE.
The events unfolded in a police lockup in the town of Acarigua. “There was an attempted escape and a fight broke out among gangs,” the state’s public safety secretary, Oscar Valero, told the media. “With police intervention to prevent the escape, well, there were 29 deaths.” Prisoners detonated three grenades, resulting in injuries to 19 police officers, Valero said. The lockup in Acarigua holds more than 350 people awaiting trial, he said.
The Venezuelan Prisons Observatory (OVP), an independent advocacy group, said blame for the deaths lay with the Ministry of Penitentiary Services, created eight years ago to address chronic overcrowding, corruption and violence in the nation’s 30 prisons. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479058&CategoryId=10717)

 

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.