International Trade
Cargo that has arrived at Puerto Cabello:
- Over
776 tons of live cattle from Brazil for Frigorífico Industrial Los Andes,
Asociación Cooperativa Hoyo de la Puerta and Carnes El Pozo, C.A.
- Over 1,160 tons of milk and coffee for state
companies.
Logistics & Transport
Air ticket sales down 50% from 2013
Humberto Figuera, president of the Airlines
Association of Venezuela (ALAV), reports the number of airplane seats has
decreased by 50% in January-October 2014, compared to the same period last
year.
Figuera said air tickets sold in 2013 were 3,133,144, and only 1,450,000 tickets have been sold in January-October this year, "that is, half the number sold in 2013". (El Universal, http://www.eluniversal.com/economia/141120/airlines-association-air-ticket-sales-down-50-compared-to-2013)
Figuera said air tickets sold in 2013 were 3,133,144, and only 1,450,000 tickets have been sold in January-October this year, "that is, half the number sold in 2013". (El Universal, http://www.eluniversal.com/economia/141120/airlines-association-air-ticket-sales-down-50-compared-to-2013)
Oil &
Energy
Venezuela willing to cut oil output along with OPEC
Venezuela would be willing to cut its own oil
production if OPEC decides to limit output when it meets on Nov. 27, says Foreign
Minister Rafael Ramirez. Ramirez, who was until recently oil minister and
president of state oil company PDVSA, declined to say what specific proposal
Venezuela planned to take to the Organization of the Petroleum Exporting
Countries meeting in Vienna. Asked which OPEC members would support that
proposal, Ramirez said: "I hope all
of them." Chances have risen that OPEC will agree to reduce
production, according to oil industry analysts, citing delegates with the
producer group. (Reuters,
http://www.reuters.com/article/2014/11/20/us-venezuela-oil-idUSKCN0J424X20141120; El
Universal, http://www.eluniversal.com/economia/141120/venezuelas-pdvsa-ready-to-cut-oil-output-to-stop-oil-fall)
Paraguaná’s Refining Complex (CRP) is processing crude oil at nearly half its capacity
after several power outages, reports union leader Iván Freites on Wednesday.
The CRP is processing some 500,000 barrels per day (bpd), compared to its total
capacity of 955,000 bpd, with Amuay processing some 240,000 bpd and Cardón,
processing 255,000 bpd. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41944&idc=4)
Although PDVSA guaranteed fuel supplies to Aragua and Carabobo states on Tuesday, long lines have
persisted at the few gas stations selling gasoline. In Carabobo, public
transportation has stopped running in some areas as units have been unable to
get gasoline. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41936&idc=4)
Foreign Minister says Venezuela to continue promoting
PETROCARIBE
Foreign Minister Rafael
Ramírez says that despite the drop in oil prices Venezuela will continue to
meet oil supply agreements in the Caribbean and Central America through
PETROCARIBE. He reports 301 million barrels have been supplied over the past
nine years, billed at US$ 28 billion, and that Venezuela has received US$ 14
billion in payment, and US$ 3 billion in kind. More in Spanish: (PDVSA, http://www.pdvsa.com/;
El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/venezuela-ha-suministrado-301-millones-de-barriles.aspx;
AVN; http://www.avn.info.ve/contenido/unión-del-caribe-y-seguridad-energética-son-principal-reto-petrocaribe,
http://www.avn.info.ve/contenido/venezuela-garantiza-continuidad-del-intercambio-energético-petrocaribe,
http://www.avn.info.ve/contenido/rafael-ramírez-petrocaibe-aminoró-efectos-crisis-del-capitalismo-países-más-pobres;
El Nacional; http://www.el-nacional.com/)
Commodities
Economic Affairs VP and automotive industry representatives
monitor agreements
Economic Affairs Vice President General Rodolfo Marco
Torres has met with representatives of the automotive and spare parts sector to
monitor their agreements with the Government aimed at boosting production. GOODYEAR
resumed a plan to export tires made in Venezuela amid part of the agreements,
says, Marco Torres. He also noted that he held a meeting with representatives
of TOYOTA Motor Corporation, also for the follow-up of agreements. "Toyota reaffirms commitment to continue
manufacturing vehicles and expresses confidence in Venezuela," he said.
(AVN, http://www.avn.info.ve/contenido/vice-president-economy-automotive-representatives-monitor-agreements)
Economy
& Finance
Maduro raises taxes, reserves to help growth
President Nicolas
Maduro raised taxes on goods ranging from yachts to rum and increased
international reserves as the government responds to the lowest oil prices in
four years. Bonds rallied by the most in almost six years. The president said
that the 28 laws he signed using decree powers will restore growth in an
economy suffering the world’s fastest inflation and shortages of basic goods.
He ordered that a US$ 4 billion loan from China be added to international
reserves. “Maduro is at last recognizing
there’s a need for a fiscal adjustment and stronger reserves,” says Orlando
Ochoa, economics professor at Andres Bello Catholic University in Caracas. “The measures in themselves are a drop in the
ocean given the magnitude of the problem. Rather, this is a signal of bigger
steps to come.” (Bloomberg, http://www.bloomberg.com/news/2014-11-19/venezuela-s-maduro-raises-taxes-reserves-to-help-growth.html)
Venezuela’s US$ 4 billion reserves boost wins investor approval
Investors in
Venezuelan bonds are welcoming steps by President Nicolas Maduro to bolster
transparency in government accounts after concern mounted that the country is
running out of cash to service its debt. Venezuelan notes posted the biggest rally in three weeks yesterday after
Maduro ordered that US$ 4 billion from Chinese loans be added to foreign reserves, which had dwindled to an 11-year low. By transferring the Chinese funds it has increased
international reserves to US$ 23.550 billion, according to the Central Bank of
Venezuela (BCV). At US$ 21.4 billion,
including gold assets, the central bank’s holdings only covered about 60% of
debt due by the end of 2017. Venezuela’s borrowing costs are the highest in emerging
markets at 20.44%. While the loans are intended to pay for specific
projects and aren’t supposed to be used to pay debt, the transfer from
off-budget funds to central bank accounts may allay
concerns that the country is teetering toward default, according to Goldman
Sachs Group Inc. The move is a departure from the opacity that often surrounds
cash from Chinese loans, which mostly remains in off-budget funds excluded from
parliamentary oversight, Caracas-based researcher ODH Grupo Consultor said. Maduro
said Marco will travel to China and some OPEC and non-OPEC
countries in the next few days to fine-tune four financing modalities. (Bloomberg,
http://www.bloomberg.com/news/2014-11-20/venezuela-s-4-billion-boost-to-reserves-wins-investor-approval.html;
Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41931&idc=2;
http://www.veneconomy.com/site/index.asp?ids=44&idt=41942&idc=2;
and more in Spanish: Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/marco-torres-realizara-gira-para-pactar-financiami.aspx#ixzz3JVXJ1yhz; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/se-cumplio-traspaso-de-4-000-millones-al-bcv.aspx; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/marco-torres-realizara-gira-para-pactar-prestamos-.aspx; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/gobierno-culmino-traspaso-de--4-000-millones-a-las.aspx#ixzz3JhMk6jK7)
Regime seeks additional revenue through tax reform
The government has reformed five tax laws to increase
income and bridge the gap in public accounts.
President Nicolás Maduro, in the last days of the expiring enabling law, has made changes to the income tax law, the law on value added tax (VAT), the tax law on alcoholic beverages, the tax law on cigarettes and the organic tax code (COT). Following such move, Economy Vice-President and Finance Minister General Rodolfo Marco Torres said the reform of the legal framework would "optimize tax collection and provide additional income."
Such adjustments, he said, "will benefit all sectors. They will not affect the larger tax base. They are progressive tax reforms. Therefore, those who earn more will pay more." (El Universal, http://www.eluniversal.com/economia/141120/venezuelan-government-seeks-additional-revenue-through-tax-reform)
President Nicolás Maduro, in the last days of the expiring enabling law, has made changes to the income tax law, the law on value added tax (VAT), the tax law on alcoholic beverages, the tax law on cigarettes and the organic tax code (COT). Following such move, Economy Vice-President and Finance Minister General Rodolfo Marco Torres said the reform of the legal framework would "optimize tax collection and provide additional income."
Such adjustments, he said, "will benefit all sectors. They will not affect the larger tax base. They are progressive tax reforms. Therefore, those who earn more will pay more." (El Universal, http://www.eluniversal.com/economia/141120/venezuelan-government-seeks-additional-revenue-through-tax-reform)
Government debt estimated at 27-30% of GDP for 2015
The Economic Affairs and
Finance Ministry estimates that projected indebtedness for 2015 will bring
total government debt to around 27-30% of GDP, as reported by Beatriz Bolívar,
head of the National Public Credit Office to the National Assembly's Finance
Committee. Officials did not reveal current government debt, which stood at US$
127.7 billion during the first semester this year. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141121/calculan-que-deuda-del-gobierno-en-2015-sera-30-del-pib)
Analysts say that Venezuela meets all requirements for
hyperinflation
Economic analysts say Venezuela is sunk in a number of
economic distortions that will lead the nation into hyperinflation during 2015,
if necessary steps aren't taken, particularly in foreign exchange policy. They
indicate prices will continue to shoot up along with the parallel exchange
rate, and scarcity will worsen by March next due to the drop in inventories. They
say the newly enacted fiscal reform will cause demand to shrink further. More in
Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/venezuela-tiene-todas-las-condiciones-para-ir-a-un.aspx#ixzz3JhLsLZan;
El Universal, http://www.eluniversal.com/economia/141121/plantean-necesidad-de-una-revision-macroeconomica;
El Nacional; http://www.el-nacional.com/)
BOFA estimates unified exchange rate should be VEB
35/US$1, subsidy now around US$ 50 billion
Francisco Rodríguez, Chief Economist for the Andean
Region at Bank of America Merrill Lynch says a
Venezuela's unified exchange rate should be VEB 35/US$
1, which is the average of current operations. He says the cost to the
government of keeping the subsidized three tiered system is around US$ 50
billion yearly, and advises unifying rates and raising gasoline prices in order
to finance subsidies for the neediest. Rodriguez says that by delivering cheap
FOREX, Venezuela is "at this time
(Venezuela) is paying the greatest tax there is: inflation. Deteriorating
buying power is what supports the exchange rate subsidy." More in
Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/rodriguez--tipo-de-cambio-para-la-unificacion-podr.aspx#ixzz3JbTElYwQ, and El Nacional; http://www.el-nacional.com/)
The overhaul of the Income Act (ISLR), signed by Nicolás Maduro,
eliminates tax waivers for cooperatives and foundations. It also eliminates the
“inflation adjustment” used by
companies. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41934&idc=2)
Politics and
International Affairs
Obama administration would back sanctions against
Venezuela
The Obama administration would like to work with the
U.S. Congress to impose sanctions on Venezuela in response to a crackdown on
anti-government protests, President Barack Obama's deputy national security
adviser told lawmakers on Wednesday. Tony Blinken, who is Obama's choice to be
deputy secretary of state, said Washington had refrained from pushing for
sanctions in the past few months to allow diplomatic efforts by some Latin
American countries to secure the release of opposition leaders from jail and
nudge Caracas toward electoral reform. But those efforts have failed, Blinken
told the Senate Foreign Relations Committee at his nomination hearing. "We would not oppose moving forward with
additional sanctions," he said. (Reuters, http://www.reuters.com/article/2014/11/20/us-usa-venezuela-sanctions-idUSKCN0J400X20141120; El
Universal, http://www.eluniversal.com/nacional-y-politica/141120/us-govt-seeks-sanctions-on-venezuela-for-repression-during-protests)
Brazilian Foreign Affairs Minister slams visit by
Venezuela's Jaua
Brazilian Foreign Minister Luis Alberto Figueiredo
told his nation's Lower House’s Foreign Affairs Committee that Brazil
forcefully demanded an explanation from Venezuelan authorities since a visit by
Venezuelan Communes Minister Elías Jaua was never notified. Jaua used the visit
to sign an agreement with a Brazilian rural movement in Sao Paulo, an agreement
Brazil does not consider valid. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41943&idc=1;
El Universal, http://www.eluniversal.com/nacional-y-politica/141120/brazil-in-disagreement-with-venezuela-over-unreported-agreement;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2361545&CategoryId=10717)
Bruised Venezuelan opposition may make headway in 2015
National conditions may be slowly turning in favor of
the opposition. A sharp economic decline in the OPEC nation, made worse by
falling oil prices, means they could make significant gains at legislative
elections in 2015. A strong result would encourage the opposition to then seek
a recall referendum in 2016 to try and end Maduro's presidency half-way
through. It could also embolden factions within the ruling Socialist Party
disillusioned with Maduro. He is currently taking a battering in the polls. DATANALISIS,
perhaps the country's most respected pollster, said 80% of Venezuelans now view
the state of the nation negatively and disapprove of the socialist economic
model. Maduro's rating is off from about 50% when he came to power to 30% now,
according to the survey in September, while remarkably 68% think he will be out
by 2016. "If the elections were
today, the government couldn't win," DATANALISIS head Luis Vicente
Leon said, predicting the opposition would win with a 20-point margin. Though
the next elections for the 165-seat assembly have to be held by the end of
2015, and are traditionally in the last quarter, there is speculation the
government might bring them forward to reduce fallout from a deteriorating
economy. The opposition coalition's new executive secretary, Jesus Torrealba,
insists that change is coming. "The
glacier that was 'Chavismo' is starting to melt," he says. (Reuters, http://www.reuters.com/article/2014/11/20/us-venezuela-opposition-idUSKCN0J41E220141120)
Leopoldo López says he will not attend any more
hearings until a
decision is reached on a motion filed by his defense over Judge Susana Barreiros’ dismissal of the UN’s
resolution before the Appeals Court. López’ attorneys claim the Venezuelan
State has no option but to comply with the UN’s recommendation. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41935&idc=1)
Venezuelan appointed UN’s Economic Development Deputy
Secretary General
Lenni Montiel, is replacing Pakistani Shamshad Akhtar.
Montiel was Economic, Social and Development Affairs Director in the Executive
Office of the UN’s Secretary General. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41932&idc=2)
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.
