April 05, 2016

International Trade

Maduro to contact Panamanian counterpart over demand against fishing boats

President Nicolas Maduro says he will get in touch with his Panamanian counterpart, Juan Carlos Valera, to compromise and settle some claims against on Venezuelan fishing boats reported by the Venezuelan Association of Tuna Shipbuilders (AVATUN). Maduro’s remarks came after Lilo Mariscalchi, the AVATUN CEO, complained about “the legal insecurity of ships in Panama city.” Maniscalchi said: “a sort of mafia has been set up, which, in addition to a number of lawyers and the Maritime Court, prepare complaints against our vessels, and with a simple collateral of US$ 3,000 they file a complaint for one or two million dollars. They impose bails and, in the event of not honoring them, the vessel is attached and the fishing works are lost, work and money are lost,” (El Universal, http://www.eluniversal.com/noticias/daily-news/maduro-contact-panamanian-counterpart-over-demand-against-fishing-boats_247635)

 

Export red tape is down 60% this year, according to Foreign Trade and Investment Minister Jesús Farías, who says that in the next few days a new phase of the Single Foreign Trade Window will be launched. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Tramites-exportaciones-disminuyeron-ano_0_823117781.html)

 

Oil & Energy

Venezuela oil price falls back below US$ 30

The price Venezuela receives for its mix of medium and heavy oil fell 6.7% this week -- back below US$ 30 a barrel after 2 weeks above -- as prices around the world slipped on oversupplied markets and Saudi Arabian comments that it would not join a production freeze if Iran did not also freeze production. According to figures released by the Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending April 1 was US$ 29.75, down US$ 2.12 from the previous week's US$ 31.87. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409130&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-oil-price-down-usd-212_247684)

 

Venezuela to cut energy output if key dam falls to critical low

Venezuela will reduce power generation if the key Guri dam, which supplies around half of the blackout-hit country's electricity, falls below a minimum level that is fast approaching, an official said on Friday. A severe drought, coupled with what critics say is a lack of investment and maintenance in energy infrastructure, has hit the nation which depends on hydropower for 60% of its electricity generation. The massive Guri dam in Venezuela's central jungle is now at just 244 meters - its lowest level ever and just 4 meters from a critical point where water cannot feed its turbines. "Without a doubt if the level reaches 240 meters we will have to apply certain operative measures, which authorities will announce in due time," Miguel Angel Romero, the head of generation at state-run energy firm CORPOELEC, told Reuters in an interview. (Reuters, http://www.reuters.com/article/us-venezuela-energy-idUSKCN0WY5TK)

 

PDVSA says supports Venezuela soccer team, denies lack of funding

State-run oil company PDVSA says its support for the national soccer team had never waned, rebuffing comment from the country's soccer federation (FVF) that it hadn't paid any of the agreed sponsoring money last year. "PDVSA has never stopped honoring its obligations with the Venezuela Football Federation," said the company in a statement, without offering specifics. The federation has said that the lack of funding from PDVSA, its chief sponsor, has hurt its ability to train and travel and made it impossible to attract a world-class international coach. (Reuters, http://www.reuters.com/article/venezuela-oil-soccer-idUSL2N1750DP)

 

Commodities

 

Poll shows 87% of all Venezuelans are on a “survival” diet

A poll by the nation’s three major universities shows 87% of all Venezuelans do not have income enough to purchase necessary food, and most of their “survival” diet is based on carbohydrates. The poll shows that the items most consume are corn flour, rice, pasta, bread, margarine and mayonnaise, while at lower income levels most say they eat mortadella rather than beef. The study shows that 40% of basic foods consumed here are flours, rice and grease, and 12.1% eat only twice a day. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Encuesta-indico-venezolanos-dieta-supervivencia_0_821917960.html)

 

POLAR bottle cap plant halts due to lack of tin foil

Johnny Magdaleno, secretary general of the METALGRAFICA plant union, reports that POLAR’s production of bottle caps has once more halted due to lack of tin plate, which causes a deficit of 30 million daily units at the plant. The supply is imported and depends on FOREX allocations by the government. More in Spanish:  (El Nacional, http://www.el-nacional.com/economia/Paralizada-produccion-chapas-Empresas-Polar_0_823717747.html)

 

Economy & Finance

 

Venezuela’s Supreme Tribunal has declared Central Bank Reform Law unconstitutional

The Constitutional Chamber within Venezuela’s Supreme Justice Tribunal has declared that a Partial Reform of the Central Bank Law passed by the National Assembly on March 3^rd is unconstitutional. The Chamber alleged that a comparative study of central bank legislation in other countries shows that in most cases the power to name authorities rests with the Executive. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/tsj-declara-inconstitucional-reforma-de-la-ley-del.aspx#ixzz44ZE1ULDm; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/tsj-declara-inconstitucionalidad-reforma-ley-del-banco-central; El Universal, http://www.eluniversal.com/noticias/politica/sala-constitucional-declaro-reforma-ley-del-bcv-como-inconstitucional_247530)

 

Venezuela’s 2015 Budget: Gaps as gold dwindles

It may be futile to apply generally accepted accounting principles in Venezuela, but Russ Dallen reports that the Venezuelan government released its 2015 budget data on Friday. Dallen, an investment banker and publisher, writes: “The most shocking number is the “Diverse FOREX Assets” on the assets side of the ledger, which went up US$ 137 billion dollars to $185.2 billion in 2015 (without a corresponding offset on the same debit side, of course)! While the make-up of that $185 billion is hidden in a footnote which we do not have access to yet (we are working on it)”. That footnote in early 2015 revealed billions in gold sales, Dallen notes, adding: “the Central Bank’s official 2015 closing figure for Venezuela’s gold reserves is US$ 10.01 billion (“Monetary Gold” under “Reserve Assets”). Venezuela started 2015 with US$ 14.5 billion in gold, so the country sold and/or mortgaged US$ 4.5 billion in gold from its reserves in 2015. … we believe that Venezuela’s gold holdings have now fallen to under US$ 8 billion....With the state of Venezuela’s finances and economy in tatters and knowing that Venezuela has now drawn down their Financial Reserves to US$ 13.237 billion (as of March 31) from the US$ 24.122 billion they were last year on March 1, 2015, you have to wonder under what standard of accounting the BCV can claim that their assets went up US$ 186 billion dollars at the same time?” (Barron’s: http://blogs.barrons.com/emergingmarketsdaily/2016/04/04/venezuelas-2015-budget-gaps-as-gold-dwindles/)

 

Venezuela today looks like Zimbabwe 15 years ago

Might Venezuela go the way of Zimbabwe? They are culturally very different, but the political parallels are ominous. Both countries have suffered under charismatic revolutionary leaders. Robert Mugabe seized big commercial farms without compensation, wrecking Zimbabwe’s largest industry. Chávez expropriated businesses on a whim, sometimes on live television. Mugabe lost a referendum in 2000 but rigged the subsequent election to keep the (more popular) opposition out of power. The chavistas lost a parliamentary election in December but have used their control of the presidency and supreme court to neuter the (more popular) opposition. Mugabe recruited a ragtag militia of “war veterans” to intimidate his opponents. Chávez recruited gangs from the slums, known as colectivos, to terrorize his. Yet the key similarity between the two regimes is not their huggishness but their economic ineptitude. Both believe that market forces can be bossed around like soldiers on parade. In both cases, the results are similar: shortages, inflation and tumbling living standards. Mugabe has long blamed his country’s economic woes on speculators, traitors, imperialists and homosexuals. Maduro, to his credit, doesn’t blame gay people. But he insists that local capitalists and their American allies are waging an “economic war” on Venezuela. This is absurd: in both economies the assaults have come from their own governments. Real incomes in Zimbabwe fell by two-thirds between 1980, when Mugabe took over, and 2008. They have partially recovered, thanks to dollarization and the scrapping of some of the old man’s daftest policies. For Venezuela, the lesson is plain. (The Economist: http://www.economist.com/news/americas/21695934-venezuela-today-looks-zimbabwe-15-years-ago-spot-difference)

 

Politics and International Affairs

 

Capriles: We have about half the votes needed to recall Maduro

The opposition presidential candidate in the last two Venezuelan general elections, Henrique Capriles, said on Sunday that they have “almost” half of the four million votes needed to try and end Nicolas Maduro’s presidency via a recall referendum. “The will for change is being felt in all corners of the country. Almost two million people have provided their information because they are ready to sign for the recall,” wrote Capriles in his Sunday press column. Next week, he added, “we will be reporting on what is happening with the recall and what the next activities that we will announce will be to exercise our constitutional right to change the government” of Maduro, who was elected in 2013 for a six-year term. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409205&CategoryId=10717)

 

Venezuela opposition sees “long road” ahead to sack Maduro 

The Venezuelan government is seen as dragging its feet against a call for a recall vote against President Nicolas Maduro, with opposition lawmakers saying they see “a long road” ahead of them before the poll is taken. Already, a first draft of a special law for recall votes has been approved by the opposition held National Assembly and passage in a second vote seems assured but opposition lawmakers don’t kid themselves: the government will put up a fight. “The referendum is waiting for CNE (the government controlled electoral authority) response. We are waiting for it over the next few days. But it will be a long road”, opposition lawmaker and Assembly Vice President Enrique Marquez wrote to LAHT. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409131&CategoryId=10717)

 

The National Assembly unanimously approved Pope Francis I call for peace here, in which the Pontiff asks for peace talks in Venezuela. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/an-aprobo-por-unanimidad-acuerdo-por-exhorto-de-pa.aspx#ixzz44ZEFfMMN)

 

Capriles says Maduro cannot veto National Assembly laws

Opposition leader Henrique Capriles Radonski has recently said that “Maduro cannot veto laws passed by the National Assembly because there is no veto power in Venezuela.” More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/capriles-maduro-tiene-poder-para-vetar-leyes-que-aprueba-asamblea_247465)

 

UNASUR calls for talks here due to clash over Amnesty Law

Ernesto Samper, Secretary General of the South American Nations Union (UNASUR) called for talks here and warned that the new Amnesty Law is leading to an “imminent train crash” in this country. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/unasur-pide-dialogo-venezuela-ante-choque-por-ley-amnistia_247527

 

CELAC, UNASUR reject Obama's decree

The Community of Latin American and Caribbean States (CELAC) and the Union of South American Nations (UNASUR) have said the extension for one year of a decree issued by US President Barack Obama, calling Venezuela an extraordinary threat for the United States, is meddling. “We cannot imagine that one of our member countries can be a threat for the most powerful country in the world,” stated a communiqué read out at the Tenth Meeting of CELAC Foreign Ministers held in Santo Domingo, Dominican Republic. A communiqué issued by UNASUR maintained that “the extension of the US executive order avoids the UNASUR request for its abrogation with no consideration.” (El Universal, http://www.eluniversal.com/noticias/daily-news/celac-unasur-refuse-obamas-decree_247985)

 

Human Rights Watch reports policy brutality and 20 extrajudicial executions in Venezuela

Human Rights Watch and PROVEA, a local NGO, have jointly reported random mass detentions, abuse of those detained, evictions by force and at least 20 extrajudicial executions in police and military raids in immigrant and popular neighborhoods in Venezuela. The report says “dozens of residents in Caracas and five states (Carabobo, Miranda, Nueva Esparta, Vargas and Zulia) say they have been victims of abuse during raids or have witnessed abuse on others”. More in Spanish: (Venevision:

http://www.noticierovenevision.net/internacionales/2016/abril/4/153468=hrw-denuncia-abusos-policiales-y-20-ejecuciones-extrajudiciales-en-venezuela)

 

The National Assembly will investigate “Panama Papers” links to Venezuela, according to Freddy Guevara, Chairman of the Comptroller Committee of the legislature here. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/investigara-supuesta-relacion-los-papeles-panama-venezuela_248002)

 

 

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.

January 28, 2016

International Trade

 

Money to pay debt to Uruguayan dairy producers is in China, according to Uruguayan Deputy Jaime Trobo. He explained the agreement signed between the two nations established Banco de Desarrollo, BANDES-Uruguay, was to open a trust to pay for food products sold to Venezuela, but Uruguay did not inform producers BANDES could give the money the use it would see fit. (Venecomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=46767&idc=2)

 

 

Oil & Energy

 

World Bank predicts oil prices will drop further in 2016, and remain low

The World Bank predicts the average price of a barrel of crude oil may drop further to US$ 37 during 2016 due to weak emerging economies and increased supply as Iran comes back into international markets. Barely 3 months after its previous projection, which had oil price averaging US$ 51 per barrel, the Bank has sharply cut back its estimates to a US$ 37 average, and warns this trend will hold “for some time.” More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Banco-Mundial-Crudo-internacional-profundizara_0_782321809.html)

 

Venezuela oil group seeks incentives to lure more foreign money

Venezuela’s main hydrocarbon association has proposed measures aimed at attracting more investment from international oil companies as prices drop to the lowest in more than a decade. Incentives would include reducing royalties and extraction taxes to 20% from 30-35%, applying a single exchange rate for the oil industry and granting more decision-making powers to joint venture partners. The measures, presented yesterday to the President’s National Council for Productive Economy, are needed to support oil-sector investments, according to a document outlining the proposals. “There have to be changes in the oil sector, and not just a more competitive exchange rate for the sector,” Asdrubal Oliveros, director of consulting firm ECOANALITICA, said during a meeting yesterday with foreign press at Bloomberg’s office in Caracas. “Until we have a collapse and change in this model, we will not see more oil sector investments.” (Bloomberg, http://www.bloomberg.com/news/articles/2016-01-26/venezuela-oil-group-seeks-incentives-to-lure-more-foreign-money)

 

Oil minister to visit OPEC, non-OPEC countries

Venezuela's oil minister will tour OPEC and non-OPEC countries in a bid to drum up support for joint action to stem the tumble in crude prices, President Nicolas Maduro announced on Tuesday night. "I've given the order to minister Eulogio del Pino for him to immediately start a tour of OPEC and non-OPEC countries," the leftist leader said in a televised broadcast. The Organization of the Petroleum Exporting Countries is considering a request from cash-strapped Venezuela to hold an emergency meeting to discuss steps to prop up prices, and Venezuela has called for a meeting of OPEC and non-OPEC nations in February. "We must stop this madness," a solemn-faced Maduro said about oil prices, urging "clear, consequential and coordinated" action. (Reuters, http://www.reuters.com/article/us-opec-venezuela-idUSKCN0V5035)

 

Former Chavez Finance Minister calls for revising credits to PETROCARIBE and other nations

Rodrigo Cabezas, who served as Finance Minister under the late President Chávez, says that in view of the current fiscal situation the country must review each one of its agreements, “soft” credit and subsidies to other nations in the region and with multilateral arrangements such as PETROCARIBE. He called such actions “absolutely pertinent” within fiscal restrictions. Cabezas also said a “default” scenario is “undesireable”. More in Spanish: (El Universal, http://www.eluniversal.com/economia/160127/plantean-revisar-creditos-en-petrocaribe-y-otros-paises)

 

 

Commodities

 

Sugar production has dropped 44% over the past year, according to the President of the National Federation of Cane Growers, José Ricardo Álvarez, who says the situation has never been as grave over the past 60 years. “It is now better for growers to leave sugar cane fallow in the fields than harvest it, because one loses less”, he says – and reports sugar growers produced 83,797.64 tons in January 2015 and only 46,177 tons so far this year due to price controls. More in Spanish: (El Nacional; http://www.el-nacional.com/economia/Produccion-azucar-cayo-ano_0_782921977.html)

 

 

Economy & Finance

 

IMF sees inflation explosion here, 18% contraction

According to the IMF: “In Venezuela, longstanding policy distortions and fiscal imbalances were already having a deleterious effect on the economy before the collapse in oil prices. These problems worsened as falling oil prices triggered an economic crisis, with an expected fall in output of almost 18% over 2015 and 2016 (the third sharpest decline in the world). A lack of hard currency has led to scarcity of intermediate goods and to widespread shortages of essential goods—including food—exacting a tragic toll. Prices continue to spiral out of control, and we expect inflation to rise to 720% this year, from a world-high inflation of about 275% in 2015.” (IMF: http://blog-imfdirect.imf.org/2016/01/22/latin-america-and-the-caribbean-in-2016-adjusting-to-a-harsher-reality/)

 

NOMURA says economic transition in Venezuela is “irreversible”

The latest report from Japan’s NOMURA firm says “economic transition is irreversible” in Venezuela, and explains the drop in commodity prices is aggravating imbalances. It warns economic distortions cannot be solved by reducing imports or a default on foreign debt, either of which can only “aggravate stagflation”.  It says cash flow is shrinking daily “amid a slow political and economic transition”. The firm says the next moves are up to the opposition in their bid for leadership, but the risk remains that the Maduro regime could “make them draw back”.  More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Nomura-transicion-economica-irreversible_0_782921984.html)

 

Venezuela plans to transition away from oil-dependent economy

Venezuela’s Economic Council has presented measures to transition away from an oil-dependent economic model, Vice President Aristobulo Isturiz said Tuesday.  The council, which was created in January, presented its first proposals to the government, which recently announced an emergency decree to battle the economic situation here.  Isturiz said the council’s working groups have been supported by local businessmen.  He said that the state guarantees the production of raw materials, credit and other facilities to domestic producers.  The vice president stressed that the government's priority is to fund social benefits in education, health, food, housing, among others, as well as revitalize the economic and productive engine of the country. He said the council’s roundtables began discussing three of the 11 strategic economic areas—telecommunications, tourism and petrochemicals—began Monday.  Other key areas tapped to reinvigorate the productive economy include food processing, mining, information technology, construction, export, forestry and industry. (TELESUR: http://www.telesurtv.net/english/news/Venezuela-Plans-to-Transition-Away-from-Oil-Dependent-Economy-20160126-0011.html)

 

Government creates centralized procurement system

President Nicolas Maduro has signed a decree under which Centralized and Standardized System of Government Procurement is established for all the bodies of public administration, effective from Monday, February 1. The president noted that he had received from the National Council of Productive Economy all the proposals brought forward at the work sessions of the nine economic engines. Maduro said he would study all the proposals during the IV Summit of the Community of Latin American and Caribbean States (CELAC). (El Universal, http://www.eluniversal.com/economia/160127/venezuelan-govt-creates-procurement-centralized-system)

 

Venezuela’s economic, social indicators speak for themselves

The country is starting to show cracks everywhere and is reaching boiling point. Several economic indicators more than tell about that situation. Among issues affecting the nation’s economic sphere: Venezuela has the highest inflation rate in the world. Venezuela’s inflation hovered near 300% in 2015, and may reach 720% in 2016, according to the International Monetary Fund. Shortages of food items, medicines and capital goods exceed 80%. The income of citizens slips through their fingers as their purchasing power has been reduced to nothing. Besides becoming desperate and helpless for not finding the essential foodstuff and/or medicines for them or any member of their family. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2404207&CategoryId=10717)

 

Inflation of the food basket goes up 1% daily since December 2015, according to the Venezuelan Teachers’ Federation’s Social Documentation and Analysis Center (CENDAS-FVM). It is the first time such a high is recorded. At the end of December, the food basket was VEB 139,273.68, up 361.5% from December 2014 when it was VEB109,096.86. (Venecomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=46770&idc=2; http://www.veneconomy.com/site/index.asp?ids=44&idt=46768&idc=2)

 

6.2 minimum wages are now needed to buy the basic food basket

In average, 4.77 minimum wages were needed to cover the basic food basket between 1999 and 2014. However, this changed at the end of 2014 when 6.2 minimum wages were required to cover it until it reached the 14.4 minimum wages at the end of December 2015, according to the CENDAS-FVM. According to CENDES, not even the basic salary of a Major General is sufficient to acquire the basic food basket, A sargeant can only purchase 9.8% of the same basket. (Venecomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=46769&idc=2; and more in Spanish: (El Nacional, http://www.el-nacional.com/economia/salario-basico-general-canasta-basica_0_782321994.html)

 

 

Politics and International Affairs

 

National Assembly President says economic crisis will sink Maduro

National Assembly President Henry Ramos Allup doubts President Nicolas Maduro will serve out his six-year term in view of the acute economic crisis here. He adds that his exit could even take place this year. “In this situation I don’t believe he will serve out his term…..he is being swallowed up by the crisis”. Ramos adds that for the nation to be rid of the highest inflation in the world, economic recession and scarcities, Maduro and his cabinet must step aside. “If they insist – as they are doing – on continuing applying a model that his failed in every sense, the reply is obvious: those who are so insisting in this crisis must leave, otherwise we will not overcome it”. And he adds: “We have insisted that the way out of this crisis must be democratic, constitutional, peaceful and elective. None other.” The opposition coalition has signed an agreement to seek a way out of this situation within six months, and Ramos says they are already working at it because “to wait for the crisis to become worse is an irresponsible political gambit”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/01/26/crisis-economica-de-venezuela-hundira-a-maduro-segun-el-presidente-de-la-asamblea/)

 

Maduro to ask CELAC aid in economic emergency

Upon his arrival in Quito, Ecuador to attend the IV Summit of Heads of State and Government of the Community of Latin American and Caribbean States (CELAC), President Nicolás Maduro said that he would propose some ideas to tackle the economic emergency in Venezuela with the help of Latin American countries. The president said he would meet with his CELAC counterparts to address the economic crisis in his country and "foster fair trade, complementarity, and solidarity. Venezuela comes with a proposal, as always, to find our own solutions and our own path by ourselves." (El Universal, http://www.eluniversal.com/nacional-y-politica/160127/venezuelas-maduro-to-ask-celac-aid-in-economic-emergency)

 

Chavez's dream of unity stumbles ahead of Latin American summit

Before he died, Venezuela’s late president, Hugo Chavez, had a dream to unite Latin America and the Caribbean against the dark forces of the U.S. empire. It’s not working out like he planned. As presidents and prime ministers from the regional group CELAC meet Wednesday in an attempt to knit closer ties, President Nicolas Maduro, Chavez’s hand-picked successor, finds himself fending off attacks from the nation’s former ally, Argentina. “Why does a country have to put up with the whole onslaught of right-wing governments,” Maduro said Saturday after Argentina’s newly-elected president, Mauricio Macri, criticized his government’s human-rights record. “I’m going to the summit of Latin America and the Caribbean nations in Quito with everything. No one is going to shut me up.” (Bloomberg, http://www.bloomberg.com/news/articles/2016-01-27/chavez-s-dream-of-unity-stumbles-ahead-of-latin-american-summit)

 

Garrulous Maduro has addressed Venezuela for 500 hours

President Nicolas Maduro has spent more than 500 hours addressing Venezuela since gaining power nearly three years ago, demonstrating a loquacity reminiscent of his late predecessor Hugo Chavez, according to a watchdog. The tally, from the local Citizens' Monitor group which is critical of the government, was based on Maduro's so-called "chain" speeches, when all local broadcasters are required to transmit his words live. Counting other speeches, carried only by state TV, the 53-year-old former bus driver and foreign minister has in fact spent far more time giving public addresses.

"In the first few weeks of this year, he surpassed 500 hours," the group said this week in a blog. "Every time the presidency holds a 'chain', they are denying Venezuelans their control over freedom of information and entertainment." (Reuters, http://www.reuters.com/article/us-venezuela-maduro-idUSKCN0V42A8)

 

Electoral body issues reply on Amazonas contested deputies

The National Electoral Council (CNE), headed by Tibisay Lucena, has issued an "administrative response" to the Supreme Tribunal of Justice (TSJ) regarding the contested election of three deputies for Amazonas state and one indigenous representative. The information was aired by the First Vice-President of the National Assembly, Simón Calzadilla, who heads the parliament committee that studies the case. Deputy Calzadilla said that Lucena refused to reveal the content of the documents that were sent to the TSJ. (El Universal, http://www.eluniversal.com/nacional-y-politica/160127/electoral-body-issues-reply-on-amazonas-contested-deputies)

 

Freedom House: Democracy faces challenges in Venezuela

Freedom in the world declined in 2015. Even though Latin America as a whole showed some improvement, democracy in Central America and Venezuela faces serious challenges, according to the annual report released by Freedom House on Wednesday. The organization that advocates freedom and democracy highlighted that democracy and freedom are at risk in El Salvador, Guatemala, Honduras, and Venezuela. In the latter, Freedom House reported "persecution" against the opposition. The Latin American country with the worst score in freedom and democracy is Venezuela, considered "partially free" with a score of 35 out of 100, followed by Haiti (41) and Honduras (45). (El Universal, http://www.eluniversal.com/nacional-y-politica/160127/freedom-house-democracy-faces-challenges-in-venezuela)

 

 

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.

 

December 29, 2015

International Trade

 

Japanese Chamber President says companies to spur projects in Venezuela

According to Erwin Miyasaka, the President of the Venezuelan - Japanese Chamber (CAVEJA), Japanese companies are contemplating to resume commercial projects in Venezuela in 2016, particularly in the areas of energy, petrochemicals, the automotive industry and technology. "We hope to take in many off track activities in the Energy Cooperation Committee set up by both nations," he says. "Biannual meetings provide a forum for sharing common interests and open up a whole world of opportunities." In Miyasaka's opinion, Venezuela is one of the few attractive countries to invest in the region. "Even with prices of US$ 40 a barrel the business of hydrocarbons and derived products is profitable on the basis of domestic costs," he says. "With the current Organic Law of Hydrocarbons, according to experts in the field, there would be no need to change." (El Universal, http://www.eluniversal.com/economia/151226/japan-to-further-projects-in-venezuela)

 

 

Economy & Finance

 

Guerra says economy could further deteriorate in 2016

Economist José Guerra, recently elected as an opposition legislator to the National Assembly, says the nation is undergoing an economic tragedy due to a severe contraction along with inflation that is destroying wages. He says GDP shrank 11%, inflation rose 200% and food prices increased 250% as scarcity of regulated food reached 80%. “All of this lead to a 40% drop in wages and pensions, only a nation devastated by war has such statistics. The Central Bank’s monetary policy played a large role in price trends, by financing the deficit by printing money.” More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Jose-Guerra-situacion-deteriorarse-todavia_0_764323604.html)

 

2015 was the worst economic crisis in 100 years

According the ECOANALITICA think tank, 2015 has seen the worst economic crisis in a century, due to scarcities and lower buying power, which have diminished the quality of life for middle and lower class Venezuelans as a result of FOREX cuts for private imports and individuals which hurt food subsidies as well as remittances, Internet operations, travelers and students. FOREX allocations to these activities dropped 66% from US$ 137.5 million daily in January-November 2014 to US$ 46 million daily in the same time frame during 2015. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/subsidios-dolares-clase-media-baja_0_764923645.html)

 

Majority in the National Assembly will call for economic reform

Re-elected legislator Julio Borges says the role of the majority in Parliament is to demand that the government take steps on the economy to meet the needs of Venezuelans. He said “the regime must decide if it will be a part of those changes the nation is demanding, or if it continues paralysis”. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politica/mayoria-parlamentaria-exigira-medidas-en-materia-e.aspx#ixzz3vhicl9b7)

 

PSUV economists say 6.30 FOREX dollar rate must disappear

Economists within the pro-government United Socialist Party (PSUV) met recently to seek proposals for the government on economic policy. One of their suggestions was to modify exchange policy, and legislator Jesus Faría spoke of an option to reach a single exchange rate by doing away with the 6.30 rate. Other economists called this rate “unsustainable”. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/economistas-proponen-desaparicion-del-dolar-a-6-30.aspx#ixzz3vbucc6b6)

 

International reserves rose US$ 1.830 billion

According to Central Bank data published December 23rd, Venezuela’s total FOREX reserves rose US$ 1,830 billion to US$ 16.518 billion, up to October levels. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/energia/reservas-internacionales-aumentaron--1-830-millone.aspx#ixzz3vhhI1ZiU; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/reservas-internacionales-aumentaron-1-830-millones.aspx)

 

 

Politics and International Affairs

 

Opposition will call for “change in government” if National Assembly work is blocked

Re-elected legislator Julio Borges, coordinator of the PRIMERO JUSTICIA party, supported statements by Henry Ramos Allup, Secretary General of ACCIÓN DEMOCRÁTICA, also re-elected to the National Assembly, on “changing the government” in six months, and specified that seeking the constitutional means for it will depend on whether the government “sabotages the changes for which millions of Venezuelan’s voted for”. Ramos has written that the coalition will “honor” all proposals made during the campaign among them “the commitment to seek within the six months following the inauguration of the new National Assembly a constitutional, democratic, peaceful and electoral way to change the government”. He added that the coalition proposals were “signed and ratified by all of those who are part of democratic unity, and they are still in force and unscathed and we will honor them”, and said no matter will be prioritized because they are all “dramatically urgent”. Earle Herrera, a re-elected pro-government legislator, says his side is prepared in case the opposition wants to invoke constitutional means against the President, such as a referendum to revoke his mandate: “The Constitution…has answers for each of the constitutional options the opposition calls for”, he says. Ramos and Borges are currently the leading contenders to preside the incoming National Assembly. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/151228/mud-apelara-a-propuesta-de-cambio-de-gobierno-si-se-impide-labor-de-la)

 

Opposition seeks to elect new National Assembly president by consensus

The leaders of parties within the Democratic Unity Conference (MUD) that have elected legislators are meeting to discuss a proposal by PRIMERO JUSTICIA to seek a consensus on rules to guide the work of the full opposition caucus, including choosing Assembly authorities and committees. If no consensus is reached, it seems probable the new authorities, including the President, will be elected through a vote on January 3^rd. After the New Assembly takes office on January 5^th, the coalition will announce its agenda. In a statement published on the Internet, the group again called for “freeing political prisoners, the return of exiles and the end of persecution against thousands of students and young people”. The statement emphasizes that “what is at stake is the viability of the nation itself, beyond the stability of a government”. (El Nacional, http://www.el-nacional.com/politica/MUD-agotar-consenso-presidente-AN_0_764923643.html; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/mud-anunciara-este-martes-su-agenda-para-el-5-e.aspx#ixzz3vhkQOcWU)

 

Audits discard fraud claims in December 6th elections

Two audits carried out after the December 6^th elections show the system performed correctly with few election infractions, which throws out fraud arguments alleged by authorities. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Auditorias-posteriores-tierra-argumentos-fraude_0_764923586.html)

 

Supreme Tribunal endorses outgoing National Assembly decisions

The Constitutional Chamber within the nation’s Supreme Justice Tribunal has decided that all decisions taken by the outgoing National Assembly during the special sessions called by outgoing Assembly President Captain Diosdado Cabello, are legal and there is no limitation on the matters they can decide. In this way they intend to reinforce the appointment of 13 new Tribunal justices despite charges that their designation is unconstitutional. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/TSJ-avala-decisiones-Asamblea-saliente_0_761324048.html)

 

Designation of Supreme Tribunal justices published

On December 23rd, the official Gazette published the designation of 13 Supreme Tribunal justices made by a simple majority of the outgoing National Assembly during a special session. The new members of the powerful Constitutional Chamber are Calixto Ortega, Luis Damiani-Bustillos, and Lourdes Suárez-Anderson. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/151229/en-gaceta-la-designacion-de-magistrados-del-tsj; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/lista---en-gaceta-designacion-de-magistrados-del-t.aspx)

 

Venezuelans in U.S. linked to US$ 1 billion in PDVSA bribes

The U.S. accused two men of taking part in a US$ 1 billion bribery scheme to secure contracts with Venezuela’s state oil company and linked one of the duo to a former head of Venezuelan military intelligence wanted for alleged cocaine trafficking. Roberto Rincon-Fernandez, a Venezuelan national, was ordered held without bail on charges of conspiring to launder money and violating the Foreign Corrupt Practices Act in connection with Petroleos de Venezuela SA, according to an order signed Dec. 19 by U.S. Magistrate Judge Nancy K. Johnson citing an indictment.  Abraham Jose Shiera-Bastidas, a Venezuelan living in Florida, was jailed in Miami on the same charges. The bribes included monetary gifts, travel, hotel reservations, meals, liquor, car rental, a yacht, a US$ 14,000 stay at the Fontainebleau Hotel on Miami Beach, and other gifts to obtain “business on behalf of Rincon’s and Shiera’s companies,” according to the joint indictment filed in Miami. In her order to keep Rincon behind bars, Johnson said he “has significant assets which could fund a fugitive life-style” and there’s a “serious risk” he could flee. Rincon, with homes in Aruba and Spain, has a “close personal friendship” with retired Venezuelan General Hugo Carvajal, who was arrested in Aruba on Rincon’s private aircraft and later released, according to the order. Carvajal – recently elected to the National Assembly on the government party ticket - is wanted in the U.S. for drug trafficking and Aruba has declined to extradite him, according to Johnson’s order. The case is U.S. v. Rincon-Fernandez, 15-cr-654, U.S. District Court, Southern District of Texas (Houston). (Bloomberg, http://www.bloomberg.com/news/articles/2015-12-22/venezuelan-in-houston-linked-to-1-billion-in-pdvsa-bribes)

 

Venezuela reached homicides record in 2015

According to the Venezuela Violence Observatory (OVV) non-government organization, violent deaths in this nation were up to 27,875 this year, a 12% increase over last year – up to 90 for every 100,000 inhabitants, which makes Venezuela one of the most violent nations in the Hemisphere. At mid-year the government was admitting to only 66 homicides per 100,000 inhabitants. More in Spanish: (Infolatam, http://www.infolatam.com/2015/12/28/las-muertes-violentas-aumentan-en-venezuela-durante-2015/)

 

Venezuela ceases mediator role in talks with Colombia’s ELN

Venezuela has allegedly abandoned its role as a mediator in the rapprochement efforts that have been under way for two years between the Colombian government and the guerrilla National Liberation Army (ELN) intended to start a peace process similar to that taking place since 2012 in Cuba with the Revolutionary Armed Forces of Colombia (FARC). The digital edition of Colombian newspaper El Tiempo reported that "according to sources close to the rapprochement," the government of Venezuelan President Nicolás Maduro has "decided to freeze its mediation". (El Universal, http://www.eluniversal.com/nacional-y-politica/151228/venezuela-ceases-mediator-role-in-talks-with-the-eln)

 

Two hurt when Venezuelan police chopper crashes in Colombia

Both occupants were injured when a helicopter of Venezuela’s national police crashed just across the border in the northern Colombian province of La Guajira, Colombia’s defense minister said. The aircraft crashed onto a parking lot in the village of Paraguachon in the Colombian municipality of Maicao, but did not catch fire, Luis Carlos Villegas said.
According to the minister, the two crew members flying the Bell helicopter were injured and were taken to medical centers in Venezuela. “Our presence at the site was a humanitarian effort to see if the crew members were being well looked after, and through diplomatic channels we will proceed to establish with the Venezuelan government what should be done with the helicopter wreckage that is left on this side of the border,” the minister told reporters. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2402558&CategoryId=10717)

 

Samper: Changes of course in Argentina, Venezuela are normal in democracy

Ernesto Samper, Secretary General of the Union of South American Nations (UNASUR), says political changes in Argentina and Venezuela are a "normal change in direction" within a democratic system, and he refused claims that the region is in the middle of ideological confrontation. "There is no need for drama over these changes," he added. (El Universal, http://www.eluniversal.com/nacional-y-politica/151228/samper-changes-of-course-in-argentina-venezuela-are-normal-in-democrac)

 

Fourth CELAC Summit to be held in Quito on January 27, 2016

The Fourth Summit of the Community of Latin American and Caribbean States (CELAC) will be held on January 27 next year in Quito, Ecuador. Cuban Vice-Foreign Minister Abelardo Moreno said that the 33 countries comprising the CELAC would seek to establish new ways to reduce inequality in the region. "There are great expectations. CELAC is our mechanism for political agreement, which has consolidated upon the summits held so far," Moreno said. (El Universal, http://www.eluniversal.com/nacional-y-politica/151228/fourth-celac-summit-to-be-held-in-quito-on-january-27-2016)

 

 

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.