December 19, 2014

International Trade

 

Venezuelan exports to the European Union rose 11% in 2014, overall exports dropped 4.9%

Venezuelan exports to the European Union rose 11% in 2014, according to a report by the Inter-American Development Bank (IDB). General exports fell by 4.9%, with a 15% drop in exports to Asia. Exports to Latin America dropped 6%, and exports to the US contracted by 1%. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/bid--exportaciones-venezolanas-a-la-union-europea.aspx#ixzz3M9blRRn6)

 

 

Oil & Energy

 

Venezuela’s export barrel averaged US$ 57.53/bbl. this week, down US$ 4.39/bbl, according to a three days late report by the Oil and Mining Ministry. The year-to-date average is US$ 90.50/bbl., well below 2013’s US$ 98.08/bbl. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42297&idc=4)

 

 

Commodities

 

CVG ALCASA contracts with Italian firm to strengthen aluminum production

State owned CVG ALCASA has signed a contract with Italy's PRESEZZI EXTRUXION for the second phase of the extrusion plant for products such as aluminum, hard alloys, copper and tin. Industry Minister José David Cabello says the plan calls for increasing plant extrusion capacity from 23,500 to 40,000 metric tons per year. More in Spanish: (AVN; http://www.avn.info.ve/contenido/cvg-alcasa-firmó-acuerdo-empresa-italiana-para-fortalecer-producción-aluminio)

 

 

Economy & Finance

 

FITCH downgrades Venezuela's IDRs to 'CCC'

FITCH Ratings has downgraded Venezuela's long-term foreign and local currency issuer default ratings (IDRs) from 'B' to 'CCC'. The issue ratings on Venezuela's senior unsecured foreign and local currency bonds are also downgraded from 'B' to 'CCC'. The country ceiling is downgraded from 'B' to 'CCC' and the short-term foreign currency IDR from 'B' to 'C'.  Venezuela's downgrade reflects the following key factors: International oil prices have declined sharply in Q4'14 increasing balance of payments pressures in the context of reduced external financing flexibility and rising macroeconomic instability. Venezuela's commodity dependence is high, as oil is expected to account for an estimated 92% of current external receipts and 50% of central government revenues in 2014. Low oil prices will erode the main source of FX for the economy. The capacity of the Venezuelan economy to respond to this external shock is constrained by the relatively low level of international reserves, constraints to their operational liquidity, and limited sources of external financing. International reserves, at US$ 21.4 billion, are about half the level of end-2008 when Venezuela last confronted the sharp oil price decline resulting from the global financial crisis. In addition, operational liquidity of reserves is constrained, as 72% of international reserves are held in gold and most of these are held at the central bank in Venezuela. Nontransparent off-budget FX funds will likely come under pressure, as central bank and extraordinary oil revenue contributions will be curtailed. Venezuela's sources of FX financing are limited, the sovereign does not have direct access to international debt markets, and significant multilateral funding is not expected in 2015-2016; China remains the sovereign's main source of financing. Nevertheless, there is no indication that China will increase its exposure to Venezuela beyond the roll-over of existing facilities. Macroeconomic instability has increased, driven by the inconsistency between FX, and fiscal and monetary policies. Continued rationing of FX, widespread price controls, and monetary financing have fueled inflationary pressures. Inflation averaged 55% in the first eight months of 2014. The spread between the official and parallel exchange rates continues to widen at a rapid pace, thus further fueling inflation and currency pressures. Fitch estimates that the economy may have contracted by close to 4% in 2014 and expects Venezuela to remain in recession in 2015. In addition to lack of transparency in government off-budget funds, transparency and timely reporting of official data for inflation, balance of payments and national accounts has suffered since 2013. Continued deterioration in terms of data provision and/or accuracy of official statistics could not only further dent confidence, but also pose limits to the capacity to assess the overall fiscal and external strength of the sovereign. Venezuela sovereign amortizations average 1.2% of GDP in 2015-16 with external debt repayments at 0.4% of GDP (3.5% of exports), using Fitch GDP estimates. As the state-owned oil company PDVSA faces an average of US$ 3.4 billion (0.6% of GDP) in external bond amortizations, average annual public sector external bond amortizations equal close to 22% of the current level of international reserves. The lagging policy response to address external pressures and macroeconomic imbalances, and the present decline in international oil prices materially weaken Venezuela's capacity to service debt. A high level of political polarization, the social impact of the ongoing economic crisis, marked divisions within the government in terms of economic policy, and the expectation of a heavily contested electoral cycle in 2015 could limit policy adjustments and increase the risk of social unrest. (Bloomberg, http://www.bloomberg.com/news/2014-12-18/venezuela-s-credit-rating-lowered-by-fitch-amid-plunge-in-crude.html; Reuters, http://www.reuters.com/article/2014/12/18/fitch-downgrades-venezuelas-idrs-to-ccc-idUSFit87570120141218; El Universal, http://www.eluniversal.com/economia/141218/rating-agency-fitch-downgrades-venezuelas-debt; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2365812&CategoryId=10717)

 

Venezuela’s GDP now smaller than Chile’s

Venezuela has fallen to sixth place among Latin America’s top seven economies, according to a LATINVEX analysis of new data from the International Monetary Fund (IMF). And in four years, it will likely fall to seventh place, behind Peru. The revised data comes as Venezuela’s own government has not published 2014 data on its economy or oil exports. “Non-official data claim a decline in activity in Venezuela's construction, manufacturing, and retail sectors during 2014,” consulting firm IHS said in an analysis. The IMF estimates that Venezuela’s economy will contract by 3% this year, which will be the worst result in Latin America. Meanwhile, IHS estimates that oil revenues fell by nearly US$ 9 billion in 2014 compared to the previous year. Venezuela’s Gross Domestic Product this year is estimated at US$ 226.3 billion in current prices in US dollars. Chile’s GDP is US$ 279.7 billion, which makes it the fifth-largest economy in Latin America.  The IMF’s new and revised figures for Venezuela are 34% lower than in April, when the fund estimated that Venezuelan GDP stood at US$ 342.1 billion. The IMF now also projects that Peru will pass Venezuela in 2018, when Peru’s GDP will likely reach US$ 274.4 billion versus US$ 262.4 billion for Venezuela. (Latinvex, http://latinvex.com/app/article.aspx?id=1776&utm_source=Weekly+Dec+15%2C+2014&utm_campaign=Weekly+Nov.+17%2C2014&utm_medium=email)

 

Venezuela’s 91% default odds mean nothing as funds dig in

Venezuela’s bonds have lost almost half their value since July as traders have become almost certain the nation will default. Stone Harbor Investment Partners, which manages the two funds with the biggest allocations to the country, is undaunted even as losses balloon. The New York-based firm’s Emerging Markets Total Income Fund and Emerging Markets Income Fund each had at least 20% of their net assets in Venezuelan bonds at the end of August, according to data compiled by Bloomberg, the most among 363 debt funds with at least some exposure to the country. Steffen Reichold, a money manager and economist at Stone Harbor, said Wednesday the firm hasn’t made “significant changes” to its holdings. (Bloomberg, http://www.bloomberg.com/news/2014-12-18/venezuela-s-91-default-odds-mean-nothing-as-funds-dig-in.html)

 

ICSID confirms Gold Reserve US$ 744 million ruling against Venezuela

The World Bank's arbitration tribunal has confirmed a US$ 744 million ruling against Venezuela in the case brought by Canada's Gold Reserve over expropriation of its two mining projects in the nation's Southeastern region. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/ciadi-confirma-fallo-contra-venezuela-por--744-mil.aspx#ixzz3M9ZJ3G11; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/ciadi-confirma-fallo-contra-venezuela-por-744-mill.aspx)

 

Santander does not have to return US$ 150 million for sale of Banco de Venezuela

The Spanish high court has confirmed the ruling that exempts Banco de Santander from paying a US$ 150 million deposit for the unsuccessful sale of Banco de Venezuela. The court thus refused an appeal by Venezuela's Banco Occidental de Descuento on a 2012 decision by the Madrid High Court. (El Universal, http://www.eluniversal.com/economia/141218/santander-should-not-return-usd-150-million-for-sale-of-banco-de-venez)

 

Executives at US Brokerage Direct Access Partners guilty in US$ 60 million Venezuela BANDES kickback scheme

The former CEO and a former managing director of a U.S. broker-dealer pleaded guilty to bribery charges arising from their scheme to pay bribes to Maria De Los Angeles Gonzalez De Hernandez, a former senior official in Venezuela’s government economic development bank (BANDES), in return for trading business that generated more than US$ 60 million in commissions. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2365726&CategoryId=10717)

 

 

Politics and International Affairs

 

Obama signs Venezuela sanctions bill, Venezuela complains of rejection by US

President Barack Obama has signed into law a bill imposing sanctions on individual Venezuelan officials who U.S. lawmakers say are responsible for violent repression of opposition protests in the Andean nation. The legislation bars the issuance of visas to the named officials and freezes any financial assets they may have in the United States. White House spokesman Josh Earnest has previously insisted that the administration shares Congress' concerns about the situation in Venezuela, where violence associated with months of anti-government protests left 39 people dead and upwards of 800 injured. The president signed the bill targeting Venezuela a day after he announced plans to restore diplomatic ties with Caracas' close ally Cuba, a move hailed by Maduro as a "courageous gesture." After Obama signed the sanctions bill, the Venezuelan leader took to Twitter to blast Washington for its "contradictory" policy. Even as the U.S. government "recognizes the failure of the policies of aggression and embargo against our sister Cuba ... it initiates the escalation of a new stage of aggressions against the homeland of Bolivar," Maduro wrote. In a New York Times op-ed, National Assembly President Diosdado Cabello complained: "We have tried to move toward better relations with the Obama administration, but have been rejected". (Fox News Latino, http://latino.foxnews.com/latino/politics/2014/12/18/obama-signs-venezuela-sanctions-bill/; El Universal, http://www.eluniversal.com/nacional-y-politica/141218/obama-okays-sanctions-against-venezuelan-government-officers; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2365849&CategoryId=10717; Reuters, http://www.reuters.com/article/2014/12/17/us-cuba-usa-maduro-idUSKBN0JV27V20141217; El Universal, http://www.eluniversal.com/nacional-y-politica/141218/venezuela-applauds-new-course-of-us-cuba-relations, http://www.eluniversal.com/nacional-y-politica/141217/maduro-hails-us-token-of-courage-for-restoring-ties-with-cuba; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/141219/cabello-hemos-sido-rechazados-por-washington)

 

MERCOSUR condemns US sanctions against Venezuela

The heads of state of the Common Market of the South (MERCOSUR) urged the US government not to apply sanctions against Venezuela, and expressed support for the people facing what it termed new interventionist US intentions in the internal affairs of Venezuela. (AVN, http://www.avn.info.ve/contenido/mercosur-rejects-us-sanctions-against-venezuela; El Universal, http://www.eluniversal.com/nacional-y-politica/141217/mercosur-backs-venezuela-urges-the-us-not-to-enforce-sanctions)

 

Washington emphasizes: Sanctions are against individuals, not the Venezuelan people

The US State Department has underlined that sanctions will be applied against individuals who took part in repressing demonstrations that took place earlier this year. "The law includes blocking assets held in the United States by individuals who have perpetrated or are responsible for ordering or directing significant violence or serious human rights abuses against persons involved in anti government protests in February 2014. These sanctions are directed against individuals, not the Venezuelan people".  More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Obama makes Maduro’s ‘insolent yankees’ a tougher sell

President Nicolas Maduro’s favorite tool to rally popular support has been a blunt one: Yanqui-bashing. That may lose its clout now that President Barack Obama has moved to restore diplomatic ties with Maduro’s principal ally, Cuba. Like his mentor, the late Hugo Chavez, Maduro has whipped up support by alleging the U.S. is conspiring against Latin American sovereignty, and his Socialist government in particular, citing the embargo on Cuba as the primary example of Washington’s bullying tactics toward the region. With that embargo, which he calls a “blockade,” weakening, Maduro may find his talking points sounding antiquated. (Bloomberg, http://www.bloomberg.com/news/2014-12-18/obama-makes-maduro-s-insolent-yankees-a-harder-line-to-sell.html; Reuters, http://www.reuters.com/article/2014/12/17/cuba-usa-venezuela-idUSL1N0U123320141217; AVN, http://www.avn.info.ve/contenido/venezuela-celebrates-new-course-diplomatic-relations-between-cuba-and-united-states)

 

Analysts believe US-Cuba rapprochement has "profound implications for Venezuela"

Analysts believe restored diplomatic relations between Cuba and the United States pulls the rug out from under President Nicolás Maduro's policies, and could force him to rephrase his wording. "This announcement moves the floor to Maduro's government regarding its policy towards the United States, and even the internal political discourse, mostly based on the anti-imperialist struggle and condemnation of the US blockade on Cuba," says political expert and dissident "chavista" Nicmer Evans. According to Evans, the US-Cuba rapprochement must have "profound implications for Venezuela." Evans also wonders whether Cuban President Raúl Castro broached the subject with Maduro, who visited Havana last Sunday for a meeting of the Bolivarian Alternative for the Peoples of Our America (ALBA). (El Universal, http://www.eluniversal.com/nacional-y-politica/141217/us-cuba-rapprochement-involves-profound-implications-in-venezuela; http://www.eluniversal.com/nacional-y-politica/141218/experts-caracas-should-analyze-changes-in-havana)

 

Mujica seeks better treatment for Venezuelan political prisoners

Former Uruguayan President José Mujica says that during his recent visit to Venezuela he asked his Venezuelan counterpart Nicolás Maduro to give local political prisoners a good treatment. "In general, I have always asked him (President Maduro) for kindness towards prisoners, especially the political prisoners unfortunately he has to have," he says. After making his statement, Mujica remained silent for some seconds and added: "I do not want to speak any further." (El Universal, http://www.eluniversal.com/nacional-y-politica/141217/jose-mujica-asks-for-good-treatment-of-venezuelan-political-prisoners)

 

 

López continues to boycitt trial proceedings, awaits appeal decision

Opposition leader Leopoldo López has for the fifth time refused to attend a hearing as he awaits results of an appeal to a Caracas court for a decision on the UN request to set him free. His trial judge, Susana Barreiros, has ruled that a UN Working Group is not a part of signed treaties and it's request is not binding. More in Spanish: (Infolatam, http://www.infolatam.com/2014/12/16/lopez-mantiene-su-negativa-de-acudir-juicio-en-espera-de-apelacion/)

 

European Parliament seeks freedom for political prisoners

The European Parliament, which group’s leftist, center and democratic right wing parties from all Europe, has passed a resolution on "persecution of democratic opposition in Venezuela", and have urged the Venezuelan government to abide by UN rulings that seek immediate freedom for Leopoldo López and all those imprisoned for protesting. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

1.5 million Venezuelans could have migrated abroad

Oscar Hernández, head of the Migration Training Center, says the number of Venezuelans who have migrated in search of new opportunities could come to 1.5 million.  He says their reason for leaving are lack of personal safety and legal guarantees, and adds that according to a study by Venezuela's Central University almost 90% of migrants are college graduates and 40% have graduate degrees. Their main destinations are the United States, France, the United Kingdom, Colombia, Chile, Mexico, Panama and Ecuador due to their economic stability. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/la-cantidad-de-venezolanos-en-el-exterior-podria-l.aspx#ixzz3M9eVOBrQ)

 

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.

 

April 20, 2012

Economics & Finance

IMF: Venezuelan economy to grow 3.2% in 2012

The International Monetary Fund (IMF) revised its growth forecast for Latin America and the Caribbean slightly upward for this year and 2013, in the IMF's World Economic Outlook released this Tuesday in Washington. Overall, the region's GDP will grow 3.7% in 2012 and pick up to 4.1% next year, 0.2 and 0.1 percentage points above estimates reported in the revision presented in January. Venezuela should grow 4.7% in 2013 and 3.2% in 2012. (El Universal, 04-17-2012; http://www.eluniversal.com/economia/120417/imf-venezuelan-economy-to-grow-32-in-2012)

Chavez battles re-election hurdle: Venezuela inflation

President Hugo Chavez is so determined to contain one of the world's highest inflation rates in an election year that his price control officials are sticking signs outside stores to enforce compliance. The red-yellow-green traffic light notices tell shoppers whether a store is obeying new price caps. Businesses that don't comply face fines, temporary closure or outright expropriation by his socialist government. (Reuters, 04-17-2012; http://www.reuters.com/article/2012/04/17/us-venezuela-inflation-idUSBRE83F16N20120417)

Unemployment in Venezuela down to 7.9% in March

The unemployment rate in Venezuela fell to 7.9% in March, according to the official National Statistics Institute (INE), which says the unemployment rate in 1999 was 14.6%. (AVN, 04-17-2012; http://www.avn.info.ve/node/108405)

Government plans to tax idle lands

Three official agencies, the National Lands Institute (INTI), the National Customs and Tax Administration Service (SENIAT) and the Supreme Court (TSJ) are sharpening details on a bill designed to tax private and public rural landowners for idle lands or lands that used against regulations. INTI President Luis Motta Domínguez says meetings toward this end are being held with the president of the Supreme Tribunal of Justice, Luisa Estella Morales and with SENIAT's superintendent, José David Cabello. (El Universal, 04-18-2012; http://www.eluniversal.com/economia/120418/government-agencies-draft-tax-on-idle-lands)

Commodities

PDVSA sends oil to Asia to fetch better price

PDVSA gets a higher oil price by selling crude to Asia rather than the U.S. and will continue to diversify its export markets, said company president Rafael Ramirez. Venezuela’s growing exports to Asia accounts for the country’s export basket price being above U.S. benchmark West Texas Intermediate crude, Ramirez said today at an event in Caracas. West Texas Intermediate crude on the New York Mercantile Exchange currently sells for about 11% less than Brent oil, according to data compiled by Bloomberg. (Bloomberg, 04-17-2012; http://www.bloomberg.com/news/2012-04-17/venezuela-s-pdvsa-sends-oil-to-asia-to-fetch-better-price.html)

... and rules out problems with REPSOL in Venezuela

"There should be no problem," with the investments by Spanish oil company REPSOL in Venezuela, because the firm is fulfilling its obligations, Minister Rafael Ramírez told EFE. "Our relationship with REPSOL here is crystal clear. The Spanish oil company is subject to our majority stake. There should be no problem. At least, I have heard no word from REPSOL", said Ramírez when asked about the nationalization of REPSOL-owned 51% of the shares of Argentinean oil company YPF. (El Universal, 04-18-2012; http://www.eluniversal.com/economia/120418/pdvsas-president-rules-out-problems-with-repsol-in-venezuela)

PDVSA's 2011 net profit rises 42%

Net profit at state oil company PDVSA leaped 42% to U$D 4.49 billion last year, helping to double its funding of President Hugo Chavez's government programs to almost U$D 50 billion, the company said on Tuesday. Chavez is seeking a new six-year term in the country's Oct. 7 elections and has been increasingly leaning on PDVSA, one of the world's biggest energy companies, to serve as the financial motor of his socialist "revolution". PDVSA funds everything from free health clinics to sports and cultural projects, and is leading an ambitious government plan to build hundreds of thousands of new homes. (Reuters, 04-17-2012;

http://www.reuters.com/article/2012/04/17/venezuela-pdvsa-idUSL2E8FH4QI20120417; http://www.google.com/hostednews/afp/article/ALeqM5gSnOB1ha3UrCwVQBzb3Mei0QaTmw?docId=CNG.491ee958a2dcdbb637261fe55eb6d494.421; Bloomberg, http://www.bloomberg.com/news/2012-04-17/pdvsa-profit-surges-42-in-2011-on-record-export-oil-price-3-.html)

and yet ... Treasury provided U$D 18.5 billion assistance to PDVSA in 2011

PDVSA's income grew 31% in 2011 to U$D 124.7 billion based on increasing oil prices. At the same time the state-run company expanded its debt and sought financial assistance from state banks and government agencies. PDVSA's financial statements show that the company issued promissory notes amounting to U$D 18.5 billion to the National Treasury (ONT) with maturities between 2011 and 2013. The ONT provided funds to Pdvsa to meet the oil company's commitments. PDVSA's balance sheet for the end of June 2011 shows that the Treasury had received U$D 2.6 billion in promissory notes issued by PDVSA up to that moment. The oil company had paid 50% of that amount in June. (El Universal, 04-18-2012; http://www.eluniversal.com/economia/120418/treasury-provides-usd-185-billion-assistance-to-pdvsa-in-2011; AVN, http://www.avn.info.ve/node/108445)

PDVSA plans to invest U$D 236 billion to increase oil production to 6 MBD by 2019

State oil company PDVSA plans to invest U$D 236 billion to increase crude production of 3 million barrels per day (MBD) in 2012 to 6 MBD by 2019. Petroleum and Mining Minister Rafael Ramírez says that "thanks to an increase in production at the Orinoco Oil Belt, we will reach 4 million barrels in 2014 and 6 million oil barrels in 2019. Based on these resources, we have petroleum for 300 years at the current pace of production (3 MBD) or for 150 years, when we produce 6 million barrels". (AVN, 04-17-2012; http://www.avn.info.ve/node/108387)

VENALUM operations were in critical conditions even before latest conflict

Workers are collecting signatures to demand the replacement of company President Rada Gamluch, and a published document by the Plant General Manager at CVG VENALUM confirms in detail that the operating crisis in the state owned aluminum plant existed prior to the protests begun in March. The labor movement has withdrawn its support from management at the plant. At noon last Tuesday only 252 cells out of 905 remained connected, which is 27.8% capacity. Operating conditions contradict statements by Mr. Gamluch, who has claims the decrease in production is due to "sabotage"; while labor leaders say all due to mismanagement. (Policloruro Aluminio, 04-18-2012; http://policloruroaluminio.com/2012/04/operaciones-de-venalum-ya-eran-criticas-antes-del-ultimo-conflicto-correo-del-caroni.html)

Demonstrators at the CVG ALCASA aluminum plant left their blood on the walls and doors of the state run industry to seek incorporation as full workers as opposed to contract labor. ALCASA operates at 35% capacity, has liabilities three times higher than assets according to its own records, and employed over 1000 coop workers in 2010 and 2011. More in Spanish: (Correo del Caroní, http://www.correodelcaroni.com/index.php?option=com_wrapper&view=wrapper&Itemid=174&id_articulo=201380&catid=75)

International Trade

Venezuela and Vietnam have signed joint agreements for technical assistance and equipment for the development of industry, energy, communications and agriculture, and grant PETROVIETNAM drilling rights in the PETROMACAREO mixed company, to increase crude oil production in the Orinoco Oil Belt. More in Spanish: (AVN, 04-20-2012; http://www.avn.info.ve/contenido/venezuela-y-vietnam-suscribieron-acuerdos-industriales-petroleros-y-agrícolas)

Venezuela supports Argentina in the defense of its natural resources

A statement released by the Foreign Ministry says the Venezuelan Government welcomes and supports the decision by President Cristina Fernandez to nationalize Argentina's main oil company YPF. (AVN, 04-17-2012; http://www.avn.info.ve/node/108414)

Logistics & Transport

The national port authority (BOLIPUERTOS) is launching a plan to replace and install fiber optics in all harbors in the country. According to Aquatic and Air Transport Minister Elsa Gutierrez-Graffe they have begun working in the Maracaibo and El Guamache ports. (Veneconomy,04-17-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=30171&idc=3)

Politics

"No one in PSUV can fill the President's leadership "

Jesse Chacon, director of the GIS XXI polling firm says that "within the PSUV (United Socialist Party of Venezuela) there is no one who can fill he full leadership held by Chavez ". Chacon said he is speaking "for the future, when the President decides to retire, as anyone at some point". He also said his statement "bears no relation" to the elections for next October 7th as "no one will think of replacing a candidate with a 30 point lead". Chacon explains that "within the "chavista" movement there is no one who occupies the entire space, but there are emerging leaderships in some areas and would in the future need a much more collective message to cover the area today filled by Hugo Chávez". A former military officer involved in the 1992 coup attempt, Chacon held the posts of Minister of the Interior and Justice, Communications and Information, and Secretary of the Presidency under President Chavez up to the time he set up his own polling firm in 2009. More in Spanish: (El Universal, 04-20-2012; http://www.eluniversal.com/nacional-y-politica/120420/en-el-psuv-no-hay-quien-llene-liderazgo-del-presidente)

"The Vice President directs justice in Venezuela"

Former Supreme Tribunal judge and military prosecutor Eladio Aponte Aponte says his situation boils down to "the paradox of the persecuted persecutor." "Knowing the system from inside, and how it works and how it's handled... I don't think I'd have any rights at all -not in my case at least." He recounted that he had received calls "from the President on down" to tamper with the justice system. He left the country because he fears for his safety. "Considering how many hired assassins there are, I wouldn't dare walk the streets in Venezuela," he said in an interview broadcast on Wednesday night on SoiTV (Interactive Opinion System) channel, owned by Venezuelan banker Eligio Cedeño and serving the US Hispanic community. The network released a transcript in advance of the interview, which is summarized in this article. (El Universal, 04-19-2012; http://www.eluniversal.com/nacional-y-politica/120419/the-vice-president-manages-justice-in-venezuela)

"Aponte has evidence and documents outside Venezuela", according to former US Ambassador to the OAS Roger Noriega, who believes the retired coronel will be a key witness in trials against high Chavez regime officials. Noriega was the first to publicly report that the former Supreme Court Justice was in conversations with DEA officials in Costa Rica, and says "Aponte was interviewed by the DEA and since he is now cooperating with US authorities it would be normal for him to be available to other law enforcement agencies working on cases related to Venezuelan authorities and others Venezuelans suspected of involvement with criminal activity." David Weinstein, former head of the Narcotics Division at the US Department of Justice says the former justice is a "gold mine"; and Thomas Raffanello, former head of DEA in Miami concurs, saying "they are not bringing in another drug cartel member; they are bringing in a judge from another country". More in Spanish: (El Nacional, 04-20-2012; http://www.el-nacional.com/)





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 17th, 2012

Economics & Finance

Venezuela to pull out of ICSID

Energy and Oil Minister Rafael Ramirez confirmed that Venezuela will pull out of the International Center for Settlement of Investment Disputes (ICSID). "We will pull out of ICSID. It is not a mechanism to settle differences and for that reason we will get out of it," says Ramirez. The Minister said that new projects with foreign companies that will be backed by state oil company PDVSA”. (AVN, 01-15-2012; http://www.avn.info.ve/contenido/venezuela-pull-out-icsid; The Washington Post, http://www.washingtonpost.com/business/industries/venezuela-to-leave-world-bank-affiliated-body-renounces-international-arbitration/2012/01/15/gIQA3K5Z1P_story.html)

Chavez refuses to acknowledge value in expropriated land

President Chavez says his government is not ready to pay for the value of the land, but for improvements made on them, as "these lands always belonged to the nation." "They wanted us to pay them per hectare," the president explained during a telephone conversation aired on state-run TV channel Venezolana de Televisión. He added that the owners of seized lands "never managed to prove that they were their owners." "The people were the expropriated ones here. They (apparent owners) had those lands as a result of the historical dispossession of our people," he asserted. (El Universal, 01-16-2012; http://www.eluniversal.com/economia/120116/venezuela-adamantly-refuses-to-acknowledge-value-of-lands)

Vicepresident Jaua admits that lag in price regulations generates shortages

Vice President Elias Jaua said that when the government delays in adjusting product prices, shortage occurs. The official said the government recognizes the actions of the private sector of the economy and although the government has a regulatory function, it will also talk to them. More in Spanish: (El Mundo, 01-17-2012; http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Jaua--Cuando-hay-rezago-en-la-fijacion-de-los-prec.aspx)

Inflation erodes purchasing power, averages 22.2% under Chavez

As interest rates on deposits are much lower than the inflation rate, rising prices erode the purchasing power of deposits; and as a result, investors are losing money. In 2011, Venezuela's inflation jumped 27.6%, while funds deposited in saving accounts earned 12.5% and time deposits a 14.5%. President Chavez has confirmed that average inflation in Venezuela during his administration is 22.2%, during the presentation of his 2011 Report and Accounts at the National Assembly. (El Universal, 01-16-2012; http://www.eluniversal.com/economia/120116/inflation-erodes-venezuelans-purchasing-power and  http://www.eluniversal.com/economia/120114/inflation-under-chavez-averages-222)

Bank credit to business up 4.8%

The Banking Superintendent (SUDEBAN) reports that banking credit to business rose from VEB 85.803 billion in December 2010 to VEB 128.599 billion during 2011, for an increase of 49.8%. More in Spanish:  (Últimas Noticias, 01-17-2012; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/creditos-al-sector-productivo-aumentaron-49,8-.aspx)

Central Bank VP says debt level in accordance with economic growth

Central Bank VP Eudomar Tovar says the level of debt, 23.6% of GDP, is in accordance with the growth the country requires to meet the needs of the population. More in Spanish: (AVN, 01-17-2012; http://www.avn.info.ve/contenido/vicepresidente-del-bcv-nivel-endeudamiento-corresponde-al-crecimiento-del-país)

Agriculture Minister claims caloric consumption has risen from 1900 to 2800 since 1999

Land and Agriculture Minister Juan Carlos Loyo claims local caloric consumption rose from 1900 in 1999 to 2800. He added that this index is above levels set by the UN Agriculture Organization (FAO). More in Spanish: (AVN, 01-17-2012; http://www.avn.info.ve/contenido/loyo-consumo-kilocalorías-del-venezolano-se-elevó-1900-2800-desde-1999)

Commodities

Aluminum smelter seeks financial aid

Venezuela's aluminum smelter CVG ALCASA has requested U$D 90.4 million in financial assistance from the Executive Office to cover payroll expenses, the purchase of raw materials, spare parts and the reactivation of smelting cells. It has also submitted several proposals to the Ministry of Industries to improve cash flow. Elio Sayago, president of aluminum smelter Aluminios del Caroní S.A. (ALCASA), said that this includes importing of 5,000 tons aluminum per month to feed currently inactive installed capacity for mineral processing. (El Universal, 01-16-2012; http://www.eluniversal.com/economia/120116/aluminum-smelter-seeks-financial-aid-to-overcome-weak-spot)

International Trade

US exports to Venezuela through November at their best level in three years

The US Department of Commerce reports that Venezuela’s imports from the US closed at U$D 11.240 billion in November, close to their highest level in 2008. Figures show Venezuelan imports have risen 15.5% over the same period in 2010, making it a six month run of over one billion monthly, the best result since the 2008 economic crisis. More in Spanish: (El Mundo, 01-17-2012; http://www.elmundo.com.ve/Noticias/Economia/Politicas-Publicas/Importaciones-desde-EEUU-se-acercan-a-su-mejor-cie.aspx)

Imports from Colombia up 20.6%

Between January and November Colombia’s exports to Venezuela were up 20.6% figures according to data from Colombia´s Autonomous Department of Statistics (DANE). In the first 11 months of last year Venezuelan purchases totaled U$D 1.553 billion, compared to U$D 1.287.6 billion during the same period in 2010. More in Spanish. (Últimas Noticias, 01-17-2012; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/importaciones-venezolanas-desde-colombia-suben-20,.aspx)

Miami Consulate closure paralyzes trade

Foreign trade sources report that export and import certificates issued by the Venezuelan Consulate in Miami, which covers Florida, Georgia, North and South Carolina will be paralyzed. The Miami Consulate serves some 200,000 Venezuelan residents in those states."These sources say: Without those certificates, Venezuelan importers cannot seek currency from the Exchange Board (CADIVI)”. Venezuela also has consulates in Boston, Chicago, Washington, New York, New Orleans, San Francisco, and San Juan, Puerto Rico. More in Spanish: (El Nacional, 01-17-2012; http://www.el-nacional.com/)

Logistics & Transport

Venezuela mulls revival of neglected ports

Venezuela is pushing for an early regeneration of its maritime and defense port facilities, neglected over many years and found to be lacking in basic infrastructural capacity. Moves for the development and refurbishment of the country's ports so far have attracted a major Chinese investor, China Harbor Engineering Co., which pledged an initial U$D 600 million. More suitors are expected to follow CHEC to gain access to a key part of the oil exporter's infrastructure. President Hugo Chavez also signed agreements with Russia that are likely to result in supply and local assembly of a range of naval defense craft, including submarines, defense and security data showed. (UPI, 01-11-2012; http://www.upi.com/Business_News/Security-Industry/2012/01/11/Venezuela-mulls-revival-of-neglected-ports/UPI-16871326314012/)

Politics

Venezuela closing Miami Consulate after diplomat’s expulsion; US calls it sovereign decision

Venezuela will respond to the U.S. expulsion of its consul in Miami by closing – at least temporarily – its consulate in the Florida city, says President Hugo Chavez. “Foreign Minister Nicolas (Maduro) has recommended closing the consulate, well, we’ll close it then” the socialist leader said while offering his annual state of the union report to Venezuela’s National Assembly. State Department spokesman William Ostick says the United States believes that the closure of the Consulate is a "sovereign decision" and added that Washington will not respond by taking any new steps in response to Venezuela's move. "The decision on how to manage their consulates and provide consular services to their citizens abroad is solely in the hands of the government of Venezuela". (Latin America Herald Tribune, 01-13-2012; http://www.laht.com/article.asp?ArticleId=462122&CategoryId=10717; El Universal; http://www.eluniversal.com/nacional-y-politica/120113/chavez-orders-closure-of-venezuelan-consulate-in-miami; http://www.eluniversal.com/nacional-y-politica/120116/venezuela-withdraws-personnel-from-miami-consulate); http://www.eluniversal.com/nacional-y-politica/120113/us-closure-of-miami-consulate-is-venezuelas-sovereign-decision)

Foreign Minister claims CELAC is one of Venezuela's foreign policy achievements in 2011

Venezuelan Foreign Affairs minister Nicolas Maduro says the most significant achievement in Venezuela's foreign policy during 2011 was the creation of the Community of Latin American and Caribbean States (CELAC). "The creation of the CELAC opens a new path for Latin America and the Caribbean. It is a project gathering diverse political, ideological and cultural thoughts from the continent," says Maduro. (AVN, 01-16-2012; http://www.avn.info.ve/contenido/celac-one-achievements-venezuela039s-foreign-policy-2011)text-align: center;