International Trade
Cargo that has arrived
at Puerto Cabello:
- Over 40,000 metric tons of
cement for state agency Socialist Cement Corporation
- Over 12,254 tons of beef and
chicken from Brazil for state agency CASA
- Over 4,282 tons of powdered
milk, margarine and chicken from Brazil for state agency CASA
170 containers with material and equipment for oil and gas exploration, production and refining, as well as supplies and accessories for the marine industry and agriculture, for PDVSA
Oil &
Energy
Maduro says time for
OPEC to convene heads of state summit
President Nicolas Maduro says it is time for
OPEC to convene a heads of state meeting and that he would present the
country's proposals to shore up oil prices to the group. Middle East producers
from OPEC, however, have pledged to maintain high output in a fight to defend
market share against rising competition. So far, they have stuck to their
decision despite calls by other OPEC members, such as Venezuela, for the Middle
East to cut excessive output. (Reuters, http://www.reuters.com/article/2015/09/15/us-venezuela-opec-idUSKCN0RF00320150915;
El Universal, http://www.eluniversal.com/economia/150912/venezuela-proposes-control-over-oil-market)
Venezuela detains
three vessels for suspected fuel smuggling
Three vessels suspected of smuggling subsidized
fuel from Venezuela's refinery-rich Paraguana peninsula were detained this week
by the country's navy, a local commander said. Sources told Reuters that seven
people have been arrested for allegedly attempting to smuggle diesel in a
tanker owned by state oil company PDVSA. Admiral Andres Gomez, commander of a
local navy unit, confirmed tanker 'Negra Hipolita' was found with an excess
load of 50,000 barrels of diesel fuel at the Cardon refinery. Two additional
vessels, both from Panama, were detained this week by the Venezuelan navy, also
on smuggling suspicions, Gomez added. It was not immediately clear when they
were apprehended. (Reuters, http://www.reuters.com/article/2015/09/13/us-venezuela-oil-idUSKCN0RD01K20150913;
El Universal, http://www.eluniversal.com/economia/150914/venezuelan-navy-detains-three-vessels-for-alleged-fuel-smuggling)
Gasoline consumption
down 7 million liters per day in bordering regions
Venezuela says it will save US$ 2.5 billion a
year, as gasoline consumption in the bordering municipalities of Táchira
(southwest Venezuela) and Zulia (west) states has decreased by 7 million liters
of gasoline per day, according to the President of state-run oil holding
Petróleos de Venezuela (PDVSA), Eulogio Del Pino. Del Pino, who is also Minister
of Energy and Mines, says President Nicolás Maduro's order to shut down several
border crossings with Colombia on August 19 (in Táchira state) and September 7
(in Zulia state) has helped to clarify the real numbers of gasoline consumption
in the area. Due to the shutdown of the Colombia-Venezuela border in Táchira
state last August 19, a total of 1.5 million liters of gasoline per day have
been prevented from being smuggled into Cúcuta, Colombia, the minister
explained. The border shutdown prevents over 260,000 gallons of gasoline from
being smuggled into Cúcuta from Venezuela, and gasoline represents 80% of
Venezuelan products sold in Cúcuta, the Foreign Office added. (El
Universal, http://www.eluniversal.com/economia/150912/gasoline-consumption-down-7-million-liters-per-day-in-bordering-region)
Venezuela to appeal
judgment giving PDVSA refinery to CONOCO
Responding to a refinery loss, Venezuelan
state-owned oil company PDVSA says it intends to appeal the U.S. federal court
ruling upholding ConocoPhillips’ acquisition of its stake in a delayed coking
unit at a Texas refinery. PDVSA and Conoco formed a 50-50 joint venture in the
late 1990s to operate the unit at the refinery. Phillips 66, which was spun off
from Conoco in 2012, currently owns and operates the coking unit and the rest
of the Sweeny refinery, located in Old Ocean, Texas. The federal court in New
York upheld a ruling last year by the Paris-based International Chamber of
Commerce, which found in an arbitration case filed in 2010 that Phillips 66 had
sole ownership in the refinery because PDVSA had forfeited its stake by failing
to supply a contractually agreed amount of crude. PDVSA received no
compensation for its 50% stake in the delayed coking unit based on a calculation
in which the dividends it had received were subtracted from its capital
contributions. Analysts said its portion of the refinery was worth over
half-a-billion. PDVSA is represented by Curtis, Mallet-Prevost, Colt &
Mosle, who frequently represent Venezuela and its state-owned oil company. (Latin
American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2396138&CategoryId=10717)
Commodities
PDVAL decreases outdoor food market sales
operations due to lack of food
Food scarcity nationwide is even hitting
government food distribution operations. PDVAL has had to cut down on the
outdoor distribution operations, according to sources close to the organization
who report: "Operations used to take
place 5 times a week, Tuesday to Saturday, but due to shortages they are now
taking place only on Saturdays, since last May". The same source
reports that PDVAL warehouses used to distribute an average 13 primary
products, and are now down to 5-7. More in Spanish: (El Nacional; http://www.el-nacional.com/)
Economy
& Finance
Monaldi: The impact of
the decline in oil prices on the economics, politics and oil industry of
Venezuela
The picture does not look pretty for Venezuela.
The macroeconomic crisis will likely get worse for lack of adjustment in an
election year. There is even a small probability of hyperinflation and a much
higher probability of debt default in 2016. There may be more political
instability. The legislative elections should produce a majority for the
opposition that could intensify the confrontation and might lead to a push to recall
the president in a referendum in 2016–17. Street protests are likely to
increase as the economy continues to collapse. The numerous problematic trends
in the oil industry have been made worse by low oil prices. However, the new
pragmatism in oil policy might lead to some improvement in private investment,
but above ground risks could limit its impact. Conventional production would
continue falling, so total production is most probably going to remain stagnant
in the short term and is highly unlikely to grow significantly in the next two to
three years. Extra-heavy production could rise at an increased rate if the
current investor-friendly attitude remains in place. In a ten-year horizon
production is more likely to increase, particularly if there is a transition to
a more credible and stable government, but that potential could remain
unfulfilled if political instability remains a serious issue. (Columbia, http://energypolicy.columbia.edu/sites/default/files/energy/Impact%20of%20the%20Decline%20in%20Oil%20Prices%20on%20Venezuela_September%202015.pdf)
FORBES: How does
Venezuela compare to the world's worst managed economies?
Outside of Venezuela, around the world, controlling
inflation is seen as the primary concern of most central bankers. In the
economic crises of the 1970s and 1980s inflation soared in as a series of
economic shocks rocked Latin America. Looking at the deleterious effects of
these periods of hyperinflation, the region’s central bankers have made
stamping out inflation and promoting economic stability their number one
priority. Latin America, with its longstanding and heavy reliance on natural
resource exports, is remarkably vulnerable to boom and bust cycles as commodity
prices rise and fall. Today, successful economies in Latin America focus on
responsible macroeconomic management and work to promote economic stability.
Even revolutionary leaders such as Evo Morales in Bolivia have adopted conservative
macroeconomic management policies and eschewed irresponsible, short-term
spending binges in favor of programs designed to create sustainable growth. So,
looking at the list of the world’s worst performing economies in terms of
inflation management a few things stand out. The fact that Venezuela tops the
list should come as no surprise. The nation has become a poster child for
macroeconomic mismanagement. President Nicolas Maduro, the unfortunate
successor to populist icon Hugo Chavez, has inherited a deeply unbalanced
economy, and has resorted to desperate PR stunts such as jailing opposition
leaders and blaming inflation on business owners rather than working to address
the country’s underlying economic problems. Within Latin America, aside from
Venezuela, only Argentina stands out for its struggles to control inflation.
With double-digit inflation, Argentina is the only other Latin American economy
besides Venezuela that sits alongside economies such as North Korea, Sudan,
Syria, Ukraine, and the Central African Republic as one of the world’s worst
managed economies. If policymakers in Venezuela are looking for a model to
follow, they may want to turn their attention to Mexico, which has transformed
from being a heavily protected interventionist economy to a much more open
country with a strong industrial base. (Forbes, http://www.forbes.com/sites/travisbradberry/2015/09/15/6-ways-to-win-at-office-politics/)
Venezuela is in last
place in world economic freedom report
For the second consecutive year, Canada's
Fraser Institute has placed Venezuela last out of 157 countries that comprise
its' 2015 World Economic Freedom Annual Report, with 3.23 points against a
worldwide average of 6.86. (Fraser Institute: http://www.fraserinstitute.org/studies/economic-freedom-of-the-world-2015-annual-report)
BofA Merrill Lynch
suggests free floating FOREX system for Venezuela
Venezuela needs to lift foreign exchange controls
and move forward towards a free floating foreign exchange system, in
conjunction with a macroeconomic stabilization plan, says Francisco Rodríguez,
director of Bank of America-Merryl Lynch. "It is not a threat for the country, because it does not have to lose
international reserves in defending the foreign exchange rate. In that regard,
the foreign exchange convertibility within a free floating exchange regime is
the best way to defend the country's resources held in the Central Bank.
Lifting foreign exchange controls is not something to be afraid of," says
Rodríguez. "The Central Bank could
hold a transparent auction for US$ 100 million per day at a foreign exchange
rate set by the market," he said. (El Universal, http://www.eluniversal.com/economia/150912/bofa-merrill-lynch-suggests-free-floating-forex-system-for-venezuela)
Politics and
International Affairs
Harsh sentence for
protest leader a gamble for Venezuela
The stiff sentence handed down to Venezuela's
most prominent jailed opposition leader brought a cascade of criticism as
President Nicolas Maduro's government continued along a combative path despite
a crushing economic crisis, feuds with his neighbors and accusations of
authoritarianism. Leopoldo Lopez was convicted of inciting violence during a
wave of protests against the country's socialist administration in 2014, and
was sentenced to the maximum punishment of nearly 14 years in a military
prison. Critics at home immediately said the sentence should rally
anti-government voters to the polls for crucial December legislative elections.
From abroad, the White House said it was "deeply saddened" by the ruling. Amnesty International, the
European Union and U.N. human rights officials joined in condemnation. "This case is a complete travesty of justice,"
said Jose Miguel Vivanco, Americas director at Human Rights Watch. "In a country that lacks judicial
independence, a provisional judge convicts four innocent people after a trial
in which the prosecution did not present basic evidence". The
conviction of Lopez is likely to end, for now, a behind-the-scenes push by the
U.S. to normalize relations with the country it declared a national security
threat in March. The White House said Maduro's government was using the justice
system to attempt to silence critics. Meanwhile, conservative lawmakers,
including Florida Sen. Marco Rubio, began calling for a new round of sanctions
in response to what the Republican presidential contender called a "show trial." The outrage in
Washington contrasted with silence in Latin America, where no sitting president
had yet to criticize the ruling. (The New York Times, http://www.nytimes.com/aponline/2015/09/11/world/americas/ap-lt-venezuela-opposition-leader.html)
US "deeply
concerned" about Lopez sentence in Venezuela
Assistant Secretary of State for Latin America
Roberta Jacobson says the United States is "deeply concerned" about the conviction of Leopoldo Lopez",
and called upon the government here "to
protect democracy and human rights in Venezuela". More in Spanish:
(Infolatam, http://www.infolatam.com/2015/09/11/roberta-jacobson-profundamente-preocupada-por-condena-a-lopez-en-venezuela/)
Latin American
governments start to speak out on López case
Costa Rica's President Luis Guillermo Solis has
openly criticized Lopez's conviction and that nation's Foreign Ministry
indicated it is "concerned about the
trial of Leopoldo López and four student leaders". Chile's Foreign
Ministry followed suit in a note to the Maduro regime indicated it is "attentively" following the López
process and hopes "judicial
guarantees for a due process and effective available options so that the
parties can appeal a sentence". Their Venezuelan counterpart quickly
retorted by asking Chile "not to
meddle", either "through
direct action or under the influence of foreign powers". Paraguay's
Foreign Ministry has said it expects "strict
compliance with due process and actual respect for rights". The
Peruvian government expressed concern over Venezuela's internal polarization
and called for dialogue. OAS Secretary General Luis Almagro asked that the
international community have access and expressed hope that due process and human
rights standards should be observed during the appeals process. (Infolatam, http://www.infolatam.com/2015/09/15/silencio-de-los-gobiernos-latinoamericanos-frente-a-lopez-empieza-a-romperse/)
What about the
Vatican?
Considering that this is an overwhelmingly
Catholic country where the Holy See has strong connections (its secretary of
state Pietro Parolin was serving there till 2013) and that Leopoldo López
himself is Catholic, people might have expected Pope Francis or at least a
senior Vatican spokesman to issue an instant condemnation of the verdict. But
for better or worse, that is not the current papacy's way; it prefers to make
its feelings known more discreetly, and to leave things to local bishops. Archbishop
Roberto Luckert, one of the country's most outspoken hierarchs, has roundly
condemned President Nicolás Maduro for expelling thousands of Colombians from
the country. But religious leaders, like
political ones, have to make hard choices between keeping relationships and
channels of dialogue open, and openly telling hard truths. In the course of his
travels the pontiff, who has shown real eloquence in condemning the excesses of
the capitalist north, can still expect some hard questions about his attitude
to excesses of another kind. Will he denounce left-wing authoritarianism as
much as he has denounced the right-wing variety? (The Economist, http://www.economist.com/blogs/erasmus/2015/09/pope-cuba-and-venezuela)
Colombia protests for
military flyover, Venezuela denies charge
Colombia's government will formally protest and
seek an explanation from Venezuela after detecting two military airplanes that
flew into its airspace, President Juan Manuel Santos said. The two aircraft
entered Colombia's northern La Guajira province without permission, flew about
1.8 miles over the border and then circled above a military unit, Colombia's
Defense Ministry said in a statement. Venezuelan Foreign Minister Delcy
Rodriguez said there was no evidence of any violation of Colombian airspace;
and Venezuela's Minister of Defense and Head of the Strategic Operational
Command of the Armed Forces (CEOFANB), General Vladimir Padrino López, denied
that Venezuelan military aircraft violated the Colombian airspace over the
weekend. Padrino López argued that Venezuelan pilots had asserted that they
have not violated any foreign airspace whatsoever. (Reuters, http://www.reuters.com/article/2015/09/14/colombia-venezuela-idUSL1N11K01B20150914;
Bloomberg, http://www.bloomberg.com/news/articles/2015-09-13/colombia-says-venezuela-military-planes-crossed-into-territory;
El Universal, http://www.eluniversal.com/nacional-y-politica/150914/venezuelan-ministry-of-defense-denies-airspace-violation-in-colombia)
Closing the border was
the “only way,” Zulia governor says
Zulia state Gov. retired Colonel Francisco
Arias Cardenas says that closing the border in this region was “the only way” left for Venezuelan
authorities to combat the problems of paramilitaries and the shipping of
contraband to Colombia.
The top authority of Zulia, a state that shares more than 600 kilometers (370 miles) of border with Colombia, said in an interview that the government is “absolutely convinced that this can be a way, or perhaps the only way we have left, to deal in depth with these problems.” “This seems to us a strong but necessary measure that forces people, as in the game of dominoes, to shuffle the cards and change things,” said the governor, who stressed the need to “reestablish the border.” (The Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2396341&CategoryId=10717)
The top authority of Zulia, a state that shares more than 600 kilometers (370 miles) of border with Colombia, said in an interview that the government is “absolutely convinced that this can be a way, or perhaps the only way we have left, to deal in depth with these problems.” “This seems to us a strong but necessary measure that forces people, as in the game of dominoes, to shuffle the cards and change things,” said the governor, who stressed the need to “reestablish the border.” (The Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2396341&CategoryId=10717)
US says Venezuela fails to comply with
anti-drug efforts
US President Barack
Obama has sent a message to Congress indicating that Venezuela and Bolivia,
along with Burma, are nations that did not - in the past year - honor their
commitments on drug traffic and production control under international antidrug
agreements. More in Spanish: .(El Nacional; http://www.el-nacional.com/)
Venezuelan Supreme Tribunal balks complying
with Human Rights Court decision on RCTV
Venezuela's Supreme
Tribunal has declared that a decision by the Inter American Human Rights Court,
ordering the Maduro regime to restore operating permits to the RCTV television
network is "inapplicable".
Other regime spokesmen have openly mocked the decision. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/tsj-declara-inejecutable-fallo-de-la-cidh-sobre-rc.aspx#ixzz3lQJmBcj4; El Nacional, http://www.el-nacional.com/politica/TSJ-declara-inejecutable-fallo-CIDH_0_699530314.html; El Universal, http://www.eluniversal.com/nacional-y-politica/150911/tsj-pide-al-gobierno-denunciar-en-la-oea-a-jueces-de-corte-idh)
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.
