November 22, 2018

International Trade

Customs Brokers Chamber reports Christmas season imports are down 98% from 2012 due to exchange restrictions and red tape. It adds that high impact imports are carried out by the government. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/camara-de-aduaneros-asegura-que-importaciones-navidenas-cayeron-98)

 

Oil & Energy

PDVSA resumes work at Jose oil port's dock

Venezuela’s state-run PDVSA has reopened a dock at the country’s main oil terminal of Jose that had been closed for almost three months due to a tanker collision, a PDVSA source and a shipper said on Tuesday. Dozens of tankers waiting to load Venezuelan oil were diverted to other PDVSA’s terminals since Jose port’s South dock was shut in late August, causing delays in deliveries to customers and cutting export revenue. (Reuters, https://www.reuters.com/article/us-venezuela-oil-ports/venezuelas-pdvsa-resumes-work-at-jose-oil-ports-dock-sources-idUSKCN1NP24K)

 

Maduro claims US$ 100 is the “fair price” for a barrel of oil

He made his statement at a funeral ceremony honoring for former Oil Minister, PDVSA President and OPEC Secretary General Alí Rodríguez Araque. Year-to-date 218, Venezuela’s oil basket price has averaged US$ 61.74. More in Spanish: (El Universal, http://www.eluniversal.com/el-universal/26375/maduro-estima-que-100-dolares-es-el-precio-justo-para-el-barril-de-petroleo)

 

Commodities

Zulia state governor declares emergency due to drinking water scarcity

Zulia state governor Omar Prieto has declared a state of emergency in the statewide distribution of drinking water and will set “a sales price cap on water casks". More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/gobernador-del-zulia-declaro-emergencia-por-escasez-de-agua-potable)

 

Economy & Finance

Chavez’s ex-treasurer will give up houses, horses and watches

A former national treasurer of Venezuela who admitted taking bribes from a billionaire television mogul will give up the trappings of his fabulous life in south Florida, including real estate, show horses, luxury watches and foreign bank accounts. Alejandro Andrade Cedeno, the treasurer from 2007 to 2010 under late socialist leader Hugo Chavez, pleaded guilty to a US$ 1 billion money-laundering plot in which wealthy Venezuelans converted bolivars to dollars through a rigged exchange system. They then moved money out of the country, which is suffering a crippling economic crisis. The Justice Department detailed the extent of Andrade’s corrupt wealth in unsealing his case Tuesday and revealing his cooperation with prosecutors. They also announced the indictment of Raul Gorrin Belisario, the billionaire who owns the GLOBOVISION television network and has been charged with paying bribes to Andrade and others as well as helping to launder the payments; and the guilty plea of Gabriel Arturo Jimenez Aray, a Venezuelan who owned BANCO PERAVIA in the Dominican Republic. Andrade, once a bodyguard to the late President Hugo Chavez, admitted he took bribes as treasurer to steer contracts to brokerage houses that conducted bolivar exchanges. Andrade chose which brokerages would sell bonds from the treasurer’s portfolio that were denominated in U.S. dollars. His conspirators could then “obtain substantial profits on the exchange transactions,” according to court documents. Even after Andrade moved in 2012 to Wellington, Florida, the bribes continued until last November, he said in pleading guilty. His plea deal requires him to forfeit the Palm Beach County real estate empire and horses. Andrade will give up a six-acre estate in a gated community and 17 horses with names like Tinker Bell, Bonjovi and Anastasia Du Park. He’ll give over his 2017 Mercedes Benz GLS 550 and nine other cars, as well as three dozen watches from makers like Rolex, Hublot and Franck Muller. He’s forfeiting Swiss accounts at BSI Bank and EFG Bank, and at three large U.S. banks. Andrade, 54, was a close ally of Chavez and helped him in a 1992 coup d’etat. Andrade faces as long as 10 years in prison when he’s sentenced on Nov. 27, but he’s likely to get less time as a cooperator. Prosecutors also relied on Jimenez, 50, who spent three years cooperating in “an international criminal investigation against highly dangerous individuals” that “put him in a dangerous position,” prosecutors said in an Oct. 1 filing unsealed Tuesday. “The government of Venezuela’s complicity in this conspiracy renders victim status inappropriate,” prosecutors said in a July 27 court filing. Gorrin, who also owns insurance firm Seguros La Vitalicia, was charged in an indictment unsealed on Monday with violating U.S. anti-corruption laws in efforts to win contracts to carry out currency exchange operations for the government. Between 2008 and 2017, Gorrin facilitated more than US$ 150 million in bribe payments to officials in Venezuela’s treasury for access to currency deals, with funds wired from Swiss bank accounts to accounts in Florida, U.S. prosecutors said. Gorrin allegedly also bought jets, yachts, “champion horses” and luxury watches in Florida and Texas for a government official as a bribe, according to the indictment. GLOBOVISION, once a virulently anti-government station, overhauled coverage and softened criticism of Chavez's successor, Nicolas Maduro, after Gorrin purchased the channel in 2013, reporters said at the time. (BLOOMBERG: https://www.bloomberg.com/news/articles/2018-11-21/venezuela-s-ex-treasurer-will-give-up-houses-horses-and-watches; https://www.bloomberg.com/news/articles/2018-11-20/venezuelan-tv-mogul-charged-in-u-s-bribery-laundering-case; REUTERS: https://www.reuters.com/article/us-venezuela-corruption/venezuelas-former-treasurer-took-1-billion-in-bribes-u-s-prosecutors-idUSKCN1NP1K1; https://www.reuters.com/article/venezuela-corruption/u-s-prosecutors-accuse-venezuela-media-mogul-of-bribery-money-laundering-idUSL2N1XV05P; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469926&CategoryId=10717; Bloomberg, https://www.bloomberg.com/news/articles/2018-11-21/venezuela-s-ex-treasurer-will-give-up-houses-horses-and-watches)

 

Politics and International Affairs

Maduro’s poll ratings dropped six points this month.

A slight gain in President Nicolás Maduro’s popularity registered in October, when he announced some economic initiatives, dropped again in November. The DATANÁLISIS Omnibus poll shows both the government and Maduro himself have again lost popularity. One out of four Venezuelans had rated Maduro favorably in October, probably due to the alleged murder attempt and new economic policy announcements. However, in November only one out of five registered a positive attitude toward the President. He lost 7 percentage points over the past 30 days due to continued hyperinflation and the murder of city councilor Fernando Alban. Overall, 78% of Venezuelans rate Maduro negatively now, although he retains 73.4% support among so-called “chavistas”. The feeling that his economic policy has failed seems to have taken root within the population. More in Spanish: (VENEPRESS: https://venepress.com/article/Evaluacion-del-presidente-Maduro-bajo-siete-puntos1542810004750)

 

U.S. weighs sanctions on Cuban officials over role in Venezuela crackdown

The Trump administration is considering imposing sanctions on Cuban military and intelligence officials who it says are helping Venezuela’s socialist government crackdown on dissent, according to a source with knowledge of the deliberations. Such sanctions would be the first time Washington has targeted a bloc of foreign officials allied with Venezuelan President Nicolas Maduro. The potential human rights-related sanctions would target Cuban officials, possibly including generals, who Washington accuses of advising Venezuela’s government on how to monitor opponents and put down street protests, the source said. The number and identities of the potential targets was unclear. Asked about possible sanctions on Cuban officials, a senior U.S. government official told Reuters in early November: “We are looking at all the potential avenues to deter those who are really helping the Maduro regime stay afloat and giving them the tools they need for repression.” Trump’s national security adviser John Bolton said earlier this month Washington would take a tougher line against Cuba, Venezuela and Nicaragua, calling them a “Troika of Tyranny.” (Reuters, https://www.reuters.com/article/us-venezuela-usa-cuba-exclusive/exclusive-u-s-weighs-sanctions-on-cuban-officials-over-role-in-venezuela-crackdown-idUSKCN1NQ2CV; NBC News: https://www.nbcnews.com/news/latino/u-s-considering-sanctioning-cuban-officials-over-their-role-venezuela-n939111)

 

Police, students clash at protest in Venezuela

Hundreds of anti-riot police in Venezuela have clashed with students staging a protest calling for better conditions at universities as the nation’s economic crisis continues to worsen. Students held a rally at the Central University of Venezuela in Caracas on Wednesday before trying to march off campus. They were stopped by officers and members of the national guard who launched tear gas at them. A dozen students required medical treatment after exposure to the fumes. The anti-government movement has lost steam in recent months, and the march had drawn an unusually large crowd. The demonstrators were trying to leave the university, but the PNB officials blocked the exits of the institution with police fences. (National Post: https://nationalpost.com/pmn/news-pmn/police-students-clash-at-protest-in-venezuela; EFE: https://www.efe.com/efe/english/world/university-students-show-umpteenth-proof-of-polarization-in-venezuela/50000262-3820573)

 

NGO has registered over 10,000 protests this year in Venezuela

Human rights activist Marco Antonio Ponce, coordinator of the Social Conflict Observatory (OVCS), reports there is an average of 47 protests daily protests nationwide in Venezuela. He adds that there have been 10,773 protests here year to date in 2018, which he calls a record year.  More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/ong-asegura-que-se-han-organizado-mas-de-10-mil-protestas-en-2018)

 

Rodriguez calls on Colombia to comply with agreements with FARC guerrilla

Venezuela’s Communications and Information Minister Jorge Rodríguez has calle don the Colombian government to comply with peace agreements reached by that nation’s government and the FARC guerrilla forces. Rodríguez said he spoke on behalf of President Nicolas Maduro given Venezuela’s role as “guarantor” of such agreements. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/venezuela-exhorta-a-colombia-cumplir-con-acuerdos-de-paz-con-las-farc; El Universal, http://www.eluniversal.com/politica/26334/rodriguez-el-gobierno-no-seguira-tolerando-las-mentiras-y-falsos-positivos-de-colombia; AVN, http://www.avn.info.ve/contenido/colombia-remiti%C3%B3-36-solicitudes-venezuela-para-respaldar-di%C3%A1logos-paz)

 

Ali Rodriguez, Venezuela’s ambassador to Cuba and former OPEC official, dies

Venezuelan Ambassador to Cuba Ali Rodriguez Araque, who also served as secretary-general of OPEC and the Union of South American Nations (UNASUR), died in Havana, President Nicolas Maduro said. He was 81. Cuban President Miguel Diaz-Canel said in a statement on Tuesday that Rodriguez Araque was a politician “inseparable from Cuba.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469903&CategoryId=10717)

 

Legislature rejects unconstitutional appointment of ambassadors abroad

Venezuela’s opposition-controlled National Assembly has rejected the appointment of ambassadors abroad by the Maduro regime, and calls them “null” and “unconstitutional”. Francisco Sucre, head of the Foreign Affairs Committee, says that the Constitution requires legislative approval for naming ambassadors, and that such appointments usurp legislative authority “and nullify treaties signed illegally”. More in Spanish: (El Universal, http://www.eluniversal.com/politica/26294/an-rechaza-nombramiento-de-embajadores-en-el-exterior)

 

OAS member state delegation visits Colombia – Venezuela border to assess crisis

On November 19-20, 2018, seventeen OAS member states participated in a field visit to assess the humanitarian crisis along the Colombia - Venezuela border: Maicao, in the Rioacha province, and Cucuta in the Norte de Santander province. The visit was organized by the Colombian government and included representation from the governments of Argentina, Belize, Chile, Costa Rica, Colombia, Ecuador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Panamá, Paraguay, Perú, Saint Lucia, Uruguay and the United States represented by Ambassador Carlos Trujillo. The OAS Working Group on Venezuela migration also participated with representation from three experts on the situation. The purpose of the visit was to raise member state awareness of the extent of the humanitarian crisis, in anticipation of continued action in the Inter-American system regarding Venezuela and address the root causes of the crisis under the Maduro regime. The OAS Inter-American Council for Integral Development (CIDI) is scheduled to meet November 26 to discuss food security and migration impacts and Pan American Health Organization (PAHO) will convene a health ministerial meeting on Venezuela November 29. (US Mission to the OAS: https://usoas.usmission.gov/member-state-delegation-visits-colombia-venezuela-border-to-assess-crisis/)

 

Hunger grows in Venezuela

The United Nations Food and Agriculture Organization (FAO); the Pan-American Health Organization (PAHO); the World Food Program (WFP); and the United Nations International Children’s Emergency Fund (UNICEF) – joined forces to create a report on the undernourishment problem affecting Latin America and the Caribbean. This report – recently made public – shows that the number of undernourished people in Venezuela has increased in both absolute and relative terms: the rate of undernourished people in the country reached 9.8% over the three-year period from 2014 to 2016, while the rate increased to 11.7% over the next three-year period from 2015 to 2017. The first percentage corresponds to an absolute amount of 3.1 million undernourished people, while the second percentage corresponds to an amount of 3.7 million people. This represents an increase of 600,000 new Venezuelans within only a year. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469996&CategoryId=10717)

 

WHO reports Venezuela registers greatest malaria increase worldwide

The World Health Organization’s yearly report on malaria shows Venezuela as the nation with the greatest increase in malaria worldwide and fears the disease will expand to neighboring countries. The report shows 773,500 confirmed cases in Latin America during 2017, a 72% increase over 2015, and 53% of those cases were registered in Venezuela, which is among 10 countries where malaria cases were over 300,000 in 2017. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/salud/oms-venezuela-registra-el-mayor-incremento-de-malaria-en-el-mundo)

 

Voluntad Popular calls for removal of UNDP representative in Venezuela

The Voluntad Popular opposition party led by imprisoned leader Leopoldo López has asked the United Nations to remove Peter Grohmann, UNDP representative in Venezuela, for “silencing” the serious situation here. The party says: “it is unacceptable that, having a budget and technical personnel, that they have not at least prepared a report on what is going on”.  A party spokesperson, legislator Manuela Bolivar, says the case will be taken to the National Assembly. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/voluntad-popular-pide-a-onu-cambiar-al-representante-del-pnud-en-venezuela)

 

OP-ED: What Options Are Left in Venezuela? by Félix Seijas Rodríguez

Nicolás Maduro is set to start a new term as Venezuela’s president on Jan. 10, and the country’s political, social and economic crisis is only becoming more profound. Far from correcting course, Maduro has taken steps to maintain control despite an imploding economy. His opposition is dispersed and lacking a coherent strategy. A solution through dialogue seems farfetched. How might things change for Venezuela? Here are three possibilities, and a look at the likelihood of any of them coming to fruition. Foreign military intervention: For some time now there has been talk of possible military intervention to depose Maduro’s regime. But there are several reasons why intervention is very unlikely. First, there is no consensus among the largest countries in the region on the need to take an active hand in changing Venezuela’s reality. Mexico, especially under Andrés Manuel López Obrador, would oppose such action. The U.S. could decide to act on its own, but a decision to invade Venezuela would need to be approved by the U.S. Congress and the UN Security Council. At the UN, both China and Russia, countries with important economic interests in Venezuela, would most certainly veto any resolution to intervene. But perhaps even more relevant is the precarious situation of the opposition forces in Venezuela. The political leadership in opposition to Maduro is weak and enjoys little support from civil society. Without an internal structure that can take the reins of the country if Maduro is deposed, the consequences of an intervention would be highly uncertain. Public support for Maduro’s regime is still around 20 percent, while the revolution proposed by his late predecessor Hugo Chávez has 35 percent approval. Military action in this circumstance is not a sensible idea. Recent reports that Trump may add Venezuela to the state sponsors of terrorism list shows that the administration still sees the possibility of adding pressure on Maduro without intervening militarily. Chavismo collapses: For Maduro’s political movement to collapse, external pressure would have to be such as to cause a fracture within its power structure. This could come through an explosion of public protest that exceeds the regime’s containment capacity and is big enough to compromise the loyalty of security forces tasked with putting it down. Another possibility is that international pressure asphyxiates the regime, rendering it incapable of maintaining the web of corruption and complicity it has had for the last 20 years. These two possibilities are not mutually exclusive, but a social explosion of the magnitude needed to cause a revolt in the security services is not likely. If popular pressure again starts building on the streets, there is no political leadership or organization with both the know-how and the credibility to use that energy effectively against the regime.  Once again, the weakness of the Venezuelan opposition is an obstacle to any solution to the crisis. Transition within Chavismo: As mentioned, international pressure could cause the power structures to flounder and there might not be a democratic alternative to take control of the situation. That could already be happening, and the international community should be concerned about where that might lead. If the absence of any possibility of a democratic transition, an intermediate alternative comes into view: a transition that leaves Chavismo in place but gets rid of Maduro and his inner circle. It’s possible that the early stages of such a transition are underway. But it would be a difficult path to follow. If successfully navigated by both the international community and domestic opposition, such a transition might eventually pave the way to a democratic opening. But the risks of further entrenchment are apparent. It would be a risky bet. (Americas Quarterly: https://www.americasquarterly.org/content/whats-left-venezuela)

 

OP-ED: More than 40 countries may cut diplomatic ties with Venezuela. Fine, but would it do any good? by Andres Oppenheimer

Venezuela’s dictator Nicolás Maduro may soon face bad news on the diplomatic front: More than 40 countries are considering cutting diplomatic relations or reducing their ties with Venezuela starting Jan. 10, when he is scheduled to start a new six-year term in office. Venezuelan opposition sources tell me that they expect at least 46 countries — including most members of the Group of Lima and the 28-member European Union — to downgrade or sever diplomatic ties with Venezuela. The big question is whether there will be any practical consequences of a formal decision by these countries to cut ties with Venezuela. Some Venezuelan exile leaders are lobbying the Trump administration and those of other countries to simultaneously cut diplomatic ties with Maduro and recognize a caretaker opposition-led government. Their plan would go like this: Since Maduro and his vice president, Delcy Rodríguez, would no longer be considered legitimate leaders once their current terms expire, there would be a power vacuum. The next in line of succession would be the head of the opposition-controlled National Assembly. Venezuela’s National Assembly was democratically elected in 2015 and is the last remaining democratic institution in Venezuela. Maduro stripped the Assembly of most of its powers and created a new Congress to rubber-stamp his decisions. But the international community could recognize the National Assembly’s president as Venezuela’s legitimate leader while new elections are convened, supporters of that plan say. But many countries would be reluctant to go that route for fear of opening a diplomatic can of worms. In addition, some diplomats note that, unlike last year, when more than 150 people died in Venezuela’s street protests, — there is no sense of urgency in the diplomatic community today that would justify taking such extreme measures. For now, the likely decision by many countries to stop recognizing Maduro as a legitimate president will be a mostly symbolic announcement. But if the opposition takes to the streets in January — as some anti-government parties are planning — to protest Maduro’s inauguration and the country’s humanitarian crisis, things could change. There would be a legal base for the next step — international recognition of a provisional opposition government. (The Miami Herald: https://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article222012125.html)

 

October 12, 2017

International Trade

3,411 tons of food and medical supplies have arrived at Guanta port in 142 containers aboard the SAN ANTONIO from Panama. The shipment includes wheat flour, sunflower oil, surgical masks, syringes. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=37703; El Universal, http://www.eluniversal.com/noticias/economia/llegan-puerto-guanta-mil-toneladas-mercancia_673416)

 

Logistics & Transport

Venezuela reels under ongoing transport crisis

Catching a bus in the Venezuelan capital today and making it to the desired destination on time can be quite an ordeal for commuters, as the country’s transport infrastructure is in shambles due to high maintenance costs, decreased tax revenue, rampant inflation and a system that is chronically understaffed. Venezuela’s spiraling transport crisis, trade union representatives say, is owing to government apathy and withdrawal of subsidies and a lack of investment in the sector. The president of a local union of transporters of Caracas, Hugo Ocando, told EFE that while salaries of drivers are fixed, maintenance costs are unpredictable as the country’s economy, in many areas, runs on the black market price of foreign exchange. According to Ocando, 70% of the country’s transport system has been paralyzed and in the Greater Caracas area alone, on-road vehicles have reduced from 18,000 to 6,000. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2444551&CategoryId=10717; EFE: https://www.efe.com/efe/english/life/venezuela-reels-under-ongoing-transport-crisis/50000263-3405419)

 

Oil & Energy

Big buyer of Venezuelan crude oil halts purchases from national oil company

The fifth largest U.S. buyer of Venezuelan crude, PBF Energy, has halted direct purchases from state-run oil company PDVSA, according to four sources, deepening a rift amid sanctions on this country. PBF is the second buyer in as many months to go elsewhere for its oil and further disagreements could spell new hardships for PDVSA, which owes bondholders US$ 1.2 billion in debt payments due this month. Venezuela relies on oil for over 90% percent of export revenue and U.S. refiners are among its largest cash-paying customers. PBF notified PDVSA last month it "is not going to take any more Venezuelan crude cargoes" from the state-run firm, said a PDVSA source who could not be identified because the information was not public. That notification came after a more than 40-day standoff over a previous shipment. In July, a Venezuelan heavy oil cargo intended for PBF sat off Louisiana awaiting a letter of credit to complete the sale. The tanker discharged in August. PBF has not directly purchased oil from PDVSA since early September, according to Thomson Reuters trade flows data. PDVSA's insistence that PBF prepay for cargoes hamstrung negotiations, the PDVSA source and one of the traders said, while the refiner suggested an open credit mechanism that would allow it to pay at least 30 days after delivery. In September, PDVSA also lost a supply contract for naphtha and natural gasoline to Brazilian petrochemical firm BRASKEM SA. Falling output and oil-quality issues have contributed to PDVSA's struggles to retain customers, and the situation worsened once its name appeared in a U.S. sanctions list. Venezuela in September sent less than 500,000 bpd of crude to the United States, its main destination for oil exports. The volume marked a 38% decline compared with the same month in 2016. Disruptions in imports from Venezuela also have affected Phillips 66, the firm said in August. PDVSA's supply to the U.S. refiner's Sweeny facility in Texas has dropped by more than two thirds this year in part due to oil quality issues forcing the firm to cancel cargoes and request price discounts. (CNBC: https://www.cnbc.com/2017/10/11/big-buyer-of-venezuelan-crude-oil-halts-purchases-from-national-oil-company.html; Reuters, http://www.reuters.com/article/us-pdvsa-pbf-energy-contract-exclusive/exclusive-pbfs-split-with-pdvsa-grows-as-u-s-refiner-halts-direct-deals-idUSKBN1CG24N)

 

Florida businessman admits to bribery scheme at Venezuela's PDVSA
The part owner of several Florida-based energy companies on Wednesday became the latest person to plead guilty as part of an ongoing U.S. investigation into bribery at Venezuela’s state oil company PDVSA. Fernando Ardila Rueda, 49, pleaded guilty in federal court in Houston to two counts, including that he violated the U.S. Foreign Corrupt Practices Act in connection with a scheme to pay bribes to PDVSA employees, the U.S. Justice Department said. He became the 10th person to plead guilty as part of a larger investigation by the Justice Department into bribery at Petroleos de Venezuela SA (PDVSA) that became public with the arrest of two Venezuelan businessmen in December 2015. The two men were Roberto Rincon, who was president of Tradequip Services & Marine, and Abraham Jose Shiera Bastidas, the manager of Vertix Instrumentos. Both pleaded guilty last year to conspiring to pay bribes to secure energy contracts. (Reuters: https://www.reuters.com/article/us-venezuela-usa-corruption/florida-businessman-admits-to-bribery-scheme-at-venezuelas-pdvsa-idUSKBN1CG2Z8)

 

Economy & Finance

Maduro came back empty handed from his recent trip to Moscow, with no announcement of any new money. Discussions were instead focused on solving existing issues. It is possible that Russia might prefer to see proof of Maduro’s strength before adding exposure, but in any case, Russia does not have the capacity to satisfy Venezuela’s financing needs. China’s potential support remains a more critical factor. While uncertainty is likely to remain elevated, overcoming the Q4 17 obstacles that both the opposition and the government face could be supportive of a possible negotiated solution to the crisis in 2018, which would be critical to avoiding default next year and/or in determining the conditions for a potential debt restructuring. (SEE ATTACHED BARCLAY’S REPORT)

 

IMF says Venezuela inflation may rise beyond 2,300%

Venezuela’s triple-digit annual inflation rate is set to jump to more than 2,300% in 2018, the highest estimate for any country tracked by the International Monetary Fund. An intensifying political crisis that’s spiraled since 2014 has weighed heavily on economic activity. Gross domestic product is expected to contract 6% next year, after shrinking an estimated 12% in 2017, the IMF said in its latest World Economic Outlook report published Tuesday. While Venezuela’s central bank stopped publishing inflation data in December 2015, the IMF argues the country’s consumer prices are estimated to leap 2,349.3% in 2018, the highest in their estimates, followed by the Democratic Republic of the Congo’s 44%. As oil production declines and uncertainty increases, unemployment is forecast to increase to about 30% in 2018, also the highest and followed by South Africa’s 28% and Greece’s 21%. The Bolivarian Republic is not current with most of its key economic statistics, leaving economists scant data to crunch. Venezuela’s debt is growing, and it is increasingly unable to make interest payments. Printing money is no longer an option which it has already done. (Financial Tribune: https://financialtribune.com/articles/world-economy/74038/venezuela-inflation-may-rise-beyond-2300; https://www.bloomberg.com/news/articles/2017-10-10/imf-sees-venezuelan-inflation-rate-rising-beyond-2-300-in-2018)

 

Cash shortages here are expected to worsen
Cash shortages are expected to worsen here, despite efforts by Venezuela’s Banking Association and the Bank Superintendent’s office. Currency exports, obsolete ATM’s and the absence of decisions by monetary authorities are causing the crisis. The Central Bank issued 289.3 million new VEB 500 and VEB 1000 bills, and data shows the amount distributed was VEB 393.322 billion, which is only 60% of cash required in July. There seems to be no end in sight for the shortages, which are expected to worsen. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/proyectan-agudizacion-falta-efectivo-pais_673446)

 

Fears of a big Venezuela default subside
Investors are gaining confidence that Venezuela will make its next big bond payments. Notes from the state oil company that mature in November climbed to 94.5 cents on the dollar Wednesday, a three-year high, while amortizing bonds due in 2020 rose to their highest price since they were issued last year. There’s a US$ 985 million payment due Oct. 27 for the 2020 bonds, and US$ 1.2 billion due Nov. 2 on the securities maturing next month. While investors assign a 99% probability to Petroleos de Venezuela SA defaulting sometime in the next five years, according to credit-default swaps trading, optimism on the near term has been growing as the government assures investors it will pay. (Bloomberg: https://www.bloomberg.com/news/articles/2017-10-11/venezuela-default-fears-subside-as-shortest-pdvsa-bonds-climb)

 

Buchheit calls for post-Maduro Venezuelan debt standstill

Any incoming regime in Venezuela replacing President Nicolas Maduro will have to consider how to gain temporary relief from paying its creditors without giving them legal grounds to accelerate their outstanding debts, according to legal experts. One solution will be to create “some form of temporary standstill on creditor actions”, according to Lee Buchheit, partner at law firm Cleary Gottlieb, and Mitu Gulati, law professor at Duke University. Venezuela is struggling to service debts with a combined face value of US$ 63 billion after a collapse in oil prices left it with dwindling revenues and a huge fiscal shortfall. Talks are already being carried out bilaterally between Venezuela and its sovereign creditors, China and Russia, which are owed US $37.2 billion between them, but policy-makers in the country still face complex challenges to find a long-term solution. (Reuters, http://www.reuters.com/article/buchheit-calls-for-post-maduro-venezuela/buchheit-calls-for-post-maduro-venezuelan-debt-standstill-idUSL8N1ML2ZL)

 

Politics and International Affairs

US hopes Maduro regime will allow Venezuela to “speak up and decide” in regional elections

US Under Secretary of State for Political Affairs Thomas Shannon says the Maduro regime must allow the people to “speak up and decide” in Venezuela’s upcoming regional elections next Sunday. He also said the United States and Spain have joined in a “special association” in favor of the people of Venezuela, and that both governments have clearly “condemned repression that feeds the Venezuelan political crisis”. He said both the U.S. and Spain are promoting dialogue as a way out of the ongoing crisis here, within the European Union and the Organization of American States, “pressing on behalf of the Venezuelan people’s right to self-determination and not for the government’s own perpetuation”. He called on the European Union “to do more” in sanctioning the Maduro regime for “violating democratic rules”, More in Spanish: (El Nacional: http://www.el-nacional.com/noticias/mundo/confia-que-venezuela-hable-decida-las-regionales_207184)

 

Is Venezuela a dictatorship? A key election will offer clues.
Venezuelans go to the polls this Sunday in state elections seen as a test of President Nicolás Maduro’s willingness to share power. But with polls showing the ruling socialists at risk of landslide losses, the authoritarian government appears to be falling back on a trifecta of tactics.  Two and half months after the creation of a super congress that gave the government nearly absolute power, Maduro has called the vote for state governors clear evidence that democracy remains alive here. Nevertheless, opposition leaders are decrying a dirty campaign by the Venezuelan government, which President Trump has denounced as a “socialist dictatorship.” State media is airing almost round-the-clock supportive coverage of pro-government candidates, while portraying their challengers as hypocritical and inept. All candidates, meanwhile, are being limited to four minutes of political ads per day on independent networks that now survive by self-censoring. Food baskets are being doled out to hungry voters at pro-government rallies. In a move seen as purposely misleading, the ballots for Sunday’s election will include a host of candidates who lost in the primaries and are not supposed to be running. This week, the government abruptly announced it would relocate a number of voting centers for “security reasons.” Opposition leaders said the move involved 205 locations in heavily anti-government districts in 16 states. That, critics say, amounts to manipulation and confusion. In Vargas, a coastal state just north of Caracas, for instance, the brother of opposition candidate Jose Manuel Olivares was detained last week by intelligence police for allegedly stealing a car — a charge his family denies. While stumping for votes, the candidate is often shadowed, he said, by state agents. Winning candidates from the opposition will likely find their powers restrained. Maduro has said that all governors will come under the authority of the Constituent Assembly, a government-controlled super congress created in a July vote marred by allegations of massive fraud. That body is likely to make life tough for any governor who is not in line with Maduro. Yet the vote is still seen as a key test. If turnout is high, polls suggest the opposition could capture governorships in up to 19 of Venezuela’s 23 states. Analysts are watching to see whether the government faces allegations of vote rigging, similar to those that emerged during the July election. Despite the polls, Maduro last weekend said his party is “expecting a historic success.” Given their strategy of subordinating governors to the government-controlled assembly, authorities might risk little by allowing a clean vote — while gaining much from the optics. The government may be calculating that such an event could defuse international pressure and appease its domestic opponents. Maduro is deeply unpopular, in part due to a severe economic crisis brought on by declining oil prices and what many view as government mismanagement. Recent polls show the president's approval rating at 23%. But opposition leaders have also lost support due to infighting and alleged disorganization. Some critics have pilloried them for even participating in the state elections, arguing the move is validating the government and playing into Maduro’s hands. Still, the election is an important bellwether for the opposition, which has largely failed to sustain the large-scale street protests that rocked the nation earlier this year. The activists’ concern now is that government tactics — and a general sense of helplessness among voters — may depress turnout on Sunday. (The Washington Post: https://www.washingtonpost.com/world/the_americas/is-venezuela-a-dictatorship-a-key-election-will-offer-clues/2017/10/11/d4301382-ad01-11e7-9b93-b97043e57a22_story.html)

 

Mexico confirms it will join talks between Maduro regime and pro-democracy coalition

Mexican Foreign Minister Luis Videgaray has showed the Mexican Senate a letter from Venezuela’s Foreign Minister Jorge Arreaza inviting Mexico to be a part of the group of countries that will accompany possible talks between the Maduro regime and the pro-democracy MUD coalition. Jorge Rodríguez, who heads the regime’s team in proposed talks, claims that a cohabitation agreement will emerge after Sunday’s regional elections. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/rodriguez-asegura-que-luego-de-elecciones-el-gobierno-y-oposicion-concretaran-acuerdo; http://www.noticierovenevision.net/noticias/internacional/mexico-confirma-acompanara-negociacion-entre-gobierno-y-oposicion-venezolana)

 

Opposition denies Maduro’s claim of progress in dialogue

The negotiator for the Venezuelan opposition in the process of developing a dialogue with the government of President Nicolas Maduro said on Tuesday that the president’s claim that negotiations have progressed 95% is totally false – the fact is they are losing ground. “Once again we must contradict the government. Political negotiations have not moved forward – they are losing ground every day,” opposition lawmaker and negotiator Luis Florido told the press in a statement. Florido said that Maduro’s remarks and those of the Venezuelan ambassador to the Dominican Republic, Jesus Uzcategui, are untrue, and since the government has not complied with the conditions required by the opposition, the dialogue is going nowhere. “From the MUD (opposition coalition) we repeat that... rather than the exploratory process being completed, it has gone backwards, because they took away our electoral guarantees by not allowing us to substitute candidates and they’re trying to get away with electoral fraud,” he said. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2444509&CategoryId=10717)

 

DATANALISIS director says democratic movement could gain 13-16 gubernatorial seats

José Antonio Gil Yepes, director of the DATANALISIS polling firm says that the pro-democracy movement could gain 13-16 governorships in Sunday’s upcoming elections, in addition to the 3 it currently controls out of a total of 23 states. He said some United Socialist Party candidates “will emerge ahead of the regime”, because he said: “The regime could lose with a margin of 84-16 which is President Nicolas Maduro’s approval rating over the past 4 months”.  He said abstention by disappointed opponents would not significantly lower the traditional rate of 40-50%. Gil added that 78% of the population distrusts the National Elections Council, and called the current voting system “obsolete”. (2001: http://www.2001.com.ve/en-la-agenda/172122/oposicion-podria-ganar-13-o-16-gobernaciones--segun-director-de-datanalisis.html)

 

BARCLAY’S: Venezuela: Obstacle course

Doubts over the competitiveness of elections in Venezuela are keeping the country’s outlook uncertain. The October 15 regional elections are therefore an important test in this regard. The most recent DATANALISIS poll shows the opposition has a strong lead, with more than twice the number of voting intentions than the government. There are 14 states in which polls suggest the opposition has an unassailable lead, which could make manipulating the outcome hard. Conditions favor the government in just three states. The remaining six states have a bias towards the opposition, but the outcome will depend on turnout and the ability of the opposition to overcome the obstacles imposed by the government. In any case, the opposition could obtain sizeable gains. More important than the number of states will be which states each side wins and the distribution of the national vote, which would be an indicator for a potential presidential election in 2018. (SEE ATTACHED BARCLAY’S REPORT)

 

Maduro again says elected governors must pledge allegiance to his ANC

President Nicolas Maduro has again said all governors elected next Sunday must be subordinate and pledge allegiance to his sham “National Constitutional Assembly” (ANC). He said those who do not will not be able to exercise their authority. He claimed all those who vote will be validating the ANC, “because it called up these elections”. The MUD pro-democracy coalition immediately called a press conference to reply to Maduro’s claim, saying: “People do not vote to endorse the ANC, they vote because it is their Constitutional right to do so”.(2001: http://www.2001.com.ve/en-la-agenda/172128/maduro-ratifico-que-gobernador-electo-debera-subordinarse-y-juramentarse-ante-la-anc---video-.html; http://www.2001.com.ve/en-la-agenda/172151/mud--la-gente-no-vota-para-avalar-la-anc--vota-porque-es-su-derecho-constitucional.html)

 

Exiled Attorney General says rule of law no longer exists in Venezuela

Venezuela’s Attorney General Luisa Ortega – deposed by the sham National Assembly - said on Tuesday in Bogota that the rule of law and democracy no longer exist in her country. “I want you to know that in Venezuela there exists neither rule of law nor democracy nor any freedom … In Venezuela there is a breakdown in the constitutional order,” Ortega added during a conference on human rights in Colombia, organized by the Political Science, Government and International Relations Faculty of Rosario University. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2444521&CategoryId=10717)

 

Opposition magistrates holed up in Chile residence flee Venezuela: source

Five magistrates named by the opposition-run congress who had been holed up in the Chilean ambassador’s residence to avoid arrest fled in the early hours of Monday and escaped over the border to Colombia, a source said on Tuesday. The Chilean Foreign Ministry said in a statement that Elenis Rodriguez, Luis Marcano, Jose Nunez, Beatriz Ruiz, and Zuleima Del Valle had left the premises on Monday, but did not offer further details. “Relatives came to get them at 5 a.m. yesterday. They escaped via (the Colombian border city of) Cucuta,” said the source close to the five, who have been granted asylum by the Chilean government. (Reuters, http://www.reuters.com/article/us-venezuela-politics/opposition-magistrates-holed-up-in-chile-residence-flee-venezuela-source-idUSKBN1CF2XB)

 

Venezuelans are told their expired passports will be valid for another two years

Venezuelans have been told expired passports are valid for another two years because they have run out of paper and ink to print new ones. President Maduro has signed an emergency decree to extend their validity because of chronic shortages at the national passport agency. At least a million Venezuelans have been waiting months for new documents and cannot travel in the interim. Demand for travel documents is at a record high as Venezuelans seek to escape from political crisis and deep recession. (The Daily Mail: http://www.dailymail.co.uk/news/article-4972088/Venezuela-runs-paper-ink-print-new-passports.html#ixzz4vIrZvYCP)

 

Thousands are fleeing Venezuela by two-lane border bridge
For weeks, Venezuelans have been flocking by the busload to San Antonio del Táchira, a border town of some 62,000 residents, fleeing as President Nicolas Maduro consolidates autocratic power. The Simon Bolivar International Bridge is the avenue for an outpouring unprecedented in the history of this oil-rich nation. Crowds stream toward the bridge, attended by street hawkers selling juice, fried pastries and bus tickets and men who ferry their meager possessions to a new life. According to Colombia’s migration authority, the number of foreigners entering Cucuta, the first major city across the bridge, more than doubled this summer. Over 50,000 came in August, up from 22,700 in June. The numbers don’t reflect dual nationals returning to their homeland, or thousands simply crossing into Colombia without passing official checkpoints. Named after the South American hero who freed both nations from Spanish rule, the Simon Bolivar International Bridge was a once major commercial artery. Now, lanes once filled with trucks bearing potatoes, onions and lettuce are reserved for pedestrians trundling handcarts, laden with shopping bags and even walking their dogs along with them. As almost a dozen airlines have pulled out of the country, the bridge has become a concrete bottleneck for the masses fleeing this crisis-torn land. Most Venezuelans stay in Cucuta only long enough to have their passport stamped and catch a ride. Those who arrive late have taken to sleeping in parks or bus stations. Church groups have been doling out food to weary travelers or those who simply cross for the promise of a free meal. Border security has been reinforced, temporary visas are being issued, but the growing exodus has the Colombian government contemplating “refugee camps” if Venezuela’s crisis spirals completely out of control. Few predict an end to Venezuela’s exodus soon. The United Nations has urged governments across Latin America to issue temporary protections to Venezuelans, yet many who are leaving seem unconcerned about permission. (Bloomberg: https://www.bloomberg.com/news/features/2017-10-12/thousands-are-fleeing-venezuela-by-two-lane-border-bridge)

 

No visas, bad jobs: Venezuelan emigrants reluctantly return home

Early last year, Leandro Colmenares sold his car and his apartment and fled Venezuela’s profound economic crisis, joining a wave of emigration to other Latin American countries. Colmenares, a medical equipment repairman, first set up in Panama with US$ 7,000 in hand. When he could not get a visa and struggled to find work, he ended up with odd jobs like painting houses and doing electrical wiring for US$ 25 a day. He then tried his luck in Colombia, where he again took odd jobs, mostly cooking. He opened a small cafe with other Venezuelans but it failed.And once again, he could not get a visa. Crushed and having run out of money, Colmenares decided in February he had no choice but return to Venezuela empty-handed and by bus - one of an apparently growing number of Venezuelan emigrants forced to go home after failing to start a new life elsewhere in Latin America. (Reuters, http://www.reuters.com/article/us-venezuela-migration/no-visas-bad-jobs-venezuelan-emigrants-reluctantly-return-home-idUSKBN1CH1XA)

 

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.

July 05, 2016

International Trade

12 food ships anchored in Bolipuertos

A total of 12 food ships are anchored at Puerto Cabello, Carabobo state. This was announced by Food Minister General Rodolfo Marco Torres, who says part this includes boats bearing yellow corn, two with soybeans, and another vessel is currently offloading 30,000 tons of white corn. More in Spanish: (Notitarde; http://www.notitarde.com/Hay-12-buques-de-alimentos-anclados-en-Bolipuertos/Economia/2016/07/02/1007351/)

 

Táchira state governor calls for reopening border

Táchira border state governor, Lieutenant José Vielma Mora, has called for reopening the border with Colombia to increase trade. He also speaks of building a refinery along the border to supply Colombia with fuel, as he conducted an inspection of a border pass jointly with the governor of Colombia’s bordering state of Norte de Santander, William Villamizar. Both governors agreed on the need to restore the important trade, social, political and cultural exchanges between both nations. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/economia/2016/julio/2/161414=gobernador-vielma-mora-evalua-construir-una-refineria-en-la-frontera)

 

 

Logistics & Transport

Aeronautic services are now officially priced in US dollars

The Transport and Public Works Ministry has published official dollar tariffs for aeronautic services in Venezuela, at the Maiquetía International Airport and all other airports under the state control. Service to Latin America and the Caribbean will cost US$ 3,000; to the US AND Canada, US$ 3,300 and to Europe, US$ 5,000. More in Spanish: (Notitarde; http://www.notitarde.com/Fijan-tarifas-del-servicio-aeronautico-en-dolares/Economia/2016/06/30/1007156/; El Nacional, http://www.el-nacional.com/economia/Fijan-tarifas-dolares-servicio-aeronautico_0_875912582.html; El Universal, http://www.eluniversal.com/noticias/economia/nuevas-tarifas-para-servicio-aeronautica-son-fijadas-dolares_317306)

 

 

Oil & Energy

Venezuela oil price falls below us$ 40

The price Venezuela receives for its mix of medium and heavy oil fell back below US$ 40 as markets and oil prices around the world collapsed on a surprise decision to leave the European Union by the U.K.  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 July 1 was US$ 39.75, down 41 cents from the previous week's US$ 40.16. According to Venezuelan government figures, the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 31.15 for the year to date. Venezuela's average oil price for 2015 was US$ 44.65, down from 2014's US$ 88.42, below 2013's US$ 98.08, 2012's US$ 103.42 and 2011's US$ 101.06, 2010's US$ 72.43, and even 2009’s average price of US$ 57.01. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415590&CategoryId=10717)

 

PDVSA says 2015 revenue tumbled on oil price fall

State oil company PDVSA's 2015 revenue tumbled 41% from the previous year, the company announced, as a result of a steep drop in oil prices that has pushed this nation into economic crisis. Revenue dropped to US$ 72.2 billion from US$ 121.9 billion the year before, while net profit fell to US$ 7.3 billion compared with US$ 9.1 billion the previous year, the company said. Economists tend to focus on PDVSA's revenue because of its multibillion-dollar contributions to government campaigns make profit figures less relevant in assessing performance than they are for private firms. PDVSA's transfers to social programs in 2015 were US$ 9.2 billion, and state development fund Fonden received US$ 974 million. According to the financial results of fiscal year 2015, Pdvsa’s oil output averaged 2.7 million barrels per day (bpd). However, the company’s head Eulogio del Pino claims the “industry produced an equivalent of 3.8 million barrels of oil.” (Reuters, http://www.reuters.com/article/us-venezuela-pdvsa-idUSKCN0ZJ02T; Bloomberg, http://www.bloomberg.com/news/articles/2016-07-03/venezuela-s-pdvsa-revenue-plunges-amid-commodity-price-collapse; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-oil-revenues-plummet-407-2015_317708)

 

Maduro ends power rationing as drought eases

Venezuela is ending an electricity rationing program launched in April in response to a severe drought that crimped the operations of the nation's hydroelectric generators, President Nicolas Maduro on Friday. "As of Monday we can say that the power administration plan will stop and electrical service will function normally throughout the country," Maduro said in a televised broadcast. "Today we can say that Guri has recovered and we have the conditions under which power service can function normally." Heavily subsidized electricity has spurred one of the region's highest rates of power consumption and left the state-run utilities with limited revenue. (Reuters, http://www.reuters.com/article/us-venezuela-energy-idUSKCN0ZI01B)

 

Amuay refinery ups output, restarts distillation unit

Venezuela's 645,000 barrel-per-day (bpd) Amuay refinery has restarted a distillation unit and is now processing 350,000 bpd compared with 160,000 bpd before, according to a union leader and a refinery worker who asked not to be identified and said Amuay's 180,000 bpd distillation unit No. 5 was producing at 140,000 bpd. The refinery's cat cracker is operating at around 70,000 bpd, said union leader and government critic Ivan Freites. The refinery's flexicoker unit remains shuttered but is expected to be operational again within 20 days, he said. (Reuters, http://www.reuters.com/article/us-refinery-operations-pdvsa-amuay-idUSKCN0ZH62B)

 

Harvest Natural Resources dumps Venezuela operations

Harvest Natural Resources, Inc. (HNR) has announced that it and its wholly-owned subsidiary, HNR Energia B.V. (HNR Energia), have entered into a share purchase agreement with CT Energy Holding SRL, a private investment firm (CT Energy), to sell all of the company’s interest in Venezuela. Under the terms of the Share Purchase Agreement, CT Energy will acquire HNR Energia’s 51% interest in Harvest-Vinccler Dutch Holding B.V., a Netherlands company, through which all of Harvest’s Venezuelan interests are owned, and CT Energy or an affiliate will deliver to Harvest US$ 80 million in cash, subject to certain adjustments, and a $12 million six-month 11% note payable by CT Energy or such affiliate. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415544&CategoryId=10717)

 

PDVSA to export gas to Colombia

Petroleum and Mining Minister Eulogio del Pino announced that state-run oil company Petróleos de Venezuela (PDVSA) would soon begin to export gas to Colombia, as part of the Mariscal Sucre oil project. Del Pino, who is also Pdvsa’s head, stressed the importance of gas export, which will be conducted from Cardón gas field in north-western Falcón state. This is one of the world’s largest gas fields, whose operations began last year with private investment. (El Universal, http://www.eluniversal.com/noticias/daily-news/pdvsa-export-gas-colombia_317684)

 

Maduro meets with US energy company representatives

President Nicolás Maduro on Friday met with Joseph Kennedy, the founder of US non-lucrative Citizens Energy Corporation, at the Miraflores Presidential Palace downtown Caracas, for a meeting that was also attended by Foreign Minister Delcy Rodríguez and corporation’s representatives. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-maduro-meets-with-energy-company-representatives_317716)

 

 

Economy & Finance

Central Bank reportedly provides full statistics to the IMF for the first time in 12 years

A source within Venezuela’s Central Bank (BCV) says the institution has provided the International Monetary Fund with full statistics for the first time in 12 years. The same source says the government ordered the BCV to provide statistics for the first time since 2004, when the late Hugo Chavez ordered IMF offices in Venezuela closed. Analysts believe the government may be seeking some type of loan or financial aid from the IMF, or that it could be getting ready to draw upon a larger portion of drawing rights from the institution, since Venezuela has used up all those it could freely cash in. Both options would require providing economic data for the IMF to evaluate. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Banco-Central-Venezuela-estadisticas-FMI_0_877712316.html)

 

Bernal admits expropriations have failed

Freddy Bernal, who heads the Control and Command Center for the government’s Local Supply and Production Local Committee (CLAPs), has admitted that past expropriations have failed. He says “in the past we took some steps, such as expropriating some companies and, unfortunately, we did not make them productive, or they failed in our hands”. He says they are now “sitting down with business to establish joint ventures, 60% government, and 40% private, in several areas: fishing, industry, manufacture”. More in Spanish: (Noticieron Venevision: http://www.noticierovenevision.net/economia/2016/julio/3/161460=freddy-bernal-reconocio-que-las-expropiaciones-fracasaron; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/bernal-admitio-que-las-expropiaciones-fracasaron.aspx#ixzz4DR1hOrkR)

 

Only 10% of all companies have received FOREX through the DICOM system, according to a poll taken at CONINDUSTRIA’s 2016 meeting; and only 2% received FOREX through the officially controlled preferential rate. The poll also shows that 47.5% of industries have raw materials inventories lower than 3 months. 81% have lowered production, and another 56% expect to lower production within the next 6 months. More in Spanish: (Notitarde: (Notitarde; http://www.notitarde.com/Solo-10-de-las-empresas-han-recibido-dolares-Dicom/Economia/2016/06/30/1007155/)

 

“Venezuela’s economic indicators at this time are, by far, the worst in history”, says Luis Vicente León, of DATANALISIS. He says 65% of the population prefers the black market to buy goods that are price-controlled, leading to a surcharge of an average 300 percentage points about official prices. “The gap between official and black market prices is some 80-100 times”. A 10% drop in overall consumption is expected this year. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Indicadores-economicos-Venezuela-momento-historia_0_875912744.html)

 

 

Politics and International Affairs

Obama urges Venezuela to respect democratic process, recall referendum

US President Barack Obama has weighed in on Venezuela’s political turmoil, calling on the government to release what he called “political prisoners” and to respect the country’s National Assembly.  The head of state made the comments in a press conference from the North American Leaders Summit in Ottawa, Canada, where he also urged both political factions in Venezuela to participate in dialogue. He was accompanied by his Mexican and Canadian counterparts, Enrique Peña Nieto and Justin Trudeau. "Given the very serious situation in Venezuela and the worsening plight of the Venezuelan people, together we're calling on the government and opposition to engage in meaningful dialogue and urge the Venezuelan government to respect the rule of law and the authority of the national assembly," Obama said at a news conference with the leaders of Canada and Mexico. "Political prisoners should be released, the democratic process should be respected and that includes legitimate efforts to pursue a recall referendum consistent with Venezuelan law."  (Reuters: http://www.reuters.com/article/us-venezuela-usa-obama-idUSKCN0ZF2KV; MSNBC: http://nsnbc.me/2016/07/02/obama-urges-dialogue-in-deadlocked-venezuela-sides-with-opposition/)

 

Argentina’s Macri accuses Venezuela of violating “every human right”

Argentina’s President Mauricio Macri has accused the Venezuelan regime of “violating every human right”, and hopes for a recall referendum as soon as possible. He says the Maduro regime “has brought famine and neglect to the Venezuelan people, which is why they need a referendum, they need to have elections as soon as possible”. Asked whether this position clashes with Argentina’s stance at the Organization of American States on whether to apply the Democratic Charter, he said: “We have done what we have been doing. We are seeking different routes to bring about this result, elections as soon as possible and always upholding our commitment to defend human rights in Venezuela”. More in Spanish: (Clarin: http://www.clarin.com/mundo/Macri-Venezuela-violar-derechos-humanos_0_1607239347.html

 

Paraguay seeks to exclude Venezuela from MERCOSUR

Paraguay has formally asked for a special meeting of MERCOSUR foreign minister to examine Venezuela’s domestic political situation in the light of the 1998 Ushuaia Protocol, which establishes a “democracy clause” calling for excluding any country that violates democratic order from the regional bloc. Paraguay’s ambassador to MERCOSUR, Hugo Saguier, who delivered the request to Uruguay’s Foreign Minister Rodolfo Nin, says “we are calling for using the Democratic Charter and the Urshuaia Protocol because we believe Venezuela is doing through a democratic crisis”. He also said Paraguay is upset because Uruguay and Argentina unilaterally called off a meeting of heads of state to transfer the pro tem Presidency of MERCOSUR from Uruguay to Venezuela, and instead called on the group’s foreign ministers to do so. Nin has replied that transferring the pro tem presidency is a matter of rules and does not bear upon political matters. More in Spanish: (El Observador: http://www.elobservador.com.uy/paraguay-pide-discutir-la-exclusion-venezuela-del-mercosur-n935501; Noticiero Venevision: http://www.noticierovenevision.net/internacionales/2016/julio/4/161618=uruguay-asegura-que-la-entrega-de-la-presidencia-pro-tempore-a-venezuela-esta-apegada-al-caracter-juridico)

 

OAS Legal Counsel says “the Democratic Charter is already being applied” to Venezuela

Jean Michel Arrighi, Chief Legal Counsel to the Organization of American States, says the Hemispheric Democratic Charter is being applied to Venezuela from the very moment Secretary General Luis Almagro rendered his report on June 23^rd. Arrighi also says Article 20 of the Charter empowers the Secretary General to act “when the constitutional order is altered so as to seriously upset the democratic order”, and he would be remiss in offering assistance if he didn’t. The Maduro regime argues that when there is a legitimate government in a nation, the Secretary General has no right to act, but Arrighi says that Article 20 is intended for the case in which there is in fact a legitimate government and that is why it involves diplomatic efforts. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/30/responsable-juridico-de-la-oea-la-carta-democratica-ya-se-esta-aplicando/)

 

International Socialist organization advocates recall referendum in Venezuela this year

Member parties of the International Socialist organization have issued a communiqué voicing their concern over Venezuela’s state of affairs and made an appeal for “a real and effective dialogue between the Venezuelan government and opposition.” They also recommend holding the recall referendum this very year, and express support for an OAS statement in support of the initiative of former presidents José Luis Rodríguez Zapatero of Spain, Leonel Fernández of the Dominican Republic, and Martín Torrijos of Panama. (El Universal, http://www.eluniversal.com/noticias/daily-news/socialist-international-advocates-recall-referendum-venezuela-this-year_317711)

 

Zapatero discusses dialogue efforts in Venezuela with the European Union

Federica Mogherini, the European Union’s High Commissioner for Foreign Affairs, met with Spain’s former President José Luis Rodríguez Zapatero, to discuss the Union’s support of efforts for a “dialogue in Venezuela”. Zapatero says the dialogue he is trying to promote is “a long, hard and difficult process”, and that their efforts are in an exploratory phase. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/internacionales/2016/junio/30/161232=zapatero-aborda-con-la-union-europea-apoyo-al-dialogo-en-venezuela)

 

Ramos cautions that Supreme Tribunal plots sentence nullifying recall referendum

Henry Ramos Allup, President of the National Assembly, is expecting a Supreme Tribunal (TSJ) sentence which would nullify recall referendum proceedings to date, and order a new collection of 1% signatures for a petition to begin the process. He says the decision was planned by pro regime legislators and members of the TSJ’s Constitutional Chamber, and would be in the hands of Justice Luis Damiani Bustillos; he adds that the National Elections Council would then call for regional elections, to vote for governors. More in Spanish: (Noticiero Venevisión: http://www.noticierovenevision.net/politica/2016/julio/1/161373=ramos-allup-advierte-sobre-sentencia-del-tsj-que-anule-el-proceso-de-rr; El Nacional, http://www.el-nacional.com/politica/PSUV-asoma-TSJ-ordenara-revocatorio_0_875912729.html)

 

Borges says recall referendum is not negotiable

Julio Borges, leader of the majority opposition bloc in the National Assembly says the proposed recall referendum is a Constitutional right of the Venezuelan people and not a subject for discussion in any possible talks with the government. “That is non-negotiable, that does not exist, that is a right that is moving forward and no one can stop it, if the government wants to talk about how to reform the economy, about respect toward the National Assembly, about how to free political prisoners, about how to reenergize productivity, those matters are welcome because they are national problems; but there are matters that are not subject to talks, and among them the recall referendum is not been subject for talks or any sort of negotiation”, he says. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/julio/4/161575=borges-aseguro-que-el-rr-no-es-un-tema-de-discuta-en-una-eventual-mesa-de-dialogo-con-el-gobierno)

 

Ramos says military high command backs President, not Constitution.

President Nicolas Maduro has demanded absolute loyalty from Venezuela’s military in order to carry forth Bolivarian ideals and the Chavez legacy. At the same time, National Assembly President Henry Ramos Allup says “the high command of the Armed Forces has chosen to support President Nicolás Maduro over supporting the Constitution”; and adds that dialogue is impossible under such conditions: “Take note: It is impossible to dialogue with a military gun pointing at your head”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/03/nicolas-maduro-exige-la-maxima-lealtad-de-su-fuerza-armada/; Noticieron Venevision: http://www.noticierovenevision.net/politica/2016/julio/3/161469=ramos-allup-destaco-que-la-fanb-apoya-a-maduro-antes-que-respaldar-la-constitucion)

 

US accuses Venezuela of complicity in human trafficking

The United States has again included Venezuela, along with Haiti and Belize, on the list of countries that are not making enough efforts to combat people trafficking. US President Barack Obama now has 90 days to decide if sanctions will be imposed on the nations on the “black list”. Those sanctions could include freezing non-humanitarian and non-commercial aid or denying the countries loans from multilateral institutions. Venezuela was included on the blacklist in 2014 and remains there after appearing for several previous editions in “special observation,” the next-lowest category where Cuba is. “The Venezuelan government does not fully comply with minimum standards for the elimination of (human) trafficking and is not making significant efforts to do it so,” the report reads. (Today Venezuela: http://todayvenezuela.com/2016/07/04/us-accuses-venezuela-of-complicity-in-human-trafficking/); and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/eeuu-acusa-venezuela-complicidad-con-trafico-personas_317309)

 

Curfew imposed on Delta Amacuro state due to food riots

Delta Amacuro state governor Lizeta Hernández issued a 24-hour curfew after food riots led to 146 arrests in the state’s capital, Tucupita, in far Eastern Venezuela, bordering Guyana. (Noticieron Venevision: http://www.noticierovenevision.net/nacionales/2016/julio/1/161308=decretan-toque-de-queda-en-delta-amacuro-debido-a-hechos-irregulares-en-tucupita)

 

 

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.