International
Trade
Money to pay debt to Uruguayan dairy producers
is in China, according
to Uruguayan Deputy Jaime Trobo. He explained the agreement signed between the
two nations established Banco de Desarrollo, BANDES-Uruguay, was to open a
trust to pay for food products sold to Venezuela, but Uruguay did not inform
producers BANDES could give the money the use it would see fit. (Venecomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=46767&idc=2)
Oil &
Energy
World Bank predicts oil prices will drop further in
2016, and remain low
The
World Bank predicts the average price of a barrel of crude oil may drop further
to US$ 37 during 2016 due to weak emerging economies and increased supply as
Iran comes back into international markets. Barely 3 months after its previous
projection, which had oil price averaging US$ 51 per barrel, the Bank has
sharply cut back its estimates to a US$ 37 average, and warns this trend will
hold “for some time.” More in
Spanish: (El Nacional, http://www.el-nacional.com/economia/Banco-Mundial-Crudo-internacional-profundizara_0_782321809.html)
Venezuela
oil group seeks incentives to lure more foreign money
Venezuela’s
main hydrocarbon association has proposed measures aimed at attracting more
investment from international oil companies as prices drop to the lowest in
more than a decade. Incentives would include reducing royalties and extraction
taxes to 20% from 30-35%, applying a single exchange rate for the oil industry
and granting more decision-making powers to joint venture partners. The
measures, presented yesterday to the President’s National Council for
Productive Economy, are needed to support oil-sector investments, according to
a document outlining the proposals. “There
have to be changes in the oil sector, and not just a more competitive exchange
rate for the sector,” Asdrubal Oliveros, director of consulting firm
ECOANALITICA, said during a meeting yesterday with foreign press at Bloomberg’s
office in Caracas. “Until we have a
collapse and change in this model, we will not see more oil sector investments.”
(Bloomberg, http://www.bloomberg.com/news/articles/2016-01-26/venezuela-oil-group-seeks-incentives-to-lure-more-foreign-money)
Oil
minister to visit OPEC, non-OPEC countries
Venezuela's
oil minister will tour OPEC and non-OPEC countries in a bid to drum up support
for joint action to stem the tumble in crude prices, President Nicolas Maduro
announced on Tuesday night. "I've
given the order to minister Eulogio del Pino for him to immediately start a
tour of OPEC and non-OPEC countries," the leftist leader said in a
televised broadcast. The Organization of the Petroleum Exporting Countries is
considering a request from cash-strapped Venezuela to hold an emergency meeting
to discuss steps to prop up prices, and Venezuela has called for a meeting of
OPEC and non-OPEC nations in February. "We must stop this madness," a solemn-faced Maduro said about
oil prices, urging "clear,
consequential and coordinated" action. (Reuters, http://www.reuters.com/article/us-opec-venezuela-idUSKCN0V5035)
Former
Chavez Finance Minister calls for revising credits to PETROCARIBE and other
nations
Rodrigo Cabezas, who served as Finance Minister
under the late President Chávez, says that in view of the current fiscal
situation the country must review each one of its agreements, “soft” credit and subsidies to other
nations in the region and with multilateral arrangements such as PETROCARIBE.
He called such actions “absolutely
pertinent” within fiscal restrictions. Cabezas also said a “default” scenario is “undesireable”. More in Spanish: (El Universal, http://www.eluniversal.com/economia/160127/plantean-revisar-creditos-en-petrocaribe-y-otros-paises)
Commodities
Sugar production has dropped 44% over the past year, according to the President of the National Federation of Cane Growers,
José Ricardo Álvarez, who says the situation has never been as grave over the
past 60 years. “It is now better for
growers to leave sugar cane fallow in the fields than harvest it, because one
loses less”, he says – and reports sugar growers produced 83,797.64 tons in
January 2015 and only 46,177 tons so far this year due to price controls. More
in Spanish: (El Nacional; http://www.el-nacional.com/economia/Produccion-azucar-cayo-ano_0_782921977.html)
Economy
& Finance
IMF sees inflation explosion here, 18% contraction
According
to the IMF: “In Venezuela, longstanding
policy distortions and fiscal imbalances were already having a deleterious
effect on the economy before the collapse in oil prices. These problems
worsened as falling oil prices triggered an economic crisis, with an expected
fall in output of almost 18% over 2015 and 2016 (the third sharpest decline in
the world). A lack of hard currency has led to scarcity of intermediate goods
and to widespread shortages of essential goods—including food—exacting a tragic
toll. Prices continue to spiral out of control, and we expect inflation to rise
to 720% this year, from a world-high inflation of about 275% in 2015.”
(IMF: http://blog-imfdirect.imf.org/2016/01/22/latin-america-and-the-caribbean-in-2016-adjusting-to-a-harsher-reality/)
NOMURA says economic transition in Venezuela is “irreversible”
The
latest report from Japan’s NOMURA firm says “economic transition is irreversible” in Venezuela, and explains the
drop in commodity prices is aggravating imbalances. It warns economic
distortions cannot be solved by reducing imports or a default on foreign debt,
either of which can only “aggravate
stagflation”. It says cash flow is
shrinking daily “amid a slow political and economic transition”. The firm says
the next moves are up to the opposition in their bid for leadership, but the
risk remains that the Maduro regime could “make
them draw back”. More in Spanish:
(El Nacional: http://www.el-nacional.com/economia/Nomura-transicion-economica-irreversible_0_782921984.html)
Venezuela plans to transition away from oil-dependent
economy
Venezuela’s
Economic Council has presented measures to transition away from an
oil-dependent economic model, Vice President Aristobulo Isturiz said
Tuesday. The council, which was created
in January, presented its first proposals to the government, which recently
announced an emergency decree to battle the economic situation here. Isturiz said the council’s working groups have
been supported by local businessmen. He
said that the state guarantees the production of raw materials, credit and
other facilities to domestic producers.
The vice president stressed that the government's priority is to fund
social benefits in education, health, food, housing, among others, as well as
revitalize the economic and productive engine of the country. He said the
council’s roundtables began discussing three of the 11 strategic economic
areas—telecommunications, tourism and petrochemicals—began Monday. Other key areas tapped to reinvigorate the
productive economy include food processing, mining, information technology,
construction, export, forestry and industry. (TELESUR: http://www.telesurtv.net/english/news/Venezuela-Plans-to-Transition-Away-from-Oil-Dependent-Economy-20160126-0011.html)
Government
creates centralized procurement system
President
Nicolas Maduro has signed a decree under which Centralized and Standardized
System of Government Procurement is established for all the bodies of public
administration, effective from Monday, February 1. The president noted that he
had received from the National Council of Productive Economy all the proposals
brought forward at the work sessions of the nine economic engines. Maduro said
he would study all the proposals during the IV Summit of the Community of Latin
American and Caribbean States (CELAC). (El
Universal, http://www.eluniversal.com/economia/160127/venezuelan-govt-creates-procurement-centralized-system)
Venezuela’s economic, social indicators speak for
themselves
The
country is starting to show cracks everywhere and is reaching boiling point. Several
economic indicators more than tell about that situation. Among issues affecting
the nation’s economic sphere: Venezuela has the highest inflation rate in the
world. Venezuela’s inflation hovered near 300% in 2015, and may reach 720% in
2016, according to the International Monetary Fund. Shortages of food items,
medicines and capital goods exceed 80%. The income of citizens slips through
their fingers as their purchasing power has been reduced to nothing. Besides
becoming desperate and helpless for not finding the essential foodstuff and/or
medicines for them or any member of their family. (Latin American Herald
Tribune, http://www.laht.com/article.asp?ArticleId=2404207&CategoryId=10717)
Inflation
of the food basket goes up 1% daily since December 2015,
according to the Venezuelan Teachers’ Federation’s Social Documentation and
Analysis Center (CENDAS-FVM). It is the first time such a high is recorded. At
the end of December, the food basket was VEB 139,273.68, up 361.5% from
December 2014 when it was VEB109,096.86. (Venecomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=46770&idc=2;
http://www.veneconomy.com/site/index.asp?ids=44&idt=46768&idc=2)
6.2
minimum wages are now needed to buy the basic food basket
In average, 4.77 minimum wages were needed to cover
the basic food basket between 1999 and 2014. However, this changed at the
end of 2014 when 6.2 minimum wages were required to cover it until it reached
the 14.4 minimum wages at the end of December 2015, according to the CENDAS-FVM.
According to CENDES, not even the basic
salary of a Major General is sufficient to acquire the basic food basket, A
sargeant can only purchase 9.8% of the same basket. (Venecomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=46769&idc=2;
and more in Spanish: (El Nacional, http://www.el-nacional.com/economia/salario-basico-general-canasta-basica_0_782321994.html)
Politics and
International Affairs
National Assembly President says economic crisis will
sink Maduro
National
Assembly President Henry Ramos Allup doubts President Nicolas Maduro will serve
out his six-year term in view of the acute economic crisis here. He adds that
his exit could even take place this year. “In
this situation I don’t believe he will serve out his term…..he is being
swallowed up by the crisis”. Ramos adds that for the nation to be rid of
the highest inflation in the world, economic recession and scarcities, Maduro
and his cabinet must step aside. “If they
insist – as they are doing – on continuing applying a model that his failed in
every sense, the reply is obvious: those who are so insisting in this crisis
must leave, otherwise we will not overcome it”. And he adds: “We have insisted that the way out of this
crisis must be democratic, constitutional, peaceful and elective. None other.”
The opposition coalition has signed an agreement to seek a way out of this
situation within six months, and Ramos says they are already working at it
because “to wait for the crisis to become
worse is an irresponsible political gambit”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/01/26/crisis-economica-de-venezuela-hundira-a-maduro-segun-el-presidente-de-la-asamblea/)
Maduro
to ask CELAC aid in economic emergency
Upon
his arrival in Quito, Ecuador to attend the IV Summit of Heads of State and
Government of the Community of Latin American and Caribbean States (CELAC),
President Nicolás Maduro said that he would propose some ideas to tackle the
economic emergency in Venezuela with the help of Latin American countries. The
president said he would meet with his CELAC counterparts to address the
economic crisis in his country and "foster
fair trade, complementarity, and solidarity. Venezuela comes with a proposal,
as always, to find our own solutions and our own path by ourselves." (El Universal, http://www.eluniversal.com/nacional-y-politica/160127/venezuelas-maduro-to-ask-celac-aid-in-economic-emergency)
Chavez's
dream of unity stumbles ahead of Latin American summit
Before
he died, Venezuela’s late president, Hugo Chavez, had a dream to unite Latin
America and the Caribbean against the dark forces of the U.S. empire. It’s not
working out like he planned. As presidents and prime ministers from the
regional group CELAC meet Wednesday in an attempt to knit closer ties,
President Nicolas Maduro, Chavez’s hand-picked successor, finds himself fending
off attacks from the nation’s former ally, Argentina. “Why does a country have to put up with the whole onslaught of
right-wing governments,” Maduro said Saturday after Argentina’s
newly-elected president, Mauricio Macri, criticized his government’s
human-rights record. “I’m going to the
summit of Latin America and the Caribbean nations in Quito with everything. No
one is going to shut me up.” (Bloomberg, http://www.bloomberg.com/news/articles/2016-01-27/chavez-s-dream-of-unity-stumbles-ahead-of-latin-american-summit)
Garrulous
Maduro has addressed Venezuela for 500 hours
President
Nicolas Maduro has spent more than 500 hours addressing Venezuela since gaining
power nearly three years ago, demonstrating a loquacity reminiscent of his late
predecessor Hugo Chavez, according to a watchdog. The tally, from the local
Citizens' Monitor group which is critical of the government, was based on
Maduro's so-called "chain"
speeches, when all local broadcasters are required to transmit his words live. Counting
other speeches, carried only by state TV, the 53-year-old former bus driver and
foreign minister has in fact spent far more time giving public addresses.
"In the first few weeks of this year, he
surpassed 500 hours," the group said this week in a blog. "Every time the presidency holds a 'chain',
they are denying Venezuelans their control over freedom of information and
entertainment." (Reuters, http://www.reuters.com/article/us-venezuela-maduro-idUSKCN0V42A8)
Electoral
body issues reply on Amazonas contested deputies
The
National Electoral Council (CNE), headed by Tibisay Lucena, has issued an
"administrative response"
to the Supreme Tribunal of Justice (TSJ) regarding the contested election of
three deputies for Amazonas state and one indigenous representative. The
information was aired by the First Vice-President of the National Assembly,
Simón Calzadilla, who heads the parliament committee that studies the case. Deputy
Calzadilla said that Lucena refused to reveal the content of the documents that
were sent to the TSJ. (El Universal, http://www.eluniversal.com/nacional-y-politica/160127/electoral-body-issues-reply-on-amazonas-contested-deputies)
Freedom
House: Democracy faces challenges in Venezuela
Freedom
in the world declined in 2015. Even though Latin America as a whole showed some
improvement, democracy in Central America and Venezuela faces serious
challenges, according to the annual report released by Freedom House on
Wednesday. The organization that advocates freedom and democracy highlighted
that democracy and freedom are at risk in El Salvador, Guatemala, Honduras, and
Venezuela. In the latter, Freedom House reported "persecution" against the opposition. The Latin American
country with the worst score in freedom and democracy is Venezuela, considered
"partially free" with a
score of 35 out of 100, followed by Haiti (41) and Honduras (45). (El Universal, http://www.eluniversal.com/nacional-y-politica/160127/freedom-house-democracy-faces-challenges-in-venezuela)
