July 07, 2016

International Trade

Venezuela exported 18,000 square meters of granite during the first half of 2016

Venezuela exported 18,000 square meters of granite during the first half of 2016, according to Arnaldo García Herrera, President of the Venezuelan Granite Association. He said 35 containers went to different markets, and the amount must be doubled during the next semesters. Exported granite comes from quarries in Cojedes and Bolivar states. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/afirman-que-exportaron-mil-metros-granito_318103)

 

 

Oil & Energy

Venezuela’s oil production expected to drop even further

The latest reports from BANK OF AMERICA, MERRILL LYNCH and BARCLAYS CAPITAL all indicate that Venezuela’s oil output could continue contracting and hurt the country’s cash flow even further. BOFA says that a rapid downfall in the nation’s savings, absent lasting adjustments by the government over time increases the probability “of a default in the next years”. BARCLAY’s says the drop in production is not due to “external variables, but is directly or indirectly impacted by the deepening political and economic crisis in Venezuela.” It says as long as the crisis continues, oil production will continue to diminish, and now has revised its estimates for a drop in production in 2016 upwards, to 300-350,000 BPD. BOFA adds that the lack of official economic indicators increases uncertainty over Venezuela’s economy, and says hyperinflation is possible. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Preven-produccion-crudo-caera_0_878912223.html).

 

PDVSA lowered contributions to Development Fund by 90% in 2015

The severe drop in oil prices has directly hit PDVSA’s contributions to the National Development Fund (FONDEN) for social projects. The company’s latest reports show that it contributed only US$ 974 million during 2015, down 90.6% from US$ 10.4 billion in 2014. More in Spanish: (Summarium: http://sumarium.com/pdvsa-aporto-90-menos-al-fonden-en-el-2015/)

 

Crisis-struck Venezuela sends fuel oil tankers into tight Singapore market

Crisis-struck Venezuela is sending two supertankers filled with fuel oil across the oceans to Singapore, in what traders described as a surprise move that could help reduce a tight market. Shipping data in Thomson Reuters Eikon shows that two fully-laden very large crude carriers, the New Dream chartered by PetroChina and the Trafigura-chartered Britanis, are heading to Singapore with 270,000 tons each of fuel oil from the Bonaire Terminal owned by Petroleos de Venezuela. Venezuelan exports of residual fuel oil have been sporadic into Singapore since the start of the year but the city-state has taken in 997,000 ton over the past three weeks from the country, recent government data showed. The total amount of fuel oil arriving in Singapore from Venezuela between early June and early August is at least 1.5 million tonnes, according to International Enterprise (IE) Singapore and ship-tracking data. (Reuters, http://www.reuters.com/article/us-fuel-oil-singapore-venezuela-idUSKCN0ZL0Z5; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-ships-540000-tons-fuel-singapore_317871)

 

 

Commodities

POLAR to renew beer production

POLAR has received 19,797 tons of malted barley to fill its inventories through December this year, and has gradually called workers back to start production. Distribution is expected to start next week, at adjusted prices. The company has also received 253,227 tons of cromed tin from Colombia. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/polar-reanuda-su-produccion-de-cerveza-y-regresa-c.aspx#ixzz4DiYVldeB; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/economia/la-polar-reanuda-produccion-cerveza-regresa-nuevo-precio/)

 

 

Economy & Finance

JP Morgan estimates Venezuela’s deficit will be US$ 10.9 billion

JP Morgan is estimating that if the average price of Venezuela’s oil rises to US$ 36 per barrel, it’s current account deficit will be US$ 10.9 billion this year. The firm says estimates are estimating even lower crude exports and an US$             18-20 billion cut in in imports. It adds a default may be avoided by drastically reducing imports, and getting more financial aid from China. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Calculan-deficit-fiscal-millardos_0_878312448.html)

 

Domestic economy in downward spiral:

• Government owes local industry US$ 12 billion, massive industrial shutdown probable

Juan Pablo Olalquiaga, President of the National Industry Council (CONINDUSTRIA) says “the government has not taken steps to increase production. All the contrary, the situation is now worse (than six months ago) due nothing has happened since the “industrial motor” was implemented (as a government policy) six months ago due to critical raw material inventories”. He says the government’s debt with local industry for paying external suppliers is now up to around US$ 12 billion, and there will be no further dispatches to Venezuela unless debts are honored. Olalquiaga adds that “industry is at a critical stage at this moment, and if there is no turnaround, a massive industrial shutdown is coming”. Yet he adds: “There is the expectation of a change in the country due to the government’s inability to manage the economy. Failure is so obvious that a change has to come.”

 

• Expectations for tourism are not very good, says José Antonio Yapur, President of the Tourism Council. He explains that due to national economic conditions and high inflation, “the priority is getting food, paying for tuition and school supplies”.

 

• Construction is paralyzed, according to Carlos González, President of the Venezuelan Real Estate Chamber, who says “the “construction motor” has been deactivated. Government representatives have not met with the Real Estate or the Construction Chamber for 3 months. They have not called us again”. He says the government has met only 12% of its housing goal, which called for 500,000 new units this year. “The lack of FOREX and materials has also hit the government’s social program”.

 

• Non-traditional exports dropped 24% in 2015, down to US$ 2.6 billion from US$ 3.4 billion in 2014, according to Ramón Goyo, President of the Venezuelan Exporters Association. He says the drop in production makes it difficult to generate surpluses for export. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/millardos-dolares-subio-gobierno-industriales_0_878912224.html)

 

At least 300 shops close daily in Venezuela

Venezuela’s National Council for Trade and Services (CONSECOMERCIO) estimates at least 300 shops are closing down per day due to lack of inventories, raw materials and domestic production. CONSECOMERCIO Vice President José Chirinella explains that scarcities are due to falling local production as a consequence of government policies in agriculture, “mainly expropriations”, and says the government has taken over more than 4 million formerly productive hectares. According to Venezuela’s main business federation, FEDECAMARAS, 1,190 companies were expropriated under the Chavez regime. More in Spanish (Infolatam: http://www.infolatam.com/2016/07/07/al-menos-300-comercios-cierran-a-diario-en-venezuela-dice-gremio/

 

Average scarcity is up to 58.9%

The ECONOMÉTRICA consulting firm reports average general scarcity is around 58.9%, and is particularly severe in basic goods and services. No improvement is expected over the next few weeks. Food and beverage scarcity in May was 83.4% and basic goods and services had a 84.9% scarcity index. More in Spanish: (Notitarde; http://www.notitarde.com/La-escasez-promedio-es-de-589/Economia/2016/07/06/1007980/)

 

ATM’S grow scarce as maintenance diminishes, higher currency denominations needed

The National Council for Trade and Services (CONSECOMERCIO) has issued an alert over the growing scarcity of ATM’s and fiscal registration outlets for formal trade operations nationwide.  It says the situation is leading many shops to trade only in cash, which makes them a target for criminals. Former Banking Superintendent Alejandro Caribas explains that shutting down many ATM’S is due to a lack of FOREX needed for maintenance. He has called on the Central Bank to issue currency in higher denominations to cut down on the number of bills needed for normal operations. More in Spanish: (Notitarde; http://www.notitarde.com/No-hay-puntos-bancarios-y-registradoras-fiscales/Economia/2016/07/06/1007982/; http://www.notitarde.com/Caribas-Faltan-divisas-para-mantener-activos-los-cajer/Economia/2016/07/05/1007801/; El Nacional, http://www.el-nacional.com/economia/Escasez-puntos-maquinas-fiscales-comerciantes_0_878912117.html)

 

Venezuela refuses to default. few people seem to understand why

It’s been almost two years now since the renowned Harvard economist Ricardo Hausmann caused a stir in his native Venezuela by posing an uncomfortable question. Why does a country that’s so starved for cash keep honoring its foreign debts? In other words, how does it justify shelling out precious hard currency to wealthy bondholders in New York when it can’t pay for basic food and medicine imports desperately needed by millions of impoverished citizens? “I find the moral choice odd,” Hausmann concluded. He was, predictably, skewered by the administration back in Caracas -- President Nicolas Maduro labeled him a “financial hitman” and an “outlaw” on national television -- but today the question feels more urgent than ever. Prices for oil, Venezuela’s lifeblood, have fallen almost by half since Hausmann first spoke out and the country’s cash squeeze has deepened dramatically. The chaos has reached unprecedented levels -- food rationing, looting, mob lynchings, collapsing medical care -- yet through it all, bond traders have received every dime they were owed, billions and billions of dollars in all. (Bloomberg, http://www.bloomberg.com/news/articles/2016-07-04/venezuela-refuses-to-default-few-people-seem-to-understand-why)

 

 

Politics and International Affairs

MERCOSUR will evaluate Venezuela’s political situation, Venezuela blasts Brazil’s government

The foreign ministers of Argentina, Brazil, Paraguay and Uruguay will meet in Montevideo next Monday to evaluate Venezuela’s political situation, after Brazilian Foreign Minister José Serra joined his Paraguayan counterpart Eladio Loizaga in objecting to Uruguay’s intention of turning over the organization’s pro tem chair to President Nicolás Maduro. Loizaga said “Venezuela’s situation turns more complex by the day, and we need MERCOSUR to be headed by a nation that has domestic peace and tranquility in order to carry forward the challenges we must meet during the next semester.” Venezuelan Foreign Minister Delcy Rodríguez rejected Serra’s remarks on Venezuela, calling them “insolent and amoral”, and again said Brazil “is undergoing a coup d’etat which violates the rights of millions of citizens who voted for President Dilma Rousseff”. Miguel Braun, the Trade Secretary of Argentina, dismissed the possibility that Venezuela may influence trade negotiations between the Southern Common Market (MERCOSUR) and the European Union (EU), even though Venezuela it may hold the pro tempore presidency of the bloc in the coming months. "Venezuela is not part of these negotiations, which started with the original four countries" of this group (Argentina, Brazil, Paraguay and Uruguay), said Braun. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-influence-eu-mercosur-trade-talks-ruled-out_318052; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/mercosur-tratara-situacion-politica-venezuela_317852; Noticiero Venevisión: http://www.noticierovenevision.net/politica/2016/julio/5/161705=delcy-rodriguez-considera-)

 

US Congress votes to extend sanctions on Venezuelan officials

The US House of Representatives has passed a draft law extending US sanctions on a number of Venezuelan officials through 2019. The measure, promoted in 2014 by Republican Senator Marco Rubio and Democratic Senator Robert Menendez, freezes US assets and visas on certain members and former members of the Maduro regime. The Senate passed the bill in April, and all that remains is for President Barack Obama, who does not oppose the decision, to sign. Sanctions are imposed on officials who have committed “significant acts of violence or serious human rights abuses against peaceful demonstrators and other innocent civilians”. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/actualidad/internacional/congreso-estadounidense-extiende-sanciones-a-funci.aspx#ixzz4DiYBLdgp; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/slider-inferior/congreso-estadounidense-extiende-sanciones-funcionarios-venezolanos/)

 

John Kerry: Venezuela is able to find her way out of the current crisis

US Secretary General John Kerry made an appeal on Tuesday to talks among all the branches of the Venezuelan government and promised to strive to improve the bilateral relation. He promised that his country “will always support Venezuela by advocating for democratic institutions, respect for human rights, and economic progress” In a communiqué, Kerry offered Venezuelans his, US President Barack Obama’s and US people’s “best wishes” on the occasion of the 205th anniversary of the country’s independence on July 5. “My government recognizes that the past year has been an extremely difficult one for the Venezuelan people. You face many economic challenges that have led to political divisions and severe hardships,” Kerry said. Nevertheless, the US senior officer recalled, “Venezuelans have shown resilience in the past and we have confidence in your ability to find your way out of the current crisis.” “We urge the leaders of all branches of the government to engage in the national dialogue required to effectively address your country’s problems,” Kerry affirmed. Kerry’s message arrived on day after Venezuelan President Nicolas Maduro congratulated the United States for its independence day, commemorated last Monday, July 4. (World Affairs Journal: http://www.worldaffairsjournal.org/content/john-kerry-venezuela-able-find-her-way-out-current-crisis)

 

Maduro vows to increase Venezuela’s military might

President Nicolas Maduro marked the 205th anniversary of Venezuela’s independence on Tuesday by vowing to expand the country’s military might even as he expressed confidence in the armed forces’ ability to prevail in the “unconventional war” that he says his government confronts. “Let us continue to increase military power,” he said. “An independent republic needs a military power that is ever more powerful.” Maduro spoke during the traditional Independence Day military parade at the Los Proceres complex, and boycotted civilian ceremonies at the National Assembly. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415798&CategoryId=10717)

 

Américo Martín calls for "serious dialogue"

Américo Martín, a lawyer, writer and leftist political leader, with an extensive track-record, including his active part in the armed struggled in sixties, called on the government and ruling Unified Socialist Party of Venezuela (PSUV) to accept the lessons implicit in electoral defeats. Martín, the keynote speaker for the 205th anniversary of Venezuela’s independence, echoed those who argue that the recall referendum to challenge the government of Venezuelan President Nicolas Maduro and championed by the Unified Democratic Panel (MUD) “is non-negotiable.” In his opinion, it is not only a constitutional right, but also because “after the deluge of signatures, it belongs to those who signed instead of the initial promoters.” (El Universal, http://www.eluniversal.com/noticias/daily-news/americo-martin-calls-for-serious-dialogue_317905)

 

Venezuelan women push past border controls for food, Colombia ready to help

About 500 Venezuelan women in search of food have broken through border controls separating the western state of Táchira from neighboring Colombia. The women said their families were going hungry because of severe food shortages in Venezuela. Hours later, they crossed back into Venezuela carrying basic goods and singing the Venezuelan anthem. The women said they had organized to meet at the border via the instant messaging service WhatsApp. Dressed in white, they gathered on the bridge linking the cities of Ureña in Venezuela and Cucuta in Colombia. Hundreds of them pushed past the Venezuelan National Guard and walked across the border, which has been closed for almost a year. One of the women told Colombian media: "We're desperate, we have nothing: no cooking oil, no sugar, no rice." After buying food and other goods which are scarce in Venezuela, they again gathered at the the border post asking the Colombian guards to let them pass. They crossed back into Venezuela singing the national anthem. Others shouted "yes, we can" and thanked the Colombian security forces for letting them through. Venezuela closed large parts of its border with Colombia in August 2015 to prevent subsidized good from being smuggled from Venezuela into Colombia. Venezuelans who want to cross into Colombia in states where the border has been closed need a special permit to do so.  But as the scarcity of food gets worse in Venezuela, many have crossed the porous border illegally. Colombian officials said a similar incident had happened in Puerto Santander, 60km north of Cucuta, in June, when 400 Venezuelans crossed into Colombia to buy essential goods. Colombia’s Foreign Minister María Ángela Holguín sent a delegation to the border to evaluate the situation, fearing the “mass arrival” of Venezuelans due to shortages. She offered to expand border passes to those seeking food, and said “we will not let our Venezuelan brothers go hungry or lack medicine”. (BBC: http://www.bbc.com/news/world-latin-america-36722422: Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415767&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelans-cross-closed-border-buy-foodstuffs-colombia_317975; http://www.eluniversal.com/noticias/daily-news/colombia-fears-massive-influx-venezuelans-amidst-shortages_318088)

 

October surprise? Planning for Venezuela’s collapse     

While reason suggests Venezuela should adjust its fiscal policies, ensure basic human needs, avoid sovereign default, and continue oil production for cash flow, it could easily fail to do all of the above.  The ripples of a Venezuelan collapse could stretch from Caracas to Miami. The international community needs to put contingency plans in place to limit the potential damage. What kind of damage? A humanitarian disaster in Venezuela. A stoppage in oil production and cash flow as Venezuela stops paying its contractors and employees.  A cessation of around 37% of all heavy crude imports into the US Gulf Coast. A cut off of credit to the Caribbean and Central America, especially Cuba and Haiti. Massive and sudden migration flows from Cuba and Haiti driven by domestic privation. And all in the middle of the US presidential election season.  Venezuela’s capacity for mismanagement should not be underestimated. Inflation exceeds 400%. Access to essential consumer goods, electricity, and even water is intermittent at best. PDVSA, Venezuela’s state-owned oil and gas company, must make US$ 1.4 billion in payments on its debt by October and US$ 2.8 billion in November or face default. Absent a shift in fiscal policy it is a race between international creditors and the Venezuelan street to see who will force the government’s hand first.  Venezuela’s neighbors are at risk, especially those who have relied on credit support for oil and products in the Caribbean and Central America. Venezuela has already curbed such exports. Those countries capable of cutting ties are already doing so, as at least five PETROCARIBE signatories are no longer receiving Venezuelan supplies while others have reduced their imports. Among those nations still reliant on Venezuelan support are Haiti and Cuba. Haiti’s stock of debt to Venezuela totals around 15% of its GDP, while Venezuelan assistance to Cuba has been estimated to comprise more than 10% of Cuba’s annual GDP. Four steps are needed now. First, the United States should manage a disruption of Venezuelan supply and minimize the potential of an abrupt surge in global oil prices by planning to loan US Gulf Coast refineries heavy oil from the Strategic Petroleum Reserve (SPR) to bridge a potential shortage until commercial supplies arrive. Second, the international financial institutions should plan for (and publicly signal the availability of) short-term credit support for nations dependent on Venezuelan credit if needed. This support would be a pittance compared to the cost of a migration crisis or a humanitarian disaster.  Third, the international community needs strategies to deal with potential shocks to Haiti and Cuba to avoid a migration crisis.  Fourth, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) and the United Nations Disaster Assessment and Coordination (UNDAC) must, with the support of the Office of US Foreign Disaster Assistance, begin contingency planning to address a humanitarian crisis in Venezuela with an eye to mobilizing international support for food, medicine, and basic needs. The international community has an interest in mitigating the impact of Venezuela’s instability on the other nations of the Western Hemisphere and beyond. The United Nations must lead contingency planning efforts to limit the contagion of a Venezuelan collapse and ensure those countries most severely impacted by a forcible cutoff of credit-supported Venezuelan exports have resources at their disposal to ensure their own stability. (Atlantic Council: http://www.atlanticcouncil.org/blogs/new-atlanticist/october-surprise-planning-for-venezuela-s-collapse)

 

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.

May 31, 2016

International Trade

 

Cargo that has arrived at Puerto Cabello:

• 30.000 tons of raw sugar
• 60.000 tons of paddy rice
• 60.000 tons of baker wheat
• 10.000 tons of crude soybean oil
• 30.000 tons of cake of soy

More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=34185; Notitarde, http://www.notitarde.com/La-Costa/Mas-de-mil-millones-de-toneladas-de-alimentos-a-granel-han-ingresado-al-pais-/2016/05/29/983574/; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/distribuyen-190-mil-toneladas-materia-prima-para-producci%C3%B3n-alimentos; El Universal, http://www.eluniversal.com/noticias/economia/60000-trigo-panadero-forman-parte-las-190000-toneladas-insumo_312407; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/arribaron-al-pais-190-000-toneladas-de-materia-pri.aspx)

 

Trade with Colombia down another 20%

Data from the Colombia’s National Statistics Department (DANE) indicate trade between Colombia and Venezuela during Q1 2016 was only US$ 311 million, down 20% from US$ 389 million last year. (El Universal, http://www.eluniversal.com/noticias/economia/intercambio-comercial-entre-colombia-venezuela-contrajo_312602)

 

 

Logistics & Transport

 

Airlines suspend more flights to Venezuela as economic crisis worsens

Venezuela has for years seen airlines reduce capacity to this country as they struggled to repatriate revenue. Now, two more airlines are calling it quits altogether. LATAM Airlines Group SA, Latin America’s largest carrier, said Monday that it would cut all flights to Caracas by August. LATAM also highlighted economic conditions, saying it wouldn’t resume flights when things improved. A day earlier, Deutsche LUFTHANSA AG had said it would suspend its three weekly flights to Venezuela next month “until further notice.” The German airline’s spokesman, Andreas Bartels, pointed to the challenge of repatriating revenue from Venezuela and a sharp drop in ticket demand -- especially among business travelers -- with the nation mired in its third year of a deep recession. Venezuela owes Lufthansa over US$ 100 million in ticket revenue. Carriers have struggled for years to transfer back profits from Venezuela, leaving billions of dollars trapped in bolivars -- the local currency. The International Air Transport Association (IATA) has been pushing Caracas to free trapped airline revenue. (Bloomberg, http://www.bloomberg.com/news/articles/2016-05-29/lufthansa-to-suspend-flights-to-venezuela-starting-next-month; Reuters, http://www.reuters.com/article/us-latam-airlines-venezuela-idUSKCN0YL1SZ; El Universal, http://www.eluniversal.com/noticias/daily-news/latam-airline-begins-gradual-suspension-flights-venezuela_312593; Reuters, http://www.reuters.com/article/venezuela-airlines-lufthansa-idUSL8N18R2PM; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-owes-lufthansa-usd-100-million-spokesperson-says_312579)

 

 

Economy & Finance

 

Venezuela’s oil income drops to under US$ 100 million per month

The drop in oil prices, the weight of foreign debt service cost, and lower production levels have drastically closed the stream of oil dollars that used to flow into Venezuela’s state coffers, lowering real income contributions to mere drops. Experts report that PDVSA contributions to Central Bank accounts are now below US$ 100 per month, after costs and debt service. This is in contrast to US$ 2-3 billion the company used to contribute two years ago. Russ Dallen, managing partner at Caracas Capital Markets, explains that “the numbers do not work”, leading the Maduro regime to sell off its few remaining foreign assets and spend reserves on importing around US$ 1 billion in food each month. Maduro himself has acknowledged the gravity of the situation, and said: “If we look to January 2010, income was US$ 1.790 billion; it was US$ 2.463 billion in January 2011; it was US$ 3 billion in January 2014; US$ 815 million in January 2015; and in January 2016 we only have US$ 77 million”.  More in Spanish: (El Nuevo Herald: http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article80184117.html#storylink=cpy)

 

Economic czar hints at FOREX release

Economic Affairs Vice President Miguel Pérez Abad has seemed to hint that FOREX operations will soon be liberated. He told media “we will soon release, set in motion, the FOREX system, particularly that which is of highest interest to the domestic economy, the supplementary exchange system”. He added that the “exchange rate relies on the market behavior and it acknowledges other stockholders, not only the government, because it is twofold: capture foreign currency, manage foreign currency to accomplish two fundamental goals, such as import substitution and promote exports.” However, expert economist Henkel García, of ECONOMÉTRICA, clarified that Pérez Abad did not promise to fully liberate the exchange rate, “what he meant was that DICOM would soon be implemented, something which has not yet happened…what he is talking about is that the new system would really be one of free access”. (El Universal, http://www.eluniversal.com/noticias/daily-news/forex-venezuela-could-set-free-soon_312476; and more in Spanish: El Nacional, http://www.el-nacional.com/economia/refirio-ministro-Perez-Abad-liberacion_0_857314592.html)

 

 

Politics and International Affairs

 

OAS head Almagro seeks emergency meeting on Venezuela

The head of the Organization of American States (OAS) has called for an urgent meeting to see if crisis-hit Venezuela's socialist government had breached democratic rules, which could lead to a process of suspension. Luis Almagro, a former Uruguayan foreign minister, has called Venezuelan President Nicolas Maduro a "petty dictator," accusing him of disrupting democracy by blocking the opposition-controlled congress and putting loyalists in the Supreme Court. A statement from the Washington-based OAS said Almagro was invoking the body's Inter-American Democratic Charter and had requested a meeting of the permanent council between June 10-20 to analyze the situation in Venezuela. Venezuela views the OAS as a pawn of hostile U.S. policy, and Maduro has dismissed Almagro as a turncoat working for its ideological adversaries in Washington. A two-thirds vote in the 34-nation OAS' General Assembly would still be needed to suspend Venezuela. Caracas has lost the support of diplomatic heavyweights Brazil and Argentina following their recent shifts to the right. But it still enjoys strong support from small Caribbean and Central American nations, including those who benefit from preferential oil and fuel sales, which could ensure it a numerical advantage in any vote. (Reuters: http://news.trust.org/item/20160531152906-1ybqo/?source=hpbreaking)

 

National Assembly President to ask for the floor at OAS meeting

Henry Ramos Allup, President of the National Assembly, says he will request the floor at the Permanent Council of the Organization of American States (OAS) to raise the issue of the current crisis here. Ramos says initiatives by OAS Secretary General Luis Almagro are “invaluable”. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-congress-speaker-ask-the-floor-oas_312498)

 

UNASUR sponsored efforts toward a dialogue here appear to be failing

The Union of South American Nations (UNASUR) has been promoting talks between the Venezuelan regime and its opponents, using the good offices of former Presidents José Luis Rodríguez Zapatero (Spain); Leonel Fernandez (Dominican Republic) and Panama (Martín Torrijos). A statement by UNASUR Secretary General Ernesto Samper says the talks are designed to strengthen the economy, preserve the rule of law, democracy and national sovereignty. Exploratory talks were held with both sides – separately - in the Dominican Republic last week, but Venezuela’s Foreign Minister Delcy Rodríguez went on media to falsely report both sides had met, which drew a wave of criticism. Opposition representatives called Rodríguez a liar and said that past UNASUR efforts have failed. They stressed that they did meet with UNASUR representatives to emphasize their four key conditions for entering into talks: Immediate freedom for political prisoners, a democratic solution this very year, respect for the National Assembly, and official recognition of the domestic humanitarian crisis. The Democratic Unity coalition (MUD) further said that any effort towards a dialogue is not viable if these demands are not accepted. For its part, the government priority is to block or delay a recall referendum against President Nicolas Maduro. Given the high level of polarization and confrontation for more than 15 years there are no bridges between the government and the opposition here. Civil war talk prevails on both sides, with “chavistas” accusing the opposition of coup-mongering and being the allies of imperialism; and the opposition refusing to recognize any legitimacy in the regime. UNASUR Secretary General Ernesto Samper reported the separate meetings and said they would continue.  (Bloomberg, http://www.bloomberg.com/news/articles/2016-05-28/venezuela-government-opposition-exploring-talks-to-end-crisis; El Universal, http://www.eluniversal.com/noticias/daily-news/unasurs-samper-believes-possible-talks-venezuela_312540; and more in Spanish: (Infolatam: http://www.infolatam.com/2016/05/30/venezuela-un-dialogo-con-escaso-futuro/Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/pj-no-hubo-ni-hay-dialogo-con-el-gobierno.aspx#ixzz4AEBn9pWv; http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/unasur-confirmo-voluntad-de-dialogo.aspx; America Nuestra: http://americanuestra.com/ultimahora-los-4-puntos-de-la-mud-la-verdad-sobre-la-reunion-de-santo-domingo/; El Universal, http://www.eluniversal.com/noticias/politica/unasur-haran-nuevos-contactos-para-dialogo-fechas-proximas_312354)

 

Roman Catholic hierarchy says UNASUR is not adequate to promote talks here

Venezuela’s Roman Catholic hierarchy is willing to lend its good offices for talks needed to meet the national crisis, and believes the Union of South American Nations (UNASUR) is not adequate as a facilitator for contacts that began last week in the Dominican Republic. The bishops believe that “UNASUR can do little to promote talks, it lacks the strength to further a dialogue, and is not an adequate participant since the government had a lot to do with its formation. In addition, at other times UNASUR efforts came to nothing. A strong player is needed, or several international organizations, that are accepted as valid by both sides”.  More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Conferencia-Episcopal-Unasur-adecuado-dialogo_0_857314617.html)

 

Elections Council calls off key meeting with opposition representatives

Miranda state governor and opposition leader Henrique Capriles reported that the National Elections Council (CNE) called off a scheduled meeting with opposition representatives to discuss the requested recall referendum. He called for new demonstrations to demand action by the CNE, which he accused of stalling. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/poder-electoral-suspende-encuentro-este-martes-con-oposicion_312614)

 

Kerry welcomes bid to spur talks between Venezuela, opposition

U.S. Secretary of State John Kerry spoke to former Spanish Prime Minister José Luis Rodríguez Zapatero on Thursday to welcome the efforts he is leading to facilitate dialogue between the government of Venezuela and members of the Venezuelan opposition. Kerry said the United States stands ready to help Zapatero, alongside former Dominican President Leonel Fernandez and former Panamanian President Martín Torrijos, in their efforts. (Reuters, http://www.reuters.com/article/us-venezuela-politics-usa-idUSKCN0YI2BY; El Universal, http://www.eluniversal.com/noticias/daily-news/senator-marco-rubio-adds-names-venezuelan-sanctionable-officials_312523)

 

Mexico calls for inclusive talks in Venezuela

The Mexican government welcomed “the first encounters for talks” between the Venezuelan government and the opposition and made an appeal for an “inclusive” dialogue. The Mexican Ministry of Foreign Affairs says it hopes the initiative will help “Venezuelans find a solution to the tough situation in their country.” (El Universal, http://www.eluniversal.com/noticias/daily-news/mexico-asks-for-inclusive-talks-venezuela_312481)

 

Argentina could seek MERCOSUR meeting on situation in Venezuela

Argentina’s Foreign Affairs Minister Susana Malcorra has announced that her government is calling for a meeting of foreign ministers of the Southern Common Market (MERCOSUR) to tackle the current situation in Venezuela. Malcorra said that the democratic clause of the economic bloc is likely to be enforced in Venezuela, but reiterated that “the only solution” to the situation here requires “talks” between the government and the opposition. (El Universal, http://www.eluniversal.com/noticias/daily-news/argentina-backs-mercosur-meeting-situation-venezuela_312518)

 

Argentina, Chile and Uruguay appeal for an urgent political dialogue in Venezuela

Argentina, Chile and Uruguay in a joint statement released on Friday issued “an urgent call for an effective political dialogue and a genuine civic understanding among all political and social actors called for political dialogue in Venezuela” and offered to help with a “national reunion” of the political and social forces of the country, The appeal was made extensive to the government, the National Assembly, under opposition control, and all political and social groups. (Mercopress: http://en.mercopress.com/2016/05/21/argentina-chile-and-uruguay-appeal-for-an-urgent-political-dialogue-in-venezuela)

 

Opposition lawmakers report on Venezuela’s crisis in Paraguay

Opposition legislators from Venezuela met with the head of the Paraguayan Chamber of Deputies, Hugo Velásquez, to report that Venezuela is facing “a humanitarian crisis” because the government “has destroyed the country’s productive apparatus.” The delegation told journalists that Venezuela “lacks basic products” and that nationals “are going through an inconceivable situation verging on atrocity,” Efe reported. (El Universal, http://www.eluniversal.com/noticias/daily-news/opposition-lawmakers-report-paraguay-venezuelas-crisis_312500)

 

Washington Post Editorial: The agony of Venezuela continues

Numerous governments, including the Obama administration, last week called for political negotiations in Venezuela to head off an incipient and potentially catastrophic breakdown of political and economic order. Former Spanish prime minister José Luis Rodríguez Zapatero traveled to Caracas with other statesmen to urge President Nicolas Maduro and opposition leaders to start talking. But Maduro was otherwise occupied. At the end of the week, he ordered tanks, aircraft and soldiers to patrol the country, claiming — not for the first time — that he was trying to head off a U.S. invasion. Thus does the delusional heir of Hugo Chávez drag a country of 30 million people, with the world’s largest oil reserves, over a cliff. By most measures, Venezuela is already a failed state: Amid crippling shortages of food, medicine, power and water, every societal ailment is soaring. Inflation is headed toward 700%, and the murder rate is probably the world’s second-highest, after El Salvador’s. According to the New York Times, deaths of infants under a month old in public hospitals are 100 times more common than three years ago, while a coalition of nongovernmental organizations says at least 200,000 people with chronic illnesses lack the medications for them. An April poll, reported by the Miami Herald, showed that 86% of Venezuelans said they bought “less” or “much less” food than they used to, while only 54% said they ate three times a day. No wonder there have been numerous reports of mobs sacking food warehouses, as well as dozens of instances of vigilante lynching of suspected thieves. Thanks to Maduro and the corrupt and incompetent coterie that surrounds him, this chaos is likely to grow steadily worse.  Calling for “political dialogue” is one way to respond to this unfolding crisis. Yet Maduro and other top regime officials, many of them implicated in drug trafficking or other major crimes, have repeatedly failed to respond seriously. It’s time for more pressure to be put on them, such as through sanctions by the Organization of American States under its democracy charter. (The Washington Post: https://www.washingtonpost.com/opinions/venezuelas-agony/2016/05/24/4db6c3e6-21d9-11e6-9e7f-57890b612299_story.html)

 

Venezuela drifts into new territory: hunger, blackouts and government shutdown

Step by step, Venezuela has been shutting down. This country has long been accustomed to painful shortages, even of basic foods. But Venezuela keeps drifting further into uncharted territory. In recent weeks, the government has taken what may be one of the most desperate measures ever by a country to save electricity: A shutdown of many of its offices for all but two half-days each week. But that is only the start of the country’s woes. Electricity and water are being rationed, and huge areas of the country have spent months with little of either. Many people cannot make international calls from their phones because of a dispute between the government and phone companies over currency regulations and rates. COCA-COLA FEMSA, the Mexican company that bottles COKE in the country, has even said it was halting production of sugary soft drinks because it was running out of sugar. There is often little traffic in Caracas simply because so few people, either for lack of money or work, are going out. Last week, protests turned violent in parts of the country where demonstrators demanded empty supermarkets be resupplied. And on Friday, the government said it would continue its truncated workweek for an additional 15 days. The growing economic crisis has turned into an intensely political one for President Nicolas Maduro, who looks increasingly encircled. American officials say the multiplying crises have led Maduro to fall out of favor with members of his own socialist party, who they believe may turn on him, leading to chaos in the streets. (The New York Times: http://www.nytimes.com/2016/05/28/world/americas/venezuela-economic-government-collapse.html?ribbon-ad-idx=2&rref=world/americas&_r=0)

 

Harrowing scenes of Venezuela on the brink of collapse – in photos

The lines outside Venezuelan supermarkets can stretch for hours, snaking down sidewalks and right-angling around corners. Each one is like a hissing fuse. Will they explode? Venezuela withers away a little more each week. Another food staple or medicine or industrial part goes missing, bringing the breaking point closer. The national guard troops policing the supermarket lines grip their riot shields and truncheons tighter, looking ever more jittery. It all is a waiting game. The government of President Nicolas Maduro is waiting for a rise in oil prices to save it from catastrophe. It is waiting for rainfall to rescue its hydroelectric plants and end the rotating blackouts that have cut the work week for state employees from five days to two. The government is holding on to hopes of another loan from China, or any other creditor willing to lend it a little breathing room. Venezuela’s political opposition is also watching the fuse, and sometimes trying to fan it, but its street protests look small beside the food lines. The opposition took control of parliament in December, but that didn’t matter. Maduro disregards their laws, their votes, their condemnations and warnings. They’re bystanders too, for the most part. For how much longer? The waiting game goes on. Venezuela’s neighbors are playing it, too, wondering if the crash can be softened and how far it may ripple. U.S. officials think the end is close. But all manner of experts and outsiders have been saying that about Venezuela for a while now, and the lines just get longer. The weariness looks like exhaustion in these images from Venezuelan photographer Alejandro Cegarra. His pictures show the Caracas park where he played as a kid, now in ruins, and a nearby McDonald’s, empty of customers because runaway inflation means a Happy Meal costs nearly a third of an average monthly wage. There is no shortage of street crime and violence in this dystopia. While Cegarra found plenty of battle-clad guardsman to keep the supermarket lines in formation, the cop in a nearby park was a cardboard cutout. Venezuela is running on an empty tank. The government can’t stop the slide, and the opposition can’t stop the government. All that’s left to do is wait until something gives. (The Washington Post: https://www.washingtonpost.com/news/in-sight/wp/2016/05/25/venezuela-is-running-on-empty/?hpid=hp_no-name_photo-story-c%3Ahomepage%2Fstory)

 

Spain to monitor situation of its nationals living in Venezuela

Spain will closely monitor the situation of the nearly 200,000 Spanish nationals living in Venezuela in view of the deteriorating conditions in the Andean nation, Deputy Prime Minister Soraya Saenz de Santamaria said Friday.
She cited the “very significant deterioration” of public safety in Caracas and other cities and said Spaniards living in Venezuela are suffering from the same shortages of basic necessities affecting the rest of the population. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2413134&CategoryId=10717)

 

Is the Venezuelan regime committing genocide by omission?

Oliver Sánchez, an 8-year-old child who participated in a demonstration because he was not receiving the chemotherapy procedure he required due to the lack of appropriate medicines, has passed away. Sánchez had Leukemia and, in his last days, he was rushed from one hospital to another because any of them ensured medical attention because of the lack of supplies. He died after 10 days of intensive care in a private clinic. At the same time, patients of Hospital Vargas in Caracas have to buy everything (even their own drinking water), while the company that used to provide food to that public health center stopped doing so simply because the Government does not pay. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2413251&CategoryId=10717)

 

 

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.