Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Showing posts with label Elias Jaua. Show all posts
Showing posts with label Elias Jaua. Show all posts

Tuesday, May 9, 2017

May 09, 2017


Logistics & Transport

CONVIASA flights reportedly have been suspended

Journalist Elyangelica Gonzalez has reported that Venezuelan airline CONVIASA has suspended national and international flights due to “a matter involving the payment of aircraft insurance”. More in Spanish: (NOTIMINUTO: http://www.notiminuto.com/noticia/reportan-suspension-de-vuelos-de-conviasa/)

 

Oil & Energy

Venezuela braces for double whammy if U.S. imposes oil sanctions

Venezuela would be hit from two directions if the U.S. were ever to impose oil-related sanctions against this nation where at least 30 have died in anti-government protests in the past month. American drivers may pay more at the pump as well. Speculation about possible new U.S. sanctions has increased because of President Nicolas Maduro’s announced plan to rewrite the constitution. America is the biggest buyer of Venezuelan crude, and CITGO Petroleum Corp., the U.S.-based refiner controlled by Petroleos de Venezuela SA, takes the largest share of those imports, according to analysis of U.S. government data compiled by Bloomberg. If CITGO can’t buy from its parent company because of sanctions, it would be forced to pay more on the spot market, said Mara Roberts, a New York-based analyst for BMI Research. “PDVSA’s reliance on the U.S. market has put it in an extraordinarily difficult position,” Roberts said. “An embargo would cripple its revenues to an even greater extent, which would be terrible news in the run-up to another large debt payment in the fourth quarter.” (Bloomberg, https://www.bloomberg.com/news/articles/2017-05-08/venezuela-braces-for-double-whammy-if-u-s-imposes-oil-sanctions)

 

Venezuela oil price falls for 2nd consecutive week
The price Venezuela receives for its mix of medium and heavy oil fell as U.S. production continued increasing among supply builds in the U.S. 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 May 5 fell to US$ 41.27, down US$ 1.19 from the previous week's US$ 42.46. According to Venezuelan government figures, the average price in 2017 for Venezuela's mix of heavy and medium crude has fallen to US$ 44.46.(Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2435931&CategoryId=10717)

 

Economy & Finance

Hidden numbers reveal scale of Venezuela’s economic crisis

Most statistics tracking Venezuela’s economy are either unreliable or have been discontinued, after national account data were suspended in 2015. Even the IMF has only partial information, as its latest interaction with Venezuela’s authorities dates back to 2004. But figures relating to Venezuela’s relations with the rest of the world offer clear insights into the scale of its problems. Venezuelans are leaving the country, heading mostly for Spain and the US. Foreign investment has dried up. es. US data show that in 2016 US net foreign direct investment in Venezuela turned negative for the first time since the series began in the early 1990s. Last year, Venezuela was the only country with which the US had negative net income flow among the 58 countries for which data are available. Overall foreign investment and acquisitions have stalled, and there have been no deals to date this year. Venezuela’s oil exports — which account for about 90% of its total exports in value terms — have collapsed, not just because of the drop in prices but also in volume terms as production has folded. The country is running out of cash to fund bond repayments Venezuela has been raiding its foreign reserves, which have dropped to about US$ 10billion, from US$ 30 billion before Maduro was elected in 2013. Economic contraction is coupled with hyperinflation. Venezuelans are seeing the value of their money shrink at the fastest pace in the world. The IMF estimates an inflation rate of 720% for this year, skyrocketing even further in the coming years. “Price controls, limitations on access to foreign currency and the collapse of the private sector in the provision of basic goods, have cumulatively led to one of the world’s highest inflation rates,” the World Bank wrote in a recent report. This means that Venezuelans see the value of their money and the ability to buy goods and services massively shrink day by day. According to IMF data, Venezuela’s GDP will contract by 7.4% in 2017, meaning the economy will have shrunk about 30% since 2013 — one of the largest peacetime economic contractions since the second world war. (Financial Times: https://www.ft.com/content/a6f7bdae-2f46-11e7-9555-23ef563ecf9a)

 

Politics and International Affairs

Venezuela opposition boycotts meeting on Maduro assembly, as civilians subjected to military courts

Venezuela's opposition boycotted a meeting on Monday to discuss President Nicolas Maduro's plan for a new popular assembly, preferring to protest in the streets where they were again blocked by security forces firing tear gas. Opposition Governor Henrique Capriles said that Maduro’s constitutional assembly goes against the Venezuela’s charter, which requires approval of the nation’s voters to alter the constitution. Capriles said that if the government “continues with this madness,” Venezuela will be ungovernable, he said. In familiar scenes from five weeks of unrest, youths with gas masks and makeshift shields faced off with police and National Guard troops in Caracas, after hundreds of demonstrators were stopped from reaching government offices. Venezuela's opposition is demanding elections to resolve the country's grave political crisis. The 54-year-old successor to Hugo Chavez is setting up a "constituent assembly" super body with power to rewrite the constitution and shake up public powers. But no representatives of the opposition Democratic Unity coalition went to the Miraflores presidential palace on Monday despite an invitation from Education Minister Elias Jaua who is leading the constituent assembly process.  "It's a trick to keep themselves in power," said Julio Borges, leader of the National Assembly legislature where the opposition won a majority in 2015. "The only way to resolve this crisis is with a free vote." The unrest has killed at least 37 people since early April, including protesters, government sympathizers, bystanders, and security forces. Hundreds have also been hurt and arrested.  Local rights group Penal Forum said 1,845 people had been detained since April 1 over the protests, with 591 still behind bars. Opposition leaders said 200 of those were being processed by military tribunals in Carabobo state. Perhaps to justify the use of those military tribunals, officials say they are now facing an "armed insurrection". Red-shirted Maduro supporters also rallied in Caracas on Monday. (Reuters: http://www.reuters.com/article/us-venezuela-politics-idUSKBN18424I; Bloomberg, https://www.bloomberg.com/politics/articles/2017-05-07/venezuela-opposition-boycotts-maduro-s-constitution-rewrite; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2435923&CategoryId=10717; (NBC News: http://www.nbcnews.com/slideshow/venezuela-upheaval-shows-no-signs-slowing-down-n755606

 

Hundreds evacuated in Maracaibo as tear gas seeps into homes

Hundreds of people were evacuated from buildings in Maracaibo, the nation’s second largest city, after security forces fired tear gas during a clash with protesters and the gas spilled into homes, schools and a hospital. The protest turned violent when demonstrators were blocked by national guardsmen while trying to deliver a letter expressing their disdain for socialist President Nicolas Maduro's push to rewrite the nation's constitution. Protesters tried to get around the officers by finding another route but were pushed back by heavy clouds of tear gas in a raucous exchange that continued for more than an hour, witnesses said. Juan Diego Amado, an anti-government activist, said he entered one building housing a foundation housing about 300 children and elderly residents and found many coughing and in tears after inhaling the fumes. Volunteers rushed children still in diapers, others in strollers and the elderly in wheelchairs out of the building to hospitals for treatment. Continued protests in Venezuela's capital Monday resulted in 60 people being injured, said Ramon Muchacho, a Caracas-area mayor. (ABC News: http://abcnews.go.com/International/wireStory/hundreds-evacuated-venezuela-tear-gas-seeps-homes-47286900)

 

Hugo Chávez statue torn down as death toll rises in Venezuela protests

The demonstration began with a group of schoolboys, who gathered – still dressed in their school uniforms – in the palm-lined square outside the town hall of the prairie town of Villa del Rosario in western Venezuela. Before long, some kind of flammable liquid was thrown at a life-sized statue of the late president Hugo Chávez and set alight. And then, to cheers from onlookers, the figurine itself – which appeared to be made of fiberglass or plastic – was pulled down and dragged into the street. In terms of historical significance, the incident is unlikely to rank alongside the toppling of Saddam Hussein’s 12-meter statue in Baghdad, shortly after the 2003 invasion of Iraq. But the destruction of the statue last Friday did not go unnoticed in a country where many public buildings are still adorned with images of Chávez, four years after his death. Over the weekend, cellphone pictures and footage of the incident went viral in Venezuela, where amid widespread discontent with president Nicolás Maduro, Chávez’s handpicked successor, has erupted into near-daily protests. Since then, the gesture has been repeated elsewhere: in Ureña, a town in western Venezuela, a bust of Chávez disappeared from a public square, and in the late leader’s home state of Barinas, a mural with the leader’s face reproduced in the style of Warhol was defaced. Some argue that such incidents demonstrate that after years of economic chaos, food shortages and government repression, Venezuelans have finally reached the breaking point.  But others warn that, as Maduro moves forward with plans to rewrite the country’s constitution despite six weeks of anti-government protests – talk of a tipping point still seems premature. According to Luís Vicente Leon, a leading pollster, the collapse of authoritarian regimes is more often caused by internal splits than outside pressure.  Although pressure on Maduro may be mounting, it is still not coming from two key areas, Leon said. “The electoral authorities validated the constituent assembly, and perhaps most important, we haven’t seen the military express dissent,” he said. For now, the war of attrition between government and opposition looks set to continue, and the death toll seems certain to rise. Monica Pérez, who lives close to the square where the Chávez monument once stood said that the toppling of the statue had galvanized the opposition in the town. “It was the first time I saw this happen here,” she said. “We all feel the moment is now, and we must continue in the streets until the end”. (The Guardian: https://www.theguardian.com/world/2017/may/09/hugo-chavez-statue-toppled-venezuela-breaking-point)

 

Roses in hand, Venezuelan women protesters face security forces

Dressed in white and chanting "Liberty!", tens of thousands of women opposed to Venezuela's socialist President Nicolas Maduro marched on Saturday, proffering roses to security forces who blocked their way. The women's marches took place in most major cities around the nation. In Caracas, marchers sang the national anthem and shouted: "We want elections!" They were halted at various points by lines of policewomen and National Guard troops with armored cars. (Reuters, http://www.reuters.com/article/us-venezuela-politics-idUSKBN1820NM; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2435899&CategoryId=10718)

 

Press union reports over 200 acts of aggression against journalists

Marco Ruiz, Secretary General of the National Press Workers Union, has asked the Attorney General’s office to investigate over 200 acts of aggression against journalists and media workers to date this year. He reports “most” of the attacks were by government security forces, and victims say their equipment was either stolen or destroyed. He said there are 18 arrests registered. More in Spanish: (Notiminuto: http://www.notiminuto.com/noticia/sindicato-de-la-prensa-denuncia-200-agresiones-a-trabajadores/)

 

Venezuela crisis: What is behind the turmoil?

Venezuela is split into Chavistas, the name given to the followers of the socialist policies of the late President Hugo Chavez, and those who cannot wait to see an end to the 18 years in power of his United Socialist Party (PSUV). After the socialist leader died in 2013, Maduro has not been able to inspire Chavistas in the same way his predecessor did. His government has furthermore been hampered by falling oil prices. The lack of oil revenue has forced the government to curtail its social programs, leading to an erosion of support among its core backers. A series of events has further heightened tensions between the government and the opposition and led to renewed street protests. Key was the surprise announcement by the Supreme Court on 29 March that it was taking over the powers of the opposition-controlled National Assembly. The opposition said that the ruling undermined the country's separation of powers and took Venezuela a step closer to one-man rule under Nicolas Maduro. The court argued that the National Assembly had disregarded previous Supreme Court rulings and was therefore in contempt. While the Supreme Court reversed its ruling just three days later, distrust of the court did not subside. Anti-government protesters have been calling for fresh general elections. They have four key demands: Removal from office of the Supreme Court justices who issued the 29 March ruling; general elections in 2017; creation of a "humanitarian channel" to allow medication to be imported to counter the severe shortages in Venezuela; release of all the "political prisoners". Faced with almost daily protests, Maduro probably felt he needed to make a move. Not willing to give in to the opposition's demand for early presidential elections, he chose to announce the creation of a constituent assembly. Opposition leaders have denounced the move as an attempt by President Maduro to maximize his power and cling on to it for longer. They argue that the process of setting up a constituent assembly and drawing up a new constitution would almost certainly mean that regional elections due to be held this year and presidential polls scheduled for December 2018 would be delayed. (BBC News: http://www.bbc.com/news/world-latin-america-36319877)

 

In Venezuela’s chaos, elites play a high-stakes game for survival

Even as Venezuela sinks into chaos, with clashes between protesters and the police escalating, why have its powerful political and military elites stuck by President Nicolás Maduro? The country would seem to be a prime candidate for something scholars call an “elite fracture,” in which enough powerful officials break away to force a change in leadership. Still, splits are beginning to emerge, as a few figures in major institutions signal opposition to Maduro, hinting at growing dissatisfaction and the government’s inability to silence it. Recent actions by both elites and the government suggest they take the possibility of fracture seriously — maneuvering in a high-stakes contest that is potentially decisive but whose outcome remains uncertain. Elite fracture operates as a kind of game in which each player tries to figure out what the others are about to do. Stay loyal to a failing government too long and you risk going down with it. But if you break with the government and others don’t, you’ll pay a high price for disloyalty. Members of the elite, in this game, try to test one another over where they stand, as well as the government’s strength, to decide whether to remain loyal. If enough believe they have achieved critical mass to force a leadership change, they will all push at once. Luisa Ortega, the attorney general, conducted such a test, whether she intended to or not, in late March. When the pro-Maduro Supreme Court moved to seize many of the legislature’s powers, Ortega condemned the ruling as a “rupture of the constitutional order.” The government faced a dilemma. Tolerating Ortega’s dissent would signal that elites could more freely break with Maduro, making action against him easier. But punishing her would risk backlash from any elites who shared her view. Ortega went unpunished, and the ruling was reversed. Rapid policy changes can open such fissures by forcing elites to decide whether to go along. This is why periods of crisis can heighten risks of elite fracture, as governments make rapid changes to keep up. The deciding vote in these situations is often cast by the military, which has the power to break a deadlock among elites and, often, the popular legitimacy to lead a transition. In Venezuela, some are already calling on the military to step in. By conferring pre-emptive legitimacy, they signal to potential coup leaders that they would enjoy at least some elite support. Even a loyal military, when forced to resolve a political crisis, might decide against the leader who called it in. The impossibility of fully predicting how the military might decide in another crisis, along with growing unrest that could again test it, has left the government nervous. Loyalty was once purchased with oil revenue, but as the economy worsens, elites compete over a smaller pie. Venezuela is also growing internationally isolated, forcing elites to fear they could face foreign sanctions or even criminal charges if they remain loyal and the government falls. This is part of what makes the lack of widespread defection, amid Venezuela’s economic collapse, so unusual. Chavez’s hyper-charged populism succeeded in so dividing society that crossing over remains, for many, unthinkable. And so ideological dedication remains widespread, including among elites. That same fervor could create an opportunity for dissidents, however. Venezuela’s few defecting elites have tended to portray themselves as the true guardians of Chávez’s cause and Maduro as the traitor. And younger, second-tier Chávistas may worry about Maduro’s damage to the cause and its longevity. This is why coups are often led by colonels or civilians of equivalent rank, who also enjoy fewer fruits of patronage and so face less downside in defecting. But movement can come only when elites, junior or senior, are sure they have the numbers to win. And any contest over ideological loyalty will tilt toward the status quo. The rules of the game still favor Maduro, even if the state of play does not. (The New York Times: https://www.nytimes.com/2017/05/06/world/americas/venezuela-unrest-protests.html?smprod=nytcore-iphone&smid=nytcore-iphone-share)

 

Venezuela's ex-spy chief promotes possible presidential bid

Nationwide protests are spreading beyond President Nicolás Maduro’s control and risk morphing into civil war, said the retired Venezuelan general in charge of suppressing the last wave of unrest three years ago. “We’re seeing much larger masses protesting across all major cities, including the working-class neighborhoods” once firmly supporting the government, said Major Gen. (Ret.) Miguel Rodríguez Torres, who adds that the government is losing control amid growing protests nationwide and should move now to call elections. A former spy chief under the late Hugo Chavez, Rodríguez Torres is emerging as a political player in turbulent Venezuela, mistrusted by the opposition and despised by the government as he travels the country in a possible bid for the presidency. He is a longshot who hopes to offer a third way for Venezuelans weary of the country's violence and economic woes. Reviled among President Nicolas Maduro's opponents for leading a crackdown on anti-government protesters in 2014, Rodriguez Torres has also alienated government loyalists with his sharp criticism of the socialist administration. But he nevertheless is finding an audience among Venezuelans who have abandoned support for a government that has failed to resolve the economic crisis but still distrust the opposition. In a recent interview, the 53-year-old Rodriguez Torres blamed Maduro for destroying Venezuela's oil-rich economy, failing to rein in violence from pro-government militias and silencing critics. He said he is wary of the street protests launched by the president's foes and instead preaches a message of reconciliation grounded in his evangelical Christian faith. Pollsters haven't included Rodriguez Torres in their surveys yet, but his criticism of Maduro hasn't gone unnoticed. High-ranking officials in recent weeks have accused him of treason or playing into the opposition's hands. His aides say Venezuelan media are under pressure not to interview him and social media is filled with speculation he could be jailed for speaking out like other once loyal military bigwigs. Others trying to occupy Venezuela's almost invisible middle ground include another Chavez army acolyte, Lara state Gov. Henri Falcon, and chief prosecutor Luisa Ortega, who shocked the nation by saying constitutional order had been violated when the Supreme Court briefly gutted the opposition-controlled congress of its powers a few weeks ago. Rodriguez Torres' close ties to Chavismo's military wing are what distinguish him from a growing cadre of administration critics on the left. While outwardly loyal to Maduro, many in the armed forces are believed to be unhappy with the government but fearful that if the opposition takes power they'll lose privileges and influence accumulated during 17 years of socialist rule. Rodriguez Torres' proposals seem taken straight from the opposition's playbook. He sees Venezuela's economic problems rooted in decade-old foreign currency controls and says he would go to the International Monetary Fund, which Chavez railed against, for help it if put food on Venezuelans' table. He said he'd also like to patch up relations with Chavez's old nemesis, the United States. (The Times Colonist: http://www.timescolonist.com/venezuela-s-ex-spy-chief-promotes-possible-presidential-bid-1.18890700#sthash.IWk3L2IB.dpuf; The Wall Street Journal: https://www.wsj.com/articles/former-minister-warns-of-civil-war-in-venezuela-1494263279)

 

Defense Minister says no armed groups outside the military are acceptable

Defense Minister General Vladimir Padrino López has said the term “colectivos” (pro government paramilitary) has been misused. “Any armed group, that are not the Armed Forces, police organizations, security organizations, that are operating out there, whatever they call themselves, are outside the law and must be treated as such. We accept no armed group outside the Armed Forces, the only armed institution here are the Armed Forces”. He added: “The Venezuelan people are being told that we are training civilians, that we support ‘colectivos’, and there is something we reject whatever name they take: guerrilla, paramilitary, criminal bands, whatever they call themselves, outside the law, they will receive a Constitutional response”. He denied there were any military officers under detention for “discontent” – a charge made by opposition leader Henrique Capriles; but added that 3 officers that deserted and sought asylum in Colombia are under investigation. In another statement the following day, Padrino said that out of 37 dead in demonstrations, 22 were murdered with firearms, which he says that current protests “are in line with subversion and armed insurrection”. He defended actions by the Bolivarian National Guard (GNB) during the demonstrations, and claimed they have “contained” violence, adding that this new wave of protests is “far more violent” than those held 3 years ago, and blamed opposition leaders based on what he called “very serious” investigations. Padrino concluded by saying the Armed Forces unconditionally support a Constitutional assembly process through “universal, direct, secret and free” voting; and added that it is “premature” to talk of the way representatives would be selected. Padrino called the recent Supreme Tribunal ruling against the Legislature an “excess” that “cannot be termed a coup d’etat”. He says the Armed Forces will conduct “a great internal debate, at all levels”, to determine the military institution they envision for the next years. He referred to the so-called Bolivarian Militia, which became the center of attention after Maduro increased their number 50 500,000 and allocated resources to provide them with rifles. He said the militia is currently around 400,000 and should not be viewed simply as armed civilians because “they are trained in all senses, not just combat”. He added that although there are weapons available for all, all weapons are controlled by the Armed Forces and are only given to them when the task assigned requires. More in Spanish: (Notiminuto: http://www.notiminuto.com/noticia/padrino-lopez-no-admitimos-ningun-grupo-armado-distinto-a-la-fanb/; http://www.notiminuto.com/noticia/vladimir-padrino-asumo-la-responsabilidad-del-bienestar-de-lopez/)

 

Maduro to convene a military constitutional assembly

President Nicolas Maduro now says he will call for a military constitutional assembly to strengthen all branches of Venezuela’s armed forces. He also called on the business community to select representatives. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/presidente-maduro-activara-una-constituyente-militar)

 

Jaua says no vote can be called to call for a Constitutional Assembly

Educations Minister Elías Jaua, who heads the Constitutional Presidential Committee, has told opposition leaders within the Democratic Unity coalition that there is no part of the Constitution that requires a vote to call for a Constitutional Assembly. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/jaua-asegura-que-no-se-puede-realizar-un-referendo-consultivo-para-convocar-la-constituyente; El Universal, http://www.eluniversal.com/noticias/politica/carta-mud-jaua-constituyente-ilegitima-inconstitucional_651719)

 

Wife says Venezuela's jailed Lopez is well, urges more protests

Jailed opposition Venezuelan politician Leopoldo Lopez is well and is urging street demonstrators to keep up massive anti-government protests, his wife said on Sunday after her first visit with the former presidential hopeful in over a month, putting to rest rumors of his ill health. With tension already high after over a month of street action, many Venezuelans were shocked on Wednesday when a journalist tweeted that Lopez had been taken to hospital without vital signs. The government accused the Lopez clan of whipping up a media frenzy to gain attention. Lopez is indeed alive and well, Tintori told reporters after a visit at the Ramo Verde military prison with Lopez's mother and two children. (Reuters, http://www.reuters.com/article/us-venezuela-politics-idUSKBN184009; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2435937&CategoryId=10717)

 

Almagro says Venezuela needs a new leader, blasts use of military courts for civilians

OAS Secretary General Luis Almagro says Venezuelan President Nicolas Maduro has gone too far to bring the country back from the brink, and that the crisis-ridden nation needs elections and a peaceful transition of power -- not the new constitution that Maduro has promised. “Venezuela is drowning in an economic, financial, social and humanitarian crisis of gigantic proportions,” he said, adding that: “There is a dictatorship in Venezuela, and Venezuela needs elections. The only institutional exit for the country is a general election.” (Bloomberg, https://www.bloomberg.com/news/articles/2017-05-08/venezuela-needs-a-new-leader-not-new-constitution-almagro-says)

 

Pope urges Venezuelans to "build bridges"

The Venezuelan Bishops’ Conference (CEV) has released a letter to them from Pope Francis, expressing “awareness of the challenges you face” and thanking bishops for their “continued appeal to prevent any form of violence, observe citizens’ rights and foster human dignity and fundamental rights and liberties”. Pope Francis encouraged Venezuelan bishops to work on the building of bridges between the government and the opposition to resolve the domestic predicament. He said he was following “with concern the situation of the Venezuelan people in view of the serious problems they suffer,” and expressed “deep sorrow for clashes and violence these days,” in the middle of a wave of protests resulting so far in at least 37 killings and over 700 injured people. (El Universal, http://www.eluniversal.com/noticias/daily-news/pope-emboldens-venezuelans-build-bridges_651650)

 

U.S. National Security head McMaster meets with Venezuela opposition leader Borges

National Security Advisor McMaster met with Venezuela's National Assembly President Julio Borges at the White House. They discussed the ongoing crisis in Venezuela and the need for the government to adhere to the Venezuelan Constitution, release political prisoners, respect the National Assembly, and hold free and democratic elections.  They agreed that there is a strong need to bring the crisis to a quick and peaceful conclusion. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2435935&CategoryId=10717)

 

…and Borges met with OAS Secretary General Almagro, who condemns use of military tribunals against civilians.

Borges also met with OAS Secretary General Luis Almagro and consigned with him a letter to the organization’s Permanent Council designed to halt Venezuela’s withdrawal from the OAS, which requires legislative approval. He also sent a video deploring actions by military prosecutors against civilians. He compared the Maduro regime to past Latin American military dictatorships. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/julio-borges-entrego-documento-a-la-oea-para-frenar-salida-de-venezuela; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/julio-borges-entrego-documento-a-la-oea-para-evita.aspx; (El Universal, http://www.eluniversal.com/noticias/politica/almagro-condena-que-civiles-venezolanos-sean-condenados-tribunal-militar_651759)

 

US Congressmen ask Trump to take Venezuela’s case to the UN

A group of 15 US Congressmen have asked President Trump to take the case of Venezuela to the UN Security Council, seeking support in providing humanitarian aid to Venezuela. They also asked the President to sanction Venezuelan officials and paramilitary that are responsible for violating human rights during ongoing protests. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/congresistas-eeuu-piden-trump-llevar-crisis-venezuela-ante-onu_651226)



8 nations deplore “worsened” violence here.

Eight Latin American nations have issued a statement deploring “worsening violence” in Venezuela. Argentina, Brazil, Colombia, Costa Rica, Guatemala, Honduras, Mexico and Paraguay signed the declaration saying: “We condemn the excessive use of force by Venezuelan authorities against civilians marching to protest government actions that hurt democratic stability, polarize Venezuelan society even further, and lead to the loss of lives, most of them young”. (El Universal, http://www.eluniversal.com/noticias/politica/ocho-paises-deploran-recrudecimiento-violencia-pais_651227)

 

Colombia’s Santos calls for release of political prisoners, slams Constitutional Assembly

Colombian President Juan Manuel Santos says a Constitutional Assembly is not an “adequate way out” for Venezuela. He says: “what is necessary first is an elections timetable, respect for the National Assembly, return its power to it, comply with the Constitution, and within that spirit to start releasing political prisoners”.  More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/santos-afirma-que-una-constituyente-no-es-la-salida-adecuada-para-venezuela)

 

Samper: Casualties are all Venezuelans

Ernesto Samper, former Secretary General of the Union of South American Nations (UNASUR) Ernesto Samper has advised the political shareholders in Venezuela to resume talks. In his opinion, it is the only way to solve the current state of affairs in Venezuela. “Violence leads nowhere,” he warned.  Dead people are neither from the opposition nor from the government, they are simply Venezuelans, victims of violence; it is time to stop,” added the mediator in the government-opposition talks commenced last year in an effort to settle the standoff in Venezuela. (El Universal, http://www.eluniversal.com/noticias/daily-news/samper-casualties-are-just-venezuelans_651654)

 

Costa Rica seeks political dialogue and democratic solution to Venezuelan crisis

Costa Rica’s President Luis Guillermo Solís says “the only way out that one should expect is political”, and a “self-coup would be a tragedy” and could be the “prelude to a civil war”. Costa Rica recently called back its Ambassador to Venezuela for consultations. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/costa-rica-pide-un-dialogo-politico-y-una-salida-democratica-ante-la-crisis-de-venezuela; El Universal, http://www.eluniversal.com/noticias/politica/costa-rica-pide-dialogo-venezuela-salida-democratica-crisis_651656; http://www.eluniversal.com/noticias/politica/costa-rica-llama-consultas-representante-diplomatica-venezuela_651228)

 

CARICOM urged to send fact finding mission to Venezuela

Caribbean Community (CARICOM) leaders have been urged to send a fact-finding mission to Venezuela to make an informed analysis of the situation in that country. Saint Lucia’s External Affairs Minister, Sarah Flood-Beaubrun, said last month that there is legitimate concern about the situation in Venezuela both in terms of loss of life, human rights and the hardships that the people there endure. (Saint Lucia Times: https://stluciatimes.com/2017/05/08/caricom-urged-send-fact-finding-mission-venezuela)

 

Uruguayan legislators seek investigation of Mujica era deals with Venezuela

Two legislators from Uruguay’s National Party and an independent member of the nation’s congress, have brought criminal charges over irregular business transactions between Uruguay and Venezuela during the government of President Jose Mujica (2010-2015). They charge the use of private middlemen that were arbitrarily appointed to carry out business in several fields, through the National Development Fund. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/diputados-presentan-denuncia-penal-por-negocios-entre-uruguay-y-venezuela; El Universal, http://www.eluniversal.com/noticias/venezuela/denuncian-gobierno-jose-mujica-por-negocios-con-venezuela_651224)

 

Dudamel dedicates concert to a slain student in Venezuela

Gustavo Dudamel, the Venezuelan music director of the Los Angeles Philharmonic, walked on stage, looked at the orchestra for a moment and then turned to the audience. He mentioned the killing, two days earlier in an antigovernment protest, of a 17-year-old violist in Venezuela’s El Sistema music education program. Dudamel said the violence in Venezuela is unacceptable, and he dedicated the concert to the slain student and to all the victims of violence. “We play for all our children,” he concluded, “to build a better future for them with peace and love.” The audience rose to give him a standing ovation. A group in the orchestra benches behind the stage unfurled a large Venezuelan flag, and shouts of “viva Venezuela” came from the balcony. Dudamel then proceeded to conduct Schubert’s inconsequential first symphony — written when the composer was a 16-year-old student taking his cues (and stealing themes) from Beethoven — as though every measure mattered momentously. With ferocious attention to detail, and with plain ferocity, he revealed a teen’s potential for greatness. Dudamel’s rise to this occasion, at a time when he is being involuntarily drawn into Venezuela’s current turmoil, is a startling new chapter. After long being constrained by the Venezuelan government’s control of El Sistema, Dudamel has begun to speak out. Much of the violence he condemns is being perpetrated by pro-government forces. But many in Venezuela are not placated, calling Dudamel’s actions too little, too late. Some have gone so far as to accuse the conductor of being complicit in the violence, for not biting the autocratic hand that feeds the hundreds of thousands of El Sistema students for whom Dudamel feels responsibility. (The Los Angeles Times: http://www.latimes.com/entertainment/arts/la-et-cm-gustavo-dudamel-venezuela-schubert-20170507-story.html)

 

Maduro talks to cows during official ceremony

An official act meant to show how Venezuela is working to put an end to the severe food crisis in the country showed instead a side of President Nicolas Maduro that, while not new, doesn’t cease to amaze. In a video shot last week during a visit to an agricultural fair in Caracas, the 54-year-old former bus driver is seen talking to a group of cows … about politics. "I want representatives, leaders and producers of the farming sector to be members of the Constituent Assembly. Are you going to accompany me?" he asks, speaking directly to the animals. "Are you going to support me in the Constituent Assembly or do you want guarimba [a term used by the government to define opposition protests]?” "Do you want violence? Do you want death? Those of us who want peace and life go to the Constituent Assembly," he then says. The video has caused quite a stir in social media, where Maduro has been accused of not being right in the head. But Maduro's main aim may be to get people talking about something besides the five weeks of anti-government protests that have left 38 people dead, including protesters, government sympathizers, bystanders, and security forces. (Fox News: http://www.foxnews.com/world/2017/05/08/venezuelas-maduro-talks-to-cows-during-official-act-will-support-me.html)

 

Venezuela indigenous group flees crisis for Brazil

Around 400 indigenous Warao people from the Orinoco Delta in Venezuela have arrived in the Brazilian city of Manaus in the Amazon. The authorities have declared a social emergency to seek government funds to help with the influx. The Warao say they travelled around 2,000 km (1,250 miles) and are fleeing hunger and Venezuela's worsening economic and political crisis. (BBC News: http://www.bbc.com/news/world-latin-america-39852877)

 

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.

Friday, November 21, 2014

november 21, 2014


International Trade

 

Cargo that has arrived at Puerto Cabello:

  • Over 776 tons of live cattle from Brazil for Frigorífico Industrial Los Andes, Asociación Cooperativa Hoyo de la Puerta and Carnes El Pozo, C.A.
  • Over 1,160 tons of milk and coffee for state companies.
More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Mas-de-tres-mil-reses-llegaron-al-puerto-carabobeno-desde-Brasil-2286379/2014/11/18/395054/)

 
 

Logistics & Transport

 

Air ticket sales down 50% from 2013

Humberto Figuera, president of the Airlines Association of Venezuela (ALAV), reports the number of airplane seats has decreased by 50% in January-October 2014, compared to the same period last year.
Figuera said air tickets sold in 2013 were 3,133,144, and only 1,450,000 tickets have been sold in January-October this year, "that is, half the number sold in 2013".
(El Universal, http://www.eluniversal.com/economia/141120/airlines-association-air-ticket-sales-down-50-compared-to-2013)

 

Oil & Energy

 

Venezuela willing to cut oil output along with OPEC

Venezuela would be willing to cut its own oil production if OPEC decides to limit output when it meets on Nov. 27, says Foreign Minister Rafael Ramirez. Ramirez, who was until recently oil minister and president of state oil company PDVSA, declined to say what specific proposal Venezuela planned to take to the Organization of the Petroleum Exporting Countries meeting in Vienna. Asked which OPEC members would support that proposal, Ramirez said: "I hope all of them." Chances have risen that OPEC will agree to reduce production, according to oil industry analysts, citing delegates with the producer group. (Reuters, http://www.reuters.com/article/2014/11/20/us-venezuela-oil-idUSKCN0J424X20141120; El Universal, http://www.eluniversal.com/economia/141120/venezuelas-pdvsa-ready-to-cut-oil-output-to-stop-oil-fall)

 

Paraguaná’s Refining Complex (CRP) is processing crude oil at nearly half its capacity after several power outages, reports union leader Iván Freites on Wednesday. The CRP is processing some 500,000 barrels per day (bpd), compared to its total capacity of 955,000 bpd, with Amuay processing some 240,000 bpd and Cardón, processing 255,000 bpd. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41944&idc=4)

 

Although PDVSA guaranteed fuel supplies to Aragua and Carabobo states on Tuesday, long lines have persisted at the few gas stations selling gasoline. In Carabobo, public transportation has stopped running in some areas as units have been unable to get gasoline. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41936&idc=4)

 

Foreign Minister says Venezuela to continue promoting PETROCARIBE

Foreign Minister Rafael Ramírez says that despite the drop in oil prices Venezuela will continue to meet oil supply agreements in the Caribbean and Central America through PETROCARIBE. He reports 301 million barrels have been supplied over the past nine years, billed at US$ 28 billion, and that Venezuela has received US$ 14 billion in payment, and US$ 3 billion in kind. More in Spanish: (PDVSA, http://www.pdvsa.com/; El Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/venezuela-ha-suministrado-301-millones-de-barriles.aspx; AVN; http://www.avn.info.ve/contenido/unión-del-caribe-y-seguridad-energética-son-principal-reto-petrocaribe, http://www.avn.info.ve/contenido/venezuela-garantiza-continuidad-del-intercambio-energético-petrocaribe, http://www.avn.info.ve/contenido/rafael-ramírez-petrocaibe-aminoró-efectos-crisis-del-capitalismo-países-más-pobres; El Nacional; http://www.el-nacional.com/)

 

 

Commodities

 

Economic Affairs VP and automotive industry representatives monitor agreements

Economic Affairs Vice President General Rodolfo Marco Torres has met with representatives of the automotive and spare parts sector to monitor their agreements with the Government aimed at boosting production. GOODYEAR resumed a plan to export tires made in Venezuela amid part of the agreements, says, Marco Torres. He also noted that he held a meeting with representatives of TOYOTA Motor Corporation, also for the follow-up of agreements. "Toyota reaffirms commitment to continue manufacturing vehicles and expresses confidence in Venezuela," he said. (AVN, http://www.avn.info.ve/contenido/vice-president-economy-automotive-representatives-monitor-agreements)

 

 

Economy & Finance

 

Maduro raises taxes, reserves to help growth

President Nicolas Maduro raised taxes on goods ranging from yachts to rum and increased international reserves as the government responds to the lowest oil prices in four years. Bonds rallied by the most in almost six years. The president said that the 28 laws he signed using decree powers will restore growth in an economy suffering the world’s fastest inflation and shortages of basic goods. He ordered that a US$ 4 billion loan from China be added to international reserves. “Maduro is at last recognizing there’s a need for a fiscal adjustment and stronger reserves,” says Orlando Ochoa, economics professor at Andres Bello Catholic University in Caracas. “The measures in themselves are a drop in the ocean given the magnitude of the problem. Rather, this is a signal of bigger steps to come.” (Bloomberg, http://www.bloomberg.com/news/2014-11-19/venezuela-s-maduro-raises-taxes-reserves-to-help-growth.html)

 

Venezuela’s US$ 4 billion reserves boost wins investor approval

Investors in Venezuelan bonds are welcoming steps by President Nicolas Maduro to bolster transparency in government accounts after concern mounted that the country is running out of cash to service its debt. Venezuelan notes posted the biggest rally in three weeks yesterday after Maduro ordered that US$ 4 billion from Chinese loans be added to foreign reserves, which had dwindled to an 11-year low. By transferring the Chinese funds it has increased international reserves to US$ 23.550 billion, according to the Central Bank of Venezuela (BCV). At US$ 21.4 billion, including gold assets, the central bank’s holdings only covered about 60% of debt due by the end of 2017. Venezuela’s borrowing costs are the highest in emerging markets at 20.44%. While the loans are intended to pay for specific projects and aren’t supposed to be used to pay debt, the transfer from off-budget funds to central bank accounts may allay concerns that the country is teetering toward default, according to Goldman Sachs Group Inc. The move is a departure from the opacity that often surrounds cash from Chinese loans, which mostly remains in off-budget funds excluded from parliamentary oversight, Caracas-based researcher ODH Grupo Consultor said. Maduro said Marco will travel to China and some OPEC and non-OPEC countries in the next few days to fine-tune four financing modalities. (Bloomberg, http://www.bloomberg.com/news/2014-11-20/venezuela-s-4-billion-boost-to-reserves-wins-investor-approval.html; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41931&idc=2; http://www.veneconomy.com/site/index.asp?ids=44&idt=41942&idc=2; and more in Spanish: Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/marco-torres-realizara-gira-para-pactar-financiami.aspx#ixzz3JVXJ1yhz; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/se-cumplio-traspaso-de-4-000-millones-al-bcv.aspx; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/marco-torres-realizara-gira-para-pactar-prestamos-.aspx; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/gobierno-culmino-traspaso-de--4-000-millones-a-las.aspx#ixzz3JhMk6jK7)

 

Regime seeks additional revenue through tax reform

The government has reformed five tax laws to increase income and bridge the gap in public accounts.
President Nicolás Maduro, in the last days of the expiring enabling law, has made changes to the income tax law, the law on value added tax (VAT), the tax law on alcoholic beverages, the tax law on cigarettes and the organic tax code (COT). Following such move, Economy Vice-President and Finance Minister General Rodolfo Marco Torres said the reform of the legal framework would "optimize tax collection and provide additional income."
Such adjustments, he said, "will benefit all sectors. They will not affect the larger tax base. They are progressive tax reforms. Therefore, those who earn more will pay more."
(El Universal, http://www.eluniversal.com/economia/141120/venezuelan-government-seeks-additional-revenue-through-tax-reform)

 

Government debt estimated at 27-30% of GDP for 2015

The Economic Affairs and Finance Ministry estimates that projected indebtedness for 2015 will bring total government debt to around 27-30% of GDP, as reported by Beatriz Bolívar, head of the National Public Credit Office to the National Assembly's Finance Committee. Officials did not reveal current government debt, which stood at US$ 127.7 billion during the first semester this year. More in Spanish: (El Universal, http://www.eluniversal.com/economia/141121/calculan-que-deuda-del-gobierno-en-2015-sera-30-del-pib)

 

Analysts say that Venezuela meets all requirements for hyperinflation

Economic analysts say Venezuela is sunk in a number of economic distortions that will lead the nation into hyperinflation during 2015, if necessary steps aren't taken, particularly in foreign exchange policy. They indicate prices will continue to shoot up along with the parallel exchange rate, and scarcity will worsen by March next due to the drop in inventories. They say the newly enacted fiscal reform will cause demand to shrink further. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/venezuela-tiene-todas-las-condiciones-para-ir-a-un.aspx#ixzz3JhLsLZan; El Universal, http://www.eluniversal.com/economia/141121/plantean-necesidad-de-una-revision-macroeconomica; El Nacional; http://www.el-nacional.com/)

 

BOFA estimates unified exchange rate should be VEB 35/US$1, subsidy now around US$ 50 billion

Francisco Rodríguez, Chief Economist for the Andean Region at Bank of America Merrill Lynch says a

Venezuela's unified exchange rate should be VEB 35/US$ 1, which is the average of current operations. He says the cost to the government of keeping the subsidized three tiered system is around US$ 50 billion yearly, and advises unifying rates and raising gasoline prices in order to finance subsidies for the neediest. Rodriguez says that by delivering cheap FOREX, Venezuela is "at this time (Venezuela) is paying the greatest tax there is: inflation. Deteriorating buying power is what supports the exchange rate subsidy." More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/rodriguez--tipo-de-cambio-para-la-unificacion-podr.aspx#ixzz3JbTElYwQ, and El Nacional; http://www.el-nacional.com/)

 

The overhaul of the Income Act (ISLR), signed by Nicolás Maduro, eliminates tax waivers for cooperatives and foundations. It also eliminates the “inflation adjustment” used by companies. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41934&idc=2)

 

 

Politics and International Affairs

 

 

Obama administration would back sanctions against Venezuela

The Obama administration would like to work with the U.S. Congress to impose sanctions on Venezuela in response to a crackdown on anti-government protests, President Barack Obama's deputy national security adviser told lawmakers on Wednesday. Tony Blinken, who is Obama's choice to be deputy secretary of state, said Washington had refrained from pushing for sanctions in the past few months to allow diplomatic efforts by some Latin American countries to secure the release of opposition leaders from jail and nudge Caracas toward electoral reform. But those efforts have failed, Blinken told the Senate Foreign Relations Committee at his nomination hearing. "We would not oppose moving forward with additional sanctions," he said. (Reuters, http://www.reuters.com/article/2014/11/20/us-usa-venezuela-sanctions-idUSKCN0J400X20141120; El Universal, http://www.eluniversal.com/nacional-y-politica/141120/us-govt-seeks-sanctions-on-venezuela-for-repression-during-protests)

 

Brazilian Foreign Affairs Minister slams visit by Venezuela's Jaua

Brazilian Foreign Minister Luis Alberto Figueiredo told his nation's Lower House’s Foreign Affairs Committee that Brazil forcefully demanded an explanation from Venezuelan authorities since a visit by Venezuelan Communes Minister Elías Jaua was never notified. Jaua used the visit to sign an agreement with a Brazilian rural movement in Sao Paulo, an agreement Brazil does not consider valid. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41943&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/141120/brazil-in-disagreement-with-venezuela-over-unreported-agreement; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2361545&CategoryId=10717)

 

Bruised Venezuelan opposition may make headway in 2015

National conditions may be slowly turning in favor of the opposition. A sharp economic decline in the OPEC nation, made worse by falling oil prices, means they could make significant gains at legislative elections in 2015. A strong result would encourage the opposition to then seek a recall referendum in 2016 to try and end Maduro's presidency half-way through. It could also embolden factions within the ruling Socialist Party disillusioned with Maduro. He is currently taking a battering in the polls. DATANALISIS, perhaps the country's most respected pollster, said 80% of Venezuelans now view the state of the nation negatively and disapprove of the socialist economic model. Maduro's rating is off from about 50% when he came to power to 30% now, according to the survey in September, while remarkably 68% think he will be out by 2016. "If the elections were today, the government couldn't win," DATANALISIS head Luis Vicente Leon said, predicting the opposition would win with a 20-point margin. Though the next elections for the 165-seat assembly have to be held by the end of 2015, and are traditionally in the last quarter, there is speculation the government might bring them forward to reduce fallout from a deteriorating economy. The opposition coalition's new executive secretary, Jesus Torrealba, insists that change is coming. "The glacier that was 'Chavismo' is starting to melt," he says. (Reuters, http://www.reuters.com/article/2014/11/20/us-venezuela-opposition-idUSKCN0J41E220141120)

 

Leopoldo López says he will not attend any more hearings until a decision is reached on a motion filed by his defense over Judge Susana Barreiros’ dismissal of the UN’s resolution before the Appeals Court. López’ attorneys claim the Venezuelan State has no option but to comply with the UN’s recommendation. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41935&idc=1)

 

Venezuelan appointed UN’s Economic Development Deputy Secretary General

Lenni Montiel, is replacing Pakistani Shamshad Akhtar. Montiel was Economic, Social and Development Affairs Director in the Executive Office of the UN’s Secretary General. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41932&idc=2)

 

 

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.