International
Trade
31 ships at bay
A total of 31 ships are in the bay of Puerto Cabello awaiting
dock assignment to unload. There are 12 ships unloading, three of them with
bulk cargo. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Importadores-son-los-mas-afectados-2282136/2014/11/12/388102)
Logistics & Transport
Puerto Cabello is operating again
After shutting down for over
30 hours due to worker protests over the lack of an agreement with the local
port authority, BOLIPUERTOS, operations have started up again after they
reached an agreement with Air and Aquatic Transportation Minister, General
Giuseppe Gioffreda, and other authorities. More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Reactivadas-las-operaciones-en-Bolipuertos-tras-lograr-acuerdos-Fotos/2014/11/12/384845)
Oil &
Energy
OPEC diplomacy picks up with Iraq-to-Libya chiefs
OPEC
producers are stepping up their diplomatic visits before the group’s meeting in
two weeks, potentially seeking a consensus on how to react to oil prices
that have plunged to a four-year low. Libyan Prime Minister Abdullah al-Thani
flew to Riyadh today just as Iraqi President Fouad Masoum left the kingdom
after a two-day visit where he met with King
Abdullah, the official Saudi Press Agency reported. Rafael Ramirez, Venezuela’s
foreign minister and representative to OPEC, held talks in Algeria and Qatar.
Saudi Arabia’s Oil Minister Ali Al-Naimi toured Latin America. “The Saudis will not walk the road alone, they want to see everyone
share the burden with them,” Kuwait-based analyst Kamel al-Harami said by
phone. Saudi Arabia, the world’s biggest oil
exporter, is trying to build consensus among fellow members of the Organization
of Petroleum Exporting Countries before they meet Nov. 27 in Vienna, he said. (Bloomberg, http://www.bloomberg.com/news/2014-11-13/iraq-libya-heads-meet-saudis-ahead-of-opec-meeting.html)
PDVSA Industrial’s workers protested outside the plant
for the government lack of compliance with labor
payments that have been dragged for the last four years when the company
formerly known as NORPRO was nationalized. The company’s union and management
sat at a table for over a year. However, union representatives said management
“stormed out.” (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41840&idc=3)
Commodities
Industry expects recession and a drop in imports
Eduardo Garmendia, President
of the Industry Federation, says they expect a drop of around US$ 11 billion in
national income from oil exports, which will restrict availability of FOREX,
and that the private sector will "suffer
the consequences". "Allocations
to private companies have dropped 20% from 2013, with in turn faced a similar
drop from 2012." "The
industrial sector is going through recession," he said, as he recalled
that by the third quarter of 2013, the industrial sector operated at 52.37% of
its capacity. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/conindustria-preve-recesion-industrial-y-baja-en-l.aspx#ixzz3IqmNoCjp; El Universal, http://www.eluniversal.com/economia/141112/industria-nacional-trabaja-al-4885-de-su-capacidad; El Nacional; http://www.el-nacional.com/)
Production lines are now crumbling due to lack of
FOREX
Industry is in critical condition. José Manuel
González, President of the Packing Chamber, and Juan Pablo Olalquiaga,
President of the Chemical and Petrochemical Industry Association, warn that
production lines must be rebuilt since their structure has crumbled to pieces.
Production is now 50% under capacity, and entire lines have shut down for lack
of supplies. Further, labor legislation ties their hands with workers who do
not meet their responsibilities. They are asking the government to solve
underlying causes and not simply focus on immediate measures. More in Spanish:
(El Nacional; http://www.el-nacional.com/)
Venezuela applies price controls to Barbies, because
of Socialism
Socialism has embraced Barbie, just in time for
Christmas. Mothers, grandmothers and beaming little girls are grabbing armfuls
of the dolls in toy stores across Caracas, taking advantage of the government's
order that large chains sell the plastic figurines at fire-sale prices during
the holiday shopping season. Venezuela's socialist government has long imposed
price caps on essential products, from milk to laundry detergent, and
threatened merchants who hoard goods or sell them at unfairly high margins with
jail time. Now President Nicolas Maduro is making the Barbie doll, often
derided by leftists as a training tool for capitalist consumerism, a highlight
of this year's "Operation Merry
Christmas," which he presented as an effort to prevent speculators
from ruining the holidays. The toy isn't the only product affected by the
initiative. Across town from the Barbie bonanza, the government is selling
big-ticket products directly to shoppers at a fraction of what they usually
cost. Business leaders say that mandatory discounts on products sometimes force
retailers to sell at a loss, discouraging imports and feeding shortages; but for
shoppers contending with chronic shortages, hour-long checkout lines and the
world's highest inflation, the sporadic price cuts are a rare bright spot that
even critics of Chavez's socialist ideology can enjoy. (Huffington Post, http://www.huffingtonpost.com/2014/11/12/venezuela-barbie_n_6145524.html)
Economy
& Finance
International reserves at US$ 19.64 billion
As of November 7, Venezuela's international reserves
hit US$ 19.64 billion, the lowest level reported since March 18, 2003, when
reserves stood at US$ 19.74 billion, according to figures provided by the
Central Bank of Venezuela (BCV).
In its most recent report, think tank Síntesis
Financiera highlighted that cash reserves ended at US$ 1.3 billion in October,
a US$ 706 million-decline over a month. As of October 31, total gross reserves
ended at US$ 20.5 billion, dropping US$ 870 million compared to September 31. Most
of Venezuela's reserves are gold ingots. (El Universal, http://www.eluniversal.com/economia/141112/venezuelas-international-reserves-at-usd-1964-billion)
Venezuela bond exodus accelerates on spurned devaluation
Bond investors are
abandoning Venezuela as President Nicolas Maduro’s administration signals the
nation doesn’t intend to devalue the currency with sinking oil prices undermining
its ability to pay debt. The country’s US$ 4 billion of dollar-denominated debt
due 2027 plummeted to an almost six-year low of 55.10 cents on the dollar
yesterday after Finance Minister Rodolfo Marco Torres said this week that
there’s “no devaluation planned.” The
securities have fallen 14.1% this month, posting the biggest drop in emerging markets over that span. (Bloomberg, http://www.bloomberg.com/news/2014-11-13/venezuelan-bond-exodus-deepens-on-spurned-devaluation.html)
BOFA concludes low state capacity introduces a
significant risk for bondholders
In his most recent
report on Venezuela, Francisco Rodriguez, Andean Region Chief Economist for
Bank of America Merrill Lynch says: "Much
of the recent discussion regarding the likelihood of a Venezuelan default has
highlighted that defaulting would be a mistake for Venezuela, given the high
costs and limited benefits to the Venezuelan government. It has not shown that
the Venezuelan government can be counted on not to make that mistake."
(BAML Venezuela: Low Bandwidth Government 12 November 2014)
Moody's believes Venezuela's fiscal imbalance does not
jeopardize debt service
Moody's reports that the total public sector deficit
for Venezuela is over 10% GDP, which would normally be considered a serious solvency
risk for any nation. "But persistent
high inflation, controls on capital movement, and highly restrictive changes
have created an environment in which the government can easily obtain domestic
financing at manageable rates without creating a debt spiral." More in
Spanish: (Notitarde; http://www.notitarde.com/Economia/Desajuste-fiscal-de-Venezuela-no-plantea-riesgo-para-pago-de-deuda-Moodys/2014/11/13/388208/; El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/moodys--desajuste-fiscal-de-venezuela-no-plantea-r.aspx)
No official information on inflation for the past two
months
Nicolás Maduro’s government has again failed to
provide statistics on inflation on October as required by law. The last report,
provided in September, showed inflation between January and August was 39%
while inflation between August 2013 and August 2014 was 63.4%. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41843&idc=2)
...nor is there data on GDP results for 2014, or balance
of payments information since the 3rd quarter of 2013, nor the Scarcity Index since February, among other
figures. Last month, the World Bank said delays in publishing official
statistics remind of old practices in Latin America and affect the capacity of
international bodies to assess a country’s performance. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=41842&idc=2)
Government claims unemployment here stands at 7% in
September
According to the National Statistics Institute (INE),
Venezuela's unemployment rate was 7% by the end of September, meaning that
1,004,273 people are unemployed, either because they lost their jobs or they
could not find a job for the first time. INE statistics count all those
receiving monthly payments from certain government welfare missions as
employed. (El
Universal, http://www.eluniversal.com/economia/141112/unemployment-in-venezuela-stands-at-7-in-september)
Law on Foreign Investment to be enacted via expiring enabling
law
A Law on Foreign Investment and an Anti-monopoly Law
are slated to be enacted by the government via the enabling law currently in
force, according to lawmakers at the National Assembly. At hearings held by the
Assembly's Finance Committee, Henry Navas, a director of the Ministry of
Commerce, noted that several regulations, including the Law on Foreign
Investment, are to be enacted via the enabling law, which is expiring later
this month. (El
Universal, http://www.eluniversal.com/economia/141113/law-on-foreign-investment-to-be-enacted-via-enabling-law-in-venezuela)
Politics and
International Affairs
Judge rejects UN plea for Leopoldo López
Judge Susana Barreiros
rejected a petition by the UN Working Group on Arbitrary Detentions for the
liberation of opposition leader Leopoldo López.
She said: "The Working Group
was not created by the International Agreement on Civil and Political Rights,
which the nation signed, but rather by a resolution of the UN Human Rights
Council, and is therefore not one of the institutions it is required to obey
under article 31 of the Constitution". López will remain in a military
prison. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/141114/jueza-desestima-peticion-de-la-onu-a-favor-de-lopez; El Nacional; http://www.el-nacional.com/)
Colectivos: one of many problems for Maduro
A recent dispute between the Venezuelan government and
members of a pro-government political patronage group, known as a "colectivo", has exposed potential
problems for President Nicolas Maduro. The incident demonstrated Maduro's
inability to exercise definitive control over the "colectivos", which function as auxiliary security forces for
the state. Fortunately for Maduro, he still has the approval of the country's
armed forces, which have so far ensured his continued rule. However, the
deteriorating national economy, Maduro's low public approval and potential
splits within the ruling party will all pose threats to the government over the
next several years. Unable to address any of these issues conclusively, Maduro
is likely to mitigate the threats by maintaining military support through
political appointments and direct benefits. And even though the military has
acquiesced to Maduro's rule for now, the degree of political unrest caused by
Venezuela's economic decline will define the future of his presidency.
(Stratfor, http://www.stratfor.com/analysis/venezuelas-colectivos-one-many-problems-maduro#axzz3J2q7qm6j)
Regime sets up hotline to nab 'infiltrators'
Venezuela's rulings socialists have set up a telephone
hotline to denounce "infiltrators" they say are jeopardizing the
legacy of beloved late leader Hugo Chavez by seeking to destroy the socialist
government. "The enemy who most
harms us is the enemy within our ranks. It's the one who calls himself
'Chavista' but is not 'Chavista,'" said Francisco Ameliach, governor
of the state of Carabobo and a high-ranking member of the ruling PSUV party.
"Militants who foment disunity must
be denounced," he said, giving out a telephone number and email
address that begins with the words "denounce
infiltrators." (Reuters, http://www.reuters.com/article/2014/11/13/us-venezuela-hotline-idUSKCN0IX1YP20141113)
Colombia's FM rejects ambassador's statements on
Deputy Serra's case
Colombian Foreign Minister María Ángela Holguín said
Colombian ambassadors were not allowed to speak to the media, in reference to
statements made by Colombian ambassador to Venezuela, Luis Eladio Pérez,
concerning the murder in October of Venezuelan Deputy Robert Serra. Pérez said
Leiver Padilla Mendoza, aka "El Colombia," the alleged murderer of
Serra, was not a Colombian national, and added that the Venezuelan government
had aired unconfirmed information about the case. (El
Universal, http://www.eluniversal.com/nacional-y-politica/141113/colombias-fm-rejects-ambassadors-statements-on-deputy-serras-case)
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.
