August 18, 2016

International Trade

Brazil and Uruguay in clash over Venezuela’s role in MERCOSUR

Brazil has called in Uruguay’s Ambassador in Brasilia to demand explanations over remarks made by Uruguayan Foreign Minister Rodolfo Nin Novoa during a Congressional hearing in his country. Nin told the House Foreign Affairs Committee of Uruguay’s Congress that "We did not much like that (Brazil’s) Foreign Minister José Serra came to Uruguay aiming to suspend the transfer (of MERCOSUR’s chair to Venezuela), and also that if it was suspended they would include us in their negotiations with other countries, as if trying to buy Uruguay’s vote”. He added that the Brazilian position “very much bothered” President Vázquez. Nin said further that Uruguay holds Venezuela as the “legitimate pro tempore chair” and will attend any meetings Maduro calls, even if the others don’t go, adding that other MERCOSUR members want to apply “bullying” over Venezuela’s chairmanship. He also said that Uruguay would for now oppose sanctioning Venezuela under MERCOSUR rules because “conditions aren’t there”. And said “the day they tell us they closed the National Assembly, for us that will be a rupture of democracy. As long as they don’t do so, it is not.” Uruguay called the matter a “misunderstanding” after Brazil expressed “deep dissatisfaction and surprise” over Nin’s statements. More in Spanish: (Infolatam: http://www.infolatam.com/2016/08/16/brasil-convoca-embajador-de-uruguay-por-declaraciones-de-novoa-sobre-mercosur/; Noticiero Venevision,  http://www.noticierovenevision.net/internacionales/2016/agosto/16/166072=canciller-nin-novoa-senalo-que-brasil-quiso-; El Universal: http://www.eluniversal.com/noticias/politica/uruguay-califica-malentendido-roce-diplomatico-con-brasil_432227)

 

Maduro "declares battle" to “save" MERCOSUR

President Nicolas Maduro announced that Venezuela "declares battle" to save the Common Market of the South (MERCOSUR) from what he calls the "triple alliance" of Argentina, Brazil and Paraguay, and thanked Uruguay for the "moral strength" that country has shown. "Venezuela declares a battle to save MERCOSUR from the coup-mongering, far-right triple alliance that aims to destroy the bloc from within, and I thank President Tabaré Vázquez, the people of Uruguay (...) for all the moral force they have shown" said Maduro. He claimed that “the coup-mongering government of Brazil" has tried "unsuccessfully and illegally" to put pressure on Uruguay for Montevideo to join what he described as a "triple alliance" to remove Venezuela from the presidency of MERCOSUR. (El Universal, http://www.eluniversal.com/noticias/daily-news/maduro-venezuela-declares-battle-save-mercosur_432161)

 

Trade Minister says those who repatriate FOREX can keep 100% of export earnings

Foreign Trade and Investment Minister Jesús Faría has called on the private sector to repatriate FOREX and claims they can get back their investment. He says the “the private sector has US$ 500 billion abroad, whether companies or individuals”, and said those who are willing to repatriate their funds to Venezuela “as raw material”” for producing exports can keep 100% of their export earnings “until they get back their investment, when they perform, and this can repeat itself automatically”. He claimed those who use funds abroad to bring raw materials will not be held to the current 60-40% export earnings ratio. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/dejaran-que-las-empresas-retengan-100-divisas_432064)

 

 

Oil & Energy

Venezuela oil exports seen falling as economic woes worsen

The long decline in Venezuela’s oil production is becoming a supply risk for international markets, according to a report by Columbia University’s Center on Global Energy Policy. Venezuela, traditionally a prominent oil exporter, will make a sharply smaller contribution to the global oil market in 2017 as an acute political and economic crisis affects its crude production. Exports from the holder of the world’s largest crude reserves fell more than 300,000 barrels a day in June, compared with the 2015 average, according to the report written by Luisa Palacios, a senior managing director at Medley Global Advisors LLC and fellow at Columbia's University Center on Global Energy Policy. While Venezuela’s output has been declining all year, the impact is only now being felt on international markets because previous losses were offset by slumping domestic oil demand amid an unprecedented economic recession. “Venezuela will represent a growing supply risk for oil markets in 2017,” the report said. “While on average crude oil exports in the first half do not yet show an important decline from the same period a year ago, the latest data point to a deteriorating trend.” (Bloomberg, http://www.bloomberg.com/news/articles/2016-08-16/venezuela-oil-exports-seen-falling-as-economic-woes-worsen; Reuters, http://www.reuters.com/article/us-venezuela-oil-idUSKCN10R1RH)

 

 

Commodities

Maduro claims Venezuela signed US$ 4.5 billion in deals that include Canadian and U.S. miners

President Nicolas Maduro has claimed that Venezuela struck US$ 4.5 billion in mining deals with foreign and domestic companies, part of plan to lift this nation's economy out of a deep recession causing food shortages and social unrest. Maduro said the deals were with Canadian, South African, U.S. and Venezuelan companies, but did not specify whether contracts had been signed or just initial agreements. He added that he expects US$ 20 billion in mining investment contracts to be signed in coming days and that 60% of the income Venezuela received would be spent on social projects. (Reuters, http://www.reuters.com/article/us-venezuela-mining-idUSKCN10R2N7)

 

 

Economy & Finance

GDP reportedly dropped 11.8% in Q2 2016

According to unofficial data from the Central Bank, Venezuela’s economy shrank 11.8% during the second quarter this year, compared to 2015. This comes along with an 8% drop in consumption during this same quarter, the worst in the past 30 years. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/PIB-cayo-segundo-trimestre_0_904109811.html)

 

Central Bank gold value down 25% over past six months

According to Venezuela’s Central Bank (BCV) June 30^th financial statements, the value of its gold reserves dropped 25% in the past six months and now stands at US$ 7.5 billion. As of December 31, 2015, the value of Venezuela’s gold reserves was registered at US$ 10.04 billion, at US$ 1140.43 per troy ounce. The June statement shows the price of gold at US$ 1181.01 per troy ounce, but the amount of gold held by the BCV has shrunk. Bank officials admitted earlier this year that they were trading in gold bullion for cash. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Oro-monetario-BCV-cayo-meses_0_904709719.html)

 

Bank of America follows Barclays in canceling Venezuela trip

Bank of America Corp. canceled an investor trip to Venezuela planned for next month because of security reasons, making it the second bank to do so in a span of weeks amid rising social tensions in the nation. The bank notified clients last week the trip was off. Its sales staff then told clients in a separate e-mail “the situation has deteriorated in Venezuela in the last few weeks as the economic and political crisis has deepened,” according to people who received the update. “As a result, the perceived safety risks have increased significantly beyond what we are willing to tolerate at the moment.” The decision comes after Barclays Plc scrapped its own Caracas travel plans in July because its security team deemed the trip “unwise” unless the bank took “significantly enhanced” safety measures. Bloomberg reported the Barclays cancellation on Aug. 11. (Reuters, http://www.bloomberg.com/news/articles/2016-08-17/bank-of-america-said-to-follow-barclays-canceling-venezuela-trip)

 

Venezuela seeks annulment of award over Vestey cattle ranch expropriation

Venezuela has requested the annulment of a decision by the World Bank’s arbitral center compelling this nation to pay around US$ 100 million to Britain’s Vestey Group for the nationalization of a number of cattle ranches here. Early in April, the International Center for Settlement of Investment Disputes (ICSID) announced that Venezuela should pay US$ 98 million plus interest for having seized Vestey ranches here in 2005. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-requests-annulment-award-over-cattle-ranch-expropriation_432128)

 

POLAR has denounced Maduro regime at ILO

Guillermo Bolinaga, director of Legal and Regulatory Affairs forf Venezuela’s major food producer Empresas POLAR, has denounced the Maduro regime at the International Labor Organization (ILO) in Geneva, Switzerland, for harassment and discrimination. Bolinaga lodged a complaint showing all the attacks against the company and employees in recent months by several representatives of the national government. (El Universal, http://www.eluniversal.com/noticias/daily-news/empresas-polar-denounces-venezuelan-govt-ilo_432011)

 

Minister Faría: Economy and politics are different things

Venezuela’s Foreign Trade and International Investment Minister Jesús Faría attributed consumer shortages to the lack of FOREX needed supply the domestic market, adding that the regime will continue to work with businesspersons who “understand that economy is one thing and politics is another thing.” He says an economic strategy is under way in order to recover foreign currency and resume exports. (El Universal, http://www.eluniversal.com/noticias/daily-news/minister-faria-economy-and-politics-are-different-things_432022)

 

As Venezuela hikes wages without increasing revenue or production, 800% inflation likely to surge

Venezuela’s inflation rate, already expected by the IMF and others to break records this year, is now expected to go even higher after President Nicolas Maduro hiked the minimum wage Monday, analysts say. Inflation is so bad here, that the Central Bank stopped publishing its consumer price index for more than a year. They only resumed regular publication months ago. And when it resumed, it was bad news. Under Maduro, inflation has gone from 20% in 2012 to 181% in 2015 and everybody says it will get worse, pointing to a tenfold increase in liquidity over the same period, a trend that has continued to this day. With the latest increase, announced over the weekend but published Monday, the minimum wage has been hiked 3 separate times for 134% this year alone, in a sinister game of catch-up with inflation, which is expected to top 700%. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418894&CategoryId=10717)

 

 

Politics and International Affairs

Brazil pressures ‘authoritarian’ Venezuela to hold referendum before the year ends

Brazil’s government is putting pressure on Venezuela to hold a recall referendum on President Nicolas Maduro, who is imposing an "authoritarian" regime on his country, according to Foreign Affairs Minister Jose Serra. "Democratic countries throughout the world should advocate for the referendum," Serra told reporters in the Brazilian capital on Wednesday. Serra’s comments come after Venezuela’s electoral authorities appeared to frustrate the opposition’s push to hold a recall this year that could result in new presidential elections. If the referendum occurs in 2017 and Venezuelans vote to oust the president, his political ally and second in command, Aristobulo Isturiz, would take over the top job until regularly-scheduled elections occur in 2019. Serra said that holding a recall referendum any later than this year, 2016, would be “a complete farce” (Reuters, http://www.bloomberg.com/news/articles/2016-08-17/brazil-pressures-authoritarian-venezuela-to-hold-referendum; More in Spanish: Infolatam, http://www.infolatam.com/2016/08/18/brasil-dice-que-si-el-revocatorio-en-venezuela-no-es-este-ano-sera-una-farsa/)

 

France voices concern over Leopoldo Lopez's conviction

France’s Foreign Ministry says it is “closely” monitoring the ongoing situation in Venezuela, and voiced concern after a Venezuelan court last Friday confirmed a prison sentence against opposition leader Leopoldo Lopez. “We call for observance of the rule of law and government-opposition talks,” said and spokesperson, who noted that this nation is going through “strong tensions since several months ago,” Efe quoted. (El Universal, http://www.eluniversal.com/noticias/daily-news/france-voices-concern-over-leopoldo-lopezs-conviction_432136)

 

Sources claim Elections Council is considering calling the recall vote in March 2017

An allegedly proposed timetable - reportedly leaked by National Elections Council (CNE) sources – shows that the CNE is considering scheduling the presidential recall referendum on March 12, 2017, and delaying regional elections to June next year. The report says the timetable has not yet been approved by the CNE board. (El Nacional, http://www.el-nacional.com/politica/CNE-evalua-realizar-revocatorio-regionales_0_904709768.html)

Ten Venezuelans sentenced for drug trafficking in Air France flight

Ten people were sentenced to 22 years and six months imprisonment for smuggling 1,382 kilograms of cocaine, confiscated on September 20, 2013, in Paris, after the landing of an Air France flight from Venezuela. Three of the involved individuals were agents of the Bolivarian National Guard (GNB). The Prosecutor General’s Office revealed that other seventeen people previously acquitted by the Fourth Criminal Trial Court of Vargas state would remain in custody until the relevant Court of Appeals renders a sentence in connection with an appeal filed by public prosecutors. (El Universal, http://www.eluniversal.com/noticias/daily-news/ten-venezuelans-sentenced-for-drug-trafficking-air-france-flight_432069)

 

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.

 

June 30, 2016

Oil & Energy

PDVSA production down 30% in 6 years, oilfields decline, needs US$ 70-80 price for investments

Venezuela’s crude oil production has shrunk around 30% over the past 6 years according to official data from state oil company PDVSA and the Organization of Petroleum Exporting Countries (OPEC). Production fell from 3.12 million barrels per day to an all-time low of 2.18 MBD, some 900,000 barrels, around 30%. In May, PDVSA denied a drop in production this year but did not provide details on pumping. Last week, at a public ceremony, President Nicolas Maduro himself urged Oil Minister Eulogio Del Pino “to start raising the nation’s oil production during next semester”. Eudis Girot, Executive Director of the United Oil Workers Federation, reported the industry is producing only 2.4 MPD, one million barrels less than in 2008. He says “the company has been abandoned, our drills are in broken down deposits, our own fleet is destroyed”. Oil expert Victor Maldonado says “if there are no resources there is no investment, which is key to developing the industry”. ECOANALITICA Director Alejandro Grisanti says “Venezuela is not getting US$ 500 million every month, or US$ 6 billion per year”, due to the drop in production. At a recent meeting Oil Minister Del Pino admitted investments to meet global oil demand require prices between US$ 70-80 per barrel. He says half of the investments scheduled for 2016 were deferred due to low prices, adding “that will obviously impact production”.  He also admitted there is a 20-25% “natural decline” in oilfields which forces them to “replace 600,000 BPD, simply to maintain (current) production”. More in Spanish: (Panorama: http://www.panorama.com.ve/politicayeconomia/En-6-anos-cayo-30-de-produccion-de-crudo-en-Venezuela-20160628-0118.html; http://www.panorama.com.ve/politicayeconomia/Ministro-Eulogio-Del-Pino-Industria-petrolera-requiere-un-barril-de-al-menos-70-dolares-20160629-0074.html)

 

Venezuela’s oil output decline accelerates as drillers go unpaid

Venezuela’s oil output, already the lowest since 2009, is set to slide further this year as contractors scale back drilling after the cash-strapped country fell more than US$1 billion behind in payments. This nation’s oil production, which generates 95% of export revenue, will decline by about 11% to 2.1 million barrels a day by the end of the year, BARCLAYS estimates. Output is falling largely because oil-services companies aren’t being paid, according to the International Energy Agency. (Bloomberg, http://www.bloomberg.com/news/articles/2016-06-27/venezuela-s-oil-output-decline-accelerates-as-drillers-go-unpaid)

 

PDVSA says it has made financing deals with WEATHERFORD, HALLIBURTON

State oil company PDVSA says it has signed financing agreements with services firms HALLIBURTON and WEATHERFORD, PDVSA's president said on Wednesday, following chronic payment difficulties for companies working here. PDVSA has more than US$ 20 billion in outstanding bills to providers, which has led some companies to slow work. The company's access to hard currency has tumbled along with the price of oil, and Venezuela is struggling with triple-digit inflation, a severe recession and heavy bond payments this year and next. "This morning WEATHERFORD signed a financing agreement with us, HALLIBURTON signed yesterday," Eulogio Del Pino, who is also the country's oil minister, said in a speech broadcast on state television. (Reuters, http://www.reuters.com/article/us-venezuela-pdvsa-idUSKCN0ZF2V6)

 

US Supreme Court to hear Venezuela oil rig dispute

The U.S. Supreme Court on Tuesday agreed to weigh Venezuela's bid to block a lawsuit filed by an American oil drilling company that claims this country unlawfully seized 11 drilling rigs six years ago. The high court will review a May 2015 ruling by the U.S. Court of Appeals for the District of Columbia Circuit that allowed one of the claims made by Oklahoma-based HELMERICH & PAYNE International Drilling Company to move forward. The company sued both the Venezuelan government and state-owned oil companies under a U.S. law called the Foreign Sovereign Immunities Act, saying among other things that the property seizure violated international law. (Reuters, http://www.reuters.com/article/us-usa-court-venezuela-idUSKCN0ZE1MV; El Universal, http://www.eluniversal.com/noticias/daily-news/receives-venezuelas-bid-block-helmerichs-lawsuit_317055)

 

 

Commodities

Venezuela seeks additional partnering with South Korea’s POSCO

Foreign Trade and Investment Minister Jesús Faría is in South Korea seeking to expand relations with POSCO, that nation’s largest steelmaker and attract investments to Venezuela. POSCO made an US$ 245 million investment in the Puerto La Cruz (Anzoátegui state) refinery’s deep conversion process. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-busca-ampliar-relaciones-empresa-sider%C3%BArgica-surcoreana)

 

 

Economy & Finance

Central Bank seeks US$ 1 billion from Latin American Reserve Fund

According to sources at the Latin American Reserve Fund (FLAR), Venezuela’s Central Bank (BCV) requested a US$ 1 billion loan, but received only US$ 400 million, drawn against the BCV’s own reserve with the institution. The same source reports that in order to get a billion-dollar loan the agreement would require approval by Venezuela’s National Assembly, in order to comply with FLAR rules which requires clear guarantees. This is not the first time the BCV seeks financial aid from international institutions. For over a year it has been drawing from the International Monetary Fund (IMF), as well as engaging in gold swaps through foreign banks. BCV authorities are concerned about the drop in international reserves, which are now at an all-time low of around US$ 12 billion. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/BCV-millardo-Fondo-Latinoamericana-Reservas_0_875312763.html

 

Companies have reduced operations by 80% due to lack of FOREX

FEDECAMARAS President Francisco Martinez, head of the nation’s largest business federation, reports that scarce foreign exchange has led 90% of all Venezuelan companies to reduce operations by almost 80%, since it is impossible to acquire “raw materials, intermediate goods, machinery and spare parts”. He says political confrontation is hindering economic progress and called for inclusive talks between the government and the private sector, “with measurable, tangible” results for the population. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Empresas-reducido-operaciones-falta-divisas_0_874712788.html)

 

Venezuela received only US$ 1.591 billion foreign investments out of US$ 167.5 to Latin America

According to the 2015 World Report by the United Nations Conference on Trade and Development (UNCTAD), Venezuela received only US$ 1.591 billion in direct foreign investment during 2015, out of US$ 167.5 billion that was directed to Latin America. Most of the amount reported for Venezuela are funds held back from repatriation due to currency controls. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/economia/venezuela-capto-inversiones-por-1591-millones-dolares-2015_316966; El Nacional, http://www.el-nacional.com/economia/Venezuela-capto-inversiones-America-Latina_0_874712814.html)

 

 

Politics and International Affairs

Obama urges Venezuela to respect democratic process, pursue recall, release prisoners

U.S. President Barack Obama on Wednesday urged the Venezuelan government to respect the democratic process and the rule of law, including allowing the release of political prisoners. "Given the very serious situation in Venezuela and the worsening plight of the Venezuelan people, together we're calling on the government and opposition to engage in meaningful dialogue and urge the Venezuelan government to respect the rule of law and the authority of the national assembly," Obama said at a news conference with the leaders of Canada and Mexico.  "Political prisoners should be released, the democratic process should be respected and that includes legitimate efforts to pursue a recall referendum consistent with Venezuelan law." (Reuters, http://www.reuters.com/article/us-venezuela-usa-obama-idUSKCN0ZF2KV)

 

China invites opposition parliamentary leader Julio Borges to talk

Julio Borges, head of the opposition majority coalition in Venezuela’s National Assembly is in China to talk about the economic crisis and challenges of change in Venezuela. The five-day visit will allow him to brief Chinese experts on the country’s current situation. He is a guest of the Chinese Association for International Understanding (CAFIU), an organization attached to the Chinese ruling party. He arrived in China on Monday, to share his vision over the economic crisis and take part in high-level meetings over, among other things, the future in Venezuela. Members of opposition umbrella group Unified Democratic Panel (MUD) backed the visit and regarded it as an open path and a clear signal of the world’s expectations around the country’s situation. Borges is a leader within the Primero Justicia party, along with former Presidential candidate Henrique Capriles Radonski. (El Universal, http://www.eluniversal.com/noticias/daily-news/julio-borges-global-community-must-know-venezuelas-visions_317078)

 

Pro-government forces threaten to abolish Parliament, Cardinal calls idea “desperate”, and a “coup d’etat”

Didalco Bolivar, a former governor of Aragua state, announced that a coalition of all pro government parties called “Great Patriotic Pole”, is considering a motion requesting that the Supreme Tribunal “abolish this National Assembly….and call for new parliamentary elections”. He claimed the legislature is violating the Constitution, betraying the Fatherland, usurping duties, and abusing its authority in foreign policy. Previously, President Nicolas Maduro had also accused Parliament of usurping duties and treason. Bolivar also said the recall referendum could not be called this year, claiming it has been called ahead of time, and accused the opposition of fraud. Venezuela’s Cardinal Jorge Urosa called the move “desperate”, and said “I think this has no head or tail, it would be a coup d’etat against the will of the people expressed on December 6, when an overwhelming majority of the Venezuelan people voted in the direction the National Assembly is now taking. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/28/chavismo-estudia-como-abolir-el-parlamento-venezolano/; El Universal, http://www.eluniversal.com/noticias/politica/iglesia-catolica-rechaza-idea-abolir-parlamento_317185)

 

….and regime then appears to backtrack

Ombudsman Tarek William Saab, a member of the pro-government PSUV party, then said “isolated voices, such as those calling for the abolition of public powers, will not have any kind of support nationally, because they are individuals----what Venezuela now needs is cooperation between public powers”. He added that “radical and extremist voices will have no success in Venezuela at this time…success will come to consensus proposals that lead to an effective solution”. The leader of the pro-government faction within the National Assembly, Hector Rodríguez, said they are not shirking the possibility of a recall referendum since it is a part of the Constitution and said the opposition has the right to use all means possible. He added that the population is more concerned with scarcity and inflation than it is with the proposed referendum. Speaking later, President Maduro called on his supporters to make it a priority to “defeat” and “denounce” the National Assembly during the second semester this year, and called the legislature “a hindrance to development, and we must all take it on as such”. He made reference to the proposal for abolition. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/29/ombudsman-venezolano-afirma-propuesta-de-abolir-parlamento-no-tendra-apoyo/; http://www.infolatam.com/2016/06/30/maduro-pide-que-derrotar-al-parlamento-sea-la-linea-del-proximo-semestre/; Noticiero Venevision: http://www.noticierovenevision.net/nacionales/2016/junio/28/161036=hector-rodriguez-aclaro-que-no-se-estan-negando-a-la-posibilidad-de-la-realizacion-del-rr-)

 

Ramos Allup slams regime for clinging to High Command, announces review of TSJ justices

National Assembly President Henry Ramos Allup says it is “worrisome” that the Maduro regime should depend on the military High Command and the Supreme Tribunal’s Constitutional Chamber to cling on to power. He rejected military coups and repeated that the democratic system has been altered here. He said the Maduro regime had been “given notice” that he is being fired; and added: “They know they’re in their final days, and they’re going to pay, whether they’re civilians or soldiers,” he said, adding that “when this comes about, which will be soon, they are going to have to answer to the courts for their evil deeds”. He also announced that the legislature will revoke the decision – which he termed unconstitutional – through which current justices of the Supreme Tribunal were appointed. He said that if this happens they will call for a new nomination process. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2415166&CategoryId=10717; and more in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/junio/28/161055=ramos-allup-critica-que-el-gobierno-se-aferre-al-alto-mando-militar-para-permanecer-en-el-poder)

 

PSUV says managers who do not fire employees who petitioned for Maduro’s recall must be fired

Lieutenant Diosdado Cabello, vice president of the pro-government PSUV party has announced that his party will demand that all those who hold management positions within government and do not fire employees who have signed a petition for a recall referendum against President Nicolas Maduro, must also be fired. He also said the opposition must be forced to collect 4 million signatures in one day and with 20% of all polling machines. “We are not going to make it easy for them. No. I swear we won’t. And we will do whatever we have to do”. More in Spanish:

 (El Nacional, http://www.el-nacional.com/politica/PSUV-destitucion-despidan-firmaron-revocatorio_0_875312804.html; http://www.el-nacional.com/politica/Solicitaran-CNE-firmas-recoja-maquinas_0_875312787.html)

 

Workers fired, students deprived of scholarships, for signing recall petition

200 employees of the SENIAT tax authority reported to the National Assembly that they were fired for having signed the petition for a recall referendum against President Nicolas Maduro. The pro-government Zulia state has suspended scholarship benefits of 200 students, according to reports confirmed by authorities at four public and private universities there. (El Nacional, http://www.el-nacional.com/politica/Despiden-trabajadores-quitan-estudiantes-firmar_0_875312785.html; El Universal, http://www.eluniversal.com/noticias/venezuela/fundalossada-niega-que-retiro-becas-sea-represalia-por-revocatorio_317162)

 

Maduro’s nationality discussed at the National Assembly

Pro government legislator Victor Clark claims the Colombian government has reported “no information was found relating to a birth certificate or identification card” that could indicate that President Nicolas Maduro is a Colombian national. Clark read out a response by Colombian Foreign Minister María Angela Holguin to a request by National Assembly President Henry Ramos Allup. Ramos Allup retorted that Clark had read an incomplete response since that first notice was followed by another document sent to the Colombian National Registry requesting information on the nationality of Maduro’s parents, which would raise the issue of dual citizenship. (El Universal, http://www.eluniversal.com/noticias/daily-news/colombian-govt-speaks-about-nationality-venezuelas-maduro_317073; http://www.eluniversal.com/noticias/daily-news/colombian-govt-support-requested-clarify-maduros-nationality_317050)

 

Foreign Minister Rodriguez and Ernesto Samper visited Surinam’s Bouterse

UNASUR’s pro tem president, Foreign Minister Delcy Rodríguez, and Ernesto Samper, Secretary General of the Union of South American Nations, have travelled to Surinam to meet with that nation’s President Dési Bouterse, and said they would call a meeting of the organization to discuss the situation there within the next few days. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/junio/28/161040=canciller-rodriguez-y-ernesto-samper-visitaron-surinam-para-reunirse-con-el-primer-mandatario-desi-bouterse)

 

Paraguay regrets MERCOSUR the union’s chair may go to Venezuela

Paraguay’s Foreign Minister Eladio Loizaga has said his nation regrets that the Foreign Ministers of Argentina and Uruguay announced that the pro tem chair of MERCOSUR would go to Venezuela, as scheduled, without consulting Paraguay or Brazil. “I deeply regret this information has been put out unilaterally by two fellow foreign ministers”, he said. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Paraguay-presidencia-Mercosur-Venezuela-consultar_0_875312757.html)

 

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.

 

June 23, 2016

International Trade

Venezuela’s government owes shipping companies over US$ 1 billion for unreturned containers

International shipping companies operating here report it has been impossible to recover containers and government is welching on payments: “There are between 4,000-6,000 containers in the hands of government agencies, some of them for over a year. The use and delay in returning these assets has generated a US$ 1 billion debts, which keeps growing by the day”, says Eddy Meayke, President of Venezuela’s Shipping Line Association. Se reports Venezuela has become an insolvent and high risk client, which is leading shipping companies to set conditions for service here. “They will demand cargo is prepaid, with a warranty for the cost of the container and average delays”, he said.  Meayke also reported a 60% drop in cargo volume to Venezuela. José Modica, President of Venezuela’s Exporters Association, reports that lack of containers has hindered exports, which have gone through their worst year in a decade, and that out of 3,000 exporting companies here in 2010, only 773 remain. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Gobierno-millardo-navieras-devolver-contenedores_0_870513202.html)

 

Trade Minister claims Venezuela will exceed 2015 export figures

Foreign Trade and Investment Minister Jesús Faría claims that “the government is making progress with an export-oriented industrialization model.” He says that this model can replace imports, boost exports and create jobs, as well as provide conditions for the country’s political stability and independence. (El Universal, http://www.eluniversal.com/noticias/daily-news/minister-faria-venezuela-will-exceed-exports-figures-from-2015_316050)

 

 

Oil & Energy

PDVSA unit eyes up to US$ 600 million to overhaul Aruba refinery

CITGO Petroleum, the U.S. unit of Venezuela's PDVSA, will likely invest about US$ 400 million to US$ 600 million to overhaul Aruba's refinery under a 25-year lease with the Caribbean island's government, a top PDVSA official said on Wednesday. CITGO earlier this month signed the agreement to reactivate the 235,000-barrel-per-day refinery, which would help process this nation's extra-heavy crude. The previous operator, Valero Energy Corp, idled the refinery in 2012 because of its low profit. "We're eyeing investments in the refinery that would be more or less between US$ 400 (million) and US$ 600 million," Jesus Luongo, vice president of refining, trade and supply, said in an interview on the sidelines of an oil workers' rally in support of the leftist government of Nicolas Maduro. (Reuters, http://www.reuters.com/article/venezuela-aruba-refinery-idUSL1N19E18K)

 

Russia’s ROSNEFT to build LNG plant in Venezuela

Russian oil firm ROSNEFT and Venezuela’s PDVSA have signed an agreement on the basic terms of a joint venture for the extraction, preparation and monetization of gas fields of Patao, Mejillones and potentially of Rio Caribe. Venezuelan Petroleum and Mining Minister Eulogio Del Pino said that PDVSA and ROSNEFT might sign documents on the establishment of a joint gas project in Venezuela within two months, possibly in July, during a Venezuelan visit of Igor Sechin on May 22-24. “We will certainly implement the extraction [of gas] offshore in Venezuela and will definitely put an LNG liquefaction plant there," Sechin said in an interview. (PRIME BIZ NEWS: http://www.1prime.biz/news/_Report_Russias_Rosneft_to_build_LNG_plant_in_Venezuela/0/%7B71E5F3C3-BAF4-4957-B5F1-4409BF1AD2D8%7D.uif)

 

 

Economy & Finance

China denies meeting with opposition over Venezuela’s debts

China has denied reports that it held talks with opposition representatives, seeking assurance that Venezuela’s large debt to Beijing is repaid if President Nicolas Maduro leaves office. Hua Chunying, a spokesperson for China’s Foreign Ministry, said those talks “absolutely do not exist”, in reference to a report published by the Financial Times. She added that bilateral mechanisms between both nations “are functioning well”, and expressed trust that Venezuela’s people “will have the wisdom and capacity to deal with their internal affairs”. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/China-dirigentes-MUD-prestamos-Venezuela_0_870512941.html)

 

Is Venezuela close to boiling point?

Has the crisis in Venezuela hit a point of no return? A growing number of analysts seem to think so. The country’s dire economic situation — marked by rampant inflation, chronic shortages of basic goods and rolling power blackouts – has deteriorated in recent weeks, with violent food riots erupting across the country. Yesterday a gunman opened fire at the country’s central bank. “Venezuela is on the brink of economic and social collapse,” Capital Economics said in a note earlier this month. “There is a high chance of a sovereign default and a removal of the president over the next eighteen months.” “The worst part of this story is that Venezuela hasn’t hit bottom yet – the only light at the end of this tunnel seems to be from another of a series of oncoming locomotives,” said Russ Dallen, managing partner at Caracas Capital Markets. (Financial Times: http://www.ft.com/fastft/2016/06/21/is-venezuela-close-to-boiling-point/)

 

 

Politics and International Affairs

U.S. in new talks with Venezuela amid worsening crisis, Shannon meets with Maduro

A senior U.S. diplomat is in Venezuela to jumpstart dialogue between the normally hostile governments as the socialist-run nation is torn apart by daily food protests and a campaign to oust President Nicolas Maduro. Thomas Shannon, a career diplomat with extensive experience in Latin America, flew to Caracas after weeks of looting and hunger riots in Venezuela. The riots led to hundreds of arrests and several deaths; and as Venezuela unravels, U.S. officials are increasingly concerned about the risk of further bloodshed and a humanitarian crisis that could spill across its borders and undermine President Barack Obama's legacy in a region where he made history by reopening relations with Cuba. State Department spokesman John Kirby said Shannon, who now serves as Undersecretary of State for Political Affairs, hopes to foster dialogue about the social, economic and political challenges facing this country.  The visit comes as the Organization of American States is set to meet later in the week in Washington to debate the mounting crisis and weigh sanctioning Maduro for allegedly stamping out political dissent in violation of regional commitments to democracy. Socialist-run Venezuela has for years had tumultuous relations with Washington, and a similar rapprochement led by Shannon stalled last year over the jailing of opposition leader Leopoldo Lopez. Despite a harsh exchange of words at a summit in the Dominican Republic last week, U.S. Secretary of State John Kerry and Venezuelan Foreign Minister Delcy Rodriguez agreed to re-start talks in an effort to reduce tensions. Shannon steps into the quagmire with an uncertain outcome. A procession of visits he made last year to Caracas yielded no tangible results, setting low expectations that this trip could result in a breakthrough on releasing political prisoners and calls for the referendum to move forward. The opposition held talks with Maduro two years ago after bloody anti-government protests swept the nation, but that dialogue eventually dissolved without bearing fruit. Today, government opponents are taking a different tack, organizing around a recall referendum they hope will lead to Maduro being removed from office this year with one of their own potentially to replace him. After meeting with Shannon, President Nicolas Maduro said: “I have confirmed to him in a long conversation our interest that sooner rather than later we can build an agenda of respect, a positive agenda between the United States government and the revolutionary and Bolivarian government that I lead”. The discussions went on for nearly two hours. (Reuters, http://www.reuters.com/article/us-venezuela-usa-idUSKCN0Z71YT; El Universal, http://www.eluniversal.com/noticias/daily-news/shannon-meet-with-venezuelan-congress-representative_316094; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414864&CategoryId=10717)

 

…but Maduro again threatens to radicalize “the revolution”

President Nicolas Maduro has threatened to “radicalize the revolution” is Venezuela is suspended or there is an intervention as a result of today’s scheduled meeting of the Permanent Council of the Organization of American States on applying the Hemispheric Democratic Charter in the case of Venezuela. “If someday the forces of the imperial right wing approve in any instance a plan to expel Venezuela, suspend, exclude or intervene in Venezuela, rest assured that I would not hesitate to take the most radical steps I need to take to radicalize the Venezuelan revolution…if they commit the mistake of messing with Venezuela, I will call on national union, for all patriots to defend peace, sovereignty and integrity of this sacred land”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/maduro-suspenden-intervienen-venezuela-radicalizare-revolucion_315981; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/presidente-maduro-constituci%C3%B3n-bolivariana-es-%C3%BAnica-carta-que-reconocemos-venezolanos)

 

… Capriles tells Shannon “there is no dialogue” in Venezuela, and Lopez says recall takes precedence over talks

Two-time presidential candidate Henrique Capriles met with the U.S. Under Secretary of State for Political Affairs, Thomas Shannon, and told him that “there is no dialogue” in this country. “I told Mr. Thomas Shannon, with whom I had the opportunity to talk to a couple of hours ago, that in Venezuela, there’s no process of any dialogue,” said Capriles. “Maduro wants to deflate concerns of our sister countries and the governments of Latin America. Since the Latin American governments are aware that the social unrest in Venezuela, for which Venezuela has no solution, will also have an impact on their countries,” added Capriles, also the governor of Miranda state. Imprisoned opposition leader Leopoldo Lopez wrote from his jail cell that “the Democratic Charter will facilitate the process so that the dialogue that currently does not exist in Venezuela can, in the first place, take place and that it can also be effective and have an agenda and clear time frames”. He added that “no talks can be above the constitutional right our people have to a recall referendum on Nicolas Maduro this year 2016”. (The New York Times: http://www.nytimes.com/aponline/2016/06/21/world/americas/ap-lt-venezuela-us.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2414792&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/capriles-shannon-talks-have-been-held-venezuela_316057; and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/lopez-carta-democratica-facilitaria-proceso-dialogo_316180)

 

Capriles reports that 98% of required recall signatures have been validated, denounces government sabotage

Capriles spoke as thousands of Caracas residents stood in a warm drizzle waiting to verify their signatures on a recall petition by having their fingerprints taken. The weeklong verification drive began Monday and is the first of a series of steps in the byzantine recall process. People in the lines said they were glad to wait and see the recall as the best way to remedy the shortages and triple-digit inflation that are forcing many here to skip meals. Members of the opposition say the recall drive and food riots have caused the government to tighten control over critics. Human rights groups say intolerance for dissent has led to the jailing of dozens of people they consider of political prisoners. Over the weekend, officials arrested two opposition activists who had been traveling outside of Caracas to participate in the validation process. On Tuesday, Human Rights Watch denounced the arrests and called on authorities to produce a legal rationale for holding the men or release them immediately. Opposition leader Henrique Capriles has reported that by the second day of a 5-day period, 156,968 signatures, almost 98% of those required, have now been validated as demanded by the National Elections Council (CNE). Jesus Torrealba, Executive Secretary of the Democratic Unity (MUD) coalition has charged that the regime and the ruling PSUV party have started to “actively sabotage” the process of validating signatures in a petition to start a recall referendum process against President Nicolas Maduro. He specifically accused regional officers of the National Elections Council (CNE) for a deliberate slowdown in Nueva Esparta, Carabobo, Aragua and Anzoátegui, along with other obstacles to voter movement. He accused regional director Joe Uzcategui of holding up the process in the island of Margarita for several hours. At the same time, Capriles accused President Nicolas Maduro of instructing the National Elections Board to slow down the validation of signatures for a petition to carry out a recall referendum against the President. He repeated his charge that the CNE was carrying out a deliberate slowdown in procedures. “They assigned 300 machines nationwide for more than 1.3 million people”, placing faulty equipment in faraway locations, and accused the 4 members of the pro-government faction that dominate the 5-member council of planning the delays. He warned election officials that to deny constitutional and human rights “has administrative and penal consequences”. He says the National Guard is there to safeguard the Constitution, not Maduro’s interests. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/22/capriles-dice-que-se-han-validado-el-98-de-las-firmas-para-revocatorio/; El Universal, http://www.eluniversal.com/noticias/politica/capriles-esta-para-garantizar-constitucion-interes-maduro_316111; http://www.eluniversal.com/noticias/politica/mud-denuncia-cne-saboteo-activo-del-oficialismo-validacion_316080)

 

OAS Almagro calls for "content and timing" in Venezuela talks

Secretary General of the Organization of American States (OAS) Luis Almagro has called for an agreement on “mediators, content and timing” so that “distrust does not hinder” talks between the Venezuelan government and the opposition. “A successful dialogue entails agreement on mediators, content and timing that generates mutual trust,” Almagro made his statement after a meeting of the OAS Permanent Council, which received Spain’s former President José Luis Rodríguez Zapatero to elaborate on the situation of international mediation in Venezuela. Zapatero, who heads a group of 3 former presidents proposed by the Union of South American Nations (UNASUR) to broker talks here, warned that any talks in Venezuela will be “long, hard and difficult”. He defended the group’s “full impartiality”, and said talks must produce “results, facts”, and said the UNASUR group was only in a “preliminary stage”, and called their efforts a “preventive peace process”. Opposition leaders here have seriously questioned the impartiality of Zapatero, and Leopoldo Lopez Sr., father of imprisoned leader Leopoldo Lopez Mendoza, says the former Spanish president “is a negotiator” on behalf of President Nicolas Maduro, and that his work is “unacceptable” because human rights are not negotiable. Zapatero has ignored opposition calls for a recall referendum to oust Maduro, which is a right established in Venezuela’s constitution.(El Universal, http://www.eluniversal.com/noticias/daily-news/oas-almagro-asks-for-content-and-timing-for-talks-venezuela_316081; and more in Spanish: Infolatam: http://www.infolatam.com/2016/06/21/zapatero-advierte-de-que-dialogo-en-venezuela-sera-largo-duro-y-dificil/; Factor MM: http://linkis.com/factormm.com/FNE7K)

 

Congress Speaker, opposition legislators travel to OAS Permanent Council

Henry Ramos Allup, President of the National Assembly, and Luis Florido, head of the legislator´s Committee on Foreign Policy, are in Washington to attend the special meeting of the Permanent Council of the Organization of American States (OAS), where participants will discuss a report by the OAS Secretary General Luis Almagro on Venezuela’s situation. Upon arriving in Washington, Ramos Allup said “conditions are necessary in order to have talks, but the government does nothing, provides no demonstration, and the country’s situation becomes more serious by the day”. (El Universal, http://www.eluniversal.com/noticias/daily-news/congress-speaker-anti-govt-deputies-travel-oas-permanent-council_316082; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/ramos-allup-washington-cada-dia-agrava-mas-situacion-del-pais_316181)

 

U.S. hopes for 'group of friends' to help Venezuela

Washington has high hopes for an Organization of American States meeting on Venezuela on Thursday, which could lead to the formation of an alliance of interested nations to help resolve its crisis, a top State Department official said. "Tomorrow's meeting is in our view a very important meeting," Annie Pforzheimer, acting deputy assistant secretary for Western Hemisphere Affairs, testified at a House of Representatives subcommittee hearing on Wednesday. "We could see the formation of something like a 'group of friends' from the OAS member states who would... try to work with the parties in Venezuela and urge them to pursue sustainable solutions there," she said. (Reuters, http://www.reuters.com/article/us-venezuela-oas-usa-idUSKCN0Z82GW)

 

 “Chavista” leader claims Maduro’s resignation is being negotiated

Former Caracas Mayor and legislator Juan Barreto, a long-time supporter of the late President Chavez, says several pro-Chavez groups have asked President Nicolas Maduro to avoid an election that could cause them a severe defeat if it is lost by 80%. He says Maduro’s resignation is being negotiated in order to avoid the disappearance of the “Chavista” movement. In a radio interview, Barreto added that Maduro does not agree with resigning, but is considering it; and said greater doubts would arise if the National Elections Board does not cooperate with citizens in considering opposition suggestions aimed at improving the process. The information was denied by Congressman Diosdado Cabello, First Vice President of the ruling PSUV party, who said “Juan, you are wrong. You have been misinformed. No one is negotiating Nicolas Maduro’s departure. Whoever wants to desert, let him desert. But that is not the case”. More in Spanish: (Tal Cual: http://www.talcualdigital.com/Nota/127188/juan-barreto-renuncia-de-maduro-se-esta-negociando?platform=hootsuite; El Nacional, http://www.el-nacional.com/politica/Cabello-Barreto-Nadie-Nicolas-Maduro_0_871113214.html)

 

Venezuela’s Cardinal says the recall process must proceed in order to have talks

Venezuela’s Cardinal Jorge Urosa says that in order to have talks between the regime and the opposition there must be mutual respect and compliance with the Constitution, which provides for recall procedures against public officials. He says that government and the Elections Board are under the duty to quickly carry out a vote. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/dialogo-permitirse-revocatorio_0_871113217.html; El Universal http://www.eluniversal.com/noticias/politica/urosa-afirma-que-revocatorio-indispensable-para-que-dialogo_316161)

 

Mexican senators request firm stance on Venezuela

The Mexican government must take an “assertive” stance on the collective defense of democracy and protection of human rights in view of the social, political and economic deadlock in Venezuela, according to the National Action Party (PAN). In a letter to Mexico’s President Enrique Peña Nieto, and in light of the “disruption of democratic order” in Venezuela, a number of senators of the conservative party said enforcement of the Inter-American Democratic Charter of the Organization of American States (OAS), is “indispensable and urgent”. “Mexico needs to speak up to request the release of political prisoners in Venezuela and call upon the country’s authorities to resolve the partial rundown of services and (violation of) basic rights to food, public security, and law enforcement millions of Venezuelans are suffering” senator Laura Rojas emphasized. (El Universal, http://www.eluniversal.com/noticias/daily-news/mexican-senators-request-firm-stance-venezuela_316055)

 

Bolivia’s Morales accused OAS SG Almagro of promoting US intervention in Venezuela

Bolivia’s President Evo Morales has accused OAS Secretary General Luis Almagro of promoting “planned US intervention against Venezuela”, and has called him an “infiltrated agent of the empire”. More in Spanish: (Infolatam: http://www.infolatam.com/2016/06/22/morales-acusa-a-almagro-de-promover-la-intervencion-de-eeuu-contra-venezuela/)

 

Maduro in Cuba taking part in the Colombian cease fire agreement

President Nicolas Maduro is in Havana, taking part in the cease fire agreement between the Government of Colombia and that nation’s “Revolutionary Armed Forces” (FARC). More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/maduro-llega-cuba-para-participar-firma-acuerdo-del-cese-del-conflicto-armado-colombia; El Nacional, http://www.el-nacional.com/politica/Maduro-participara-acto-colombiana-Cuba_0_871113218.html; El Universal, http://www.eluniversal.com/noticias/politica/maduro-llego-cuba-presenciara-acuerdo-cede-del-conflicto-colombiano_316177; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/presidente-llega-a-cuba-para-participar-en-firma-d.aspx)

 

 

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.