July 14, 2016

International Trade

Major General Efraín Velasco Lugo named head of the national port authority, BOLIPUERTOS

President Nicolas Maduro has named Major General Efraín Velasco Lugo as the new president of the Bolivarian ports (BOLIPUERTOS). He also announced he is designating a single authority for each port: Real Admiral Carlos Martín at La Guaira (Vargas state); General Rafael José Aguana at Puerto Cabello (Carabobo state); General José Noguera Silva at Maracaibo (Zulia state); Rear Admiral Andrés Rojas at Guanta (Anzoátegui state) and General Luciano Marquina at El Guamache (Nueva Esparta state). More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/designan-al-mayor-general-velasco-lugo-nuevo-presi.aspx#ixzz4EHbQzADI; http://www.elmundo.com.ve/noticias/actualidad/noticias/presidente-juramento-a-las-autoridades-unicas-de-c.aspx#ixzz4ENYDK5uW; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/economia/designan-mg-velasco-lugo-presidente-bolipuertos/; El Universal, http://www.eluniversal.com/noticias/economia/maduro-ordena-restructuracion-cinco-puertos_319115)

 

SÍRAGON exports Venezuela-made PC's for the first time

Venezuelan technology products manufacturer SÍRAGON has for the first time exported its top-of-the-range product named All in One PC 7100 Series for sale in several Central American countries. Venezuela will dispatch a number of these computers to Panama, from where they are to be sent to Central American countries such as Nicaragua, Costa Rica and Guatemala. (El Universal, http://www.eluniversal.com/noticias/daily-news/siragon-exports-venezuela-made-pcs-for-the-first-time_319037)

 

Over 200,000 tons of raw materials for agribusiness have arrived at Puerto Cabello this month, according to Nutrition Minister General Rodolfo Marco Torres. General Marco reports that 14 ships have arrived bearing white and yellow corn, soy cakes, paddy rice, raw sugar, baking wheat and durum wheat. He reports there are another 5 ships waiting to offload at least another 100,000 tons, 80% of which will go to the private sector. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/arribaron-puerto-cabello-m%C3%A1s-200-toneladas-materia-prima-para-agroindustria; El Mundo, http://www.elmundo.com.ve/noticias/economia/agro/arribaron-al-pais-228-mil-toneladas-de-materia-pri.aspx)

 

Ship bearing 200 tons of food from Trinidad arrived at Cumaná. The shipment is part of 506 tons purchased from neighboring Trinidad for Sucre state in Eastern Venezuela, and includes chicken, flour, sauces and milk, as well as personal care and cleaning products. Sucre state governor Luis Acuña said the transaction with Trinidad includes 106 tons flown in, and 400 tons by sea. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/buque-cargado-200-toneladas-alimentos-arrib%C3%B3-cuman%C3%A1)

 

Maracaibo’s port received 16 tons of corn for chicken feed, says Zulia state governor Colonel Francisco Arias Cárdenas. The shipment was imported by private business, and will be distributed to chicken farms around the region. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/zulia-recibe-16-toneladas-de-maiz-para-producir-al.aspx#ixzz4EHdE2tNj; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/economia/zulia-recibe-16-toneladas-maiz-producir-alimento-pollos/)

 

 

Oil & Energy

Venezuela’s oil production fell to 13-year low in June, IEA says

Venezuelan crude production fell to a 13-year low last month as an economic crisis weighed on this country’s oil industry, the International Energy Agency said. Output sank to 2.18 million barrels a day, down 240,000 barrels a day from a year earlier and the lowest since February 2003 when an oil workers’ strike trimmed volumes. The drop in production is set to continue, with the IEA forecasting an annual slump of 200,000 barrels a day, double the decline it predicted last month. “While Iran is clearly OPEC’s biggest source of supply growth this year, Venezuela is notching up the largest decline,” the agency said in its monthly report on Wednesday. Iranian production rose to 3.66 million barrels a day in June, maintaining gains seen since the start of the year when international sanctions were lifted. (Bloomberg, http://www.bloomberg.com/news/articles/2016-07-13/venezuela-s-oil-production-fell-to-13-year-low-in-june-iea-says)

 

PDVSA issued US$ 831 million in debt to pay providers this year

State oil company PDVSA has issued US$ 831 million in promissory notes this year to repay debts to service providers, according to its latest financial statement. The notes, with an interest rate of 6.5%, mature in 2019, the company said in its 2015 financial statement. PDVSA has run up over US$19 billion in unpaid bills to service providers as a result of cash-flow problems, which has led some companies to slow work. PDVSA began negotiating private issuances last year to settle years-old suppliers' bills, with at least US$ 310 million of notes in 2015 to companies including General Electric Co. (Reuters, http://www.reuters.com/article/pdvsa-debt-idUSL1N19Z0MY)

 

PDVSA finds procurement fraud in U.S. case

PDVSA is investigating U.S. allegations of a US$ 1 billion bribery conspiracy involving the state oil company and has found there was fraud in procurement processes, according to a report of its 2015 results. PDVSA, the financial motor of President Nicolas Maduro's socialist government, had previously blasted the Houston court case against two Venezuelan businessmen as part of a smear campaign by opponents trying to link it to corruption. But PDVSA's audited financial statement, published this week, said an internal probe "confirmed the company was a victim of fraud in its process of international procurement." The two businessmen, Abraham Shiera and Roberto Rincon, have pleaded guilty after being arrested last year and charged for conspiring to pay bribes for energy contracts. (Reuters, http://www.reuters.com/article/venezuela-usa-corruption-idUSL1N19Z1H9)

 

Venezuela, Trinidad and Tobago continue with gas projects

Representatives of Venezuela and Trinidad & Tobago have met this week to continue with bilateral gas agreements previously signed as part of the development of offshore reserves at the Campo Dragón, “Mariscal Sucre” project, 40 km north off Sucre state. They confirmed the agreements struck on May 24 in Port of Spain apropos the visit paid by President NicolAs Maduro, when they agreed on gas exports from Venezuela to Trinidad and Tobago. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-trinidad-and-tobago-continue-with-gas-projects_327501)

 

Bolivia's Morales admits issues in PETROANDINA

Bolivian President Evo Morales has admitted that oil joint venture PETROANDINA is facing economic troubles, and that Bolivia is likely to take charge of this situation. PETROANDINA is comprised of state-owned oil companies YPFB of Bolivia (60% of interests) and Petróleos de Venezuela (PDVSA-40%). “PETROANDINA was an agreement with PDVSA, yet difficulties have arisen. (This situation) is under study; we will likely overcome it, as was the case with other companies facing problems and the State took over,” Morales said during a press conference. (El Universal, http://www.eluniversal.com/noticias/daily-news/bolivias-morales-admits-issues-petroandina_318989)

 

 

Commodities

Venezuela trucks food directly to the poorest as chaos spreads

Catia, a vast network of makeshift homes in western Caracas, has long been a proud bastion of Venezuelan socialism. The residents may be working class but their housing is subsidized, their clinics free, their favorite color ruling-party red. Red T-shirts were everywhere in Catia one recent morning but not for another ribbon cutting. This time, loyalists were unloading a government truck packed with food for once-resolute supporters whose pantries are achingly empty. “Since they told me last night it was on its way, I could barely sleep,” said Andrea Vasquez, a 40-year-old call center operator, who watched as dozens of her neighbors swarmed the truck. “It’s a miracle.” (Bloomberg, http://www.bloomberg.com/news/articles/2016-07-13/as-chaos-spreads-venezuela-trucks-food-directly-to-the-poorest)

 

Venezuela will distribute “consumer cards” to the poorest

Executive Vice President Aristóbulo Istúriz says the Venezuelan government plans to issue “consumer cards” to the poorest, so that they can acquire basic goods at subsidized prices. “We hope to deliver some 500,000 cards in the first stage”, he said. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/13/venezuela-dara-tarjetas-de-consumo-a-los-mas-pobres-para-productos-basicos/)

 

 

Economy & Finance

CITIBANK decision will impact SIMADI FOREX operations

CITIBANK’s decision to shut down Venezuela’s Central Bank and the Bank of Venezuela’s accounts with the institution will impact SIMADI operations in the FOREX market, since all transactions are carried out by the Central Bank through CITIBANK. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/medida-del-citibank-afectara-operaciones-en-el-sim.aspx#ixzz4EHbeMNkj)

 

Wall Street’s biggest Venezuela bond contrarian feels vindicated

While Wall Street analysts and investors have braced for Venezuela’s default in the past three years, Francisco Rodriguez has remained steadfast in his belief that the country would pay. Now, his contrarian view is winning converts. The nation’s bonds have returned 28% this year -- twice the average gain for emerging markets. Debt investors are betting that Venezuela’s economic crisis will finally help force President Nicolas Maduro from office and usher in a new government capable of making the desperately needed policy changes to avert a total collapse.

Rodriguez, who took up his new role as chief economist at Torino Capital last week after leaving Bank of America Corp. in May, says a new government is likely to make changes including re-establishing market access and offering a voluntary rollover of debt. (Bloomberg, http://www.bloomberg.com/politics/articles/2016-07-12/wall-street-s-biggest-venezuela-bond-contrarian-feels-vindicated)

 

Secret police detains KIMBERLY CLARK staffers for interrogation

Venezuela’s secret police (SEBIN) has detained and interrogated 8 KIMBERLY CLARK employees demanding the whereabouts of company managers, according to a source that did not want to be identified. The company had “6 members of the board and a general manager, all of whom have left the country. There was a national sales manager and seven account managers under them, all of whom have been held for interrogation”. The national sales manager is still being held at Valencia, in Carabobo state. Yirven Laucho, Secretary General of the company union, confirmed the information. He says there is still work going on at the plant located at San Vicente in Aragua state, which was occupied by government forces last Monday, and only one of the 7 production lines is operating, turning out KOTEX protection pads. He says the government will provide raw material. Executive Vice President Aristobulo said the owners “can come back when conditions change, but he will not find a plant, that plant is no longer his, he has already lost it. Any plant that shuts down we will take over with the workers”. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Sebin-empleados-Kimberly-Clark-interrogarlos_0_883711842.html)

 

 

Politics and International Affairs

Catholic bishops say delaying recall referendum can destabilize Venezuela

Venezuela’s Episcopal Conference (CEV) has urged the National Elections Council (CNE) to let the recall referendum to revoke the mandate of President Maduro take place this year, and says “delaying it” can destabilize the nation politically and socially. “It is the CNE’s duty to tend to the recall referendum so that it can take place this year…it is a political right mandated by the Constitution, to block it or delay it with multiple obstacles is absurd because it endangers the nation’s political and social stability”, said CEV spokesman Bishop Ubaldo Santana, who again offered the Roman Catholic Church’s “good offices” for a dialogue between both sides. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/12/iglesia-venezolana-dice-que-retrasar-revocatorio-puede-desestabilizar-al-pais/)

 

Ramos Allup says recall referendum is a right and will not be “bargained” in any talks

National Assembly President Henry Ramos Allup says that the recall referendum being sought by the opposition to revoke President Nicolas Maduro’s mandate will not be “bargained” in any possible talks, and that the President has asked to talk to get out of a jam “by throwing cold water on the situation”. “The recall referendum has nothing to do with talks, the recall is a Constitutional right” of the Venezuelan people and does not “belong” to anyone”, he says. Ramos says the opposition is not refusing to talk but will only do so under “respectable conditions” and if Constitutional rights are guaranteed. Maduro has again called on the opposition to enter into talks, while saying the recall referendum is a “no go” and cannot be a precondition for starting talks. “What are they seeking? A war?”, says Maduro. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/13/ramos-allup-dice-que-revocatorio-no-se-regateara-en-un-potencial-dialogo/)

 

Opposition state governors ask Zapatero to include social problems in talks

Two opposition state governors have met with Spain’s former President José Luis Rodríguez Zapatero, to ask social problems the people are facing be included if there is a dialogue between the Maduro regime and the opposition. Lara state governor Henri Falcón says talks must include matters such as “medicines and services, violence, security and food.” The opposition has continued to insist on preconditions for sitting down to talks with the government, including expanding mediation efforts to include the Vatican, holding the meetings in Venezuela, an end to “illegitimate” arrests, the recall referendum and recognizing the National Assembly. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2416313&CategoryId=10718; http://www.laht.com/article.asp?ArticleId=2416208&CategoryId=10717; and more in Spanish: Infolatam: http://www.infolatam.com/2016/07/12/gobernadores-opositores-piden-a-zapatero-incluir-temas-sociales-en-el-dialogo/)

 

Venezuela insists MERCOSUR pro tem chair is not subject to a consensus

Foreign Minister Delcy Rodríguez is insisting that passing over MERCOSUR’s rotating pro tem chairmanship to Venezuela should not be subject to “any type of consensus” or “condition”. However, Paraguay, Argentina and Brazil and holding off on transferring the chair of the organization to the Maduro regime because it does not comply with MERCOSUR rules on human rights. Only Uruguay, which currently holds the chair, has been favorable to passing the position over to Venezuela. The matter continues under discussion and may be held over until August. More in Spanish: (Infolatam: http://www.infolatam.com/2016/07/12/venezuela-dice-traspaso-de-presidencia-del-mercosur-no-esta-sujeto-a-consenso/)

 

OAS Almagro: Democratic Charter aims to reorient democracy in Venezuela

Luis Almagro, Secretary General of the Organization of American States (OAS) says that the Democratic Charter aims to seek solutions “to redirect democracy rather than to punish” Venezuela. Almagro, a former Uruguayan foreign minister, added that the process for the eventual enforcement of the Democratic Charter is under way. However, he stated that the ultimate goal is not applying such legal instrument, for it would lead to Venezuela’s suspension from the regional organization. (El Universal, http://www.eluniversal.com/noticias/daily-news/oas-almagro-democratic-charter-aims-reorient-democracy-venezuela_327486)

 

Children dying in Venezuelan hospitals

Hospitals in Venezuela are rapidly decaying with a lack of resources such as medicine, endangering the lives of sick patients. CNN's Paula Newton reports (Video Report:http://edition.cnn.com/videos/world/2016/07/13/venezuela-kids-going-without-pkg-newton.cnn)

 

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 07, 2016

Logistics & Transport

AEROMEXICO mulls leaving Venezuela

AEROMEXICO is analyzing the possibility of stopping its flights to Venezuela, claiming the government here has not allowed it to repatriate earnings from ticket sales for the past two years. Currently, AEROMEXICO operates one daily flight between Mexico City and Caracas. “The situation is deteriorating by the second,” said Grupo AEROMEXICO general director Andrés Conesa. His statement comes days after Lufthansa and LATAM announced they were halting all services to Caracas due to Venezuela’s economic difficulties. More in Spanish: (El Financiero: http://www.elfinanciero.com.mx/empresas/aeromexico-analiza-la-posibilidad-de-salir-de-venezuela.html)

 

Oil & Energy

Paraguay rejects PDVSA’s demand for immediate debt repayment following OAS vote

The Paraguayan government has emphatically rejected a demand by PDVSA for immediate repayment of US$ 287 million in debts within 10 days. It says the demand is not valid because it clashes with “the text of an international treaty”, in reference to the Energy Cooperation Agreement signed in Caracas in 2000. Paraguay’s state oil company PETROPAR rejected a demand by PDVSA for immediate repayment of a fuel debt right after that nation called for applying the Democratic Charter to Venezuela and supported the pending recall referendum here during a meeting of the Organization of American States, Paraguay’s Trade and Industry Minister Gustavo Leite said: “Not even 20 such demands will make us back off Paraguay’s principled position on human rights,” The 2000 Energy Cooperation agreement signed in Caracas calls for a 2% yearly interest rate and a 15 year grace period. It also benefits Costa Rica, El Salvador, Panamá, Haiti, the Dominican Republic, Honduras, Nicaragua, Guatemala, Jamaica and Belize. More in Spanish: (El Universal: http://www.eluniversal.com/noticias/economia/paraguay-rechazo-intimacion-pdvsa-para-que-pague-deuda-dias_313659)

 

Economy & Finance

 

May inflation is pegged at 21.8%

The consumer price index measured by the Central Bank and the National Statistics Institute shot up in May and closed at 21.8%, the sharpest rise this year to date, according to unofficial bank sources. Year to date inflation is now at 125.7%, and inflation for the past 12 months is now at 450.7%, More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Inflacion-mayo-ubico_0_861514193.html)

Doing business in Venezuela is worse than in Syria, Haiti or Ethiopia, according to the World Bank Doing Business 2016 report, which ranks this country 186 out of 189 in the world. Only Libya, Southern Sudan and Eritrea have worse conditions. Venezuela ranked behind Afghanistan and Syria, among others, due to difficulties in paying taxes, setting up a company, border trade, registering property and obtaining electricity. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Hacer-negocios-Venezuela-Haiti-Etiopia_0_861514189.html)

 

US companies fleeing Venezuela to escape country's collapsing economy

Since 2013, when Nicolas Maduro assumed presidency in Venezuela and plunging oil prices began wreaking havoc on the country, more than a dozen U.S. companies have been forced to sell, stop or reduce their operations here in order to avoid damage cause by the economic crisis. In the past three weeks alone, COCA-COLA announced that it had to stop production in here due to a scarcity of sugar, while BRIDGESTONE, a tire company based in Tennessee, decided to sell their assets to local investors and KIMBERLY CLARK, a paper product company based in Texas, reduced its production by 90%. At least 35 companies in the Standards & Poor’s 500 have expressed concerns about Venezuela in the past two months and many have discussed removing Venezuela from its global operations, according to an analysis by USA Today. That has left Venezuela, already reeling from empty supermarket shelves and a lack of basic goods, with a dearth of American products. The U.S. companies pulling out of Venezuela say they are feeling the squeeze because of the country’s hyperinflation.  KIMBERLY and other major companies like PROCTER & GAMBLE, COLGATE, FORD, GENERAL MOTORS and MONDELEZ (OREO) opted to remove Venezuela from their global operations to avoid a direct impact on the overall company's bottom line. GENERAL MILLS sold its operations in Venezuela to local investors in March. MEAD JOHNSON, which makes infant formula, said Venezuela was its toughest market. It blamed the Venezuela for its revenues falling 6%. Since 2013, when Maduro took power, at least eight multinational companies have fled from Venezuela. Four are from the US: GENERAL MILLS, BRIDGESTONE AMERICA, EFCO and CLOROX. The others are from Italy (ALITALIA), Canada (AIR CANADA), Mexico (GRUMA) and the United Kingdom (WONDER). Just this week, Chile-based LATAM, Latin America's largest airline, announced it was suspending its flights to Venezuela because of the "difficult macroeconomic scenario" affecting the region. As the economic situation becomes worse, more could follow. The biggest problem for foreign companies is that the amount of dollars circulating in Venezuela’s economy has reduced dramatically since 2013, prompting a further tightening of currency controls. Multinational companies’ revenues remain hopelessly trapped in the local bolivar. According to local firm ECOANALITICA, the government owes U.S. companies more than US$6 billion. “To get out of this crisis the government should sit and negotiate with private companies to start producing. Other socialist presidents, like Evo Morales in Bolivia, do it,” said Alejandro Grisanti, one of the heads of Ecoanalitica. But Maduro’s government is doing the opposite. Last week, they blamed 10 private companies for the country’s current shortages. Alongside with POLAR, the biggest Venezuelan company, the list included five US firms: CARGILL, JOHNSON & JOHNSON, KIMBERLY CLARK, COLGATE PALMOLIVE and PROCTER & GAMBLE. (Fox News Latino: http://latino.foxnews.com/latino/news/2016/06/01/us-companies-fleeing-venezuela-to-escape-country-collapsing-economy/)

 

 

Politics and International Affairs

Lopez rejects Zapatero’s offer of improved jail conditions in exchange for postponing recall refendum

Spain’s former President José Luis Rodríguez Zapatero, who leads a group of three UNASUR sponsored former heads of state who are trying to broker talks between the Maduro regime and the opposition here, held an unprecedented meeting with imprisoned Voluntad Popular leader Leopoldo Lopez, the first such visit authorized for Lopez since he turned himself in to authorities in February 2014, Lopez, who is serving a 14 year sentence, later said via Twitter (which is run by his relatives) that he told Zapatero that the dialogue that is being promoted cannot take precedence over regime change. “I told him that no talks or dialogues cannot be above the greater interest of achieving a constitutional change this year, 2016”. He added that he emphasized to the former President “the importance that the dialogue cannot simply be (for the government) to gain time, because the people of Venezuela no longer have time”. Lopez’s father, Leopoldo Lopez Gil, subsequently reported that Zapatero had offered his son better imprisonment conditions for political prisoners in exchange for the recall referendum. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/leopoldo-lopez-dijo-zapatero-que-gobierno-venezuela-debe-cambiar_313505; El Nacional, http://www.el-nacional.com/politica/Leopoldo-Lopez-dialogo-cambio-constitucional_0_860914002.html: http://www.el-nacional.com/politica/Leopoldo-Lopez-Gil-Rodriguez-Zapatero_0_861514186.html)

Venezuela authorities again postpone decision on Maduro referendum

Venezuela's electoral authorities have postponed a key meeting with the opposition in which they were expected to announce whether to allow a recall referendum. After a proposed constitutional amendment to shorten his term from six to four years was rejected by the Supreme Court, the MUD launched a petition to recall him. On 2 May they handed the National Electoral Council (CNE) lists with 1.85 million signatures backing a recall referendum, many more than the 197,000 needed at this initial stage. Members of President Maduro's United Socialist Party (PSUV) allege that at least 10,000 of those signatures are fraudulent. The CNE's decision on whether it accepts the petition is therefore seen as key, even though this is only the first hurdle on the road to a recall referendum. For the recall referendum to be successful almost 7.6 million people will have to vote to oust Maduro, The country is deeply divided into those who support Maduro's socialist policies and those who oppose him, and there have been marches by both sides. But the worsening economic situation in Venezuela, which now has the world's highest inflation rate as well as shortages of basic food and power cuts, means many people who once supported Maduro are demanding change. The opposition says all its efforts to bring about change are being thwarted by the government and the judiciary, which it alleges has been stacked with supporters of Maduro. (BBC News: http://www.bbc.com/news/world-latin-america-36433535)

Opposition postpones talks with regime in the Dominican Republic pending recall process

The opposition Democratic Unity coalition (MUD) has asked UNASUR Secretary General Ernesto Samper to postpone a scheduled meeting with regime representatives in the Dominican Republic, saying it needs to await a decision by the National Elections Council (CNE) on the next step toward activating the recall referendum it is seeking against President Nicolas Maduro. Foreign Minister Delcy Rodríguez had previously announced that government representatives would attend the meeting. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/mud-solicito-diferir-encuentro-previsto-dominicana-con-gobierno_313593;Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/politica/gobierno-asistira-reuniones-oposicion/; El Nacional, http://www.el-nacional.com/politica/Delcy-Rodriguez-asistencia-Republica-Dominicana_0_860913987.html)

….and will again take to the streets protesting CNE delays

The parties and political groups that take part in the Democratic Unity (MUD) coalition are holding a number of demonstrations nationwide to ask the National Elections Council (CNE) to set a date for validation of over a million certified signatures seeking a recall referendum. MUD Secretary General Jesus Torrealba declared “the Constitution is above any bureaucratic expression of the regime’s fear”, and rejected a Supreme Tribunal sentence banning demonstrations near CNE offices. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/mud-unidad-regresara-este-martes-cne-pero-con-pueblo_313569; El Nacional, http://www.el-nacional.com/politica/Torrealba-pueblo-pedimos-paciencia-firmeza_0_861514181.html)

Maduro entreats Latin America not to isolate him

President Nicolas Maduro called upon Latin America on Saturday not to give in to "brutal pressure" from the United States to isolate his government, which is battling intensifying opposition at home and abroad. Meanwhile on Thursday a senior Brazilian official said Brazil may help block Venezuela from taking the rotating presidency of the Mercosur trade group this month, in a bid to prevent Maduro from strengthening his power. "I call upon the governments of the continent to maintain solidarity, cooperation and understanding and not to submit to ... brutal pressure to isolate Venezuela," Maduro entreated other Caribbean leaders gathered for a summit in Havana. The summit, however, did not produce a strong statement of support for Maduro, with the OAS limiting itself to backing the initiative for mediated talks between his government and the opposition. (Reuters: http://www.reuters.com/article/us-caribbean-summit-idUSKCN0YQ0RD)

Is there another way out of Venezuela's crisis?

Venezuela faces a new dilemma, albeit a relatively tame one compared to its other crises. The Organization of American States (OAS) on June 1 held an urgent meeting to discuss the political situation in Venezuela. One day earlier, the organization's secretary general, Luis Almagro, said that Venezuela could be expelled from the body. This would require a vote on the subject of Venezuela's continued unconstitutional disruption of its democratic order — a violation of the organization's charter. While the expulsion of Venezuela from the OAS carries relatively remote risk to Venezuela, a declaration that President Nicolas Maduro's government is in violation of the organization's charter would deteriorate relations between the United States and Venezuela further. The decision could also make obtaining loans from international lending organizations, including the International Monetary Fund, Inter-American Development Bank or World Bank, even more problematic because of U.S. political pressure. But an option for the government is to find another way out of the crisis. A tentative dialogue involving the United States has begun in the Dominican Republic between representatives of the Venezuelan government and the opposition coalition, though it provides no guarantee that the government and opposition will inevitably reach some arrangement to coexist politically. If the discussion does not progress over the next several months, policies for addressing Venezuela's political and economic crises will likely be decided informally between opposing factions of the PSUV, independent of any influence by the opposition. Other international factors will also play their part in the near term. But whether oil prices rise significantly or whether Venezuela's simmering social unrest boils over into larger, more frequent protests, Caracas is still very much balanced on a knife-edge. (Stratfor: https://www.stratfor.com/analysis/there-another-way-out-venezuelas-crisis?id=be1ddd5371&uuid=2f21d318-2f89-4df2-8946-6f9669324bed)

Luis Almagro: A courageous voice on Venezuela

As Venezuela has plunged into economic chaos and a humanitarian crisis, its hemispheric neighbors, including the United States, have mostly looked the other way. The remarkable exception to this dismal diplomatic record has been Luis Almagro, the secretary general of the Organization of American States, who stunned his timid fellow statesmen by proposing that the OAS formally review Venezuela’s adherence to the Inter-American Democratic Charter, a 2001 treaty that binds OAS members to democratic norms and provides for collective action when they are violated. In a 132-page letter to the OAS permanent council, Almagro documented the Maduro government’s sweeping breaches of the rule of law and the mounting humanitarian crisis caused by food, medicine and power shortages. He called for the immediate release of political prisoners and steps to repair institutions and combat corruption. Most important, he stressed that a recall referendum on Maduro, sought by the opposition and provided for in the constitution, should be held this year. “On that depends democracy in Venezuela,” the report concluded. The good news is that Almagro’ s bold action prompted the OAS permanent council to convene its first meeting on Venezuela in two years — despite the buffoonish posturing of Maduro, who called a rally in Caracas to tell Almagro to “stuff” his report. The bad news is that cowardice and crass political calculations by council members prompted it to issue another anodyne appeal for “dialogue.” The non-response was orchestrated by Argentina’s foreign minister who is hoping to be elected the next U.N. secretary general, and so is anxious to appease Venezuela and its dwindling band of allies. The Obama administration has inexplicably joined in the empty “dialogue” chorus while failing to take a position on Almagro’ s letter. As Almagro noted in his letter, political dialogue is useless without “a commitment a priori to democracy and the rule of law.” The solution in Venezuela, he rightly argued, is not talks but votes. “When the political system of a country is extremely polarized, the only solution can come from the decision of the sovereign,” says his report. On Thursday, Mr. Almagro reiterated his call for a review of Venezuela under the Democratic Charter. He’s calculating that greater diplomatic pressure could force the Maduro regime to schedule a referendum. Almagro ought to have the support of the United States. (The Washington Post: https://www.washingtonpost.com/opinions/a-courageous-voice-on-venezuela/2016/06/02/401b2f76-28e9-11e6-b989-4e5479715b54_story.html

Maduro says that if US elections “were free” Sanders would win

President Nicolas Maduro says if US elections “were free”, Democratic Senator Bernie Sanders would win them because its people want change. He says “if elections in the US were free and did not depend on an archaic 200-year old system, Bernie Sanders would be President of the United States”. He called Hillary Clinton a “comrade”, “a member of the US Bolivarian Movement”, and “militant Bolivarian”, and added he doesn’t share her views won the world, Latin America and Venezuela, but respects them. He said she has “veered toward change, but the only way she can win is by nominating a vice president from the left”. (Infolatam: http://www.infolatam.com/2016/06/01/maduro-dice-que-si-elecciones-en-eeuu-fueran-libres-ganaria-bernie-sanders/)

 

 

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 18, 2013

Economics & Finance

Debt ratings lowered by doubts on economic plans

Standard & Poor's has lowered Venezuelan sovereign debt rating from B+ to B due to political turbulence that is blocking the reforms that would bolster a sagging economy.  The move by S&P is in line with a B2 note assigned by Moody's Investors Service and one step below B+ from Fitch Ratings. Both Moody's and Fitch share a negative outlook in their ratings, says Reuters. A release by S&P says "the lowered rating reflect the Government's decreasing room for maneuver in carrying out policies that stop the increasing drop in GDP, inflation, and weakening external liquidity". More in Spanish: (El Universal, 06-18-2013; http://www.eluniversal.com/economia/130618/dudas-sobre-plan-economico-afectan-calificacion-de-la-deuda; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/standard-and-poor-s-rebaja-nota-de-deuda-de-venezu.aspx)

Soaring inflation adds stress to the economy

President Nicolás Maduro claimed he would "tackle" inflation, yet a few days later the Central Bank reported a 6.1% spike in May's inflation. Cumulative year to date inflation rose to 19.4%, and has crushed any chance of meeting the 14% to 16% official target. Pedro Palma, former president of the National Academy of Economics, the economy is in a "prelude" for a drastic scenario and will require a "180-degree turnaround in economic policies." He warns: "what we have now is something similar the last months of Jaime Lusinchi's (1989) and Rafael Caldera's (1996) presidential terms". (El Universal, 06-15-2013; http://www.eluniversal.com/economia/130615/soaring-inflation-adds-even-more-stress-to-the-venezuelan-economic-mod)

Scarcities can take 3-6 months to overcome

FEDECÁMARAS President Jorge Botti believes scarcities will not be solved in two weeks, as claimed by Foreign Minister Elías Jaua. "It is impossible in two weeks, it can improve in three months, and be even better in 6 months", he said.  More in Spanish: (El Universal, 06-18-2013; http://www.eluniversal.com/economia/130618/estiman-que-escasez-puede-superarse-entre-3-y-6-meses)

Central Bank officer claims FOREX supply backlog has been relieved
Central Bank Director Armando León says FOREX allocations to small and mid size business have been met 100% and the remaining areas have been covered by 70%. He stressed that key areas such as food, staples, electric, and machinery have been covered by the Currency Board (CADIVI). More in Spanish: (El Mundo, 06-18-2013; http://www.elmundo.com.ve/noticias/economia/mercados/bcv-y-cadivi-logran-aliviar-la-tranca-de-dolares.aspx#ixzz2WZ2JBARm)

38 countries beat UN targets to halve proportion of hungry people by 2015

Thirty-eight countries have beaten a U.N.-imposed deadline of 2015 to cut in half the proportion of hungry people.

The U.N. Food and Agriculture Organization on Saturday recognized the 38 countries and urged those still working to meet the U.N. target to redouble efforts. The U.N. General Assembly in 2000 established a set of “Millennium Development Goals” for countries. The No. 1 target was to eradicate extreme poverty and hunger, including halving the proportion of hungry people by 2015. The 38 countries include: Algeria, Angola, Armenia, Azerbaijan, Bangladesh, Benin, Brazil, Cambodia, Cameroon, Chile, Cuba, Djibouti, Dominican Republic, Fiji, Georgia, Ghana, Guyana, Honduras, Indonesia, Jordan, Kuwait, Kyrgyzstan, Malawi, Maldives, Nicaragua, Niger, Nigeria, Panama, Peru, St. Vincent and the Grenadines, Samoa, Sao Tome and Principe, Thailand, Togo, Turkmenistan, Uruguay, Venezuela and Vietnam. (The Washington Post, 06-16-2013; http://www.washingtonpost.com/business/38-countries-beat-un-targets-to-halve-proportion-of-hungry-people-by-2015/2013/06/16/acc81bae-d697-11e2-ab72-3f0d51ec1628_story.html; Fox News, http://www.foxnews.com/world/2013/06/16/38-countries-beat-un-targets-to-halve-proportion-hungry-people-by-2015/)

Commodities

ENI confirms gas production at Perla by late 2014

ENI's President Paolo Scarioni has confirmed that the first phase at Cardón IV, a joint venture by Spain's REPSOL, ENI and PDVSA, will begin producing some 300 million cubic feet by year end 2014. PDVSA had previously said first phase production would begin in 2013. More in Spanish: (El Universal; 06-18-2013; http://www.eluniversal.com/economia/130618/eni-confirma-produccion-del-yacimiento-gasifero-perla-para-2014; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/gas/esperan-que-proyecto-de-gas-perla-produzca-300-mil.aspx)

Minister says National Steel Complex exceeds production targets this year

According to Industry Minister Ricardo Menendez, the National Steel Complex in Lara state exceeded production targets this year. He said rebar production is not 90% of the amount targeted for this year, and lamination is 103%, "which means we have surpassed the goals that were designed in the plan." (AVN, 06-14-2013; http://www.avn.info.ve/contenido/national-steel-complex-exceeds-production-targets-year)

Argentina's YPF to join DELTANA gas project

Argentina's state-controlled energy company YPF will join Venezuela's offshore Deltana Platform natural gas project along with state oil company PDVSA and U.S. oil major Chevron Corp, Venezuela's oil minister said on Friday. The Deltana Platform is a project to extract and export natural gas from fields believed to hold some 7 trillion cubic feet. Venezuela has made little progress in efforts to monetize offshore natural gas, and currently imports gas from neighboring Colombia even though it has much larger reserves. Oil Minister Rafael Ramirez, who signed the agreement with YPF President Miguel Galuccio, did not provide details on what percentage stake the Argentine company would hold. (Reuters, 06-14-2013; http://www.reuters.com/article/2013/06/14/venezuela-ypf-idUSL2N0EQ1BA20130614)

India lowers oil imports from Iran, buys more from Venezuela
India has cut its crude oil imports from Iran by 40% and is replacing them with shipments from Venezuela, Iraq and Omán. India's crude oil imports from Iran dropped 12% in May from the same time frame last year, according to data compiled by REUTERS. More in Spanish: (El Mundo, 06-18-2013; http://www.elmundo.com.ve/noticias/petroleo/industria/india-recorta-importacion-de-crudo-irani-y-compra-.aspx#ixzz2WZ2vIPeC)

Venezuela has sixth largest shale oil reserves

The International Energy Agency says global shale oil reserves stand around 345 billion barrels, 78% of which are in 10 countries. The Agency says half of these reserves are in Russia, followed by the USA, China, Argentina and Libya. Venezuela comes in 6th with shale oil reserves around 13 billion barrels, most of it in the Western state of Zulia, on the Colombian border. More in Spanish: (El Nacional; 06-18-2013; http://www.el-nacional.com/)

KIMBERLY CLARK will invest VEB 234 million to increase personal care product production

KIMBERLY CLARK Venezuela has met with Trade Minister Alejandro Fleming to outline investment plans that aim to increase production of toilet paper, sanitary towels and disposable diapers. Plans include an investment of VEB 234 million in the next 6 to 24 months. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/empresa-productos-higiene-personal-invertir%C3%A1-bs-234-millones-para-aumentar-producci%C3%B3n; El Universal, http://www.eluniversal.com/economia/130618/ejecutivo-descarta-comprar-mas-bienes-de-aseo-personal; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/empresa-gringa-invertira-en-venezuela-para-reducir.aspx)

Logistics & Transport

Shipping companies require assurances from state companies

The Government has become a large-scale importer, bringing business to shipping companies along with a fair amount of risk. As cases multiply such as that of the infamous PDVAL imports, where the state-owned company held on to containers for several years, shipping companies demand some type of "assurance" prior to doing business with state-owned enterprises. "Every time a state company makes a booking, shipping companies demand some sort of assurance," said the director of one of world's largest cargo companies. (El Universal, 06-15-2013; http://www.eluniversal.com/economia/130615/shipping-companies-demand-assurance-from-venezuelan-state-companies)

Politics

Cardinal says Pope should pressure Nicolas Maduro, and focus on democracy, coexistence

Cardinal Jorge Urosa, the Catholic Church's top spokesman in Venezuela, said he expected the pontiff to try to persuade Maduro during their meeting - held yesterday at the Vatican - to cease verbal attacks on political rivals and critics. He said Pope Francis should pressure President Nicolas Maduro to focus on promoting democracy and peaceful coexistence to ease tensions with the socialist government’s opponents. The cardinal said he hopes to see “increased serenity and impartiality in the president’s language” following the meeting. (The Washington Post, 06-16-2013; http://www.washingtonpost.com/world/the_americas/venezuelas-cardinal-says-pope-should-pressure-nicolas-maduro-focus-on-democracy-coexistence/2013/06/16/a7ce34b6-d6b1-11e2-ab72-3f0d51ec1628_story.html; Fox News, http://www.foxnews.com/world/2013/06/16/venezuela-cardinal-says-pope-should-pressure-nicolas-maduro-focus-on-democracy/; and El Universal, http://www.eluniversal.com/nacional-y-politica/130617/nicolas-maduro-meets-with-pope-francis-in-rome)

Venezuela court grants freedom for judge who angered Chavez; charges against her remain

Venezuelan authorities on Friday freed a judge who was arrested in 2009 after then-President Hugo Chavez objected to one of her rulings. Her case became a "cause celebre" for the opposition and international human rights groups. Dozens of supporters met Maria Lourdes Afiuni outside the apartment building where she has been under house arrest with cries of “freedom,” as she walked to the street without handcuffs or police escort for the first time in three-and-a-half years. Amid a few tears, she thanked the well-wishers for coming out, but declined to comment further since she’s still under a gag order not to discuss her case publicly. Instead the judge, her daughter and her lawyers went to a church to pray. (The Washington Post, 06-14-2013; http://www.washingtonpost.com/world/the_americas/venezuela-court-grants-freedom-for-judge-who-angered-chavez-charges-against-her-remain/2013/06/14/bf31de22-d54f-11e2-b3a2-3bf5eb37b9d0_story.html; El Universal, 06-14-2013; http://www.eluniversal.com/nacional-y-politica/130614/judge-afiuni-is-granted-conditional-release; Fox News, http://www.foxnews.com/world/2013/06/14/venezuela-court-grants-freedom-for-judge-who-angered-chavez-charges-against-her/)

Analyst Carlos Romero says: "The Maduro-Ramírez-Cabello troika is the one exercising the power"

Carlos Romero, a doctor in Political Sciences and professor at the Central University of Venezuela, presents a clear, yet moderate approach, and provides views that often contradict mainstream opinion. He disputes the view that there is an ongoing fight for power, saying: "Maduro and Cabello work hand in clove to sustain the power structure. "They and Rangel, Rodríguez, Jaua and others follow a common denominator". (El Universal, 06-15-2013; http://www.eluniversal.com/nacional-y-politica/130615/the-maduro-ramirez-cabello-troika-is-the-one-exercising-the-power)

Spain, Venezuela renew political dialogue

Spanish Foreign Minister Jose Manuel Garcia-Margallo and Venezuelan counterpart Elias Jaua had a meeting Friday in Madrid that proceeded “on very cordial terms,” the ministry said in a communiqué. The note said the meeting also served to re-launch a political dialogue. It was the first meeting between the ministers following the controversial results of April’s special presidential election in the Andean nation. Margallo and Jaua discussed the chief topics on the bilateral agenda, “agreeing to continue the political dialogue re-launched in this meeting,” the Spanish foreign ministry said. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=807984&CategoryId=10717)


The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.