International
Trade
Venezuela runs up US$1 billion debt for late shipping
containers
Venezuelan
state agencies have run up close to US$1 billion in debts with shipping firms
due to delays in returning containers, potentially boosting the cost of
importing staple goods as the country struggles with product shortages and an
economic crisis. The agencies have held containers for months or simply never
returned them, at times leaving the truck-sized steel boxes for years in oil
industry facilities or on provincial farms even though this costs US$ 100 per
day per container, according to industry sources. The debts have piled up over
the last six years, coinciding with a steady rise in the role of state agencies
in importing goods to Venezuela, particularly food. The country is served by
industry giants such as MAERSK of Denmark and HAMBURG SUD of Germany. The
container debts put shipping lines on a long list of industries ranging from
international airlines to telecommunications giants that have complained of
being unable to collect on billions of dollars in unpaid Venezuelan bills.
(Reuters, http://www.reuters.com/article/us-venezuela-shipping-idUSKCN0XJ1HK)
Three ships have arrived bearing wheat for bakeries, according to Tomas Ramos, President of Venezuela’s Bakery Industry
Federation. More in Spanish: (Notitarde; http://www.notitarde.com/Economia/Tres-buques-han-arribado-al-pais-con-trigo-panadero/2016/04/25/951979/)
Arreaza reports medical supplies and medication are
arriving at ports
Social
Affairs Vice President Jorge Arreaza says medication and medical supplies are
arriving here for the National Health Service and private services. “We are
starting to receive medications”, he claims. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/gobierno-anuncia-el-arribo-de-medicamentos-y-equip.aspx#ixzz46vZmnEE8;El
Nacional, http://www.el-nacional.com/politica/Arreaza-medicamentos-material-quirurgico-llegaron_0_836316648.html)
Oil & Energy
HALLIBURTON curtailing business activity in Venezuela
U.S.
oil services firm Halliburton Co has decided to begin curtailing activity in
Venezuela, the company said on Friday, less than two weeks after SCHLUMBERGER
Ltd announced a similar decision as a result of payment difficulties. Venezuelan
state oil company PDVSA has struggled to settle unpaid bills to service firms
as a result of low oil prices and heavy bond payments that the company must
make this year. "During the quarter
we made the decision to begin curtailing activity in Venezuela," HALLIBURTON
said in an earnings release. (Reuters, http://www.reuters.com/article/us-halliburton-venezuela-idUSKCN0XJ2RC)
Blackouts in parts of Caracas Excluded from
Electricity Rationing
Vast
areas of the Venezuelan capital report electricity blackouts, even though
Caracas was excluded from the 4-hour-a-day ration ordered by the government and
which is being imposed on the rest of the country for at least 40 days. With no
official reports on the power cuts made public, the media were quick to notice
that the blackouts chiefly affect the capital’s densely populated east side. The
daily El Nacional said that the cuts began shortly after sunrise. The power
cuts announced last week by the government exclude Caracas, the neighboring
state of Vargas and a northeastern region of Venezuela that includes the
touristic island of Margarita, as well as urban areas where hospitals, airports
and security forces’ headquarters are located. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2410730&CategoryId=10717;
Bloomberg, http://www.bloomberg.com/news/articles/2016-04-21/venezuela-calls-for-patriotism-as-it-plans-to-ration-electricity);
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2410595&CategoryId=10717;
http://www.laht.com/article.asp?ArticleId=2410568&CategoryId=10717)
FEDECAMARAS says electricity crisis is due to poor
planning, mismanagement of US$ 95 billion
Francisco
Martínez, President of the nation’s largest business federation (FEDECÁMARAS)
has charged the government with poor planning on electricity here. “The electricity problem is a consequence of
poor management, poor planning”, he said. He also said this problem
involves corruption: “Venezuelans need to
know what they have done with US$ 95 billion invested into the electricity
system in order to have the disaster we have in Venezuela” More in Spanish:
(El Universal, http://www.eluniversal.com/noticias/economia/fedecemaras-tema-electrico-producto-una-mala-planificacion_306578)
Venezuela oil price rises for 2nd week
The
price Venezuela receives for its mix of medium and heavy oil rose slightly as
oil prices around the world also rose on a strike in Kuwait. According to
figures released by the Ministry of Petroleum and Mining, the average price of
Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week
ending April 22 was US$ 32.39, up 29 cents from the previous week's US$ 32.10. According to Venezuelan government figures,
the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$
27.03 for the year to date. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2410639&CategoryId=10717)
Commodities
Regime strangles POLAR in FOREX allocations, plants
grinding to a halt
Omaira
Sayago, executive director of the Beer Manufacturers Chamber, reports that the
only manufacturer not receiving FOREX is POLAR, which has a US$ 200 million in debts
with suppliers dating back to 2014 and has run out of inventories. The company
had planned to migrate to the DICOM (controlled official FOREX rate) system rival
manufacturers are using, but has received no reply from the government. Four of
its plants will shut down this week, impacting 80% if the population. POLAR union leader Arquímedes Sequera
has reported that the Labor Inspector’s Office has confirmed the lack of
supplies to produce beer and malt at their San Joaquin plant, and 1,340 workers
are at risk of being suspended if it closes. Marisa
Guinand, POLAR’s Personnel Director, reports that the standstill of beer
manufacturing plants will take place gradually, for not all facilities have the
same storage capacity. She stressed the government has failed to give the company an equal
treatment over foreign currency access compared to rival enterprises. (El
Universal, http://www.eluniversal.com/noticias/daily-news/empresas-polar-asks-for-egalitarian-foreign-currency-allocation_306553);
and more in Spanish; (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/este-viernes-se-paralizan-las-ultimas-plantas-de-c.aspx#ixzz46vaVneHU;El
Nacional, http://www.el-nacional.com/economia/Polar-Maracaibo-San-Joaquin-viernes_0_836316423.html;
http://www.el-nacional.com/economia/Inspectoria-trabajo-confirmo-Cerveceria-Polar_0_836316535.html;
Notitarde; http://www.notitarde.com/Economia/Polar-es-la-unica-cerveceria-afectada-por-falta-de-divisas-2661776/2016/04/23/950725/)
Economy & Finance
IMF
warns that Venezuela’s economy could collapse entirely in 2017
Robert
Rennhack, Deputy Director in the Western Hemisphere Department of the
International Monetary Fund, has issued a statement warning that Venezuela’s
economy could collapse completely in one and a half years of government
financial policies are not corrected. This could happen in 12 to 18 months. He
also warns that inflation will reach 2,200% in 2017, and believes annual
inflation could be up to 13,000%, which is what experts call full
hyperinflation. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/FMI-advierte-economia-colapsar-completamente_0_833916878.html)
ICSID
orders Venezuela to pay for VESTEY expropriation
The
World Bank’s International Center for the Settlement of Investment Disputes
(ICSID) has ordered Venezuela to pay almost US$ 100 million to Britain’s VESTEY
cattle group for taking over a number of the company’s estates here. The late
President Hugo Chavez ordered a takeover of VESTEY properties in 2005. ICSID
has now ordered Venezuela to pay up US$ 98 million plus interest. More in Spanish: (Notitarde;
http://www.notitarde.com/Economia/Ciadi-ordena-al-pais-pagar-por-expropiacion-a-Vestey/2016/04/22/948388/;
El Universal, http://www.eluniversal.com/noticias/economia/ciadi-ordena-venezuela-pagar-ganadera-britanica-por-expropiacion_306056;
El Nacional, http://www.el-nacional.com/economia/Banco-Mundial-Venezuela-Vestey-expropiaciones_0_833916839.html)
FEDECÁMARAS
says President Maduro’s “productive motors”
have had no results
FEDECÁMARAS
President Francisco Martínez reports that the launching of “productive motors” announced by President Nicolas Maduro to
reinvigorate the economy has been ineffective.
He said that a few independent businessmen have attended the established
working groups in order to talk to Economic Vice President Miguel Perez Abad,
but have received no answers about FOREX allocations to suppliers; “All we have seen is frustration because the
business sector continues to be under government attack”. More in Spanish: (El
Nacional, http://www.el-nacional.com/economia/Fedecamaras-Motores-productivos-resultados_0_836316465.html)
…and
Isturiz tells business to break open their FOREX “piggy banks”
Venezuela’s
Executive Vice President Aristobulo Isturiz says any Venezuelan businessman who
has FOREX abroad should repatriate it to propel the nation’s economy. “At Venezuela’s current situation, all those
who have dollars abroad should break open their “piggy bank”, He criticized
Lorenzo Mendoza for saying POLAR cannot produce food and beverages for lack of
FOREX: “It cannot be that one who has
most dollars abroad says he does not produce because the government does not
allocate dollars, when there are businessmen who have far less than he and are
contributing in order to move forward”. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/isturiz--empresarios-deberian-romper-su--cochinito.aspx#ixzz46vXFEvDC;
Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/isturiz-empresarios-deberian-romper-su--cochinito-.aspx)
Cattlemen
report that their productivity is down 50%
Carlos
Albornoz, head of the National Cattlemen’s Federation, reports that
agricultural production has dropped by more tan 50%, Last Thursday, Venezuelan
rural producers demonstrated in the city of Valle de la Pascua to demand better
working conditions from the government. “We are barely producing 31% of the
beef we eat, a Little over 35% of milk, merely 32% of White corn and 22% of
yellow corn, and 60% of rice…we have no machinery, security or profitability”.
He reported a lot of cattle is perishing due to lack of food and supplies. More
in Spanish: (Notitarde; http://www.notitarde.com/Economia/Fedenaga-Productividad-ha-bajado-50/2016/04/21/948371/)
70% of all industries report drops in their production
levels, according to Juan Pablo Olalquiaga, President of the
Venezuelan Confederation of Industries (CONINDUSTRIA). He reports that
manufacturing is operating at 43.87% capacity “and the trend is for it to continue dropping if emergency measures are
not taken.” More in Spanish: (Notitarde; http://www.notitarde.com/Economia/70-de-la-industria-reporta-caida-en-nivel-de-produccion-/2016/04/21/948368/; El Universal, http://www.eluniversal.com/noticias/economia/del-sector-industrial-reporto-caida-niveles-produccion_305994; El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/conindustria--empresas-trabajan-43-87--de-su-capac.aspx)
All
you need to know about Venezuela's looming implosion
It now seems inevitable that Venezuela, for decades
touted as a “socialist paradise”,
will disintegrate by the end of the year. It’s the ultimate case of “Dutch disease”, a country now rotten
from depending far too much on the export of a primary product and, as a
result, facing a currency so bloated it can’t maintain productivity and
competitiveness. Venezuela’s problem is the crashing price of oil, its major
export commodity. About 95% of the country’s exports, in fact. Because of that,
it’s considered to be burdened with the riskiest debt in the world. Revenue
from oil exports is said to have plummeted from US$37.2 billion in 2014 to US$
12.6 billion. Compounding the problem, it also has to import roughly half of
the food its people consume. In the middle of Chavez’s reign, the government
seized control of some 3 million hectares of agricultural land in an effort to
control production and prices. Now it sits idle, because the overvalued
currency means it’s cheaper to import food than grow and distribute it. While
the Venezuelan government still denies it, for nearly two years now, people
have been saying they must wait several days in lines to enter government
grocery stores for basic essential items which may not even be on the shelf
when they finally get through the door. The other edge of the sword is that
when Venezuelans eventually get inside the stores, they’re leaving with much
more than they need, because reselling it across the border into Colombia and
Brazil is extremely lucrative. There’s huge pressure on the government to
maintain the subsidies or face a political backlash from the country’s
significant chunk of voters beset by poverty. In February, Venezuela topped the
“Misery Index,” an annual list
compiled by The Cato Institute. For the second year in a row, it was considered
the most miserable country in the world based on data about a country’s
inflation rate, interest rates, and unemployment. Poverty levels are now approaching 90%. Now,
the inevitable violence and chaos is starting to spill over. There’s been no
official homicide data from Venezuela since 2006, but one local think tank puts
the rate at 92 killings per 100,000 citizens. It’s almost five times the rate
in the year before Hugo Chavez came to power. Now death, lynching, prison
breakouts, deadly student protests and mafia executions dominate the pages of
national newspapers. The latest note from Deutsche Bank says even a return to
US$ 100 a barrel for oil won’t help Venezuela. It needs closer to US$ 200 just
to balance its budget. Communications services are now being cut. The
government owes some US$ 700 million to private telecoms and cable firms, one
of which, the giant Telefonica, has suspended long distance calls to the US,
Europe and crucial partners Colombia, Brazil and Panama. And now Venezuelans
face the next stage in their seemingly inevitable decline – switching off the
lights. Venezuelan society is well past the stage of being three square meals
away from revolution. Now, as the FT
notes, “the economic crisis risks turning
into a humanitarian one”. (Business Insider Australia: http://www.businessinsider.com.au/venezuela-implosion-2016-4)
Politics and International Affairs
Venezuelan high court rules amendment to shorten term does
not apply to current president term
Venezuela’s
Supreme Tribunal of Justice (TSJ) has ruled that any amendment to the
Constitution intended to make President Nicolas Maduro step down is not
applicable in his presidential term. According to the high court, the amendment
would apply in subsequent presidential terms. In the judgment, the TSJ
Constitutional Chamber affirmed that, following a review of a petition for
construction of Article 340 of the Constitution, any attempt to use of the
amendment to cut the current presidential term would be fraud of the
Constitution. (El
Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-high-court-amendment-does-not-apply-current-president-term_306606)
National Elections Council delays approval of official
recall form
The
National Elections Council (CNE) has continued to delay providing the
opposition Democratic Unity coalition with the official form required to
collect signatures calling for a recall referendum against President Nicolas
Maduro. Opposition leader Henrique Capriles announced demonstrations at all CNE
offices nationwide to demand action. “No
CNE director has the right to block our recall. We are going to go for our
form, it’s out right to do so”, he said. He complained that the CNE has not
acted even after receiving four letters requesting an approved form. Last week
seven opposition legislators chained themselves to CNE railings along with a
group of demonstrators to demand the forms, and were violently removed by
National Guard officers, who also manhandled newsmen covering the activity. The
CNE subsequently threatened legal action against the legislators who “seek to destroy” the institution. More
in Spanish: (El Nacional, http://www.el-nacional.com/politica/Capriles-Vamos-buscar-planilla-derecho_0_836316619.html;
http://www.el-nacional.com/politica/CNE-amenazo-diputados-quieren-destruirlo_0_835716482.html;
El Universal, http://www.eluniversal.com/noticias/politica/gnb-desalojo-fuerza-diputados-encadenados-sede-del-cne_306033)
National Assembly to move on OAS Democratic Charter
against Maduro regime
Venezuelan
National Assembly President Henry Ramos Allup told CNN-E that the legislature
may ask the Organization of American States (OAS) to apply the Hemispheric
Democratic Charter against the Maduro regime “as a last step, because it is necessary to previously ensure the
indispensable votes for the Charter to be applied, and this requires overcoming
obstacles at the OAS since CARICOM nations are there that have permanently
received aid from the Venezuelan government and have committed their votes”.
He says the opposition has had the “receptivity,
balance and responsability” of OAS Secretary General Luis Almagro, and we
have gone to other legislatures in friendly nations. He says that although they
will make a formal petition to the OAS they are trying to fine tune instruments
in order “to avoid setbacks, we know
anything we try and fail at will be used by the Venezuelan government as a
victory”. A delegation of legislators, headed by Foreign Affairs Committee
Chairman Luis Florido, is travelling to Washington to meet with OAS Secretary
General Almagro, to analyze ways to proceed. Article 20 of the Democratic
Charter, which was approved in 2001, authorizes Almagro or a member State to
convene the Permanent Council “in the
event of an unconstitutional alteration of the constitutional regime that
seriously impairs the democratic order in a member State” (El Universal, http://www.eluniversal.com/noticias/daily-news/oas-almagro-may-apply-democratic-charter-venezuela_306531; and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/delegacion-reunira-con-secretario-general-oea_306560; Infolatam: http://www.infolatam.com/2016/04/25/oposicion-venezolana-evaluara-en-oea-la-activacion-de-la-carta-democratica/; Informe21: http://informe21.com/politica/allup-en-cnn-necesitamos-asegurar-votos-para-la-carta-democratica)
The National Assembly’s positive rating has dropped
down from 64% to 55% since the start of the year,
according to a study by the Catholic University’s Political Science Center, and
has fallen behind the universities, students, Catholic church, business, and
private media. Experts believe the change is due to overblown expectations
after Parliamentary elections and the fact that legislative action has been
blocked by the Supreme Court, the regime or the National Elections Council.
More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Evaluacion-positiva-Asamblea-puntos-porcentuales_0_835716481.html)
Former Chavez VP slams Maduro for generating “loss of hope”.
Journalist
Jose Vicente Rangel, a former Chavez Vice President and minister, has
criticized economic policy and the hopeless message projected by President
Nicolas Maduro and those responsible within the regime. He says: “The government’s key weakness is the
economic crisis, mainly because of shortages and inflation; the lack of a
hopeful discourse and a clearer economic outlook accentuates uncertainty,
defenselessness, and sadness”. He
showed results of a poll by pro-government pollster HINTERENLACES, which
reveals a drop in public confidence down to 24%. More in Spanish: (Infolatam: http://www.infolatam.com/2016/04/24/exvicepresidente-de-chavez-critica-el-discurso-gubernamental-desesperanzador/)
Joel Hirst: The Suicide of Venezuela
Venezuela
is slowly, and very publically, dying; an act that has spanned more than
fifteen years. National suicide is not product of any one moment. But instead
one bad idea, upon another, upon another and another and another and another
and the wheels that move the country began to grind slower and slower; rust
covering their once shiny facades. Revolution – cold and angry. Hate, as a
political strategy. Law, used to divide and conquer. Regulation used to punish.
Elections used to cement dictatorship. Corruption bleeding out the lifeblood in
drips. Good men and women stuck in a two-decade old debate from which there is
no escape. Videos of nightly sacking of supermarkets that are fortuitous enough
to have had a supply of something. Tonight there are no lights. They blame the
weather – the government does – like the tribal shamans of old who made
sacrifices to the gods in the hopes of an intervention. There is no food
either; they tell the people to hold on, to raise chickens on the terraces of
their apartments. There is no water – and they give lessons on state TV of how
to wash with a cup of water. The money is worthless; people now pay with
potatoes, if they can find them. Doctors operate using the light of their smart
phones; when there is power enough to charge them. Without anesthesia, of
course – or antibiotics, like the days before the advent of modern medicine.
The phone service has been cut – soon the internet will go and an all-pervading
darkness will fall over a feral land. The marathon of destruction is almost
finished; the lifeblood of the nation is almost gone. No, there is nothing
heroic or epic here; ruins in the making are sad affairs – bereft of the
comforting mantle of time which lends intrigue and inevitability. (World Press:
https://joelhirst.wordpress.com/2016/04/23/the-suicide-of-venezuela/)
