International
Trade
India
eyes oil-for-drugs deal with Venezuela to recoup pharma cash
Indian officials say they have proposed an
oil-for-drugs barter plan with cash-strapped Venezuela to recoup millions of
dollars in payments owed to some of India's largest pharmaceutical companies. Several
of India's generics producers, led by the country's second-largest player Dr.
Reddy's Laboratories Ltd, bet heavily on Venezuela as they sought emerging
market alternatives to slower-growing economies such as the United States. But
the unravelling of Venezuela's socialist economy amid a fall in oil prices has
triggered triple-digit inflation and a full-blown political and financial
crisis. Unable to pay its bills, the country is facing severe shortages of even
basic supplies such as food, water and medicines. (Reuters, http://www.reuters.com/article/us-india-venezuela-pharma-idUSKCN0Y91IG)
Oil & Energy
Venezuela
oil output may go all the way to zero
In an
interview with BLOOMBERG, Philip Verleger, president of PKVerleger LLC, says
Veenzuela’s oil production could go all the way down to zero. “There are no new investments. The country is
disintegrating”. (Full audio interview at Bloomberg: http://www.bloomberg.com/news/videos/2016-05-17/verleger-venezuela-oil-output-may-go-all-the-way-to-zero)
Why
Morgan Stanley expects crude oil prices to trend even lower
As of the end of April, crude oil prices had rallied
by almost 70% since the lows of February 2016. But prices were still almost 60%
lower than in June 2014. This drop in prices has stemmed from a supply-demand
gap. The World Bank reported that Brent crude oil prices could average around US$
41 per barrel in 2016, as compared to previous estimates of US$ 37 per barrel.
This is due to expectations of the narrowing supply-demand gap. A Reuters
survey showed that Brent crude oil prices could average as high as ~US$ 42.30
per barrel in 2016. But a Wall Street Journal survey shows that Brent crude oil
prices could average as low as US$ 39.25 per barrel in 2Q16 before rising to US$
42.30 in 3Q16. And Morgan Stanley expects that crude oil prices could actually
fall in 3Q16. The record US crude oil inventory and rising production from OPEC
could support this expectation. Crude oil stored in US oil tankers will only
add to the global glut. (Market Realist: http://marketrealist.com/2016/05/morgan-stanley-expects-crude-oil-prices-trend-even-lower/)
Commodities
2
million tons of sugar cane went without milling nationwide
Oscar
Contreras, head of the Sugar Cane Growers Society of Portuguesa state, report
that due to price controls around 2 million tons of sugar cane were not
collected nationwide. More in Spanish: (Ultima Hora Digital; http://ultimahoradigital.com/2016/05/2-millones-de-toneladas-de-cana-se-quedaron-sin-moler-a-nivel-nacional/)
Economy & Finance
Venezuela
is falling apart
Venezuela’s
economy has been in decline for a long time now, but a spate of recent news
articles highlights how bad the situation has become. The Atlantic has a list
of vivid anecdotes showing how economic breakdown has led to social
breakdown. Meanwhile, the New York Times reports on the deteriorating state of
Venezuelan medical care. The situation has prompted the government to declare a
state of emergency, which given President Nicolas Maduro’s record, seems likely
to make things worse. The news coming from Venezuela—including shortages as
well as, most recently, riots over blackouts; the imposition of a two-day
workweek for government employees, supposedly aimed at saving electricity; and
an accelerating drive to recall the president—is dire, What the country is
going through is monstrously unique: It’s nothing less than the collapse of a
large, wealthy, seemingly modern, seemingly democratic nation just a few hours’
flight from the United States. In the last two years Venezuela has experienced
the kind of implosion that hardly ever occurs in a middle-income country like
it outside of war. The real culprit is “chavismo”, the ruling philosophy named
for Chavez and carried forward by Maduro, and its truly breathtaking propensity
for mismanagement; institutional destruction; nonsense policy-making; and plain
thievery. The happy, hopeful stage of Venezuela’s experiment with Chavez’s
21st-century socialism is a fading memory. What’s been left is a visibly
failing state that still leans hard on left-wing rhetoric in a doomed bid to
maintain some shred of legitimacy. A country that used to attract fellow
travelers and admirers in serious numbers now holds fascination for
rubberneckers: stunned outsiders enthralled by the spectacle of collapse.
(Bloomberg, http://www.bloomberg.com/view/articles/2016-05-18/a-socialist-revolution-can-ruin-a-country;
The Atlantic: http://www.theatlantic.com/international/archive/2016/05/venezuela-is-falling-apart/481755/)
Venezuelan
soldiers steal goats because no food is left in the barracks
The situation in Venezuela has become so bad that even
soldiers are struggling to support themselves. Over the weekend, six members of
the Venezuelan military were detained by local authorities for stealing goats.
Local media reported the soldiers confessed to stealing the goats and said they
did it to feed themselves, since they had no food left in their barracks.
(Caribbean Digital Network: http://www.caribbeandigitalnetwork.com/venezuelan-soldiers-steal-goats-because-no-food-is-left-in-the-barracks/)
Politics and International Affairs
Legislature
rejects state of exception as “unconstitutional”
The
Venezuelan Parliament – controlled by the opposition – on Tuesday said the “state of exception and economic emergency”
declared by President Nicolas Maduro last week to deal with the alleged threat
of a coup is “unconstitutional.” “It’s a
decree that does not adhere to the Constitution and, the saddest thing is that
it fails to recognize the pain of the Venezuelan family,” said the leader
of the opposition lawmakers, Julio Borges during the session. The decree,
published on Monday in the Official Gazette, allows, among other things, the
president to “dictate measures and
execute special public security plans that guarantee the maintenance of public
order against destabilizing actions.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2412425&CategoryId=10717;
El Universal, http://www.eluniversal.com/noticias/daily-news/deputy-paz-venezuelan-govt-not-acquit-itself-recall-vote_310307)
Venezuelan
crisis reaching a peak
Venezuela’s
ongoing political crisis is turning into a constitutional crisis. In the last
week, the political and institutional situation in Venezuela has quickly
deteriorated. During this time, there were large-scale marches against the
government, rumors of military intervention, rumors of a planned popular uprising
and a state of emergency was declared. The opposition and general populace
appear to be on the cusp of desperation, which in turn makes widespread social
unrest and violence almost certain. President Nicolas Maduro has asserted that
it's only a matter of time before the National Assembly disappears, saying that
the body has lost its political force. This was said after the National
Assembly refused to approve his most recent emergency decree. Maduro added that
the country is not obliged to hold a referendum. He also said the opposition
doesn’t want a referendum but a coup, and that the opposition plans to use
marches as opportunities to create insurrection and violence. Both the
government and opposition are invoking different laws and legal procedures
based on their own interpretations and political goals. Heightened desperation
and violence appear imminent. The National Assembly faces contempt from the
other four branches of government and has no more legal recourse available for
ousting Maduro. The general populace faces growing obstacles for acquiring
basic food supplies. The only means for the opposition and general populace to
pressure the government is through demonstrations and street actions.
Meanwhile, the behavior and unity of the military is unpredictable. While there
have been repeated calls for mediation efforts – particularly with the Vatican
– none have been established thus far.
(Geopolitical Futures: https://geopoliticalfutures.com/venezuelan-crisis-reaching-a-peak/)
Venezuela
security forces block anti-Maduro protesters
Venezuelan
police have fired tear gas at anti-government protesters in Caracas demanding a
recall referendum on embattled President Nicolas Maduro. Thousands have marched
in several cities in what is expected to be the biggest wave of opposition
rallies. Maduro has rejected a referendum drive amid growing discontent with
the country's spiraling economic crisis. He has announced a 60-day state of
emergency, giving soldiers and police wider powers. In the third day of
demonstrations in a week, the opposition called for a march on the headquarters
of the National Electoral Council (CNE), in Caracas. But security forces were
out in force, and used tear gas to prevent protesters from reaching the
building. Some demonstrators threw stones and bottles in response. At least
four people were reportedly arrested. In the morning rush hour, 14 underground
stations were closed in the capital. Officials said the closures were caused by
technical issues but opponents said it was a government effort to prevent
people from joining their demonstrations. Demonstrations have been mostly
peaceful. But the government has already made it clear that the referendum will
not go ahead. This has angered the opposition, which says it is seeking a legal
and constitutional manner to achieve political change. "The referendum can be held this year, and
you know this. Let's avoid an explosion" of public frustration,
opposition leader Henrique Capriles said at Wednesday's demonstration. Luis
Emilio Rondon, the only director of the National Electoral Council (CNE) not
aligned with the Maduro regime, went to the streets to receive from opposition leaders
of the Democratic Unity coalition (MUD) a document listing demands related to the
proposed recall vote against President Nicolas Maduro. Capriles handed over the
document and deplored the decision of municipal authorities to stop the
opposition from getting to the CNE headquarters. At the same time National
Assembly President Henry Ramos Allup said that Maduro “is not democratic; fails to stand for a government with working powers;
it is an autocratic regime heading for a dictatorship”. (BBC News; http://www.bbc.com/news/world-latin-america-36326185; Reuters,
http://www.reuters.com/article/us-venezuela-politics-idUSKCN0Y82DV;
El Universal, http://www.eluniversal.com/noticias/daily-news/people-detained-during-opposition-rally-caracas_310571; http://www.eluniversal.com/noticias/daily-news/cne-director-receives-document-from-opposition-leaders_310541;
http://www.eluniversal.com/noticias/daily-news/congress-speaker-govt-autocratic-regime-heading-for-dictatorship_310559)
Opposition
leader Capriles says Venezuela’s military must choose
Henrique
Capriles, governor of Miranda state and former presidential candidate, has
urged the army to choose whether it is "with the constitution or with (President Nicolas) Maduro",
after a state of emergency was declared. Capriles says the decree gave the
president unconstitutional powers. He has called on Venezuelans to ignore it
and take to the streets. "We,
Venezuelans, will not accept this decree. This is Maduro putting himself above
the constitution," Capriles told journalists. "To impose this, he'd better start preparing
to deploy the war tanks and military jets," he added. "And I tell the armed forces: The hour of
truth is coming, to decide whether you are with the constitution or with Maduro,"
he said. Capriles said the opposition is not calling for a military coup, but
instead seeking a legal and constitutional way of ousting Maduro through a
recall referendum. The decree was
rejected by the opposition-held National Assembly late on Tuesday, but Maduro
has indicated that he would not abide by their decision. At a press conference
with foreign journalists in Caracas, Maduro said the National Assembly had
"lost political validity. "It's
a matter of time before it disappears," he added. Capriles charged
that there were sharpshooters perched at the top of the CNE building during the
march and said that the recall referendum is the dialogue everyone calls for, “not hypocritical conversations”. (BBC
News: http://www.bbc.com/news/world-latin-america-36318553;
and more in Spanish: (El Nacional, http://www.el-nacional.com/politica/Capriles-dialogo-revocatorio-conversaciones-hipocritas_0_849515329.html)
OAS
head blasts Maduro, labels him a traitor to his people
The
head of the Organization of American States said Venezuelan President Nicolás
Maduro is verging on becoming a “petty dictator” and called on the multilateral
organization to consider an emergency meeting to address antidemocratic
tendencies in the continent’s biggest oil producer. In a strongly worded open
letter to Venezuelan President Nicolas Maduro, OAS Secretary General Luis
Almagro, countered the head of state’s accusation that he (Almagro) is an agent
of the CIA. Using unprecedentedly blunt language, Almagro – who was Foreign
Minister of Uruguay under former Chavez ally José Mujica - replied: “I am not a CIA agent. And your lie, even if
it is repeated a thousand times, will never be true… I am not a traitor… But
you are, President. You betray your people and your supposed ideology with your
rambling tirades… You should return the riches of those who have governed with
you to your country, because they belong to the people… You should return the political prisoners to
their families. You should give the National Assembly back its legitimate
power… You will never be able to give back the lives of the children who have
died in hospitals because they did not have medicine, you will never be able to
free your people from so much suffering, so much intimidation, so much misery,
so much distress and anxiety. I hope that no one commits the folly of carrying
out a coup d’état against you, but also that you yourself do not do so. It is
your duty. You have an obligation to public decency to hold the recall
referendum in 2016, because when politics are polarized the decision must go
back to the people. That is what the Constitution says. To deny the people that
vote, to deny them the possibility of deciding, would make you just another
petty dictator, like so many this Hemisphere has had.” (The Wall Street
Journal: http://www.wsj.com/articles/oas-head-blasts-venezuelas-nicolas-maduro-1463604658;
Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2412445&CategoryId=10717;
(El Universal, http://www.eluniversal.com/noticias/daily-news/oas-almagro-labels-venezuelas-maduro-traitor_310596)
Uruguay’s
Mujica says Venezuela’s Maduro is as “crazy
as a goat”
Uruguay’s
former President, socialist José Mujica, a close friend of the late Hugo
Chavez, came to the defense of his former Foreign Minister, OAS Secretary
General Luis Almagro, saying that Venezuelan President Nicolas Maduro is as “crazy as a goat…Everyone is crazy in
Venezuela. They call themselves all sorts of names and will fix nothing that
way”. Mujica said Almagro “is no
traitor. He is a lawyer that is a slave to the rule of law”, and scoffed at
Maduro’s charge that Almagro is a CIA agent, saying “that is out of line. But in Venezuela everything is out of line”.
He said he respects the President of Venezuela, “but that does not mean I don’t tell him he is crazy- You are crazy like
goat”. The expression is similar to saying “mad as a hatter”, in English. More in Spanish: (El País: http://internacional.elpais.com/internacional/2016/05/19/america/1463619450_772724.html;
El Universal, http://www.eluniversal.com/noticias/politica/mujica-dice-que-maduro-esta-loco-como-una-cabra_310638)
Spain
terms Maduro’s conspiracy charges “absolutely
delirious”
Spanish
Foreign Minister José Manuel García-Margallo called conspiracy charges by
Venezuelan President Nicolas Maduro “absolutely
delirious”. Maduro claims Spanish media is leading a campaign against his
regime to justify foreign military intervention. García-Margallo said “no one supports the conspiracy theory, it is
an absolutely delirious approach…and fortunately nobody believes it”. He
added “to think that ABC or El Pais can
overthrow his regime is magical realism”. He said he has had talks with the
governments of Cuba and Ecuador – both allies of Maduro – and no one believes
the charges. Garcia-Margallo explained that he ordered the return of the
ambassador on Wednesday because Spanish former prime minister Jose Luis
Rodriguez Zapatero is now in Venezuela for mediation, while Albert Rivera, head
of the Ciudadanos (Citizens) party, will visit Venezuela next Monday He added
that “there are 400,000 Spaniards or
people with double nationality (in Venezuela) who need protection”. (Latin
American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2412462&CategoryId=10717;
and more in Spanish: (El Nacional: http://www.el-nacional.com/mundo/Canciller-Espana-Conspiracion-denunciada-Maduro_0_850115103.html)
Spanish,
Dominican, Panamanian former Presidents in Caracas
Former
Presidents José Luis Rodríguez Zapatero (Spain), Leonel Fernandez (Dominican
Republic), and Martín Torrijos (Panama) are in Venezuela to seek mediation
between the government and the political parties comprising umbrella group Democratic
Unity (MUD). Zapatero and Torrijos have met with President Nicolas Maduro, who
previously invited them to take part in the Commission of Truth, Justice and
Reparation of Victims of Violence in the country, a group installed in April
this year. The visiting former heads of state also met at length with the
officials of the National Assembly and Miranda State Governor Henrique
Capriles. (El Universal, http://www.eluniversal.com/noticias/daily-news/spanish-dominican-panamanian-ex-presidents-reach-caracas_310379;
and more in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/presidente-maduro-sostuvo-reunion-con-expresidente.aspx#ixzz496AHVKBm)
Vatican
Secretary of State Paul Gallagher cancels visit to Venezuela
Pope
Francis I’s Secretary of State, Monsignor Paul Gallagher, has cancelled a
scheduled visit to Venezuela “for reasons
unconnected to the Holy See”. It had been expected that Gallagher could act
as a mediator or intermediary in Venezuela’s ongoing political crisis. More in
Spanish: (NTN24: http://www.netcanalntn24.info/noticia/emisario-del-vaticano-paul-gallagher-posible-mediador-en-la-crisis-cancela-su-viaje-a-venezuela-101552)
US
voices deep concern over the excessive use of force against peaceful
demonstrations
US
State Department spokesman John Kirby has expressed deep concern “about the difficult conditions that the
Venezuelan people are experiencing right now. This is the time now for
Venezuelan leaders to listen to the people, to their voices, and to try to work
together peacefully – all Venezuelans to try to work together peacefully to
solve these things. But reports of excessive use of force and violence against
protesters obviously is troubling to us and of deep concern. We don’t believe
that that response to peaceful protest about real difficulties facing the
Venezuelan people is the appropriate response. When you see people who are
protesting peacefully treated in this rough manner, that – we don’t believe
that’s appropriate.” (US Department of State: http://www.state.gov/r/pa/prs/dpb/2016/05/257328.htm#VENEZUELA;
and more in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/eeuu-exhorta-los-lideres-venezolanos-escuchar-pueblo_310636)
Angry
streets, not recall, may be Venezuela leader's biggest risk
Streaming
down from hilltop slums in the dead of night, hundreds of Venezuelans join an
ever-growing line that circles the vast "Bicentennial" state-run supermarket. By sunrise, there are
several thousand, closely watched by National Guard soldiers, all waiting for
the chance to buy coveted rice, flour or chicken at subsidized prices amid
crippling nationwide shortages and inflation. Many of them used to be devoted
supporters of Hugo Chavez. Now, in the grumbling of pre-dawn lines, there is
disillusionment with Chavez's "Beautiful
Revolution" and undisguised anger at his successor and self-declared
"son" Nicolas Maduro. (http://www.reuters.com/article/us-venezuela-politics-anger-idUSKCN0Y81UR)
Anticipating
the collapse of Venezuela
The
question for businessmen and governments with a stake in the deteriorating
situation in Venezuela is no longer if the regime of Nicholas Maduro will come
to a premature end, but under what circumstances. Maduro’s intransigence
increases the probability that the suffering and frustration of the Venezuelan
people will eventually give rise to violence. “How will it end?” The possibilities are beginning to center on a
limited number of scenarios, explored by Dr. R. Evan Ellis is Latin America
Research Professor at the U.S. Army War College Strategic Studies Institute,
who believes Venezuela may reach the point of governmental and societal
self-disintegration by the end of the present year, and it is likely that the
more pragmatic senior government and military leaders who had derived their
illicit fortunes from the regime will quietly jump at the chance for a
superficially constitutional way to do away Maduro if by doing so, they can
preserve their ill-gotten gains and protect themselves from prosecution.
Whatever the outcome in Venezuela, the region will have to rely on the strength
of its institutions to manage the crisis. The Organization of American States,
and associated financial and other institutions of the Inter-American system,
will be key to allowing a kleptocrat-led post-Maduro Venezuela to economically
recover, while pressuring it to rebuild true democratic institutions.
Reciprocally, a multinational force led by Brazil or other Latin American
states, without U.S. troops, may be the only politically acceptable way of
restoring order to a Venezuela that has imploded. (Latin America Herald
Tribune: http://www.laht.com/article.asp?ArticleId=2411674&CategoryId=13303)
Mob
burns Venezuelan man alive over US$ 5 as justice fails
The mob
didn't know at first what Roberto Bernal had done, but he was running and that
was enough. Dozens of men loitering on the sidewalk next to a supermarket
kicked and punched the 42-year-old until he was bloodied and semi-conscious.
Then a stooped, white-haired man trailing behind told them he'd been mugged. The
mob went through Bernal's pockets and handed a wad of bills to the old man: The
equivalent of $5. They doused Bernal's head and chest in gasoline and flicked a
lighter. And they stood back as he burned alive. Vigilante violence against
people accused of stealing has become commonplace in this crime-ridden country.
Reports of group beatings now surface weekly in local media. The public
prosecutor opened 74 investigations into vigilante killings in the first four
months of this year, compared to two all of last year. And a majority of the
country supports mob retribution as a form of self-protection, according to
polling from the independent Venezuelan Violence Observatory. The revenge attacks
underscore how far Venezuela has fallen. Nationwide, police used to make 118
arrests for every 100 murders, according to the Violence Observatory; now they
make eight. Robberies and thefts are so rarely investigated that most victims
don't bother to file a report, government surveys have found. "We have to prioritize cases,"
explained public prosecutor Regino Cova. Last year, the state charged 268,000
people with crimes ranging from robbery to murder; a threefold increase from
the year before. But only 27,000 were found guilty. (Associated Press: http://hosted.ap.org/dynamic/stories/L/LT_VENEZUELA_UNDONE_MOB_JUSTICE)
U.S.
embassy limits consular services to Venezuela amid tensions
The United States is limiting consular services in
Venezuela due to staff shortages at its embassy resulting from this nation's
refusal to grant visas for staff, the embassy in Caracas said. The embassy will
no longer provide appointments for first-time applicants for business or
tourist visas, according to a statement on its web site. "The Venezuelan Foreign Ministry has refused
for many months to issue visas for U.S. Embassy personnel, resulting in staff
shortages throughout the Embassy and also preventing visits by technicians to
maintain, upgrade and repair our consular computer systems," the
statement read. (Reuters, http://www.reuters.com/article/us-venezuela-usa-idUSKCN0Y92ST)
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.
