International Trade
Trade
remains paralyzed after border reopened with Colombia
Two
months after the border between Venezuela and Colombia was partly opened to
pedestrians, shopkeepers and industry on both sides are still waiting for trade
to pick up, On the Venezuelan side there is little to offer, and in the
Colombian border city of Cucuta the value of Venezuelan currency dropped 40%
since the Colombian market is stuffed with bolivars. More in Spanish:
(Noticiero Venevision: http://www.noticierovenevision.net/economia/2016/octubre/16/172412=comercio-sin-reactivarse-tras-apertura-de-frontera-con-colombia-)
30,000
tons of wheat for state agency CASA have arrived at Puerto Cabello. More
in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=34651; El
Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/arriban-a-puerto-cabello-30-mil-toneladas-de-trigo.aspx)
Oil & Energy
PDVSA
extends us$ 7 billion swap for 4th time
Petroleos
de Venezuela, S.A. (PDVSA) has announced again the extension of the Deadline of
the offers to exchange (the “Exchange
Offers”) of up to U.S. US$ 5,325 million aggregate principal amount of
PDVSA’s outstanding 5.250% Senior Notes due 2017 (the “April 2017 Notes”) and
8.50% Senior Notes due 2017 (the “November 2017 Notes,” and together with the
April 2017 Notes, the “Existing Notes”) for new 8.50% Senior Secured Notes due
2020 (the “New Notes”). The state oil company warns "If the Exchange Offers are not successful,
it could be difficult for the Company to make scheduled payments on its
existing debt, including the Existing Notes, which would result in the Company
evaluating all alternative options." The Company has extended each of
the Early Tender Deadline and the Expiration Date to 5:00 P.M. New York City
time on October 21, 2016, unless further extended by PDVSA in its sole and
absolute discretion. The Early Tender Deadline was previously scheduled to
expire at 5:00 P.M. New York City time on October 17, 2016, and the Expiration
Date was previously scheduled to expire at 5:00 P.M. New York City time on
October 17, 2016. All other terms and conditions to the Exchange Offers remain
the same. The consummation of the Exchange Offers is conditioned upon, among
other things, the valid tender of at least 50% of the aggregate principal
amount of the Existing Notes. Last week, oil giant ConocoPhillips filed a
lawsuit against PDVSA and CITGO trying to block the use of CITGO as collateral,
calling it a "fraudulent transfer"
to avoid their creditors. CRYSTALLEX -- owed US$ 1.4 billion -- has also
alleged the same fraud in its suits against Venezuela, PDVSA and CITGO. Venezuela
and PDVSA must pay $1.8 billion this month and $3 billion next month in debt
interest and maturities. Half of the US$ 4 billion in PDVSA 8.5% of November 2,
2017, must be paid this November 2 unless the swap is successful in reducing
that number. (Latin American Herald Tribune: http://laht.com/article.asp?CategoryId=10717&ArticleId=2423302;
Reuters, http://www.reuters.com/article/venezuela-pdvsa-bond-idUSC2N13F00C)
PDVSA
accuses newspaper of defamation, harming bond swap
State
oil company PDVSA has filed a lawsuit against local newspaper El Nuevo Pais,
accusing it of defamation and damaging efforts to persuade investors to take up
a US$ 5.3 billion bond swap offer. Petroleos de Venezuela President Eulogio Del
Pino personally lodged the accusations against the anti-government
Caracas-based newspaper for saying in an article last week that the company was
in financial trouble. "They are
trying to harm, in whatever way they can, an operation that we have offered
transparently," Del Pino said of El Nuevo Pais outside the Caracas
courthouse after filing the lawsuit. "The
socialist government is privatizing PDVSA," El Nuevo Pais said in its
article, referring to the use of PDVSA's U.S. subsidiary CITGO Holding Inc as
collateral to back the new debt. (Reuters: http://www.reuters.com/article/us-venezuela-pdvsa-idUSKBN12E20P)
Venezuela oil price gaps up for 3rd week
The price Venezuela receives for its mix of medium and
heavy continued rising for the third consecutive week on prospects for an
agreement for an oil output cut. 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 October 14 was US$ 43.09,
up US$ 1.51 from the previous week's US$ 41.58. According to Venezuelan government figures, the average price in 2016 for
Venezuela's mix of heavy and medium crude is now US$ 33.77 for the year to
date. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2423253&CategoryId=10717;
El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-oil-basket-climbs-usd-4309-per-barrel_622715)
Economy & Finance
Maduro ignores
Venezuelan Congress and sends budget to Courts
President
Nicolas Maduro has presented the 2017 budget to Venezuela’s top court,
sidestepping the opposition-controlled National Assembly. The move caps almost
a year of clashes between the executive and the newly elected congress, which
has seen its powers whittled away by the courts as it looks to oust Maduro. The
Supreme Court, stacked with pro-government judges, paved the way for the decree
earlier this week, removing Congress’s
budgetary authority. “No one can go
against the ruling of the Supreme Court; it’s binding,” Maduro said while
signing the decree in front a crowd of cheering supporters. (Bloomberg, http://www.bloomberg.com/news/articles/2016-10-14/maduro-ignores-venezuelan-congress-and-sends-budget-to-courts;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2423185&CategoryId=10718)
Opposition
serves notice that public credit operations under 2017 budget can be disowned
Jesus
Torrealba, Secretary General of the Democratic Unity (MUD) opposition coalition
says Venezuela can repudiate public debt to other nations due to the irregular
approval of the 2017 Budget by the Supreme Tribunal. “Any nation or individual who may take part in a public credit operation with the Bolivarian
Republic of Venezuela, must know that since the government is in contempt of
the Constitution by illegally approving the budget, any such debt can be
repudiated by a sovereign Venezuela. You are warned”, he
said. Francisco Rodriguez, of Torino Capital, agrees that the 2017 Public Debt
Law could come under question if it is not approved by the parliament. “We believe there is a strong legal case for
a future administration to declare that debt contracted during 2017 is not
valid without an Annual Debt Law that is approved by the National Assembly.
This argument could potentially damage not only new bonds issued by Venezuela,
but also any other local or international financial debt, including commercial,
bilateral and multilateral bonds, as well as internal debt issued in bolivars.”
Rodríguez says debt by PDVSA, the Central Bank and state owned banks are exempt
from legislative approval, but Legislator José Guerra, who chairs the Budget
Subcommittee at the National Assembly, reported that at least one multilateral
organization has decided to withhold a US$ 400 million loan for housing due to
the lack of legislative approval. He added that sovereign debt and bonds cannot
be issued without support by the Legislature, and said “a large part of the failure in the recent bond swap is because
investors are cautious that the operation is illegal”. Guerra also says “since CITGO is placed as a guarantee it is
in the national interest and must be approved by the National Assembly”. Guerra adds that multilateral organizations
such as the Inter-American Development Bank and the Andean Development
Corporation could avoid new funding to Venezuela. He concludes by saying: “The government is taking the worst route. I
do not believe any investment bank will dare make the mistake of putting
together a foreign financing package without the Assembly’s backing. There will
be no outside financing and this will impact the economy, which will sink
further in 2017”. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/14/172294=mud-afirma-que-el-pais-no-podra-reconocer-deudas-de-credito-publico-ante-ilegalidad-de-presupuesto-2017; and
Factor MM: http://factormm.com/organismos-multilaterales-comienzan-a-exigir-aval-de-la-an-para-dar-financiamiento-al-regimen/)
Venezuelan
domestic budget FY2017 above 447% last year
Venezuela’s
domestic budget FY2017, submitted to the Supreme Tribunal of Justice (TSJ),
exceeds by 447% the budget for 2016 enacted last year. While the current budget
was drawn up as based on crude oil prices at US$ 40 per barrel the financial plan
for 2017 was estimated at US$ 30 per barrel, a “conservative figure” in words of President Nicolas Maduro. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-domestic-budget-fy2017-above-447-last-years_622925)
Regime
backs away from price controls as citizens go hungry
President Nicolas Maduro’s government has begun
dismantling price controls, a major policy shift that aims to ease widespread
unrest by letting shops sell food at market prices but is worsening Venezuela’s
already punishing inflation. What began as a limited experiment in March in
western Zulia state, which borders Colombia, has since been rolled out to six
other border states, according to ruling-party governors and interviews with
supermarket owners and shoppers across the country. The scheme allows state
governments and private retailers with access to dollars to import everything
from ketchup to rice from neighboring Brazil, Colombia and tiny Trinidad and
Tobago. Officials who pushed for the changes in the provinces said they did so
because people were desperate. The downside for Venezuelans is a tremendous
rise in prices—sometimes as much as 20 times the regulated price. That is
further fueling inflation that the International Monetary Fund already predicts
will rise by 500% this year, the highest rate in the world. The phasing out of
the price controls is already hitting black-market dealers who have been
reselling shoppers marked-up products they obtained at government-set prices.
Private distributors are importing the food using savings exchanged for dollars
on the black market, which is illegal but being condoned by officials, said
Asdrubal Oliveros, who closely tracks government policies as director of
Caracas-based research firm ECOANALÍTICA.
(The Wall Street Journal: http://www.wsj.com/articles/venezuela-backs-away-from-price-controls-as-citizens-go-hungry-1476475368)
Politics and International Affairs
National
Assembly approves motion to rescue democracy and the Constitution
Venezuela’s
National Assembly has passed a historic resolution declaring that “Nicolas Maduro’s government is attempting to
ignore the Venezuelan electorate’s will for change, rejecting and creating
obstacles to the legitimate right to vote”; and that Venezuelan democracy
is facing “its most serious crisis since
the Executive and the Supreme Tribunal do not recognize the authority of the
National Assembly”, which implies the “nullification
of the will of voters that elected it on December 6th, 2015,
rejecting popular sovereignty, as well as the life of democracy and the rule of
law”. It further declared that in ruling that the national budget should be
submitted to the Constitutional Chamber, that Chamber has committed “an atrocious usurpation of this parliament’s
duties” and “totally exceeded”
its jurisdiction. Further that “the
Supreme Tribunal of Justice has betrayed its reason to exist, abandoned its
role as guarantor of basic rights and the Constitution’s supremacy, because its
rulings show lack of independence and objectivity”; and that “the justices in the Electoral Chamber and
the Constitutional Chamber of the Supreme Tribunal do not represent justice and
authority, or the Constitution”; that they “usurp authority for justice due to the vices in their appointments”
particularly those made “following legislative
elections on December 6th, 2015.” Further, that with the “crude violation of basic rights, principles
and values upheld in the Constitution”, the Citizen and Electoral powers
are acting in a manner “servile to the
interests of the government”. As a consequence of all this, the National
Assembly will reject the authority or validity of Executive acts and Supreme
Tribunal sentences that run “counter to
democratic values, principles and guarantees, and injure basic rights”. It
also demanded that the National Elections Council act as an independent power
to “set a definite timetable for a recall
vote” against President Maduro, and the “election of state governors, all within calendar 2016.” The
National Assembly further calls upon the National Armed Forces to “demand that the President and the National
Elections Council guarantee the political rights of Venezuelans and respect the
will of voters”, as well as contribute to restoring the rule of law, basic
rights and democratic principles. It also calls on the Supreme Tribunal’s
Electoral Chamber to once and for all incorporate legislators elected from
Amazonas state on December 6th 2015 or else call for new elections
in that state. The Assembly also voted to replace Supreme Tribunal justices
unconstitutionally appointed on December 23rd 2015, and create a
special committee to analyze illegal procedures in the appointment of National
Elections Council members by the Supreme Tribunal on December 26th
2014. The Assembly called on international organizations, through the UN High
Commissioner for Human Rights, the Secretary General and Permanent Council of
the Organization of American States (OAS) to act on behalf of democracy and
human rights in Venezuela; and on international organizations and Latin
American legislatures, the authorities of the Common Market of the South
(MERCOSUR) and the Union of South American Nations (UNASUR) to remain watchful
and help restore democratic institutions in Venezuela. More in Spanish: (El
Universal: http://www.eluniversal.com/noticias/politica/aprobo-acuerdo-para-rescate-democracia-respeto-constitucion_622480)
Supreme
Tribunal deals blow to bid to unseat Maduro
Venezuela's
government-stacked courts have dealt another blow to the opposition's attempts
to unseat President Nicolas Maduro. In a decision Monday, the Supreme Court
ruled that opponents must collect signatures from 20% of registered voters in
each of Venezuela's 24 states in order to force a recall referendum. The
opposition had argued it needed to garner only 20% nationally to trigger the
vote. The ruling will make it harder for opponents to mobilize support,
especially in rural states dominated by the government, when it attempts next week
to collect and electronically verify 4 million signatures over three days
allotted for the petition drive. The court said on Monday: "The failure to collect that percentage in
any of the states or the capital district would nullify the validity of a presidential
recall referendum." Polls show Venezuelans overwhelmingly want to cut
short Maduro's term. But the embattled socialist still has control over key
institutions including courts and the electoral council. Opposition leader
Henrique Capriles Radonski, Governor of Miranda state, says the Supreme
Tribunal is following orders from the government and its rulings are
increasingly violating democratic procedures. He warns that the government is
trying to cling to power at any cost and that if the referendum is denied
people must prepare to take over Venezuela to defend the Constitution. (BBC
News: http://www.bbc.com/news/world-latin-america-37688901?utm_source=Sailthru&utm_medium=email&utm_campaign=New%20Campaign&utm_term=%2AMorning%20Brief;
ABC News: http://abcnews.go.com/International/wireStory/venezuelas-high-court-deals-blow-bid-unseat-maduro-42871166;
and more in Spanish: Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/16/172407=henrique-capriles-expreso-que-el-tsj-solo-sigue-ordenes-del-ejecutivo; AVN; http://www.avn.info.ve/contenido/tsj-ratifica-que-20-firmas-para-solicitar-referendum-se-haga-estado; El
Universal, http://www.eluniversal.com/noticias/politica/sala-electoral-decide-que-recoleccion-del-debe-ser-por-estados_623048)
Maduro
meets Zapatero, Samper: MUD rejects dialogue without the recall referendum
President
Nicolas Maduro has again met with Spain’s former President José Luis Rodríguez
Zapatero and UNASUR Secretary General Ernesto Samper, allegedly to discuss
promoting talks with the Venezuelan opposition. However, the Democratic Unity
(MUD) opposition coalition says their key objective is collecting 20% of
registered voter signatures and that there will be no dialogue without a recall
referendum, despite claims by the regime and President Maduro’s meetings. National
Assembly President Henry Ramos Allup says “Any
possibility of talks is contingent on the recall”. More in Spanish: (El
Nacional, http://www.el-nacional.com/politica/MUD-reitera-dialogo-revocatorio_0_941306130.html;
Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/16/172377=maduro-se-reunio-con-el-expresidente-espanol-jose-luis-rodriguez-zapatero)
Colonel
Ameliach to file lawsuit to block recall referendum procedures by MUD
Colonel
Francisco Ameliach, Governor of Carabobo State and Vice-President of ruling
United Socialist Party of Venezuela (PSUV), says he will ask the Supreme
Tribunal to issue a legal stay to prevent the Democratic Unity (MUD) opposition
alliance from moving on to the next phase in recall procedures against
President Nicolas Maduro, including collecting 20% of signatures of registered
voters. Tomas Guanipa, Secretary General of the opposition Primero Justicia
party, called Colonel Ameliach’s announcement “shameless” and charged that the Carabobo state Governor is among
those who are pushing for the nomination of Lieutenant Diosdado Cabello to
replace Maduro. (El Universal, http://www.eluniversal.com/noticias/daily-news/psuv-file-lawsuit-against-opposition-alliance-for-alleged-offense_622968;
and more in Spanish: Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/16/172382=francisco-ameliach-aseguro-que-solicitara-medida-cautelar-para-que-rr-no-avance-; El
Universal, http://www.eluniversal.com/noticias/politica/tomas-guanipa-psuv-oficialismo-busca-sustituto-maduro_622862)
Venezuela’s
legal institutions and bar associations denounce Supreme Tribunal rulings
In an
unprecedented move in Venezuela’s history, the National Lawyers Federation, the
Lawyers’ Social Security Institute (INPREABOGADO) and the bar associations in
21 states, along with several NGO’s related to the legal profession have
condemned recent decisions by the Supreme Tribunal of Justice (TSJ). Several
NGO’s will take their case to the Organization of American States, the United
Nations, and the Iber-American Union of Legal Guilds and Associations, to denounce
“unconstitutional and partisan”
actions by the Supreme Tribunal here. They accused the Tribunal of usurping
legislative functions, and creating a “carte
blanche for government corruption”. (El
Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-lawyers-meet-protest-top-courts-decisions_622955;
and more in Spanish: Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/15/172354=denunciaran-actuacion-del-tsj-ante-la-onu-y-la-oea-)
Dissident “chavistas” call for signatures against
Maduro
A group
of dissident “chavistas” and former Chavez cabinet members and military
officers has called for signatures against President Nicolas Maduro, in defense
of the Constitution. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/disidentes-del-chavismo-llaman-firmar-contra-maduro_623050)
Wives
of political prisoners accuse Cabello of torture
Lilian
Tintori, wife of imprisoned Voluntad Popular leader Leopoldo Lopez, along with
the wife of jailed San Cristobal Mayor Daniel Ceballos, and former legislator
Maria Corina Machado, has denounced a leader Lieutenant Diosdado Cabello, of
the pro-regime PSUV party, for being the mastermind behind the illegal
imprisonment of her husband, and filed an accusation with the Prosecutor
General’s office accusing him of violating human rights, torture, and
aggression. She says he is behind the mistreatment of the Lopez family when
they visit the jailed leader and having them followed, having them filmed and
then broadcasting the contents on his television show; and added that he “orders judges and jailers to break the law”.
More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/nacionales/2016/octubre/15/172348=denuncian-a-diosdado-cabello-ante-la-fiscalia-general
"Increased crime mirrors security failure in
Venezuela"
The
head of the Venezuelan Violence Watch (OVV), Roberto Briceño León, blamed the
country's increased crime on failed security plans implemented by the
government in recent years. “Efficiency
of a public policy is apparent in its results. Murders, theft, kidnappings and
violence in prisons have skyrocketed, so we can say that the 22 plans
implemented have failed,” he added. According to a research based on
official data, Briceño León estimated 118 arrests in every 100 killings in 1998
in Venezuela, and from 2006 onwards, there have been as few as eight or nine
arrests. In other words, no arrests in almost 91% of the murders. (El
Universal, http://www.eluniversal.com/noticias/daily-news/increased-crime-mirrors-security-failure-venezuela_622540)
Infant
mortality soars in Venezuela
Infant mortality is rising fast here, at a time when
it is falling in almost every other part of the world, in one of the most
alarming signals that Venezuela’s social and state structures are unraveling.
Venezuela’s overall infant mortality rate—defined as deaths within the first year
of life—is currently 18.6 per 1,000 live births, according to the most recent
government statistics. That is well beyond the upper range of 15.4 UNICEF
estimates for war-torn Syria. Statistics on infant mortality in Venezuela are
difficult to come by because the government no longer reports them regularly.
Doctors at state hospitals, which most babies are born, are often sanctioned or
threatened with job loss for making data public. The dire state of health
care—once a pillar of the socialist government’s so-called people’s
revolution—has become a state secret here, with armed security guarding
health-care facilities and throwing out journalists who manage to enter. In
September, Venezuelans were outraged by leaked photos of newborns in cardboard
boxes in the maternity ward of the state-run hospital Domingo Guzmán Lander in
the eastern state Anzoátegui. The governor of the poor coastal state said the
boxes were substitutes for incubators, adding volunteers could decorate them.
Hospitals sometimes lack running water and disinfectants and often face
shortages of antibiotics and baby formula. The situation poses danger for
mothers as well. Childbirth-related maternal deaths in state hospitals are five
times what they were in 2012, according to Venezuelan government statistics,
bucking the global trend of a fall in maternal mortality by 44% percent since
1990, according to the United Nations. (The Wall Street Journal: http://www.wsj.com/articles/infant-mortality-soars-in-venezuela-1476716417)
