May 28, 2013

Economics & Finance

Inflation downturn is expected

Finance Minister Nelson Merentes says inflation is expected to slow down in the coming quarters of this year:"We will deliver more products, more goods for consumers and surely, the Central Bank will have be a currency policy coordinated between the private sector and the Government so as to reduce this year's impact," Merentes said. In fact, he said: "I think we will finish better than the way we started the first quarter. I think there must be a downturn by the second quarter." (AVN, 05-27-2013; http://www.avn.info.ve/contenido/inflation-downturn-expected-upcoming-trimesters)

Bolivar devaluation continues to pressure U.S. companies

Venezuela’s currency devaluation dented first-quarter earnings per share (EPS) and net profits for U.S. companies with operations or doing business within this market and Fitch Ratings believes pressure on the bolivar fuerte (Bs.F.) and potential incremental charges could continue. In first-quarter 2013, Ford recorded a U$D 186 million re-measurement loss in Venezuela; the re-measurement impact at General Motors (GM) was U$D 162 million while the re-measurement impact at Goodyear was U$D 115 million. GM also noted that another devaluation of the Bs.F. to the dollar would result in a U$D 50 million charge based upon the company’s Bs.F.-denominated assets and liabilities as of March 31, 2013. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=785235&CategoryId=10717)

Commodities

Pdvsa lost U$D 7.79 billion in refining and supply in 2012

Oil refining brought negative financial results to state-run oil firm PDVSA in 2012. The oil company's management report shows that refining, trade and supply, both locally and abroad, suffered a total operating loss of U$D 7.79 billion. This implies an astronomical spike of 851% in losses compared to U$D 819 million in 2011. Segmented data reveals that losses in refining, trade and supply in Venezuela alone were U$D 8.44 billion, which explains billion dollar losses in PDVSA's global refining activities. (El Universal, http://www.eluniversal.com/economia/130525/pdvsa-loses-usd-779-billion-in-refining-and-supply-over-2012)

CHEVRON extends PDVSA a U$D 2 billion credit to raise production to 127,000 BPD in Zulia

PDVSA and CHEVRON have signed a U$D 2 billion credit line in order to raise production at their PETROBOSCAN joint venture in Zulia State. The new agreement seeks to raise production from 107,000 BPD to 127,000 BP. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/pdvsa-y-chevron-elevar%C3%A1n-producci%C3%B3n-127000-barriles-campo-zuliano; http://www.avn.info.ve/contenido/pdvsa-y-chevron-suscriben-este-lunes-acuerdo-para-aumentar-producci%C3%B3n-petrobosc%C3%A1n; El Universal, http://www.eluniversal.com/economia/130527/credito-de-chevron-a-pdvsa-se-desembolsara-por-tramos; http://www.eluniversal.com/economia/130528/petroboscan-preve-elevar-186-su-produccion; El Nacional; http://www.el-nacional.com/; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/pdvsa-recibe-2-mil-millones-en-credito-de-chevron.aspx; El Mundo, http://www.elmundo.com.ve/noticias/petroleo/pdvsa/pdvsa-apalanca-produccion-de-crudo-con-fondos-de-l.aspx; http://www.elmundo.com.ve/noticias/petroleo/pdvsa/pdvsa-recibe--2-000-millones-de-credito-de-chevron.aspx)

Schlumberger extends PDVSA U$D1 billion credit line

PDVSA will receive a revolving credit line of at least U$D 1 billion from oil services giant Schlumberger, the oil minister said on Friday. The deal will provide some financial breathing room for PDVSA, which as of last year had built up U$D 16.5 billion in debts to service providers as it focused on social spending at the expense of paying off industry-related debts. "What we are signing today is an agreement for a revolving credit facility...that will allow us to receive more services from Schlumberger," said Oil Minister Rafael Ramirez after signing the agreement with Schlumberger Chief Executive Paal Kibsgaard. (Reuters, 05-24-2013; http://www.reuters.com/article/2013/05/24/venezuela-schlumberger-idUSL2N0E51MA20130524)

Consecrating wine running scarce at Catholic churches, according to Archbishop Roberto Luckert, President of Venezuela's Episcopal Conference, who reports that wine used in communion ceremonies is running out and their key supplier has reported that they may not make further deliveries due to lack of ingredients. Archbishop Luckert reports the Church has no alternate suppliers and cannot import wine used for religious purposes because there is no FOREX available. President Maduro has acknowledged an "acute scarcity" and promises additional massive imports and more expeditious FOREX allocation. More in Spanish: (INFOLATAM)

Caribbean should trade Venezuelan oil for homegrown sun

Still recovering from last year’s Hurricane Sandy and the 2008 financial crisis, many Caribbean countries now face another threat: the possible curtailment of PETROCARIBE, a Venezuelan program that has kept their economies afloat with deals on discounted oil. Consider the case of Jamaica, which this month had to go to the International Monetary Fund for a U$D 932 million loan after rescheduling U$D 9 billion worth of domestic debt. With exports of bauxite and sugar down, fewer tourist arrivals and Sandy’s lingering costs, its economy has been shrinking. Unemployment hovers at 14%. Last year, public-sector debt was up to 140% of gross domestic product. (Bloomberg, 05-26-2013; http://www.bloomberg.com/news/2013-05-26/caribbean-should-trade-venezuelan-oil-for-homegrown-sun.html)

International Trade

Reserves available for imports estimated to cover only 21 days supplies

The SÍNTESIS FINANCIERA report says liquid reserves at the close of April stood at U$D 2.6 billion, which is the amount needed for 21 days worth of imports. The report adds that "the state of liquid reserves is critical in speeding up CADIVI FOREX allocations, as promised by the Government". More in  Spanish: (EL Universal; http://www.eluniversal.com/economia/130528/calculan-que-reservas-equivalen-a-21-dias-de-importaciones )

29.1% less FOREX will be allocated for imports in 2013

Central Bank President Edmée Betancourt says between 3-3.5 billion U$D per month for imports are enough to sustain a stable 3% growth rate. This implies dollar supplies will decrease 29.1% from last year, when $ 59.3 billion were supplied. More in Spanish: (El Nacional; http://www.el-nacional.com/economia/entregaran-divisas-importaciones_0_197980423.html )

Colombia offers to support Venezuela in meeting shortages

President Maduro expects trade between Venezuela and Colombia will increase over the next few months. He says a group of Venezuelan ministers are in now in Bogotá to seek agreements in this area. More in Spanish: (El Universal; http://www.eluniversal.com/economia/130528/colombia-ofrecio-apoyo-a-venezuela-para-superar-escasez; Últimas Noticias; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/negocian-con-colombia-reimpulso-comercial-para-pal.aspx)

Logistics & Transport

VEB 330 million were invested in Guanta Port modernization

Major General Hebert Josué García Plaza says some VEB 300 million were invested in modernizing Guanta Port in Anzoátegui State. More in Spanish: (El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/61893/330-millones-de-bolvares-invertirn--en-modernizacin-del-puerto-de-guanta)

Lack of shipping controls increases tax evasion

Hugo Mijares, President of the National Association of Customs Agents says that in recent years there has been no shipside checking, with cargo manifests must be relayed to tax authorities before a ship docks. More in Spanish: (El Nacional; http://www.el-nacional.com/economia/Falta-control-navieras-propicia-impuestos_0_197980371.html)

Politics

President Maduro says Venezuela to create new workers militia to defend homeland

Maduro has ordered the creation of a new workers’ militia to defend the country’s “Bolivarian revolution” at a time when the government faces economic problems and political turmoil. President Nicolas Maduro gave few details about the militia, including how many members it would consist of, but said it would be part of the Bolivarian Militia created by late President Hugo Chavez, which consists of roughly 120,000 volunteers. Analysts have said only about one-fourth of that force is combat ready. (The Washington Post, 05-24-2013; http://www.washingtonpost.com/world/the_americas/president-maduro-says-venezuela-to-create-new-workers-militia-to-defend-homeland/2013/05/24/7d47a676-c493-11e2-9642-a56177f1cdf7_story.html)

Supreme Court rejects recusations in Presidential election challenge

The Elections Chamber of the Supreme Court here has rejected two recusations presented by former candidate Henrique Capriles and the Democratic Unity Conference, against two magistrates who must decide the case. More in Spanish: (El Universal; http://www.eluniversal.com/nacional-y-politica/130528/tsj-rechaza-recusaciones-en-la-impugnacion-del-14a)

IAPA concerned about freedom of expression in Venezuela

The Inter American Press Association has been reviewing conditions on freedom of expression in Venezuela due to recent events at GLOBOVISION, the suspension on of ATEL's licenses, and meetings by President Nicolás Maduro with the heads of VENEVISION, TELEVEN and GLOBOVISION. More in Spanish: (El Nacional; http://www.el-nacional.com/politica/SIP-preocupada-libertad-expresion-Venezuela_0_197980441.html)

Capriles charges new GLOBOVISION owners with vetoing his speeches, calling them "plugged in", a term he uses to identify those who benefit from Government largesse. He also says the Maduro regime wants to control "all media". The new Board of GLOBOVISION met recently with President Maduro and pledged the station will henceforth be "very sensible" in conveying information. According to Capriles, their agreement includes vetoing his live broadcasts. More in Spanish: (INFOLATAM)

López: Attorney General should target mafias feeding on the country's blood

In response to a subpoena served by the Attorney General Office on Friday, former Chacao mayor Leopoldo López lamented the decision of Attorney General Luisa Ortega Díaz to press charges against him over his past administration. "Attorney General, I can see the check behind this new accusation. You should take care of the mafias and cartels that are bleeding the nation dry," López twitted. (El Universal, 05-24-2013; http://www.eluniversal.com/nacional-y-politica/130524/lopez-attorney-general-should-target-mafias-feeding-on-the-countrys-bl)

2 US Embassy Officials Injured in Venezuela

A Venezuelan police official says a military attaché at the U.S. Embassy has been injured in a shooting outside a night club. The State Department said two U.S. officials were injured in an "incident" early Tuesday but gave few details. The police official said that Roberto Ezequiel Rosas was shot in the right leg during an argument outside a night club in the Chacao district of Caracas. She said he was taken to a local hospital. His condition was not immediately clear. The official spoke Tuesday on condition of anonymity because she was not authorized to release the information publicly. In Washington, State Department spokesman William Ostick confirmed that "two members of the U.S. Embassy in Caracas were injured during an incident early this morning." "Medical staff inform us that their injuries do not appear to be life-threatening," Ostick said. Crime is a serious problem for Venezuela, which has one of the world's highest murder rates. (The Miami Herald, http://www.miamiherald.com/2013/05/28/3420663/us-embassy-employee-shot-in-venezuela.html)

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

May 21, 2013

Economics & Finance

Venezuela faces less growth, increasing shortages and higher inflation

Prices soar meteorically, basic commodities vanish from supermarket aisles, and the economy plunges into recession and reduced growth. Just what is going on? The epicenter of this tremor is none other than the government, which in the midst of elections throughout 2012 and the ones held last April opted to unleash public spending to create a sense of bonanza. Economist Miguel Ángel Santos notes that public spending in 2012 was the highest ever in real terms per capita. The State dished out the equivalent of 51% of the GDP while the rest of Latin America averaged 30%. And spending in the first quarter of 2013 continued to expand. (El Universal, 05-18-2013; http://www.eluniversal.com/economia/130518/venezuela-faces-less-growth-increasing-shortages-and-higher-inflation)

Finance Ministry and Central Bank are adjusting SICAD, domestic debt estimated around U$D 53 billion

The reactivation of SICAD - Ancillary FOREX System - is been further delayed as the Finance Ministry and the Central Bank continue to review it, thus confining FOREX allocation to CADIVI. After meeting with food industry representatives, Central Bank President Edmée Betancourt said "the outflow from SICAD has been slow, and this is what we are trying to improve". Central Bank Director and CADIVI VP José Khan added that "there will be no auction this week". According to ECOANALITICA consulting firm, ECOANALÍTICA, the government would have to disburse U$D 53 billion to meet domestic obligations: U$D 16 billion for expropriations; some U$D 12 billion in dividend repatriations spanning several years, and some U$D 9.5 billion in CADIVI's backlog. On top of this there are U$D 16 billion which PDVSA owes its suppliers and contractors. More in Spanish: (El Universal, 05-21-2013; http://www.eluniversal.com/economia/130521/finanzas-y-bcv-hacen-ajustes-al-sicad-y-dilatan-su-reactivacion and GRUPOSOLUCIONES).

Government seeks private support to reduce shortages

The government has resorted to the private sector to fight widespread shortage of staples. Meetings are beginning this week between the business sector and the government in order to overcome hurdles to production. Finance Minister Nelson Merentes has conceded that delays in the apportionment of foreign currency at the official exchange rate are among the causes for shortages. (El Universal, 05-20-2013; http://www.eluniversal.com/economia/130520/socialism-trapped-at-this-moment-in-time)

An agro-industrial state struggles with food production

The first four months of the year show a 16.24% inflation in foods and a 21.3% shortage in basic staples as food demand soars above supply constrained by restricted access to currency, labor strife and 20 month old price controls on several items. Although the government warns that it will not allow companies to lower production, the truth is that the Venezuelan agro-industrial sector, which had prices climb 20% in 2013, is not only in the hands of private businesses. Luis Vicente León, director of consulting firm DATANÁLISIS, explains that in October 2012 the government, particularly Minister Jorge Giordani (then head of the Planning and Finance Ministry) "significantly deepened its economic revolution. Giordani felt it was time to take control of the economy and reacted to what he deemed impossible, imports reaching U$D 59 billion, not being required by the economy because resources are deviated and inefficiency and corruption abound." (El Universal, 05-18-2013; http://www.eluniversal.com/economia/130518/an-agro-industrial-state-struggles-with-food-production)

Commodities

Venezuela may allow oil joint ventures to manage funds

Petróleos de Venezuela SA will allow joint ventures with China National Petroleum Corp. and Chevron Corp. to manage U$D 6 billion in loans designed to reverse oil output declines, said a PDVSA official. The state-owned producer reached agreements on terms of a U$D 2 billion credit from Chevron for the PETROBOSCAN venture and a U$D 4 billion loan from China Development Bank for SINOVENSA, said the official who was briefed on the negotiations. The transactions probably will be signed by the end of June, said the person, who isn’t authorized to speak publicly. PDVSA is allowing the joint ventures to handle the funds directly for oil infrastructure rather than being channeled through the state company or the government, said the official. PDVSA is also working on arrangements with oil service providers to pay as much as U$D 2 billion in overdue payments and for new cash flow mechanisms. Venezuela, which channels oil earnings into social programs and regional fuel subsidies, is depending on the ventures with foreign partners to tap more of the world’s largest oil reserves. PDVSA is in talks for similar funding with companies including REPSOL and Royal Dutch Shell Plc as it targets output capacity of 3.5 million barrels a day by the end of 2014 from about 3 million at the end of 2013, the official said. PDVSA reported daily oil and natural gas liquids production of 3.03 million barrels last year from 3.13 million in 2011. (Bloomberg; 05-17-2013; http://www.bloomberg.com/news/2013-05-17/venezuela-said-to-allow-oil-joint-ventures-to-manage-fund.html)

20% price increases for chicken, beef, milk and cheese are now official, due to a joint resolution by the Nutrition, Agriculture and Land, Trade, and Finance Ministries. The resolution says the Government aims to "attain strategic supply levels and compensate disadvantages present in agriculture". More in Spanish: (AVN, 05-21-2013; http://www.avn.info.ve/contenido/publicados-gaceta-oficial-nuevos-precios-del-pollo-carne-leche-y-queso; El Universal, http://www.eluniversal.com/economia/130521/regularon-cortes-de-pollo-sazonados-y-la-carne-molida)

Caracas water service to be restored

Water service should be restored today after a three-day outage in parts of Caracas, the state news agency AVN said.

A water pipeline failure that the state company HIDROCAPITAL said was caused by valves at La Guairita treatment plant cut supplies to southeast and northeast areas of the nation’s most populous city for much of the weekend. Water supplies yesterday were 37% lower than normal, HIDROCAPITAL said in a website statement.(Bloomberg; 05-20-2013; http://www.bloomberg.com/news/2013-05-20/venezuela-capital-water-service-to-be-restored-after-three-days.html)

International Trade

Brazil trapped by Argentina and Venezuela economic mismanagement

Under the heading of “Brazil and the neighbors’ crises, just next door” columnist Sergio Leo exposed growing concern and disenchantment in the cabinet of President Rousseff with the economic situation of Argentina and Venezuela, MERCOSUR partners. “Ideology sympathy was strong, geopolitical proximity also but what sends the shivers down the backs of President Rousseff and her advisors and inspires the recent good-will gestures towards Argentina and Venezuela is the economic deterioration of the two countries with which Brazil has its largest trade surpluses in Latinamerica”, writes Leo. Regarding Venezuela, he says there is no positive climate for Brazilian investors since many Brazilian corporations have cancelled their operations and projects in the country. “As the Brazilian authorities cautioned the Venezuelans, Maduro will need a less troublesome political climate, to at least begin to attempt a reduction of the non functionalities of the Venezuelan economy” says Leo and recalls the meeting of Dilma with Chavez successor, during his first official round of MERCOSUR member countries visit. “Forced to revert some of the decisions that made Chavez popular, to avoid a recession of the economy, Maduro is appealing to rhetoric in an effort to minimize the impact on his not so popular public image. In Brasilia however there was satisfaction with the slight change in the tone of Maduro’s speeches, still full of triumphalism rhetoric and conspiracy theories, but now also with calls for conciliation including with business people and the business community”. (MERCOPRESS; 05-20-2013; http://en.mercopress.com/2013/05/20/brazil-trapped-by-argentina-and-venezuela-economic-mismanagements)

Minister says 26,000 tons of food arriving daily

Nutrition Minister Felix Osorio says a average of 26,000 tons of food has been arriving daily since last week, in order to strengthen reserves, thanks to agreements made with Uruguay, Argentina and Brazil. Osorio said that among other staples arriving next week there is: edible oil, powdered milk, beef, chicken, tuna and sugar. More in Spanish: (AVN, 05-20-2013; http://www.avn.info.ve/contenido/26000-toneladas-alimentos-llegan-diariamente-venezuela-para-fortalecer-reserva; El Universal, http://www.eluniversal.com/economia/130521/ejecutivo-abastece-supermercados-para-atender-la-escasez; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/26-000-toneladas-de-alimentos-llegan-a-diario-a-ve.aspx)

Politics

Opposition: Audio suggests Cuba meddling, conspiracies

Venezuela's opposition has released an audio recording that it said contains a prominent member of the ruling party discussing political strategy with a Cuban intelligence officer. Opposition lawmaker Ismael Garcia said Monday that the recording captures a phone conversation between state TV personality Mario Silva, a staunch government ally, and a Cuban identified as Lt. Col. Aramis Palacios. At a news conference, Garcia didn't say when the conversation was recorded or how he obtained it. In it, a man identified as Silva is heard discussing a split in the ruling socialist party between parliament leader Diosdado Cabello and President Nicolas Maduro, the late President Hugo Chavez's successor. The man says he worries that Cabello, a former army officer, is conspiring against the president, who narrowly defeated Capriles in an April 14 election that the opposition refuses to accept, claiming fraud. For example, the voice says, Maduro's opponents in the party want to remove Defense Minister Diego Molero. Silva first dismissed the recording on Twitter as a "montage" and suggested U.S. and Israeli intelligence agencies were behind it, and pledged his support to both Maduro and Cabello. However, he later announced he will take leave of absence from his TV show for health reasons. Cabello also dismissed the recording, calling on the opposition to present real evidence, "not a show." In a speech broadcast Monday on state TV, Maduro called for an end to "intrigues" against his administration and the armed forces but didn't specifically mention the recording. Capriles had urged his supporters to pay attention to the news conference in which the recording was released. "Every corrupt and illegitimate government always implodes!" he tweeted later Monday. (ABC NEWS, 05-20-2013; http://abcnews.go.com/International/wireStory/venezuela-opposition-audio-suggest-cuban-meddling-19219169#.UZuXQ7W1HHR; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/130521/cabello-califico-de-fiesta-mal-hecha-audio-presentado-por-opositores, and http://www.eluniversal.com/nacional-y-politica/130521/mario-silva-dice-ponerse-a-derecho-de-la-justicia-para-investigaciones)

Venezuela says it is taking steps to restore U.S. diplomatic ties

Venezuela's recent designation of an acting head of its diplomatic mission in the United States shows it's desire to restore full diplomatic relations, says Foreign Minister Elías Jaua. "This is a message for U.S. politicians so they understand Venezuela's desire to normalize relations ... via the designation of the highest diplomatic authorities," he said. "Why? Because the United States remains our top trade partner." (Reuters, 05-19-2013; http://www.reuters.com/article/2013/05/20/venezuela-usa-idUSL2N0E101X20130520; El Universal, 05-20-2013; http://www.eluniversal.com/nacional-y-politica/130520/venezuela-wants-to-reinstate-ambassadors-with-the-us)

State Dept. report notes increase in anti-Semitism in Venezuela

The State Department released its 2012 annual report on religious freedom around the world, stating expressions of anti-Semitism by government officials, religious leaders were of great concern, particularly in Venezuela, Egypt and Iran. At times, such statements led to desecration and violence, the report said. The report mentions the "numerous" anti-Semitic statements in government controlled media against opposition Presidential candidate Henrique Capriles, a Catholic of Jewish ancestry. "The government harassed and intimidated critical religious groups", and expresses "special concern" over "instances of anti-Semitism in government controlled media". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/130521/washington-dice-que-el-gobierno-acoso-a-grupos-religiosos; The Washington Post, 05-20-2013; http://www.washingtonpost.com/politics/state-dept-report-notes-increase-in-anti-semitism-special-envoy-named/2013/05/20/9e271e86-c16d-11e2-9aa6-fc21ae807a8a_story.html)

Government releases ex-general jailed in post-election crackdown on opposition

Authorities have released a dissent ex-general who was jailed on charges of inciting unrest after the country’s disputed presidential election. Retired Gen. Antonio Rivero said he would “take care of my health” as he was freed late Friday. Opposition leaders said he was hospitalized Saturday with a respiratory infection and digestive problems following a 16-day hunger strike he undertook to protest his arrest. (The Washington Post, 05-18-2013; http://www.washingtonpost.com/world/the_americas/venezuela-releases-ex-general-jailed-in-post-election-crackdown-on-opposition/2013/05/18/2231e880-c008-11e2-b537-ab47f0325f7c_story.html; Fox News, http://www.foxnews.com/world/2013/05/18/venezuela-releases-ex-general-jailed-in-post-election-crackdown-on-opposition/)

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.

July 20th, 2012

Economics & Finance

Venezuelan economy to contract 3.5% after elections in 2013, after expansion during elections

Guest economists attending the FEDECÁMARAS Annual Meeting estimate that after the October 7 presidential elections spending dynamics “obviously driven by the elections” will post a significant reduction. They warn this drop will continue in 2013 and will result in an important deceleration of the economy. The Ministry for Planning and Finance projects annual expansion of 7% this year, closing around 7% for this quarter, led by construction, trade, manufacturing and finance. (Veneconomy, 07-18-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=31347&idc=2; more in Spanish: El Mundo, 07-19-2012, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/cifras-preliminares--muestran-un-alto-crecimiento-.aspx)

Government has used up 90% of authorized credit for this year, according to a report by the Ministry of Planning and Finance which shows 90% of the originally authorized indebtedness, VEB 56.3 billion out of VEB 62.9 billion had been used by July 13th. More in Spanish: (El Universal, 07-20-2012; http://www.eluniversal.com/economia/120720/gobierno-ha-colocado-90-de-la-deuda-prevista-para-este-ano)

Non-oil exports hit 60-year low

Non-oil private exports this year will end at a record low, according to Francisco Mendoza, a former president of the Venezuelan Association of Exporters (AVEX), who says: "This year we will go under the floor of less than U$D 1 billion in exports, which had not happened in Venezuela since the 1960's". The activity continues to decline due to serious obstacles faced by Venezuelan domestic manufacturers. "The outlook is pretty gloomy; competitiveness is becoming increasingly complex due to recently enacted laws, the situation (of delays) in ports, and the shortage of foreign exchange." (El Universal, 07-18-2012; http://www.eluniversal.com/economia/120718/venezuelan-non-oil-exports-hit-60-year-low)

Private investment-to-GDP-ratio may be boosted to 20%

Jorge Botti, President of the Federation of Trade and Industry Chambers (FEDECÁMARAS), says it is possible to raise the private investment-to-GDP-ratio to 20%. He says that since the 1970's private investment in Venezuela has fallen steadily. "Private investment in Peru and Colombia exceeds 20%. Under similar circumstances, we could raise the production capacity of industries," Botti said during the 68th General Assembly of Fedecámaras. (El Universal, 07-18-2012; http://www.eluniversal.com/economia/120717/businesspeople-private-investment-to-gdp-ratio-may-be-boosted-to-20)

Venezuela has the least transparent budget in Latin America, according to the Latin American Index for Budgetary Transparency (ILTP). Costa Rica, Ecuador and Mexico have the most transparent budgets in the region. More in Spanish: (Notitarde, 07-20-2012; http://www.notitarde.com/notitarde/plantillas/notitarde/inota.aspx?idart=1699736&idcat=9845&tipo=2)

Commodities

PDVSA, CHEVRON reach U$D 2 billion financing deal

State oil company PDVSA says it has reached an agreement with CHEVRON to secure U$D 2 billion in financing to boost oil production at PETROBOSCAN, a joint venture between the two companies. Since the end of 2010, the Energy Ministry has been pressuring some 20 joint ventures between PDVSA and foreign energy partners to find extra funding to raise output. The socialist administration of President Hugo Chavez has threatened to cancel the ventures' permits if they fail to hike production. PDVSA said CHEVRON would provide the funds to PETROBOSCAN at a rate of Libor plus 4.5%, and the last payment would be made in 2025. The agreement includes preliminary accords to make outstanding payments to PETROBOSCAN, PDVSA said. (Reuters, http://www.reuters.com/article/2012/07/18/us-venezuela-chevron-idUSBRE86H1MT20120718; The Washington Post, http://www.washingtonpost.com/business/industries/venezuelas-oil-company-says-chevron-corp-plans-to-invest-2-billion-in-boscan-oil-field/2012/07/18/gJQAD2wduW_story.html; Fox Business, http://www.foxbusiness.com/news/2012/07/18/venezuela-pdvsa-terms-finalized-with-chevron-for-2-billion-financing-deal/)

RUSORO adds another action against Venezuela at the ICSID

Russian-Canadian mining company RUSORO has filed a request for arbitration against the Bolivarian Republic of Venezuela following the nationalization of RUSORO's assets in the country, a move that has resulted in significant loss, according to the firm. The company commenced the arbitration at the International Centre for Settlement of Investment Disputes (ICSID), despite Venezuela's withdrawal from the organization, where the country faces a dozen lawsuits for up to U$D 45 billion. According to workers at RUSORO, production there has dropped since the government´s takeover. (El Universal, 07-18-2012; http://www.eluniversal.com/economia/120718/rusoro-adds-another-action-against-venezuela-at-the-icsid; Reuters; http://www.reuters.com/article/2012/07/18/venezuela-rusoro-idUSL2E8II1SA20120718; and more in Spanish: El Universal, 07-20-2012; http://www.eluniversal.com/economia/120720/tras-nacionalizacion-decayo-produccion-aurifera-de-rusoro)

The coke is still there: According to Víctor Hernández, from Anzoátegui’s Engineers’ Association (CIANZ), coordination to withdraw the coke from the Jose premises has been a total “disaster.” Displaying evidence, he said that in May 2012, PDVSA ended the contracts signed with Cuferca and TYC to handle and export the residues from the yards of the José Antonio Anzoátegui Industrial Complex and reassigned it to Energy Coal, which has also done nothing. (Veneconomy, 07-18-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=31346&idc=4)

PDVSA sells more to Latin America than the U.S.

The yearly statistical report by the Organization of Petroleum Exporting Countries (OPEC) released this week said that Venezuela's oil exports to Latin America exceeded shipments to the United States last year. The data provided by OPEC, based on information provided by the Ministry of Petroleum and Mining indicate that exports in 2011 were on average 2.3 million barrels per day and the volume (just over 1 million barrels per day) were sent to Latin American countries. More in Spanish: (El Nacional, 07-19-2012; http://www.el-nacional.com/)

Agricultural product imports rose 105.4% in 5 months for a total over U$D 2.14 billion, according to official statistics from the Institute for National Statistics. This is double the amount imported for these products during the same time frame last year. Rice imports rose by 435.8%, for 423,493.67 tons. More in Spanish: (El Nacional, 07-20-2012; http://www.el-nacional.com/)

Logistics & Transport

Minister Elsa Gutierrez announced a new dock at the Port of Guanta

The Minister for Air and Water Transport, and President of National Port Authority (BOLIPUERTOS), CA. Elsa Gutierrez, announced the construction of a seventh pier at the marine terminal, for PDVSA machinery. She said:

"The pier will be 34 meters wide and will work primarily to facilitate the import of machinery for the growth of the oil industry in the east". More in Spanish: (Bolipuertos, 07-19-2012, http://www.bolipuertos.gob.ve/noticia.aspx?id=5712)

Politics

Chávez leads most polls, PREDIGMÁTICA gives Capriles a 4% lead

Two and a half months into the presidential elections, incumbent candidate Hugo Chávez leads the polls, according to Datanálisis (15.3 points ahead) and Hinterlaces (17 points ahead) but his health evolution, the elevated number of undecided voters or opposition candidate Henrique Capriles’ campaign could alter this situation, according to analysts. The PREDIGMATICA polling firm says results of a more recent June study of 1,600 polled reflects support for Henrique Capriles at 47.7% and President Chavez at 43.7%. (Veneconomy, 07-18-2012; http://www.veneconomy.com/site/index.asp?ids=44&idt=31360&idc=1 and more in Spanish: Últimas Noticias, 07-20-2012; http://www.ultimasnoticias.com.ve/noticias/tuvoto/noticiaselectorales/predigmatica-pone-a-capriles-radonski-4-puntos-por.aspx)

Venezuela condemns Syria bombing, warns against intervention

Venezuela condemned the bombing in Damascus that killed the Syrian defense minister and President Bashar al-Assad's brother-in-law, urging foreign powers against military intervention. Socialist President Hugo Chavez has helped undermine sanctions against Syria by shipping diesel fuel to the embattled country, and has described the conflict there as an international conspiracy backed by Western powers. (Reuters, 07-18-2012; http://www.reuters.com/article/2012/07/19/syria-bombing-venezuela-idUSL2E8IJ0YB20120719)