Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Showing posts with label Petrobras. Show all posts
Showing posts with label Petrobras. Show all posts

Thursday, August 6, 2015

August 06, 2015


International Trade

 

Venezuela is working with China on a development plan for 2025 by strengthening productive chains, claims Planning and Knowledge Minister Ricardo Menéndez. Reported representatives from 11 Chinese companies are seeking for business opportunities in Venezuela, as part of said plan to reactivate domestic production and are holding meetings with public officials this week. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44919&idc=3; El Universal, http://www.eluniversal.com/economia/150804/venezuelan-govt-strikes-up-alliances-with-11-chinese-companies)

 

 
Oil & Energy

 

PDVSA has received at least six offers from foreign oil firms

Royal Dutch SHELL, STATOIL, CHEVRON, Reliance Industries, ESSAR Oil and PETROCHINA are interested in supplying light crude oils to dilute its extra-heavy crude oil, sources from the companies involved told Reuters. Last month, PDVSA asked oil suppliers to present offers to sell it some 70,000 bpd of light crude oil, via up to five year long contracts. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44927&idc=4)

 

 

Economy & Finance

 

Conindustria suggests securitizing Venezuela's debt to foreign providers

The Venezuelan Confederation of Industries (CONINDUSTRIA) proposed on Tuesday "five actions" that could help substituting imports, apropos the government's initiative to set up a High Level Committee for the Substitution of Imports. Juan Pablo Olalquiaga, President of CONINDUSTRIA, pointed out that that initiative should have concrete results. In that regard, he suggested some changes in public policies aimed at "increasing domestic production" in the short term, including securitizing debt incurred with international providers, which roughly amounts to some US$ 9.92 billion. (El Universal, http://www.eluniversal.com/economia/150805/conindustria-suggests-securitizing-venezuelas-debt-to-foreign-provider; http://www.eluniversal.com/economia/150804/conindustria-proposes-five-actions-to-substitute-imports-in-venezuela)

 

Empresas Polar’s workers will be meeting with government authorities in Caracas to determine on a new location for the distribution center that was expropriated in La Yaguara. They will also go over the situation at the brewery plants and their conditions in view of the shut-down and loss of benefits due to production drops. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=44922&idc=3)

 

Headhunters woo low-cost Venezuela talent amid crisis

Headhunters across Latin America are tapping Venezuela for low-cost professionals as a deepening economic crisis has left many skilled workers earning less money than taxi drivers and waiters. Highly-trained Venezuelans are seeking to escape a decaying socialist economy in which they often have to work second jobs and spend hours in line to buy basic goods such as milk or diapers. (Reuters, http://www.reuters.com/article/2015/08/05/us-venezuela-headhunters-idUSKCN0QA1X720150805)

 

 

Politics and International Affairs

 

STRATFOR: Russia, Venezuela hold anarchy at bay

Two countries stand out as high-risk targets for significant social unrest in the coming months. Not surprisingly, both are oil producers terrified at the sight of Brent crude falling below US$50 per barrel. The first is Venezuela, where even the most optimistic of government-manufactured statistics should give observers a feeling of deep foreboding. Venezuela burns through its oil reserves at a dizzying rate of roughly US$ 1 billion per month. Not only that, but the country is actually down to about US$ 16.9 billion in total reserves, with only a fraction of that amount — estimated at less than US$ 1 billion — held in liquid reserves. Given the country's heavy dependence on oil revenue, it hardly takes an expert statistician to see that Venezuela is in an untenable financial situation. The lack of foreign exchange to finance imports has led to severe food shortages. And the Dec. 6 legislative election only complicates matters, as an already hamstrung government is going to be all the more resistant to imposing structural economic reforms that are as unpopular among voters as they are necessary to the country's financial viability. Exacerbating Venezuela's economic difficulties is widespread corruption. Government-affiliated mafias with powerful military links rely on Venezuela's overvalued exchange rates and capital controls to profit from arbitrage. So far, Venezuelan President Nicolas Maduro has shown neither the inclination nor the ability to crack down on these corrosive elements. Nor is Maduro willing to take the politically precarious step of cutting fuel subsidies in the lead-up to an election where his party is already at risk of losing significant support. The threat of spontaneous unrest is still very much alive. On July 31, hundreds of people in San Felix, Bolivar state, angered by high food prices, shortages and a recent fivefold increase in local bus fares, started looting supermarkets. One of the rioters was killed in the melee.  We can expect the Venezuelan government to rely largely on the National Guard and the national police to put down such riots, followed by less disciplined colectivos should the situation warrant reinforcements. And should economic difficulties breed divisions within the government, a weaker government will be even less able to cleanly and effectively contain widespread social unrest. (STRATFOR, https://www.stratfor.com/geopolitical-diary/russia-venezuela-hold-anarchy-bay)

 

Venezuela is close to a humanitarian crisis

It has become usual in Venezuela for pregnant women to go to up to 5 hospitals before finding one able to take them in, amid a general collapse of the economy and public institutions nationwide. And the situation threatens to become much worse, according to NGO Crisis Group, which warns the nation is headed for a humanitarian crisis due to the implosion of the "chavista" economic model. One of the most alarming consequences is the sharp decay of medical care here.  FOREX restrictions are directly hitting health conditions since most medicines sold in Venezuela are either imported or have imported components. Human Rights Watch says "we seldom have seen as rapid a deterioration in access to medicine as we have in Venezuela, except for war zones". For thousands of Venezuelans suffering from cancer, AIDS or chronic disease such as diabetes or high blood pressure, lack of medication translates into a death sentence. Hunger also looms as a possibility after agriculture and agribusiness have been destroyed and the regime now lacks funds to continue importing food. More in Spanish: (El Nuevo Herald, http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article29988456.html#storylink=cpy)

 

Pulling Venezuela back from the brink

In just the past few weeks, President Obama has opened official ties with Cuba and clinched a nuclear deal with Iran. Now Venezuela, another longtime US adversary, might be next in line for a bit of reconciliation with Washington. Secretive negotiations between the two countries have picked up in recent months, perhaps reversing years of belligerency and estrangement. The talks have come none too soon. Venezuela’s economy is faltering fast, even more so than Greece’s, with mobs looting supermarkets, inflation reaching triple digits, and opposition figures like Leopoldo López being thrown in jail by President Nicolás Maduro. The country has experienced an average of 14 protests a day. A collapse of the Venezuelan economy or its government is in no one’s interest, especially its neighbors. The US has been rightly cautious in seeking rapprochement with the Maduro regime. It should not undercut the efforts of the country’s political opposition. It must welcome actions from others in Latin America. And it must first emphasize universal concerns, such as human rights violations and a humanitarian concern for the growing food crisis. But the most urgent step is for the regime to allow the international community to monitor the elections without hindrance. A credible vote would begin to restore confidence in the country while contested elections might worsen it. (The Christian Science Monitor, http://news.yahoo.com/pulling-venezuela-back-brink-204403840--politics.html)

 

Paintings of Chavez and Maduro burned as food seeking protesters attack Sinamaica municipality

Enraged inhabitants of Venezuela's Goajira peninsula on the northern border with Colombia, mostly populated by Wayuu tribes, attacked and burned the Sinamaica municipality during a protest over scarcity and food rationing. The area has endured weeks without receiving supplies, and the protest broke out when four lorries filled with food tried to go through the Colombian frontier. It was reported that during the protest, paintings of the late President Chavez and President Maduro were taken out and burned by the population. Pro government authorities promptly blamed Colombian smugglers for the event. More in Spanish: (El Nacional, http://www.el-nacional.com/regiones/Zulianos-quemaron-Chavez-Maduro-Sinamaica_0_677932300.html)

 

Regime uses military to control desperate food queues

Thousands of people who line up for many hours to receive food at subsidized prices - an average family needs 8 minimum salaries to pay for one food basket - are now being controlled by armed military officials, amid charged of brutality against those who protest and corruption by officers who privilege their friends and neighbors. More in Spanish:  (Correo del Caroní, http://www.correodelcaroni.com/index.php/cdad/item/35436-gobierno-recurre-a-militarizacion-de-las-colas-para-contener-el-desespero-por-la-grave-escasez)

 

Venezuela’s electoral "remix" 

The electoral subject is back on the table as December 6 nears, a date belatedly set by the National Electoral Council (CNE) on purpose for an election in which Venezuela’s two only political rivals will square off for a majority of seats in the Parliament. The Government and its public powers find themselves fine-tuning every little detail so they can tilt the balance in their favor when the time comes, knowing that popular support has never been weaker. Sixteen years of outdated policies that have proved a failure are felt in every corner of the country, while its populist speech doesn’t convince the staunchest supporters of chavismo anymore. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2393789&CategoryId=10717)

 

Foreign Ministry here rejects U.S. call to Venezuela to scrap ban on opposition political candidates

The United States has called on Venezuela to reverse a ban on opposition members from holding office and participating in the Dec. 6 parliamentary elections. Washington made the request after opposition leader Maria Machado said she had tried to register as a candidate but her application was rejected. The State Department said in a statement that the decisions by Venezuelan electoral officials "clearly have the intention of complicating the ability of the opposition" to contest the poll and to limit the field of candidates. Venezuela's Foreign Ministry immediately issued a statement rejecting the call and asked the US to respect international law "in order to continue friendly talks that lead to normalizing bilateral relations". (Reuters, http://www.reuters.com/article/2015/08/04/us-usa-venezuela-idUSKCN0Q92CJ20150804; El Universal, http://www.eluniversal.com/nacional-y-politica/150805/venezuelan-foreign-office-rejects-us-statement-on-disqualifications; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/150805/cancilleria-rechazo-declaraciones-de-eeuu-sobre-inhabilitaciones)

 

Brazilian corruption boss had business dealings with Chávez, Maduro

José Dirceu, who is at the center of the PETROBRAS corruption scandal that is shaking the base of Brazil's governing Workers Party, spoke on behalf of former President Luiz Inácio “Lula” da Silva in a number of mystery projects that involved the Brazilian leader, the late Hugo Chavez and Cuba's Castro brothers, according to documents published by Miami's El Nuevo Herald include reports by Maximilian Arbeláez, then Venezuelan ambassador to Brazil, detailing meetings by Lula and Dirceu meeting with Venezuelan officials on behalf of Brazilian businessmen. In one of them, written by Arbeláez himself, Lula himself asked the ambassador directly to meet with his own lawyer and with "a businessman of his entire trust" who wanted to import iron rods and petroleum coke from Venezuela. Dirceu travelled to Venezuela several times and met with Chavez and then Foreign Minister Maduro, as a Lula representative. Dirceu, Lula's chief cabinet chief from 2003 to 2005, was recently arrested at his home in Brasilia where he was under house arrest on an 11 year sentence for taking part in a mass vote buyout in the Brazilian Congress. He is being accused of being the mastermind of the PETROBRAS corruption network. More in Spanish: (El Nuevo Herald, http://www.elnuevoherald.com/noticias/mundo/america-latina/venezuela-es/article30180861.html#storylink=cpy)

 

The Carter Center is pulling out of Venezuela

The Carter Center has decided to pull out of Venezuela in order to "focus limited resources on other countries that have sought it's support". It will continue monitoring current elections from its Atlanta offices after 13 years of working within the country. Center Director Jennifer McCoy left the organization earlier this year to become director of the Global Studies Institute at the University of Georgia. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150805/centro-carter-se-retira-de-venezuela)

 

 
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.

Friday, May 23, 2014

May 23, 2014

Oil & Energy

PDVSA will receive U$D 2 billion in 3 additional credit lines from service companies
Petroleos de Venezuela, S.A. (PDVSA) has received new credit lines for a total of U$D 2 billion from SCHLUMBERGER, WEATHERFORD and HALLIBURTON, bringing total outstanding loans to U$D 13 billion since 2012. PDVSA has signed loans for $11 billion with seven oil companies (CNPC, CHEVRON, ENI, GAZPROM, REPSOL, PERENCO and SUELOPETROL) to increase oil production. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=39422&idc=4;
                                                                                                                                                                     
Ramírez says agreement with REPSOL and ENI has been reached
Rafael Ramírez, Economic Affairs Vice President and Oil Minister, says an agreement has been reached with Spain's REPSOL and Italy's ENI to exploit condensed oil in the Perla 3X well in Northeast Venezuela. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/petroleo/gas/venezuela-firmara-acuerdo-con-repsol-y-eni-el-4-de.aspx#ixzz32RPG4rhj)

Venezuela plans first shale gas exploration project
Venezuela plans to begin its first shale gas exploration campaign in western Lake Maracaibo in a joint venture with Brazil's state-run PETROBRAS, according to Venezuela's energy minister. The PETROWAYU joint venture is to run the project. According to PDVSA, it has a 60% stake in the company, while PETROBRAS has 36% and U.S.-based Williams has the remaining 4%. The minister did not say when exploration would start, nor how much PDVSA and its partners would likely spend. (Reuters, http://www.reuters.com/article/2014/05/21/venezuela-shalegas-idUSL1N0O71SK20140521; AVN, http://www.avn.info.ve/contenido/pdvsa-announced-agreement-exploit-major-gas-field-country; http://www.avn.info.ve/contenido/pdvsa-explore-unconventional-gas-maracaibo-lake)


Commodities

Gold miner HIGHBURY files new U$D 633 million suit against Venezuela
Gold and diamond miner HIGHBURY International has filed a new suit against Venezuela before the World Bank’s arbitration forum, the International Center for the Settlement of Investment Disputes (ICSID), seeking U$D 633 million for the loss of its mining concessions Alfa and Delta, near the Caroní River in the mineral rich area of the southeastern Venezuela state of Bolívar.  Venezuela now has 28 cases pending against it – the most of any nation in the world. Other companies with pending ICSID arbitrations against Venezuela include mining and smelting companies ANGLOAMERICAN, Gold Reserve Inc., RUSORO Mining Ltd., CRYSTALLEX International Corporation, and TENARIS SA; food industry companies GRUMA, POLAR, LONGREEF, VESTEY, and OWENS-ILLINOIS Inc.; and oil industry companies Tidewater Inc., Williams Cos. Inc., Koch Industries Inc., ConocoPhillips, and ExxonMobil. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2250018&CategoryId=10717)


Economy & Finance

Government spending is 65% higher than 2013
Official data from the Finance Ministry shows the government has disbursed VEB 227.6 billion during the first 4 months of 2014, a 65% increase from the same period in 2013, despite promises that fiscal balance would be restored. Salary and pension increases, as well as greater government spending have caused the increase. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140523/65-subio-gasto-del-gobierno-central-con-respecto-a-2013)

Pro-government legislator says U$D 20 billion went to phantom companies in 2011-13
Ricardo Sanguino, a pro government legislator who is part of the Presidential Commission to verify FOREX Allocations says a report on irregularities within FOREX allocations from 2011 to 2013 will be presented by mid June. He said preliminary results show some U$D 20 billion went to phantom companies that did not import what they said they would. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140521/sanguino-afirma-que-20-millardos-fueron-a-empresas-de-maletin; AVN; http://www.avn.info.ve/contenido/comisi%C3%B3n-que-investiga-asignaciones-divisas-aspira-entregar-informe-mediados-junio)

Minimum wages up in the region, except for Venezuela
In a joint report, the Economic Commission for Latin America and the Caribbean (ECLAC) and the International Labor Organization (ILO) pointed out that the minimum wage in the region recorded a real growth of 2.2% in 2013, except for Venezuela. The report outlined that in Venezuela the minimum wage was undermined by growing inflation, which hit 56.2% in 2013. (El Universal, http://www.eluniversal.com/economia/140522/minimum-wages-up-in-the-region-except-for-venezuela)

Regime prepares road show in NY, London
The government is preparing a road show in New York and London in an attempt to better communication with investment funds holding Venezuelan bonds or likely to buy new securities in the short and medium term. It is hoping to build links with international financial markets at a time when the country faces a serious gap between foreign currency demand and supply. (El Universal, http://www.eluniversal.com/economia/140522/venezuelan-govt-prepares-to-hold-road-show-in-ny-london)

The economy has worsened in the last 90 days says FEDECÁMARAS Chief Jorge Roig. He explains that despite talks on economic affairs, there is no economic recovery because the same obstacles persist: Price controls, inspections and bureaucracy, labor laws and the FOREX controls. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=39416&idc=2)


Politics

Mediators leave as standoff continues, US Congress seeks sanctions on human rights violators. A South American effort to end a standoff in talks between Venezuela's government and opposition appeared to have stalled, while legislation in the U.S. Congress to punish Venezuelan officials for human rights abuses took a step forward. The foreign ministers of Colombia, Brazil and Ecuador left Caracas after a two-day visit without persuading opponents of President Nicolas Maduro to return to talks aimed at easing the country's political crisis. In a statement, the diplomats urged both sides to reflect on the next steps and decide on the date for another meeting in the near future. Opposition leaders pulled out of month-old talks last week to protest mass arrests at anti-government protests. As a condition for returning to negotiations, they are demanding progress on their proposals, including an amnesty for jailed activists and a non-partisan commission to investigate the 42 deaths tied to anti-government protests that began in February. As a breakdown in the talks looks more likely, a bipartisan effort in Washington to impose targeted sanctions on Venezuela advanced in Congress. By a vote of 16-2, the Senate Foreign Relations Committee approved a bill that would direct the Obama administration to impose a visa ban and freeze the assets of Venezuelan officials who committed human rights abuses during the recent wave of unrest. A similar bill cleared a House committee earlier this month. (The New York Times, http://www.nytimes.com/aponline/2014/05/20/world/americas/ap-lt-venezuela-crisis-talks.html?ref=americas&utm_source=Sailthru&utm_medium=email&utm_term=%2AMorning%20Brief&utm_campaign=2014_MorningBrief5.21.14&_r=0)

Kerry warns of possible sanctions against Venezuela. Secretary of State John F. Kerry has warned that patience with Venezuela’s government is wearing thin, and raised the possibility of sanctions against the country if the process of political reconciliation does not move forward. “Our hope is that sanctions will not be necessary. Our hope is that we can move in the direction of reconciliation and a political path forward,” Kerry said during a news conference. But Congress is discussing the sanctions, Kerry said, and it is up to Maduro and others to “make the decisions that will make it unnecessary” for sanctions to be imposed. Kerry said that “regrettably there has just been a total failure by the government of Venezuela” to act in good faith. “What is important for the Venezuelan government now is to honor the dialogue process, and to restore the civil liberties of opposition leaders who have been unjustly imprisoned,” he said. Maduro this week described a vote by the Senate Foreign Relations Committee to impose a visa ban on and freeze assets of certain Venezuelan officials as “detestable.” (The Washington Post, http://www.washingtonpost.com/world/the_americas/kerry-warns-of-possible-sanctions-against-venezuela/2014/05/21/f8928910-e123-11e3-810f-764fe508b82d_story.html; Reuters, http://www.reuters.com/article/2014/05/21/usa-venezuela-idUSL1N0O71XW20140521; El Universal, http://www.eluniversal.com/nacional-y-politica/140521/kerry-sees-growing-impatience-over-venezuela-in-the-region; Bloomberg, http://www.bloomberg.com/news/2014-05-21/kerry-says-u-s-seeks-to-avoid-sanctions-on-venezuela.html; Fox News, http://www.foxnews.com/world/2014/05/21/us-diplomat-cites-total-failure-by-caracas-to-ease-unrest-respect-rights-and/; http://www.foxnews.com/politics/2014/05/21/kerry-off-to-mexico-for-talks-on-venezuelan-crisis/)

Opposition believes splits within the government stall agreements
Ramón Guillermo Aveledo, Secretary General of the opposition Democratic Unity Conference (MUD) says talks are useful and necessary, but that as long as the government shows no positive action the talks will remain frozen. "There have been no new actions that allow us to change our position, as we would like, and we hope promises turn into facts". The government is reported to be analyzing the release of all detained students and setting up a "plural" Truth Commission, but that internal divisions are holding up decisions. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140521/unidad-cree-que-division-en-el-oficialismo-evita-acuerdos)

Maduro claims: "Talks will continue, with or without the MUD"
President Nicolás Maduro says his regime will continue holding peace talks with or without representatives of the Democratic Unity Conference (MUD), and he will not be "blackmailed by anyone". He did not say whom he would continue talking to. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140521/maduro-el-dialogo-va-a-seguir-con-mud-o-sin-mud)



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.

Tuesday, March 25, 2014

March 25, 2014

International Trade

Inbound cargo at Puerto Cabello:
  • 14.250 tons of wheat from Terra World Trade, Texas, USA for Molinos Carabobo
  • 10.000 tons of degummed crude oil soy bean from Rosario, Argentina for CARGILL de Venezuela.
  • 555 tons of frozen boneless beef from Brazil, in 17 containers, for CASA
  • 24,000 tons of soy, from Georgia, USA, for Agrolucha, Granja Alconca and Avícola La Guásima.
  • 15,998 tons of paper products, ceramics, aerosol and plastics, from Kingston, Jamaica, for several private and public companies.
  • 50 tons of fructose molasses, also from Kingston, for Productora y Distribuidora Venezuela.
Exports:
  • 224 tons of coaxial electric cable from Transworld 2000 for J.D Senese & Associates, New Orleans, USA
  • 623 tons of bovine and equine hides and skins for Cartagena, Colombia.
Thirteen ships remain at bay, including 4 grain ships carrying 117,000 tons of basic foods - including 20,000 tons of corn, 77,000 tons of soy, and 20,000 tons of rice; another vessel is carrying 11,500 tons of barley.More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Llegaron-al-puerto-mas-de-14-mil-toneladas-de-trigo-2128321/2014/03/23/316770; http://www.notitarde.com/La-Costa/Llegaron-555-toneladas-de-carne-desde-Brasil-2129429/2014/03/24/316990; and El Carabobeño, http://www.el-carabobeno.com/impreso/articulo/97317/117-mil-toneladas-de-alimentos-primarios-a-granel-en-espera-de-muelles)

Imports from PETROCARIBE nations grew 394% over five years
Venezuela's political and economic alliance with 17 partners in PETROCARIBE has meant a significant dependence on Venezuelan oil by Caribbean and Central American countries within the group, as well growing exports from these nations to Venezuela. Data released by the National Statistics Institute (INE) shows that over the past 5 years, imports from PETROCARIBE nations increased 394%, from U$D 95.45 million in 2008 to U$D 583.2 million in 2013, up 511% in food purchases. Increased imports are mostly food items from countries like Nicaragua, Guatemala and the Dominican Republic, including livestock and animal products; vegetal products, animal fat and oil; as well as food industry products. (El Universal, http://www.eluniversal.com/economia/140324/imports-from-petrocaribe-grow-394-over-five-years)

Oil & Energy

Weatherford is cutting back Venezuela operations
Oilfield services provider Weatherford International Ltd says it is reducing operations in Venezuela. The Swiss-based company, which competes with Schlumberger and Halliburton, said the "serious liquidity situation in Venezuela" is causing it to pare back services it provides here, according to CEO Bernard Duroc-Danner. Weatherford provides drilling and exploration services to the national oil company Petróleos de Venezuela, S.A. (PDVSA), but Venezuela's currency devaluation and economic instability have caused payment delays, according to Weatherford's annual filing with the U.S. Security and Exchange Commission. (Reuters, http://www.reuters.com/article/2014/03/24/weatherford-howardweil-idUSL1N0ML16U20140324)

Venezuela oil price continues to fall
Venezuela's weekly oil basket stayed below the country's desired U$D 100 per barrel, and continued to slip in the wake of the announced US plans to release oil from the Strategic Petroleum Reserve to cool off world oil prices that were rising over concerns caused by the Russian invasion of Ukraine. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending March 21 was U$D 95.01, down U$D 0.64 from the previous week's U$D 95.65. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1820090&CategoryId=10717)

PETROBRAS relinquishes compensation from oil giant PDVSA
Brazilian newspaper "O Estado de Sao Paulo reports Brazil's national oil company PETROBRAS will not claim any millionaire compensation from Venezuela's oil giant PDVSA arising out of the Abreu e Lima refinery joint venture. According to the newspaper, the original deal included sanctions in the event PDVSA failed to provide 40% of construction costs, yet this would only be effective if the parties had signed a final agreement, which never happened. (El Universal, http://www.eluniversal.com/economia/140324/petrobras-relinquishes-compensation-from-oil-giant-pdvsa)

Economy & Finance

Venezuela new FOREX system sells dollars at 8 times official price
The cash-strapped Maduro regime allowed the Bolivar to weaken 89% on an additional currency market after loosening controls, a move to increase dollar supplies needed to alleviate a record shortage of imports including medicine, food and toilet paper. The Bolivar was sold for 55 Bolivars per dollar, eight times the official price, in the first transaction on the new trading platform, according to three traders including Paul Leiva, from Banctrust & Co. in Caracas. Private bank operators said the price for dollars on the inaugural day of the SICAD 2 system varied between 50 and 55 bolivars, with demand high but offers thin. The government’s official exchange rate used to import medicine and food is 6.3 bolivars per dollar and a second dollar auction system last sold greenbacks at 10.8 bolivars. “This is a devaluation any way you look at it,” says Tamara Herrera, chief economist at financial research firm SINTESIS FINANCIERA. “The government is trying to bring down the black market rate with this new market, with the consensus that the dollar should be trading for about 50 bolivars.” The government is counting on the new exchange mechanism to alleviate pressure on a black market Venezuelans turn to when they can’t purchase hard currency from the government at the official 6.3 bolivars per dollar rate. "Without doubt, it's the biggest monetary adjustment in Venezuela's history," said Henkel Garcia, of private think-tank ECONOMETRICA. Opposition leader Gov. Henrique Capriles said the so-called SICAD 2 exchange system is akin to a massive devaluation and will eat away at the savings of poor families. (Bloomberg, http://www.bloomberg.com/news/2014-03-24/venezuela-to-start-trading-dollars-for-first-time-in-four-years.html; The Washington Post, http://www.washingtonpost.com/business/venezuela-unveils-new-currency-market/2014/03/24/dcb848e4-b390-11e3-bab2-b9602293021d_story.html; Fox News, http://www.foxnews.com/world/2014/03/24/venezuela-unveils-new-currency-market-opponents-call-it-devaluation/; Reuters, http://www.reuters.com/article/2014/03/24/venezuela-currency-idUSL1N0ML0QB20140324; http://www.reuters.com/article/2014/03/24/venezuela-currency-rates-idUSL1N0ML0OY20140324; El Universal, http://www.eluniversal.com/economia/140324/capriles-mega-devaluation-is-a-hard-blow-on-venezuelans-income, and http://www.eluniversal.com/economia/140324/central-bank-of-venezuela-endorses-operations-in-sicad-2)

Politics

Venezuela death toll rises to 34 as troops and protesters clash
Three more have died from gunshot wounds during protests against socialist President Nicolas Maduro, pushing the death toll from almost two months of anti-government demonstrations to 34. Troops briefly clashed with a small group of protesters who attempted to block a highway in Caracas after thousands of opposition sympathizers marched to demand the release of students imprisoned during the unrest. (Reuters, http://www.reuters.com/article/2014/03/23/us-venezuela-protests-idUSBREA2L0LK20140323; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1820388&CategoryId=10718; The New York Times; More in Spanish: CNN, http://cnnespanol.cnn.com/2014/03/22/nueva-jornada-de-protestas-en-venezuela/?iref=allsearch)

Interior Minister: Military actions will be taken to stop street protests
Minister of the Interior, General Miguel Rodríguez Torres has announced "special military and public order operations aimed at eradicating street protests. Following "a meeting with high ranking military officers to once again launch our security plans. We are taking actions in those municipalities still seized by violence so we can restore law and order". Rodriguez Torres called on Táchira and Mérida residents in southwest Venezuela to condemn protests. (El Universal, http://www.eluniversal.com/nacional-y-politica/140324/minister-military-actions-will-be-taken-to-stop-street-protests)

Regime claims opposition lawmaker has lost seat
The head of Venezuela’s congress claims leading opposition politician Maria Corina Machado has lost her seat in the legislature and is no longer immune from prosecution for her alleged role fomenting violence in anti-government protests. Captain Diosdado Cabello says Machado violated the constitution by addressing the Organization of American States last week at the invitation of Panama, which ceded its seat at the Washington-based group so she could provide regional diplomats with a firsthand account of the unrest. President Nicolas Maduro referred to Machado as “ex-congresswoman” on Saturday, a few days after arresting two opposition mayors for allegedly conspiring with the U.S. to topple his 11-month old administration. Cabello made the announcement before complying with the five steps the Constitution set out for removing a legislator. He also said Machado would not be allowed to enter the Assembly, saying she "automatically" lost her seat, and said the charge of "treason" would be added against her. According to the Constitution the full Assembly must first remove Machado's parliamentary immunity; if and when that happens it is only the Supreme Court that can decide whether she is divested of her legislative role. Machado responded in a Twitter message Monday, writing, “Landing in Lima. Mr. Cabello: I am a congresswoman as long the people of Venezuela want me to be.” According to the Constitution the full Assembly must first remove Machado's parliamentary immunity; if and when that happens it is only the Supreme Court - not the President of the National Assembly - that can decide whether she is divested of her legislative role. (The Washington Post; and more in Spanish: El Nacional; http://www.el-nacional.com/; El Universal, http://www.eluniversal.com/nacional-y-politica/protestas-en-venezuela/140324/machado-volvera-lo-antes-posible-y-seguira-ejerciendo-como-diputada)

US Embassy in Caracas halts new visas
In a public announcement, the US Embassy in Caracas says that "as a result of the expulsion of several consular officials and Venezuelan government delays in issuing visas for incoming officers, the U.S. Embassy in Caracas does not have sufficient consular staff at present to continue to schedule appointments for first-time tourist (B-1/B-2) visa applicants. Until further notice, we are able to offer such appointments only in emergency situations. If you already have an appointment, please appear at the appointed date and time, because it is unlikely under current staffing conditions that we will be able to re-schedule your interview in a timely manner." (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1825105&CategoryId=10717; More in Spanish: CNN, http://cnnespanol.cnn.com/2014/03/23/embajada-de-ee-uu-en-caracas-suspende-citas-para-visas-de-turista/?iref=allsearch; El Universal, http://www.eluniversal.com/nacional-y-politica/140324/us-embassy-decision-on-visa-termed-retaliation-by-parliament-speaker)

Kennedy Center condemns Venezuela government abuses
Kerry Kennedy, President of the Robert F. Kennedy Center for Justice and Human Rights (RFK Center), and Santiago A. Canton, Director of RFK Partners for Human Rights, condemn the ongoing violations against the freedom of expression and assembly in Venezuela. The RFK Center staff is monitoring the human rights situation in Venezuela and is deeply concerned about the deaths during protests, censorship and intimidation against members of the press, and arrests of students and opposition leaders. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1824992&CategoryId=10717)


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

Friday, September 27, 2013

September 27, 2013

Economics & Finance

Venezuela seeks help due to drop in reserves
President Maduro and his team went to China so seek financial assistance due to the drop in disposable international reserves, but Chinese authorities did not grant it. Disposable reserves have dropped to U$D 900 million in the last few weeks, which can only cover 6 days worth of imports. This is why the Maduro regime needs a credit that is not tied to infrastructure or agriculture projects, which is the case with the Chinese Fund and all other agreements signed with China. What the need is cash that can be used for imports. Maduro has said economic agreements entered into between Venezuela and China have been reached under the "best financial conditions possible in the market." He added that for five years China has financially supported Caracas with U$D 50 billion for the development of several projects in Venezuela. More in Spanish: (El Nacional; http://www.el-nacional.com/; and El Universal, 09-26-2013; http://www.eluniversal.com/economia/130926/maduro-venezuela-china-reach-agreements-under-the-best-terms; AVN, http://www.avn.info.ve/contenido/venezuela-become-latin-american-power-china039s-support)

15% GDP deficit is the center of the crisis
A sharp currency devaluation in the parallel market, accelerated inflation, and a scarcity of FOREX for the private sector. What is going on in Venezuela's economy? In the most recent Bank of America report, economist Francisco Rodríguez explains that the center of the crisis is that government expenses are above oil and tax income, and if you consider the entire public sector the deficit now stands at 15% of GDP. He adds that as the Central Bank prints currency it goes into buying FOREX and this pushes the parallel rate up and accelerates inflation since there is no increase in production. He says inflation equals what it would have been if the official rate were devalued to 10 Bolivares to the U$D. More in Spanish: (El Universal, http://www.eluniversal.com/economia/130927/el-deficit-del-gobierno-es-el-epicentro-de-la-crisis)

Bonds-for-chickens barter feeds debt selloff in Venezuela
Venezuela will pay for U$D 600 million of food imports including milk and live chicks from Colombia with dollar-denominated bonds, a sign the nation is running out of money to address the chronic shortages of basic goods fueling the world’s fastest inflation. Venezuela’s borrowing costs, which fell this month on speculation it would start a foreign-exchange system to boost the dollars needed to buy necessities from abroad and alleviate inflation of 45%, surged by the most in three weeks yesterday after El Nacional newspaper said China wouldn’t loan the cash intended to fund the change. (Bloomberg, 09-26-2013; http://www.bloomberg.com/news/2013-09-26/bonds-for-chickens-barter-feeds-debt-selloff-in-venezuela.html)

FOREX board ponders extraordinary allocation of foreign currency
Jose Khan, President of the Foreign Exchange Administration Commission (CADIVI), is saying an "extraordinary" allocation of US dollars could take place in the upcoming months in order to speed up imports. "Such decision is in the hands of the President of the Republic (Nicolás Maduro); there is a proposal and it is up to him to make the announcements," the official stated after a meeting with Vice-president Jorge Arreaza and other members of the Economy Higher Authority. The business sector claims that foreign currency shortage is the main obstacle to boost production and increase supply. (El Universal, 09-26-2013; http://www.eluniversal.com/economia/130926/forex-board-ponders-extraordinary-allocation-of-foreign-currency)

Unemployment rate hits 8% in August
Venezuela's unemployment rate in August 2013 stood at 8%, a small increase compared to August 2012, when unemployment hit 7.9%, according to the monthly labor report issued by the National Institute of Statistics (INE). In absolute terms, 1,133,674 people were unemployed in Venezuela last month, either because they lost their jobs, or because they were looking for their first job and did not found one. In addition, 58% of Venezuelans (7,629,436 people work in the formal sector of the economy, and 41.2% (5,342,390 people) work in the informal sector. (El Universal; http://www.eluniversal.com/economia/130925/venezuelas-unemployment-rate-hits-8-in-august)

Commodities

Private sector seems anxious to invest if PDVSA builds confidence
PDVSA is scrambling to increase production by enlisting the private sector and by meeting the tough new constraints on loans imposed by Beijing and major foreign oil companies. Several Venezuelans, on condition of not being quoted as they do business with PDVSA, related a consistent picture differing only in amount of detail: PDVSA has had to allow delivery of loans directly to large joint ventures (JVs) with major foreign oil companies, surrendering much operational management.  To guarantee timely payment and repatriation of profits, PDVSA delivers oil produced to a third party for marketing abroad, with proceeds put in offshore accounts with JV partners. (Americas Quarterly, 09-17-2013; http://www.americasquarterly.org/caracas-and-maracaibo-venezuela-private-sector-anxious-invest-pdvsa)

Brazil's PETROBRAS nixes refinery deal with Venezuela
Brazil's state-run oil giant PETROBRAS has scrapped a proposed partnership with its Venezuelan counterpart in the ongoing construction of a refinery in northeastern Brazil, the economic daily Valor reported Tuesday. As of November 1, the Abreu e Lima refinery will become a PETROBRAS business unit, ending bilateral talks which began more than six years ago between Brazil's ex-president Luiz Inacio Lula da Silva and his now deceased Venezuelan counterpart Hugo Chavez, Valor said. While awaiting a 40% participation by Venezuela's state-owned PVDSA oil company in the project, Brazil began building the refinery south of Recife in 2007. Venezuela's promised investments failed to materialize however. (Global Post; http://www.globalpost.com/dispatch/news/afp/130924/brazils-petrobras-nixes-refinery-deal-venezuela)

Ramirez announces meeting of Venezuela-India oil companies
Oil and Petroleum Minister Rafael Ramírez says directors of Venezuelan and Indian oil companies will gather in October in Caracas to discuss the possible participation of India in oil projects at the Orinoco Oil Belt (OOB). The official noted the meeting would be held on October 7-9 in Caracas and in the Orinoco Oil Belt. (El Universal, 09-26-2013; http://www.eluniversal.com/economia/130926/pdvsas-head-announces-meeting-of-venezuela-india-oil-companies)

Land grabs aggravate food scarcities
Ciro Labarca, President of the Cattlemen Association of Colón, in Zulia state, says land grabs make food production worse since invaders sell off whatever is there, and therefore diminish the production of milk, beef, plantains and other items. He explains that those who enter forcibly have taken over 4 highly productive farms in his area, for a total 6900 hectares. "Their modus operandi is to occupy, steal all there is , sell the cattle, and then resell lots at any price". More in Spanish: (Últimas Noticias; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/afirman-que-invasiones-agravaran-escasez-de-comida.aspx; El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/afirman-que-invasiones-agravaran-escasez-de-comida.aspx)

SIDOR remains paralyzed due to lack of agreement between management and the unions. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/industrias/acuerdo-entre-sutiss-y-sidor-en-punto-muerto.aspx#ixzz2g5tnOb51)

International Trade

Drop in reserves lead to paying for Colombia food with PDVSA bonds
The drop in disposable reserves is so great that the Maduro regime is getting ready to pay Colombian food exporters with U$D 600 million worth of PDVSA bonds. Colombian Finance Minister Mauricio Cárdenas has explained that "there is an ongoing dialogue between Venezuela's Nutrition Ministry and Colombian businessmen...and there is a pending last discussion on the way to pay, over how PDVSA bonds will operate, as this is the device initially suggested as payment." He added: "we are waiting for a reply to a proposal made by the Colombian government." More in Spanish: (El Universal, http://www.eluniversal.com/economia/130927/caida-de-reservas-obliga-a-pagar-alimentos-a-colombia-con-bonos)

Venezuela promises to cut red tape on imports of essential goods
Vice-President Jorge Arreaza said the government was cutting red tape for companies willing to import food, toiletries and mechanical parts.  Arreaza also announced that the government was giving importers easier access to foreign currency. (BBC; http://www.bbc.co.uk/news/world-latin-america-24276587)

Logistics & Transport

Puerto Cabello's port has been overwhelmed due to deficit in ground transportation
Over 40 vessels, some of them bearing food and live cattle, have collapsed the most important commercial port in Venezuela due to a chain of events made worse by bureaucracy. The Puerto Cabello maritime terminal in Central Venezuela has a deficit in land transportation which makes it difficult to move 332 tons of backed up cargo, and ships continue to arrive with grain coming out of the harvest season. Tarek Bahsas, President of the Central Venezuela Transportation Chamber, says there is a deficit of some 2000 cargo vehicles, and that some 10% of the fleet is paralyzed due to a lack of spare parts. Offloading is slow and takes an average 8 to 15 days. Delays are extremely costly to the government as each additional day costs between U$D 10-25,000, depending on the type of cargo. Container cargo arrivals have dropped 30-35% from 2012 due to delays in FOREX allocation and other bureaucratic snags. National Assembly member Neidy Rosal called on the government to declare an emergency at this port which received 80% of all imports. She also said there are 200, 000 tons sugar and corn backed up at the port due to the inefficiency of the port authority (BOLIPUERTOS). She says there are 45 ships in the port, 27 of them waiting at bay and 18 in the process of docking. Rosal says ships take an average 72 hours to dock, offload and go through customs at most Latin American ports, and it takes over a month to do so in Venezuela. More in Spanish: (Ultimas Noticias; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/puerto-cabello-esta-hasta-los--tequeteques-.aspx#ixzz2ftld3jXr)

Customs agents protest increase in cargo freightage
Antonio Marcano, President of the Puerto Cabello Customs Agents Association says there has been an exaggerated increase in freightage for transporting cargo. He says the increase is not 40%, which is what carriers claim, but approximately 130%. As an example he said the cost of transportation between Puerto Cabello and Valencia went up from 3,000 to 8,000 Bolivars. More in Spanish: (El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/77363/sector-aduanero-en-desacuerdo--con-incrementos-de-fletes-para-cargas; Notitarde; http://www.notitarde.com/La-Costa/Aumento-en-precio-de-fletes-es-exagerado/2013/09/26/267776)

Maiquetía Airport’s security unit has been intervened, says Internal Affairs Minister Major General Miguel Rodríguez Torres, after French authorities reported the major drug seizure at the Parisian airport. Rodríguez Torres said all the necessary changes will be made to make sure this does not occur again. (Veneconomy, 09-26-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=36499&idc=1)

Politics

Maduro cancels UN speech over alleged New York threats
President Nicolas Maduro canceled a trip to speak at the United National General Assembly’s annual gathering in New York because of what he called threats to his safety. One of the alleged plots could have caused violence in New York and the other could have affected his physical safety, Maduro said in a national address carried on television and radio yesterday. “The clan, the mafia of Otto Reich and Roger Noriega once again had planned a crazy, terrible provocation that can’t be described in any other way,” Maduro said, referring to two former U.S. officials he frequently accuses of plots against Venezuela. Maduro, who returned to Venezuela yesterday from a state visit to China, said he learned of the plots from “various sources” during a stopover in Vancouver and decided to return to Caracas. The State Department in March said claims by Venezuelan officials of U.S.-based plots to destabilize the South American country were “unsubstantiated and outlandish.” Foreign Minister Elías Jaua will speak instead and says "We have prepared a file outlining all ...obstacles and difficulties". (Bloomberg; http://www.bloomberg.com/news/2013-09-26/venezuela-s-maduro-cancels-un-speech-over-new-york-threats.html; El Universal, 09-26-2013; http://www.eluniversal.com/nacional-y-politica/130926/venezuelan-fm-to-report-on-obstacles-to-nicolas-maduros-trip; Latin American herald Tribune, 09-26-2013; http://www.laht.com/article.asp?ArticleId=1038518&CategoryId=10717; Reuters, http://www.reuters.com/article/2013/09/26/venezuela-airbus-idUSL2N0HM01B20130926; Bloomberg, http://www.bloomberg.com/news/2013-09-27/venezuela-s-maduro-said-to-drop-u-s-trip-over-cuban-jet.html; CNN, http://www.foxnews.com/world/2013/09/25/venezuela-president-maduro-claims-scrapped-trip-for-un-speech-after-plot/)

Maduro says he will sue AIRBUS
President Nicolás Maduro says he is planning legal action against AIRBUS, after his presidential plane developed a fault. "A serious fault appeared in one of the wings of the plane after five months at AIRBUS in France - my God!" said Maduro. "With the help of an international law firm, we're preparing legal actions against AIRBUS of France." (BBC: http://www.bbc.co.uk/news/world-latin-america-24276587

Beijing expands presence in Venezuelan Armed Forces
During recent meetings of China-Venezuela authorities and representatives, the Venezuelan Government entered into agreements under which China is to conduct a preliminary study for the construction of two general commands of the Bolivarian National Armed Forces (FANB) and furnish defense supplies to the Venezuelan military. (El Universal, 09-26-2013; http://www.eluniversal.com/nacional-y-politica/130926/beijing-expands-presence-in-venezuelan-armed-forces)

Venezuela, Russia sign electoral cooperation agreement
Tibisay Lucena, head of Venezuela's National Electoral Council, and Stanislav Vavilov, deputy chairman of Russia's Central Election Commission, have signed a bilateral cooperation protocol to exchange experiences relative to election affairs, particularly the alleged cutting-edge technology of the Venezuelan electoral system. (El Universal, 09-26-2013; http://www.eluniversal.com/nacional-y-politica/130926/venezuela-russia-sign-electoral-cooperation-agreement)

SPECIAL REPORT BY THE ECONOMIST: Maduro’s balancing act
It is a remarkable achievement. Amid the longest oil boom in history Venezuela has in many respects the worst-performing economy in the Americas, even though it has (it claims) the world’s biggest reserves of the black stuff and gets 94% of its export earnings from it. That is the legacy of 14 years of “21st-century socialism” under the late Hugo Chávez. Inflation is over 45% a year and supermarket shelves are bare of many staple goods. Even Nelson Merentes, the finance minister, concedes that Chávez’s revolution has yet to achieve economic success. But oil revenues of U$D 90 billion a year allow Nicolás Maduro, Chávez’s successor, the luxury of debating whether or not to change course. After contracting for several months, the economy grew in the second quarter. August inflation of 3% was half the monthly rate in May. But most economists do not believe a sustainable recovery has begun. The growth spurt appears to come from a fiscal splurge; the budget deficit is probably around 10% of GDP. A decade and a half of hyper-regulation, including ever more stringent price and exchange controls, has inflicted “terrible distortions” which will be hard to correct, even given the political will, says José Manuel Puente of IESA, a business school in Caracas. Foreign exchange has been largely allocated by government fiat since 2003. On the black market, the dollar commands more than six times the official exchange rate of 6.3 Bolivares. The government handed out more hard currency in the second quarter, which may have boosted growth. Merentes is more pragmatic than his predecessor Jorge Giordani, a Utopian Marxist. Following a 32% devaluation in January there is talk of another, or even of floating the Bolívar, though Giordani, who is now planning minister, opposes this. Opportunists, who delight in the profits to be made from graft and arbitrage, are happy to go along with him. The government’s main response to the scarcity of food and other staples, such as toilet paper and toothpaste, is a conspiracy theory. It blames an “economic war” waged by the United States and its “fascist” allies in the Venezuelan opposition. On September 20th it sent the national guard to occupy a big toilet-paper factory. Officials said the “temporary” takeover was needed to check for irregularities in production and distribution. Maduro claimed recently that in meetings at the White House earlier this year a plan was hatched to engineer the “total collapse” of the Venezuelan economy in October. A huge power cut affecting 18 (out of 24) states on September 3rd was due to sabotage, he said, as was a refinery explosion last year that killed 49 people. This month he set up an army-backed task-force to tackle the supposed plot, with the help of 0800-SABOTAJE, a hot-line. Maduro has produced not a scrap of evidence for these claims. The private sector wearily promised to collaborate. After all, said one business leader, “we already face 50 to 100 inspections a month of various kinds, so what is one more?” Economists debate how long Venezuela’s foreign-currency reserves can stand the current rate of attrition. They have plummeted by around a quarter this year, thanks in part to the fall in the price of gold, of which they largely consist. Liquid reserves amount to less than a month’s imports. There could be another U$D 20 billion or so in opaque off-budget funds, but up to a third of this may be earmarked for specific projects. This week Maduro was in Beijing, where he confirmed a fresh U$D 5 billion credit line (with strings attached) and U$D 15 billion in long-term oil and mining investments. Pragmatists argue that an adjustment is unavoidable. But Maduro faces local elections on December 8th which are widely viewed as a plebiscite on his rule. IVAD, a pollster, recently found that two-thirds of those it surveyed saw the economy as being in bad shape—and they blamed the government. Less than 4% believed the official line about “sabotage”. Maduro is caught in a trap of his predecessor’s making. If he sticks to the recipes of the radicals, the economy will only worsen. If he abandons them, he risks being labeled a reformist traitor and exacerbating faction-fighting within the regime. For the moment, he is moving cautiously in the direction of reform, even as he bangs the revolutionary drum and cracks down on dissent. For the president, who recently managed to fall off a bicycle on live television, it is a tricky balancing act. (The Economist, http://www.economist.com/news/americas/21586850-adjustment-and-reform-are-economically-essential-politically-impossible-maduros-balancing)


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.