November 07, 2017

International Trade

130 containers of food and medicine offloaded at Puerto Cabello

130 containers bearing food and medicine have been offloaded at Puerto Cabello from the vessel NIKOLAS, from Cartagena, in Colombia. The shipment includes 50 containers of semolina pasta, 20 of milk, 15 of black beans, 10 of red beans, and 3 of beef, as well as chemicals for the pharmaceutical industry. All cargo was consigned to state agency CUSPALCA. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=37758)

 

Oil & Energy

U.S. oil service firms face hit from Venezuela debt restructuring

U.S. oil service companies face hard decisions in the coming weeks on whether to continue working for Venezuela’s state-run oil company PDVSA, and the prospect of hundreds of millions of dollars in write-offs for overdue bills. The companies’ services are critical for Venezuela, which is struggling with a deep economic crisis marked by shortages of food and medicine. Oil accounts for over 90% of the nation’s export revenues. Socialist President Nicolas Maduro on Thursday said the country plans to potentially restructure some US$ 60 billion in bonds, widely seen as signaling a possible default that could affect other debt. New York-based investment firm Torino Capital estimates that, in addition to the bonds, Venezuela owes some US$ 26 billion to creditors and US$ 24 billion in commercial loans. (Reuters, http://www.reuters.com/article/venezuela-bonds-oilservices/rpt-u-s-oil-service-firms-face-hit-from-venezuela-debt-restructuring-idUSL1N1NC029)

 

Commerce Secretary appears to have links to PDVSA, despite U.S. sanctions

Despite U.S. sanctions on Venezuela’s bond transactions in international markets and other restrictions against top officials, the Paradise Papers show that Secretary of Commerce Wilbur Ross has an important stake in multi-million-dollar businesses related with state-oil giant Petroleos de Venezuela (PDVSA). Ross still retains interest in Navigator Holdings, a shipping company incorporated in the Marshall Islands in the South Pacific that maintains a close relationship with Russia’s energy company SIBUR, which is run by President Vladimir Putin’s son-in-law Kirill Shamalov and other individuals who have been sanctioned by the U.S. Navigator Holdings has received millions of dollars every year in earnings due to coastal shipping services provided to PDVSA, which is no small client of Navigator Holdings. The state-oil company contributed to 10.7% of Navigator’s earnings during fiscal year 2014 and 11.7% in fiscal year 2015. (Newsweek: http://www.newsweek.com/paradise-papers-show-links-between-trumps-secretary-commerce-and-venezuelas-703496)

 

Brother of former PDVSA head implicated in money laundering

Fidel Ramírez Carreño, brother of Rafael Ramírez Carreño, former President of PDVSA and Venezuela’s current Ambassador to the United Nations, has been listed among the beneficiaries of a money laundering scheme that provided fake consulting bills to send millions of dollars to the United States through a Doral, Florida, company called Miami Equipment & Export Co. The company is under investigation for selling Venezuela overpriced electric plants. A Venezuelan consortium called KCT Cumaná II International sent millions of dollars to the Doral company, which in turn transferred the funds to the private accounts of Venezuelan government officials and former officials. Luis and Luis Javier Díaz, owners of the Doral based firm, are being charged by the US government for operating an unlicensed bank and money laundering. The transactions, involving a PDVSA affiliate, took place while Ambassador Ramírez was the company’s CEO. His brother, Fidel, has held several government positions under the current regime. The money-laundering case is being filed by NY Southern District DA Joon A. Kim. More in Spanish: (Venepress: https://venepress.com/article/Hermano_de_Rafael_Ramirez_implicado_en_lavado_de_dinero_en_bancos_de_Nueva_York1509906927514

 

Venezuela oil basket hits 2 year high

The price Venezuela receives for its mix of medium and heavy oil rose for a third straight week, hitting its highest level since July of 2015.  According to figures released by the Ministry of Petroleum and Mining, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending November 3 rose to US$ 52.90, up US$ 2.16 from the previous week's US$ 50.74.  According to Venezuelan government figures, the average price in 2017 for Venezuela's mix of heavy and medium crude is now US$ 44.96. (Latin America Herald Tribune: http://www.laht.com/article.asp?ArticleId=2445811&CategoryId=10717)

 

Commodities

Pets on the menu as Venezuelans starve

In a country that once was rich, but where people are beginning to starve, few animals are safe. One morning in August at the metropolitan zoo in the torrid city of Maracaibo, workers were shocked to find the bones of a buffalo and some wild pigs inside their cages with clear signs of mutilation. Thieves allegedly stole the meat to eat what they could and sell the rest on the local market. In west Caracas, at the zoo of Caricuao district, the same sort of thing happened. Watchmen found the bones and offal of a black horse inside its enclosure. Apparently the perpetrators only took the edible parts of the animal. Venezuela’s increasingly authoritarian President Nicolas Maduro knows people are going hungry in his country, but he doesn’t know what to do about it. He keeps announcing new stopgap measures, but his words don’t carry a lot of nutritional weight. One of the latest programs was the so-called rabbit plan, a failed attempt to start rabbit farms all over the capital to substitute the proteins that come from unaffordable chicken and even more unaffordable beef. But, indeed, Venezuelans traditionally do see rabbits as pets and not food, so in areas where the government brought rabbits to start farms people started adopting them, giving them funny nicknames, and even embellishing their long ears with colorful bows. No question of eating the little dears after that. (Barron ’s: http://www.barrons.com/articles/its-your-default-not-mine-maduros-doublespeak-in-venezuela-1509721529)

 

Economy & Finance

Venezuela’s debt struggle poses more questions for investors

Analysts and investors say there are more questions than answers surrounding Venezuela’s plans to “refinance and restructure” its financial liabilities. Venezuela has about US$ 63 billion of foreign bonds outstanding, according to TORINO Capital, while the central bank estimates the country’s overall foreign debts at about US$90 billion. The real number say most analysts is much higher.  PDVSA, the state oil company, has sold US$ 28.6 billion of bonds and owes billions of dollars more in “promissory notes”. Venezuela owes another US$ 4billion or so to creditors that have taken it to the World Bank’s ICSID court. Stuart Culverhouse, chief economist at EXOTIX, thinks total public sector external debts range between US$100 billion and US$ 150 billion. Even this is uncertain. A refinancing usually implies something voluntary while a restructuring means forcibly “haircutting” creditors. Crucially, US sanctions imposed this summer in practice means both options are off the table. That Maduro named vice-president Tareck El Aissami as the lead negotiator with bondholders complicates matters further. Aissami has himself been sanctioned by the US as an alleged narcotics trafficker, which means US investment groups — the biggest holders of Venezuelan debt — cannot enter talks with him.  “The logistics seem almost impossible,” notes Siobhan Morden, head of Latin American fixed income strategy at Nomura. “The cynical interpretation is that the impossible deadline for negotiations conveniently shifts the blame of default to bondholders for their unwillingness (inability) to negotiate.” Worries that a default would trigger creditor lawsuits that could imperil its vital oil export revenues have spurred Venezuela to stay current much longer than many expected. It has managed this largely through largesse from China and Russia and pushing the hardship on to ordinary Venezuelans by sharply limiting imports. The country’s options appear limited. Venezuela is overdue on the interest payments on bonds that mature in 2019, 2024, 2025 and 2026, demonstrating the “significant fiscal strain” the country is facing, S&P notes. Foreign currency reserves are below US$ 10 billion — and much of this is in gold that will be hard to liquidate. China is wary of deepening its financial exposure to Venezuela while the country has already restructured some of its bilateral loans from Russia. The markets have reacted badly. The price of Venezuela’s bond maturing in August next year has tumbled from 72 cents on the dollar to about 34 cents this week, as investors panicked after the restructuring announcement and bank traders pulled out of the market, causing prices to “gap” lower.  S&P last week downgraded Venezuela’s rating to the second-lowest rung possible without actually being in default, arguing there was an even chance of a full default within the next three months. That dour view is reflected in the spiraling cost of Venezuelan credit-default swaps. The most likely outcome, investors and analysts say, is a protracted period of financial limbo, with a restructuring precluded by US sanctions and Venezuela facing a barrage of lawsuits that will tie it up for years to come. (Financial Times: https://www.ft.com/content/5f07e298-c326-11e7-a1d2-6786f39ef675; Bloomberg: https://www.bloomberg.com/news/articles/2017-11-06/gramercy-says-venezuela-debt-saga-will-be-worse-than-argentina-s; https://www.bloomberg.com/news/articles/2017-11-06/drug-kingpin-leading-venezuelan-bond-talks-has-a-violent-streak; Dealbreaker: https://dealbreaker.com/2017/11/heisenberg-venzuela-debt-drug-kingpin/; FORBES: https://www.forbes.com/sites/kenrapoza/2017/11/06/venezuela-default-day-looms/#30b56b1c7202; Oilprice: https://oilprice.com/Geopolitics/International/Is-A-Venezuelan-Default-Inevitable.html; Barron’s: http://www.barrons.com/articles/its-your-default-not-mine-maduros-doublespeak-in-venezuela-1509721529: Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2445698&CategoryId=10718; http://www.laht.com/article.asp?ArticleId=2445774&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-maduro-announces-restructuring_676546)

 

Venezuela bonds tumble, PDVSA bonds rise on partial default speculation

Venezuelan bond prices tumbled on Monday while those of state oil company PDVSA were mixed, affected by speculation that the government of President Nicolas Maduro could halt payments on sovereign bonds while maintaining payment on PDVSA debt. The country’s cash-strapped government invited creditors to a Nov. 13 meeting in Caracas on Friday, after announcing plans to potentially restructure some US$ 60 billion in bonds. Venezuela’s 2018N bond, the country’s next sovereign maturity, was down 31.125 points to a bid price of 34. Meanwhile, several PDVSA bonds were rising, with the benchmark 2022 rising 2.000 points to a bid price of 32. Investors remain confused by Maduro’s announcement that his government will continue to pay but that it will also refinance and restructure debts. The latter options are all but impossible given U.S. sanctions against Caracas that block U.S. citizens from acquiring newly-issued Venezuelan debt. Many believe Maduro’s announcement was meant to pave the way for default, because the country’s debt burden has left it desperately short of basic goods such as food and medicines - spurring malnutrition and preventable diseases. Next year service is close to US$ 9 billion, of which US$ 6 billion must be paid by Venezuela. Investors are still waiting for a US$ 1.2 billion payment on PDVSA’s 2017N bond that came due last week. Officials last week said they had initiated the payment. Such payments have been increasingly slowed, as banks worry about doing business with PDVSA following the U.S. sanctions. (Reuters: https://www.reuters.com/article/venezuela-bonds/venezuela-bonds-tumble-pdvsa-bonds-rise-on-partial-default-speculation-idUSL1N1NC0ZJ)

 

National Assembly accuses Maduro of sinking bond prices in secret buy-back plan

Venezuela’s Parliament today accused President Nicolás Maduro, of announcing a foreign debt restructuring to sink the price of Venezuelan bonds, to allow them to be repurchased by funds willing to offer better payment terms. The charge was made today by the congressman Rafael Guzmán, on behalf of the Finance Committee’s opposition majority. He accused the government for providing "inside information" to "friendly funds." (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2445824&CategoryId=10717)

 

OP-ED: A debt restructuring that’s really a giant money laundering operation

Nicolás Maduro has announced Venezuela couldn’t keep paying its debts, and needed to restructure.  But “restructuring” - a negotiated outcome agreed with bond holders — is totally impossible in current circumstances. Even if sanctions didn’t rule restructuring out, it’d still be unrealistic without major, sweeping policy reforms, which Maduro certainly isn’t promising. Without them, you’d end up having to offer 30% yields or some similarly high number. And even if Maduro did promise sweeping neoliberal policy reforms, restructuring would still not be feasible, because PDVSA bonds have no collective action clauses, so it’s practically impossible for the government to deal with holdout bondholders.  Long story short, this talk of “restructuring” is just noise. They can’t restructure. One way to see it is that this is about the political marketing of an already expected default: an attempt to soften public opinion ahead of the inevitable. But if so, why would you exempt the 2017N maturity due today? Why would you pay that bond even after you’ve announced default? One possibility is that this is all a bit of high-stakes market manipulation designed to send the price of all Venezuelan bonds plummeting. The CITGO-backed PDVSA 2020s could be a buyback target in such a scenario. Last week, trading in 2017Ns saw unprecedented volume. The kind of volume you’d expect if a few very rich, very well-connected people had reliable information that the 2017Ns were the last bond Maduro was planning to pay. That’s the kind of volume that could be interpreted as a massive money laundering operation, with tons of dirty money rushing in to buy-up a sure-thing bond. (Caracas Chronicles: https://www.caracaschronicles.com/2017/11/02/debt-restructuring-thats-really-default-thats-really-giant-money-laundering-operation/)

 

Standard & Poor's downgrades Venezuela's credit rating

Credit rating agency Standard & Poor's reported on Friday that it has downgraded Venezuela’s debt notes with an outlook of probable default after the announcement made by Venezuelan President Nicolás Maduro about restructuring and refinancing. The decision followed a similar step taken earlier on Friday by credit rating agency Fitch, AFP reported. Rating lowered from CCC- to CC. In other words, the agency considers Venezuela’s debt in foreign currency as it were in default, with some possibility of recovery. (El Universal, http://www.eluniversal.com/noticias/daily-news/standard-poors-downgrades-venezuelas-credit-rating_676554)

 

Venezuela bonds now yield a record 40 points over U.S. Treasuries

Venezuelan debt is teetering toward default with average prices near 30 cents on the dollar. As investors ponder an invite from the government to come to Caracas next week to discuss a restructuring (or renegotiation or refinancing, depending on which official is speaking), they now demand a record 40.8 percentage points of extra yield over U.S. Treasury bills to hold the country’s bonds. No one really expects those yields to pay out as Venezuela seeks debt relief, but they do give an idea as to just how distressed the securities have become. The spread implies that if the government were to issue new notes it would either have to pay a coupon near that figure or sell them at an extreme discount from the face price. In a normal sovereign restructuring, negotiations would probably lead to a haircut for bondholders around current prices. (Bloomberg, https://www.bloomberg.com/news/articles/2017-11-06/venezuela-bonds-now-yield-record-40-points-over-u-s-treasuries) 

 

Goldman Sachs asset arm faces large paper loss on Venezuelan bond

Goldman Sachs’ asset management division is likely to be nursing a multimillion-dollar paper loss on a controversial Venezuelan bond purchase it made this summer after the country abruptly announced that it was seeking to restructure its foreign debts. Ricardo Penfold, a senior portfolio manager at Goldman Sachs Asset Management, earlier this year swooped on a big slice of a bond issued by PDVSA, Venezuela’s state oil company, people familiar with the matter say. Mr. Penfold paid US$ 865 million for bonds with a face value of US$2.8 billion — a price of just under 31 cents on the dollar — reflecting the elevated risks of a default even at the time. While GSAM has since sold off chunks of the bond, it was still listed as the single biggest overall owner of the PDVSA bond maturing in 2022, with a face value holding of US$ 1.3 billion at the end of the third quarter. But with Thursday’s announcement that Venezuela would seek to restructure all its foreign bonds, the bond is now trading at 25 cents on the dollar, down from 29 cents at the start of last week. That would translate into a paper loss of US$ 54 million in just five days if GSAM has not reduced its stake since the end of the third quarter. “The opposition has already said they won’t honor that bond, so you’re taking a big risk trading those,” said Russ Dallen of Caracas Capital, an investment bank boutique that follows Venezuela. (Financial Times: https://www.ft.com/content/94a6cbc0-c101-11e7-b8a3-38a6e068f464)

 

Venezuela's debt restructuring is probably just a political gambit by Maduro, experts say

President Nicolas Maduro may be trying to shore up support for next year's presidential election with the announcement of a massive foreign debt restructuring. Last week, Maduro unveiled plans to restructure Venezuela's US$ 120 billion debt. The restructuring effort will be led by Vice President Tareck El Aissami, who will also start "the fight against the financial persecution of our country," Maduro said. But a successful debt restructuring seems unlikely now, given a series of sanctions imposed by the U.S. earlier this year. The announcement also raises concern that the oil-rich country could default on its debt. "There's a political angle to this," said Risa Grais-Targow, director of risk consultancy Eurasia Group's Latin America practice. "I think their eye is on the presidential election next year." By unveiling this restructuring, Maduro can score political points and help secure his place as the most powerful person in the country, said Reggie Thompson, Latin America analyst at STRATFOR, a geopolitical analysis platform. (CNBC: https://www.cnbc.com/2017/11/06/heres-the-real-endgame-for-nicolas-maduro-of-venezuela.html)

 

Maduro chooses food over bondholders as Venezuela goes hungry

With foreign reserves at a 15-year low after years of ruinous economic stewardship, Maduro is caught between satisfying creditors and voters who struggle to afford basics like beef, chicken and milk. When Maduro said last week that he would renegotiate the nation’s crushing $140 billion-plus debt, he chose butter over bonds. Obtaining fresh financing is a tall order, given the authoritarian government’s increasingly toxic reputation and U.S. sanctions that prohibit Americans from receiving new bonds as part of a restructuring. But rather than simply declaring default, Maduro has summoned creditors to Caracas on Nov. 13 to discuss new terms. By staving off a final reckoning, the nation can keep control of oil-producing assets, use its       US$ 9.7 billion in reserves to purchase goods from abroad -- and keep food and other social aid flowing. Through food distribution programs like the CLAPs, or Local Committees for Supply and Production, Maduro has tried to hold sway over Venezuela’s urban poor and countryside -- long considered the bedrock of the socialists’ support. Rather than sending scarce subsidized goods to supermarkets or state food stores, the government since last year has supplied food to loyal neighborhood groups, which distributes it directly to their neighbors to head off reselling and long lines. As Maduro and his allies promise to improve shaky services and increase deliveries, critics say the program only extorts a hungry electorate. The government says it shelled out almost US$ 72 billion to pay principal and interest on bonds and loans since Maduro took office four years ago, but after making a final payment last week, the president suggested such funds would be better spent in social programs. “It could have been spent in schools, clinics, housing, a prosperous economy,’’ he said. Luis Vicente Leon, head of DATANALISIS, said that whether bondholders turn up for the meeting, the government will lay blame on the U.S., which Maduro has described as indulging in “financial persecution.” (Bloomberg: https://www.bloomberg.com/news/articles/2017-11-07/maduro-chooses-food-over-bondholders-as-venezuela-goes-hungry)

 

Unversed in debt details, Venezuelans desperate for any relief

Venezuelans heaving under an unprecedented economic meltdown know little about the finer points of foreign debt negotiations, but long for anything that would put more food on their plate and slow the world’s highest inflation. Few on the streets of capital Caracas really understood unpopular leftist President Nicolas Maduro’s announcement this week that he would seek to refinance the oil-rich nation’s heavy bond burden of US$ 60 billion - or about US$ 2,000 per person. But those interviewed by Reuters said they were hoping any deals between the government and its multiple foreign creditors would free up foreign currency to increase imports of scarce food, medicine, and basic products. (Reuters, http://www.reuters.com/article/us-venezuela-bonds-reaction/unversed-in-debt-details-venezuelans-desperate-for-any-relief-idUSKBN1D40GV)

 

IMF gives Venezuela six months to supply economic data

The International Monetary Fund (IMF) gave Venezuela on Friday six months to produce statistics on the domestic economy, following the government failure to meet the deadline stipulated in the IMF regulations. Should Venezuela fail to supply the requested information, the IMF could end up expelling it. The board of the International Monetary Fund (IMF) found that Venezuela did not deliver data on time on the operations of the Social Security Institute and total exports and imports of commodities, expressing their value in local currency, per country of destination and country of origin, AP quoted. The organization explained in a release that the meeting of the executive board of directors had been slated well in advance and it is not related at all with the announcement made on the eve by Venezuelan President Nicolás Maduro on the beginning of restructuring of the Venezuelan foreign debt for U$D 120 billion. (El Universal, http://www.eluniversal.com/noticias/daily-news/imf-gives-venezuela-six-months-supply-economic-data_676565)

 

OP-ED: How Long Can Venezuela Count on Russia and China? by Geoff Ramsey

Venezuela has found in Russia a source of quick loans and oil deals that have been essential to the government’s efforts to stay afloat. In the near term, it appears that Russia is willing to accept the high risks associated with lending to Venezuela in exchange for an increasing role in the country’s oil industry. This has been a major point of concern U.S. policymakers. The Venezuela Humanitarian Assistance and Defense of Democratic Governance Act—which passed the House Foreign Affairs Committee on September 28 and is awaiting consideration by the full House—specifically tasks the State Department and intelligence community with providing a report on Russia’s activities in Venezuela. Much of the discussion on Venezuela’s international backers have tended to lump Russia and China in the same boat, with some painting them both as “enablers” of the Maduro government. However, these arguments obscure more than they reveal. For one thing, Russia’s economic support has clear limits. Russia’s economy has been degraded by declining oil prices and sanctions. Russia has a GDP smaller than that of New York state, and its capacity to project power abroad is somewhat exaggerated. While the Russian government has been willing to accept higher risks in backing Maduro, they do not appear to have the resources to provide an indefinite lifeline. China’s government, on the other hand, has a far greater capacity to do so, but appears to have more interest in looking beyond the Maduro government than its Russian counterparts. Unlike Russia, though, China moved to stop issuing new loans to the country in 2016, and has held unofficial meetings with individual members of the opposition to seek assurances that debt would be honored by a potential opposition government in the future. More recently, PETROCHINA announced that its U.S. affiliate would respect the U.S. debt sanctions announced by the White House in August, and China has reportedly grown impatient with increasing delays in shipments of Venezuelan crude. International relations analysts have pointed to two other clear incentives for China to support a resolution to the Venezuelan crisis. The first of these reasons, put plainly, is that serving as a lifeline to the Maduro government is bad for China’s “brand” in Latin America. The second reason for a Chinese interest in backing away from Maduro and supporting transition is China’s own evolving approach to relations with other developing nations. In recent years, analysts suggest that China has been cautiously reevaluating its long-held policy of non-intervention in other states’ internal affairs. Now, China is calculating that the benefits of having Maduro in power outweigh the risks of his government’s economic mismanagement. However, the differences between the Chinese and Russian approach to the Venezuelan crisis suggest that China’s support for Venezuela cannot be taken for granted. Moving forward, it is unlikely that the Chinese government will be an entirely inflexible ally to Maduro. (WOLA: https://www.wola.org/analysis/long-can-venezuela-count-russia-china/)

 

Politics and International Affairs

Maduro's allies strip leading legislator of immunity, launch trial

Prominent Venezuelan lawmaker Freddy Guevara has sought refuge in the Chilean ambassador’s residence in Caracas amid fears he could be jailed, a development that leaves the ailing opposition with even fewer leaders to take on leftist President Nicolas Maduro. Venezuela's pro-government constitutional assembly (ANC) stripped Guevara of his immunity from prosecution in a case that is fueling fears of another crackdown on President Nicolas Maduro's opponents. Guevara released a video saying he doesn't regret his call for civil obedience after the unanimous vote Monday. Guevara was one of the leaders of this year's deadly protests against Maduro and the second highest-ranking member of the opposition-controlled congress. The opposition and local media said that SEBIN intelligence agents had surrounded Guevara’s house over the weekend. The vote by the constitutional assembly was widely expected after the supreme tribunal Friday barred Guevara from leaving the country and accused him of instigating unrest and other crimes. By law only congress can determine whether a legislator's immunity should be lifted. The Venezuelan Supreme Court (TSJ), which is packed with government loyalists, ordered on Friday that Guevara be stripped of his immunity and prosecuted for crimes of "association, persistent public instigation and the use of an adolescent to commit crimes." Twelve governments — including those of Mexico, Brazil and Canada — issued a joint statement on Saturday calling the Supreme Court's accusations against Guevara a "new blow to the rule of law and separation of powers in Venezuela." The 31-year-old lawmaker is the vice president in the opposition-controlled National Assembly. Chile is willing to grant political asylum to Venezuelan opposition politician Freddy Guevara, Chilean Foreign Minister Heraldo Munoz said on Monday. The Maduro regime’s Foreign Ministry demanded other countries cease their “aggressions” against this country. The head of the opposition-controlled Venezuelan Parliament, Julio Borges, called the Supreme Court’s ruling “absolutely political ... arbitrary ... outside the law”. Borges said that the move by the TSJ is “one more attempt” to try and “destroy the Parliament,” adding that since the opposition took control of the chamber after the 2015 legislative election, the government has sought to divest it of its functions. The National Assembly will take this new instance of political persecution to the World Parliamentary Union and other international organizations. Guevara could become the highest-profile Venezuelan politician to seek exile in recent years. (The New York Times: https://www.nytimes.com/aponline/2017/11/07/world/americas/ap-lt-venezuela-political-crisis.html; DW: http://www.dw.com/en/chile-willing-to-offer-venezuelan-opposition-politician-political-asylum/a-41268076; Fox News: http://www.foxnews.com/world/2017/11/07/maduros-allies-strip-leading-venezuela-opponent-immunity.html; The Chicago Tribune: http://www.chicagotribune.com/sns-bc-lt--venezuela-political-crisis-20171105-story.html; Reuters, http://www.reuters.com/article/us-venezuela-politics/venezuela-opposition-leader-guevara-seeks-refuge-in-chile-ambassadors-home-idUSKBN1D50LN; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2445792&CategoryId=10717; http://www.laht.com/article.asp?ArticleId=2445819&CategoryId=10717; and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/anc-autoriza-tsj-continuar-juicio-diputado-freddy-guevara_676806; Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/gobierno-nacional-exige-cese-inmediato-de-agresiones-en-su-contra-tras-medida-contra-diputado-guevara; http://www.noticierovenevision.net/noticias/politica/parlamento-denunciara-persecucion-contra-freddy-guevara-ante-instancias-internacionales)

 

Venezuela frees two anti-Maduro activists; scores still jailed

Venezuelan authorities overnight freed two activists who were in jail for more than a year after being accused of plotting against socialist President Nicolas Maduro, the opposition said on Saturday. Delson Guarate, who had been a mayor in central Aragua state, and former student leader Yon Goicoechea were among nearly 400 jailed anti-Maduro activists who rights campaigners say are political prisoners but whom the government calls coup-plotters. “I‘m with my family today,” tweeted Goicoechea, displaying a photo of himself against the backdrop of Caracas’ Avila mountain. “Tomorrow I’ll address the country. God is with us.” (Reuters, http://www.reuters.com/article/us-venezuela-politics/venezuela-frees-two-anti-maduro-activists-scores-still-jailed-idUSKBN1D40QW)

 

Canada imposes sanctions on Maduro and 18 government officers

Canada imposed sanctions on 52 government officers of Venezuela, Sudan and the Russian Federation on charges of human rights abuses and corruption. The Canadian government renewed on Friday sanctions against Venezuelan President Nicolás Maduro, in addition to 18 government authorities for “gross violations of internationally recognized human rights or acts of significant corruption.” Under the new Justice for Victims of Corrupt Foreign Officials Act, Canadian Minister of Foreign Affairs, Chrystia Freeland, announced targeted sanctions against 52 individuals. In addition to Maduro, other officials include Executive Vice-President Tareck el Aissami; Adán Chávez and Argenis Chávez, brothers of late President Hugo Chávez, and multiple ex ministers and pro-government deputies. (El Universal, http://www.eluniversal.com/noticias/daily-news/canada-imposes-sanctions-maduro-and-government-officers_676570)

 

Venezuela's hate crime law seeks to silence political opposition, bishops warn

The president of the Venezuelan bishops' justice and peace commission has criticized a hate crimes law passed on Thursday, charging that its aim is to silence those opposed to the socialist government of Nicolas Maduro. The Law Against Hatred and Fascism, the Nov. 2 legislation passed by the Constituent Assembly, will be used by Maduro's government against the opposition “so we can't even speak or protest,” said the Emeritus Archbishop of Coro Roberto Lückert Leon. The Constituent Assembly's president, Delcy Rodriguez, has said the law targets media that “promote hatred and racism.” Lückert stated that news media critical of the government have been undercut by Maduro's government. “Right now, they've hamstrung the news media. They're using the supply of newsprint to undermine us. The oldest newspaper in Coro is called La Mañana. The can't print it because they're not giving them any newsprint; on the other hand, they gave to the paper that they founded a building, machinery, and newsprint, and it comes out every day. That's freedom of the speech? No.” Archbishop Lückert stated that “as a Venezuelan, the only solution for the country that I have is elections; but elections that are transparent and fair.”  However, he said that now the Venezuelan people are profoundly upset by the National Electoral Council, which “is completely sold out to the government” and which manipulated recent elections, so Maduro's party would win. The prelate also said the Constituent Assembly “is an invention Maduro brought in from Cuba,” where there are no political parties or independent news media”. Cardinal Jorge Urosa Savino of Caracas called the Constituent Assembly “fraudulent and illegitimate” in a recent interview. “It's made up of political activists at the service of the government and it's not going to resolve the problems with the economy. What's needed here is to change the Marxist, totalitarian, and statist ideology that has brought the country to ruin,” he charged. Cardinal Urosa said Maduro wants to “decapitate the opposition so there's just one political party.” (EWTN: http://www.ewtnnews.com/catholic-news/Americas.php?id=16530)

 

OP-ED: Is Venezuela's Maduro regime on its way out the door? by Michael Rowan

The reported hope that Venezuela’s dictatorial regime may collapse in the face of its tardiness in paying bond bills is wildly exaggerated. What may be happening is the new normal for Venezuela: just more lying. Consequently, a whole lot more killing, disease and starvation may be in store for the population. Sorry to say it, but relief from oppression and social collapse may not be on the horizon. Hugo Chavez built a very powerful machine to unravel Venezuela’s democracy and free market, and it is not going to be easy to set it right. It might never happen. But as they say, the bigger they are the harder they fall. The strength – and weakness -- of the current gang in power is their connection to the US$300 billion missing from public accounts since 2000. Where is that money? Without control of the state, that gang is toast. The game of the world’s outlaws is to ultimately escape from dependence on law and the dollar. Venezuela, Iran and Russia have exerted ferocious effort to destroy the dollar and failed. China is cleverly on both sides of that game, which is a big game, the world game. Chavez went “all in” with Venezuela’s chips in that game and lost big time. Yet while Venezuela is only a pawn in that game, and easily sacrificed, it still has oil and other assets – official corruption, for example – which have great value to outlaws. Maduro should look on the bright side: he’s worth a lot more alive than gone and forgotten by the bad guys. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2445805&CategoryId=13303)

 

OP-ED: If the Trump doesn't do something, Venezuela will collapse, by Roger Noriega

The Trump administration’s targeted sanctions have taken a toll on the regime and its corrupt leaders, and the U.S. president has pressed regional and European partners to back an urgent democratic transition. However, without stronger internal opposition and tougher international efforts, Maduro will either consolidate a dictatorship or collapse the country altogether. After more than a decade of beleaguered opposition to the regimes of Hugo Chávez and his acolyte Maduro, most Venezuelans prefer fundamental change and are seeking new ways to obtain it. Creating a much more coherent and resolute opposition—which earns the confidence of the people and the international community—is a key to avoiding a catastrophic meltdown or dictatorship in Venezuela. Much tougher, clear-headed U.S. leadership is indispensable to that outcome. What is lacking is a strategy to focus these pro-democracy efforts in a more decisive, coordinated way. This should be the task of the State Department. It is not too late for the White House to empower a coordinator to lead a whole-of-government effort on Venezuela and work with global partners to promote democracy and adopt targeted sanctions. (Newsweek: http://www.newsweek.com/tougher-us-leadership-could-help-save-venezuela-catastrophe-696815)

 

Guyana has been outfoxed by Venezuela

Guyana has bungled its handling of the territorial controversy with Venezuela. The talks which were held recently in New York between the foreign Ministers of Guyana and Venezuela suggest strongly that Guyana will not achieve its objective of having the matter placed before the International Court of Justice. Venezuela launched a diplomatic blitz when Guyana tried to isolate it within CARICOM, and Guyana had no response to that blitz, because it did not have the resources or the know-how to respond. CARICOM was always going to call for talks and negotiations as a condition of its support for Guyana’s position. One mistake that Guyana made was to place all its eggs in one basket. It decided to go for a juridical settlement of the dispute without carefully contemplating how realistic were the chances of success. The matter is never likely to end up before the ICJ, because Venezuela is not a member of the ICJ and it requires the approval of both parties to a controversy for a matter to go in front of the ICJ. So, Guyana is misdirecting its diplomatic efforts – in a direction in which there is little hope. Even if the matter does go to the ICJ eventually, this is a drawn-out process. Guyana is now locked into a good offices process, which can drag on for another 10 years. (Kaietur News: https://www.kaieteurnewsonline.com/2017/11/07/guyana-has-been-outfoxed-by-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

August 17, 2017

International Trade

Florida bans future investments in Maduro's Venezuela

Florida Gov. Rick Scott easily won approval Wednesday for a proposal to bar the state's US$ 150 billion pension plan from making future investments that directly support the regime of President Nicolas Maduro in Venezuela. Scott and the two other trustees who oversee the plan quickly approved the ban, which could be more symbolic than substantive, since the Florida Retirement System doesn't currently invest in any companies or securities controlled or owned by Venezuelan government interests. Scott, a likely Republican challenger of Democratic U.S. Sen. Bill Nelson next year, called the ban a "huge step in the right direction." But Nelson, another Maduro critic, accused Scott of backtracking from his original vows by banning only direct investments in Venezuela, but not sanctioning companies that do business there. Florida already has laws that prohibit the state from investing in companies that do business in Cuba, Iran and Sudan. And last year the State Board of Administration was ordered to divest from companies that boycott Israel. But the final proposal approved Wednesday doesn't target all companies that may be doing business in the country, nor would it affect the investment banking firm Goldman Sachs, which acquired US$ 2.8 billion in bonds initially issued by Venezuela's state-run oil company PDVSA at a steep discount last year, acting through a broker for a client. The bank manages some of Florida's investment portfolio, and the state owns stock in Goldman Sachs. Records obtained this week by The Associated Press show that the State Board of Administration prepared a document in mid-July indicating that parting ways with the firm could have a significant impact on the pension plan. That same document also showed that Florida own stocks in nearly two dozen companies doing business in Venezuela. Democratic state senator from Miami Jose Javier Rodriguez has already filed a bill for 2018 that would force the state to drop its business ties with Goldman Sachs. (US News: https://www.usnews.com/news/best-states/florida/articles/2017-08-16/florida-may-ban-future-investments-with-venezuela)

 

White corn shipments continue to arrive at Puerto Cabello

The PROMISE 3 has arrived at Puerto Cabello, bearing another 30,000 tons of white corn. The container vessel NEW YORK TRADER is also offloading there, bringing 146 containers with material for the automobile industry, as well as diapers, light bulbs, sanitary napkins, toothpaste, and chemicals for agriculture. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=37565; Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/arribo-al-pais-30-mil-toneladas-de-maiz-blanco)

 

Commodities

The fall and collapse of Venezuela’s oil industry

Attached is a note on the state of the Venezuelan oil sector and how it got there. The note describes in detail the decline in production and the rearrangement of export markets. It also analyses in detail the income that Venezuela has foregone from its oil production, via subsidized internal consumption and exports to non-commercial destinations.

 

Economy & Finance

Regime expropriates food producing farm owned by vocal opponent

The National Land Institute (INTI) has ordered the occupation fo the “El Gólgota” food producing farm in Guárico state, which is owned by National Cattlemen Association (FEDENAGA) President Carlos Albornoz, who says the decision is part of a political vendetta. More in Spanish: (Ultima Hora Digital, http://ultimahoradigital.com/2017/08/medida-contra-predio-el-golgota-responde-a-orden-del-alto-gobierno/)

 

Venezuela has paid Gold Reserve another US$ 29.5 million

Venezuela has made another US$ 29.5 million payment to Canadian mining company Gold Reserve, bringing the total it has paid to US$ 99 million, out of US$ 1 billion the company was awarded. More in Spanish: (El Nacional; http://www.el-nacional.com/noticias/economia/venezuela-pago-gold-reserve-295-millones_198899)

 

Politics and International Affairs

Venezuela's Socialist-run 'truth commission' to investigate opposition

Pro-democracy opposition candidates running in Venezuela's October gubernatorial elections will be investigated to make sure none were involved in violent political protests this year, the head of a new pro-government truth commission said on Wednesday. The panel was set up earlier in the day by the constituent assembly elected last month at the behest of socialist President Nicolas Maduro. Government critics say the commission is designed to sideline the opposition and bolster the ruling party's flagging support ahead of the October vote. Also before the assembly is a bill that would punish those who express "hate or intolerance" with up 25 years in jail. The opposition fears such a law would be used to silence criticism of a government that, according to local rights group Penal Forum is, is already holding 676 political prisoners. "Whoever goes into the streets to express intolerance and hatred, will be captured and will be tried and punished with sentences of 15, 20, 25 years of jail," Maduro said last week. Maduro loyalist Delcy Rodriguez was named as head of the truth commission, on top of being president of the assembly. She said she would ask the country's CNE elections authority for information about candidates running in October, stressing this would have a "cleansing effect" on Venezuela. "We have seen tweets, messages on social networks and photographs of opposition leaders responsible for convening and organizing violent events in Venezuela," Rodriguez told the commission on Wednesday. In its first session after being elected on July 30, the assembly fired Venezuela's top prosecutor Luisa Ortega and appointed a Maduro loyalist to replace her. The Geneva-based International Commission of Jurists said in a report on Wednesday that Ortega's dismissal "removes one of the last remaining institutional checks on executive authority." The country's new chief prosecutor, Maduro's ex-human rights ombudsman Tarek Saab, on Wednesday outlined corruption accusations against Ortega and her husband German Ferrer. They, and members of Ortega's former staff of prosecutors, are accused of running an "extortion gang" and funneling profits to an account in the Bahamas, the new chief prosecutor said. (Reuters: http://www.reuters.com/article/us-venezuela-politics-idUSKCN1AW2A1; http://www.reuters.com/article/us-venezuela-politics-court-idUSKCN1AV2LN)

 

Maduro ally says next year's presidential election still on

Next year’s presidential elections in Venezuela will proceed as planned, according to a top ally of President Nicolas Maduro and former head of the country’s electoral council. Caracas Mayor Jorge Rodriguez, 51, denied claims leveled by Maduro’s opponents that the so-called constituyente, a legislative super body that has claimed supreme power, will upend the electoral schedule or cancel the 2018 vote altogether. “With the constituyente, the 1999 constitution is still valid,” Rodriguez said in an interview. “The time frames established in the 1999 constitution are still current.” According to the nation’s charter, the president must be inaugurated by Jan 10. of his first year in office. The election can be any time before, though they have typically been held in December. (Bloomberg, https://www.bloomberg.com/news/articles/2017-08-16/maduro-ally-says-next-year-s-presidential-election-still-on)

 

Pro-democracy opposition will hold primaries, accuses CNE of  promoting abstention

Miranda state governor Henrique Capriles has announced that the pro-democracy Democratic Unity (MUD) coalition will hold primaries on September 3^rd, to select single unity candidates for gubernatorial elections. The MUD coalition has accused the National Elections Council (CNE) of promoting low turnout. CNE chairperson Tibisay Lucena has reported that 226 candidates have registered to run for governor in Venezuela’s 23 states. More in Spanish: (NOTIMINUTO: http://www.notiminuto.com/noticia/capriles-anuncio-que-primarias-de-la-mud-seran-el-3-de-septiembre/; El Universal, http://www.eluniversal.com/noticias/politica/oposicion-escogera-candidatos-unicos-para-regionales-octubre_666051; http://www.eluniversal.com/noticias/politica/lucena-226-candidatos-inscribieron-para-las-elecciones-regionales_665987; El Nacional, http://www.el-nacional.com/noticias/oposicion/capriles-primarias-oposicion-podrian-hacerse-septiembre_199073; http://www.el-nacional.com/noticias/oposicion/mud-cne-promueve-abstencion-baja-votantes_199127)

 

Intelligence agents raid the Attorney General’s home, husband charged with corruption

The Bolivarian Intelligence Service (SEBIN) conducted a raid on the home of Venezuela’s Attorney General Luisa Ortega Díaz. Ms. Ortega called the move “revenge for her battle against totalitarianism in Venezuela.” The raid came after the Constitutional Chamber of Venezuela’s Supreme Tribunal declared that they would try Ms. Ortega’s husband, Congressman Germán Ferrer, of “flagrant” corruption, using a term intended to bypass the constitutionally mandated procedure for removing his immunity. The Tribunal acted at the request of Tarek William Saab, who days ago was named to replace Ms. Ortega by the fraudulent Constitutional Assembly (ANC). More in Spanish: Action against Ferrer was proposed by PSUV Vice President and ANC member, Captain Diosdado Cabello, who accused the couple of operating an “extortion network”, but did not show proof. (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/sebin-allano-residencia-de-luisa-ortega-diaz; http://www.noticierovenevision.net/noticias/politica/ortega-diaz-califico-allanamiento-de-su-residencia-como-una-venganza; http://www.el-nacional.com/noticias/politica/sala-plena-del-tsj-decidio-aprobar-orden-captura-contra-german-ferrer_199146;  http://www.el-nacional.com/noticias/gobierno/anc-decidira-allanar-inmunidad-parlamentaria-german-ferrer_199147; El Universal, http://www.eluniversal.com/noticias/politica/sebin-allano-residencia-luisa-ortega-diaz_666034; http://www.eluniversal.com/noticias/politica/cabello-denuncia-red-extorsion-que-operaba-desde-ministerio-publico_665973)

 

US Court throws out Venezuela's Diosdado Cabello lawsuit against Wall Street Journal

A Federal Judge in Manhattan has dismissed a libel lawsuit brought by Venezuela political leader Diosdado Cabello against the Wall Street Journal. Captain Cabello, a Venezuela political leader and former military leader, is one of the most powerful politicians in Venezuela. He has served as Vice President, President of the country's parliament as well as in a variety of other positions. "Cabello alleges that Dow Jones published a defamatory article in the Wall Street Journal entitled 'Venezuelan officials suspected of turning country into global cocaine hub,'" wrote U.S. Federal District Court Judge Katherine B. Forrest, dismissing the suit. "For the reasons set forth below, Cabello has failed to adequately plead material falsity as to most challenged statements and actual malice as to all challenged statements." "Plaintiff has failed to make out a prima facie case of libel and his second amended complaint is therefore DISMISSED. The Clerk of Court is directed to close the motion ... and terminate this action," concluded Forrest. The article was published by the Wall Street Journal on May 18, 2015, citing 12 sources including prosecutors involved in the investigation, detailed that a group of Venezuelan officials were being investigated for turning Venezuela into a center for international drug trafficking. Cabello also sued 22 media executives in Venezuela for publishing variations reporting the story. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2441851&CategoryId=10717)

 

OP-ED: An off-the-cuff remark by Trump may have helped Venezuela’s slide ‘into dictatorship’

Within hours of President Donald Trump's assertion, the US had a "military option" in response to turmoil in Venezuela, governments in the region, which had been nearing consensus on confronting the Venezuelan government, repudiated the statement. Colombian President Juan Manuel Santos and Argentine President Mauricio Macri — two of Venezuelan President Nicolas Maduro's biggest critics — were quick to dismiss the idea of military intervention in their meetings with Pence. Just as Trump's remarks sent a chill through a region that was growing stronger in its condemnation of Maduro, the president's words have left the Venezuelan opposition in an unfavorable position. The main opposition coalition, Democratic Unity (MUD), said in a statement that it "rejected the use of force, or the threat to apply the same, on the part of any country on Venezuela." It didn't mention Trump specifically, but the need to make the statement put the opposition in an unfavorable position. The opposition has gained international support, and the harsh reaction by security forces — more than 120 people have been killed, many of them anti-government demonstrators — have brought condemnation on Maduro, but he has been able to ignore the protests. Now the opposition coalition appears to be fracturing over a decision to participate in regional elections in October. In addition to managing these internal divisions, the opposition will now have to work harder to avoid the appearance of favoring US military action, and it would also likely have to reduce contact with the US State Department and high-level meetings with US officials. Defense Minister General Vladimir Padrino, who called Trump's statement "an act of craziness," criticized the opposition's response as ambivalent. "This is a time of reflection," Padrino said. "You are either a Venezuelan patriot, or pro-Yankee." (Business Insider: http://www.businessinsider.com/trumps-bluster-changed-the-game-in-venezuela-2017-8)

 

Maduro makes surprise visit to Cuba

President Nicolas Maduro paid tribute to the late leftist icon Fidel Castro during a surprise visit to Cuba, state media reported Wednesday. The daily Granma said Maduro traveled Tuesday to Castro's tomb in Santiago de Cuba. Maduro was accompanied by his wife Cilia Flores, Cuban President Raul Castro -- Fidel's brother -- and Cuban Foreign Minister Bruno Rodriguez, according to the newspaper. Venezuela is Cuba's most important economic and political ally, and Havana has offered strong support for Maduro's embattled leftist regime. (AFP: https://www.yahoo.com/news/venezuelas-maduro-makes-surprise-visit-cuba-150221717.html; Reuters, http://www.reuters.com/article/us-cuba-venezuela-maduro-idUSKCN1AW20E)

 

UN criticizes Trump's remarks on military action in Venezuela

UN Secretary-General Antonio Guterres on Wednesday criticized President Donald Trump's threat of military action to resolve Venezuela's political crisis, saying Latin America successfully got rid of foreign intervention and this must be safeguarded. The U.N. chief also implicitly criticized Venezuela's President Nicolas Maduro for creating an all-powerful constitutional assembly that leaves the opposition powerless saying Latin America got rid of authoritarianism as well and this must be preserved. Guterres told reporters Wednesday that “it is very clear that Latin America has successfully struggled over the last decades to free itself from both foreign intervention and authoritarianism.” “This is a lesson that is very important, to make sure that this legacy is safeguarded - and namely in Venezuela, both aspects of it,” he told reporters. The secretary-general urged the government and the opposition to restart negotiations “because I believe the only solution is a political solution based on those negotiations.” Guterres said he strongly supports efforts by international facilitators and regional leaders to assist the Venezuelan government and the opposition in negotiating a solution. “I've been in close contact with all of them,” he said. (CP24: http://www.cp24.com/world/un-criticizes-trump-s-remarks-on-military-action-in-venezuela-1.3548679)

 

UN Committee against Torture pursues meeting with Venezuelan gov't

The United Nations Committee against Torture plans to request the Venezuelan government a meeting in Geneva to discuss “the deteriorated situation” in Venezuela and an urgent follow-up report after the claims of mistreatment, abuse of authority and torture. “In this session, we have tackled the deteriorated situation in Venezuela and have resolved to send a special reminder to the government, asking for the urgent delivery of a follow-up report,” the Committee chief, Jens Modvig, told reporters. According to Modvig, the step taken by the Committee “goes beyond, as it gets out from the usual procedures.” (El Universal, http://www.eluniversal.com/noticias/daily-news/committee-against-torture-pursues-meeting-with-venezuelan-govt_665861)

 

UN Special Rapporteur: Dialogue is of the essence in Venezuela

The United Nations expert on human rights and international sanctions, Idriss Jazairy, has advised the international community not to impose restrictive measures on Venezuela due to the democratic crisis in the country. Any sanctions, besides the sanctions imposed by the US government on President Nicolás Maduro and other top government authorities would endanger the ordinary people. (El Universal, http://www.eluniversal.com/noticias/daily-news/special-rapporteur-dialogue-the-essence-venezuela_665744)

 

Russia says military intervention in Venezuela crisis is unacceptable

Russian Foreign Minister Sergey Lavrov criticized the idea of any intervention, including military, in the Venezuela crisis, saying that the situation in the country must be resolved through peaceful means. “We are united in the need to overcome the existing disagreements in the country by peaceful means through a nationwide dialogue as soon as possible, without any external pressure, not to mention the unacceptability of the threats of military intervention in the internal affairs of this country,” Lavrov stated, after meeting with his Bolivian counterpart, Fernando Huanacuni. The minister added that most Latin American states also condemn the possibility of such actions. (RT: https://www.rt.com/news/399755-lavrov-venezuela-military-intervention/; Reuters, http://www.reuters.com/article/us-venezuela-politics-russia-idUSKCN1AW0XQ; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2441849&CategoryId=10717)

 

China warns interference will not help Venezuelan crisis

China’s Foreign Minister Wang Yi reiterated his country’s neutral stand over the current Venezuelan political crisis, and said external pressure will not help resolving it. Wang stressed the Venezuelan government will have to resolve the crisis through dialogue. “History has shown outside pressure and interference do not help settle a crisis,” the Chinese foreign minister said on Tuesday in a meeting with his Bolivian counterpart, Fernando Huanacuni, while discussing the Venezuelan crisis. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2441833&CategoryId=10717)

 

Argentina warns US against military move on Venezuela

US Vice President Mike Pence heard more complaints from Latin American allies on Tuesday about President Donald Trump's warning of a possible US military option to deal with the crisis in Venezuela. "The use of force is not the way", but rather political pressure, Argentine President Mauricio Macri said at a news conference alongside Mike Pence, who is on a tour of Latin American countries. Pence moved to soften the impact of Trump's announcement, stressing that peaceful pressure is the priority. But he did not rule out Trump following through on his threat. "The United States has many options, and we reserve those options," Pence said. "But we truly believe that by increasing economic and diplomatic pressure on the Maduro regime -- not just across the Americas, but across the wider world -- that we can achieve a restoration of democracy in Venezuela by peaceable means." The United States along with Argentina and other regional allies have joined in international condemnation of Maduro. But the South American bloc MERCOSUR over the weekend rejected any use of force to resolve the Venezuela crisis. (NDTV: http://www.ndtv.com/world-news/argentina-warns-united-states-against-military-move-on-venezuela-1738044)

 

Chile won’t support U.S. intervention in Venezuela, Bachelet tells Pence

Chilean President Michelle Bachelet has told United States Vice President Mike Pence that Chile will not support coups d’etat or military interventions, but will agree to sanctions that should be adopted by the United Nations Security Council. Pence met with Ms. Bachelet Wednesday as part of his tour of Latin America, which seeks to strengthen support for joint action against Venezuela. “I want to be very clear. Chile will do its utmost to support the Venezuelans in finding a peaceful way,” Bachelet said during a joint press conference at La Moneda Palace. The U.S. vice president began his trip in the region in Colombia, where he met with President Juan Manuel Santos, then visited Argentina and President Mauricio Macri. The trip will end with a final stop in Panama to meet President Juan Carlos Varela. (Santiago Times: http://santiagotimes.cl/2017/08/16/chile-wont-support-u-s-intervention-in-venezuela-bechelet-tells-pence/)

 

Brazil’s Lula says Maduro’s mistakes do not justify intervention in Venezuela

Brazil’s former President Lula da Silva has said: “We cannot have it that, whatever error Nicolás Maduro may have committed or may be about to commit, let’s a US president say he will use force to overthrow him”. More in Spanish:  (El Universal, http://www.eluniversal.com/noticias/politica/lula-dice-que-errores-maduro-justifican-intervencion-venezuela_665872)

 

Panama grants asylum to Supreme Tribunal justice, diplomat

The Panamanian government reports it has granted asylum to José Sabino Zamora, who was recently appointed to Venezuela’s Supreme Tribunal by the nation’s legislature. It also granted asylum to Gabriel Pérez, former Secretary at Venezuela’s embassy in Panama, saying they are “in danger” here. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/panama-concede-asilo-politico-a-diplomatico-y-magistrado-venezolanos; El Nacional, http://www.el-nacional.com/noticias/mundo/panama-otorga-asilo-politico-magistrado-consul-venezuela_199084)

 

OP-ED: What to do with Venezuela?

Until last Friday, much of the conversation in Latin America was aimed at how to remove Venezuelan President Nicolas Maduro from office. The region is often only unified in its unwillingness to meddle, no matter how radical the politics. So, it was historic when 12 countries met last week in Lima, Peru, and together denounced Venezuela’s “rupture of democratic order.” Such a large and unified opposition was a major blow to Maduro’s narrative that the country’s economic woes are the result of political sabotage led by the U.S. Then President Trump mentioned the possibility of a “military option.” But even with Trump’s inclination for braggadocio, the thought of U.S. military intervention in Latin America struck a nerve because there is a feeling that international pressure might not be enough to convince Maduro to step down, or end his push to rewrite the country’s constitution, and that the U.S. might take the lead with a more drastic approach. Part of Trump’s effect has been to alter the conversation on Venezuela from one of what to do, to that of what will not be allowed.  Finding a balance in U.S. policy will be difficult because Venezuelans might be hypersensitive to any overly aggressive U.S. actions.  Much of the talk at the U.S. State Department so far has been focused on sanctions. And, at the most extreme level, a possible oil embargo, because Venezuela is still one of the top suppliers of oil to the U.S. What’s left of Venezuela’s economy depends heavily on the 2.1 million barrels of oil it exports each day. The U.S. accounts for one-third of that, and banning all Venezuelan crude imports would likely finish off what remains of the country’s broken economy and kill its moribund oil industry. This is sometimes called the “nuclear option” because it would not only devastate the Maduro government, it would equally ruin the powerful and the poor, supporters and the opposition. A move this drastic would likely strengthen Maduro, because it feeds into the historic narrative set up by his predecessor, Hugo Chavez. (The Atlantic: https://www.theatlantic.com/international/archive/2017/08/venezuela-intervention/536970/)

 

OP-ED: Venezuela: At the edge of a deeper chasm

According to the consultancy firm ECONOMETRICA, 2.1 million Venezuelans are now eating from the garbage. Its citizens are at war with the military. The real enemy responsible for this lethal landscape is not foreign. This destruction has come from within. For almost two decades, Venezuela's socialist government has managed to undermine every institution that kept the country afloat. When Hugo Chavez ascended to the presidency in 1998, he had an agenda: Bring socialism to Venezuela, then export it to the rest of Latin America. His successor, Nicolas Maduro, has continued the country’s hurtle down a slope paved by the total destruction of the means of production. Indeed, he has managed to sharpen the slope. On May 29, the Supreme Court of Justice declared the National Assembly in contempt and usurped its functions. That unleashed a series of protests, which in turn generated a wave of repression that has so far killed more than 130 people and imprisoned nearly 1,400. Maduro declared victory at the end of July with an illegal election. The company that provided the voting system alleges that the results were tampered with. Sixteen people died violently on polling day. The violence, the repression, the assault on fundamental human rights, and the rupture of the constitutional order have prompted opposition leaders to defend the Constitution. The resistance is mainly composed of teens and young adults born under socialism, fighting to defend the country from what they believe will be the deeper abyss of communism. T-shirt soldiers, they call them. These street fighters make shields with just about anything. Their weapons are fireworks and Molotov cocktails. They constantly cover their faces and change their names for fear of being identified and detained, like a lot of their friends. According to the non-governmental organization Foro Penal—Spanish for Criminal Forum—278 have been detained in Bolívar State alone. Only 12 of those detainees have been formally accused by prosecutors. The others have been accused by judges who have usurped the prosecutor function; 21 of them have been released under injunction, while 40 are under injunction but still in custody. The others are under house arrest. This summer's vote is widely considered a sham. Electoral authorities said more than eight million people, or 41.5 percent of the electorate, voted. Yet a Reuters reporter claims to have seen an internal memo from the Electoral Council saying fewer than four million votes had been cast just two hours before polls closed. Opposition leaders and even the attorney general agree that participation was closer to 12%. This latest phase in the drift toward dictatorship began with the dismissal of Attorney General Luisa Ortega Díaz. The assembly plans to take further legal actions against her and opposition leaders, claiming they are "terrorists." International sanctions will only make things worse. The food and medicine shortages will deepen. More people will die. In the streets, people continue to protest. Some military groups have joined the resistance, which struggles to maintain the few free spaces left. It has come to this. (Reason: http://reason.com/archives/2017/08/16/venezuela-at-the-edge-of-a-deeper-chasm)

 

EDITORIAL: Exporting chaos to Venezuela

Having scared a lot of people last week with his bombast over North Korea, causing jitters about nuclear war, President Trump he threatened on Friday to use force to quell chaos in Venezuela. That threat poured fuel on the worsening conflict between President Nicolás Maduro and his opponents. It also unsettled people across Latin America, which has suffered a long history of American intervention. In this environment, Mr. Trump’s threat of military action is a lifeline for Maduro. Like other Venezuelan leaders, he has used the United States to rally his people, often with specious warnings of American plots to invade. Regional leaders also responded to his threat. Juan Manuel Santos, the president of Colombia, said on Sunday, “The possibility of a military intervention shouldn’t even be considered.” Vice President Mike Pence, on a trip to the region, attempted to calm the outrage, saying in Buenos Aires on Tuesday that he was confident about reaching a “peaceable” solution for Venezuela through economic and diplomatic pressure on Maduro. But he also said, “We’re simply not going to tolerate seeing Venezuela collapse into dictatorship.” The precipitous decline of Venezuela is not just a tragedy for its people, but a threat to regional stability. Mr. Trump should continue to toughen sanctions, but any lasting solution will be achieved only in concert with regional leaders. (The New York Times: https://www.nytimes.com/2017/08/17/opinion/venezuela-trump-maduro-military-threat.html)

 

Prison 'massacre' kills 37 in Amazonas state, governor says

At least 37 people in a southern Venezuela prison died Tuesday night after a massive fight broke out between inmates and security officials. The violence started around midnight on Tuesday at the prison in Puerto Ayacucho, according to Gov. Liborio Guarulla of Amazonas state. Guarulla said security forces entered the grounds to restore order in the prison, where the inmates had seized control several weeks ago. The governor referred to the fighting as a "massacre". The bloodshed was believed to be the worst in Venezuela since a prison riot in 2013 that left 61 people dead. The office of Venezuela's chief prosecutor said on social media that 14 prison guards were injured in the fight, and that it was investigating the incident Venezuela has around 30 prisons, many of which suffer from overcrowding and are dominated by criminal gangs that traffic in weapons and narcotics. The prison system, built to hold about 16,000 inmates, is currently estimated to house some 50,000 prisoners, according to the Venezuelan Prisons Observatory, which monitors prison conditions. (Fox News: http://www.foxnews.com/world/2017/08/16/venezuela-governor-says-36-killed-during-fighting-at-prison.html; The Washington Post: https://www.washingtonpost.com/world/the_americas/venezuela-governor-at-least-36-dead-following-raid-by-security-forces-at-jail/2017/08/16/0b8da24e-82d3-11e7-9e7a-20fa8d7a0db6_story.html)

 

Violin-playing protester freed from jail in Venezuela

A Venezuelan violinist who is a well-known face of protests against his country's socialist government has been freed after more than two weeks in prison. The office of Venezuela's chief prosecutor said Tuesday night that a court granted its request for Wuilly Arteaga to be let out on parole. He was detained last month during a protest and his lawyers have said he was beaten with his violin while during custody. The 23-year-old musician skyrocketed to fame after he and his violin were dragged to the ground by national guardsmen during a confrontation with protesters. Arteaga was often seen playing somber renditions of Venezuela's national anthem while standing amid clouds of tear gas. He even was invited to Washington to perform for members of Congress. (ABC News: http://abcnews.go.com/International/wireStory/violin-playing-protester-freed-jail-venezuela-49241570; Reuters, http://www.reuters.com/article/us-venezuela-politics-violinist-idUSKCN1AW05A)

 

Venezuelan soldiers caught in Guyana begging for food

A handful of Venezuelan soldiers - armed and in uniform - have been caught in neighboring Guyana begging for food, local police reported, another sign of Venezuela's deepening hunger crisis. Guyanese Police Inspector Christopher Humphrey said he'd gone to the border along the Amacuro river, which divides the two nations, last week to investigate reports that the Venezuelan military was stealing food from locals. But the three soldiers he encountered - two carrying military assault rifles - said they had come to beg for meals and hadn't harmed anyone. Humphrey said the men had crossed into Guyana on a wooden raft and seemed genuinely hungry. The Guyana Guardian newspaper, which first reported the story, said the men had been given some additional food and then sent back across the border. Venezuela's armed forces - which are key to propping up the administration of President Nicolas Maduro - have always been perceived to have easier access to basic goods. Lately, though, there have been growing but uncorroborated reports of soldiers going hungry, particularly at far-flung border outposts. Venezuela's military is under intense scrutiny for signs that its support for Maduro might be eroding. That soldiers would cross into Guyana is telling. The two nations have been locked in a centuries-old border dispute over a swath of Guyanese territory known as the Esequibo and are not on good terms. (The Sydney Morning Herald: http://www.smh.com.au/world/venezuelan-soldiers-caught-in-guyana-begging-for-food-20170816-gxxdf8.html)

 

Zoo animals 'stolen to be eaten' amid Venezuela shortages

Police in crisis-hit Venezuela believe animals stolen from a zoo were taken to be eaten amid chronic food shortages here. Two collared peccaries, a mammal similar to a pig, went missing over the weekend from the Zulia Metropolitan Zoological Park, near Venezuela's northeastern border with Colombia. "What we presume is that they (were taken) with the intention of eating them," said a local police official. A recent study revealed 93% of Venezuelans cannot afford to buy enough food and 73% have lost weight in the last year. But the zoo's chief Leonardo Nunez denied the thefts were related to food shortages. Former zoo director Mauricio Castillo said thieves had made off with two tapirs - another mammal like a pig that is classed as vulnerable to extinction. The shortages have left zookeepers unable to properly feed their animals, with some 50 estimated to have died within six months last year at one of the country's main zoos in the capital Caracas. The government denied the animals had starved. (Sky News: http://news.sky.com/story/zoo-animals-stolen-to-be-eaten-amid-venezuela-shortages-10991977)

 

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.