Economics &
Finance
Central Bank admits GDP growth falls
short of goals
Central Bank President Eudomar Tovar admitted the economy
will not attain the 6% goal set as a goal for 2013, as the YTD rate holds
around 1.4%. "Undoubtedly we are not
going to grow 6% this year... but we will grow. Growth is possible if we
strengthen construction, oil and manufacturing. Rest assured that the economy
tends to grow", he said, adding that the country faces "ferocious economic warfare". He also defended the government's forcing
stores to lower prices: "One must
understand that there is a strong speculative trend in Venezuela which had to
be cut short, it was in fact developing a bubble, an increase in prices which
was creating distortions." More in Spanish: (INFOLATAM)
.... denies gold swap transactions
Central Bank President Eudomar Tovar also denied the
institution is carrying out transactions with Wall Street banks, a day
after a senior government source said it was evaluating a swap agreement
involving its gold reserves. Opposition leaders and local media reported
that Venezuela is seeking to boost availability of hard currency
through transactions with Goldman Sachs (GS.N) and Bank of America (BAC.N). "With respect to the institutions you've
mentioned, the central bank ... is not carrying out any operations with these
institutions," Central Bank President Eudomar Tovar said at a press
conference. "There are some
considerations out there which have come out, but these are unofficial
positions, if you will." Asked again by a reporter, he said: "There has been no activity done by the
central bank with Goldman Sachs or any institution." (Reuters,
11-28-2013; http://www.reuters.com/article/2013/11/28/us-venezuela-economy-idUSBRE9AR0JG20131128;
http://www.reuters.com/article/2013/11/27/venezuela-economy-idUSL2N0JC13G20131127; El Universal, http://www.eluniversal.com/economia/131128/central-bank-of-venezuela-denies-any-swap-with-gold-reserves;
Bloomberg. http://www.bloomberg.com/news/2013-11-27/goldman-to-bofa-pitch-venezuela-deals-to-drum-up-dollars.html)
Minister Ramírez claims 2014 will
bring "growth and prosperity"
Rafael Ramírez, who is
Venezuela´s Vice President for Economic Affairs, Minister for Oil and Mining
and President of state owned oil company PDVSA, is saying 2014 will bring
"growth and prosperity" to
the nation. More in Spanish: (PDVSA, http://www.pdvsa.com/;
El Universal, http://www.eluniversal.com/economia/131129/ramirez-dice-que-evolucion-del-pib-es-satisfactoria)
FEDECAMARAS President Jorge Roig
says 2014 will be "precarious and
complicated"
In contrast, Jorge Roig,
President of the country's main business organization, FEDECÁMARAS, says the
economic situation is "serious"
and that prospects for 2014 are "complicated".
Roig calls current conditions "precarious"
and that the current economic model shows "clear signs of failure" with the highest rate of inflation in
the Hemisphere, a 24% scarcity index, disposable FOREX reserves that can meet
only one week worth of imports despite, that ten years of price controls during
which time the cost of food has increased 1953%. Roig points out that only 2%
of businesses in Venezuela receive FOREX from the Currency Board (CADIVI) and
the process for obtaining FOREX means delays of "up to 700 days". He says CADIVI owes the pharmaceutical
industry U$D 1.8 billion, the automotive industry U$D 2 billion, U$D 385
million to distributors of medical equipment; U$D 2.356 billion to
international airlines; U$D 515 to the chemical area; and another U$D 400
million to the printing industry. Roig also points out that state run companies
run at 50% capacity, less than 2% of land taken over by the government is productive
and 10 out of 16 sugar mills are operating at 40% capacity. "They have the dollars and the plants and are
not capable of producing, they prefer to import products". He calls
buying after forcing lowered consumer prices a "drunken spree" which will result in a "hangover" in the first quarter
2014. He says business is "cautious"
about replacing inventories, and "several
have said they will not reopen". More in
Spanish: (El Universal: http://www.eluniversal.com/economia/131129/fedecamaras-cree-que-inicio-de-2014-sera-precario-y-complicado; El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/asignacion-de-divisas-a-empresas-privadas-ha-caido.aspx#ixzz2m1yQfSk2;
http://www.elmundo.com.ve/noticias/economia/gremios/fedecamaras--retraso-de-liquidaciones-de-divisas-a.aspx;
El Universal, http://www.eluniversal.com/economia/131129/fedecamaras-cree-que-inicio-de-2014-sera-precario-y-complicado)
Maduro vows stricter business
inspections, threatens Roig for saying 2014 will be "precarious"
President Nicolas Maduro said a stricter wave of inspections for
suspected price-gouging would begin on Saturday in an aggressive pre-election
"economic offensive" aimed
at taming the highest inflation in the Americas. He said price irregularities
were found in nearly 99% of 1,705 businesses inspected so far this month. He
says "capitalist parasites"
are trying to wreck Venezuela's economy and force him from office. "The inspections are continuing daily and
have let us see into the under-world of capitalism," Maduro said in
his latest speech to the nation. He also said 100 retailers have been arrested
but his chief prosecutor puts that at around 30. Maduro also announced a new decree to limit
monthly rents for commercial properties. He accused the nation's main business
organizations: FEDECÁMARAS, CONSECOMERCIO and VENAMCHAM of "ratifying their economic warfare on the
nation" and warned FEDECÁMARAS President Jorge Roig: "Mr. Roig dont' say later that you are being
persecuted politically. You have declared economic warfare on the nation. Be
ready to meet legal consequences." During the same speech Maduro swore
in authorities to lead the Foreign Trade Corporation and the National Foreign
Trade Corporation, to be headed by the Commander of Venezuela's Air Force. (Reuters;
and more in Spanish: Globovision, http://globovision.com/articulo/nicolas-maduro-anunciara-este-viernes-acciones-para-recrudecer-y-acelerar-la-batalla-economica)
Oil
& Energy
PDVSA, Russia sign agreement to increase oil production
State oil company PDVSA and Russian bank GAZPROMBANK, have
signed a U$D 1 billion agreement to finance the increase of crude production of
PETROZAMORA company, on the east coast of the Maracaibo Lake, in Zulia state. The
agreement calls for development of oilfield services to boost production levels
from mature fields of PETROZAMORA. (AVN, 11-28-2013; http://www.avn.info.ve/contenido/venezuela-russia-sign-agreement-increase-oil-production; El Universal, http://www.eluniversal.com/economia/131128/venezuela-russia-sign-agreement-to-boost-crude-oil-output)
PDVSA seeks U$D 1.2 billion from REPSOL
Rafael Ramírez, President of PDVSA says a U$D 1.2 billion
financing agreement with Spain's REPSOL will be signed in the first half of
December. The funds are to be invested in the PETROQUIRIQUIRE joint venture in
the Orinoco Oil Belt. He said additional deals have been struck with China's
CNPC for U$D 4.5 billion; US CHEVRON for U$D 2 billion and Italy's ENI for U$D
1.76 billion. (El Universal,
11-28-2013; http://www.eluniversal.com/economia/131128/pdvsa-seeks-funding-for-usd-12-from-repsol)
Venezuela says OPEC should maintain
production limits
Oil Minister Rafael Ramírez says OPEC should maintain its current
production levels at next week's meeting, and that any easing of sanctions
on Iran will let the group reorganizes itself. "Inventories are growing and are above all averages. There's too much
oil, over 2 million barrels that need to be collected," he says.
(Reuters, 11-28-2013; http://www.reuters.com/article/2013/11/28/venezuela-opec-idUSL2N0JD0V920131128;
Bloomberg, http://www.bloomberg.com/news/2013-11-27/venezuela-sees-reasonable-oil-sales-to-u-s-more-to-asia-1-.html)
International
Trade
Venezuela received over 200 tons of
household appliances
Over 200 tons of household appliances such as kitchens,
ovens, and TV sets have been imported China as part of the stock replenishment
recently announced by the Executive Office, daily newspaper NOTITARDE reported.
In addition to household appliances, some 180 tons of food have been imported
from Brazil, and both two tons of milk and 337 tones of toilet paper from the
United States. Similarly, state-run companies Pequiven and Pdvsa have received
nearly 152 tons of pipes to develop some of their projects. (El Universal, 11-28-2013; http://www.eluniversal.com/economia/131128/venezuela-receives-over-200-tons-of-household-appliances)
300 buses arrive from China
Land Transport Minister Haiman El Troudi says they were imported as a
part of the Special China-Venezuela Fund agreement, and added another 800 buses
will arrive in December. More in Spanish: (El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/85372/unos-300-autobuses-provenientes-de-china-arribaron-a-puerto-cabello)
Politics
Violence enters election campaign
An opposition city council candidate was gunned down in
the western state of Zulia. Jose Chirinos, who was seeking a seat on the
council in Baralt, Zulia, was shot Tuesday night by two assailants on a
motorcycle as he left a radio station after an interview, the MUD opposition
alliance said. A radio host and a young woman were wounded in the attack, but
are listed in stable condition at a nearby hospital, says the Democratic Unity
Conference (MUD). (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1233493&CategoryId=10717)
Elections Council Director charges
government unfair advantage practices are escalating
Vicente Díaz, the lone independent director on Venezuela's
National Elections Council (CNE), has complained over the escalating unfair
advantage being carried out by the government in the electoral campaign. The
official says Venezuelans are fully aware of the imbalance official mass media
networks, an added that the behavior of some public officials is not consistent
with the laws banning such conduct. (El Universal, 11-28-2013; http://www.eluniversal.com/nacional-y-politica/131128/director-of-electoral-council-warns-about-escalation-of-govt-advantage)
Venezuela elections: Empty shelves
and a skyscraper squat
Venezuelans go to the polls in local and regional elections on 8
December that are being widely seen as a referendum on the six-month presidency
of Nicolas Maduro. Opponents accuse him of leading the country to economic
ruin, but he insists his reforms are essential and popular. It is quite common
these days to see queues outside shops where there has been a fresh delivery of
milk or toilet paper - basic goods that many Venezuelans no longer take for
granted. The left-wing populist government tries to offset the notion of a
crisis by running heavily discounted food and produce markets - counteracting,
it says, the actions of profit-hungry private companies. Two weeks ago,
President Maduro ordered a chain of electronic stores called Daka to slash
their prices, accusing it of defrauding ordinary people. The ensuing rush for
cut-price TVs made some happy and the government warned it would extend the
policy to other sectors. But at Daka the shelves are now empty and it is
difficult to see what such policies do for business confidence. Critics say
Venezuela is now becoming ungovernable. One stark example is the Tower of
David. This oil-rich country once had plans to build Wall Street in the heart
of Caracas. But in 2007, homeless squatters invaded an unfinished financial
centre and more than 1,000 families now live in the Tower of David. The
residents of "Torre David" live beyond Venezuelan society and beyond
the reach of the law. (In the past the community was said to be a haven for
drugs dealers and former criminals.) With official inflation figures running at
around 50% (unofficially it is probably much higher) the opposition accuses
President Maduro of leading Venezuela to the abyss and of fomenting a
Zimbabwean-style class war in South America. Corruption is endemic here and
almost everyone admits to having paid a bribe to a policeman or public official
at some point. Henrique Capriles, the main figure in the opposition movement,
says: "Venezuela is heading in the
wrong direction and I think we will pay a huge price for that". (BBC
Special Report: http://www.bbc.co.uk/news/world-latin-america-25141809)
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.
