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 Venezuela oil production. Show all posts
Showing posts with label Venezuela oil production. Show all posts

Tuesday, March 6, 2018

March 06, 2018


International Trade

Imports from Colombia down 48% in 2017

Trade between Venezuela and Colombia was US$ 539 million during 2017, a 33% drop from US$ 802 million in 2016, as per data from Colombia’s National Statistics Department reported by the Venezuela-Colombia Economic Integration Chamber (CAVECOL). The report shows imports from Colombia totaled US$ 319 million last year, a 48% drop from US4 612 million in 2016. The three main products that were imported from Colombia were sugar and sweeteners (13.1%), electrical supplies, video and sound equipment (5.2%); and plastic material and products (5%). More in Spanish: (El Nacional, http://www.el-nacional.com/noticias/economia/importaciones-desde-colombia-cayeron_225475)

 

Logistics & Transport

Air carriers authorized to sell tickets in Petros

Cryptocurrency Supervisor Carlos Vargas has announced that domestic and international tickets may be sold in Petros and other cryptocurrencies. He also said: “all Venezuelan fuel sold at gas stations along the border with Colombia will also be sold in Petros”. More in Spanish: (AVN, http://www.avn.info.ve/contenido/autorizan-aerol%C3%ADneas-nacionales-vender-boletos-petros)

 

Oil & Energy

Venezuela's oil output running 1.5 million bpd short: Ecuador minister

Venezuela’s oil production is running 1.5 million barrels per day (bpd) short of its historic output, but it is something that the country must address itself, Ecuador oil minister Carlos Perez said on Monday. The country should address the shortfall on its own, he said on the sidelines of the CERAWeek energy conference, adding: “It is up to (Venezuela) to decide what to do.” The United Arab Emirates oil minister said on Sunday that OPEC last year discussed member Venezuela’s falling production and offered technical aid to help restore this country’s output.

Venezuela’s oil production fell 13 percent in 2017 to a 28-year low of about 2.072 million bpd. OPEC believes Venezuela will be able to rebuild its production, UAE oil minister Suhail Mohamed Al Mazrouei said. (Reuters, https://www.reuters.com/article/us-ceraweek-opec-ecuador/venezuelas-oil-output-running-1-5-million-bpd-short-ecuador-minister-idUSKBN1GH2FR)

 

Trump administration seizes energy opportunity amid Venezuela collapse

While the White House tightens the grip on Venezuela, the Trump administration is simultaneously drafting contingency plans for the U.S. energy sector to assist Caribbean and Latin American governments that have been reliant on Venezuela oil. The White House is meeting with foreign leaders in the hemisphere to discuss how the U.S. government and energy industry can provide them with fuel and infrastructure needs in the event the Maduro regime collapses and the political crisis in Venezuela chokes off the supply of subsidized oil. “This is a great time for the U.S. to be both promoting the infrastructure work that the U.S. can do, but also be exporting some of the extra energy that is coming out of the shale deposits,” a senior administration official told McClatchy. Caribbean and Latin American nations like Haiti, St. Vincent and Grenadines, Dominica, St. Kitts and Nevis and Nicaragua receive billions in cheap loans for oil. And in return, they have helped Maduro retain crucial diplomatic support and block hemispheric efforts to punish the regime. What made Venezuelan petroleum so attractive were the discounts that Caribbean governments received. Money saved was supposed to be invested in social programs, but the governments have also come under scrutiny for mismanagement and criticism. One example is Haiti, where a special Haitian Senate commission is accusing former government officials of embezzling and wasting US$ 2 billion in PETROCARIBE funds. The subsidized oil program allowed some countries the luxury of embracing anti-U.S. rhetoric. But now they’ve been forced to reduce their reliance on Venezuela's subsidized oil export program and are looking north for help. The Trump administration sees an opportunity to wedge itself between countries that once depended on Venezuela oil and the Maduro regime. (McClatchy: http://www.mcclatchydc.com/news/politics-government/white-house/article203633614.html)

 

Venezuela oil basket starts March on an uptick

The price Venezuela receives for its mix of medium and heavy oil rose going into the first week of March. 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 March 2 rose to US$ 59.08, up 75 cents from the previous week's US$ 58.33.  According to Venezuelan government figures, the average price in 2018 for Venezuela's mix of heavy and medium crude for 2018 is US$ 60.04.(Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2452044&CategoryId=10717)

 

Economy & Finance

Venezuelan economy tanked 13.2% in 2017

Venezuela’s crumbling economy shrank 13.2% in 2017, the fourth year of a crippling recession in the OPEC nation, the opposition-led congress said on Monday. The opposition has been calculating inflation and GDP in the absence of up-to-date official data for the socialist-run economy that has been contracting since early 2014. “The economy is being destroyed,” said opposition lawmaker and economist Jose Guerra at a presentation of the figures at the opposition-controlled National Assembly. (Reuters, https://www.reuters.com/article/us-venezuela-economy/venezuelan-economy-tanked-13-2-percent-in-2017-opposition-idUSKBN1GH2HQ)

 

Venezuelans are paying a 100% premium for cash

It’s yet another frustration of living in an imploding economy. There are few places as chaotic or dangerous as Venezuela. “Life in Caracas” is a new series of short stories that seeks to capture the surreal quality of living in a land in total disarray. Amid widespread cash shortages, paper money is much sought after in poorer neighborhoods, where people often have no other way to make payments. Traders there are everywhere, charging up to 100% interest on cash for people desperate for it, including taxi drivers, restaurant owners, product salesmen, anyone in a hurry. (Bloomberg, https://www.bloomberg.com/news/articles/2018-03-02/venezuelans-are-paying-a-100-premium-for-cash)

 

US Federal Court registers US$1.2 billion judgment for RUSORO against Venezuela

U.S. Federal District Court Judge Richard J. Leon has ordered RUSORO's US$1.2 billion ICSID Expropriation award against Venezuela registered in the U.S. RUSORO took the ICSID judgment to U.S. Federal Court in Washington, D.C. on October 10, 2016 to register the award so that they could begin to collect on the judgment in the U.S. against Venezuela assets. RUSORO, a company with Russian capital that is based in Vancouver, Canada, had two mines in production in Venezuela: the Choco 10 mine (previously operated by Goldfields) and the Isidora mine, both near the southeastern town of El Callao. President Hugo Chavez expropriated Rusoro's gold mining interests on August 23, 2011. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2451864&CategoryId=10717)

 

Regime tightens controls on private sector

During Nicolas Maduro’s 59-month rule, he has found that 2 enabling laws and repeated economic emergency degrees not enough to fence in private initiative, and he is now calling on his “National Constitutional Assembly” to create more barriers for a business community that has been hit with 15 years of regulations. He has sent 8 new laws and proposals to the Assembly that would impose further restrictions, pressure and threaten private economic activity. More in Spanish: (El Nacional, http://www.el-nacional.com/noticias/economia/anc-recrudece-controles-sector-privado_225399)

 

Maduro again raises minimum wage

President Nicolas Maduro went on Facebook Live to announce he is decreeing yet another minimum wage increase, following the recent 58% increase. Food stamps are also to be increased by 67%. In addition, he said he would give 5 million women a 700,000 VEB bonus through the “Fatherland License”, on March 8th, “Women’s Day”. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/presidente-maduro-anuncio-aumento-del-salario-minimo-y-del-cesta-ticket; El Universal, http://www.eluniversal.com/politica/1358/maduro-anuncio-aumento-sueldo-minimo-partir-primero-mayo; AVN, http://www.avn.info.ve/contenido/ingreso-m%C3%ADnimo-integral-queda-1307546-bol%C3%ADvares-desde-este-jueves)

 

OP-ED: Venezuela's cryptocurrency is one of the worst investments ever

There are two types of countries, just as there are two types of companies: ones that are doing well, and ones that are pivoting to blockchain. And now it's Venezuela's turn to try to cash in on the crypto craze to save itself from its own long list of mistakes. It's hard to think of a government that, absent a war, revolution or Stalinist-style purge, has done a worse job running its economy than Venezuela's. Which is why Venezuela's government has just launched the Petro, its own cryptocurrency backed by oil. Well, at least that's what the regime is saying. In reality, the Petro isn't a crypto, it isn't a currency, and it isn't backed by oil in any meaningful sense. It's just a way for Caracas to try to get around the sanctions against it while raising money from the only people more clueless than itself. It isn't an exaggeration to say that the Petro might be the most obviously horrible investment ever. There are two things to understand here. The first is that you can only buy Petros with dollars, not bolivars. The second is that you can only use Petros to pay your taxes in Venezuela. They aren't good for anything else. And that sets up a very deliberate catch-22: The only people who can buy Petros can't use them, and the only people who can use them can't buy them. Venezuela's government says it will value your Petros at whatever price it calculates oil is at when you use them to pay taxes. What it won't do, though, is give you oil itself in return for them. So, if you're looking for a way to bet on the price of oil that only works as long as you owe taxes in Venezuela and believe one of the least trustworthy governments in the world will keep its promises, well, the Petro is for you. For everybody else, you can just buy oil instead. The Petro is about creating something useless - that's why only foreigners can buy them, but only Venezuelans can spend them - that, through the magic of techno-utopian jargon, is able to persuade enough people it's the future for them to fork over US$ 735 million for it. That's how much money the Chavista regime says it's raised so far. Maybe that's a lie ... but maybe it's not. Cryptocurrency investors, after all, aren't always the most discerning bunch. It was only a few months ago that they pushed the price of dogecoin, a bitcoin parody featuring dogs saying ungrammatical things, up to as much as US$ 2 billion. Is buying a bond that will never pay you back from a government that's already defaulting on its debt any worse a decision? Arguably not! At this rate, it won't be long until every person, company and country in the world is focusing on blockchain. If Venezuela can make money off it, there isn't anyone who can't. (The Chicago Tribune: http://www.chicagotribune.com/business/columnists/ct-venezuela-cryptocurrency-petro-20180305-story.html)

 

Politics and International Affairs

19 Army officers reportedly arrested for “conspiracy

19 Army officers have reportedly been arrested over the weekend; among them the commander of the key armored Ayala Battalion, Iber Marín Chaparro, who was an aide to the late President Hugo Chavez, who once said he had his “entire trust”. Those arrested are part of the most important units in the Fort Tiuna garrison in Caracas. The Ayala Battalion is the largest in the country, including 300 US-made Dragon tanks and 45 Russian-made units with very high firepower. Military sources report this battalion is down to 245 men, from 350, due to desertions. Another group arrested belong to the Bolívar Armored Battalion, which also operates out of Fort Tiuna, which used MBP-3 tanks. Marín Chaparro, who is a nephew of the Apure State Governor and former Vice President, General Ramón Carrizales, is reported to have been interrogated by Defense Minister Major General Vladimir Maduro before being taken to Military Counter-Intelligence headquarters. Army Lieutenant Colonel Eric Peña Romero, a former aide to Major General Miguel Rodríguez Torres at the Bolivarian Intelligence Service (SEBIN), was also arrested. More in Spanish: (Venepress: https://venepress.com/article/Detenido_en_DGCIM_Comandante_del_Batallon_Ayala_por_presunta_conspiracion1520273240715)

 

Maduro demotes, expels 13 military officers

President Nicolas Maduro demoted, expelled or separated from the Armed Forces 13 current and/or former military officers, including men currently in jail and retired personnel. Raul Isaias Baduel, the Army General in Chief who rescued Maduro’s mentor and predecessor, Hugo Chavez, after a failed coup d’etat in 2001 and who is already in jail (for asking that Maduro leave office last year) and who retired when Chavez was still alive and in power (both men had a falling out after Baduel came out against eternal re-election) was the first officer mentioned in the decree. Maduro is accusing Baduel and the other 13 officers of crimes against the integrity, independence and freedom of the nation, including treason to the fatherland. Local military and security affairs NGO “Control Ciudadano” said the total number of military officers demoted recently, including the recent batch of 13 expurgated personnel, is now 24. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2451998&CategoryId=10717)

 

Venezuela presidential election postponed to May 20th

The snap presidential election in Venezuela scheduled for 22 April has been pushed back by a month, the National Electoral Council (CNE) has announced. The CNE said the poll would now be held on 20 May. The move came after an agreement was reached between the government and a small number of opposition parties. CNE chief Tibisay Lucena also announced the government had agreed on "electoral guarantees" for the forthcoming elections with a few minor opposition parties. UN chief Antonio Guterres would also be invited to send an observer mission to monitor "all phases of the process". The decision was widely interpreted by critics of the government as an attempt to steamroll the deeply divided opposition coalition and throw it into disarray. It also triggered international criticism, with Argentina, Brazil, Chile, Colombia, Mexico and Peru all rejecting the early election and some countries warning that they would not recognize the result. The US has said it would consider imposing further sanctions against the government if it went ahead with the presidential vote under what it called fraudulent conditions. The main opposition Democratic Unity coalition announced it would boycott the 22 April election and refused to put up any candidates to oppose President Maduro. In response to the latest announcement the coalition said it would be maintaining its boycott, saying the elections would still be fraudulent. The organization tweeted that none of its members had signed the agreement with the Electoral Council. But former state governor Henri Falcón decided to run in the presidential election. The most high-profile opposition candidates, such as Henrique Capriles and Leopoldo López, are barred from running. Others have left the country for fear of arrest. It is also not clear whether the delay will ease pressure on the Venezuelan government. An unnamed US government official quoted by news agency Reuters said a delay "likely would not prompt the US administration to hold back on sanctions". (BBC News: http://www.bbc.com/news/world-latin-america-43241884)

 

Venezuelan Parliament calls on UN not to “legitimize” snap presidential elections

Luis Florido, Chairman of the National Assembly’s Foreign Affairs Commission, has called on the United Nations to withhold recognition from snap presidential elections now rescheduled to May 20th. He says: “The terms for election competitiveness do not exist in Venezuela since this is a fake elections charade”. He wrote that the UN should become an international observer “only in competitive and truly free elections”. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/asamblea-nacional-pido-a-la-onu-no-legitimar-presidenciales; El Nacional, http://www.el-nacional.com/noticias/asamblea-nacional/asamblea-nacional-pidio-onu-avalar-presidenciales_225623)

 

Poll shows 77.6% of Venezuelans want to take part in presidential vote

A recent poll by DATANALISIS shows that 77.6% of 1000 Venezuelans asked said they want to vote, and 12.3% say they will abstain. Pro-regime voters intend to vote by 96.7%, along with 65.9% of opponents, and 80.1% of independents. 9.1% of those polled are totally unwilling to vote, 13.3% not very disposed; 34% willing to vote, 39.1% very willing; and 4.1% would not respond. The most popular leader is Leopoldo López, who is disqualified and under house arrest, which makes Henri Falcón the main choice, even above Henrique Capriles Radonski, who has also been disqualified. The poll shows a majority of opponent would vote for López, while a large segment of independents would choose Falcón. When López and Capriles are withdrawn from the list, President Nicolás Maduro leads with 19.7%. If all opposition choices were joined they would amply surpass all pro-regime groups. More in Spanish: (Venepress: https://venepress.com/article/Asi_esta_la1520285437818)

 

Maduro sings lewd version of ‘Despacito’ as he announces re-election bid

On Tuesday, President Nicolás Maduro told a group of red shirt-clad followers that he will officially run for re-election in April’s snap presidential vote—and he did so to the rhythm of Luis Fonsi and Daddy Yankee’s smash hit “Despacito” by changing the song lyrics for a more salacious version. In reference to former National Assembly president and opposition leader Henry Ramos Allup—Maduro’s political foe—the left-leaning leader said he would “despacito [Spanish for “slowly”] shove it up [to Allup], 10 million votes down his gut, slowly.” This is not the first time Maduro used Fonsi’s song for political reasons. Last summer, the Venezuelan strongman told opponents that his Constituent Assembly project was going to happen by altering the song lyrics. In response, the Puerto Rican singer issued a statement in Spanish via Instagram, saying: “At no time I’ve been consulted, nor I’ve authorized the use or change of Despacito’s lyrics for political purposes, much less in the deplorable situation that a country that I love as much as Venezuela is in.” (Newsweek: http://www.newsweek.com/venezuelas-maduro-sings-lewd-version-despacito-he-announces-re-election-bid-824809)

 

Pragmatic candidate livens up Venezuela’s presidential race

In another year, Henri Falcon might be just another middle-of-the-pack presidential candidate in Venezuela. He’s not the most popular opposition leader. He’s a dull speechmaker. The parties that back him are small. He’s managed to irritate both the left and the right. But a boycott of the race by Venezuela’s biggest parties means Falcon is by far the most prominent option on the May 20 ballot for those who want to unseat socialist President Nicolas Maduro — and polls indicate that is the majority in a country with spreading hunger and an almost worthless currency. Some of the same polls even have the former governor as the front-runner, with a double-digit lead over Maduro. The big question is whether that will matter. Most of Venezuela’s opposition, joined by the U.S. and much of the international community, is convinced it won’t — that the fix is in. Falcon, 56, lacks the flair of many Venezuelan political figures. He comes across as a cerebral, competent manager driven more by pragmatism than ideology. Even while in the ruling socialist movement, he kept lines open to the business community that was being pummeled by much of the government. Now as an opponent, he calls for preserving generous social programs and subsidies started under Chavez. He has urged seeking help from the International Monetary Fund, and his most noted economic adviser, Wall Street analyst Francisco Rodriguez, has called for adopting the dollar as the national currency to halt the hyperinflation that has devastated the economy. In a 2010 secret cable made public through Wikileaks, then U.S. Ambassador Patrick Duddy described Falcon as a “Chavista Lite.” But his Chavista heritage led to lingering suspicion among anti-government rivals. He was banished from the opposition coalition after announcing his candidacy, with some hardliners suggesting he should be sanctioned by the U.S., which has backed the decision to boycott the vote. That mistrust, combined with anger at his decision to buck the election boycott and a widespread loss of hope among the opposition, could depress turnout, undermining his chances if the vote turns out to be fair. Partly for the same reason, he lost a re-election bid in October against a government loyalist by a landslide. Still, a recent survey by local pollster DATANALISIS said most people identifying themselves as opposition supporters indicated a willingness to vote even under current conditions that they view as rigged. The Feb. 1-14 poll had Falcon, before he announced his candidacy, leading Maduro by more than 12 points. It had a margin of error of plus or minus three percentage points; and some see Falcon’s politics as the most feasible way forward for Venezuela, allowing a soft landing for Maduro should he decide to cede power. (AP: https://apnews.com/1276721f9f5f4937890eab761e4c4792)

 

OP-ED: Why I am running for President of Venezuela, by Henri Falcón

Last week, I registered as a candidate for the presidency of Venezuela. I am running for president because I think Venezuelans should have a choice of whether to continue with the disastrous rule of President Nicolás Maduro, or to support a route of inclusion, progress and justice. Some of my fellow members in the opposition coalition have called for boycotting the election, claiming that misconduct by the regime makes a free and fair vote impossible. They are right in denouncing the abuses of the government: Maduro has persecuted opposition leaders, banned political parties, filled electoral institutions with his loyalists and blatantly used government resources in his campaign. Venezuela’s presidential election will be played on an uneven playing field. Those who want to sit out the election argue that participating lends legitimacy to a rigged process. They also worry that the international support that the opposition has been able to muster could wane as a result of our decision. These concerns are legitimate. But we can’t give up and let Maduro get away with six more years in power. Choosing to fight under unfair rules does not legitimize the rules: it affirms our willingness to defend our rights. And if the government decides to steal this election, it can count on finding me in the streets, by the sides of the brave Venezuelan people, fighting for our right to be respected. My difference is one of strategy. Electoral boycotts almost never work. When resistance movements decided instead to confront authoritarian regimes at the polls — authoritarians from Pinochet to Milosevic — they had a much greater chance of producing regime change. Governments do not win elections during periods of hyperinflation — except when, as in Zimbabwe in 2008, the opposition makes the fatal mistake of boycotting the vote. Opinion surveys consistently show that Venezuelans want to vote in the coming elections. I agree that divisions in the opposition are harmful to our cause. Still, since the overwhelming majority of Venezuelans want to vote, my responsibility is to stand by our people, even if it means breaking with the minority that wants to sit out the election. The overriding priority of my administration will be to make sure that not one Venezuelan child goes to bed without having eaten. I will seek international assistance — including from bilateral and multilateral agencies — to replenish stocks of food and medicines. I will create a program of conditional cash transfers with the objective of eradicating hunger. I will also immediately free all the country’s political prisoners, thrown in the government’s dungeons for the sole crime of thinking differently. My plea to Venezuelans who oppose Maduro’s despotic rule is to reach across our divisions and reunite around the common project of a better country. But reconciliation begins with justice, and those responsible for human rights violations and corruption must be held accountable. (The New York Times: https://www.nytimes.com/2018/03/06/opinion/henri-falcon-president-venezuela.html)

 

SPECIAL REPORT: Can Venezuela be saved?

The New York Times magazine has recently published a lengthy special report on Leopoldo López, the leader of Venezuela’s Voluntad Popular party. López was arrested in February 2014 after leading a public protest that turned violent. Prosecutors acknowledged in court that López was technically peaceful, but they accused him of inciting others to hatred and violence. At trial, he was sentenced to 13 years and nine months in prison. Since then, he has become the most prominent political prisoner in Latin America, if not the world. López has become a kind of symbol but there’s widespread disagreement on precisely what he represents. For three and a half years in prison, López refused to let anyone speak for him. Though he was prohibited from granting interviews or issuing public statements and was often denied access to books, paper, pens and pencils, he managed to scribble messages on scraps of paper for his family to smuggle out, and he recorded a handful of covert audio and video messages denouncing the Maduro government. From time to time, he could even be heard screaming political slogans through the bars of the concrete tower in the military prison where he was kept in isolation. López was released to house arrest last July on the condition that he fall silent. He promptly climbed the fence behind his house to rally a gathering crowd, then issued a video message asking his followers to resist the government. Three weeks later, he was back in prison; after four days, he was released again. Ever since, he has vanished from public view.  Almost nobody is allowed to enter the López house, for one thing, being surrounded all day and night by the Venezuelan secret police. Using an obscure video service, he spoke to a New York Times reporter. Asked if he ever thought about trying to escape. “Most people tell me that I should,” he said. “But I believe a commitment to the cause means that I need to take the risk.” The word “radical” is often used about López in a misleading way. Where you can describe López as a radical is the way he approaches political activity. He believes that a relentless campaign of street demonstrations and civil disobedience is essential to challenge an authoritarian government. He now says: “In the past, I was in confrontation with different views,” he told me. “Now I understand that everybody is needed to reach a way out of this disaster … A lot of people in the opposition have resentment, and I understand that,” he told me. “But I think our responsibility is to move beyond the personal resentment. Four years in prison have given me the possibility of seeing things a different way, of putting rage in its perspectiveIt’s not easy, but I have the responsibility to speak my mind. I’ve been in prison four years now because of speaking my mind, and if I self-censor, I’m beaten by the dictatorship.” López said he still believed that with the right leadership, Venezuela could rebound. He knew that stabilizing the Bolívar could be accomplished by attaching its value to a foreign currency, and that under a new government, the private sector would return. He believed the country’s oil production would recover under good management, and he had been working for nearly a decade on a plan to convert the national oil company into a kind of Social Security trust, with investment shares assigned to the public for retirement, education and emergencies. Unable to speak publicly, he developed a network of private channels — reconnecting with leaders of the political parties from which he’d split, making inroads with members of the Maduro government and with foreign ministers and heads of state. López was also flexible in his thinking about transition. An unwelcome mechanism can bring welcome change. “In 1958, there was a military coup that began the transition to democracy,” he said. “And in other Latin American countries, there have been coups that called elections. So, I don’t want to rule anything out, because the electoral window has been closed. We need to go forward on many different levels. One is street demonstrations; a second is coordination with the international community. But this is how I’m thinking now: We need to increase all forms of pressure. Anything, anything that needs to happen to produce a free and fair election.” Since the publication of this article, armed guards from the Venezuelan intelligence service have raided and occupied the residence of Leopoldo López. Members of the Venezuelan National Assembly gathered in front of the house, along with local media and citizens, to protest the invasion and threats by the Venezuelan government that López will be returned to military prison. (The New York Times: https://www.nytimes.com/2018/03/01/magazine/can-venezuela-be-saved.html)

 

Almagro denounces  secret police raid into Lopez’ home as “illegal

OAS Secretary General Luis Almagro has denounced the “illegal and intimidating” nighttime entry by Venezuelan secret pólice (SEBIN) into the home of Leopoldo López, who remains under house arrest in Caracas. More in Spanish:  (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/almagro-considera-ilegal-la-entrada-del-sebin-venezolano-en-casa-de-lopez)

 

OP-ED by Sen. Marco Rubio: Venezuelan military could help restore democracy

No one should be fooled when Venezuelan dictator Nicolás Maduro holds a fraudulent presidential election and seeks to force illegitimate legislative elections to replace the country’s democratically elected National Assembly on April 22. While the Castro-backed Maduro regime and his cronies cynically seek to use a sham vote to restore their international legitimacy, these “elections” will be unfree, unfair and completely rigged. Maduro has banned virtually every opponent — including his strongest political rivals, Leopoldo López, María Corina Machado, Henrique Capriles and Antonio Ledezma — from running against him. The regime will monitor how government workers and recipients of subsidized food vote, with the clear threat of losing their jobs or their food if they don’t vote for Maduro. And the regime will not allow credible and transparent international monitors to observe the vote, allowing it to alter unfavorable polling outcomes, just like it did in the illegitimate Constituent Assembly elections of July 2017 and regional elections of October 2017. In short, their sham “elections” will not be free, fair or transparent — Maduro would lose if they were. The Venezuelan people and the rank and file members of its embattled military can be the ultimate instrument for ending the dictatorship and restoring Venezuela’s constitutional democracy. History reminds us that despots rarely give up dictatorial power voluntarily. The most stable and peaceful path forward for Venezuela is for a united front of disaffected government insiders and military personnel, with popular support from the Venezuelan people, to remove Maduro and his inner circle from power. But the Venezuelan military, with the popular support of their citizenry, can end this dictatorship and restore their people’s freedom, dignity, and right to govern themselves. If, and when, they choose to, I believe they will enjoy overwhelming support from the United States and other free nations of the world. (The Miami Herald: http://www.miamiherald.com/opinion/op-ed/article202764209.html)

 

ALBA Summit in Venezuela agrees to promote Maduro’s entry into Summit of the Americas

At around 5:00 pm Monday in Caracas the summit of representatives of countries belonging to the Bolivarian Alliance (ALBA) convened to discuss Venezuela's general elections, to be held next May 20. The host country's head of state, Nicolas Maduro, led the meeting, in which Dominican Prime Minister Roosevelt Skerrit and Presidents Evo Morales or Bolivia, Daniel Ortega of Nicaragua and Raul Castro of Cuba also took part. It is reported they will pressure for Maduro to be included in the upcoming Summit of the Americas. Bolivia’s former foreign minister and ALBA Secretary General David Choquehuanca called the decision by the Lima Group to leave Maduro out was “interference into Venezuela’s internal affairs”, while Dominica’s Roosevelt Skerrit called the decision to exclude Maduro “disrespectful of the Venezuelan people” and a flagrant violation of international law. The group said they would take unspecified “diplomatic and political measures” to ensure Venezuela’s participation at the meeting. (EFE: https://www.efe.com/efe/english/world/alba-summit-in-venezuela-to-discuss-host-country-s-upcoming-elections/50000262-3543666, and more in Spanish: El Nuevo Diario: https://www.elnuevodiario.com.ni/internacionales/457629-alba-venezuela-cumbre-americas/)

 

Venezuela opens backchannel over jailed American, Maduro ally travels to Washington

President Nicolas Maduro welcomed a visit by a top-ranking Republican congressional staffer last month to discuss the possible release of a Utah man jailed for more than 20 months in this volatile nation, six U.S. congressional and administration aides told The Associated Press. It's not known if there has been any progress in the backchannel talks to secure Joshua Holt's freedom, but the mere fact that Maduro met with the staffer, and in turn sent an envoy of his own this week to Washington, may be a sign of movement in a case that has become a major irritant as tensions between the two countries rise. The unannounced discussions began when Caleb McCarry, a Republican aide on the Senate Foreign Relations Committee, traveled to Caracas in February and met with Maduro and first lady Cilia Flores to discuss Holt's imprisonment, said the aides, who agreed to discuss the matter only if not quoted by name because the talks are sensitive. The behind-the-scenes dialogue prompted a surprise visit this week to Washington by a trusted ally of Maduro, Gov. Rafael Lacava of Carabobo state, to discuss Holt, three congressional aides familiar with the visit said. The visit by Lacava, who traveled to Washington on Sunday after being granted a U.S. visa, has been met with hostility by Sen. Marco Rubio, a Florida Republican who is a harsh critic of Maduro and has President Donald Trump's ear on policy toward Venezuela. One congressional aide said that Lacava had only requested meetings on Capitol Hill and that the sole purpose of those meetings is to urge the release of Holt and not negotiate anything in exchange. Any discussion of sanctions relief that may be on Lacava's agenda is unlikely to come up, since that is a matter for the administration to decide, the aide added. (Fox News: http://www.foxnews.com/world/2018/03/06/us-aides-venezuela-opens-backchannel-over-jailed-american.html)

 

OP-ED: How Venezuela tests Latin America’s commitment to democracy

When Bill Clinton called the first Summit of the Americas in Miami in 1994 he wanted to celebrate the shared commitment of all 34 countries in the hemisphere to democracy and free trade—all, that is, except Cuba, the 35th, which was not invited. At the seventh summit in Panama in 2015, regional solidarity prevailed. At Latin America’s insistence, Cuba was invited and Raúl Castro sat down with Barack Obama, setting the seal on their diplomatic détente. So, it was a big diplomatic step when last month Peru’s government, the host of the eighth summit, scheduled for April 13th-14th, announced that it was withdrawing Venezuela’s invitation and that Nicolás Maduro, its president, would be denied entry. Peru acted for the 14-nation ad hoc “Lima group”, which includes most Latin American countries. They rejected Maduro’s decision to hold a sham presidential election on April 22nd. Latin America is once again giving priority to the defense of democracy. What chance is there that action by Venezuela’s neighbors can achieve results? Ostracism is a start. Latin American countries should follow the United States and the EU in barring the regime’s leaders from visiting, and in seizing their looted assets. It should also demand that the faction-ridden opposition unite behind a single leadership. Latin America has plenty of disagreements with Donald Trump, but anti-imperialism should not, as Venezuela argues, override the defense of democracy and human rights. Neither should the tradition of non-intervention, nor an insistence on unattainable regional unanimity. That means the OAS might not be the right diplomatic vehicle. Rather, the Group of Lima should turn itself into an open-ended coalition of the willing to take whatever political action is necessary to return Venezuela to democracy and stave off a humanitarian disaster. (The Economist: https://www.economist.com/news/americas/21737555-regional-solidarity-should-not-trump-defence-pluralism-how-venezuela-tests-latin-americas)

 

Four in 10 Venezuelans would leave Venezuela behind

Venezuelans are fleeing their country in droves amid the chaos in their government and their streets. More than four in 10 residents (41%) in 2017 said they would like to move to another country permanently if they could. This desire is higher than any figure Gallup has measured since 2008 for the country. Up until 2014, no more than 15% of Venezuelans expressed a desire to leave their country and live elsewhere. Meanwhile, a small majority of Venezuelans say they would like to remain in their country. These data were collected in the latter half of 2017, between August and November, as violence and hunger overcame the country. During this period, anti-government protesters raided a military base, taking weapons. GALLUP has tracked Venezuela's descent on a host of measures in recent years. Now, many Venezuelans would like to leave the crisis behind them. Of the residents who say they would like to move away, one in five (20%) say they would like to go to neighboring Colombia. By the end of 2017, Colombian immigration officials have counted more than a half million Venezuelan refugees who crossed the border. Nearly as many, 17%, say they would like to move to the U.S. The current figure is a somewhat muted level of desire to move to the U.S. compared with the past few years. Among Venezuelans who would like to move, about two in three (64%) name another Latin American country as a desired destination, including Colombia, Chile (12%), Panama (8%) and Ecuador (8%). Many of these countries have made accommodations for Venezuelans entering their country. 6% of those who would like to leave Venezuela say they would like to go to Spain. With President Nicolas Maduro running for re-election this spring, a change in leadership could cause many Venezuelans to reconsider a potential move. (GALLUP: http://news.gallup.com/poll/228338/four-venezuelans-leave-venezuela-behind.aspx)

 

Venezuela’s collapse causes humanitarian and security crisis for Colombia

The massive migratory flow from a collapsing Venezuela can be measured by the 91,000 people estimated to have crossed Colombia’s border on a single day in mid-February. Three statistics from Migración Colombia convey the magnitude of the exodus. In 2012, 2,000 Venezuelans sought to travel through Colombia to Ecuador. In January, according to Migracion Colombia, that number was 56,147 — a rate that would reach about 674,000 by year’s end. Many of those fleeing Venezuela go on to Peru and Chile — and from the words of the migrants, anywhere but a return to Maduro-run Venezuela. In the last six months of 2017, 68,739 applied for Migracion Colombia’s Special Permanent Permission (PEP). In the first 37 days of 2018, 86,833 applied. Migracion Colombia already has issued 1.6 million short-term visa-like permits for those who say they will go back to Venezuela after working a few days or getting emergency medical care or just eating a decent meal. Fortunately, President Juan Manuel Santos Calderón, having traveled to Cúcuta three weeks ago, has called for a major international response — and the magnitude of the humanitarian and security challenges clearly require speed, generosity and wisdom. While the licit and illicit commerce across that almost 1,400-mile border is traditional. With no passport formally required between the sister cities of Cúcuta and San Antonio, fewer migrants are returning to Venezuela. Leaving Venezuela, migrants use seven formal monitored crossings like the Simon Bolivar Bridge into Cucuta, or more than 200 smuggling paths, with now 1,000 to 3000 staying in Colombia daily, according to Colombian officials. Having walked along one of those paths with Colombian police to the mostly dry riverbed separating the two countries, it was clear that not only pedestrians, but motorcycles and trucks also can be used to smuggle cattle, gasoline and anything else into Colombia, plus and narcotics or stolen minerals into Venezuela. Colombia already had the task of implementing a complicated peace accord that ended a five-decade conflict with the FARC guerrillas, while battling other illegal armed groups all financed by cocaine and human trafficking, kidnapping and extortion. The complicity of many at the highest levels of the Maduro administration’s largely military-controlled trafficking has been documented by the United States. The Colombia military just denounced Venezuela’s providing sanctuary to ELN leaders and alleged involvement of two Venezuelan troops in the latest ELN bombing in Barranquilla that resulted in the deaths of six police and some 20 wounded. Colombia’s initial extra military deployment of 3,000 troops and border police undoubtedly will serve to monitor the illegal crossings more closely. However, with easily traversed scrub brush, river and mountain borders, a halt to migration and to security threats from Venezuela cannot be stopped by Colombia, only change in Venezuela can end those pressures. (The Miami Herald: http://www.miamiherald.com/opinion/op-ed/article203654959.html)

 

Venezuela mass exodus taking toll on nation's patrimony

About 4 million Venezuelans have left the country since 1999, trying to escape hyperinflation, a worthless currency, starvation and high crime after 19 years of Communist mis-rule, but as the pace of the exodus picks up, some are also trying to take an iconic piece of their country with them: small tiles from the large Carlos Cruz-Diez monumental mosaic on the floor of the lobby of the departure section of the Simon Bolivar International Airport, the oil-rich nation’s largest. Travelers and visitors started noticing pieces of Op Art’s pioneer Cruz-Diez’s “Cromo interferencia de color aditivo” – installed in 1974-1978 and taking up more than 2,600 square meters- missing. The trend began in earnest five years ago, at about the same time Maduro took over. National Assembly opposition lawmaker Delsa Solorzano took issue with the damaging of Cruz-Diez’s work Monday in a series of tweets, asking travelers not to take that special part of Venezuela with them, and reminding readers that maintenance is not precisely the forte of Maduro’s administration. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2452047&CategoryId=10717)

 

Abandoned minors roam the streets of Venezuela after parents leave country

An increasing number of Venezuelans are crossing the border into Colombia due to the unprecedented economic and social crisis scourging their homeland, leaving their children in the care of relatives who cannot afford to support them. Shelters for abandoned or orphaned children have reported being overcrowded but they still receive requests to house more kids from relatives and people under whose care the children have been placed. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2452021&CategoryId=10717)

 

Venezuelans, Go Home: Xenophobia Haunts Refugees

For decades, the oil-rich citizens of a great nation were stereotyped by their poorer neighbors as haughty. Now comes the payback. (Bloomberg, https://www.bloomberg.com/news/features/2018-03-05/venezuelans-go-home-xenophobia-spreads-as-refugees-flee-crisis)

 

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.

Wednesday, February 14, 2018

February 14, 2018


Oil & Energy

 

Venezuela oil production is plummeting

Venezuela's main source of cash is dwindling at a breathtaking pace. The country's oil output in January fell to its lowest level in nearly 30 years, not including a brief oil strike in 2003, according to S&P Global Platts. A monthly OPEC report published Monday revealed Venezuela pumped 1.6 million barrels of oil per day last month. Production in January was down 20% from a year ago. The staggering decline is another sign of Venezuela's economic and political crisis. Venezuela has more crude oil than any other country in the world and it heavily depends on the commodity to power its economy. Crude oil makes up about 95% of Venezuela's exports. The country has no other source of foreign income. Yet the government-owned oil company, PDVSA, has pumped less and less oil for the last few years because of corruption, crumbling infrastructure and a massive debt crisis – and the United States could get tougher on Maduro very soon. Secretary of State Rex Tillerson said last week on his tour of Latin American countries that the administration is still considering a ban on Venezuelan crude oil exports to the United States. Experts say a complete oil ban would be a devastating blow to Venezuela's economy and Maduro's political fortunes. (CNN Money: http://money.cnn.com/2018/02/12/news/economy/venezuela-oil-production/; Oil Price: https://oilprice.com/Energy/Crude-Oil/OPEC-Production-Steady-In-January-As-Venezuela-Output-Plunges.html)

 

Venezuela's oil output crash is costly for U.S. refiners

U.S. Gulf Coast refiners are paying the price for shrinking Venezuelan crude output. U.S. production is at an all-time high, while output from Venezuela, despite a modest increase in January, is in decline. As a result, U.S. crude’s typical premium to heavy Venezuelan oil shrank to as small as 31 cents a barrel Friday, the narrowest since October. Most U.S. Gulf Coast refiners profit when crude grades like those from Venezuela are at a large discount to WTI because these so-called heavy crudes comprise 40% to 60% of the oil they process, said Fernando Valle, oil and refining analyst at Bloomberg Intelligence. Venezuelan oil is getting more expensive relative to U.S. benchmark amid falling output. “The narrowing can be attributed to a rapidly changing fundamental picture in both markets,” Mara Roberts Duque, a New York-based analyst at BMI Research, said by email. “Rising U.S. production is keeping a lid on the WTI upside while continued declines in Venezuelan output are supporting the local benchmark.” (Bloomberg: https://www.bloomberg.com/news/articles/2018-02-12/venezuela-s-oil-output-crash-comes-at-a-cost-to-u-s-refiners)

 

Official: US believes ex-Venezuela oil czar took bribes

U.S. prosecutors believe Venezuela's former oil czar received bribes as part of a major graft scheme that allegedly took place in this nation's oil industry, an American official familiar with the probe said. Rafael Ramirez, who was one of Venezuela's most powerful officials until he quit as the country's U.N. ambassador in December, was named as a bribe recipient although not charged in an indictment against five other former senior officials that was partially unsealed Monday. In the indictment, prosecutors in Houston allege two of the charged individuals told businessmen that proceeds from bribe payments they made in exchange for quick payments and contracts with Venezuela's state-run oil giant PDVSA would be shared with a senior Venezuelan official, identified in the unsealed portion as "Official B." That unidentified Venezuelan politician is Ramirez, a U.S. official told The Associated Press. The official agreed to talk about the case only on condition of anonymity because they were not authorized to discuss the matter. (Fox News: http://www.foxnews.com/world/2018/02/13/official-us-believes-ex-venezuela-oil-czar-took-bribes.html; Bloomberg: https://www.bloomberg.com/news/articles/2018-02-12/ex-venezuela-officials-charged-with-money-laundering-at-pdvsa)

 

Commodities

Venezuela army clashes with illegal miners, 18 reported dead

Soldiers clashed with illegal miners in southern Venezuela on the weekend, killing 18 people in a region notorious for violence and gang rivalries, a lawmaker and local media said. Bolivar state Governor Major General Justo Noguera said a military unit had fought off an attack, but gave no more details. “An investigation is under way,” he told reporters. Local newspaper Correo del Caroni reported that 17 men and one woman died in the incident on Saturday morning in an area known for gold and diamond mining. (Reuters, https://www.reuters.com/article/us-venezuela-miners/venezuela-army-clashes-with-illegal-miners-18-reported-dead-idUSKBN1FV0XV)

 

Economy & Finance

PDVSA bonds join Venezuela bonds in trading flat (defaulted)

Following consultations with major market participants, the Emerging Markets Trading Association (EMTA) is recommending that, for all trades entered into on or after February 12, 2018, all Bonds issued by PDVSA that are on a U.S. sanctions exceptions list (see the Annex to the General License No. 3 related to the Executive Order: https://www.treasury.gov/resource-center/sanctions/Programs/Documents/vz_bond_list_long.pdf)  should, unless otherwise agreed, trade “flat”. The Executive Order, together with the General Licenses, can be found here: https://www.emta.org/WorkArea/DownloadAsset.aspx?id=10480, but counterparties are urged to refer to the U.S. Treasury’s website for further updates. To the extent that bonds are added to this Venezuela General License No. 3 Annex, they will be subject to this Market Practice, and to the extent that bonds are deleted from this Annex, they will not be subject to this Market Practice. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2450683&CategoryId=10717)

 

US Treasury publishes 2 new Venezuela & PDVSA debt restriction explanations

The U.S. Department of the Treasury’s Office of Foreign Assets Control has published two new Venezuela-related frequently asked questions (FAQs).  The FAQs provide additional guidance on the debt-related prohibitions in Executive Order (E.O.) 13808, including the meaning of “new debt” for the purposes of E.O. 13808 and the receipt of certain late payments from the Government of Venezuela, including Petroleos de Venezuela, S.A. (PDVSA). OFAC does not consider debt that was created prior to August 25, 2017 to be “new debt” for purposes of E.O. 13808 so long as the terms of the debt instrument (including, for example, the length of the repayment period or any interest rate applied) agreed to by the parties do not change on or after August 25, 2017. For debt created on or after August 25, 2017, U.S. persons are not permitted to accept payment from PDVSA or other segments of the Government of Venezuela, absent a specific license or other authorization from OFAC, if payment for a debt is not received within the applicable period specified in E.O. 13808 (90 days for PDVSA, 30 days for other segments of the Government of Venezuela)? Because receiving payments outside of these specified maturity periods generally constitutes a prohibited dealing in debt, U.S. persons should ensure that payment terms accord with the applicable debt prohibition. In circumstances where PDVSA or another segment of the Government of Venezuela fails to pay a debt in full within 90 or 30 days, as applicable, U.S. persons must obtain a specific license from OFAC before accepting payment after the expiration of the applicable period. License applications involving circumstances that do not meet these criteria will be reviewed on a case-by-case basis with a presumption of denial, with the exception of activity that is in U.S. national security or foreign policy interests, including humanitarian-related transactions, legal services, or personal communication-related services. (US Treasury Department: https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#553)

 

Colombia wants to build Venezuela financial rescue plan

Colombia has contacted international lending agencies about devising a financial rescue plan worth up to US$ 60 billion for neighboring Venezuela if President Nicholas Maduro leaves power, Colombia’s finance minister said in an interview on Friday. Hyperinflation and severe recession in oil-rich Venezuela are prompting Venezuelans to flee over the border to Colombia, now about 2,000 a day, Colombian Finance Minister Mauricio Cardenas said. Officials the International Monetary Fund, Inter-American Development Bank and World Bank are just beginning to understand the impact of the exodus, he said. “What happens when Maduro falls? We should not improvise. There should be a plan because Venezuela will require financial support,” Cardenas said (Reuters, https://www.reuters.com/article/us-colombia-venezuela-aid/colombia-wants-to-build-venezuela-financial-rescue-plan-idUSKBN1FU00L)

 

Venezuela's 20-Cent bonds are one hedge fund's emerging-market pick

Peter Kisler says one of the best bets in emerging-market debt is a country racked by quadruple-digit inflation, a plunging currency, punishing sanctions and months of overdue payments. (Bloomberg, https://www.bloomberg.com/news/articles/2018-02-09/venezuela-s-20-cent-bonds-are-hedge-fund-s-emerging-market-pick)

 

The Economy Is Full of Crypto (And Collective Delusion)

We have talked a few times around here about a socialist republic that has been hit hard by sanctions imposed by the U.S. government and that, in response, is planning to issue its own cryptocurrency to raise money. I mean Venezuela. Venezuela's government is the one that is planning to issue a cryptocurrency to replace money that it has lost due to the policies of the U.S. federal government. (Bloomberg, https://www.bloomberg.com/view/articles/2018-02-11/the-economy-is-full-of-crypto-and-collective-delusion)

 

Venezuela’s economy is so bad, parents are leaving their children at orphanages

Poverty and hunger rates are soaring as Venezuela’s economic crisis leaves store shelves empty of food, medicine, diapers and baby formula. Some parents can no longer bear it. They are doing the unthinkable. Giving up their children. There are no official statistics on how many children are abandoned or sent to orphanages and care homes by their parents for economic reasons. But interviews with officials at FUNDANA and nine other private and public organizations that manage children in crisis suggest that the cases number in the hundreds — or more — nationwide. FUNDANA received about 144 requests to place children at its facility last year, up from about 24 in 2016, with the majority of the requests related to economic difficulties. A study by the Catholic charity CARITAS in poorer areas of four states found the percentage of children under 5 lacking adequate nutrition had jumped to 71% in December from 54% seven months earlier. For years, Venezuela had a network of public institutions for vulnerable children — traditionally way stations for those needing temporary or long-term protection. But child-welfare workers say the institutions are collapsing, with some at risk of closing because of a shortage of funds and others critically lacking in resources. So, increasingly, parents are leaving their children in the streets. In the gritty Sucre district of Caracas, for instance, eight children were abandoned at hospitals and public spaces last year, up from four in 2016. In addition, officials there say they logged nine cases of voluntary abandonment for economic reasons at a child protective services center in the district in 2017, compared with none the previous year. A child-welfare official in El Libertador — one of the capital’s poorest areas — called the situation at public orphanages and temporary-care centers “catastrophic.” One of Venezuela’s main adoption agencies, PROADOPCION, said that in 2017, his organization received 10 to 15 requests monthly from pregnant women seeking to give up their babies, compared with one or two requests per month in 2016. Overwhelmed, the organization had to turn down most of the women. It accepted 50 children in 2017 — up from 30 in 2016. (The Washington Post: https://www.washingtonpost.com/world/the_americas/venezuelas-economy-is-so-bad-parents-are-leaving-their-children-at-orphanages/2018/02/12/8021d180-0545-11e8-aa61-f3391373867e_story.html)

 

Politics and International Affairs

Lima Group countries slam Venezuela election plans, Maduro unwelcome at Americas Summit

The "Lima Group" of Latin American nations plus Canada on Tuesday criticized Venezuelan President Nicolas Maduro's decision to hold a presidential election on April 22 and urged him to reconsider the date. In a statement, the countries said there could not be free and fair elections in Venezuela as long as there were political prisoners. Peru's foreign minister also told a news conference that Maduro would not be welcome at the Summit of the Americas to be held in Lima in April. (The Daily Mail: http://www.dailymail.co.uk/wires/reuters/article-5388569/Lima-Group-countries-criticize-Venezuela-election-date.html#ixzz572Nw2XRg9

 

US says new sanctions can be applied it Maduro holds illegitimate elections

In a review of US Secretary of State Rex Tillerson’s trip to Latin America and the Caribbean, Francisco Palmieri, Principal Deputy Assistant Secretary of State for Western Hemisphere Affairs, again condemned the Maduro regime’s call for a snap election in which the main opposition candidates are barred from running: “We are working together with the countries of the region to ensure that Venezuelan elections are free, fair, and internationally verifiable. There must be international election observation for successful, legitimate elections to take place, and we will not accept elections that do not allow for the full participation of all political actors in Venezuela. It’s clear that the path that the Maduro regime is moving down at this time will result in an illegitimate election… If the Maduro regime holds an illegitimate election in April, the United States will continue to use all our political, diplomatic, and economic tools to help restore true democratic order in Venezuela. It’s hard to imagine an election, a snap election held in less than 60 days, meeting the international standards for a free, fair, and transparent election, particularly given the unwillingness of the Venezuelan regime to allow meaningful participation by the opposition parties or to address the conditions on the ground that resulted in multiple illegitimate elections last year… Secretary Tillerson has been very clear that what we want in Venezuela is a peaceful transition and the restoration of constitutional democratic order. The best way to solve the multiple crises inside Venezuela is for the Venezuelan people to be able to exercise their democratic rights and select the leaders, the real leaders, who can solve the multiple problems that the Maduro regime is inflicting on the country.” He said the Secretary advocated for increased regional attention to the crisis in Venezuela during every discussion. “It was clear the region shares our concerns in this regard. We must continue to work to fulfill the requirements of the Inter-American Democratic Charter. As Secretary Tillerson said in Argentina, we simply cannot allow and stand idly by to see a total destruction of democracy in Venezuela. With our regional partners we continue to pressure the corrupt Maduro regime to return to a democratic constitutional order… We would like to see an orderly, peaceful transition to democratic order in Venezuela.” Palmieri declined to elaborate on possible new sanctions: “I don’t think at this time I have anything to announce with regard to what kind of sanctions would be put in place with regard to oil, but the Secretary was clear: the United States will continue to consider the use of every political, diplomatic, and economic tool we have to help restore democracy in Venezuela to the benefit of the Venezuelan people… I think we will use all the tools available to us at any moment, at any time, and in any place, to help the Venezuelan people restore their democratic system of governance.” Regarding the possibility that President Maduro will attend the Summit of the Americas meeting in Lima next April, Palmieri said: “Should President Maduro decide to attend that summit, he would certainly have a lot to answer for in terms of democratic governance and corruption. And any Venezuelan participation would have to address those issues.” (US Department of State: https://fpc.state.gov/278200.htm)

 

Venezuela fears ‘invasion’ after U.S. military chief visits Colombia

Venezuela on Monday accused neighboring Colombia of planning a bombing campaign or a “military invasion” amid heightened tensions in the region and a mass exodus fueled by Venezuela’s collapsing economy. “In Colombia, they are planning to revive eras that had ended in human history, like military bombing, a military invasion or the occupation, through blood and gunfire, of a peaceful country like Venezuela,” said Venezuela’s chief prosecutor, Tarek William Saab, according to the state-run AVN news agency. “We will not allow it.” Saab didn’t provide proof of his allegations, but other regional allies pointed to the weekend visit to Colombia by Admiral Kurt Tidd, head of U.S. Southern Command. Tidd and Colombian Vice President Óscar Naranjo met in the troubled coastal city of Tumaco on Saturday. According to the vice president’s office, they met to review bilateral efforts to stem the flow of drugs from Colombia’s Pacific coast. Bolivian President Evo Morales, a staunch Caracas ally, however, called Tidd’s presence “suspicious.” On Monday, the commander of Colombia’s armed forces, Gen. Alberto Mejía, suggested he had his hands too full with domestic issues to worry about Venezuela’s accusations. The statements also come as Venezuelan neighbors, including Colombia, Brazil and Guyana, have been tightening border controls in recent weeks to try to contain the flow of hundreds of thousands of Venezuelan migrants. (The Miami Herald: http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article199715099.html)

 

The International Criminal Court opens preliminary examinations into Venezuela

The Prosecutor of the International Criminal Court (ICC), Fatou Bensouda, has announced they will open preliminary examinations into the situation in Venezuela. The ICC Prosecutor announced she would examine crimes allegedly committed in Venezuela since at least April 2017 in the context of demonstrations and related political unrest. She noted that the continued demonstrations led to excessive use of force to disperse demonstrators and arrested and detained thousands of people and that many of those detained have been allegedly subjected to serious abuse and ill-treatment. It was also reported that some groups of protestors resorted to violent means, resulting in some members of security forces being injured or killed. According to the Office of the High Commissioner for Human Rights, 124 people have been killed in the framework of the protests: 46 killings were allegedly have been committed by the security forces and 27 by the pro-government armed groups. The International Federation for Human Rights hailed the move and urged Venezuela “to conduct thorough, impartial, and independent investigations into those allegedly responsible for international crimes committed on their soil and to cooperate with the Court during these preliminary examinations.” Venezuela’s Foreign Ministry promptly rejected the decision and claimed not to have received any formal notice thereof. (FIDH: https://www.fidh.org/en/issues/international-justice/international-criminal-court-icc/in-the-face-of-brutal-crackdowns-the-international-criminal-court); and more in Spanish: (Noticiero Venevisión, http://www.avn.info.ve/contenido/venezuela-rechaza-apertura-examen-preliminar-parte-corte-penal-internacional)

 

Trump denounces Cuban, Venezuelan repression

President Donald Trump has once again denounced the “repressive regimes” of Cuba, Venezuela, Iran and North Korea and said that his administration is on the side of all those people around the world suffering “persecution” because of their religious faith. Trump delivered his remarks at the annual National Prayer Breakfast in Washington, an event that traditionally blends politics and religion. The most recent State Department report on religious freedom, released last August, said that the religious environment in Cuba had improved in recent years, and in the case of Venezuela, the report only expressed concern over alleged “anti-Semitic” commentary in the state-run media. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2450572&CategoryId=10718)

 

Rubio says world would support Venezuelan military ‘removing a dictator’

Marco Rubio took to Twitter on Friday morning to suggest that the world would support Venezuela’s military if it decided to “restore democracy by removing a dictator” as the country’s President Nicolas Maduro prepares for an April election some are already predicting to be rigged. (Bloomberg, https://www.bloomberg.com/news/articles/2018-02-09/rubio-says-world-would-support-venezuela-removing-a-dictator)

 

European Parliament calls for further sanctions on Maduro regime

The European Parliament has called for more sanctions on high officials of the Maduro regime and raise the possibility of taking economic steps against the state oil company (PDVSA) here. The EU legislature also demanded that political rights be restored to opposition politicians so they can take part in the announced presidential election. The vote in the European Parliament was 480 in favor, 51 against and 70 abstentions. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/parlamento-europeo-pidio-ampliar-sanciones-a-funcionarios-del-gobierno-venezolano)

 

Venezuela loses right to vote at United Nations

Venezuela has lost its right to vote in the United Nations General Assembly because of the non-payment of its contributions, according to the organization. The country was in the same situation last year until regained the right to vote in that body after paying part of its debt. The UN rules establish the loss of the right to vote in the General Assembly for Member States that have outstanding payments to the organization's budget for an amount equal to or greater than the contributions that corresponded to them during the previous two years. Stéphane Dujarric, spokesman for the United Nations, said today that, as of January 29, these eight countries were in that situation: Venezuela, the Central African Republic, Dominica, Equatorial Guinea, Grenada, Libya, Suriname and Yemen. (Latin American Herald Tribune: http://www.laht.com/article.asp?ArticleId=2450732&CategoryId=10717)

 

Venezuela’s misery fuels migration on epic scale

Hundreds of thousands of Venezuelans are fleeing their country’s misery and pouring across borders into nearby countries, particularly Colombia, creating a sharpening challenge for the region. As the collapse of Venezuela’s economy deepens, the number of those fleeing is accelerating. Nearly 3 million Venezuelans—a 10th of the population—have left the country over the past two decades of leftist rule. Almost half that number—some 1.2 million people—have gone in the past two years, according to Tomás Páez, a Venezuelan immigration expert at Venezuela’s Central University. Some 550,000 Venezuelans were in Colombia at the end of 2017, a 62% increase from a year before, according to the Colombian government, with another 50,000 entering so far this year. (The Wall Street Journal: https://www.wsj.com/articles/venezuelas-misery-fuels-migration-on-epic-scale-1518517800)

 

Colombia, Brazil tighten borders as Venezuelan crisis deepens

Colombia and Brazil tightened border controls with Venezuela on Thursday as both nations grapple with a mounting influx of hundreds of thousands of desperate migrants fleeing a worsening economic crisis. In a visit to the border region, Colombian President Juan Manuel Santos said he would impose stricter migratory controls, suspend new daily entry cards for Venezuelans and deploy 3,000 new security personnel along the frontier, including 2,120 more soldiers. Brazil's Defense Minister Raul Jungmann, speaking in the northern border town of Boa Vista, said the government would also deploy more troops and start relocating tens of thousands of Venezuelan refugees who have crossed the open frontier to seek food, work and shelter. Both countries said they would take measures to count the number of Venezuelan migrants who have entered their territory: Brazil through a census and Colombia through a registry. The moves to tighten border security could threaten a key social safety valve for desperate Venezuelans as hyperinflation and a severe recession grip their country. The steps also signaled a mounting regional frustration with Venezuela's unpopular President Nicolas Maduro, who will seek re-election on April 22 amid conditions that the United States and other countries say are stacked against a divided opposition. "I want to repeat to President Maduro - this is the result of your policies, it is not the fault of Colombians and it's the result of your refusal to receive humanitarian aid which has been offered in every way, not just from Colombia but from the international community," Santos said. While Venezuelan professionals such as doctors and engineers have found work in Colombia's big cities or its oil industry, the bulk of the poor have settled in border towns. (NASDAQ: https://www.nasdaq.com/article/colombia-brazil-tighten-borders-as-venezuelan-crisis-deepens-20180208-01858)

 

Desperate Venezuelans pouring into Brazil

Officials in northern Brazil are demanding federal aid to help manage the influx of people seeking food and shelter. Brazilian President Michel Temer interrupted his Carnival vacation to fly to Roraima on Monday and promised to provide whatever aid is necessary to the country's northern state, which has been overwhelmed by tens of thousands of desperate Venezuelans fleeing their country's collapsing economy and political turmoil. Some 40,000 Venezuelans have poured into the Roraima capital, Boa Vista, overwhelming local government agencies and infrastructure in the city of 400,000. Many of the displaced Venezuelans are living in the streets. The president suggested that some migrants could be moved to other states but insisted that Brazil would not turn its back on the people fleeing misery. Defense minister Raul Jungmann later said that the army would set up a field hospital along the border and work with local officials to build triage centers, the G1 news portal reported. There are growing fears among residents that the Venezuelans will take jobs away from Brazilians, who are concerned about their own country's lackluster economy. Two residences housing Venezuelans were set alight last week — five people were injured. A local man has been arrested in connection with the attack. The Roraima government gave federal officials a list of demands last week, including equipment, vehicles and its own security forces. Temer's government has so far agreed to double the number of federal security forces at the border to 200. After his meeting with local officials Temer reaffirmed that the government will not block Venezuelans from entering but it may try to organize the flow. (DW: http://www.dw.com/en/desperate-venezuelans-pouring-into-brazil/a-42558289)

 

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.