International
Trade
Cargo that has arrived at Puerto Cabello:
- Over 621 tons of vitamin enriched milk from
Argentina for state agency CASA.
Over 512 tons of milk in 19 vans from Nestlé Chile for its Venezuelan affiliate. - Over 452 tons of cheese, skim milk and powdered
buttermilk from Uruguay for Productos Lácteos Flor de Aragua, Zuly Milk
S.A. and General de Alimentos Nisa.
Basic inputs to pay no import duties
Changes to the Customs Law
establish that items classified as primary need and those that are in the basic
need basket shall be exempted from import duties "whenever there is scarcity due to lack of domestic production or
insufficient production". More in Spanish: (El Universal; http://www.eluniversal.com/economia/141208/exoneraran-de-pagos-en-aduanas-a-insumos-basicos)
New rules to simplify customs procedures
Recent changes to the
Customs law have also created the role of a special economic operator that can
benefit from simplified commodity control and dispatching. In addition to
customs agents, carriers, warehousing, couriers and port operators, Customs may
now designate any importer as a special operator so that they can benefit from
any special import or export benefits. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/nueva-ley-simplifica-tramites-aduanales.aspx#ixzz3LOZQJtX7)
Imports from the US up 24.6% in October
Venezuelan imports from the US rose
to US$ 1.270 billion in October, the highest in 2014, according to the US
Department of Commerce. The main items are products for refining (US$ 336.4
million), chemicals (US$ 169.2 million), machinery (US$ 163.6 million) and
computing and electronic equipment (US$ 98.8 million). (El
Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/importaciones-desde-eeuu-subieron-24-6--en-octubre.aspx#ixzz3LIgCtKCg)
Logistics
& Transport
CONFERRY suspended its La Guaira-Margarita ferry
The Ministry of Aquatic and Air
Transport reports the route La Guaira-Punta de Piedras serviced by state-run CONFERRY
will not be operating during the Christmas Season. This measure worsens the
transport problem to the island which could cause a loss of up to 30% in
reservations, according to CONSETURISMO head Ricardo Cusanno. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42170&idc=3)
Oil &
Energy
PETROCARIBE member countries prepare for an end to
cheap oil
Several Central American and Caribbean countries are
preparing for a cutback in cheap oil shipments from Venezuela as this country
deals with a drop in oil prices and a worsening economic crisis. For the past
decade 13 beneficiaries of Venezuelan largesse have become highly dependent on
its oil to pay for social programs and infrastructure, and in turn have
supported Venezuela internationally. Although Venezuela vows it will continue
supporting the program, its oil exports to these nations dropped 20% January to
October 2014 from 2013, according to ClipperData. The International Monetary
Fund has reported that 2013 crude oil shipments had already dropped 15% from
2012 levels. Several member nations are preparing for greater cuts, according
to diplomatic sources. The IMF is warning regional governments that "today the probability of disruption is
higher since Venezuela is under greater pressure", according to Adrienne
Cheasty, IMF Assistant Manager for the Western Hemisphere. Honduras and
Guatemala are no longer part of the program since Caracas made conditions
tougher. Countries outside the program have also seen cuts: Bolivia and
Paraguay received no crude shipments at a discount, and Argentina's quota has
been cut by half, according to PDVSA data. Highly dependent nations, such as
Haiti, would face the worst difficulties. For many years the PETROCARIBE was
mutually beneficial: Member nations paid only a fraction of the oil market
price up front and delayed repayment for up to 25 years at interest rates as
low as 1%. The program has cost Venezuela some US$ 22.1 billion, and in
exchange enlisted the support of these countries at the UN, the OAS and other
organizations. But now a PETROCARIBE member ambassador in Caracas says: "There is an agreement among us that we do
not want to be too dependent on one source....we don't want to put all of our
eggs in one basket". More in Spanish: (Latinoamérica Informa, http://latinoamericainforma.com/los-paises-de-petrocaribe-se-preparan-para-el-fin-del-petroleo-venezolano-barato/)
U.S. refining surge fills tankers taking fuels to Latin
America
The U.S. refining
surge is lifting tanker rates to the highest in at least three years as demand
accelerates for vessels carrying the processed fuels to buyers in Latin America
and the Caribbean. Tankers shipping about 38,000 metric tons of refined fuels
to Rio de Janeiro from Houston
earned an average of US$ 31,050 a day last week, according to data from Clarkson Plc. That’s the highest since
at least December 2010, when the world’s largest shipbroker began publishing
the data. Traders booked 29 fuel
shipments to Latin America and
the Caribbean on medium range tankers last week, an all-time high, according to
Weber. Fixtures to Venezuela
rose “aggressively” owing to
extensions to refinery halts which began last month, it said. (Bloomberg, http://www.bloomberg.com/news/2014-12-08/u-s-refining-surge-fills-tankers-taking-fuels-to-latin-america.html)
Commodities
2015 first quarter now looms difficult to low
inventories
Ismael Pérez Vigil, Executive President of the
National Council of Industries (CONINDUSTRIA) says the first quarter of 2015
looms as difficult due to low inventory levels, a lack of foreign exchange and lengthy
vacations companies have been forced to implement because they have no supplies
for production. More in Spanish: (Notitarde, http://www.notitarde.com/Economia/Primer-trimestre-2015-luce-complicado-por-bajos-niveles-de-inventarios-2300907/2014/12/08/430559/)
Brazilian pharmaceutical EUROFARMA is
considering investing in medicine production in Venezuela, particularly in generics, cancer
medicines and antibiotics. Some of the company’s representatives met with
Health and Trade ministers Nancy Pérez and Isabel Delgado, and Brazil’s
Ambassador to Venezuela Ruy Pereira to adjust the stated agreements. A second
meeting is scheduled for next week. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=42171&idc=3)
Economy
& Finance
Maduro says Venezuelan oil is down to US$ 60.55 per
barrel, rails against international credit agencies
President Nicolás Maduro announced that the price of
Venezuelan oil is now down to US$ 60.55 per barrel, and railed against credit
agencies for making Venezuela pay 35% interest on credits by rating it as the
"worst country risk in the world".
He says Venezuela is undergoing an economic blockade, and that the black market
dollar "does not exist"
within Venezuela's economic reality and it is being "imposed as an instrument of financial, monetary, psychological and
political warfare". He says his regime is "fully optimizing and planning its foreign exchange budget for 2015."
Maduro also announced he will launch a "powerful" socialist offensive from the start of 2015 against
"economic warfare by stateless
oligarchs against the nation...and will make a a revolution within the
revolution...on all political fronts". More in Spanish: (El Universal,
http://www.eluniversal.com/economia/141208/maduro-hoy-llego-a-6055-dolares-el-barril-de-petroleo-venezolano)
Venezuela, into the abyss
Oil prices are flirting with yet another five-year
low, and few countries are as fundamentally threatened as Venezuela, where the
sudden collapse in crude prices is making a dire economy downright dismal. Global
benchmark prices have now shed 40% since their June highs. For a country like
Venezuela, which is dependent on oil for nearly all of its export earnings, the
threat is becoming more urgent by the day. Last week, Venezuela’s government
announced a 20 % spending cut. While President Nicolas Maduro vowed that the
cuts won’t affect the country’s cherished social spending–a key to maintaining
what little popular support the successor to Hugo Chavez still enjoys–it’s
clear that Venezuela’s inability to drum up fresh sources of revenue is tearing
at the sinews of an economy that was already reeling from rampant inflation,
consumer shortages, and widespread (if underreported) unemployment. Complicating
everything is the country’s byzantine currency exchange rate, which officially
values the local currency, the bolivar, at huge multiples of the black-market
exchange rate, despite stealth devaluations over the past year. That means that
even Venezuela’s oil earnings tend to evaporate when they are converted into
artificially inflated local coin. Although the country has vowed to repay its
debt, traders are dumping Venezuela’s sovereign bonds and there are signs that
the market is increasingly pricing in the possibility of a default. Venezuelan bonds
are trading at 50 cents on the dollar and offering sky-high yields, while bond
traders are preparing to cover themselves–with debt swaps–in the event that
Caracas follows the path of other troubled Latin American countries such as
Argentina. (Foreign Policy, http://foreignpolicy.com/2014/12/08/venezuela-into-the-abyss-maduro-oil-prices-pdvsa/)
Capriles forecasts a "new disguised devaluation"
Miranda Governor and
opposition leader Henrique Capriles says President Maduro is getting ready to
decree a "new disguised
devaluation...it will apply a dual exchange system in 2015...that is a new
devaluation...and will probably do away with the minimum official rate of VEB
6.30/US$1". (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/capriles-preve--una-nueva-devaluacion-disfrazada-.aspx#ixzz3LIgfuAwp;
El Universal, http://www.eluniversal.com/nacional-y-politica/141208/gobernador-de-miranda-importaciones-estan-afectando-a-venezolanos)
Politics and
International Affairs
Venezuela braces for a tough 2015
Venezuela's increasingly desperate economic
circumstances are affecting the government's popularity: As public finances dry
up, so does support for the ruling party. In 2015, President Nicolas Maduro and
the United Socialist Party of Venezuela will struggle — and possibly fail — to
maintain stability. It is clear that neither Maduro nor the United Socialist
Party of Venezuela retain the political support or oil revenue to guarantee
stable rule. The upcoming year will be especially problematic for Caracas
because Maduro will face ongoing economic problems as well as a legislative
election in 2015, tainted by increasing public dissatisfaction with his
performance. The government's current strategy of avoiding potentially
controversial economic reforms while maintaining high deficit spending is
untenable and likely to prompt steps toward increasing Venezuela's public cash
flow next year. However, time is not on Maduro's side. Logical attempts to
mitigate the crisis, such as increasing the price of gasoline, slashing public
spending or sharply devaluing the bolívar, will undermine the popular support
underpinning the United Socialist Party of Venezuela's rule. With voters
steadily abandoning the ruling party, political challengers will continue to
emerge throughout the coming year from factions within the PSUV and the
opposition coalition MUD. Next year will be crucial for the Venezuelan
government's future. Even without controversial government actions, ongoing economic
problems make another outbreak of protests likely in 2015. (Stratfor, http://www.stratfor.com/sample/analysis/venezuela-braces-tough-2015)
Crackdown weakens divided Venezuela opposition as
election looms
Maduro’s government, the most unpopular in at least 15
years, is squeezing its opponents as it tries to tighten its grip on power
before congressional elections scheduled for next year, said Diego
Moya-Ocampos, an analyst at political risk consultancy IHS Inc. A victory by
the opposition in the vote could pave the way for a plebiscite in 2016 on
whether Maduro should resign. “Maduro’s
use of state institutions to go after political opponents hasn’t been seen in
Venezuela since the fall of the last dictatorship in the late 1950s,” says Moya-Ocampos.
“This level of repression is
unprecedented in the country’s recent history.” And it’s working, according
to David Smilde, senior fellow at the Washington Office on Latin America.
Internal divisions are preventing the opposition from presenting a coherent economic
plan to the voters, while repression is diminishing its capacity to campaign
ahead of the vote, he said. “The
government has criminalized the protests, limiting what the opposition movement
can do on the streets,” Smilde said. “As
an organized force, the opposition will enter this electoral year weaker than
the previous one.” There are now three groups within the alliance jostling
for positions in the next government, Moya-Ocampos said. But the scale of the
problems facing the country will force the opposition to put aside differences
as the elections get closer, says Luis Vicente Leon of the DATANALISIS polling
firm. “The opposition has never reached a
consensus around radical events such as protests, but has historically rallied
around elections.” (Bloomberg, http://www.bloomberg.com/news/2014-12-09/crackdown-weakens-divided-venezuela-opposition-as-election-looms.html)
US Senate approves Venezuela sanctions bill
The United States Senate has approved a bill which
would impose sanctions on Venezuelan officials found to have violated
protesters' rights. The Venezuela Defense of Human Rights and Civil Society Act
targets current and former Venezuelan officials who directed "significant acts of violence or serious
human rights abuses against persons associated with the anti-government
protests in Venezuela that began on 4 February". The United Nations
condemned "all violence by all sides
in Venezuela" and called on the government "to ensure that people are not penalized for exercising their rights to
peaceful assembly and to freedom of expression". The government said
opposition leaders had incited protesters to violence and had been planning a
coup against the government of President Nicolas Maduro. At the height of the
protests in February, opposition leader Leopoldo Lopez was arrested, and has
been charged with inciting violence. And last week, Venezuela's chief
prosecutor launched an investigation into leading opposition politician Maria
Corina Machado over an alleged plot to assassinate President Maduro. If the
bill is passed, Venezuelan officials deemed to have violated the rights of
protesters could be denied visas to the US and see their assets frozen. Previously,
the US government opposed sanctions, arguing they would interfere with
negotiation efforts between the Venezuelan government and the opposition. But
last month, US Deputy National Security Advisor Tony Blinken told a Senate
foreign relations committee hearing, "We
would not oppose moving forward with additional sanctions." The bill
will now go to the House of Representatives. If it is passed, it will still
have to be signed by President Obama. (BBC News,
http://www.bbc.com/news/world-latin-america-30393198)
Maduro "reviews" relations with the US
President Nicolás Maduro has
announced he will "review"
relations with the US, claiming he has information the American Embassy in
Caracas has undertaken actions which he says "are beginning to be intolerable" against domestic stability.
State Department spokesperson Jen Psaki quickly retorted that the US will
continue to speak out "against the
lack of respect for human rights and democracy in Venezuela." Psaki
says "our embassy operates within
the limits of the Vienna Convention on diplomatic relations." More in Spanish: (El Nacional; http://www.el-nacional.com/; and Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/venezuela-revisa-relaciones-estados-unidos)
Maduro will not attend the Ibero-American Summit in
Veracruz
President Nicolás Maduro will not attend the XXIVth
Ibero-American Summit in Veracruz (México), according to official sources. He
has never attended one of these meetings as head of state. Foreign Minister
Rafael Ramírez will not attend either, and instead will attend a meeting on
climate change in Peru. More in Spanish: (El
Nacional, http://www.el-nacional.com/mundo/Maduro-asistira-Cumbre-Iberoamericana-Veracruz_0_533946709.html)
Inter-Parliamentary Union to follow up prosecution
against Machado
The Inter-Parliamentary Union (IPU) plans to send an
observer to Venezuela to follow-up on proceedings against deposed opposition
deputy María Corína Machado, who was charged by the Prosecutor General with
scheming the assassination of President Nicolás Maduro, says Roger Huizenga, Secretary
of the Human Rights Committee of the IPU.
Huizenga explained that the observer will brief the
Committee and the member parliaments of the organization on the development of
the legal action against Machado, and whether her court rights were observed. (El
Universal, http://www.eluniversal.com/nacional-y-politica/141208/inter-parliamentary-union-to-follow-up-prosecution-against-machado)
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.
