November 22, 2018

International Trade

Customs Brokers Chamber reports Christmas season imports are down 98% from 2012 due to exchange restrictions and red tape. It adds that high impact imports are carried out by the government. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/camara-de-aduaneros-asegura-que-importaciones-navidenas-cayeron-98)

 

Oil & Energy

PDVSA resumes work at Jose oil port's dock

Venezuela’s state-run PDVSA has reopened a dock at the country’s main oil terminal of Jose that had been closed for almost three months due to a tanker collision, a PDVSA source and a shipper said on Tuesday. Dozens of tankers waiting to load Venezuelan oil were diverted to other PDVSA’s terminals since Jose port’s South dock was shut in late August, causing delays in deliveries to customers and cutting export revenue. (Reuters, https://www.reuters.com/article/us-venezuela-oil-ports/venezuelas-pdvsa-resumes-work-at-jose-oil-ports-dock-sources-idUSKCN1NP24K)

 

Maduro claims US$ 100 is the “fair price” for a barrel of oil

He made his statement at a funeral ceremony honoring for former Oil Minister, PDVSA President and OPEC Secretary General Alí Rodríguez Araque. Year-to-date 218, Venezuela’s oil basket price has averaged US$ 61.74. More in Spanish: (El Universal, http://www.eluniversal.com/el-universal/26375/maduro-estima-que-100-dolares-es-el-precio-justo-para-el-barril-de-petroleo)

 

Commodities

Zulia state governor declares emergency due to drinking water scarcity

Zulia state governor Omar Prieto has declared a state of emergency in the statewide distribution of drinking water and will set “a sales price cap on water casks". More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/gobernador-del-zulia-declaro-emergencia-por-escasez-de-agua-potable)

 

Economy & Finance

Chavez’s ex-treasurer will give up houses, horses and watches

A former national treasurer of Venezuela who admitted taking bribes from a billionaire television mogul will give up the trappings of his fabulous life in south Florida, including real estate, show horses, luxury watches and foreign bank accounts. Alejandro Andrade Cedeno, the treasurer from 2007 to 2010 under late socialist leader Hugo Chavez, pleaded guilty to a US$ 1 billion money-laundering plot in which wealthy Venezuelans converted bolivars to dollars through a rigged exchange system. They then moved money out of the country, which is suffering a crippling economic crisis. The Justice Department detailed the extent of Andrade’s corrupt wealth in unsealing his case Tuesday and revealing his cooperation with prosecutors. They also announced the indictment of Raul Gorrin Belisario, the billionaire who owns the GLOBOVISION television network and has been charged with paying bribes to Andrade and others as well as helping to launder the payments; and the guilty plea of Gabriel Arturo Jimenez Aray, a Venezuelan who owned BANCO PERAVIA in the Dominican Republic. Andrade, once a bodyguard to the late President Hugo Chavez, admitted he took bribes as treasurer to steer contracts to brokerage houses that conducted bolivar exchanges. Andrade chose which brokerages would sell bonds from the treasurer’s portfolio that were denominated in U.S. dollars. His conspirators could then “obtain substantial profits on the exchange transactions,” according to court documents. Even after Andrade moved in 2012 to Wellington, Florida, the bribes continued until last November, he said in pleading guilty. His plea deal requires him to forfeit the Palm Beach County real estate empire and horses. Andrade will give up a six-acre estate in a gated community and 17 horses with names like Tinker Bell, Bonjovi and Anastasia Du Park. He’ll give over his 2017 Mercedes Benz GLS 550 and nine other cars, as well as three dozen watches from makers like Rolex, Hublot and Franck Muller. He’s forfeiting Swiss accounts at BSI Bank and EFG Bank, and at three large U.S. banks. Andrade, 54, was a close ally of Chavez and helped him in a 1992 coup d’etat. Andrade faces as long as 10 years in prison when he’s sentenced on Nov. 27, but he’s likely to get less time as a cooperator. Prosecutors also relied on Jimenez, 50, who spent three years cooperating in “an international criminal investigation against highly dangerous individuals” that “put him in a dangerous position,” prosecutors said in an Oct. 1 filing unsealed Tuesday. “The government of Venezuela’s complicity in this conspiracy renders victim status inappropriate,” prosecutors said in a July 27 court filing. Gorrin, who also owns insurance firm Seguros La Vitalicia, was charged in an indictment unsealed on Monday with violating U.S. anti-corruption laws in efforts to win contracts to carry out currency exchange operations for the government. Between 2008 and 2017, Gorrin facilitated more than US$ 150 million in bribe payments to officials in Venezuela’s treasury for access to currency deals, with funds wired from Swiss bank accounts to accounts in Florida, U.S. prosecutors said. Gorrin allegedly also bought jets, yachts, “champion horses” and luxury watches in Florida and Texas for a government official as a bribe, according to the indictment. GLOBOVISION, once a virulently anti-government station, overhauled coverage and softened criticism of Chavez's successor, Nicolas Maduro, after Gorrin purchased the channel in 2013, reporters said at the time. (BLOOMBERG: https://www.bloomberg.com/news/articles/2018-11-21/venezuela-s-ex-treasurer-will-give-up-houses-horses-and-watches; https://www.bloomberg.com/news/articles/2018-11-20/venezuelan-tv-mogul-charged-in-u-s-bribery-laundering-case; REUTERS: https://www.reuters.com/article/us-venezuela-corruption/venezuelas-former-treasurer-took-1-billion-in-bribes-u-s-prosecutors-idUSKCN1NP1K1; https://www.reuters.com/article/venezuela-corruption/u-s-prosecutors-accuse-venezuela-media-mogul-of-bribery-money-laundering-idUSL2N1XV05P; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469926&CategoryId=10717; Bloomberg, https://www.bloomberg.com/news/articles/2018-11-21/venezuela-s-ex-treasurer-will-give-up-houses-horses-and-watches)

 

Politics and International Affairs

Maduro’s poll ratings dropped six points this month.

A slight gain in President Nicolás Maduro’s popularity registered in October, when he announced some economic initiatives, dropped again in November. The DATANÁLISIS Omnibus poll shows both the government and Maduro himself have again lost popularity. One out of four Venezuelans had rated Maduro favorably in October, probably due to the alleged murder attempt and new economic policy announcements. However, in November only one out of five registered a positive attitude toward the President. He lost 7 percentage points over the past 30 days due to continued hyperinflation and the murder of city councilor Fernando Alban. Overall, 78% of Venezuelans rate Maduro negatively now, although he retains 73.4% support among so-called “chavistas”. The feeling that his economic policy has failed seems to have taken root within the population. More in Spanish: (VENEPRESS: https://venepress.com/article/Evaluacion-del-presidente-Maduro-bajo-siete-puntos1542810004750)

 

U.S. weighs sanctions on Cuban officials over role in Venezuela crackdown

The Trump administration is considering imposing sanctions on Cuban military and intelligence officials who it says are helping Venezuela’s socialist government crackdown on dissent, according to a source with knowledge of the deliberations. Such sanctions would be the first time Washington has targeted a bloc of foreign officials allied with Venezuelan President Nicolas Maduro. The potential human rights-related sanctions would target Cuban officials, possibly including generals, who Washington accuses of advising Venezuela’s government on how to monitor opponents and put down street protests, the source said. The number and identities of the potential targets was unclear. Asked about possible sanctions on Cuban officials, a senior U.S. government official told Reuters in early November: “We are looking at all the potential avenues to deter those who are really helping the Maduro regime stay afloat and giving them the tools they need for repression.” Trump’s national security adviser John Bolton said earlier this month Washington would take a tougher line against Cuba, Venezuela and Nicaragua, calling them a “Troika of Tyranny.” (Reuters, https://www.reuters.com/article/us-venezuela-usa-cuba-exclusive/exclusive-u-s-weighs-sanctions-on-cuban-officials-over-role-in-venezuela-crackdown-idUSKCN1NQ2CV; NBC News: https://www.nbcnews.com/news/latino/u-s-considering-sanctioning-cuban-officials-over-their-role-venezuela-n939111)

 

Police, students clash at protest in Venezuela

Hundreds of anti-riot police in Venezuela have clashed with students staging a protest calling for better conditions at universities as the nation’s economic crisis continues to worsen. Students held a rally at the Central University of Venezuela in Caracas on Wednesday before trying to march off campus. They were stopped by officers and members of the national guard who launched tear gas at them. A dozen students required medical treatment after exposure to the fumes. The anti-government movement has lost steam in recent months, and the march had drawn an unusually large crowd. The demonstrators were trying to leave the university, but the PNB officials blocked the exits of the institution with police fences. (National Post: https://nationalpost.com/pmn/news-pmn/police-students-clash-at-protest-in-venezuela; EFE: https://www.efe.com/efe/english/world/university-students-show-umpteenth-proof-of-polarization-in-venezuela/50000262-3820573)

 

NGO has registered over 10,000 protests this year in Venezuela

Human rights activist Marco Antonio Ponce, coordinator of the Social Conflict Observatory (OVCS), reports there is an average of 47 protests daily protests nationwide in Venezuela. He adds that there have been 10,773 protests here year to date in 2018, which he calls a record year.  More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/ong-asegura-que-se-han-organizado-mas-de-10-mil-protestas-en-2018)

 

Rodriguez calls on Colombia to comply with agreements with FARC guerrilla

Venezuela’s Communications and Information Minister Jorge Rodríguez has calle don the Colombian government to comply with peace agreements reached by that nation’s government and the FARC guerrilla forces. Rodríguez said he spoke on behalf of President Nicolas Maduro given Venezuela’s role as “guarantor” of such agreements. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/venezuela-exhorta-a-colombia-cumplir-con-acuerdos-de-paz-con-las-farc; El Universal, http://www.eluniversal.com/politica/26334/rodriguez-el-gobierno-no-seguira-tolerando-las-mentiras-y-falsos-positivos-de-colombia; AVN, http://www.avn.info.ve/contenido/colombia-remiti%C3%B3-36-solicitudes-venezuela-para-respaldar-di%C3%A1logos-paz)

 

Ali Rodriguez, Venezuela’s ambassador to Cuba and former OPEC official, dies

Venezuelan Ambassador to Cuba Ali Rodriguez Araque, who also served as secretary-general of OPEC and the Union of South American Nations (UNASUR), died in Havana, President Nicolas Maduro said. He was 81. Cuban President Miguel Diaz-Canel said in a statement on Tuesday that Rodriguez Araque was a politician “inseparable from Cuba.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469903&CategoryId=10717)

 

Legislature rejects unconstitutional appointment of ambassadors abroad

Venezuela’s opposition-controlled National Assembly has rejected the appointment of ambassadors abroad by the Maduro regime, and calls them “null” and “unconstitutional”. Francisco Sucre, head of the Foreign Affairs Committee, says that the Constitution requires legislative approval for naming ambassadors, and that such appointments usurp legislative authority “and nullify treaties signed illegally”. More in Spanish: (El Universal, http://www.eluniversal.com/politica/26294/an-rechaza-nombramiento-de-embajadores-en-el-exterior)

 

OAS member state delegation visits Colombia – Venezuela border to assess crisis

On November 19-20, 2018, seventeen OAS member states participated in a field visit to assess the humanitarian crisis along the Colombia - Venezuela border: Maicao, in the Rioacha province, and Cucuta in the Norte de Santander province. The visit was organized by the Colombian government and included representation from the governments of Argentina, Belize, Chile, Costa Rica, Colombia, Ecuador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Panamá, Paraguay, Perú, Saint Lucia, Uruguay and the United States represented by Ambassador Carlos Trujillo. The OAS Working Group on Venezuela migration also participated with representation from three experts on the situation. The purpose of the visit was to raise member state awareness of the extent of the humanitarian crisis, in anticipation of continued action in the Inter-American system regarding Venezuela and address the root causes of the crisis under the Maduro regime. The OAS Inter-American Council for Integral Development (CIDI) is scheduled to meet November 26 to discuss food security and migration impacts and Pan American Health Organization (PAHO) will convene a health ministerial meeting on Venezuela November 29. (US Mission to the OAS: https://usoas.usmission.gov/member-state-delegation-visits-colombia-venezuela-border-to-assess-crisis/)

 

Hunger grows in Venezuela

The United Nations Food and Agriculture Organization (FAO); the Pan-American Health Organization (PAHO); the World Food Program (WFP); and the United Nations International Children’s Emergency Fund (UNICEF) – joined forces to create a report on the undernourishment problem affecting Latin America and the Caribbean. This report – recently made public – shows that the number of undernourished people in Venezuela has increased in both absolute and relative terms: the rate of undernourished people in the country reached 9.8% over the three-year period from 2014 to 2016, while the rate increased to 11.7% over the next three-year period from 2015 to 2017. The first percentage corresponds to an absolute amount of 3.1 million undernourished people, while the second percentage corresponds to an amount of 3.7 million people. This represents an increase of 600,000 new Venezuelans within only a year. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469996&CategoryId=10717)

 

WHO reports Venezuela registers greatest malaria increase worldwide

The World Health Organization’s yearly report on malaria shows Venezuela as the nation with the greatest increase in malaria worldwide and fears the disease will expand to neighboring countries. The report shows 773,500 confirmed cases in Latin America during 2017, a 72% increase over 2015, and 53% of those cases were registered in Venezuela, which is among 10 countries where malaria cases were over 300,000 in 2017. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/salud/oms-venezuela-registra-el-mayor-incremento-de-malaria-en-el-mundo)

 

Voluntad Popular calls for removal of UNDP representative in Venezuela

The Voluntad Popular opposition party led by imprisoned leader Leopoldo López has asked the United Nations to remove Peter Grohmann, UNDP representative in Venezuela, for “silencing” the serious situation here. The party says: “it is unacceptable that, having a budget and technical personnel, that they have not at least prepared a report on what is going on”.  A party spokesperson, legislator Manuela Bolivar, says the case will be taken to the National Assembly. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/voluntad-popular-pide-a-onu-cambiar-al-representante-del-pnud-en-venezuela)

 

OP-ED: What Options Are Left in Venezuela? by Félix Seijas Rodríguez

Nicolás Maduro is set to start a new term as Venezuela’s president on Jan. 10, and the country’s political, social and economic crisis is only becoming more profound. Far from correcting course, Maduro has taken steps to maintain control despite an imploding economy. His opposition is dispersed and lacking a coherent strategy. A solution through dialogue seems farfetched. How might things change for Venezuela? Here are three possibilities, and a look at the likelihood of any of them coming to fruition. Foreign military intervention: For some time now there has been talk of possible military intervention to depose Maduro’s regime. But there are several reasons why intervention is very unlikely. First, there is no consensus among the largest countries in the region on the need to take an active hand in changing Venezuela’s reality. Mexico, especially under Andrés Manuel López Obrador, would oppose such action. The U.S. could decide to act on its own, but a decision to invade Venezuela would need to be approved by the U.S. Congress and the UN Security Council. At the UN, both China and Russia, countries with important economic interests in Venezuela, would most certainly veto any resolution to intervene. But perhaps even more relevant is the precarious situation of the opposition forces in Venezuela. The political leadership in opposition to Maduro is weak and enjoys little support from civil society. Without an internal structure that can take the reins of the country if Maduro is deposed, the consequences of an intervention would be highly uncertain. Public support for Maduro’s regime is still around 20 percent, while the revolution proposed by his late predecessor Hugo Chávez has 35 percent approval. Military action in this circumstance is not a sensible idea. Recent reports that Trump may add Venezuela to the state sponsors of terrorism list shows that the administration still sees the possibility of adding pressure on Maduro without intervening militarily. Chavismo collapses: For Maduro’s political movement to collapse, external pressure would have to be such as to cause a fracture within its power structure. This could come through an explosion of public protest that exceeds the regime’s containment capacity and is big enough to compromise the loyalty of security forces tasked with putting it down. Another possibility is that international pressure asphyxiates the regime, rendering it incapable of maintaining the web of corruption and complicity it has had for the last 20 years. These two possibilities are not mutually exclusive, but a social explosion of the magnitude needed to cause a revolt in the security services is not likely. If popular pressure again starts building on the streets, there is no political leadership or organization with both the know-how and the credibility to use that energy effectively against the regime.  Once again, the weakness of the Venezuelan opposition is an obstacle to any solution to the crisis. Transition within Chavismo: As mentioned, international pressure could cause the power structures to flounder and there might not be a democratic alternative to take control of the situation. That could already be happening, and the international community should be concerned about where that might lead. If the absence of any possibility of a democratic transition, an intermediate alternative comes into view: a transition that leaves Chavismo in place but gets rid of Maduro and his inner circle. It’s possible that the early stages of such a transition are underway. But it would be a difficult path to follow. If successfully navigated by both the international community and domestic opposition, such a transition might eventually pave the way to a democratic opening. But the risks of further entrenchment are apparent. It would be a risky bet. (Americas Quarterly: https://www.americasquarterly.org/content/whats-left-venezuela)

 

OP-ED: More than 40 countries may cut diplomatic ties with Venezuela. Fine, but would it do any good? by Andres Oppenheimer

Venezuela’s dictator Nicolás Maduro may soon face bad news on the diplomatic front: More than 40 countries are considering cutting diplomatic relations or reducing their ties with Venezuela starting Jan. 10, when he is scheduled to start a new six-year term in office. Venezuelan opposition sources tell me that they expect at least 46 countries — including most members of the Group of Lima and the 28-member European Union — to downgrade or sever diplomatic ties with Venezuela. The big question is whether there will be any practical consequences of a formal decision by these countries to cut ties with Venezuela. Some Venezuelan exile leaders are lobbying the Trump administration and those of other countries to simultaneously cut diplomatic ties with Maduro and recognize a caretaker opposition-led government. Their plan would go like this: Since Maduro and his vice president, Delcy Rodríguez, would no longer be considered legitimate leaders once their current terms expire, there would be a power vacuum. The next in line of succession would be the head of the opposition-controlled National Assembly. Venezuela’s National Assembly was democratically elected in 2015 and is the last remaining democratic institution in Venezuela. Maduro stripped the Assembly of most of its powers and created a new Congress to rubber-stamp his decisions. But the international community could recognize the National Assembly’s president as Venezuela’s legitimate leader while new elections are convened, supporters of that plan say. But many countries would be reluctant to go that route for fear of opening a diplomatic can of worms. In addition, some diplomats note that, unlike last year, when more than 150 people died in Venezuela’s street protests, — there is no sense of urgency in the diplomatic community today that would justify taking such extreme measures. For now, the likely decision by many countries to stop recognizing Maduro as a legitimate president will be a mostly symbolic announcement. But if the opposition takes to the streets in January — as some anti-government parties are planning — to protest Maduro’s inauguration and the country’s humanitarian crisis, things could change. There would be a legal base for the next step — international recognition of a provisional opposition government. (The Miami Herald: https://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article222012125.html)

 

March 25th, 2011

Economics & Finance

China to extend Venezuela another USD$4 billion loan in joint fund

China will inject $4 billion next month into a joint development fund with Venezuela, according to a Venezuela government official, stepping up its lending to the South American country while securing a steady flow of oil. With the latest loan, China will have extended Venezuela$28 billion in financing since August, all to be serviced with oil. Two previous Chinese installments into the bilateral fund, totaling $8 billion, have been mostly repaid by Venezuela. Venezuela will be adding $2 billion to the fund, which was set up between BANDES, the Venezuelan development bank, and the China Development Bank. Many analysts and economists include the Chinese loans with Venezuela's sovereign debt, but the government doesn't, because they will be serviced with petrodollars. China is Venezuela's second-most important trade partner. (By Ezequiel Minaya, Dow Jones Newswires, 03-24-2011; http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201103241643dowjonesdjonline000520&title=china-to-extend-venezuela-another-4-billion-loan-in-joint-fund)

Venezuela's debt payments at USD$ 19.4 billion in 2011-2012

The decision of the Venezuelan Executive Office to cover the revenue gap by increasing indebtedness has a strong impact on fiscal accounts and public debt service for 2011 and 2012, when total indebtedness amounts to USD$ 19.4 billion. Domestic debt represents the biggest burden on future payments. The domestic debt service in 2011 and 2012 will reach USD$ 10.7 billion, according to data released by the Ministry of Finance. (El Universal, 03-22-2011; http://english.eluniversal.com/2011/03/22/venezuelas-debt-payments-at-usd-194-billion-in-2011-2012.shtml)

Government import policy expected to weaken production in Venezuela

Venezuelan government's attempts to centralize imports of commodities will curb domestic production, said Ismael Pérez Vigil, the executive president of the Venezuelan Confederation of Industries (CONINDUSTRIA). "Regulations are always a nuisance (...) The government has misread the economic situation and is trying to fix economic problems through regulations and monopolizing certain activities. This will eventually end up worsening the economy," Pérez Vigil said.

The business leader added that the plan announced by the Executive Office will further delay imports of inputs and, consequently, will undermine production in private companies. (El Universal, 03-23-2011; http://english.eluniversal.com/2011/03/23/governments-imports-expected-to-hit-production-in-venezuela.shtml)

Venezuela raises bread, pasta prices as much as 33%

Venezuela raised price caps on bread and pasta in order to bring costs in line with rising international prices, Food Minister Carlos Osorio said, threatening to accelerate the hemisphere’s fastest inflation. The cost of baguette-style bread was increased about 24 percent to 5.52 bolivars (USD$1.29) per kilo and pasta was raised 33 percent to 4.33 bolivars per kilo, Osorio said. Venezuelan President Hugo Chavez’s government regulates the price of basic foods. (Bloomberg, 03-22-2011; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a_pE0JBoJRlg)

Commodities

Venezuela's oil obligations to China may go unfulfilled

Venezuelan President Hugo Chavez says he hopes to send one million barrels of oil per day to China within the next three years, but industry data suggests odds are against that happening. The plan would require a drastic increase in production at a time when the South American country faces a lack of investment in the petroleum sector and declining output. (The Wall Street Journal, 03-22-2011; http://online.wsj.com/article/SB10001424052748703921204576217073681492388.html?mod=WSJ_World_LEFTSecondNews)

Pdvsa's oil exports down 11.6 percent in 2010

Exports by state-run oil company Petróleos de Venezuela (PDVSA) lost ground in 2010, according to the preliminary results shown in PDVSA's 2010 Annual Report and Accounts submitted to the National Assembly. The document claims PDVSA exported 2.41 million barrels per day of crude oil and byproducts. According to PDVSA's figures, 1.93 million barrels were crude and upgraded oil while the remaining 485,000 barrels were oil byproducts. (El Universal, 03-23-2011; http://english.eluniversal.com/2011/03/22/pdvsas-oil-exports-down-116-percent-in-2010.shtml)

PDVSA puts pressure on partners to find funding-sources

Venezuela's state oil company PDVSA has told its foreign partners to secure funding of hundreds of millions of dollars by July to boost production at joint ventures in line with a government demand, according to sources involved in the ventures. PDVSA is the financial motor of President Hugo Chavez's socialist "revolution" in the South American OPEC member, but it has been suffering from falling crude output levels. Seeking to pump more and reap the rewards of high oil prices, the government gave foreign companies a one-month deadline late last year to present higher production targets for more than 20 joint venture projects. Among the companies involved were CHEVRON, REPSOL, BP and SHELL. In January, Energy Minister Rafael Ramirez said the foreign oil companies must hike production or possibly face a review of their rights to operate in the country. (Reuters, By Marianna Parraga, 03-25-2011; http://af.reuters.com/article/energyOilNews/idAFN2418833820110325)

Concomitant shutdowns in oil upgraders

This week, there will be simultaneous shutdowns in PETROPIAR and PETROMONAGAS, two oil upgraders at the Orinoco Oil Belt, according to Eudis Girot, a union leader of the Federation of Venezuelan Oil Workers (FUTPV). The spokesperson for the Federation said that the shutdowns will be "partial." Girot explained that the upgraders will not be totally halted, but there will be a drop in crude oil processing. He did not provide further details about the decline in production. (El Universal, 03-23-2011; http://english.eluniversal.com/2011/03/23/concomitant-shutdowns-in-oil-upgraders.shtml)

Venezuela’s Guri Dam reduces capacity

Two turbines at Venezuela’s Guri dam, the country’s largest hydroelectric plant, were shut down this week, which may reduce generation by more than 1,000 megawatts. A 730-megawatt unit was shut because of vibration problems and a 375-megawatt turbine was taken offline for tests, the Caracas-based newspaper reported today, without identifying where it got the information. (Bloomberg, 03-23-2011; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=an0y1.pwIhtM)

Politics

Hugo Chavez decries capitalism....on Mars

Venezuelan President Hugo Chavez, who routinely blames capitalism for many of this world's troubles, pointed elsewhere in the galaxy for his latest critique, saying Tuesday that the economic system may have destroyed life on Mars. (The Wall Street Journal, 03-22-2011; http://online.wsj.com/article/SB10001424052748704461304576217060217916894.html?mod=WSJ_World_LEFTSecondNews)

Chavez decree strengthens pro-government militias

New rules authorizing Venezuela's military to distribute weapons to pro-government militias took effect Tuesday, raising concern among critics who say the armed groups could be used by President Hugo Chavez to cement his hold on power.

Rocio San Miguel, an anti-Chavez activist who heads Citizen Control for Security, a non-governmental group that studies military-related issues, said the decree could allow Chavez to turn the militias into "the armed branch of the revolution."

Militiamen had previously been trained to use firearms, but were not issued weapons. They used firearms only in training exercises and military parades under the strict supervision of military officers. (Miami Herald, 03-22-2011; http://www.miamiherald.com/2011/03/22/2129201/chavez-decree-strengthens-pro.html)

Chavez, Fernandez resume quarterly meetings next week

Venezuelan President Hugo Chavez and Argentina’s Cristina Fernandez will meet in Buenos Aires next Tuesday to review the progress of bilateral accords, reported Venezuelan television channel VTV. Argentina’s Foreign Ministry confirmed that Fernandez will welcome her Venezuelan counterpart at the Casa Rosada presidential palace, where they would hold a closed door meeting with their cabinet of ministers. Foreign ministers of Argentina and Venezuela, Hector Timmerman and Nicolas Maduro, are expected to present to their presidents the achievements of the third High Level Binational Commission Argentina-Venezuela, which will be hold next Monday at the seat of the Argentinean foreign ministry. (AVN, 03-24-2011; http://www.avn.info.ve/node/49790)

H1N1 outbreak in Venezuelan state, official says

An outbreak of the H1N1 virus, known commonly as the swine flu, has hit the Venezuelan Andean state of Merida, the country's health minister said, the state-run AVN news agency reported. More than 100 cases of H1N1 have been recorded in Venezuela as of Tuesday, according to Health Minister Eugenia Sader. (CNN, 03-23-2011; http://edition.cnn.com/2011/WORLD/americas/03/23/venezuela.swine.flu/index.html)

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.

February 2nd, 2011

Economics & Finance

CONINDUSTRIA reports 623 "attacks" on private businesses over the past nine years

From January 2002 to January 2011, 623 attacks on business property have been recorded, as estimated by the Venezuelan Council of Industries (CONINDUSTRIA). "Between 2005 and 2005, 14 attacks were perpetrated on private property; one in 2006; 126 in 2007; the following year, it lowered to 25. In 2009, there were 139 events; 287 in 2010 and thus far in 2011, the number is 31 events," CONINDUSTRIA broke down in a press release. Based on this count, seizures and State appropriation of formerly private assets have escalated over the past two years. "Interestingly, 70 percent of these records have been generated in 2009-2011." (El Universal, 02-02-2011;

 http://english.eluniversal.com/2011/02/02/en_eco_esp_a-total-of-623-atta_02A5099131.shtml)

A new Government sponsored Stock Exchange will rival the private Caracas exchange

Planning & Finance Minister Jorge Giordani has been promoting the new public stock exchange that opened for business last Monday. “It’s a new kind of financial system”, he said, “aimed at uniting savers with investors working in the productive field”. The Bicentenary Public Stock Exchange was established after the government overhauled the highly speculative financial system operating through brokerage houses and a private stock exchange that continues to exist. Savers are now able to operate at a fixed or variable rate on the new market that is transparent and regulated by the State. (VHeadline, 02-02-2011; http://www.vheadline.com/readnews.asp?id=100737)

Venezuelan Government indebtedness to local banks rose by 50% during 2010

Despite an average oil price – the main source of revenue - pegged at $ 72 per barrel during 2010, the Venezuelan Government required additional funding for its expenditures and resorted to borrowing locally. More information in Spanish. (El Universal, 04-02-2011;

http://www.eluniversal.com/2011/02/04/eco_art_en-2010-la-deuda-del_2181882.shtml)

Strike shuts down HEINZ plant

A plant run by HEINZ in the state of Carabobo, north central Venezuela was shut down by workers, who demanded the signing of their collective bargaining agreement. "The company believes that we are still living the era of Juan Vicente Gómez (a Venezuelan ruler from 1908 to 1935) and believes that workers are going to live on VEB 10 or 15 a day (USD 2.30-3.50)," said union leader Edison García. Meanwhile, in a statement, HEINZ declared that "these people have not only started an illegal strike, but also they have prevented workers from entering the facilities. Therefore, production of ketchup, baby food, jelly and other key products in the Venezuelan market has been halted." (El Universal, 01-02-2011; http://english.eluniversal.com/2011/02/01/en_eco_art_workers-close-heinz_01A5091131.shtml)

Commodities

OIL FUTURES: Crude Falls On Dollar Strength; Egypt In Focus

Crude oil futures fell Thursday as the U.S. dollar rallied, even as traders remain focused on escalating violence in Egypt and the prospect of supply disruptions. Light, sweet crude for March delivery settled 32 cents, or 0.4%, lower at $90.54 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded down 58 cents, or 0.6%, at $101.76 a barrel. Oil prices turned negative on a stronger U.S. dollar against the euro, after European Central Bank President Jean-Claude Trichet indicated that the central bank isn't ready to raise interest rates. (The Wall Street Journal, 03-02-2011; http://online.wsj.com/article/BT-CO-20110203-718885.html)

Reports indicate PDVSA is buying oil from third parties to meet commitments

Purchase of crude oil and byproducts to third parties by PDVSA increased to $14,620 million at the end of the first semester of 2010 from $9,915 million in the same period the year before, according to data from its financial statements. (Veneconomy, 03-02-2011; http://www.veneconomy.com/site/index.asp?ids=44&idt=24760&idc=4)

Venezuela to supply petcoke to Turkey in exchange for housing construction

Venezuela has proposed to supply Turkey with petcoke in exchange for the construction of 5,000 to 10,000 houses in Venezuela's eastern state of Anzoátegui. Pedro León, the director of state-run oil company Corporación Venezolana de Petróleo (CVP), said that the proposal is based on a bilateral agreement signed by the Minister of Energy and Petroleum Rafael Ramírez and president of state-run oil company Petróleos de Venezuela SA (Pdvsa), Rafael Ramírez, in a recent visit to Turkey. (El Universal, 02-02-2011; http://english.eluniversal.com/2011/02/02/en_eco_art_venezuela-to-supply_02A5097931.shtml)

Chavez predicts the Government food program will increase monthly distribution to 300,000 tons

Venezuelan President Hugo Chavez said that the National Government seeks to increase the monthly food distribution from 170,000 tons up to 300,000 tons, by means of the state-run marketing network, made by grocery stores Mercal, PDVAL and Abastos Bicentenarios. President Chavez spoke during a visit to the facilities of a PDVAL grocery store in Caracas, amid celebrations of the 12th anniversary of the Bolivarian Revolution. He explained his administration is working on an extraordinary plan in food matters. “I have already approved resources for plans to expand the mission. This year, we will increase food distribution from 170,000 tons to 300,000 tons to give more life to people.” (AVN, 02-02-2011; http://www.avn.info.ve/node/41318)

Chavez says 176,000 farmers have enrolled in Mission Agro Venezuela

Venezuela's President Hugo Chávez reported that 176,000 growers have been enrolled in Mission Agro Venezuela, according to the latest cut-off estimated midday on Wednesday. "Thanks to all, Mission Agro Venezuela is a major success, because we ought to produce what we consume, diminish import, increase domestic production and then even export," President Chávez said. (El Universal, 02-02-2011; http://english.eluniversal.com/2011/02/02/en_eco_art_a-total-of-176,000-g_02A5098653.shtml)

Logistics & Transport

Import costs increase because of irregularities at BOLIPUERTOS

Importers have been experiencing a significant increase of their administrative and storage costs within customs as a result of the operational irregularities at La Guaira sea port, which is being managed by Bolivariana de Puertos (BOLIPUERTOS) since mid-2009. (Veneconomy, 01-02-2011;

http://www.veneconomy.com/site/index.asp?idt=24723&idc=3&ids=44&Var_Send=1&mmD=02&ddD=01&mmH=02&aaD=2011&ddH=02&aaH=2011&Send=Find)

Imports decline as importers face uncertainties on price adjustments

The flow of bulk cargo that arrives through the port of Puerto Cabello ebbed during the first month of 2011. More information in Spanish. (El Universal, 04-02-2011; http://www.eluniversal.com/2011/02/04/eco_art_incertidumbre-sobre_2181885.shtml)

Politics

Venezuela: Chávez in re-election bid after 12 years in office

President Hugo Chávez, marking his 12th anniversary in power, said he was prepared to campaign for six more years in office. In a televised speech, Mr. Chávez said that “the battle has begun” for the election in 2012. And in visits to a school and a state-run supermarket, he promoted his programs and agenda. He also apologized for errors; saying much remained to be done as he sought to lead Venezuela toward socialism. While the president is facing problems like rising crime and 27 percent inflation, the opposition has yet to select a candidate to run against him. (The New York Times, 02-02-2011;

 http://www.nytimes.com/2011/02/03/world/americas/03briefs-Venezuela.html?_r=1&scp=4&sq=Venezuela&st=cse)

Polling firm: Only 23 percent of respondents support a Chávez reelection in 2012

Luis Vicente León, the director of Caracas-based polling company DATANÁLISIS, said that bimonthly polls conducted by his firm show that President Hugo Chávez's popularity still holds at 50 percent. León added that although pro-Chávez votes dropped in regional elections, his popularity has increased again as the ruling party is implementing an unwavering and improved political campaign. The economist stressed that Chávez's campaign is deployed in mandatory nationwide radio and TV broadcasts, his weekly talk show “Hello, President”, billboards, testimonial TV ads about the president's performance. Additionally, the Venezuelan president is implementing a "much more populist strategy that highlights the gap between the rich and the poor -a strategy that has helped him boost people's support and polarize Venezuelan society." According to the poll, 23 percent of respondents support Chávez's reelection. (El Universal, 02-02-2011; http://english.eluniversal.com/2011/02/02/en_pol_art_polling-firm:-23-per_02A5097291.shtml)

Reuters projects key political risks in Venezuela

According to Reuters, political disputes over when President Hugo Chavez will give up decree powers, jockeying ahead of the 2012 presidential election and a weak economy are the main political risks to watch in Venezuela.

Chavez is expected to use his decree powers for more nationalizations. He has already said more private land needs to be turned over to build houses for the poor, and has warned banks that they must help finance his social programs or face expropriation. A new banking law passed in December made takeovers in the financial sector easier. (Reuters, 01-02-2011; http://www.reuters.com/article/2011/02/01/venezuela-risks-idUSRISKVE20110201)

Chávez promises more personal safety for Venezuelans

Venezuela's President Hugo Chávez said on Wednesday that in the same way that his government is committed to provide food, housing and education to every Venezuelan he wants to provide security to his fellow citizens. "We must ensure that every Venezuelan walks in the streets without fear of being mugged, being shot or being hit," Chávez said. "We have been making significant progress" in personal security,” he said. (El Universal, 02-02-2011;

http://english.eluniversal.com/2011/02/02/en_pol_art_chavez-promises-to-e_02A5097733.shtml)

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.

December 13th, 2010

Economics, Trade & Business

ECLAC Venezuelan economy projected to close 2010 with a 1.6% contraction

The Venezuelan economy will close this year with a contraction of 1.6% according to projections by the Economic Commission for Latin America and the Caribbean (ECLAC), which disclosed its regional its balance in Santiago de Chile. The organization notes that the country will recover next year with a growth of 2%. As for the region, projected growth is 4.2% in 2011, a 6% lower performance at the close of this year. (El Mundo, 12-13-2010; http://www.elmundo.com.ve/Default.aspx?id_portal=1&id_page=26&Id_Noticia=11373)

PDVSA said to plan $2 billion bond sale before year-end

Petróleos de Venezuela SA plans to sell $2 billion in bonds to the central bank to repay a loan, said a government official with direct knowledge of the transaction. The bond sale will take place before the end of December, said the official, who asked to stay anonymous because the plan isn’t public. With the bond sale, the state-run oil company will have practically repaid the full amount of the loan, the person said. (Bloomberg, 12-13-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aitFIwX7uY4g)

Chávez to decree Venezuela sales tax rise

President Hugo Chavez said on Monday he would use special decree powers to hike Venezuela's sales tax rate and raise cash to help the South American nation recover from disastrous floods. "We need extraordinary funds and one of the laws we are going to approve is going to be a rise in sales tax," Chavez said. The Venezuelan leader said the government had still not decided by how many points it wanted to raise the tax from the current level of 12 percent. But any increase would have only a "minimal effect" on inflation, Chavez said. Each percentage point rise in the sales tax would raise 5 billion bolivars, Chavez said, without specifying over what time period that would be. (Reuters, 12-13-2010; http://www.reuters.com/article/idUSN1323747220101214)

Venezuelan government exonerates debts of flood-hit farmers

The government will exonerate agricultural debts acquired by farmers and producers with private or public institutions in the region of Sur del Lago, western Venezuela, informed last Sunday Agriculture and Lands Minister, Juan Carlos Loyo. Loyo commented the State is taking measures in the agricultural area with the aim to benefit all farmers who were affected by the heavy rains which hit the country. “Any agricultural producer who has a debt and had a partial or total loss will be exonerated by the Government and we will make it by means of an instrument which is being requested in Parliament,” he informed. (AVN, 12-13-2010; http://www.avn.info.ve/node/33673)

Argentina and Venezuela to build textile joint venture

The first textile joint venture in Portuguesa state will be built in the framework of the agreements between Venezuela and Argentina, to promote national production of fabric and rescue the production of cotton. The factory is expected to cost about 7.69 billion dollars. The Mayor of Araure, Jose Rafael Vasquez, where the factory will be built, announced that the works have already begun and the factory should be fully operational by March. It will be the largest textile company in Venezuela and with it, Portuguesa will generate 80% of the national cotton production,” he commented. (AVN, 12-13-2010; http://www.avn.info.ve/node/33744)

Politics

Chavez seeks decree powers over opposition protests

Venezuelan President Hugo Chavez is set to ask the National Assembly to grant him powers to enact legislation without its approval; a move the opposition says is intended to weaken the new congress being sworn in next month. Decree powers are needed to quickly allocate resources to build homes and repair infrastructure after heavy rains killed 35 people and left 124,000 homeless, Chavez said Dec. 10. The government will request permission as early as today and begin to pass legislation on Dec. 17, he said. (Bloomberg, 12-13-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a5aSH4Qme6ac)

Venezuela ranks 76th in quality of democracy

Norway is the most complete and developed democracy in the world, followed by Sweden and Finland, according to an interdisciplinary study prepared by the Vienna-based institute. In the 100-country list, New Zealand, which ranks sixth, is the only non-European country. The ranking considers indicators related to politics, economy, gender equality, access to education, health and environmental protection. The first Latin American country is Uruguay (21), while Chile and Costa Rica rank 28 and 29, respectively. Argentina ranks 38, ahead of Brazil (43), El Salvador (45), Ecuador (49), México (51), Colombia (55), Paraguay (59), Nicaragua (63), Bolivia (64), Honduras (70), Guatemala (74) and Venezuela (76). (El Universal, 12-13-2010; http://english.eluniversal.com/2010/12/13/en_pol_esp_venezuela-ranks-76th_13A4848855.shtml)

Venezuelan bill seeks to regulate the right to strike in the oil industry

Labor conflicts and union demands are perceived by the Executive Office's authorities as possible threats to the oil industry's operations. Therefore, a possible legal instrument to regulate oil workers' right to strike is being considered by Venezuelan authorities. According to an article of the draft Organic Law for Protection of the National Hydrocarbons Sector, "the right to strike may be exercised within the companies included in the national oil and gas sector, in the terms and conditions authorized by the Ministry with competence over labor issues. It will also provide the minimum services to be carried out to ensure the continuity and regularity of operations." (El Universal, 12-13-2010; http://english.eluniversal.com/2010/12/13/en_pol_esp_venezuelan-bill-seek_13A4848493.shtml)

Reform of the Telecommunications Act

The Democratic Unity Bureau warned that the planned amendments to the Telecommunications Law is evidence, once again, of the government's intention to establish greater controls to prevent the free flow of information and opinions in Venezuela. "If the Venezuelan democratic society does not reject it (...), the country would end up with one version of events that will be presented by the government controlled media (...) A citizen would have no option to choose and could only have access to the services provided by the government," warned the executive secretary of the UNT, Ramon Guillermo Aveledo, who condemned the Government's attempt to "seize the airwaves and even online." (Ultimas Noticias, 12-13-2010; www.ultimasnoticias.com.ve/Noticias/MUD-condena-reforma-a-Ley-de-Telecomunicaciones.aspx)

Petroleum & Energy

Venezuela Oil Minister: OPEC unlikely to change output in 2011

OPEC is unlikely to change its production ceiling in 2011 even though the price of oil could rise, Venezuela Oil Minister Rafael Ramirez said Saturday. Speaking to reporters after the Organization of Petroleum Exporting Countries' meeting, Ramirez said that oil's likely rise to the $100 per barrel does not reflect its true cost to consumers, as it is due to the relative weakness of the U.S. dollar. "The price we are seeing is not real," he said. "The price is affected by the dollar devaluation and the cost of services." (Fox Business, 12-11-2010; http://www.foxbusiness.com/markets/2010/12/11/venezuela-oil-min-opec-unlikely-change-output/)

US documents: Chavez's oil industry deteriorating

U.S. officials detailed declining conditions in Venezuela's oil industry in memos released by WikiLeaks, saying the country's growing economic problems are taking a toll on President Hugo Chavez's popularity. In one confidential document dated Oct. 15, 2009, the U.S. Embassy said "equipment conditions have deteriorated drastically" since the government expropriated some 80 oil service companies earlier that year. It said safety and maintenance at the now state-owned oil facilities were in a "terrible state." (AP, 12-10-2010; http://news.yahoo.com/s/ap/20101211/ap_on_bi_ge/lt_wikileaks_venezuela_1)

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.