International Trade
MERCOSUR crisis continues as Venezuela holds onto
chair, suspension or exclusion possible. MERCOSUR’s
key founding members (Argentina, Brazil and Paraguay) are compiling a list of
Venezuela’s compliance and non-compliance with requirements for qualifying an “associate member state”, and will review
it later this week. Paraguay’s Foreign Minister Eladio Loizaga says there will
be a new meeting of country coordinators on this matter with Uruguay on August
23rd; and added that Venezuela will have until then “to gain full membership into MERCOSUR”. He
says Venezuela has failed to sign onto the MERCOSUR Protocol on Human Rights
and comply with other economic requirements; and reported that the agenda for
the next steps was set during a meeting of the Presidents of Argentina (Macri),
Brazil (Temer) and Paraguay (Cartes) during the Rio Olympics. After that, Uruguay’s
President Tabaré Vásquez said that Venezuela remains a member “as long as the democratic clause is not
applied”, He added that his government will continue to bolster dialogue as
"the best tool to find solutions”
to the problems facing the Common Market of the South (MERCOSUR). At the same
time, Paraguay has recalled its ambassador to Caracas after President Nicolas
Maduro made disparaging remarks about Paraguay. Previously, Venezuelan Foreign
Minister Delcy Rodriguez had unilaterally raised the MERCOSUR flag in Caracas
and said her country will not allow Argentina, Brazil and Paraguay, the
so-called “the triple alliance,” to “take by assault” the pro tempore
presidency, which she claims is now to be fully exercised by Caracas. She
quoted a statement by the chair of the Committee on Economic Affairs of the
Brazilian Senate, a supporter of deposed President Dilma Rousseff, who rejected
the decision by that country’s interim government. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418177&CategoryId=10717;
Reuters, http://www.reuters.com/article/us-paraguay-venezuela-idUSKCN10G1W9;
(El Universal, http://www.eluniversal.com/noticias/daily-news/uruguay-advocates-dialogue-overcome-mercosur-crisis_430850; http://www.eluniversal.com/noticias/daily-news/brazilian-senates-economic-committee-backs-venezuelas-mercosur-presidency_430786;
and more in Spanish: El Universal, http://www.eluniversal.com/noticias/politica/sin-acuerdo-entre-coordinadores-mercosur-sobre-traspaso-venezuela_430333;
Infolatam; http://www.infolatam.com/2016/08/09/crisis-de-mercosur-a-espera-de-cumplimientos-e-incumplimientos-de-venezuela/; El
Mundo, http://www.elmundo.com.ve/noticias/economia/internacional/uruguay--venezuela-estara-en-mercosur-mientras-no.aspx#ixzz4GpY6hGq1)
Venezuela-Colombia continue discussing reopening
binational border. Venezuela’s Foreign Minister Delcy Rodríguez and her
Colombian counterpart María Ángela Holguín met in Caracas and announced that
the Presidents of both countries may announce a date for reopening of the
binational border. Rodríguez explained “We
have agreed upon some preliminary actions that can help create the atmosphere
for a gradual and progressive reopening of the border”. She said that
Colombia has suggested creating a border ID document so that citizens on both
sides can transit through the border between 5 AM and 8 PM, which was accepted
by Venezuela. Táchira state governor, Lieutenant José Vielma Mora added that
Venezuela has proposed a “special customs
system” for the border to deal with a basic group of products. The Defense
Ministers from both nations are scheduled to meet over the next couple of
months. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Cancilleres-Colombia-Venezuela-proponen-frontera_0_896910602.html;
Noticiero Venevisión: http://www.noticierovenevision.net/politica/2016/agosto/4/164938=cancilleres-de-venezuela-y-colombia-se-reunieron-para-analizar-la-reapertura-de-la-frontera;; El
Universal, http://www.eluniversal.com/noticias/economia/venezuela-propone-regimen-especial-aduanas-frontera-con-colombia_430882)
30,000 tons of sugar from Guatemala arrived at Puerto
Cabello, according to local Port authority chief General
Rafael Aguana. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Arribaron-toneladas-guatemalteca-Puerto-Cabello_0_898110303.html)
1.632 tons of tuna arrive into Cumaná’s port,
according to Fisheries and Aquaculture Minister. More in Spanish: (Notitarde, http://www.notitarde.com/Llegaron-1632-toneladas-de-atun-a-Cumana/Economia/2016/08/08/1014882/)
Logistics & Transport
CONVIASA
cuts daily flights from 20 to 16 due to a
pilot shortage after over 80% reportedly have resigned. Sources within the
airline report that there are only 6 pilot and co-pilot crews left. More in
Spanish: (El Nacional, http://www.el-nacional.com/economia/Conviasa-reducido-vuelos-diarios_0_898710195.html)
AVIOR Airlines adds third direct route to Panama,
operating from Maracaibo in Western Venezuela. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/empresas/avior-airlines-abrio-tercera-ruta-directa-a-panama.aspx#ixzz4GS3IIVVA)
Oil & Energy
Venezuela oil price falls back to April lows. The
price Venezuela receives for its mix of medium and heavy oil fell for a sixth
consecutive week as world oil stocks remained high and U.S. oil and gasoline
stocks continued be in surplus. 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 August 5 was US$ 33.36,
down US$ 1.64 from the previous week's US$ 35.00.
According to Venezuelan government figures, the
average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 32.09
for the year to date. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2418266&CategoryId=10717)
OPEC plans informal talks next month, sees oil dip
temporary. The Organization of Petroleum Exporting Countries will
hold informal talks at a conference in Algiers next month and considers the
recent decline in oil prices temporary, the group’s president said. “Expectation of higher crude oil demand in
the third and fourth quarters of 2016, coupled with decrease in availability,
is leading the analysts to conclude that the current bear market is only
temporary” and prices will increase later this year, Mohammed Al Sada,
Qatar’s energy minister and holder of OPEC’s rotating presidency, said in a
statement on the group’s website. Members constantly discuss ways to stabilize
the market, he said. West Texas Intermediate crude rose to the highest level in
almost two weeks, gaining as much as 2.8% to US$ 42.97 a barrel as of 10:26
a.m. on the New York Mercantile Exchange. OPEC ministers, who rejected a
proposal to adopt a new output ceiling when they last met in June, had always
planned to continue discussions at the International Energy Forum Ministerial
Meeting in Algeria next month, two delegates from the group said Friday. OPEC Secretary-General Mohammad Barkindo met
with Venezuela’s Oil Minister Eulogio del Pino about holding a meeting with
non-member countries, but Russia sees no need for renewing discussion of an
oil-output freeze at current crude prices, while leaving open the possibility
for the future, Iran will probably raise production to pre-sanctions levels by
the end of the year, while Saudi Arabia will also be selling more crude as
domestic use of fuel during the country’s summer months slows. (Bloomberg: http://washpost.bloomberg.com/Story?docId=1376-OBKZ146JTSES01-7PC3UU145ETJ1SELR8MJ57V5JA;
Reuters: http://www.reuters.com/article/venezuela-oil-idUSL1N1AL1QT)
Venezuela's crude sales to the United States up 25% in
July. Venezuelan crude sales to the United States increased
to 817,806 barrels per day (bdp) in July, the highest level since November, due
to larger exports of grades produced in the vast Orinoco Belt. This country’s
July shipments to the United States were 25% higher than in June and 12% more
than in the same month in 2015. Falling output and delays at Venezuela's main
oil port had kept exports low in recent months. The United States received 50
crude cargoes from state-run oil firm PDVSA and its joint ventures in July,
versus 39 the previous month. Valero Energy was the largest recipient, followed
by PDVSA refining unit CITGO Petroleum, PHILLIPS 66 and CHEVRON Corp. Occasional
buyers of Venezuelan oil including LUKOIL Panamericas and MARATHON Petroleum
also received shipments in July, according to the data, which is based on
preliminary figures. (Reuters, http://www.reuters.com/article/venezuela-usa-exports-idUSL1N1AL275)
China’s Development Bank grants US$ 5 billion to
Venezuela, earmarked for joint ventures, says Oil
Minister and PDVSA President Eulogio del Pino. He adds that Venezuela is
sending China 600,000 BPD of crude oil and the plan calls for the amount
increasing to 1 million BPD over the next few days. More in Spanish: (Noticiero
Venevisión: http://www.noticierovenevision.net/economia/2016/agosto/8/165269=venezuela-recibira-5-mil-millones-de-dolares-mediante-credito-acordado-con-banco-de-desarrollo-chino)
PDVSA’s Del Pino backtracks on statements about errors,
private sector participation. A few days ago Venezuela’s Vice
President for Energy Affairs and PDVSA President Eulogio Del Pino, an engineer
graduated at Stanford University, said publicly that “we must move toward a new model with a private sector majority, and
this means admitting mistakes”. The response from regime hardliners was
immediate. Former PDVSA President, Rafael Ramírez, currently Venezuela’s UN
Ambassador tweeted “Commander Chavez’s
oil policy is correct. Nationalization brought oil back to the people. It is
his legacy”. Then Lieutenant Diosdado Cabello, Vice President of the ruling
PSUV party said “they will not privatize
PDVSA because the revolution will rule there until oil runs out”. And
former Vice President Elías Jaua wrote: “Has
he forgotten there is a Plan for the Fatherland that was approved in popular
voting and is now the law of the land?”. Days later, Del Pino backtracked
at a rally where he was flanked by Cabello and Jaua: “They have taken some statements in a squalid media, and have set it up
trying to indicate that we are trying to privatize the (oil) industry. How can
they go to such extremes?”, he said. Analysts wonder why didn’t President
Maduro ask for Del Pino’s resignation along with that of Trade and Industry
Minister Miguel Pérez Abad? The answer seems to be that PDVSA is preparing a
bond swap and financing outstanding debts with suppliers, all of who trust only
Del Pino, who may be replaced after such transactions take place. (Analítica:
http://www.analitica.com/economia/de-como-el-estatus-quo-puso-de-rodillas-al-presidente-de-pdvsa-por-blanca-vera-azaf/)
This could be the last straw for Venezuela's oil
sector. Oilfield union officials in Venezuela’s Lake Maracaibo
region leaked news to Platts that all is not well in the drilling sector here.
With sources saying that major international operator SCHLUMBERGER has halted
the majority of its operations. Union
leaders said that SCHLUMBERGER has shut down four of six rigs it was operating
for offshore oil production in Lake Maracaibo. The reason being — a lack of
payment for drilling services from PDVSA. This shutdown looks to be somewhat of
a “last straw” for PDVSA’s
operations. After funding for drilling here appeared to come under stress
earlier this year — when both SCHLUMBERGER and HALLIBURTON said they were
reducing rigs in Venezuela due to non-payment. At the same time, fellow
drillers SAN ANTONIO and PETREX suspended a total of 36 rigs across Venezuela.
But PDVSA had appeared to be making headway — with SCHLUMBERGER saying in June
it had reached an agreement with the oil major to keep six rigs operational in
the Lake Maracaibo area. The fact that
most of those drills have now been idled suggests that PDVSA’s last-ditch
contract efforts have failed. Possibly signaling a significant cliff ahead for
drilling across Venezuela — which could foreshadow an accelerated decline in
production. Such a downturn would have big implications for a) global oil
supply, b) Latin American oil trade (including the U.S. Gulf Coast), and c)
Venezuela projects, national finances, and politics. Watch to see if PDVSA can
find a way to get the idled rigs restarted — and for news on further drilling
shutdowns in the country. (Business Insider: http://www.businessinsider.com/this-could-be-the-last-straw-for-venezuelas-oil-sector-2016-7)
Commodities
Gold Reserve shares surge on US$ 770 million Venezuelan
settlement. Gold Reserve Inc. will get about US$ 770 million as
part of a settlement with Venezuela for the 2008 seizure of its Brisas gold and
copper project in an arrangement that depends on the country securing
financing. Shares surged. Payment is expected to be made in two installments: US$
600 million by the end of October and the rest by year-end, the Spokane,
Washington-based company said. Venezuela also agreed to buy the company’s
mining data for US$ 240 million and enter into a jointly owned company with
Gold Reserve for a 18,000-hectare claim including the Brisas Cristinas deposit.
The statement didn’t say where Venezuela, whose oil-dependent economy has been
pummeled by slumping energy prices, would obtain the funding. “Venezuela will use the proceeds from any
financing it closes after the execution of this agreement to pay Gold Reserve
the amounts owed under this agreement in preference to any other creditor,”
Gold Reserve said. (Bloomberg, http://www.bloomberg.com/news/articles/2016-08-08/gold-reserve-shares-surge-on-770-million-venezuelan-settlement)
TOYOTA is restarting operations, will produce 150
vehicles per month. TOYOTA has restarted operations at their plant in Cumaná
(Sucre state), and expect to produce 150 vehicles per month, for a total 750
assembled units by the end of this year. Their record production was 33,240
units ten years ago. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Toyota-reanudo-produccion-ofrecera-vehiculos_0_896910604.html)
Telefonica opens rate talks in Venezuela after
Maduro’s threat. Telefonica SA is holding talks with the Venezuelan
government to adjust phone-service rates after President Nicolas Maduro blocked
an attempt to increase prices and said the state was open to taking over
carriers if necessary. The company is in “talks
with the authorities to define new prices," according to a statement
on its Venezuelan website Friday. The Madrid-based company also plans to
reimburse customers who already paid bills after a July price increase, which
was later overturned by the government. As Venezuela struggles with the world’s
fastest inflation, Telefonica and rivals had raised prices to stay afloat and be able to pay interconnection fees for
international data and call traffic. Nobody can “set prices just like that," Maduro said Aug. 1 on national
television, and warned that he was open to taking control of phone carriers if
they can’t manage their businesses amid the country’s worst economic recession
in decades. (Bloomberg, http://www.bloomberg.com/news/articles/2016-08-08/telefonica-opens-rate-talks-in-venezuela-after-maduro-s-threat)
Economy & Finance
Maduro looks to a Marxist Spaniard for an economic
miracle. President Nicolás Maduro, hoping for an economic
miracle to salvage his country, has placed his trust in an obscure Marxist
professor from Spain who holds so much sway the president calls him “the Jesus Christ of economics.” Alfredo
Serrano—a 40-year-old economist whose long hair and beard have also elicited
the president’s comparison to Jesus—has become the central economic adviser to
Maduro, according to a number of officials in the ruling United Socialist Party
and other government consultants. His rise has come at the expense of advisers
who, though also leftist, have urged the president to undertake more
conventional steps to address Venezuela’s dysfunctional economy, such as
liberalizing the country’s tightly controlled currency, these people say. Instead,
Serrano’s calls for even more state controls on manufacturing and food supply
have largely shaped the president’s response to the country’s economic crisis.
Such moves risk prolonging the deepest recession in the nation’s history—as
well as the hyperinflation and severe food shortages that have accompanied it.
“All the attempts to reform, to
coordinate with the private sector, have been blocked by him,” a senior
ruling-party lawmaker said. Serrano arrived in Latin America in the mid-2000s
with a group of anti-capitalist Spanish intellectuals who would later go on to
form Spain’s leftist PODEMOS party. Among his more unorthodox ideas are that
inflation is caused by class struggle and that government bureaucracy should be
replaced by revolutionary communes that would handle everything from health
care to food production. “The communes
must be at the center of gravity of the new state,” Serrano said in a July
speech in Caracas. (The Wall Street Journal: http://www.wsj.com/articles/venezuelas-nicolas-maduro-looks-to-a-marxist-spaniard-for-an-economic-miracle-1470678805)
Venezuela: Trench cabinet. The
latest cabinet changes announced by President Maduro are a negative signal, as
they reduce the presence of moderate factions within the government while
Maduro surrounds himself of loyalists and radicals in what has the appearance
of a preamble to radicalization. With the exit of Vice President of Economics
Miguel Perez Abad from the cabinet, Eulogio Del Pino, President of PDVSA, is
left practically alone in an uncomfortable position on the pragmatic side of
the government. In terms of economic policies, the more immediate implication
is drifting further away from exchange rate market unification. A possible widening
of economic distortions and radicalization of the government also make a
successful PDVSA debt swap more difficult. In the current situation, a debt
swap of short-maturity bonds that PDVSA has said it is considering would be
mainly encouraged by political reasons. PDVSA had not done this swap before
because of its high cost, and these conditions have not improved. The
government could be changing its mind and be willing to have a transaction,
even if it is at the expense of a significant increase in the debt stock and/or
the debt service, as long as it increases its margins to maneuver the political
situation. A successful debt swap could have a bigger political than economic
effect. While cash flows would likely remain tight, it could significantly reduce
the probability of a political transition: US$ 6 billion less in debt payments
over the next 16 months could be used by the government to increase imports
almost 30%, helping it to calm the political situation. Although PDVSA is
supposed to be able to issue debt without approval of the National Assembly,
the conditions in which this transaction could take place are likely to
generate political noise and could give any new administration arguments to
question the legitimacy of this debt. A successful swap could have mixed
implications for Venezuelan/ PDVSA debt. While it would support the view of the
investor base that has maintained a strong confidence in the short-term
willingness and capacity to pay of the country, it could weaken the arguments
of those who have been expecting a political transition to lead to a more
market-friendly government. Perhaps unintentionally, with a successful swap,
the market could end up helping the government to prevent the scenario that
would be better for the market itself. (Barclay’s:
Full Report Attached).
July inflation pegged at 23.2%
according to sources within Venezuela’s Central Bank; and year to date
inflation is now 240%. Inflation for the past full year was 565.2%, only in
products under price controls. Central Bank experts say these levels of
inflation are unprecedented in Venezuela. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Inflacion-julio-cerro_0_896910608.html)
Lorenzo Mendoza willing to meet with Venezuelan
government. Lorenzo Mendoza, the head of Venezuela’s major food
producer Empresas Polar, says he is willing to meet with President Nicolas
Maduro. “Should President Maduro call me
to meet, I will go, just the way I did the other times when I was called,”
Mendoza said in an interview. About dialogue, the businessman termed it
necessary, but he discouraged dividing dialogue into political or economic. “In today’s civilization and world, communication
and dialogue are a coexistence rule. I think sectorizing things (…) removes a
natural structure from dialogue. Let’s talk about the relevant topics,”
Mendoza added. (El Universal, http://www.eluniversal.com/noticias/daily-news/lorenzo-mendoza-willing-meet-with-venezuelan-govt_430793)
Politics and International Affairs
Presidential recall unlikely this year amid new
tentative timeline. President Nicolas Maduro is highly unlikely to face
recall this year, as authorities provided a detailed electoral calendar
suggesting a vote might not happen until early 2017. If the recall were to happen before Jan. 10,
2017, it would trigger new elections. However, If Maduro were to lose a recall
vote after that date, his hand-picked vice president would finish out his term
through 2019. The opposition has been accusing the electoral body of dragging
its feet on the process to protect the unpopular Maduro. And opposition leaders
are planning a massive Sept. 1 march on Caracas to demand the vote. National
Electoral Council President Tibisay Lucena said the opposition was “wasting its time.” “This electoral power does not accept pressure from anyone,” she
told an audience of administration officials. According to her timeline, the
opposition might be asked to collect 3.9 million signatures — or 20% of voter
rolls — at the end of October. The body would then have 28 or 29 days to review
those signatures and call a referendum. But the CNE can schedule that vote
anytime during the next 90 days, making a January or February vote a
possibility. (The Miami Herald: http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article94596437.html;
Summarium:
Independent CNE member refutes Lucena’s presentation. Luis
Emilio Rondon, the sole independent member of the 5 member National Elections
Council (CNE) says he did not attend Tibisay Lucena’s press conference today
because he disagrees with the decision to delay the 20% signature collection to
late October. He said an earlier date could be set if technical and logistic
preparations begin during the second half of August. He condemned his
colleagues for delaying timetables for executing the recall process, which was
established in September 2007, and charges that the 5 days needed to check
signatures in the first stage were turned into over 30 days. Rondón adds that “there is no legal, technical or logistic
obstacle to carry out recall request procedures once requirements are complied
with” and says the absence of a timetable since the time the request was
accepted “has damaged the principle of
impartiality that the institution must maintain” He says the national
crisis should lead the CNE to respect the timetables that were established, and
must comply with the requisite of “speed
in complying with its constitutional duty.” (Prodavinci: http://prodavinci.com/2016/08/09/actualidad/esta-fue-la-respuesta-del-rector-luis-emilio-rondon-al-anuncio-de-tibisay-lucena-sobre-el-revocatorio/)
Opposition coalition calls for massive demonstration
on September 1st to demand recall timetable. Opposition
leader Henrique Capriles Radonski, a former presidential candidate and current
governor of Miranda states, if there the National Elections Council (CNE) does
not provide a timetable for a recall process against President Nicolas Maduro,
the Democratic Unity opposition coalition call for a massive nationwide
mobilization to occupy the entire city of Caracas. In reference to today’s
statements by CNE Chair Tibisay Lucena, Capriles said “the nation does not accept (the word) “could”(Lucena referred to all possible recall dates in tentative
terms) … “it is our constitutional right
and we will make it stick” He called Lucena’s press conference was “an exercise in cynicism and lies”, and
said Lucena “believes we Venezuelans are
fools”. He added that Lucena’s statements aimed at demoralizing voters. (Noticiero
Venevision: http://www.noticierovenevision.net/politica/2016/agosto/6/165093=mud-convoca-gran-movilizacion-el-1°-de-septiembre-si-el-cne-no-da-fecha-del-20)
National Assembly moves to replace National Elections
Council board members. Congressman Julio Borges, who heads the opposition
majority in the National Assembly, has announced that the Legislature will
appoint members of the Nominating Committee that will elect new members of the
National Elections Council as is required this very same year - when their
terms expire. He said they would also call upon the CNE to honor the rights of
Venezuelans to a recall referendum and regional elections. “This is a right that cannot be negotiated,
changed, or manipulated by the government as it tries to remain in power.”
More in Spanish: (Ultimas Noticias: http://www.ultimasnoticias.com.ve/noticias/politica/borges-anuncia-creacion-del-comite-elegir-nuevos-rectores-del-cne/;
Analítica: http://www.analitica.com/actualidad/actualidad-nacional/julio-borges-vamos-a-constituir-los-comites-de-postulaciones-para-sustituir-al-cne/)
Gubernatorial elections remain on hold. The
last regional elections to elect state governors and state legislators were
held in Venezuela on December 16 2012. The result was a victory for the ruling
United Socialist Party (PSUV), which won the governorships of 20 of the 23
states. The term of incumbent governors expires in December of this year.
According to Constitution, governors are elected for four-year terms. The
National Electoral Council (CNE) has yet to release a decision or a date for
these elections, (El Universal, http://www.eluniversal.com/noticias/daily-news/would-be-candidates-for-governors-await-decision-from-the-mud-and-the-gpp_430433)
Slow motion coup in Venezuela? In
recent weeks Nicolás Maduro appears to have taken a back seat to Venezuela’s
top general, defense minister Vladimir Padrino López, who also – unusually –
holds the post of operational commander of the armed forces. The prominence of
the military in determining Venezuela’s political future was illustrated once
again last week by the appointment of Néstor Reverol as interior minister.
Unlike Padrino, who rose through the army, Reverol hails from the National
Guard. His alleged criminal connections suggest that different factions in the
military may now be jostling for shares of influence in the state. The gradual
expansion of military powers in response to the regime´s loss of legitimacy is
starting to resemble a slow-motion coup. What is in doubt is the army’s ability
to improve the situation. General Padrino has said that he does not want to
“militarize” the administration but to “restore
order” in the face of a “lack of
governance” – a strange choice of words, given that any such lack must be
attributed to his commander-in-chief. With so much power concentrated in the
hands of the military, understanding what their goals are is paramount. Rather
than merely shoring up an increasingly unpopular president, the aim of the
generals may be to control the transition in a way that protects their own
interests. The defense minister’s new role means “the dialogue [over] transition will be with the military”, as one
defense expert put it. But if the army cannot halt the slide into economic and
social chaos, the crisis could take the generals with it too. So far, there is
no sign of a workable plan in that regard. (The Crisis Group: https://www.crisisgroup.org/latin-america-caribbean/andes/venezuela/slow-motion-coup-venezuela)
Venturing Into Caracas' Chavismo bastion.
Traditionally,
colectivos are known to be radical,
left-wing armed groups that support Venezuela's ruling party in exchange for
patronage. But they are also individual clans, each seeking to serve as a
counterbalance to the others as they vie for resources, territory and power. According to one source: "There are more than 60 colectivos, some of
them have their own personal objectives, like education, where others are
inherently linked with government officials, and others, yet the smallest and
newest self-label themselves as colectivos, just to inspire fear, but in
reality they are criminal bands." Colectivos
gained what power they have by aligning with Chavez and still have reason to
serve the government to keep its patronage flowing. But they are angry and are
frustrated with Maduro's economic policies. Even if his administration sticks
to Chavez's model of supporting the groups with money and government aid, there
is no guarantee that it will be enough to stop them from protesting his
measures. Should the president's plummeting popularity give the Venezuelan
opposition room to unseat the ruling party, the next government could seek to
rein in the colectivos by reducing
their power and autonomy. Such an outcome would provoke heavy resistance,
whether through violence or protests. (Stratfor: https://www.stratfor.com/analysis/venturing-caracas-chavismo-bastion).
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.
