October 08, 2015

International Trade

 

US-Venezuela trade is down 38.6% YTD in August 2015

A report by the Venezuelan-American Chamber of Commerce (VENAMCHAM), based on US Census Bureau figures shows that through August 31st, total trade was US$ 17.273 billion, a 38.6% drop from the same time frame last year. Net total trade was US$ 4.947 billion, a 66.21% drop. More in Spanish: (El Universal, http://www.eluniversal.com/economia/151007/intercambio-comercial-entre-eeuu-y-venezuela-se-ubico-17273-millones; El Nacional; http://www.el-nacional.com/)

 

 

Logistics & Transport

 

CONVIASA suspended its flights to Madrid and Buenos Aires

Without prior notice or any official statement, the Venezuelan air carrier notified passengers via telephone it had suspended flights to these two destinations due to “operational reasons.” Twelve thousand ticket holders have been affected. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45738&idc=3)

 

 

Oil & Energy

 

Venezuelan crude exports to the United States fell 10%  in September

Venezuelan crude exports to the United States declined 10% in September versus the previous month due to lower sales of heavy and medium grades to some of regular customers, according to Reuters trade flows data and PDVSA trade documents. State-run oil company PDVSA and its joint ventures sent 44 crude cargoes to the United States last month carrying 724,230 barrels per day (bpd), compared with 807,065 bpd in August. Sales of diluted crude oil (DCO) made with naphtha rose again to 348,200 bpd, from 311,130 bpd in August, but the increase was not enough to offset an export decline to regular clients including PDVSA's refining unit CITGO Petroleum, MOTIVA Enterprises, PHILLIPS 66 and PBF Energy's Chalmette refinery. Venezuela also delivered in September a 200,000-barrel cargo of natural gasoline and a 240,000-barrel cargo of jet fuel to PETROCHINA with the United States as destination, according to PDVSA's internal imports and exports reports. The country imported four 500,000-barrel cargoes of heavy naphtha last month from trading firms VITOL and TRAFIGURA and PDVSA also bought some 3.8 million barrels of Cabinda, Kissanje, Nemba and Bonny Light crudes received at its Bullenbay storage terminal in Curacao. (Reuters: http://www.reuters.com/article/2015/10/07/us-oil-venezuela-usa-idUSKCN0S12JM20151007)

 

2016 budget projects oil prices at US$ 35-40 per barrel

Sources close to the Finance Ministry report that the government has the 2016 Budget and Debt Law ready, with few surprises. It calls for a "conservative" budget and are estimated oil prices in the US$ 35-40 per barrel range, which was the projection for 2015. The drop in world oil prices will force the government to lower their estimations. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/petroleo-entre--35-y--40-es-la-premisa-presupuesta.aspx#ixzz3nyEsn5QL).

 

Venezuela’s power energy crisis worsens as the direct result of the implementation process of an authoritarian, statist, central-oriented, offhand and arbitrary political project, according to Antonio Patiño, a member of the Engineers’ Guild’s National Power Committee. In a study conducted by 100 electrical engineers in this committee for eight years, they explain the current situation the National Power System faces and its outlook. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45740&idc=3)

 

 

Economy & Finance

 

Venezuela's economy worst in world as IMF Forecasts 10% contraction

Venezuela will see its economy shrink more than any other country in the world this year as lower oil prices drain government coffers, according to the International Monetary Fund. “Venezuela is projected to experience a deep recession in 2015 and 2016,” the IMF said Tuesday in its World Economic Outlook. The country’s real gross domestic product probably will contract 10% this year and 6% in 2016, it said. President Nicolas Maduro’s policy response to the economic crisis remains paralyzed ahead of congressional elections set for Dec. 6. The bolivar has slumped to 792 to the dollar on the black market, while the official rate remains at 6.3. The government has also maintained fixed prices for staple foods, even as supplies run out in many shops and prices for other goods soar. Inflation in Venezuela, already the fastest in the world, will average 159% in 2015 and increase to 204% next year, the IMF said. The price Venezuela receives for its oil exports, which accounts for about 95% of foreign currency earnings, has fallen 52% in the past year. Barclays characterized Venezuela’s economic troubles as the “deepest economic crisis in its history” in a Sept. 25 note to clients. “It is impossible to understand why the government is not reacting to this reality, why it has not taken measures to alleviate the economic distortions that are destroying the real income of Venezuelans,” Barclays said. (Bloomberg, http://www.bloomberg.com/news/articles/2015-10-06/venezuela-worst-in-world-as-imf-forecasts-economy-to-shrink-10-)

 

BARCLAY's: Will Venezuela score an own goal?

Barclays reports that its own estimates support a statement by Finance Minister Rodolfo Marco Torres that the Venezuelan government owns 20-25% of its own bonds. It adds that the Venezuelan government’s high exposure to its own debt implies that the public sector would be a big loser in a default scenario. This, it says, combined with a still non-negligible position in hard currency assets, reinforces their view of a strong willingness to pay among the country’s authorities. The report adds that the public sector debt portfolio is highly concentrated in five PDVSA bonds that, in total, should account for around 70% of the portfolio: PDVSA 26, 24, 22N, 15, and 17N. The largest holders of this debt are Banco de Venezuela, BCV and the PDVSA pension fund.  Barclays concludes that although the government has indicated hard currency assets of US$ 46 billion, they estimate the disposable assets total around US$ 15.1 billion, and believe this should allow the government to meet debt payments until at least Q116, though at the expense of depleting its liquidity position. (BARCLAYS: Full report attached).

 

Venezuela’s liquid international reserves were US$ 1.7 billion as of September 30, down 9.62% from September 16, according to Inter American Trends. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45742&idc=2)

 

Bonds buyback prevents Venezuela's possible default

Ramiro Molina, the Director of the Center of Finance and Economy Studies (CEFE), said foreign debt maturities of the Venezuelan government and state-run oil company Petróleos de Venezuela (Pdvsa) in 2016 amount to nearly US$ 9.93 billion, including payment of principal and interests. Venezuela "has the capacity to honor foreign debt," said Molina, despite persistent concerns in international markets about a possible default by Venezuela. He added that the country "is in a more comfortable position upon bonds buyback" mainly by PDVSA. Molina said  those operations make a default less likely. (El Universal, http://www.eluniversal.com/economia/151007/bonds-buyback-prevents-venezuelas-possible-default)

 

PepsiCo’s Q3 earnings per share fall 73% on Venezuela charges

Food and beverage giant PepsiCo said that its earnings per share fell 73% in the third quarter due to charges of US$ 1.4 billion, or US$ 0.92 per share, related to a change in the way it accounts for its operations in Venezuela. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397728&CategoryId=10717)

 

 

Politics and International Affairs

 

President Maduro rejects US ambassador's remarks on the Essequibo

President Nicolás Maduro has rejected statements made by US Ambassador to Guyana, Perry Holloway, regarding the territorial conflict between Guyana and Venezuela. Maduro also alerted that his Guyanese counterpart, David Granger, sought to create a "major" conflict with Venezuela by disregarding the Geneva Agreement, which was endorsed by both countries as a mechanism to try to find a peaceful solution to the border dispute. "All the governments of Guyana have acknowledged the Geneva Agreement, except for Granger's government," Maduro noted. (El Universal, http://www.eluniversal.com/nacional-y-politica/151007/president-maduro-rejects-us-ambassadors-remarks-on-the-essequibo)

 

...and National Assembly Speaker Cabello: Guyana's government is "out of its mind; it wants war"

National Assembly Speaker Lieutenant Diosdado Cabello called Perry's statements "very serious"; and said the government of President David Granger is "out of its mind," because, in his view, Guyana "wants a war" with Venezuela over the Essequibo. "We are not going to war; we will not do that. We want peace," Cabello stressed. (El Universal, http://www.eluniversal.com/nacional-y-politica/151006/congress-speaker-cabello-guyanas-govt-is-out-of-its-mind-it-wants-war)

 

Venezuela arrests 250 in crackdown on Colombian border
Venezuelan authorities say that 250 people have been arrested along the western border of Tachira state – including Venezuelan police officers, soldiers and 34 suspected Colombian paramilitaries – since President Nicolas Maduro ordered the closure of the border with Colombia on Aug. 19. Tachira Governor Lieutenant Jose Vielma Mora and the military commander on the border, General Efrain Alvarado, announced the tally during a nationally broadcast joint press conference in the state capital. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397730&CategoryId=10718)

 

Opposition coalition rejects agreement to abide by results

Jesús Torrealba, Executive Secretary of the Democratic Unity Conference (MUD) said the regime has failed to abide by recent results, and it is not possible to trust an agreement proposed by President Nicolás Maduro calling for respecting the results of December 6th parliamentary elections. He pointed to several instances where "the government has shown disrespect for election results", not only against opposition officials, but also against former chavistas "who defect". More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Lucena says the National Elections Council does not count polls, it counts votes

Tibisay Lucena, Chair of the National Elections Council rejected "negative matrixes" against the institution she heads, and  spoke of "real reality versus fabricated reality". She said it is not possible to speak of "fraud" and cast doubt on the Council's "transparency", which she believes seeks to disqualify the institution. Lucena added that there were no changes to election constituencies. "There are the same ones as in the 2010 parliamentary elections. Not one was created." She also denied the Council is discouraging opposition voters: "Had there been a 'hidden' elections registry, there would not have been 2.2 million voter moves, through changes in address and new registrations", she argued. More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Spain asks "all parties" to accept election results in Venezuela

The Spanish Minister of Foreign Affairs and Cooperation, José Manuel García-Margallo, has said he expects the December 6 parliament vote in Venezuela to be held "in normal conditions" and that "all parties accept the electoral result." "The minister added that he knew he would be lambasted for his statements. (El Universal, http://www.eluniversal.com/nacional-y-politica/151006/spain-asks-all-parties-to-accept-election-results-in-venezuela)

 

MERCOSUR refuses to invoke "democratic clause" on Venezuela over López' imprisonment

Brazil's Florivaldo Fier, MERCOSUR's High Representative, says "the democratic clause is applied when there is a coup against a constitutional government", and is applied through consensus, "not at the request of one of its members".  Fier was responding to a statement by Argentine presidential candidate Mauricio Macri, who said that if elected he would ask MERCOSUR to demand freedom for jailed Venezuelan opposition leader Leopoldo López. Macri said "we are doing to demand freedom for Leopoldo López, and if Maduro does not accept we are going to call a meeting with MERCOSUR nations and ask that the democratic clause be applied." (Infolatam: http://www.infolatam.com/2015/10/08/mercosur-descarta-clausula-democratica-a-venezuela-por-lopez/)

 

Socialists’ grip on power in Venezuela may be too strong to dislodge

Amid food shortages, galloping crime and inflation that could top 150% this year, polls show swelling support for the country’s political opposition which could win a majority in the Dec. 6 legislative elections. Should that happen it would be a first major breakthrough for the opposition, which has lost nearly every local and national election since the late Hugo Chavez ushered in Venezuela’s socialist revolution in 1999. It would break the power monopoly of the ruling Socialist Party, which controls the judiciary, the legislature and government watchdog agencies — all of which answer to President Nicolas Maduro. And it would open the door for a recall referendum to remove Maduro from power. The problems started under Chavez, who died of cancer in 2013, but have accelerated under Maduro, who lacks the charisma of his predecessor. “No Socialist Party candidates want Maduro to visit their states because that would be the kiss of death,” says Jesus Torrealba, spokesman for the opposition coalition known as the Democratic Unity Roundtable. Under these conditions, an opposition victory in December might seem like a certainty. It’s not. State workers are now being pressured to vote for ruling party candidates who also count on government financing and a propaganda boost via the many TV and radio stations controlled by the government. Some opposition leaders have been sidelined by judicial fiat. Pollster Luis Vicente Leon said that over 16 years in power, first Chavez and now Maduro have mastered the electoral arts. “They fiercely control the institutions and the money which allow them to become stronger through electoral engineering even when their support is flagging,” Leon wrote. Even so opposition candidates are expected to win a majority of the 164 seats. Yet their power would be limited. Political analyst Carlos Romero says that before new deputies take the oath of office in January, the outgoing Maduro-controlled National Assembly could renew the extraordinary powers that have allowed the president to rule by decree since March. New laws that challenge government authority could be thrown out by judges loyal to Maduro. Victory on Dec. 6, Romero says, “is important for the opposition in political terms but it’s not going to change the course of the country.” (TIME: http://time.com/4061641/socialists-venezuela-maduro/)

 

 

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.

October 06, 2015

International Trade

Cargo that has arrived at Puerto Cabello

• 150 containers of milk, beef, refined oil and drugs for Corporación de Alimentos y Suministros Agrícolas (CASA) and Fundación Misión Barrio Adentro.

More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=33841)

 

Cargo that has arrived at Bolipuertos Maracaibo

• 30,000 tons of soybean cakes from Argentina for Corporación de Abastecimiento y Servicios Agrícolas (CASA)
• 3 containers bearing electric generators for state agency Corporación Venezolana de Alimentos (CVAL)
• 4 containers bearing machinery for different state agencies, including Petróleos de Venezuela S.A (PDVSA), BARIVEN; AGROPATRIA and Corporación de Abastecimiento y Suministros Agrícolas (CASA).  
• 18 containers bearing 2,400 tires for state agency Suministros Venezolanos Industriales C.A. (SUVINCA)
• 24 motorboats from the US for state oil company Petróleos de Venezuela (PDVSA)

More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=33842; http://www.bolipuertos.gob.ve/noticia.aspx?id=33839; http://www.bolipuertos.gob.ve/noticia.aspx?id=33840; Notitarde, http://www.notitarde.com/La-Costa/Llega-a-Bolipuertos-generadores-electricos-maquinarias-y-neumaticos/2015/10/01/652620/; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/llega-a-puerto-cabello-cargamento-con-2-400-caucho.aspx)

 

Government reports Venezuela’s non-petroleum exports hit US$ 4.2 billion

Venezuela’s non-petroleum exports total US$ 4.2 billion so far this year, with the figure expected to rise on year-end sales, the official AVN news agency reported. “We’re expecting a large amount of exports for the end of the year, as is normal in terms of trade in any nation. We believe we’re going to have very new (sic) export figures this year,” says Trade Minister Isabel Delgado, who claims non-petroleum exports cover products manufactured “by productive units of the state,” but also those produced by “small- and mid-sized private industries” that sell cocoa, flowers, medicines, shrimp and chocolate. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397590&CategoryId=10717; El Universal, http://www.eluniversal.com/economia/151005/venezuelan-govt-ponders-new-exports-scheme)

 

 

Oil & Energy

 

Venezuela oil price continues slipping

After bouncing up US$ 6.50 in the first week of September, Venezuela's weekly oil basket price continued slipping for a fourth straight week as oil prices around the world moderated in a plentifully supplied market. According to figures released by the Ministry of Energy and Petroleum, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending October 2 was US$ 40.02, down 49 cents from the previous week's US$ 40.51. According to Venezuelan government figures, the average price in 2015 for Venezuela's mix of heavy and medium crude is now US$ 47.60 for the year. Venezuela's average oil price for 2014 was US$ 88.42, down from 2013's US$ 98.08, 2012's US$ 103.42 and 2011's US$ 101.06, but higher than 2010's US$ 72.43, and much higher than 2009’s average price of US$ 57.01, which the current average is well below. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397585&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45713&idc=4)

 

PDVSA: Major refinery will be operational again this week

State-run oil company Petróleos de Venezuela (Pdvsa) expects to restore operations this week at all the units of the largest refinery in Venezuela, the Paraguaná Refining Compound (CRP), which was hit by a massive blackout last week.
Pdvsa said last Thursday it had started "gradual reactivation" of the refining complex, after a power failure hit the major refineries in the compound: Amuay and Cardón, with a capacity to process about 955,000 barrels per day. (El Universal: http://www.eluniversal.com/nacional-y-politica/151005/pdvsa-major-refinery-will-be-operational-again-next-wednesday-thursday; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45700&idc=4)

 

 

Commodities

 

Tuna and sardines are simply not there

The can of tuna, formerly a fairly normal pantry staple, has long been missing from stores in Venezuela, especially the domestic brands. When tuna cans, imported or domestic, do occasionally show up on store shelves, prices have increased several fold. This also extends to other seafood products like sardines, formerly a popular item for people with low incomes. In 1998 industrial and artisanal (small scale) capture produced 513,585 tons of fish, covering the domestic market. This trend continued until 2004 (597,148 tons). But since 2005 production has gone into a downturn, falling to 226,591 tons in 2014. Production has contracted by nearly 60%. (El Universal, http://www.eluniversal.com/economia/151003/tuna-and-sardines-are-simply-not-there)

 

 

Economy & Finance

 

Venezuelan government filed an incomplete report with the SEC

The annual report filed by the Venezuelan government before the US Security Exchange Commission (SEC) did not include the definite figures on the country’s economic behavior in 2014. It only provided information up to the third quarter when the gross domestic product (GDP) posted a 4% drop in nine months. Allegedly, following direct orders from Nicolás Maduro, the Venezuelan Central Bank (BCV) was banned from publishing figures since the end of last year. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45698&idc=2; and more in Spanish: (El Nacional; http://www.el-nacional.com/)

 

ECLAC forecasts 6.7% downturn in Venezuela

The Economic Commission for Latin America and the Caribbean (ECLAC) released a report including corrected growth projections showing a downward trend compared to estimates presented in July. According to the commission, the region will grow only 0.5% on average in 2015, mostly due to deceleration in South America. It estimates Venezuela's contraction next year at close to 7%. "Growth projections indicate that South American economies -specialized in the production of primary goods, especially oil and minerals- and with a growing level of trade integration with China, will register the biggest deceleration," ECLAC pointed out. (El Universal, http://www.eluniversal.com/economia/151005/eclac-forecasts-67-downturn-in-venezuela; and more in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/cepal-estima-que-economia-venezolana-caera-6-7--es.aspx#ixzz3nmVxxGoE; El Nacional; http://www.el-nacional.com/)

 

 CENCOEX has paid out 35% of the dollars allocated in the bid held for the transport sector, says Surface Transport and Public Works Minister José Luis Bernardo. The auction was called last June 15 for US$ 350 million and 239 firms were allocated dollars. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45709&idc=2)

 

 

Politics and International Affairs

 

Venezuela’s legislative elections: Muddled, yet united

Some of its leaders are in jail. Others are banned from running for office. All are up against an autocratic government with formidable resources. Yet in legislative elections scheduled for December 6th, Venezuela’s opposition has its best chance of winning a national victory since 1998. Recent polls find that 70% of respondents expressing a preference will vote for opponents of the Socialist government led by Nicolás Maduro. The prospective winner, the Democratic Unity (MUD) alliance houses ideologies from Marxism to free-market conservatism, united only by a shared loathing of the government. Its electoral program consists primarily of the incontestable, but deliberately vague, proposition that Venezuela “wants change”. The alliance has demonstrated impressive flexibility and stoic discipline in the lead-up to the election. It has persuaded its members to bury their differences and field a single opposition candidate for each seat. It has yet to offer a manifesto for reform of Venezuela’s dysfunctional economy or hollowed-out state institutions, and its candidates defend their lack of concrete proposals by stressing that they are battling a system. Luis Vicente León, a pollster, believes that losing the National Assembly—even by a single seat—would devastate the Socialists by shattering their illusion of invincibility. But thanks to Venezuela’s complex semi-proportional electoral system, compounded by flagrant gerrymandering under both Chávez and Maduro, the MUD will need far more than a simple majority of votes to win control. Nonetheless, if the polls hold up and prove accurate, then in the absence of any electoral fraud the alliance’s current lead of over 20% should prove sufficient. Even without the two-thirds minimum for constitutional changes, a majority could enable the opposition to schedule a recall referendum against Maduro next year. Optimists hope that losing the legislature will lead moderate chavistas to oust the president and start cleaning up the mess that their movement’s namesake left behind. But that would require Maduro’s exit, and no one knows how far he will go to prevent a MUD victory. A last-ditch tactic might be to delay the vote, under the pretext of a manufactured crisis like Venezuela’s border disputes with Colombia or Guyana. Even if the coalition does prevail, it could take street protests and foreign pressure to make Maduro relent. (The Economist, http://www.economist.com/news/americas/21669929-voters-are-eager-end-chavismo-can-disciplined-diverse-opposition-coalition?frsc=dg%7Ca)

 

Venezuela hits back at U.S. for questioning its democracy

Venezuela's foreign minister has blasted her U.S. counterpart John Kerry for questioning the country's democratic credentials ahead of legislative elections the ruling socialists are forecast to lose. The spat follows a nascent rapprochement earlier this year between the two ideologically-opposed nations. In an interview, Kerry described Venezuela as "troubled" and said December's elections would be a "measure of the type of democracy that exists in the country." Responding on Twitter, Delcy Rodriguez said Venezuela rejected Kerry's comments. "The electoral register in the United States is founded on discrimination... Our political system is founded on democracy." On Sunday, President Nicolas Maduro said President Barack Obama was delaying consent for his proposed new ambassador in Washington. Maduro also said that current US diplomats in Caracas "are worse" than those expelled last June, and "are actively conspiring, like crazy". ((Reuters: http://news.yahoo.com/venezuela-hits-back-u-questioning-democracy-035820758.html; http://www.reuters.com/article/2015/10/04/us-venezuela-usa-idUSKCN0RY0US20151004; and more in Spanish: Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/canciller-rechaza-declaraciones-de-kerry-sobre-dem.aspx#ixzz3nmQnEeQ8; AVN; http://www.avn.info.ve/node/323229)

 

Colombian and Venezuelan Defense ministers met, border to remain closed

Colombian and Venezuelan Defense ministers met in Santa Marta in Colombia this Friday. After the meeting, Venezuela’s Minister Major General Vladimir Padrino said Nicolás Maduro could be making new announcements and Colombia’s Minister Luis Carlos Villegas thanked Venezuelan authorities to let them know about the measures beforehand. At the same time, Táchira state governor Lieutenant José Vielma Mora said the border will remain closed until the Colombian government nullifies its Resolution 08, which allows exchange houses in the border area. He said only 12 exchange houses are authorized by Colombia's Central Bank, and another 3,400 operate illegally in the area. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45711&idc=1; and more in Spanish: Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/frontera-con-colombia-desde-tachira-permanecera-ce.aspx#ixzz3nmS8EefZ)

 

Venezuela assumed the Presidency of the OAS’ Security Council to “restructure” the Pan American institution, claimed Foreign Affairs Minister Delcy Rodríguez in her Twitter account. The objective is doubtful considering Venezuela’s mandate will last only three months until next December 31. She also announced Bernardo Álvarez was appointed Venezuela’s Ambassador to the Organization of American States (OAS), in place of Roy Chaderton. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45699&idc=1; http://www.veneconomy.com/site/index.asp?ids=44&idt=45714&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/151005/bernardo-alvarez-appointed-new-venezuelan-representative-to-the-oas)

 

Venezuela and Guyana appoint ambassadors, restore relations

The Ministry of Foreign Affairs announced that Venezuelan ambassador Reyna Arratia would return to Guyana, following agreements signed between Presidents Nicolás Maduro (Venezuela) and David Granger (Guyana) in a meeting held on September 27 with United Nations (UN) Secretary General Ban Ki-moon. Venezuela also authorized Guyana's designated ambassador to Caracas, whose identity has not been revealed. (El Universal, http://www.eluniversal.com/nacional-y-politica/151005/venezuela-and-guyana-appoint-ambassadors-restore-relation)

 

Survey shows Venezuelans believe government is involved in organized crime

A Venezuelan survey indicates a growing percentage of Venezuela's population thinks state institutions are carrying out and facilitating organized crime activities. The joint survey by the Venezuelan Observatory of Violence (known by its Spanish acronym OVV), the Observatory on Organized Crime, and the Laboratory on Social Sciences (LACSO) suggests a large percentage of Venezuelans believe the security forces are involved in arms and drug trafficking.  Polling 3,500 individuals from seven Venezuelan states, the survey found 66% of Venezuelans believe that the police and military sell weapons to organized crime groups. Meanwhile, 62% of respondents said they think drug traffickers include corrupted elements of the military, up from 52% in 2013. Venezuelans are also likely to believe the government is facilitating organized crime and corruption in less direct ways. Between 63-72% of respondents said the government's economic policies have enabled corruption, the black market for currency exchange, contraband gasoline smuggling, and the smuggling of basic goods to flourish.  The perceived strengthening of organized crime groups appears to be having a significant impact on citizen security. 76% of respondents feel more insecure than they did 12 months ago, while just 6% say they feel safer. Fully half of all the respondents believe it is "easy" to get someone killed in their neighborhood, up from 35% in 2013. According to the OVV, Venezuela registered a homicide rate of 82 per 100,000 in 2014, the highest murder count since at least 1998. Furthermore, the survey indicates Venezuelans have few remaining doubts about the active role state institutions play in the country's underworld. A shadowy network of corrupt military officials, known as the Cartel of the Suns, is believed to be deeply involved in international cocaine trafficking. (Insight Crime, http://www.insightcrime.org/news-analysis/venezuela-citizens-believe-govt-involved-in-organized-crime-survey?utm_source=Master+List&utm_campaign=3e9fa08834-10_02_159_30_2015&utm_medium=email&utm_term=0_e90c5425f9-3e9fa08834-206744441)

 

Pope Francis urges Venezuela's bishops to promote dialogue

During his third meeting with Venezuelan bishops since his election, Pope Francis urged them to insist on seeking dialogue between the regime, the opposition and other social groups, in a move toward reconciliation. He called it a "pastoral priority". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/151002/papa-pidio-a-los-obispos-venezolanos-fomentar-el-dialogo; El Nacional; http://www.el-nacional.com/)

 

 

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.

October 01, 2015

International Trade

 

Cargo that has arrived at Puerto Cabello

• 30,000 tons of yellow corn, from Argentina for state agency CASA
• 1,070 head of cattle from Brazil for government nutrition programs
• 3,500 metric tons of iron rods from Costa Rica, for government housing programs

(Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=33831; http://www.bolipuertos.gob.ve/noticia.aspx?id=33832; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/llegan-3-500-toneladas-de-cabilla-para-la-mision-v.aspx; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/llegan-a-puerto-cabello-30-000-toneladas-de-maiz-y.aspx; El Universal, http://www.eluniversal.com/economia/150930/llegan-importaciones-de-maiz-reses-yeso-y-cabillas; Notitarde, http://www.notitarde.com/La-Costa/Bovinos-en-pie-y-maiz-amarillo-arribaron-a-Puerto-Cabello/2015/09/29/649333/; Agencia Venezolana de Noticias; http://www.avn.info.ve/node/322240

 

Cargo that has arrived at Bolipuertos Maracaibo

• 16,500 tons of plaster from Spain for Cementos Catatumbo
• 8,000 tons of corn for PROTINAL

More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=33834; El Universal, http://www.eluniversal.com/economia/150930/llegan-importaciones-de-maiz-reses-yeso-y-cabillas; El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/arriban-a-maracaibo-8-mil-toneladas-de-maiz-y-16-m.aspx)

 

 

Oil & Energy

 

Táchira Governor claims 60 million liters of gasoline were prevented from being smuggled in Táchira

Táchira State Governor, Lieutenant José Gregorio Vielma Mora, claims that since the implementation of the Colombia-Venezuela border shutdown and the enforcement of a state of emergency decree in the border municipalities of Táchira state 35 days ago, 60,800,000 liters of gasoline have been prevented from being smuggled across the border. He explained that 7,293 liters of gasoline had been seized. Also 3,806,670 million bolivars (VEB) and 12,932 Colombian pesos have been seized. (El Universal, http://www.eluniversal.com/economia/150930/60-million-liters-of-gasoline-prevented-from-being-smuggled-in-tachira)

 

 

Economy & Finance

 

Finance Minister promises to reveal official economic data, honor debt

During a meeting with investment bankers in New York, Venezuela's Vice President for Economic Affairs and Finance Minister, General Rodolfo Marco Torres, responded to complaints about the lack of reliable information by promising to publish official economic data held within the Finance Ministry and the Central Bank here. The meeting was organized by DEUTSCHE Bank, and attended by PIMCO, ALLIANCE, GSAM, FINTECH, JP MORGAN INV MGMT, DISCOVERY, FIDELITY, TCW, WELLINGTON, BLACKROCK, NWI and STONE HARBOR, according to General Marco. The official is reported to have told the group that government entities own about a quarter of the nation’s total debt stock, according to two people with knowledge of the matter. He declined to provide details on which bonds the government has been buying. He also said that the government, which has about US$ 5 billion in bond payments due in the last three months of this year and about US$ 10 billion due in 2016, is weighing liability-management proposals, said the people, who asked not to be named because the meeting was private. (Bloomberg, http://www.bloomberg.com/news/articles/2015-09-30/venezuela-said-to-tell-investors-it-owns-20-25-of-debt-stock; and more in Spanish: Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-inicio-reuniones-con-inversionistas-estad.aspx#ixzz3nJAMigxL; El Universal, http://www.eluniversal.com/economia/150930/marco-torres-sostuvo-reunion-con-posibles-inversionistas-en-nueva-york; AVN; http://www.avn.info.ve/node/322497; El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/gobierno-inicio-reuniones-con-inversionistas-estad.aspx; El Nacional; http://www.el-nacional.com/)

 

Venezuela revises 2014 data to show economy shrank 4%

Venezuela's government has revised its economic data for 2014, showing that Gross Domestic Product (GDP) declined 4% in the worst performance around Latin America, according to a filing n the United States. The government has given no GDP data for 2015, to the anger of opponents and consternation of economists. In its filing to the U.S. Securities and Exchange Commission, the Maduro government said the OPEC nation's petroleum sector expanded 0.3% last year, whereas the non-petroleum sector decreased 3.8%. (Reuters, http://www.reuters.com/article/2015/10/01/venezuela-economy-idUSL1N1203NZ20151001)

 

Bolivar falls past 800 per dollar on black market

Venezuela’s bolivar passed the physiological barrier of 800 bolivars per dollar Tuesday in black market trading as Venezuelans rushed to protect savings amid rising inflation. That means that the country’s biggest currency note of 100 bolivars is now worth about 12 U.S. cents. The currency has declined 14.7% in the past month to 816 bolivars per dollar. The government maintains official rates of 6.3, 13.5 and about 200 bolivars per dollar for authorized purchases of items deemed essential. Venezuela’s inflation, estimated by some to be nearing 200%, is the fastest in the world as President Nicolas Maduro’s administration prints more currency to pay budget expenses as the falling price of oil reduces foreign currency income. The amount of bolivars in circulation passed 3 trillion for the first time on Sept. 19, up 97% in the past year, according to data compiled by Bloomberg. (Bloomberg, http://www.bloomberg.com/news/articles/2015-09-29/venezuela-s-bolivar-falls-past-800-per-dollar-on-black-market; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45659&idc=2)

 

The contrarian Venezuela bond trade that's delivering 37% return

Want to make money in Venezuela’s bond market? Ignore the conventional wisdom. STONE HARBOR Investment Partners LP has done just that. The New York-based money manager has been buying up the country’s soon-to-mature notes as a bet the struggling oil-producing nation will scrounge up enough cash to continue making payments in the short-term. The move has paid off, with bonds maturing next month from Venezuela’s state-owned oil company returning 37% since the end of 2014. On average emerging-market bonds lost 0.5% this year. (Bloomberg,http://www.bloomberg.com/news/articles/2015-09-29/the-contrarian-venezuela-bond-trade-that-s-delivering-37-return)

 

AT&T may take $1.1 billion charge on DirecTV’s Venezuela assets

A change in exchange rates could wipe as much as US$ 1.1 billion off the value of AT&T's newly acquired DirecTV assets in Venezuela, the company said in an SEC filing. AT&T said in the filing it is evaluating whether to use a less preferential Venezuela currency exchange rate to value more than US$ 1.1 billion in DirecTV assets in that South American country. "If AT&T changes to the SIMADI exchange rate, it will have a negative impact on reported revenues, operating income and the fair value of our investment in the Venezuelan subsidiary," the company said in the SEC filing on Friday. (CNBC, http://www.cnbc.com/2015/09/29/att-may-take-hit-related-to-directvs-venezuela-assets.html)

 

 

Politics and International Affairs

 

Maduro hints at possible violence in December 6th parliamentary vote in UN speech

During his address before the United Nations General Assembly on Tuesday, President Nicolás Maduro asked the international community to "be on the alert for any attempts at igniting violence against the political life" of Venezuela, in the upcoming parliament vote next December 6. "Venezuela is willing to pursue its path through participatory democracy, through a Constitution passed by our people in 1999, through the way of peace," Maduro added. (El Universal, http://www.eluniversal.com/nacional-y-politica/150929/maduro-at-the-un-warns-against-possible-violence-in-parliament-vote; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=45660&idc=1)

 

Colombia's Santos has suggested that Maduro set López free

During a CNN Español interview, Colombia's President Juan Manuel Santos, revealed that he told his Venezuelan counterpart Nicolás Maduro he felt  badly about the imprisonment of Leopoldo López and suggested the best thing would be to set him free. Santos said that despite ideological differences he has a "pragmatic" relationship with Venezuela on behalf of the Colombian people, but that when Maduro started to blame Colombia for "domestic reasons", "I said to him: Hold it there, your problems are made in Venezuela, not in Colombia." He said he offered to help Maduro but that the Venezuelan president did not receive advice. "He believes he is going to win the elections. We wish him the best because it is a difficult situation". Maduro had previously said that he and Santos, have together charted out “a route to resolve provocations, threats and attacks by paramilitary and drug-traffickers against Venezuela.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2397366&CategoryId=10717; and more in Spanish: El Nacional; http://www.el-nacional.com/)

 

Maduro's Foreign Minister Delcy Rodríguez has blasted Inter American Human Rights Court, for "political and ideological partisanship" on the issue of Colombian border refugees. She said the Court is "vulgar and immoral...once again these bureaucrats, overstepping their duties and jurisdiction, are showing their anti-Venezuelan and anti-Bolivarian feelings". More in Spanish: (El Nacional; http://www.el-nacional.com/)

 

Crashed Venezuelan Air Force aircraft was escorting FARC leader

Colombia's RCN Television revealed that a Venezuelan Air Force SUKHOI-30 that crashed on the border between the two nations was escorting the leader of the FARC guerrillas, Rodrigo Londoño Echeverri, alias “Timochenko“, en route to Cuba aboard a Beechcraft 1900 owned by Venezuela's state oil company PDVSA. The PDVSA aircraft took off from a landing strip in Apure state, near the Colombian border, on a property owned by Guarico State Governor former Navy Captain Ramón Rodríguez Chacín, who was also on board with "Timochenko". The PDVSA aircraft and another escorting SUKHOI then flew to the Manuel Ríos Air Force Base in Guárico state. They initially thought the fallen jet has been downed by a missile. "Timochenko" travelled to Havana one week later to meet with the Colombian government peace delegation. More in Spanish: (Infolatam, http://www.infolatam.com/2015/09/29/avion-militar-siniestrado-de-venezuela-escoltaba-lider-de-farc/)

 

Border dispute with Guyana drags on

A recent deal between Venezuela and Guyana will not resolve the two countries' border issues. On Sept. 27, Venezuelan President Nicolas Maduro and Guyanese President David Granger met in New York at a reunion hosted by U.N. Secretary-General Ban Ki Moon. The two heads of state reached an agreement on Guyana's next ambassadorial nominee to Venezuela, Marilyn Cheryl Miles, who Caracas has refused to accept thus far in light of the Guyanese government's efforts to seek an International Court of Justice ruling that would award it territory to which Venezuela also lays claim. During the meeting, Maduro also expressed his desire to continue dialogue on the territorial issue in the hope of negotiating a resolution. Despite these seemingly positive steps, Venezuela and Guyana are unlikely to solve their border dispute in the coming months. The spat provides a useful platform for the Venezuelan government's domestic propaganda, and Guyana has no intention of changing its plans to take the dispute to the International Court of Justice. Therefore, further flare-ups in political rhetoric on the issue will be likely in the next few months, particularly ahead of Venezuela's crucial legislative elections in December. (Stratfor, https://www.stratfor.com/user/login?destination=analysis/south-american-border-dispute-drags&login=1)

 

At U.N., Guyana blasts Venezuela over century-old border spat

Guyana used the United Nations as a forum to blast Venezuela, accusing it of "intimidation and aggression" related to a border dispute two days after the countries agreed to restore diplomatic ties. In his speech at the U.N. General Assembly, Guyana's president David Granger accused his Venezuelan counterpart, Nicolas Maduro, of cross-border bullying. "There has been a series of acts of aggression by presidents of Venezuela against my country," Granger said, citing actions dating from 1968 to "President Nicolas Maduro's decree of May 2015." The decree created a theoretical "defense" zone offshore that would, in Venezuela's eyes, leave Guyana with no direct access to the Atlantic Ocean. Granger said Venezuela, "mindful of its superior wealth and military strength and unmindful of its obligation as a member state of the United Nations ... has pursued a path of intimidation and aggression." (Reuters, http://www.reuters.com/article/2015/09/29/un-assembly-guyana-venezuela-idUSL1N11Z2HR20150929)

 

Maduro met bilaterally with Greece's Alexis Tsipras and Palestine's Mahmud Abbas during his visit to the UN in New York. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/tsipras-y-maduro-se-reunieron-en-nueva-york.aspx#ixzz3nDLrwnSx; AVN; http://www.avn.info.ve/node/322370)

 

 

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.