April 14, 2016

International Trade

 

Venezuela-Colombia trade dropped 44% in 2015

The Colombia-Venezuela Integration Chamber (CAVECOL) reports that trade between Venezuela and Colombia contracted 44% during 2015, down to US$ 1.352 from US$ 2.427 billion the year before. It shows Venezuelan exports to Colombia shrank by 34%, and Colombian exports to Venezuela were 47%. The information was supplied by Colombia’s National Statistics Department (DANE). More in Spanish: (Notitarde: http://www.notitarde.com/Economia/Comercio-entre-Venezuela-y-Colombia-bajo-44-durante-2015/2016/04/14/939981/)

 

30,000 tons of wheat have arrived from Canada into Zulia state for bakeries, according to Luis Caldera, president of the Bolivarian Mayors Association. He said the wheat was assigned to MONACA and CARGILL for processing. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/arribaron-al-zulia-30000-toneladas-trigo-para-panader%C3%ADas; El Mundo, http://www.elmundo.com.ve/noticias/economia/gremios/arribaron-al-zulia-30-000-toneladas-de-trigo-para.aspx)

 

 

Oil & Energy

Schlumberger to limit Venezuela operations on payment problems

Oilfield services provider Schlumberger Ltd said it would reduce its operations in Venezuela due to payment problems, a further sign of the cash crunch facing this nation because of weak oil markets. State oil company PDVSA, the exclusive operator of the country's oilfields, has built up billions of dollars in unpaid bills to service providers as a result of cash-flow problems. "Schlumberger appreciates the efforts of its main customer in the country to find alternative payment solutions and remains fully committed to supporting the Venezuelan exploration and production industry," the company said in a statement. "However, Schlumberger is unable to increase its accounts receivable balances beyond their current level." (Reuters, http://www.reuters.com/article/us-schlumberger-venezuela-idUSKCN0X92P0; Bloomberg, http://www.bloomberg.com/news/articles/2016-04-12/schlumberger-to-pare-services-in-venezuela-on-lack-of-payments; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409885&CategoryId=10717)

 

Drought-hit Venezuela awaits rain at crucial Guri dam

Drought has turned parts of the area behind Venezuela's Guri dam, one of the world's biggest, into a desert, but the government is optimistic of rain within weeks to drive the vast installation that provides the bulk of this nation's power. On a tour of the hydroelectric complex on the Caroni river, Electricity Minister General Luis Motta told Reuters that forecasts showed a 70 to 80% chance of rain toward the end of April or in May to stop the waters behind the dam falling to a critical depth of 240 meters (790 feet). Driving, hiking and rafting round the 4,600 square km (1,780 square miles) area, General Motta, 57, pointed to unprecedented scenes revealed by the receding waters: long-sunken boats now visible; sand-dunes in previously submerged areas; cattle wandering across parched earth. The reservoir in southern Bolivar state, which provides about 60% of the nation's 16,000 megawatt power demand, hit a historic low of 243 meters (797 feet) this week. (Reuters, http://www.reuters.com/article/us-venezuela-energy-idUSKCN0XA1WL)

 

 

Commodities

Industrialists: shortage of basic food basket hits 83% in Venezuela

At a meeting with the Special Subcommittee of the National Assembly (AN) assessing the Law on Domestic Production, Juan Pablo Olalquiaga, president of the Venezuelan Confederation of Industries (CONINDUSTRIA) reported that 83% basic basket products are unavailable in the country. (El Universal, http://www.eluniversal.com/noticias/daily-news/industrialists-shortage-basic-food-basket-hits-venezuela_258718)

 

Venezuelan hospitals make do with barely 5% of supplies needed

Douglas Leon Natera, President of Venezuela’s Medical Association, says that hospitals are operating with 4-5% of all materials and medicines they need due to supply difficulties, and called the government “irresponsible” for abandoning them. “All of the doctors are trying to solve problems in our hospitals with barely 4-5% of supplies and medication needed.” He added that “the government has abandoned hospitals, has automatically closed them down, and doors remain open because the health workers are trying to face” the situation. He also said the government “has been hiding epidemiology information for 17 months”. Natera reported that the Latin America and Caribbean Medical Federation, the World Medical Association, and the World Medical Council are willing to help out with donations if local authorities authorize shipments, The government, however, denies there is a “health crisis”, More in Spanish: (Infolatam: http://www.infolatam.com/2016/04/13/hospitales-venezolanos-operan-con-5-de-materiales-segun-federacion-medica/)

 

Kimberley Process starts diamond certification in Venezuela

A delegation of the Kimberley Process Certification Scheme is in Venezuela to continue the certification process of diamond mining, as part of the so-called Mining Engine, one of fourteen areas intended to boost the Venezuelan economy. José Khan, president of the Venezuelan Mining Corporation (CVM) and director of the Central Bank of Venezuela (BCV), reported that the technical delegation consists of representatives from China, Angola, South Africa, Canada and other member countries of the Kimberley Process. He explained that the party will remain in the country until Sunday 17. (El Universal, http://www.eluniversal.com/noticias/daily-news/kimberley-process-starts-diamond-certification-venezuela_258692)

 

 

Economy & Finance

 

IMF projects 1600% inflation for Venezuela in 2017

The International Monetary Fund (IMF) has adjusted its projections for Latin America, showing that Venezuela’s economy will contract 8% this year and 4.5% in 2017, following a 5.7% contraction in 2015. The IMF projects the drop in oil prices makes existing macroeconomic distortions worse, and will bring 500% inflation in 2016 and 1600% inflation in 2017. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/FMI-Venezuela-cerrara-inflacion_0_829117096.html)

 

Venezuela paid out US$ 199.6 million in 2019 and 2024 bond interst this week

This week Venezuela paid up US$ 199.6 million in interest for its 2019 and 2024 sovereign bonds. In 2016 and 2017 the nation and state oil company PDVSA must still repay US$ 9.6 billion, of which US$ 8.1 billion pertain to PDVSA. President Nicolas Maduro has said Venezuela has paid out “US$ 30 billion in debt, a powerful amount”, and denies any default projections. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/mercados/venezuela-cancela-intereses-de-bonos-2019-y-2024-p.aspx#ixzz45nQ6rNkw; http://www.elmundo.com.ve/noticias/economia/politicas-publicas/venezuela-mantiene-record-positivo-en-sus-pagos-de.aspx#ixzz45nPuzsvT; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/en-abril-el-compromiso-de-pago-de-deuda-externa-as.aspx; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/pdvsa-cancela-intereses-a-tenedores-de-los-bonos-2.aspx)

 

 

Politics and International Affairs

 

Opposition presses push for Presidential recall

Opposition representatives have gone before Venezuela's electoral board, the CNE, for the fourth time, to ask that a recall referendum process against President Nicolas Maduro be initiated. Jesús Torrealba, head of the Opposition's united political platform MUD, along with several deputies delivered the document to the CNE. The opposition points out that the new document, according to the CNE new instructions, is the proper requirement to request the form that will allow the collection of signatures to activate the process towards the recall referendum. “Now, instead of advocating participative and protagonist democracy, they (CNE authorities) turn to conventions and technicalities to interrupt the people’s involvement (in democratic events). Last week, you (CNE) requested new requirements from us; here they are,” Torrealba twitted. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409903&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/opposition-delivers-documents-electoral-body-for-recall-referendum_258748)

 

Maduro says no opposition action is politically viable

President Nicolas Maduro has once again emphasized that no initiative coming from the National Assembly is politically viable or has a future in Venezuela. “None of the options and actions announced by the right, the oligarchy and the coup mongers in Venezuela is politically viable or has a future in our country. The revolution will continue to rule here in this year 2016, 2017, 2018 and all that remains of this decade and the next”, he said. More in Spanish: (El Nacional: http://www.el-nacional.com/politica/Maduro-sostuvo-opositora-viabilidad-politica_0_829117339.html)

 

Legislator charges that the regime promotes chaos because it knows it will lose any election

The National Assembly’s First Vice President, opposition legislator Enrique Marquez, says “the government is promoting anarchy, violence and chaos because it knows it will lose any election”. He added: “There will be a recall referendum this year and we will be able to tell the government we are tired of scarcity, violence and crisis. There is no way they can block the recall initiative”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/marquez-gobierno-apuesta-caos-porque-sabe-que-pierde-cualquier-eleccion_277370)

 

Maduro, UNASUR install a so-called Truth Commission

President Nicolas Maduro urged the political opposition to engage in the Presidential Commission of Truth, Justice and Reparation of Victims installed on Tuesday. Maduro said: “I hope the opposition may take a step forward. I know it is difficult. A coup d’ètat is being planned again in Venezuela. I believe we can neutralize it, for most people advocate peace, coexistence and respect, beyond differences,” While attending the ceremony, Ernesto Samper, Secretary General of the Union of South American Nations (UNASUR) said that the main goal of the Truth Commission is “to give Venezuelans the possibility of a sincere path for dialogue” and claims it is a group where “any question may be raised. This is essentially a commission for peace, not war”. Samper also announced that he, along with former presidents Martin Torrijos of Panama, Leonel Fernandez of the Dominican Republic and Spain’s former Prime Minister Jose Luis Rodriguez Zapatero will accompany the truth commission looking into the political violence in Venezuela in recent years. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelas-maduro-hope-opposition-takes-part-truth-commission_277308; http://www.eluniversal.com/noticias/daily-news/unasurs-samper-truth-commission-provides-sincere-path-for-talks_258749; http://www.eluniversal.com/noticias/daily-news/unasurs-samper-install-truth-commission-venezuela_258705; (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409878&CategoryId=10717)

 

Opposition denies it is taking part in so-called “Truth Commission”, seeks to meet with Samper

Julio Borges, leader of the opposition caucus in the National Assembly denied that any opposition representatives will participate in the newly installed Presidential “Truth Committee”, and requested an official meeting with UNASUR Secretary General Ernesto Samper, who is in Venezuela to set it up. “We deny (a report) that for members of the Unity coalition will take part in an alleged Truth Commission”, he said, and added “we will not attend a meeting we were summoned to on television and have no idea what it is all about”. More in Spanish: (El Universal: http://www.eluniversal.com/noticias/politica/mud-desmintio-participacion-comision-verdad_258679)

 

Ramos tells Maduro: “refrain from making fraudulent offers on prisoner exchanges”

National Assembly President Henry Ramos Allup told President Maduro: “We will not enter any barter agreement”, in response to an offer by the regime to Parliament on freeing 3 jailed elected legislators in exchange for the opposition taking part in the so-called “Truth Committee”. Accompanied by lawyers and relatives of the jailed legislators, Ramos said: “We are not about to leave some political prisoners behind bars to free others. The goal of freeing all political prisoners and having exiles return is a common cause. We are not seeking any barter. The government must abstain from making such fraudulent offers that seek to divide the opposition”. More in Spanish: (El Nacional: http://www.el-nacional.com/politica/Ramos-Maduro-Abstengase-suministrar-fraudulentas_0_829117330.html)

 

US decries the absence of an independent judiciary in Venezuela

The US State Department has issued its annual 2015 human rights report pointing to partisanship and lack of judicial independence in Venezuela. The report charges that the judiciary in Venezuela is used “to intimidate and selectively judge government critics”. It also denounces “indiscriminate police action against civilians” and “arbitrary mass detentions”. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/eeuu-denuncia-falta-independencia-judicial-venezuela_277471

 

THE WASHINGTON POST EDITORIAL: Venezuela is in desperate need of a political intervention.

“An opposition victory in parliamentary elections in December gave Venezuela a fragile opportunity to arrest what has been an accelerating spiral toward an economic and political crash. Had it chosen to accommodate and negotiate with opposition leaders, the deeply unpopular government of Nicolas Maduro might have been able to ease mounting political tensions and build consensus around desperately needed economic stabilization measures. It was urged to pursue this course by the Obama administration and most Latin American governments, with the notable exception of its closest ally, Cuba. Unfortunately, the regime has pursued scorched-earth warfare with the National Assembly, even as the hardships suffered by ordinary Venezuelans mount. Having been illegally packed with government supporters before the legislature took office, the Supreme Court has proceeded to strip the opposition majority of its constitutional powers and reject every measure it has passed. The latest was an amnesty bill that would have freed76 opposition activists, including three senior figures whose release is the essential starting point for political reconciliation. Like every other ruling it has issued, the court’s rejection of the prisoner release was ludicrous in its lack of legal sense. The justices claimed that the prisoners’ release would be unfair to victims of violence in anti-government demonstrations two years ago. But as human rights groups have extensively documented, most of that bloodshed, including 43 deaths, was committed by the regime’s security forces; far from engaging in violence, opposition leaders made speeches against it. Apart from the crude violation of the rule of law, Maduro’s commitment to confrontation matters because Venezuela, a country of 30 million people with some of the world’s largest oil reserves, is approaching a calamitous breakdown. Shops are empty of basic foods and medicines, and the government is within months of a foreign debt default. Severe water and electricity shortages have spread in recent weeks; inflation is in triple digits, and violent crime is soaring. The government’s only response has been nonsensical measures, such as decreeing a four-day workweek for all public employees. Opposition leaders are now pursuing the strategy of trying to legally unseat the government by collecting signatures for a recall referendum or passing a law shortening Mr. Maduro’s term. Almost certainly the regime’s minions on the Supreme Court and electoral authority will declare the initiatives void, regardless of their legality. Considering the people’s extreme privation, the chances of mass disorder are high. Venezuela is desperately in need of political intervention by its neighbors, which have a ready mechanism in the Organization of American States’ Inter-American Democratic Charter, a treaty that provides for collective action when a regime violates constitutional norms. But the region’s leaders are distracted: Brazil is suffering its own political crisis, while the Obama administration is preoccupied with its outreach to Cuba. While the White House courts the Castros, they are using their control over Venezuela’s intelligence and security forces, and longtime acolyte Maduro, to foment his kamikaze tactics. An explosion is probably not far off.” (The Washington Post: https://www.washingtonpost.com/opinions/venezuela-is-in-desperate-need-of-a-political-intervention/2016/04/12/d7071d98-00c9-11e6-9203-7b8670959b88_story.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.

April 12, 2016

Logistics & Transport

 

Venezuelan government owes AVIANCA US$ 236 million

Colombia’s AVIANCA airline has announced that it will take all necessary steps to collect an estimated US$ 236 million in ticket sales held back by Venezuela. Germán Efromovich, Chairman of the Board of AVIANCA says he hopes this country will become “stable and able to honor its commitments”. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Avianca-gobierno_venezolano-millones-deuda_boletos_aereo_0_827917394.html)

 

 

Oil & Energy

 

LatAm oil producers discuss output freeze, Mexico reluctant

Delegations from Latin American oil exporters Colombia, Ecuador, Mexico and Venezuela have met in Quito to discuss a proposed output freeze and other methods to bolster international crude prices. The Ecuador meeting is the first significant sign non-OPEC producers Colombia and Mexico may be involved in an effort to bolster prices amid the global glut. But Mexico's government stressed it was only participating as an "observer" to share information. Its energy ministry emphasized in a statement that crude output has already declined by more than a million barrels per day in the last 12 years. Suffering more than most producers from the 60% plummet in oil prices since mid-2014, leftist-ruled Venezuela and Ecuador have pushed hard for the meeting in Doha. Russian Energy Minister Alexander Novak said Friday he hoped producers will agree to freeze output in Doha. Russia, Saudi Arabia, Venezuela and Qatar agreed in February to freeze production at January levels, but said at the time the deal was contingent on other producers joining in. (MSNBC: http://www.cnbc.com/2016/04/08/reuters-america-update-1-latam-oil-producers-discuss-output-freeze-mexico-reluctant.html)

 

Istúriz speaks of new gradual increase for domestic gasoline prices.

Venezuela’s Executive Vice President Aristóbulo Istúriz has said he believes it “convenoent to have another gradual gasolina price increase, since an adjustment has not been made on Diesel gasoline.” More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/isturiz-vamos-a-tener-que-hacer-otro-aumento-progr.aspx#ixzz45bckQFJu)

 

Venezuela oil price falls for 3rd week

The price Venezuela receives for its mix of medium and heavy oil fell for the third week in a row as prices around the world slipped on oversupplied markets and doubts about a OPEC deal to freeze oil production. 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 April 8 was US$ 27.90, down US$ 1.85 from the previous week's US$ 29.75. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409634&CategoryId=10717)

 

 

Economy & Finance

 

Venezuela received US$ 100 million from oil sales in March, according to President Nicolás Maduro – who said that two years ago oil revenues were at US$ 3.5 billion – which is a 97% drop in revenue from this source. More in Spanish: (Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/100-millones-ingresaron-al-pa%C3%ADs-marzo-venta-petr%C3%B3leo; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/en-marzo-ingresaron-100-millones-por-venta-de-petr.aspx)

 

Foreign tourists to pay for local services in FOREX

Venezuela’s Central Bank has published a resolution which allows tourism service providers to collect for operations in FOREX, whether in cash or foreign currency denominated credit cards. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/turistas-extranjeros-pagaran-sus-servicios-en-divi.aspx#ixzz45bX5Is7V; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/turistas-extranjeros-pagaran-sus-servicios-en-divi.aspx; AVN; http://www.avn.info.ve/contenido/turistas-extranjeros-podr%C3%A1n-realizar-pago-servicios-divisas; El Universal, http://www.eluniversal.com/noticias/economia/publican-regulacion-operaciones-divisas-para-sector-turistico_249241)

 

DIGITEL, TELEFONICA subsidiary halt international calls from Venezuela

Spain's TELEFONICA this month will suspend international phone service from Venezuela, the firm's local subsidiary said, amid a growing shortage of foreign exchange that has limited telecom investments. The subsidiary MOVISTAR, Venezuela's second largest mobile phone provider, last year restricted international calls to only 10 countries following chronic difficulties in obtaining dollars through the OPEC nation's 13-year-old currency control system. DIGITEL will also suspend roaming and long distance service after not being able to get extended debt service terms from service providers. (Reuters, http://www.reuters.com/article/venezuela-telefonica-idUSL2N17B1DF; and more in Spanish: (El Nacional, http://www.el-nacional.com/economia/Digitel-suspendera-servicio-Roaming_0_825517562.html)

 

Local telecom authority asks telephone firms to be "proactive"

Venezuela’s National Telecommunications Commission (CONATEL) has urged telephone operators to take “a proactive stance.” Earlier, the companies had reported that they would limit or discontinue their services due to debts in foreign currency. According to CONATEL, such decision is an “undesirable situation” arising from the country economic crisis, “particularly, a drastic reduction of the FOREX budget.” (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-telcom-authority-asks-telephone-firms-proactive_249288)

 

Impoverished Venezuela still finances nations with stronger economies

According to Alejandro Grisanti, formerly Barclay’s chief for Latin America, while Venezuela goes through the worst economic contraction in the region – 5.7% at the close of 2015 – it continues to fund oil sales to PETROCARIBE partner nations with growing economies. According to Grisanti, the Dominican Republic’s GDP grew 7%; Panama’s, 6%; Guatemala’s 3.9%; Costa Rica’s 2.9% and El Salvador’s 2.3%. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Venezuela-empobrecida-financia-mejores-economias_0_827917526.html)

 

Maduro creates new Ministry for Basic, Strategic and Socialist Industries

President Nicolás Maduro has announced the creation of a new Ministry for Basic, Strategic and Socialist Industries headed by Juan Arias. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/actualidad/noticias/crean-ministerio-de-industrias-basicas--estrategic.aspx#ixzz45bUTDW00; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/gobierno-creo-el-ministerio-de-industrias-basicas-.aspx; AVN; http://www.avn.info.ve/contenido/conformado-motor-industrias-b%C3%A1sicas-estrat%C3%A9gicas-y-socialistas; http://www.avn.info.ve/contenido/juan-%C3%A1rias-asumir%C3%A1-nuevo-ministerio-industrias-b%C3%A1sicas-estrat%C3%A9gica-y-socialistas)

 

 

Politics and International Affairs

 

Venezuela's Supreme Court overturns amnesty bill

Venezuela's Supreme Court has overturned an amnesty for jailed opposition leaders approved by the opposition-controlled parliament. About 70 activists opposed to President Nicolas Maduro's socialist government had been due for release under the law approved last month. But the court declared the amnesty law unconstitutional. Maduro had condemned the law as an attempt to destabilize his leadership of the country. The Supreme Court has consistently backed the Venezuelan government since the opposition triumphed in congressional elections in December.  In a statement, the court said the amnesty law was unconstitutional because it covered offences "that are acts of organized crime, which are not related to crimes of a political nature". Among the detainees is Leopoldo Lopez, a prominent opposition leader who was sentenced to 13 years and nine months in prison last year for inciting violence during mass protests. The prosecutor in the case later fled Venezuela and told media abroad that Lopez's conviction had been a political show trial. Government officials maintain that Lopez is responsible for violence that erupted during protests in which 43 people were killed in 2014. Other political leaders who were set to be freed include the former Caracas Mayor Antonio Ledezma, who is under house arrest, and the former mayor of San Cristobal, Daniel Ceballos. President Maduro last week told supporters that he had decided to ask the court to invalidate the "criminal" bill. After the Supreme Court's ruling, he said he would set up a truth commission to deal with jailed opposition activists' cases and that opposition members would be invited to join. Critics of the government say the top court is stacked with supporters of the president. (BBC News: http://www.bbc.com/news/world-latin-america-36021976)

 

UN Human Rights High Commissioner slams Venezuela´s Supreme Court anti-amnesty ruling

UN Human Rights High Commissioner Ravina Shamdasani has issued an official statement saying “We are very surprised with the ruling yesterday by the Constitutional Chamber of Venezuela’s Supreme Court against the Amnesty and National Reconciliation Bill. The Bill, which was approved by the National Assembly on 29 March this year, could have served as the basis for a path of dialogue and reconciliation in Venezuela…Upon the request of the Government, the High Commissioner had sent a legal analysis of this bill to Venezuela, advising that the text was generally in conformity with international human rights standards. We call on the Government of Venezuela and the political opposition to open up avenues for a process of dialogue that could contribute to reaching the crucial political agreements that are necessary to tackle the multiple human rights challenges that the people of Venezuela are facing. We also call on the Government of Venezuela and all State entities to ensure full respect for the basic rights and freedoms to which all the people of Venezuela are entitled - including human rights defenders and civil society actors - in line with the country's obligations under the international human rights treaties it has ratified, as well as the commitments it made during its Universal Periodic Review before the UN Human Rights Council.” (UN HRC Commission: http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=19808&LangID=E#sthash.Zebjk5NE.dpuf)

 

Maduro seeks to unseat Assembly bent on ousting him, threatens insurrection if opposition prevails

Venezuela's constitutional crisis took a turn towards the bizarre this week, when President Nicolas Maduro said he would consider a move to shorten the term of the National Assembly, which is trying to initiate a recall vote to oust the President. “If I see this [the initiative] as the possibility to clear the way of coup d’etat attempts by using the National Assembly, I will activate it, if the people accompany me. I promise you that,” said Maduro, live on state television. In a country becoming used to the even most bizarre, even the opposition was shocked by Maduro's move to cut the Assembly’s term -- which runs until January 6th, 2021 -- to just 60 days. Maduro has also warned that if the opposition were to reach full power someday “the revolutionary movement, the people of Venezuela” would take to the streets in a “general civil-military insurrection and “start another revolution”. “I say thus to the oligarchy, and I would be at the head of that revolution”. He added: “if someday they do something to me…you head up a popular, revolutionary, Bolivarian and socialist civil-military insurrection”. Maduro went on to charge that imprisoned opposition leader Leopoldo Lopez and former Presidential candidate Henrique Capriles are “behind paramilitary crimes against community leaders.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409675&CategoryId=10717; and more in Spanish: Infolatam: http://www.infolatam.com/2016/04/07/maduro-convoca-una-insurreccion-popular-si-le-hacen-algo/)

 

National Assembly votes to reform Supreme Justice Tribunal law

The opposition majority in the National Assembly has passed a law to reform the Supreme Justice Tribunal’s Constitutional Law, increasing the number of magistrates in the Constitutional Chamber from 7 to 15 within approximately 5 months. The new law calls for a new Judicial Nominations Committee to call for new candidates. In passing the law, the opposition coalition cited Article 204 in the Constitution, and presented the documents with which pro regime legislators reformed the same law in 2004 and 2009. More in Spanish: (El Nacional, http://www.el-nacional.com/politica/Oposicion-sanciono-reforma-Ley-TSJ_0_825517694.html)

 

Public prosecutors to investigate Venezuelans regarding Panama Papers

“We have appointed a team of public prosecutors to investigate the Venezuelans mentioned in the Panama Papers,” says Prosecutor General Luisa Ortega Diaz. She says that the offenses include money laundering and corruption. Likewise, she added that four public prosecutors with national authority were entrusted with the appropriate inquests. (El Universal, http://www.eluniversal.com/noticias/daily-news/public-prosecutors-investigate-venezuelans-regarding-panama-papers_249255)

 

Defense Minister speaks out against April 11 events in Venezuela

“April 11 remains in history as a mark of betrayal, deception, media manipulation, and thirst for power,” twitted Defense Minister General Vladimir Padrino López in rejection of the events occurred back on April 12, 2002, which led to the removal from power for several hours of late President Hugo Chávez Frías. The official said that this date “also left lessons of rejection to violence, of civic-minded and constitutional conscience, and civil-military union.” (El Universal, http://www.eluniversal.com/noticias/daily-news/defense-minister-speaks-out-against-april-events-venezuela_249279)

 

Venezuelan assembly's foreign policy chief ashamed of treatment of Rajoy, OAS

The head of the Foreign Policy Committee in Venezuela's unicameral National Assembly, opposition politician Luis Florido, said Sunday that the treatment by his country's government of Spain's acting prime minister, Mariano Rajoy, and OAS chief Luis Almagro was shameful. "This week has been shameful and unprecedented for Venezuelan diplomacy," declared Florido in rejecting "the insults and disqualifications" on the part of (Venezuelan President) Nicolas Maduro and the foreign minister of Venezuela, Delcy Rodriguez" against Rajoy and the secretary general of the Organization of American States. "We repudiate the verbal attack" by both authorities of a government that, "instead of insulting Spain, should accept the help offered by the Spanish government to handle the serious humanitarian crisis that Venezuela is suffering, where the scarcity of medicines exceeds 80%," said Florido in a statement. Maduro on Saturday called Rajoy a "racist, corrupt trash and colonialist trash." The Rajoy government responded by calling its ambassador to Caracas home for consultations, and Spain’s Popular Party has termed Maduro a “disgraceful madman”. Rodriguez, meanwhile, said that Almagro "reaffirms his hatred for Venezuela," "violates all the operating norms for the OAS secretary generalship" and has joined "the interventionist zeal of the stateless right" against Caracas. (Fox News, http://latino.foxnews.com/latino/politics/2016/04/10/venezuelan-assembly-foreign-policy-chief-ashamed-treatment-rajoy-oas/) and more in Spanish: (El Nacional: http://www.el-nacional.com/mundo/Partido-Popular-impresentable-Nicolas-Maduro_0_827917245.html)

 

IAPA asks Venezuela to halt "newspaper closures due to newsprint shortage”

The Inter-American Press Association (IAPA) has asked the Venezuelan government to stop its “strategy of closing media outlets” and allow “immediate access” to newsprint “without discrimination.” The NGO made a special reference to El Carabobeño and El Impulso dailies and other newspapers which “have had to stop working” due to lack of paper. (El Universal, http://www.eluniversal.com/noticias/daily-news/iapa-asks-venezuela-stop-newspapers-closure-due-newsprint-shortage_249284)

 

STRATFOR: Looking for a way out of Venezuela's crisis

As Venezuela slouches toward a potentially catastrophic default on foreign debt and wider social unrest appears more and more likely, individuals in the ruling United Socialist Party of Venezuela (PSUV) are looking for a way out of the crisis, largely motivated by self-interest. After all, if the crisis in Venezuela continues unabated, the country's elites are sure to lose political status, and with it, the security it brings them. Of these factions, the ruling clique — represented by Maduro and his wife, Cilia Flores, legislator Diosdado Cabello, and, to a lesser extent, Aragua State Gov. Tareck el Aissami and National Guard Commander Nestor Reverol — is the most resistant to economic reform and political dialogue with the opposition. In light of ongoing criminal investigations of Cabello and Flores, losing political sway in the country could jeopardize their futures. Similarly, swift economic adjustments — no matter how necessary — could threaten Maduro's presidency, further driving up inflation that already totals around 300% annually. Consequently, Cabello and Maduro have chosen a path of inaction on the economic front, while continuing to deflect political challenges from the opposition coalition. Several state governors, ostensibly led by Zulia State Gov. Francisco Arias Cardenas, represent the other major faction to emerge in the United Socialist Party. Based on growing public dissatisfaction with the ruling party, even within the party, the governors in this faction oppose holding gubernatorial elections later this year. They would sooner support Maduro's departure from office, whether by referendum or resignation, than risk holding elections they could very well lose. In removing Maduro and transitioning toward a new government, the governors likely hope to mitigate public anger at the ruling party and avert a major electoral defeat. Among those in favor of holding a referendum to remove the president is former Interior Minister Miguel Rodriguez Torres. Rodriguez Torres — whom Maduro ousted in 2014 — has the support of a few unspecified dissident allies, but it is unclear whether he falls in Arias Cardenas' camp. Now the question becomes whether they can convince key individuals and constituencies to back a transition away from Maduro. Although Maduro's circle of elite supporters has been shrinking, one of its most important members, Defense Minister Gen. Vladimir Padrino Lopez, has not overtly proposed Maduro's removal. As long as Padrino Lopez, accompanied by a segment of the country's military and political elite, is allied with the president — or at least not actively working against him — Maduro stands a chance of retaining his office until his term ends in 2019. If the governors prevail and Maduro is forced to resign before January 2017, the outcome will be quite different. New elections would have to be held within 30 days of his resignation, and the opposition would have a realistic shot at victory. But if Maduro were to resign after January, the presidency would go to the standing vice president until the next presidential vote in 2019. (STRATFOR, https://www.stratfor.com/analysis/looking-way-out-venezuelas-crisis?id=be1ddd5371&uuid=b942d007-6fc9-4915-9f21-78b63f934073)

 

 

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.

 

April 05, 2016

International Trade

Maduro to contact Panamanian counterpart over demand against fishing boats

President Nicolas Maduro says he will get in touch with his Panamanian counterpart, Juan Carlos Valera, to compromise and settle some claims against on Venezuelan fishing boats reported by the Venezuelan Association of Tuna Shipbuilders (AVATUN). Maduro’s remarks came after Lilo Mariscalchi, the AVATUN CEO, complained about “the legal insecurity of ships in Panama city.” Maniscalchi said: “a sort of mafia has been set up, which, in addition to a number of lawyers and the Maritime Court, prepare complaints against our vessels, and with a simple collateral of US$ 3,000 they file a complaint for one or two million dollars. They impose bails and, in the event of not honoring them, the vessel is attached and the fishing works are lost, work and money are lost,” (El Universal, http://www.eluniversal.com/noticias/daily-news/maduro-contact-panamanian-counterpart-over-demand-against-fishing-boats_247635)

 

Export red tape is down 60% this year, according to Foreign Trade and Investment Minister Jesús Farías, who says that in the next few days a new phase of the Single Foreign Trade Window will be launched. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Tramites-exportaciones-disminuyeron-ano_0_823117781.html)

 

Oil & Energy

Venezuela oil price falls back below US$ 30

The price Venezuela receives for its mix of medium and heavy oil fell 6.7% this week -- back below US$ 30 a barrel after 2 weeks above -- as prices around the world slipped on oversupplied markets and Saudi Arabian comments that it would not join a production freeze if Iran did not also freeze production. 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 April 1 was US$ 29.75, down US$ 2.12 from the previous week's US$ 31.87. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409130&CategoryId=10717; El Universal, http://www.eluniversal.com/noticias/daily-news/venezuelan-oil-price-down-usd-212_247684)

 

Venezuela to cut energy output if key dam falls to critical low

Venezuela will reduce power generation if the key Guri dam, which supplies around half of the blackout-hit country's electricity, falls below a minimum level that is fast approaching, an official said on Friday. A severe drought, coupled with what critics say is a lack of investment and maintenance in energy infrastructure, has hit the nation which depends on hydropower for 60% of its electricity generation. The massive Guri dam in Venezuela's central jungle is now at just 244 meters - its lowest level ever and just 4 meters from a critical point where water cannot feed its turbines. "Without a doubt if the level reaches 240 meters we will have to apply certain operative measures, which authorities will announce in due time," Miguel Angel Romero, the head of generation at state-run energy firm CORPOELEC, told Reuters in an interview. (Reuters, http://www.reuters.com/article/us-venezuela-energy-idUSKCN0WY5TK)

 

PDVSA says supports Venezuela soccer team, denies lack of funding

State-run oil company PDVSA says its support for the national soccer team had never waned, rebuffing comment from the country's soccer federation (FVF) that it hadn't paid any of the agreed sponsoring money last year. "PDVSA has never stopped honoring its obligations with the Venezuela Football Federation," said the company in a statement, without offering specifics. The federation has said that the lack of funding from PDVSA, its chief sponsor, has hurt its ability to train and travel and made it impossible to attract a world-class international coach. (Reuters, http://www.reuters.com/article/venezuela-oil-soccer-idUSL2N1750DP)

 

Commodities

 

Poll shows 87% of all Venezuelans are on a “survival” diet

A poll by the nation’s three major universities shows 87% of all Venezuelans do not have income enough to purchase necessary food, and most of their “survival” diet is based on carbohydrates. The poll shows that the items most consume are corn flour, rice, pasta, bread, margarine and mayonnaise, while at lower income levels most say they eat mortadella rather than beef. The study shows that 40% of basic foods consumed here are flours, rice and grease, and 12.1% eat only twice a day. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Encuesta-indico-venezolanos-dieta-supervivencia_0_821917960.html)

 

POLAR bottle cap plant halts due to lack of tin foil

Johnny Magdaleno, secretary general of the METALGRAFICA plant union, reports that POLAR’s production of bottle caps has once more halted due to lack of tin plate, which causes a deficit of 30 million daily units at the plant. The supply is imported and depends on FOREX allocations by the government. More in Spanish:  (El Nacional, http://www.el-nacional.com/economia/Paralizada-produccion-chapas-Empresas-Polar_0_823717747.html)

 

Economy & Finance

 

Venezuela’s Supreme Tribunal has declared Central Bank Reform Law unconstitutional

The Constitutional Chamber within Venezuela’s Supreme Justice Tribunal has declared that a Partial Reform of the Central Bank Law passed by the National Assembly on March 3^rd is unconstitutional. The Chamber alleged that a comparative study of central bank legislation in other countries shows that in most cases the power to name authorities rests with the Executive. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/tsj-declara-inconstitucional-reforma-de-la-ley-del.aspx#ixzz44ZE1ULDm; Agencia Venezolana de Noticias; http://www.avn.info.ve/contenido/tsj-declara-inconstitucionalidad-reforma-ley-del-banco-central; El Universal, http://www.eluniversal.com/noticias/politica/sala-constitucional-declaro-reforma-ley-del-bcv-como-inconstitucional_247530)

 

Venezuela’s 2015 Budget: Gaps as gold dwindles

It may be futile to apply generally accepted accounting principles in Venezuela, but Russ Dallen reports that the Venezuelan government released its 2015 budget data on Friday. Dallen, an investment banker and publisher, writes: “The most shocking number is the “Diverse FOREX Assets” on the assets side of the ledger, which went up US$ 137 billion dollars to $185.2 billion in 2015 (without a corresponding offset on the same debit side, of course)! While the make-up of that $185 billion is hidden in a footnote which we do not have access to yet (we are working on it)”. That footnote in early 2015 revealed billions in gold sales, Dallen notes, adding: “the Central Bank’s official 2015 closing figure for Venezuela’s gold reserves is US$ 10.01 billion (“Monetary Gold” under “Reserve Assets”). Venezuela started 2015 with US$ 14.5 billion in gold, so the country sold and/or mortgaged US$ 4.5 billion in gold from its reserves in 2015. … we believe that Venezuela’s gold holdings have now fallen to under US$ 8 billion....With the state of Venezuela’s finances and economy in tatters and knowing that Venezuela has now drawn down their Financial Reserves to US$ 13.237 billion (as of March 31) from the US$ 24.122 billion they were last year on March 1, 2015, you have to wonder under what standard of accounting the BCV can claim that their assets went up US$ 186 billion dollars at the same time?” (Barron’s: http://blogs.barrons.com/emergingmarketsdaily/2016/04/04/venezuelas-2015-budget-gaps-as-gold-dwindles/)

 

Venezuela today looks like Zimbabwe 15 years ago

Might Venezuela go the way of Zimbabwe? They are culturally very different, but the political parallels are ominous. Both countries have suffered under charismatic revolutionary leaders. Robert Mugabe seized big commercial farms without compensation, wrecking Zimbabwe’s largest industry. Chávez expropriated businesses on a whim, sometimes on live television. Mugabe lost a referendum in 2000 but rigged the subsequent election to keep the (more popular) opposition out of power. The chavistas lost a parliamentary election in December but have used their control of the presidency and supreme court to neuter the (more popular) opposition. Mugabe recruited a ragtag militia of “war veterans” to intimidate his opponents. Chávez recruited gangs from the slums, known as colectivos, to terrorize his. Yet the key similarity between the two regimes is not their huggishness but their economic ineptitude. Both believe that market forces can be bossed around like soldiers on parade. In both cases, the results are similar: shortages, inflation and tumbling living standards. Mugabe has long blamed his country’s economic woes on speculators, traitors, imperialists and homosexuals. Maduro, to his credit, doesn’t blame gay people. But he insists that local capitalists and their American allies are waging an “economic war” on Venezuela. This is absurd: in both economies the assaults have come from their own governments. Real incomes in Zimbabwe fell by two-thirds between 1980, when Mugabe took over, and 2008. They have partially recovered, thanks to dollarization and the scrapping of some of the old man’s daftest policies. For Venezuela, the lesson is plain. (The Economist: http://www.economist.com/news/americas/21695934-venezuela-today-looks-zimbabwe-15-years-ago-spot-difference)

 

Politics and International Affairs

 

Capriles: We have about half the votes needed to recall Maduro

The opposition presidential candidate in the last two Venezuelan general elections, Henrique Capriles, said on Sunday that they have “almost” half of the four million votes needed to try and end Nicolas Maduro’s presidency via a recall referendum. “The will for change is being felt in all corners of the country. Almost two million people have provided their information because they are ready to sign for the recall,” wrote Capriles in his Sunday press column. Next week, he added, “we will be reporting on what is happening with the recall and what the next activities that we will announce will be to exercise our constitutional right to change the government” of Maduro, who was elected in 2013 for a six-year term. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409205&CategoryId=10717)

 

Venezuela opposition sees “long road” ahead to sack Maduro 

The Venezuelan government is seen as dragging its feet against a call for a recall vote against President Nicolas Maduro, with opposition lawmakers saying they see “a long road” ahead of them before the poll is taken. Already, a first draft of a special law for recall votes has been approved by the opposition held National Assembly and passage in a second vote seems assured but opposition lawmakers don’t kid themselves: the government will put up a fight. “The referendum is waiting for CNE (the government controlled electoral authority) response. We are waiting for it over the next few days. But it will be a long road”, opposition lawmaker and Assembly Vice President Enrique Marquez wrote to LAHT. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2409131&CategoryId=10717)

 

The National Assembly unanimously approved Pope Francis I call for peace here, in which the Pontiff asks for peace talks in Venezuela. More in Spanish: (Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/an-aprobo-por-unanimidad-acuerdo-por-exhorto-de-pa.aspx#ixzz44ZEFfMMN)

 

Capriles says Maduro cannot veto National Assembly laws

Opposition leader Henrique Capriles Radonski has recently said that “Maduro cannot veto laws passed by the National Assembly because there is no veto power in Venezuela.” More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/capriles-maduro-tiene-poder-para-vetar-leyes-que-aprueba-asamblea_247465)

 

UNASUR calls for talks here due to clash over Amnesty Law

Ernesto Samper, Secretary General of the South American Nations Union (UNASUR) called for talks here and warned that the new Amnesty Law is leading to an “imminent train crash” in this country. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/unasur-pide-dialogo-venezuela-ante-choque-por-ley-amnistia_247527

 

CELAC, UNASUR reject Obama's decree

The Community of Latin American and Caribbean States (CELAC) and the Union of South American Nations (UNASUR) have said the extension for one year of a decree issued by US President Barack Obama, calling Venezuela an extraordinary threat for the United States, is meddling. “We cannot imagine that one of our member countries can be a threat for the most powerful country in the world,” stated a communiqué read out at the Tenth Meeting of CELAC Foreign Ministers held in Santo Domingo, Dominican Republic. A communiqué issued by UNASUR maintained that “the extension of the US executive order avoids the UNASUR request for its abrogation with no consideration.” (El Universal, http://www.eluniversal.com/noticias/daily-news/celac-unasur-refuse-obamas-decree_247985)

 

Human Rights Watch reports policy brutality and 20 extrajudicial executions in Venezuela

Human Rights Watch and PROVEA, a local NGO, have jointly reported random mass detentions, abuse of those detained, evictions by force and at least 20 extrajudicial executions in police and military raids in immigrant and popular neighborhoods in Venezuela. The report says “dozens of residents in Caracas and five states (Carabobo, Miranda, Nueva Esparta, Vargas and Zulia) say they have been victims of abuse during raids or have witnessed abuse on others”. More in Spanish: (Venevision:

http://www.noticierovenevision.net/internacionales/2016/abril/4/153468=hrw-denuncia-abusos-policiales-y-20-ejecuciones-extrajudiciales-en-venezuela)

 

The National Assembly will investigate “Panama Papers” links to Venezuela, according to Freddy Guevara, Chairman of the Comptroller Committee of the legislature here. More in Spanish: (El Universal, http://www.eluniversal.com/noticias/politica/investigara-supuesta-relacion-los-papeles-panama-venezuela_248002)

 

 

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.