International Trade
Cargo that has arrived at Puerto Cabello
- 1.404 tons of coffee
- 675 tons of powdered whole milk
- 1,070 tons of black beans, all consigned to state
agency CASA.
231 containers have arrived at La Guaira’s port,
bearing basic food items, medicine and personal care products. More in Spanish:
(Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=34642;
El Universal, http://www.eluniversal.com/noticias/economia/arriban-265-contenedores-alimentos-puertos-guaira-guanta_622406)
772 tons of food arrived at Guanta port in
Eastern Venezuela, aboard 34 containers. The shipment includes 7 containers
bearing rice, 7 with pasta, 12 with sugar and 8 with oil. More in Spanish: (Bolipuertos,
http://www.bolipuertos.gob.ve/noticia.aspx?id=34646)
Maduro seeks a Venezuela-Turkey binational fund
During his visit to Turkey, President Nicolas Maduro meth
the board of Turkish bank TURKEXIMBANK to discuss recent financial cooperation
agreements between the two nations. (El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-and-turkey-mull-over-binational-fund_622265)
Logistics & Transport
Canada
advises citizens to avoid travel to Venezuela, as have the US, Netherlands,
Spain and Germany
Canada has joined the list of nations advising their
citizens to avoid travel to Venezuela on the basis of safety. A notice by the
Canadian Foreign Affairs Ministry says unnecessary travel should be avoided due
to the “significant level of violent
crime”, as well as “unstable
political and economic conditions”, and the “decline in basic living conditions, including scarcity of medicine,
food and water”. The United States Department of State, Netherlands Foreign
Affairs Ministry, Spain’s Foreign Ministry and Germany’s Embassy in Caracas
have issued similar warnings. More in Spanish: (El Universal: http://www.eluniversal.com/noticias/politica/canada-suma-los-paises-que-recomiendan-evitar-viajar-venezuela_622407)
Oil & Energy
Maduro
says oil prices must be “fairer, more
realistic”
Global
oil prices need to be fairer and more realistic to encourage investment and
OPEC members should reach an agreement to bring price stability, President
Nicolas Maduro told an energy congress on Monday. "OPEC members should reach an agreement and should work for the
stability of the oil industry. Prices must be fairer, more realistic, and they
should be an incentive for investors. For that we need fair prices,"
Maduro told the World Energy Congress in Istanbul, according to a translation
of his comments. He said he hoped an agreement could be reached at a meeting of
energy ministers next Wednesday and that Venezuela was ready to be part of any
alliance among producers. (Reuters: http://www.reuters.com/article/us-oil-opec-venezuela-idUSKCN12A1J8?il=0)
PDVSA seeks to supply oil to Global Liman
The world largest operator of ports and cruises Global
Liman and state-run oil company Petroleos de Venezuela (PDVSA) are evaluating
the possibility for PDVSA to supply oil to meet the needs of cruises and other
ships. A Memorandum of Understanding was signed during President Nicolas
Maduro’s visit to Turkey. According to the document, the parties promised to
evaluate and set terms and conditions for supplying oil. (El Universal, http://www.eluniversal.com/noticias/daily-news/pdvsa-signs-memorandum-with-global-liman_622097; http://www.eluniversal.com/noticias/daily-news/venezuela-and-turkey-strike-new-energy-deals_622059)
Commodities
Decree orders that 50% of all products must be sold to
government
A
decree just published by the Maduro regime forces “public and private companies that produce agribusiness supplies or
products, personal care and home products, must sell 50% of their production to
public institutions”. All productive units, companies, sugar mills,
factories, industries, farms, productive plants, processing plants,
slaughterhouses, importers, distributors, wholesalers and merchants are subject
to this decree, under penalty if they refuse, delay or do not comply with the
decree. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/economia/2016/octubre/13/172107=decreto-establece-que-50-de-la-produccion-agricola,-higiene-personal-y-aseo-se-destinara-a-los-clap;
El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/oficializan-normas-para-la-venta-del-50--de-produc.aspx)
Maduro seeks wheat supply from Russia
President Nicolas Maduro says he will soon sign
agreements with Russia intended to ensure bread wheat for over 10,000 bakeries
nationwide in the upcoming years. He claimed that under instructions from his
Russian counterpart Vladimir Putin, the two leaders are “to close a deal to provide all the wheat that Venezuela needs to make
bread for years 2017 and 2018. Russia is the world's largest wheat producer.
(El Universal, http://www.eluniversal.com/noticias/daily-news/venezuela-secures-wheat-supply-from-russia_622408)
Economy & Finance
PDVSA
warns bondholders to swap 2017 notes by next Monday, sues local newspaper
Petroleos
de Venezuela SA’s President said holders of US$ 7 billion of the company’s 2017
bonds would be best advised to tender them in a swap offer, because the
alternative is worse. He declined to give further details. “The best option they have is the exchange,
and if it doesn’t happen we will be evaluating all options,” Eulogio Del Pino,
also the country’s oil and energy minister, said in an exclusive interview from
Caracas. “We are against the clock and
there isn’t time for us to make a better offer.” The state-owned oil
company is trying to persuade holders of at least half of its bonds due next
year -- US$ 3 billion that mature in April and the rest in November -- to swap
them for new notes that pay out between now and 2020. That would “give us breathing room,” and allow PDVSA
to shift maturities into 2018 and 2019 when it doesn’t have big liabilities, “as any company would,” Del Pino said. Venezuelan
bonds are the best-performing in emerging markets this year, with a return of
about 60%, as the country defied expectations it would default on its debt.
While some ratings companies have said they would treat the swap transaction as
a default, investors had been betting that it will allow both the company and
the country to keep making payments. PDVSA
will cancel the deal if it doesn’t achieve its target, Del Pino said. The
company has pledged 50.1% of its stake in the holding company of U.S. refining
arm CITGO Petroleum Corp. as a guarantee for the bonds. To go ahead with less
than 50% participation would dilute the value of that stake, according to the
company. “CITGO has a value for us
and we’re not going to exchange it for anything less than a minimum 50%,”
he said. “We are giving two days for
bondholders to understand that. This is a good offer and the best option there
is. Otherwise we will have to analyze all options.” The company plans to
pay the US$ 1 billion of debt it has coming due later this month, he said. He
declined to make the same commitment for US$ 2 billion in payments on the 2017
bonds that fall due this November. So far, take-up of the swap offer has been
very low, Del Pino said. PDVSA has twice extended the deadline, which now runs
out on Monday at midnight New York time. PDVSA also filed a lawsuit against
local newspaper El Nuevo Pais, accusing it of defamation and damaging efforts
to persuade investors to take up a US$ 5.3 billion bond swap offer. "They are trying to harm, in whatever way
they can, an operation that we have offered transparently," Del Pino
said of El Nuevo Pais outside the Caracas courthouse after filing the lawsuit. The
government has repeatedly insisted that it would pay its debts. Central bank
President Nelson Merentes assured investors, in a rare private meeting in
Washington last week, that they would be paid. (Reuters; http://af.reuters.com/article/commoditiesNews/idAFL1N1CK10E;
http://www.reuters.com/article/us-venezuela-pdvsa-debt-idUSKCN12D1VK;
http://www.reuters.com/article/venezuela-pdvsa-swap-idUSL1N1CJ026;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2422977&CategoryId=10717;
Bloomberg, http://www.bloomberg.com/news/articles/2016-10-13/pdvsa-bonds-fall-after-swap-deadline-extended-for-second-time;
https://www.bloomberg.com/gadfly/articles/2016-10-11/saudi-pdvsa-bond-sales-reveal-the-sorry-state-of-oil)
Inflation
in Venezuela seen hitting 1,500% in 2017 as crisis goes from bad to worse
The
economic situation in Venezuela continues to go from bad to worse, and things
are unlikely to get better, experts have warned. This week, Venezuela's
congress was stripped of its powers over the budget, viewed as a move by the
country's President Nicolas Maduro as an attempt to consolidate power. On top
of this, the country lacks many basic goods and inflation is out of control.
Year-on-year inflation is expected to reach 700% this year and UBS forecasts it
will reach 1,500% next year. "This
situation is vastly deteriorating," Diego Moya-Ocampos, senior Latin
America analyst at IHS Country Risk, told CNBC Thursday. "We expect the economy to contract at least
11.5%, inflation to hit 700%, already the highest in the world." (CNBC: http://www.cnbc.com/2016/10/13/inflation-in-venezuela-seen-hitting-1500-in-2017-as-crisis-goes-from-bad-to-worse.html)
Isturiz
says exchange controls here are a political measure, not economic policy
Venezuela’s
Executive Vice President Aristobulo Isturiz says exchange controls in Venezuela
are not an economic policy but rather a political instrument. “If we remove exchange controls we would be
overthrown …. Exchange controls here are not an economic policy, but a
political one…That is the truth, and we cannot allow ourselves to be
overthrown, let them kill us first because we have a commitment to the people”.
More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/economia/2016/octubre/11/171955=isturiz-afirma-que-control-cambiario-en-venezuela-no-es-una-medida-economica-sino-politica
CONINDUSTRIA
says Supreme Tribunal rulings frighten away investors
Juan
Pablo Olalquiaga, President of the Confederation of National Industries
(CONINDUSTRIA) says that the ruling by the Supreme Tribunal (TSJ) that allows
President Maduro to decree the 2017 budget without legislative approval will
frighten away investors. He explained that decisions that bypass the
Constitution do not project Venezuela as a trustworthy nation that can attract
foreign investment. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/economia/2016/octubre/12/172019=presidente-de-conindustria-expreso-que-sentencias-del-tsj-genera-desconfianza-en-inversionistas
Venezuela
says it makes us$ 201 million interest payment on some PDVSA bonds
Petróleos
de Venezuela, S.A. (PDVSA) says it has made the US$ 201 million interest
payments for its PDVSA Bonds maturing April 2017, 2027 and 2037. This
semi-annual interest payment was due to bondholders on Wednesday, October 12,
2016, according to the payment conditions. "PDVSA honors the commitment with
the people and all investors of bonds issued by the national oil company, which
confirms the financial soundness of the main industry of Venezuelans,"
PDVSA said in a statement. The bonds are part of a US$ 7.5 billion, three
maturity issue that the government of President Hugo Chavez sold in the markets
on April 12, 2007. PDVSA issued US$ 3 billion of the PDVSA 5.25% of April 12,
2017, for which it paid US$ 79 million in interest for the last 6 months. That US$
3 billion comes due, along with the final interest payment, in April of next
year. Rather than have to pay the US$ 3 billion, PDVSA is currently trying to
swap holders into a new bond maturing in 2020, collateralized by a first lein
on 50.1% of its CITGO Holding company in the United States. (Latin American
Herald Tribune, http://www.laht.com/article.asp?ArticleId=2422846&CategoryId=10717)
An
unlikely winner in Venezuela crisis: high-end real estate
Building
luxury apartments or corporate office towers might seem like an odd investment
in an economy reeling from a deep recession, triple-digit inflation and chronic
product shortages. Unless it's Venezuela. The combination of soaring prices and
exchange controls that prevent businesses from buying dollars has made high-end
real estate an attractive way for companies to protect the value of revenue
earned in the increasingly worthless bolivar currency. (Reuters, http://www.reuters.com/article/us-venezuela-construction-idUSKCN12715A)
ECLAC forecasts Venezuela’s economy will shrink by 8%
in 2016
The UN Economic Commission for Latin America and the
Caribbean (ECLAC) projects that Venezuela’s Gross Domestic Product (GDP) will
fall by 8% this year, hitting the region's economic growth with an average
shrinkage of -0.9%. (El
Universal, http://www.eluniversal.com/noticias/daily-news/eclac-forecasts-venezuelan-economy-shrinkage-2016_622403)
Politics and International Affairs
National
Assembly defies Executive and Supreme Tribunal
Venezuela’s
opposition says it is the Executive and the Supreme Tribunal (TSJ) that are in
contempt of the Constitution. The National Assembly decided it will not
recognize “the authority and validity of
Executive actions and TSJ sentences that contradict democratic values,
principles and guarantees, and violate basic rights”. Julio Borges, leader
of the opposition majority in the National Assembly accused the government of
being the number one transgressor of the Constitution: “It is Nicolas Maduro who is outside the Constitution when he holds political
prisoners, when he persecutes media, when he destroys productions, when he
denies property, then he forces the Armed Forces to act as an appendix of the
PSUV (ruling party)”. Congressman Simon Calzadilla said: “Where does the Constitution say that the TSJ
can pass a law? Because the national budget is a law and it must be approved by
the National Assembly. And they are so shameless as to say the National
Assembly is in contempt. Contempt lies with the TSJ and this regime!” The
legislature’s resolution orders the leadership of the National Assembly “to lead consultations and the organization
of Venezuelan society to promote a great national civil movement to defend the
Constitution, democracy and the right to vote”. It also demands that the National Elections
Council set a date for the recall referendum and regional elections within this
year, and calls on the Armed Forces to disregard Executive and TSJ orders that
violate the Constitution, and demand that the President respect the will of the
people. In addition, it decided to create the Judiciary Nominating Committee to
replace TSJ justices named in December 2015 and another Committee to
investigate the TSJ decision to name Elections Council members in December
2014. During the fiery debate PSUV legislator Hugbel Roa threw his microphone
at another legislator and also tried to throw his laptop, for which his right
to debate was suspended for one month. More in Spanish: (El Nacional: http://www.el-nacional.com/politica/AN-desconocera-Ejecutivo-antidemocraticos-TSJ_0_938906402.html)
Venezuelan
democracy takes another blow as Congress bypassed
Venezuela’s
democracy took another blow late Tuesday when the Supreme Tribunal ruled that
its constitutional chamber had the authority to approve the 2017 budget instead
of the opposition-controlled National Assembly. Citing a previous ruling that
nullified any acts passed by the National Assembly after it reinstated three
disputed lawmakers and President Nicolas Maduro’s emergency powers, the court
bypassed the congress completely. The government now
has five days to submit the budget to the constitutional chamber, one of the
Supreme Court’s six chambers. The ruling will intensify a political standoff in
the country as the opposition tries to gather signatures later this month to
push for a recall vote on Maduro in the face of a collapsing economy and
rampant inflation. Since winning control of congress in December elections, the
opposition has seen most of its legislative initiatives blocked or overturned
by the Supreme Tribunal, which was stacked with pro-Maduro judges by the
outgoing, pro-government congress. The tribunal based its decision "on the need to complete the legal formation
of the national budget ... with the aim of maintaining the state's functions,
guaranteeing fundamental rights and constitutional order." (Bloomberg,
http://www.bloomberg.com/news/articles/2016-10-12/venezuelan-democracy-takes-another-blow-as-congress-bypassed;
El Universal, http://www.eluniversal.com/noticias/daily-news/tsj-lets-venezuelas-maduro-enact-national-budget-without-congress-consent_622248;
Reuters, http://www.reuters.com/article/us-venezuela-politics-budget-idUSKCN12C21O)
"Public loans will be null and void after top
court's decision on budget"
José
Guerra, head of Budget Subcommittee of National Assembly’s Finance Committee,
says the country is undergoing a scam by the Supreme Tribunal of Justice (TSJ),
following a Tuesday ruling that authorizes President Nicolas Maduro to submit
the nation’s 2016 budget for to the TSJ Constitutional Chamber instead of the
Legislature. Guerra added that the government could have serious troubles with
public loans operations should the domestic budget be not enacted by Congress. Likewise,
the official claimed the government does not want to deliver the budget to the
Legislature, in order to have at its disposal a level of spending that will be
illegal. “This does great damage harm to the
country. The government should have better presented the budget and the Law on
Indebtedness at the Congress for us to make relevant comments and ultimately
pass them (both instruments) to prevent the country from facing something that
will happen in 2017 regrettably,” he said. National Assembly President
Henry Ramos says the ruling reflects the court’s “lawbreaking attitude.” (El Universal, http://www.eluniversal.com/noticias/daily-news/public-loans-will-null-with-top-courts-decision-budget_622371;
http://www.eluniversal.com/noticias/daily-news/venezuelan-dissent-deplores-top-court-decision-budget-fy2017_622293;
The Washington Post: https://www.washingtonpost.com/world/the_americas/venezuela-top-court-president-can-bypass-congress-on-budget/2016/10/12/92edf0e8-90a0-11e6-bc00-1a9756d4111b_story.htm)
Capriles:
Venezuelans to take streets if high court halts recall
Two-time Venezuelan presidential candidate Henrique
Capriles said Wednesday that Venezuelans will mobilize nationwide if the
Supreme Tribunal issues a ruling paralyzing the process of holding a referendum
to recall President Nicolas Maduro. The governor of the central state of
Miranda said that the Venezuelan opposition had been informed that the high
court allegedly is preparing a preventive measure to halt the process for
activating the referendum begun last March but which still has not been
announced because the magistrates hold “divided”
positions on the matter. “We have to be
on maximum alert, if they try via a preventive measure to rob us of our right,
immediately the response must be to ... defend the Constitution and ... our
right for this country to get out of this situation,” Capriles told
reporters. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2423018&CategoryId=10717)
Venezuela
in a vise
A
so-called recall referendum may be held if 20% percent of registered voters in
each state sign a petition at the end of this month. Even if they do, however,
a meaningful recall vote is far from guaranteed. Under the Constitution new
elections won’t take place if the referendum is scheduled after Jan. 10. In
that case, and if President Nicolas Maduro is voted out, the vice president
will serve the remaining two years of Maduro’s term in his place. It’s up to
the national election commission to determine when to hold the referendum, and
the commission has a long record of pro-government partisanship. Earlier this
year, it took over a month to produce the simple one-page official form that
the political opposition needed to collect signatures for the referendum. This
foot-dragging has been called unconstitutional, undemocratic, a desperate ploy
to hang on to power. Desperation is roiling just beneath the surface. Voters
said to be in favor of removing Maduro from office far outnumber those against:
nearly 68%, compared with 23.5%, according to a poll taken this summer by
VENEBAROMETRO, a respected local pollster. Some 92% of respondents also said
the country’s situation was “somewhat bad,”
“bad” and 57% calling it “very bad.” Venezuela is no longer a
country split between roughly two antagonistic halves: a pro-government left
and an opposition-minded right. Now, a small, heavily militarized state elite
rules over a hungry, desperate mass of people who increasingly hate it. A broad
and diverse opposition movement has coalesced around the need to return
Venezuela to democracy. But it finds itself in a peculiar predicament: Although
its numbers are strong, it is virtually powerless. And now the Maduro
government, by maneuvering to deny a timely recall vote, is shutting down any
institutional avenue out of the crisis. Which is why today, depressingly,
Venezuela’s fate once again may rest where it should never be: with the armed
forces. Yet Chavistas, of all people, should realize the dangers of making it
necessary for a group of desperate officers, spurred on by history, to go off
into the middle of the night to see what comes of it. (The New York Times OP-ED
by Francisco Toro: http://www.nytimes.com/2016/10/12/opinion/venezuela-in-a-vise.html?_r=1)
VP
party denounces “wave of persecutions”
by regime
Representatives of the Voluntad Popular party, which
is headed by imprisoned opposition leader Leopoldo Lopez, has presented a
300-page complaint to the Organization of American States, denouncing what they
call a “wave of persecutions” by the Maduro regime, which they say has become
“systematic” against opposition parties. They say around 250 Voluntad Popular
activists are being persecuted and there are 8 jailed, two underground and over
five in exile. More in Spanish: (Infolatam: http://www.infolatam.com/2016/10/10/partido-de-lopez-denuncia-en-la-oea-ola-de-persecuciones-del-gobierno/
Cardinal
Porras says Elections Council must abide by the Constitution on recall process
Newly
appointed Cardinal Baltazar Porras has said that the National Elections Council
(CNE) and the Supreme Tribunal (TSJ) must follow the lines set out in the
Constitution with regard to the recall referendum process, and adds that
criticism by the Catholic Church should not be taken as partisan. “Each time a criticism is made or real
problems are pointed to because we see what people tell us, that is not to be
in the opposition, or for or against any side, it is basically the wish to help
those most deprived who are the ones that suffer the most”. More in Spanish: (Noticiero Venevision: http://www.noticierovenevision.net/politica/2016/octubre/10/171785=cardenal-baltazar-porras-expreso-que-el-cne-debe-respetar-lineamientos-de-la-constitucion-sobre-rr
European
Parliament asks EU to assist European prisoners in Venezuela
The
Human Rights Subcommittee of the European Parliament has asked the European
Union to “go into action” to solve “the humanitarian crisis” in Venezuela
and “assist” European political
prisoners that remain detained in this country. More in Spanish: (Noticiero
Venevision: http://www.noticierovenevision.net/internacionales/2016/octubre/12/172014=eurodiputados-piden-que-ue-actue-para-ayudar-a-presos-europeos-en-venezuela)
Clinton
or Trump? Both bad, Maduro bemoans
Venezuela's president has blasted White House
contenders Republican Donald Trump and Democrat Hillary Clinton, panning their
weekend debate and warning either becoming the next U.S. president would be bad
for Latin America. "I have not seen
a more miserable, more immoral debate in the United States' political history,
which I've followed for 30 years," said Socialist Nicolas Maduro,
during an event to mark "Indigenous Resistance Day" in Venezuela, a
former Spanish colony. "If half of
what they told each other is true, neither of them can be president of the
United States or any other country in the world," added Maduro, a
former bus driver and union leader who had previously thrown his support behind
former Clinton rival, Senator Bernie Sanders, calling him his "revolutionary friend." (Reuters, http://www.reuters.com/article/us-usa-election-venezuela-idUSKCN12C2LY)
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.
