October 11th, 2010

Economics, Trade & Business

Osorio: Polar and Cargill must go to the state

"Oligopolies do not ensure food security in the country and the Bolivarian government has seeking solutions to this problem for  11 years. There are two opposing extremes: the socialist and capitalist. Yankees’ attacks through their domestic lackeys have failed to halt the advance of the revolutionary laws. The Bolivarian government has made progress in these 11 years, despite capitalist and imperialist efforts." The speaker is not a stale leader of the radical left, but rather a general of the National Bolivarian Armed Forces. The People's Minister for Food, Carlos Osorio, is an example of the new era in Venezuela, in the process of building socialism. Companies like Polar and Cargill, as happened with Agroisleña should be in the hands of the state, said Osorio. The new coalition of forces in the National Assembly to be installed on January 5, 2011, will not be an impediment to the progress of the Revolutionary Government. (Correo del Orinoco, 10-11-2010; http://www.correodelorinoco.gob.ve/economia/osorio-polar-y-cargill-deben-pasar-a-manos-estado/)

Venezuela has seized about 185 industries in 2010

Carlos Larrazábal, the president of the Venezuelan Confederation of Industries (Conindustria), said that the Venezuelan government has seized at least 185 manufacturing companies in 2010, excluding firms in the agriculture sector. "We are concerned that the Venezuelan government will continue to seize companies without complying with Article 115 of the Constitution," Larrazábal said about the recent seizure of Agroisleña, Venoco and Fertinitro. (El Universal, 10-11-2010; http://english.eluniversal.com/2010/10/11/en_eco_esp_venezuela-has-seized_11A4591655.shtml)

Venezuela nationalizes Koch, Eni fertilizer plant

Venezuela's President Hugo Chavez nationalized a large U.S. and Italian-owned fertilizer factory on Sunday, just days after vowing to radicalize his state-led revolution in the aftermath of elections last month. The government will take over Fertinitro, one of the world's main producers of nitrogen fertilizer and part-owned by private U.S. company Koch and Saipem a subsidiary of Italy's Eni, Chavez said. During 12 years in power, the 56-year-old former soldier has put large swathes of the OPEC member country's economy into state hands. On Sunday, he also announced the nationalization of Venezuelan motor lubricants company Venoco. (Reuters, 10-10-2010; http://www.reuters.com/article/idUSN1026579720101011)

Venezuela's business sector asks top court for ruling on private property

Venezuela's private business association Fedecámaras will request that the Supreme Tribunal of Justice (TSJ) issue a ruling on the status of private property, said Noel Álvarez, the president of the Federation of Trade and Industry Chambers (Fedecámaras). "We are going to file an action with the TSJ for it to determine whether private property has been infringed or not," the business leader told private TV news channel Globovisión. (El Universal, 10-11-2010; http://english.eluniversal.com/2010/10/11/en_eco_esp_venezuelas-business_11A4591333.shtml)

Venezuela's government increases control over agricultural and industrial sectors

Venezuelan state policy to control the means of production was reinforced after President Hugo Chávez signed a decree expropriating Spanish farming supply firm Agroisleña, which provided supplies to 70 percent of the country's farmers before it was seized by the government. With  the seizure of Agroisleña, which was renamed Agropatria, the Venezuelan government aims at expanding and tightening the grip over food production. The first seizures of lands, which now total about 2.9 million hectares (7.17 million acres), were carried out at the end of 2004 with a series of expropriation decrees of farms located in the central state of Cojedes. (El Universal, 10-11-2010; http://english.eluniversal.com/2010/10/11/en_eco_esp_venezuelas-governme_11A4590051.shtml)

Nationalized agroindustry to offer products with discounts between 40 and 60%

The Venezuelan State company Agropatria (new name for the recently nationalized Agroisleña) will offer agricultural products at discounts between 40 and 60 percent, compared to the prices of said company when it was under private control. Agroisleña was nationalized on October 4 to put the company at the disposal of country’s agricultural development. During his weekly show “Alo, Presidente,” the Venezuelan Head of State ordered the reduction of 49.3% of the prices of 12 fertilizers, 43% the prices of 260 agrochemicals, and an average of 41.7% the prices of black beans, corn and rice seeds. (AVN, 10-11-2010; http://www.avn.info.ve/node/22405)

National Statistics Institute highlights Venezuelan inflation decreasing tendency

The President of the National Statistics Institute (INE) Elias Eljuri highlighted on Monday a deceleration of the inflation rate in Venezuela, estimating that the indicator will finish 2010 at about 27%, a figure well below the 40% predicted by “opposition” analysts. He reiterated that the inflation rate of 1.1% in September reflects this decreasing tendency and represents a significant reduction compared to the rate of 2.5% obtained in the same month last year. (AVN, 10-11-2010; http://www.avn.info.ve/node/22426)

Politics

Chavez backs China over Nobel for jailed dissident

Venezuelan President Hugo Chavez expressed solidarity with China's government Sunday over the awarding of the Nobel Peace Prize to a jailed Chinese dissident. He suggested the prize should not have gone to Liu Xiaobo, who has drawn praise from Western governments as an advocate of gradual political change without any violent confrontation with Chinese leaders. "This (Liu) is like Obama, the other peace prize," Chavez said. (Miami Herald, 10-10-2010; http://www.miamiherald.com/2010/10/10/1866972/chavez-backs-china-over-nobel.html)

The wave continues to swell

Since the appearance of the computers belonging to Raúl Reyes in 2008, the wave of compromising evidence indicating that the Hugo Chávez administration has ties with the narco-terrorist group, the Revolutionary Armed Forces of Colombia (FARC), has not ceased to grow. Now, this year, new facts have emerged that would seem to corroborate the high level of collaboration maintained by the Venezuelan Government not only with the FARC, but also with terrorist groups such as the National Liberation Front (ELN), and Euskadi Ta Askatasuna (ETA). On July 22, Álvaro Uribe presented accusations against Hugo Chávez before the International Criminal Court (ICC) and filed a lawsuit against the Bolivarian Republic of Venezuela before the inter-American Court of Human Rights (IACHR). (Veneconomy, 10-11-2010; http://www.veneconomy.com/site/?ids=44&idt=23417&idc=4)

Venezuelan opposition reinvents itself

Venezuelan opposition leaders have realized that unity works. They support this idea and they highlight this fact from their different political views. Ramón Guillermo Aveledo, the executive secretary of the Democratic Unified Panel (MUD), says that it is the best course to follow in the coming years. "Unity has proven successful. Unity -as people demand and as political success requires - has been endorsed by the successful election results," he said. According to Aveledo, they are now faced with a new challenge: proposing a real agenda to both slums and affluent residential areas. Such agenda should include "the fight against crime and against the high cost of living and the protection of private property." (El Universal, 10-08-2010; http://english.eluniversal.com/2010/10/08/en_ing_esp_venezuelan-oppositio_08A4577251.shtml)

ETA members claim they were trained in weapons use in Venezuela

The government of Venezuela's President Hugo Chávez has decided to launch an investigation into the activities of ETA activist Arturo Cubillas Fontán after it emerged that he provided weapons training to Xabier Atristain and Juan Carlos Besance, two alleged members of Basque terrorist group ETA, in Venezuela in 2008. (El Universal, 10-08-2010; http://english.eluniversal.com/2010/10/08/en_ing_esp_eta-members-claim-th_08A4582691.shtml)

Petroleum & Energy

Venezuela approves China's stake in Orinoco Oil Belt

Venezuela has approved China's stake in a joint venture to tap up to 400,000 barrels per day of extra-heavy crude oil in the Orinoco Oil Belt, under an agreement published in Venezuela's Official Gazette on Monday.
The Venezuelan government has negotiated several oil interests in the Junín block with companies from China (CNPC), Russia (Rosneft), Vietnam and Italy (ENI) after it completed a successful bidding of two multimillion projects in the Carabobo block of Venezuela's Orinoco belt. (El Universal, 10-11-2010; http://english.eluniversal.com/2010/10/11/en_eco_esp_venezuela-approves-c_11A4591291.shtml)

Domestic gas market requires over 2,000 million additional cubic feet (MMcf) -excluding what is demanded by the oil industry-  to satisfy domestic demand. This means production would have to double. PDVSA consumes 71% of the 7,000 MMcf a day of national production. (Veneconomy, 10-11-2010; http://www.veneconomy.com/site/?ids=44&idt=23417&idc=4)

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 7th, 2010

Economics, Trade & Business
 

Venezuela is the only country in the region that will remain in recession

In 2010, The Latin American and Caribbean (LAC) economies will average 5.7% growth and an inflation rate of 6%, according to a report published by the International Monetary Fund released on Wednesday. Venezuela is the only LAC country hit by recession in 2010, with a -1.3% GDP contraction in 2010 and a minute growth projection of 0.5% for 2011. According to the report, "Venezuela's recession will continue in 2010, reflecting severe supply bottlenecks, challenges from capital flight, and generally weak policy frameworks." Venezuela also suffers from the highest inflation rate in the hemisphere (29.2 percent), followed by Argentina (10.6 percent), the only other country with double-digit inflation. Peru, Chile and Bolivia exhibit a lower inflation, at 1.7%, the report highlighted. (El Universal, 10-06-2010; http://english.eluniversal.com/2010/10/06/en_eco_esp_venezuela-is-the-onl_06A4571017.shtml)

IMF Wrong on Continuing Recession in Venezuela, Giordani Says

Venezuelan Finance Minister Jorge Giordani rejected the IMF’s conclusions that the government’s poor fiscal policy is causing a five-quarter recession to continue into the second half of 2010. Venezuela will be constrained by “severe supply bottlenecks” and a “weak policy framework,” the IMF said in its World Economic Outlook published today. The country’s economy will shrink 1.3 percent this year before returning to growth of 0.5 percent in 2011, the report said. “It’s the IMF that’s in crisis,” Giordani said in an interview on Union Radio. “They did not foresee the world crisis.” (Bloomberg, 10-06-2010; http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a7MYKPmHg2Sc)

Food Basket (basic goods price index) increased to Bs.F.2.616,97, up Bs.F.28.36 or 1.1%.  The food basket is based on the cost of feeding a five-member family, according to estimates by the Analysis and Documentation Center (Cendas). Food staples have gone up Bs.F.609.72 (30.4%) so far this year. Over two minimum wages are required to meet its cost. (Veneconomy, 10-07-2010; http://www.veneconomy.com/site/?ids=44&idt=23381&idc=2)

Venezuelan government makes seizure of farming company Agroisleña official

As expected, the decree that makes official the seizure of farming supply company Agroisleña (an Enrique Fraga Afonso company) was published on Tuesday in the Venezuelan Official Gazette No 39,523. President Hugo Chávez announced on Monday night that he had signed the decree against the will of the board of directors of the Spanish firm who had requested the Venezuelan head of state to reconsider the decision. Chávez argued that the farming company had become an oligopoly in the market of agriculture inputs, contrary to the provisions of the Constitution. (El Universal, 10-05-2010; http://english.eluniversal.com/2010/10/05/en_eco_esp_venezuelan-governmen_05A4564773.shtml)

Expropriation of Friosa was published in Gaceta Oficial (October 5), circulating today. The measure establishes the occupation of the main office of Complejo Comercial Hermanos García (GAISA) which includes Frigorífico Ordaz, S.A. (Friosa), Inversiones Koma and Delicateses Las Fuentes and nine branches in Bolívar state. (Veneconomy, 10-06-2010; http://www.veneconomy.com/site/?ids=44&idt=23379&idc=3)

Fall in prices of agricultural supplies will be notable in a few days

Venezuelan Minister of Agriculture and Lands, Juan Carlos Loyo, affirmed that “in the short run we will see a notable fall in prices of agricultural supplies such as fertilizers.” In a visit to a community in the central state of Guarico, Loyo took part in a special session carried out by the legislative council of the state, in order to support the measure agroindustrial emporium Agroisleña’s foreceful expropriation. (AVN, 10-07-2010; http://www.avn.info.ve/node/21835)

Didn’t he insist there should be no profits in Socialism?

President Chávez ordered the “intervention” of Maiquetía International Airport in order to turn it into a profitable business. Chávez wondered how such a large airport fails to yield profits while in Cuba the José Martí Airport provides the government with annula earnings of $100 million. (Veneconomy, 10-06-2010; http://www.veneconomy.com/site/index.asp?idt=23370&idc=3&ids=44&Var_Send=1&mmD=10&ddD=06&mmH=10&aaD=2010&ddH=07&aaH=2010&Send=Buscar)

Politics

Venezuela, Colombia foreign ministers meet in Cúcuta

The Colombian Minister of Foreign Affairs María Ángela Holguín and her Venezuelan counterpart Nicolás Maduro are assessing on Thursday the progress made thus far after the resumption of bilateral relations. The two foreign ministers are meeting in the Colombian city of Cúcuta, on the border with Venezuela. The ministers of Energy, Trade, Defense and Transport of the two countries are attending the meeting. (El Universal, 10-07-2010; http://english.eluniversal.com/2010/10/07/en_pol_esp_venezuela,-colombia_07A4575491.shtml)

Spanish Judge believes that ETA and FARC produced weapons in Venezuela

Spain's National Court Judge Eloy Velasco, who is investigating the alleged links between Basque separatist group ETA and the Revolutionary Armed Forces of Colombia (FARC), a guerrilla group, thinks that both armed organizations developed and produced weapons in Venezuela. Judge Velasco, who instructed the Spanish police to travel to Colombia to interrogate nine former FARC members who claimed they had met with ETA members in camps established in Venezuelan territory, has also ordered Spanish security forces to prepare an expert report about the activities of ETA and the Colombian guerrilla in the development of new weapons. (El Universal, 10-07-2010; http://english.eluniversal.com/2010/10/07/en_pol_esp_spanish-judge-believ_07A4575413.shtml)

Chavez denies that Venezuela helped train Basque separatists

Venezuelan President Hugo Chavez denied an allegation that his government helped train Basque separatists trying to create an independent state. The allegations surfaced Monday, when Spanish media reported that two captured members of the outlawed Basque separatist organization known as ETA told authorities they had received arms training in Venezuela in 2008. Juan Carlos Besance and Xabier Atristain, members of an ETA cell known as Imanol, were arrested September 29. And a Spanish judge said in March that the Venezuelan government facilitated a long-time cooperation between leftist rebels in Colombia and ETA. (CNN, 10-05-2010; http://edition.cnn.com/2010/WORLD/americas/10/05/venezuela.terrorist.training/index.html)

NGO Ojo Electoral: Venezuelan opposition could have won 80 deputies

Carlos Genatios, a director of Venezuelan NGO Ojo Electoral (Electoral Eye) said on Thursday that the most complex problem in the parliament election held on September 26 involved some irregularities the Organic Law on Election and Political Participation introduced in the voting process. "Had legislative elections been conducted according to the proportional representation system and had the Organic Law on Election and Political Participation not introduced such tricks, the opposition would have won 80 deputies and the government would have won 85 seats," Genatios said. (El Universal, 10-07-2010; http://english.eluniversal.com/2010/10/07/en_pol_esp_ngo-ojo-electoral:-v_07A4576093.shtml)

Chávez Doubles Down on Expropriations

Following the opposition’s popular vote victory in Venezuela’s parliamentary elections, observers around the world have wondered how Venezuelan President Hugo Chávez would react. Now we know. In lieu of accepting the election results as a mandate from the Venezuelan people to change course on his policies, including his repeated assaults on private property, President Chávez has reportedly dismissed the opposition’s victory calling it “15 minutes of drunkenness.” In addition, President Chávez has promised to further “radicalize” his socialist revolution, despite the depleted majority his party (PSUV) is soon to hold in the National Assembly. "We are going to continue forward, democratically radicalizing the socialist revolution because it is necessary," Chávez said. (What’s Next Venezuela, 10-06-2010; http://en.whatsnextvenezuela.com/#)

Compulsory military service

Nearly a year ago, the new Military Conscription and Enlistment Act was published in the Official Gazette. This law establishes that registration in the Bolivarian National Armed Force’s database shall be compulsory for all Venezuelans of “military age,” in other words for every man and woman between the ages of 18 and 60. According to the law’s first transitory provision, October 21, 2010, is the deadline for enrolling in the military service register. While the law establishes that no one may be recruited by force, it also establishes that military service is a duty binding on those subject to the law. (Veneconomy, 10-07-2010; http://www.veneconomy.com/site/)

Petroleum & Energy

PDVSA resumes operations at the BOPEC terminal in Bonaire today after a bolt caused a fire in one of its fuel tanks last September 8. The authorities on the island gave the Venezuelan State oil company all the necessary permits. (Veneconomy, 10-07-2010; http://www.veneconomy.com/site/?ids=44&idt=23390&idc=4)

Venezuela’s Nuclear Projects

Venezuela is “carrying out the first studies” toward building a nuclear energy program, Venezuelan President Hugo Chávez announced on September 27. “We’re taking on the project of nuclear energy for peaceful purposes, and they aren’t going to stop us,” Chávez told a news conference. Venezuela also has a deal with Moscow for Russia to build a nuclear reactor in the country. Yet these are probably not the most concerning of Venezuela’s nuclear projects. (The Trumpet, 10-07-2010; http://www.thetrumpet.com/index.php?q=7531.6102.0.0)

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.