Economics &
Finance
Venezuela to create new foreign exchange market, Maduro says
- BCV dollar tenders anticipated
Venezuela will create an alternative currency market to
crack down on a black market in which the dollar is worth about four times more
than the official rate, interim President Nicolas Maduro said. “It’s now ready, we’re missing some details
on the mechanisms,” Maduro said in an interview yesterday. “We hope to announce it very soon, activate
it, incorporating all the economic sectors.” The new state-run system will
replace a central bank- administered currency market known as SITME and would
seek to complement the current foreign exchange rate system known as CADIVI,
Maduro said. The complementary system will provide sufficient foreign currency
for the economy while meeting the country’s “real needs,” Maduro said. According to unofficial sources, experts
at PDVSA and the Central Bank have devised a plan for dollar tenders by the
Central Bank with support from the state oil company. FOREX would be drained
from funding currently going to the National Development Fund, as the Central
Bank lacks resources to support the system - and using reserves is not an
option as they are used to pay from imports made through the Exchange Board
(CADIVI). The base price would be set by the Central Bank (BCV) and would
fluctuate according to supply and demand. This would imply an additional
devaluation, but the percentage has not yet been established. Finance and
Planning Minister Jorge Giordani is reported to be the sole holdout for
approving the system. (Bloomberg, 03-14-2013; http://www.bloomberg.com/news/2013-03-14/venezuela-to-create-new-foreign-exchange-market-maduro-says.html;
El Universal; http://www.eluniversal.com/economia/130314/venezuelas-acting-president-new-forex-system-is-ready; and more in Spanish: El Nacional; http://www.el-nacional.com/)
Gov't allows exporters to keep 40%
of US dollar earnings
Venezuela's new requirements and steps for exports have
been enacted allowing both individuals and companies involved in exporting
goods and services will be allowed to retain and manage up to 40% of their earnings
in US dollars. (El Universal,
03-14-2013; http://www.eluniversal.com/economia/130314/venezuelan-govt-allows-exporters-to-keep-40-of-us-dollar-earnings)
American intelligence services warn of an economic
collapse in
Venezuela, pointing out that debt
obligations by the Venezuelan government “will use up” any increase of oil
revenue even if the prices remain high. (Veneconomy, 03-13-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=34020&idc=2)
Official unemployment rate at 9.4%
in January
Venezuela's unemployment rate averaged 9.4% in January according to a
monthly report compiled by the National Statistics Institute (INE). The report,
which examines the state of the workforce, shows 1.27 million people unemployed
in the first month of 2013 - a drop compared to 2012, when it hit 10.3%. (El Universal, 03-13-2013; http://www.eluniversal.com/economia/130313/venezuelas-unemployment-rate-at-94-in-january)
Commodities
IEA warns of oil challenges Venezuela faces after President Chávez’ death. The
International Energy Agency point out Chávez has left PDVSA under financial
pressure, “an aged infrastructure in
desperate need of investments (…) and part of its future crude production
mortgaged to Chinese leaders.” According to the IEA, Venezuelan oil
production has dropped by 700,000 barrels per day in the last 14 years. Oil and
Mining Minister Rafael Ramírez's response was to say that the Agency is an
imperialist instrument, "anti-OPEC,
created to destroy OPEC". (Veneconomy, 03-13-2013; http://www.veneconomy.com/site/index.asp?ids=44&idt=34021&idc=4;
Reuters, http://www.reuters.com/article/2013/03/13/oil-iea-venezuela-idUSL6N0C533S20130313;
Bloomberg, http://www.bloomberg.com/news/2013-03-13/venezuela-oil-spending-may-extend-decline-under-maduro-iea-says.html;
and more in Spanish: AVN; http://www.avn.info.ve/contenido/ram%C3%ADrez-agencia-internacional-energ%C3%ADa-defiende-intereses-for%C3%A1neos)
Lyondell refinery replaces
Venezuelan oil with Canadian oil
Lyondell Basell Industries NV is readying its Houston based
refinery, which mostly uses Venezuelan oil, to receive new oil supplies,
particularly from Canada, according to a presentation made Wednesday to Wall
Street analysts. The company has spent U$D 50 million to almost treble its
refining capacity of Canadian heavy oil in Houston, from 60,000 barrels per day
(bpd) to 175,000 bpd. Revamping a crude oil distiller and a coking unit to
refine crude oil from the tar fields of Alberta, Canada, "is being completed," Lyondell CEO
Jim Gallogly said. Works began in the middle of February and they are expected
to finish in the middle of April, Reuters said.(El Universal, 03-13-2013; http://www.eluniversal.com/economia/130313/lyondell-refinery-replaces-venezuelan-oil-with-canadian-oil)
LUKOIL barred from Venezuela
Oil and Mining Minister Rafael Ramirez has announced that
unless statements by a LUKOIL executive are clarified, the Russian company will
be barred from Venezuela. LUKOIL representatives recently complained about the
slow pace of operations and agreements, saying that oil investors need legal
certainty. Ramirez has responded: "We
are verifying whether statements attributed to Mr. Andrei Kuzyayev, of Lukoil,
are true; and if they are this leaves LUKOIL out of our oil business as we will
not allow any private foreign company to dictate to us what our policy should
be. We have not taken this from US multinationals and we will not take it from
anybody." (El Mundo, 03-15-2013; http://www.elmundo.com.ve/Noticias/Petroleo/Industria/Ramirez--Lukoil-esta-fuera-del-pais.aspx)
Orinoco output with Italy's ENI
launched
Venezuela started production with Italy's ENI at a joint
venture in its vast Orinoco belt on Wednesday, and officials expect output to
begin soon at projects with Chevron and the China National Petroleum Corporation
(CNPC). In addition, Oil Minister Rafael Ramirez said Venezuela's state oil
company PDVSA will sign a long-awaited U$D2 billion credit agreement with
Chevron at the end of this month. Ramirez has said that Venezuela will maintain
its oil industry tax and legal framework under acting President Nicolas Maduro,
seeking to reassure foreign investors after last week's death of Hugo Chavez.
"Today begins early production at
our PETROJUNIN joint venture (with ENI)," Ramirez told reporters.
"We're symbolically starting with
700 barrels per day (bpd). It will reach 15,000 bpd by the end of the year, and
75,000 bpd en 2015." (Reuters, 03-13-2013; http://www.reuters.com/article/2013/03/13/venezuela-oil-idUSL1N0C5ATP20130313; El Universal, http://www.eluniversal.com/economia/130313/oil-drilling-at-junin-5-starts-up)
CORPOELEC denies its own sale to China. In a press release, the National Electric Corporation CORPOELEC has
denied rumors of an alleged sale of the company to the Peoples Republic of
China. The company is headed by a brother of the late President Chavez. More in
Spanish: (AVN, 03-15-2013; http://www.avn.info.ve/contenido/corpoelec-rebate-falso-rumor-sobre-venta-acciones-china;
Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/corpoelec-desmiente-venta-de-acciones-a-china.aspx)
Politics
Capriles: Nicolás Maduro is the Castro
brothers presidential candidate
Opposition presidential candidate Henrique Capriles has
challenged the way Nicolás Maduro was made acting president and presidential
candidate of the ruling United Socialist Party of Venezuela.
"How did Nicolás come into play?
Well, Nicolás is the candidate of (Cuban President) Raúl Castro. Therefore, he
means giving Venezuela away to the interests of Raúl Castro. I would like the
followers of (late) President (Hugo Chávez) to tell me if they want
Venezuelans' resources to be given to the Castro brothers (...) That's what
Nicolás will do," Capriles said. (El Universal, 03-14-2013; http://www.eluniversal.com/nacional-y-politica/130314/capriles-nicolas-maduro-is-castro-brothers-presidential-candidate)
Cuba is said to have sent 2,000
agents to support Maduro
Cuba bet hard on the political management of President
Hugo Chávez's illness. Now, it is committed to make the election favor acting
President Nicolás Maduro. Some 46,000 Cuban "cooperators" who
officially reside in Venezuela, have the mission of safeguarding the "Chavista"
revolution. In addition, Havana has commissioned a detachment for election
monitoring, estimated at 2,500 troops, according to intelligence reports from
Cuba. As Cuban units in Venezuela paid tribute to the body of President Chavez,
their leader, Roberto López said: "We
are here to ratify our dedication; yes, so far we have given it all; now, we
are ready to give even our lives, our blood, if necessary, for this revolution".
(El
Universal, 03-14-2013; http://www.eluniversal.com/nacional-y-politica/130313/cuba-is-said-to-have-sent-2000-agents-to-lever-maduro)
FARC grateful for Venezuela's
support in Colombian peace talks
The Colombian Revolutionary Armed Forces (FARC) have expressed
their gratitude to Venezuelan acting President Nicolás Maduro for his support
in the peace talks held in Havana, which seek to put an end to the Colombian
armed conflict that has last more than fifty years. "Thank you, President
Maduro. We will work hard here in Havana to make progress in the roundtable
(discussions), seeking to reach an agreement with the Colombian
Government," based on peace, said FARC's chief negotiator Iván Márquez,
AFP reported. (El Universal,
03-14-2013; http://www.eluniversal.com/nacional-y-politica/130313/farc-grateful-for-venezuelas-support-in-colombias-peace-dialog)
Maduro now says it will probably not
be possible to embalm Chavez
Acting Venezuelan President Nicolas Maduro said Wednesday
that it would be “rather difficult”
to embalm the body of Hugo Chavez because the decision to do so was made too
late and the procedure was not started in time. Maduro said that Russian and
German experts arrived in Venezuela to help with the embalming process but that
“the scientific news and the opinions”
among the group were that “it’s going to
be rather difficult for it to be that way, because the preparations needed to
be started and the decision (to do so) should have been made much sooner.” (Latin
American herald Tribune, 03-13-2013; http://www.laht.com/article.asp?ArticleId=710003&CategoryId=10717;
El Universal, 03-14-2013; http://www.eluniversal.com/nacional-y-politica/130314/venezuelas-maduro-chavezs-body-may-not-be-embalmed; Bloomberg, http://www.bloomberg.com/news/2013-03-13/venezuela-s-chavez-may-not-receive-lenin-like-embalmment.html;
Fox News, http://www.foxnews.com/world/2013/03/13/chavez-long-term-embalming-unlikely-venezuela-acting-president-says/)
Jaua speaks of improved relations
with the US
Foreign Minister Jaua told CNN that Venezuela has
established communication with the US Government through its OAS Representative
Roy Chaderton, and says bilateral relations can be strengthened "as long as the US has the good will to
understand that we can only have better relations on a basis of mutual respect".
More in Spanish: (AVN, 03-15-2013; http://www.avn.info.ve/contenido/jaua-s%C3%B3lo-respeto-mutuo-garantizar%C3%A1-buenas-relaciones-entre-venezuela-y-eeuu)
Chavez legacy lauded at UN
During a United Nations tribute to Hugo Chavez, Foreign Minister Elias
Jaua said Venezuela will to continue to promote the ideas that marked the
actions of the Bolivarian Revolution's leader in international policy, in
search for other possible world and "raise
with greater strength flags of the Bolivarian Socialism." (AVN, 03-14-2013;
http://www.avn.info.ve/contenido/chavez-legacy-ratified)
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.
