Economics &
Finance
Central Bank President downplays
economic 'crisis', predicts 4% growth
this year, shortages to end
Central Bank President Nelson Merentes acknowledged
Venezuela is undergoing an "economic crisis" but says measures
like a new market-based currency mechanism will help bring rapid improvement. "It's a crisis, but it's not a crisis of such
deep dimensions as some analysts say," said Merentes, who is
considered more of a reformist than other senior financial officials in
President Nicolas Maduro's government. "We can't hide the reality: the economy has inflation,
shortages, and growth is not robust," Merentes said in an interview.
"But Venezuela has the
ability to get out of this moment which is not so good. Indeed, the government
is taking measures that will help us get out quickly." He said the
SICAD2 will provide for dollar transactions "in an expeditious and
unrestricted manner", through banks and exchange brokers, using government
and PDVSA bonds; and added that "exporters can keep 60% of the FOREX they
generate abroad, and sell the rest in this system at market value".
Merentes also said the economy will grow 4% this year, adding that potential
GDP is above 6-7%, and that scarcity will not last over 3 months. (Reuters, http://www.reuters.com/article/2014/03/16/us-venezuela-economy-idUSBREA2F0JS20140316;
and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/merentes-preve-con-el-sicad-2-mayor-apreciacion-de.aspx;
El Universal, http://www.eluniversal.com/economia/140317/merentes-desabastecimiento-no-puede-pasar-de-tres-meses)
SICAD1 allocations are dropping, the
latest exchange rate at VEB 10.9/U$D, new auction called
Last January the Government said SICAD1 would auction U$D
220 million per week, but the Foreign Trade Center (CENCOEX) reports
auctions on 28 February and 14 March totaled U$D 173 million as opposed to U$D
440 million planned. During the first 3 months this year total auctions come to
U$D 639 million, which is only 10% of the total announced by Economic Affairs
Vice President Rafael Ramírez for the entire year. A new exchange rate for VEB 10.9/U$D went
into effect this week - airlines, maritime companies and plastics industries
have been called up for the upcoming auction tomorrow, for a maximum amount of
U$D 2.2 million per company. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140317/disminuye-la-asignacion-de-divisas-por-la-via-del-sicad-i;
Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/sicad-convoca-a-subasta-a-aerolineas-empresas-mari.aspx; El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/sicad-convoca-a-aerolineas--empresas-maritimas-y-d.aspx)
SICAD2 further delayed as Central Bank and the financial
system conduct tests
The Central Bank (BCV) and
financial institutions have finished testing the SICAD2 system and for the
moment expect it to begin operations next Thursday. The BCV has just published
one of the decisions required for operating, allowing banks and stock brokers to
carry out transactions in cash or bonds within SICAD2. Transactions require
holding a dollar denominated account in Venezuela and will be paid to the
account indicated by the client. All resulting exchange rates must be
published; and banks, brokers must report commissions on operations that are to
be carried out. More in
Spanish: (El Universal, http://www.eluniversal.com/economia/140318/bcv-y-banca-terminaron-con-las-pruebas-al-sistema-del-sicad-ii;
and El Mundo, http://www.elmundo.com.ve/noticias/economia/banca/bancos-deben-colocar-en-lugar-visible-tasa-del-sic.aspx#ixzz2wJGGAblz)
PRIMERO JUSTICIA charges government stalls
economic decisions while "waiting
for more China funds"
As the new SICAD2 FOREX system is further delayed and no debt recognition
takes place, Julio Borges, Coordinator General of the PRIMERO JUSTICIA
opposition party charges that Maduro and his regime are trying to gain time as
they await the "U$D 7 billion in new
debt they were negotiating recently with China and Russia... it is unwonted
that a year of announcement have gone by on reforming the FOREX system and they
are still fiddling with a new mechanism, SICAD2, which implies a third type of 'official'
exchange". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140317/borges-gobierno-da-largas-esperando-mas-deuda-de-china)
Oil
& Energy
Harvest Natural says it is unsure when
PETRODELTA deal will close
Oil and gas producer Harvest Natural Resources Inc said
it was not sure when the Venezuelan government would approve the sale of its
remaining assets in the country. Shares of Harvest Natural, which also reported
a bigger quarterly loss, fell as much as 10% to U$D 3.90 on Monday on the New
York Stock Exchange. The company is in the process of
exiting Venezuela by selling its stake in PETRODELTA SA - a joint
venture with state-owned Petroleos de Venezuela SA - to Argentinian oil and gas
company PLUSPETROL for about U$D400 million. Harvest Natural's Venezuelan asset
is its only producing asset. The company sold a part of its assets in the
country for U$D 125 million in December. (Reuters, http://www.reuters.com/article/2014/03/17/harvest-natural-results-idUSL3N0ME2RZ20140317; El Universal, http://www.eluniversal.com/economia/140317/harvest-natural-reports-bigger-losses-over-sale-of-assets-in-venezuela)
Venezuela oil price drops
Venezuela's weekly oil basket stayed below the country's
desired U$D 100 a barrel floor, slipping U$D 2.11 as the US announced plans to
release oil from the Strategic Petroleum Reserve to cool off world oil prices
that were rising over concerns caused by the Russian invasion of Ukraine. According
to figures released by the Ministry of Energy and Petroleum, the average price
of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week
ending March 14 was U$D 95.65, down U$D 2.11 from the previous week's U$D 97.76.
(Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=1774269&CategoryId=10717)
Amuay flexicoquer plant is stopped, undergoing repairs
for another 60 day repairs
The Flexicoquer unit at Amuay refinery, which processes
64,000 BPD of oil by products has been stopped since January due to critical
problems with its air compressor. Iván Freites, of the FUTPV union says repairs
will take another 60 days. More in Spanish: (El Universal; http://www.eluniversal.com/economia/140318/flexicoquer-de-amuay-entra-en-reparacion-de-60-dias)
PDVSA supplies 43% of energy to 17 PETROCARIBE
member states
The PETROCARIBE scheme, established in 2004 on the initiative of late
Hugo Chávez, comprises Venezuela and other 17 countries: Antigua and Barbuda,
Bahamas, Belize, Cuba, Dominica, Grenada, Guatemala, Guyana, Haiti, Honduras,
Jamaica, Nicaragua, the Dominican Republic, Saint Kitts and Nevis, Saint
Vincent and the Grenadines, Saint Lucia and Suriname. This group of countries
received at least 103,000 barrels per day (bpd) of oil byproducts in 2013, 84%
of the goal, according to data supplied by state-run oil holding Petróleos de
Venezuela (PDVSA). Venezuela's oil shipments to Petrocaribe in 2013 amounted to
U$D 3.7 billion. (El Universal, http://www.eluniversal.com/economia/140317/pdvsa-supplies-43-of-energy-to-17-petrocaribe-member-states)
Commodities
Food shortages rose to 47% by the
end of February
Generalized food shortages in Venezuela have consistently
exacerbated for 16 months. Shortages in regulated goods averaged 37.2% in 2013,
up 21.3% from 2012. By January-February 2014, shortages in regulated products
hit 47.7%, rising 10.5% from 2013, according to a DATANALISIS study of seven
distribution routes. (El Universal, http://www.eluniversal.com/economia/140317/venezuelas-food-shortage-by-the-end-of-february-at-477)
Maduro announced a new food card against
"speculators"; Capriles labels
it a "rationing card"
President Maduro says the government will begin a
biometric census on March 22 to issue citizens electronic cards for food
purchases in state supermarkets in order. The so-called Secure Supply Card is
to protect the people from speculators. Benjamin Tripier, of NTN Consultants,
says the card could help reduce scarcity if it is used to subsidize specific
social strata and not general consumption...but adds he has no details on how
the card will work. Opposition leader and Miranda state governor Henrique
Capriles Radonski, has labeled the tool a "rationing card", saying it has not been designed as a
contingency, but on a permanent basis. Capriles added that the right to food, is
enshrined in the Venezuelan Constitution, and a "gift." (El Universal, http://www.eluniversal.com/economia/140317/capriles-scarcity-is-not-a-contingency-but-something-permanent;
and more in Spanish: El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/preven-que-tarjeta--de-abastecimiento-haga-mas-efi.aspx#ixzz2wJFubBgf)
Food packing inventories running out
in April-May
José Manuel González, President of the Venezuelan Packing
Industry (CAVENVASE) says most packing manufacturers report inventories only up
to April, or May at the most due to lack of raw materials. The problem is
mostly in cardboard and plastic covers for pasteurized milk, juice, sugar,
coffee and all those that use flexible plastic packing. More in Spanish: (El
Mundo, http://www.elmundo.com.ve/noticias/economia/banca/hasta-abril-alcanzan-inventarios-en-las-industrias.aspx#ixzz2wDRybz6Y)
POLAR aluminum can plant is now
paralyzed
POLAR, which manufactures aluminum cans for juices, tea,
soft drinks, beer and malt, has temporarily suspended operations due to delays
in obtaining FOREX needed to import raw materials. Their plant in the
Valencia industrial area (Carabobo state), stopped working partially 3 weeks
ago, and totally last Friday. More in Spanish: (El Universal, http://www.eluniversal.com/economia/140318/polar-confirma-parada-de-su-fabrica-de-latas-de-aluminio;
and Ultimas Noticias: http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/se-paraliza-planta-de-envases-de-polar-en-valencia.aspx#ixzz2wDQPhIpv)
Maduro seeking an additional VEB
42.513 million for food imports
The National Assembly is in the process of approving an
additional VEB 42.513 for food imports this year, 2015 and 2016, as per a
request from President Maduro in order to "feed the people." More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/son-bs--42-513-millones--mas--para-traer-alimentos.aspx#ixzz2wJH8VlnM)
SIDOR loses U$D 100 million in new 8
day halt in operations
The SIDOR steel plans has been losing U$D 12 million daily over the past
8 days dur to paralyzed operations in several areas. More in Spanish: (El
Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/sidor-ha-perdido--100-millones--en-ocho-dias-de-nu.aspx#ixzz2wJGo4hL4)
International
Trade
Incoming cargo
at Puerto Cabello:
- 900 tons of green
peas from Vancouver for Comercial
El Verdugo y La Casa.
- Over 722 tons of chicken in 25 vans from
Argentina, to La Casa.
- 83 tons of frozen beef, in 3 containers, from
Brazil.
- Over 1,000 tons of pulp paper from Chile, in
3 containers, for Papeles Venezolanos.
(El Carabobeño; http://www.el-carabobeno.com/impreso/articulo/96686/-ms-de-900-toneladas-de-guisantes-verdes-arribaron-a-puerto)
Logistics
& Transport
Cargo is down 40% from last year
Official FOREX restrictions have brought down cargo
arriving into Venezuela. Importers and customs agents at Puerto Cabello
estimate imports are down 40% from last year, this year to date. Port sources say a large part of cargo
arriving in January and February was "straggling"
from imports negotiated last year and delayed due to December port congestion.
"Not much cargo is arriving, and
most of it is for government agencies", said the source. (El Universal,
http://www.eluniversal.com/economia/140318/estiman-que-arribo-de-carga-cayo-40-con-respecto-a-2013)
IATA: Airlines not willing to negotiate
Venezuela debt
IATA Director General Tony Tyler warns airlines have no
payment guarantee from Venezuela and "cannot
continue to operate". He says airlines are not willing to negotiate
CADIVI's debt to them, estimated at U$D 3.7 billion, and repeated the need for
the Venezuelan government and airlines to draw up a payment plan and establish
a rules for "how things will be
conducted in the future". He adds that warnings from President
Nicolás Maduro that there are no excuses for flight reductions "do not help solve the problem."
Last week Maduro warned: "Any
airline leaving Venezuela will not return while we are in office, they will
have to overthrow us". Today, General Hebert García Plaza said in
reference to the airline industry: "we
recognize there are pending matters and we are going to talk about them, we
have no problem in having a commercial relationship". He added, that
as for air travel fares, "those who
want to travel will pay their fares at 40, 50, or 60...whatever price they are".
More in Spanish: (Ultimas Noticias: http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/iata-aerolineas-no-estan-dispuestas-a-negociar-deu.aspx#ixzz2wJE4B299; and Globovisión, http://globovision.com/articulo/garcia-plaza-fue-una-sorpresa-suspension-de-vuelo-de-aircanada)
Air Canada suspends flights to
Venezuela in wake of civil unrest, regime to cut AC out
Air Canada decided to suspend its flights to and from
Venezuela on Monday as anti-government protests continue to rattle the country.
"Due to on-going civil unrest in
Venezuela, Air Canada can no longer ensure the safety of its operation and has
suspended flights to Caracas until further notice," the airline said
in a statement posted on its website. "Air
Canada will continue to monitor the situation and will evaluate the
re-introduction of flights with the objective of resuming operations on the
route once Air Canada is satisfied that the situation in Venezuela has
stabilized." General Hebert García Plaza, Minister for Air and Water
Transport, reacted angrily, announcing the Venezuelan Government would instruct
the Foreign Ministry to terminate relations with Air Canada, "until President Maduro says otherwise".
(CTV News, http://www.ctvnews.ca/canada/air-canada-suspends-flights-to-venezuela-in-wake-of-civil-unrest-1.1733582#ixzz2wKELaYBH;
and more in Spanish: Globovisión, http://globovision.com/articulo/garcia-plaza-fue-una-sorpresa-suspension-de-vuelo-de-aircanada)
Around 7000 workers unemployed as
railroad construction halts
Around seven thousand workers are out of a job as construction of the
Puerto Cabello-La Encrucijada railroad ground to a halt due to government debt
to contractors. More in Spanish. (El Carabobeño, http://www.el-carabobeno.com/impreso/articulo/96690/siete-mil-trabajadores-quedaron-sin-empleo-por-paralizacin-de-obras-del-ferrocarril)
Politics
Toll rises as protests continue. A National Guard captain died
yesterday after being shot in the head during a demonstration in the central
city of Maracay (Aragua state), the 29th fatality in six weeks of clashes
between protesters and security forces, according to Venezuela's military. Stronger
police response and fatigue from daily marches have drained some of the
momentum from the protest movement, said David Smilde, senior fellow at the
Washington Office on Latin America, a human rights organization. “Prepare yourselves, we are coming for you,”
Maduro warned protesters, and then played John Lennon’s song, “Give Peace a Chance.” But opposition parties
and students have vowed to continue protesting across the country until Maduro
releases political prisoners, improves the supply of products and ends police
repression. In the capital troops cleared demonstrators from Plaza Altamira, a
square in the east of the capital, where that became the wreckage-strewn site
of daily violent clashes. The day before opponents of the socialist government
marched towards the Carlota military air base to protest against alleged Cuban
interference in the armed forces. Later some protesters went to Plaza Altamira,
where they threw stones at troops firing rounds of tear gas. After clearing the
plaza, at least four Venezuelan government ministers gave interviews about its
“liberation.” Immediately after, hundreds
of protesters demonstrated peacefully in the square singing and waving flags as
police looked on. In the western border state of Tachira residents rebuilt some
barricades overnight on streets that the authorities had cleared. In Puerto
Ordaz, in the south of the country, riot police clashed with hundreds of
students. The opposition Popular Will party is planning a march in Caracas
today to mark a month since its leader, Leopoldo Lopez, handed himself in to
face charges of fomenting unrest after helping kick off the demonstrations.
Hundreds of people have been injured, and more than 1,500 have been arrested.
About 100 people remain behind bars, including 21 security officials accused of
crimes ranging from brutality to homicide. (The Washington Post, http://www.washingtonpost.com/world/the_americas/venezuela-govt-moves-forces-into-protest-plaza/2014/03/17/cd31f8e0-adee-11e3-b8b3-44b1d1cd4c1f_story.html;
Fox News, http://www.foxnews.com/world/2014/03/17/venezuelan-government-takes-caracas-plaza-that-has-been-center-protests/;
Reuters;
http://www.reuters.com/article/2014/03/16/us-venezuela-protests-idUSBREA2F0XZ20140316;
Bloomberg, http://www.bloomberg.com/news/2014-03-17/venezuela-protests-lose-momentum-as-maduro-toughens-his-response.html)
Colombia: We will never support a
violent solution
Colombian Foreign Minister María Ángela Holguín says her
country will not support any solution outside the democratic framework, and called
for reestablishing stability in Venezuela. "We have called for the respect
for human rights, the pursuit of peace and dialogue, and the preservation of
all democratic rights, seeking for Venezuela to be able to restore stability,
which is fundamental for its people, as it is for us and the whole region. We
will not support any solution outside a democratic framework," Holguín
told daily newspaper El Tiempo as DPA reported. (El Universal, http://www.eluniversal.com/nacional-y-politica/140317/colombia-we-will-never-support-a-violent-solution)
Bachelet opposes overthrowing
legitimately elected Presidents; urges respect for human rights
Chilean President Michelle Bachelet says nobody, including
individuals or nations, is entitled to overthrow a legitimately elected
president through violence. Amidst reports of torture and violation of
dissenters' human rights in Venezuela, Bachelet told Reuters, "We hope at all times for the respect of
human rights and the Constitution, and hope that democracy turns out to be an
essential value." (El Universal, http://www.eluniversal.com/nacional-y-politica/140317/bachelet-reaffirms-support-to-maduro-urges-respect-for-human-rights)
The State Department cold shoulders
Maduro overture
State Department spokesperson Jen Psaki says she doesn't
believe the US government is for now considering naming a representative that
can start talks with Venezuela and the South American Union (UNASUR), as
proposed last Saturday by President Nicolás Maduro. "I am not aware of any plan for that", she said. Maduro
appointed National Assembly President Captain Diosdado Cabello to represent his
government at a "peace conference"
with the US and UNASUR. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140318/departamentode-estado-ignora-propuesta-de-maduro)
Venezuela to again seek a seat on the UN Security
Council, according to Foreign Minister Elias Jaua. Voting will take place at
the UN in October this year for 5 new Security Council members for 2015-2016.
Venezuela was rebuffed in the same quest in 2006. More in Spanish: (El
Universal, http://www.eluniversal.com/internacional/140317/venezuela-volvera-a-apostar-por-el-consejo-de-seguridad)
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.
