March 19, 2015

International Trade

 

Mexican companies in Venezuela in trouble as devaluation eats profits

Mexican companies operating in Venezuela are enduring a failing foreign-exchange system that’s draining profits.  The outlook for local units of companies such as MEXICHEM and COCA-COLA FEMSA is dimming as plunging crude prices and the world’s fastest inflation erode the value of the local currency. The bolivar has tumbled 64% on the black market, while a third official rate is adding to distortions. The petrochemical maker lost US$ 33 million on Venezuela’s currency last year after adopting 12 bolivars per dollar as its rate versus 6.3. This quarter, earnings before interest, taxes, depreciation and amortization in Venezuela will be 20%-35%t of year-ago levels, Chief Financial Officer Rodrigo Guzman said in an interview. Similarly, FEMSA’s results are being buffeted by adjusting to a rate of 50 per dollar. (Bloomberg, http://www.bloomberg.com/news/articles/2015-03-17/venezuela-keeps-hold-on-mexichem-to-femsa-as-bolivar-eats-profit)

 

 

Commodities

 

Wheat inventories for three weeks

Juan Crespo, head of the Flour Industry’s Workers’ Federation’s (FETRAHARINA) reports the sector has declared itself in emergency as they only have wheat inventories for three weeks. Venezuela is the fifth global consumer of bread and pasta. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43165&idc=3)

 

 

Economy & Finance

 

Government and industry representative meet to plan strategies to increase production

José David Cabello, Minister of Industries, José David Cabello Rondón and Miguel Pérez Abad, who heads the pro government Federation of Small and Medium Industry and Artisans of Venezuela (FEDEINDUSTRIA), to discuss and outline new strategies to increase national production. They discussed investment and production recovery projects, plus new proposals brought forward by the Executive Office, the Ministry of Industries said in a press release. (El Universal, http://www.eluniversal.com/economia/150318/venezuelan-govt-industrialists-plan-strategies-to-increase-production)

 

 

Politics and International Affairs

 

Latin American leftist leaders back Venezuela over US spat

Members of the Alba regional group have expressed their support for Venezuela in the face of increasing tensions between the US and Venezuela. At an emergency summit, Latin American left-wing leaders urged the US to repeal an executive order which declared Venezuela a threat to the national security of the US. Venezuelan President Nicolas Maduro stressed his country was no threat: "Venezuela has no plans, did not have, nor will it ever have plans to attack the United States or hurt anyone", he said. He received strong backing from the Cuban leader, Raul Castro, who announced a rapprochement between his government and that of the US in December after decades of animosity, said that "the US needs to understand once and for all that it cannot seduce or buy Cuba, just as it cannot intimidate Venezuela.....Our unity is indestructible". Bolivian President Evo Morales said that "the US government must understand we are not living in imperial times of the past". Nicaraguan President Daniel Ortega said that it was the US and not Venezuela which was "a threat to global security, this is not rhetoric, it is reality". Ecuadorean Foreign Minister Ricardo Patino questioned what the US, a country which he said "has made torture legal and (...) developed the most powerful mass surveillance system", could teach Latin American nations about human rights. Meanwhile, at a Senate hearing in Washington, the US Deputy Assistant Secretary for South America and Cuba, Alex Lee, meanwhile urged Latin American nations "to emphasize to the [Venezuelan] government the absolute importance of holding free and fair elections". (BBC News: http://www.bbc.com/news/world-latin-america-)

 

...and agree to establish group of facilitators

The Bolivarian Alliance for the Peoples of Our America (ALBA), Member States reached an agreement to create a "group of facilitators" from several Latin American integration mechanisms in order to "foster a diplomacy of engagement" between the governments of the United States and Venezuela. The group of facilitators will comprise the ALBA, the Community of Latin American and Caribbean States (Celac), the Union of South American Nations (Unasur), and the Caribbean Community (Caricom). It will be aimed at "easing tensions and ensuring an amicable settlement." (El Universal, http://www.eluniversal.com/nacional-y-politica/150318/alba-to-establish-group-of-facilitators; http://www.eluniversal.com/nacional-y-politica/150317/president-maduro-the-us-wants-to-re-colonize-venezuela; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2379681&CategoryId=10717)

 

U.S. insists it doesn’t seek Maduro’s ouster and wants regional solutions for Venezuela

The U.S. government insisted before Congress that it is not seeking the fall of Nicolas Maduro’s government, but it called on its Latin American partners to join forces to find a solution to the crisis besetting Venezuela. The deputy assistant secretary for South America and Cuba, Alex Lee, said that the U.S. aim is not to “sabotage the Venezuelan economy” and he noted, during a Senate Subcommittee on Western Hemisphere Affairs hearing, that the United States continues to be Venezuela’s main trade partner. “I want to be clear: It is not our policy or intent to promote instability in Venezuela or to endorse solutions to Venezuela’s political problems that are inconsistent with its own legal system,” said Lee, alluding to the recent sanctions imposed on several top Venezuelan officials for alleged human rights violations. A group of senators urged the State Department to extend the sanctions to include more Venezuelan officials involved in human rights violations, beginning with Defense Minister Vladimir Padrino López. Also, they warned Venezuela’s economy is on the verge of collapse due to the corrupt ways of its government. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2379603&CategoryId=10717; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43170&idc=1; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43171&idc=1)

 

IACHR orders precautionary measures for Venezuelan HR defenders

The Inter-American Commission on Human Rights (IACHR) has requested precautionary measures for three Venezuelan human rights advocates, as the commission believes their lives and physical integrity are at risk. The IACHR asked the Venezuelan government to adopt precautionary measures for human rights defenders Alfredo Romero, Luis Betancourt, members of non-governmental organization (NGO) Foro Penal (Criminal Forum), and for Yoseth Comenares, a sister of the coordinator of one of the regional chapters of the organization. (El Universal, http://www.eluniversal.com/nacional-y-politica/150318/iachr-orders-precautionary-measures-for-venezuelan-hr-defenders)

 

Appeals Court upholds Ledezma detention, Holdack released

A court of appeals has quickly upheld the detention of Caracas Mayor Antonio Ledezma in a military prison while the Prosecutor General's office decides to try him for being involved in a plan to overthrow President Nicolás Maduro. At the same time, Christian Holdack, one of the four students on trial for the alleged attacks to the Prosecutor General’s Office building in February 2014, was the last one to be paroled Tuesday evening. Of the five defendants, only Leopoldo López is on remand for the duration of that trial. Holdack had experienced serious health problems. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=43172&idc=1; El Universal, http://www.eluniversal.com/nacional-y-politica/150318/christian-holdack-detained-during-protests-released-on-probation; Fox News, http://www.foxnews.com/world/2015/03/18/venezuela-court-orders-release-student-protester-whose-arrest-has-been-widely/; and more in Spanish: El Universal, http://www.eluniversal.com/nacional-y-politica/150318/corte-de-apelaciones-avala-detencion-preventiva-del-alcalde-ledezma)

 

120 candidates sign up for opposition parliamentary primary elections

The Elections Commission for the opposition Democratic Unity Conference has received 120 registrations from candidates who will run in primary elections to be held in 38 circuits on May 17th, to elect 42 candidates for the National Assembly. Primaries will be held in 12 states. Voluntad Popular, the party led by Leopoldo López, has registered 21 candidates. Vente Venezuela, led by María Corina Machado, has registered 7 candidates. More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/150319/a-primarias-de-la-mud-se-inscribieron-120-candidatos)

 

 

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.