International
Trade
571
containers of toys and food have arrived at La Guaira´s port
The La Guaira
port authority reports that 571 containers are being offloaded from the ship Balao,
including 128 containers bearing toys and the remainder carrying food, to be
distributed by the government nationwide. More in Spanish: (AVN, http://www.avn.info.ve/contenido/bolivariana-puertos-descarga-buque-balao-571-contenedores-insumos-para-navidad)
Oil
& Energy
Gasoline
queues are back in Caracas
Gasoline queues to buy fuel have begun again in Caracas due to supply
problems and gas station closures. A source within PDVSA reports that
diminished supplies have been caused by a fire in a distributing plant East of
Caracas that reduced capacity. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/vuelven-las-filas-en-las-gasolineras-de-caracas-por-fallos-en-el-suministro)
Commodities
FEDECAMARAS
reports: "2018 was the worst year in
history for production "
Venezuela’s
principal business organization, FEDECAMARAS has reported that 2018 has had “devastating results” as a result
government policies “aimed at the destruction
of economic freedom, private Enterprise, and free initiative”, which have “caused 2018 to be the worst year in history for
all of the country’s productive sectors”. More in Spanish: (Noticiero
Venevisión, http://www.noticierovenevision.net/noticias/economia/fedecamaras-advierte-que-2018-fue-el-peor-ano-de-la-historia-en-produccion)
Economy
& Finance
Trust for US bondholders sues Venezuela over
defaulted debt
A trust
representing holders of Venezuelan bonds filed suit in New York federal court
Tuesday demanding payment on more than US$ 34 million in unpaid debt. The
lawsuit is believed to be the first by a long list of investors not being paid
by Venezuela's socialist government as it confronts a historic cash crunch
worsened by hyperinflation and collapsing oil production. It was filed by Casa
Express Corp., a firm registered in Coral Gables, Florida, and which said it
represents investors in dollar-denominated bonds issued in 1998 and 2002. Last
year Venezuela stopped paying interest and principal on US$ 65 billion in bonds
issued by the government and state oil company PDVSA. Creditors had been
reluctant to sue for fear of racking up huge legal fees with no repayment
scenario in sight as long as President Nicolas Maduro remains in power and
under U.S. financial sanctions barring new lending to his government. But their
patience has worn thin as other stiffed lenders like ConocoPhillips have jumped
ahead of them and sought to seize Venezuela's limited number of foreign assets,
such as PDVSA's U.S. subsidiary Citgo. Last week, a group calling itself the
Venezuela Creditors Committee hired top-flight law firm Cleary Gottlieb to
explore its options in the face of efforts by individuals to satisfy claims
that have "skewed recoveries in
their favor to the detriment of bondholders." The group said it
represents Wall Street investors holding some $8 billion in Venezuelan and
PDVSA bonds. "There is likely to be
a surge of lawsuits attempting to get at what is left of Venezuela's assets,"
said Russ Dallen, head of Caracas Capital, who was the first to draw attention
to the bondholder lawsuit in a note to investors. (ABC News: https://abcnews.go.com/International/wireStory/trust-us-bondholders-sues-venezuela-defaulted-debt-59899426;
Reuters, https://www.reuters.com/article/us-venezuela-bonds/florida-firm-sues-venezuela-for-34-million-over-unpaid-bonds-idUSKBN1OI073)
Latin
American lender gives Venezuela U$ 500 million credit line
Latin
American development bank CAF said on Monday it has approved a US$ 500 million
credit line to Venezuela’s central bank, drawing criticism from opposition
lawmakers for financing the government of President Nicolas Maduro amid
economic chaos. The loan will “mitigate
liquidity risks and provide macroeconomic support,” Caracas-based CAF
Development Bank of Latin America said in a statement. The bank is owned by 19
countries primarily in Latin America and the Caribbean and 13 private banks in
the region. “With this financing, CAF is
supporting the dictatorship,” said opposition legislator Angel Alvarado,
who has for years warned investment banks of the reputational risk of giving
financial support to Maduro’s socialist government. (Reuters, https://www.reuters.com/article/venezuela-caf/latin-american-lender-gives-venezuela-500-mln-credit-line-idUSL1N1YM12J)
IMF projects
1.370.000% hyperinflation in Venezuela by the end of 2018
An IMF
report indicates the yearly inflation rate for Venezuela could be 1.370.000% by
the end of 2018, as the government is unable to cover the budget deficit by printing
money. The revised report says inflation is 100 times quicker than their
January 13000% estimate. More in Spanish: (El Universal, http://www.eluniversal.com/economia/28694/fmi-preve-hiperinflacion-de-1370000-al-finalizar-2018)
Venezuela isn’t the crypto use case you want it
to be
Cryptocurrency
enthusiasts love to talk about Venezuelan users – wracked by political
oppression, economic collapse and food insecurity – as a prime example of
bitcoin’s subversive potential. But the reality is far more complicated. Many
Venezuelans are learning about cryptocurrency through forced exposure to the
state-issued Petro, in addition to aggressive outreach strategies from projects
like dash. Many don’t even know that bitcoin is useful itself, beyond its
ability to ease the transfer of assets like dash or dollars. Some Venezuelans
fleeing the country do so with their assets held in bitcoin, to avoid being
harassed at the airport or the border. Expats become more involved with the
broader bitcoin ecosystem when they leave Venezuela. In part, this is due to
fear that public association with crypto inside Venezuela could attract
attention from corrupt government officials. Although some local projects like
EOS Venezuela have so far managed to provide liquidity to small groups of local
users without such conflicts, those use cases are both nuanced and nascent. Some
migration experts compare the Venezuelan crisis to the Syrian civil war, a mass
forced-migration movement that leaves many unbanked and desperate for necessities.
All things considered, there is still a long way to go until crypto is used for
its own merits in Venezuela. Now, it’s often used as a tool for acquiring or
liquidating fiat. (Coindesk: https://www.coindesk.com/venezuela-isnt-the-crypto-use-case-you-want-it-to-be)
Politics
and International Affairs
Venezuela denies Russia building military base,
but missiles deployed as nation starves
A video
posted to Twitter shows multiple missiles being deployed by truck around
Venezuela Wednesday, less than 48 hours after embattled head of state Nicolas
Maduro promised to “strengthen the air
defense” in case of a joint U.S.-Colombia-Brazil invasion. At roughly the
same time the video above was being made public, Maduro’s number two, Diosdado
Cabello, publicly denied Tuesday night that Russia was establishing a new base
on Venezuelan soil. “I wish it were true
that Russia is preparing the installation of a military base in La Orchila,”
Cabello, a former Army lieutenant who participated with Chavez in a coup
attempt in 1992, said during a session of the Constituent Assembly, an
illegitimate parallel legislature that is controlled by the government. Social
media users however ignored Cabello’s unwanted clarifications, choosing instead
to focus on the available evidence: armaments being moved around. (Latin
American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2471811&CategoryId=10717)
Brazil's
Bolsonaro says he will target Venezuela, Cuba
Brazil’s President-elect
Jair Bolsonaro said on Tuesday that he would take all action “within the rule of law and democracy” to
oppose the governments of Venezuela and Cuba. Bolsonaro, who takes power Jan.
1, is a fervent anti-communist who frequently targets Venezuela and Cuba for
verbal attacks, a drastic change from Brazil’s governments under the leftist
Workers Party that ruled from 2003 to 2016 and had warm relations with those regimes.
Brazil’s incoming president did not provide any details when he made his most
recent comments on Venezuela and Cuba. (Reuters, https://www.reuters.com/article/us-brazil-politics-bolsonaro/brazils-bolsonaro-says-he-will-target-venezuela-cuba-idUSKBN1OH2F8)
Uruguay’s
president says he is willing to be an “intermediary”
in the Venezuelan situation
Uruguay’s
President Tabaré Vázquez has said he is willing to act as an “intermediary” in Venezuela, if asked and
if this country restores democracy and leaves violence aside. Vásquez had been
asked about that nation’s position on Venezuela, which has been termed lukewarm
by the local opposition. More in Spanish: (El Universal, http://www.eluniversal.com/politica/28719/presidente-uruguayo-se-muestra-dispuesto-a-intermediar-en-situacion-venezolana)
Why the low turnout in Venezuela?
A high
turnout rate when Venezuela is going through a serious crisis could make us
think that the masses would be encouraged to go out and vote in order to
overcome it: citizens have lost connection with the government and should be
encouraged to vote against him if only 19% approve the administration of the
President; 13% defines itself as "chavista";
12% is identified with the government party (PSUV) because the negative
assessment of the situation of the country is located at 94%; Venezuela has
lost more than 50% of GDP in 5 years and has the highest inflation in the
world. However, opposition parties have also lost connection with citizens and
are not channeling their discontent: The massive marches and street protests
staged in previous years are unthinkable today since the identification of
citizens with opposition parties has dropped to 26% this year from 47% in
November 2016; it also dropped to 8% from 27% in late 2017 as a lack of
coordination prevails among its members. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2471813&CategoryId=10717)
President
Maduro points to Iván Duque as the main promoter of threats against Venezuela
President Nicolás Maduro claims that his Colombian
counterpart, Iván Duque, is
the main promoter of the threats against Venezuela. "Iván Duque is responsible if one day, Colombia militarily attacks
Venezuela, for your ambition, selfishness, for your hatred against Venezuela,
for your immaturity," he said in a joint radio and television. He also
repeated his accusation against US Security Adviser John Bolton: "He personally directs the preparation of
actions against Venezuela, so I denounce it to the world with the support, with
the financing of the White House, of John Bolton, Secretary of Internal
Security of the USA". (AVN, http://www.avn.info.ve/contenido/president-maduro-points-iv%C3%A1n-duque-main-promoter-threats-against-venezuela)
Chilean expats return home from Venezuela
A Chilean
air force plane landed in Santiago, Chile, with Chilean expatriates who decided
to abandon Venezuela amid a protracted political and economic crisis in that
nation, officials said. The aircraft stopped in Caracas on the return from
Port-au-Prince after a mission to bring 175 Haitians back to their country as
part of a voluntary repatriation plan. The flight was the third one under the
plan that has so far returned 500 Haitians to their homeland at no expense to
them, on condition that they not try to enter Chile for nine years. The plane
that touched down Tuesday at an airbase in Santiago carried 47 Chilean
nationals along with eight Venezuelan-born dependents. Eight Argentines were
also aboard under an accord between Santiago and Buenos Aires. The Chilean
returnees were received by their families and by Chile's acting foreign
minister, Carolina Valdivia. On Nov. 27 around a hundred of Chilean expats were
greeted on their return by President Sebastian Piñera. (The San Diego Union
Tribune: https://www.sandiegouniontribune.com/efe-3846550-14951225-20181218-story.html)
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.
