International Trade
Imports from Nicaragua decrease
Imports from Nicaragua have
dropped over 10% for the first time since 2008. They shrank 13.59% in volume
and 16.28% in value. Milk exports, which is the main Nicaraguan export to
Venezuela, increased. Sugar, cooking oils and coffee exports dropped in value
and volume. More in Spanish: (Ultimas
Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/disminuyen-envios-desde-nicaragua.aspx#ixzz3wMmSquan)
Oil &
Energy
Venezuela delays gas exports to Colombia,
citing climate
Venezuela's state oil company, PDVSA, has
delayed the export of natural gas to Colombia because of climate factors, the
Colombian Mines and Energy Ministry said on Friday. In a letter to the
Colombian government on Wednesday, PDVSA said the exports would not begin
because of "climate variability,"
the ministry said in a statement. The exports are part of a deal between the
two countries, which includes provisions for the neighbors to supply their own
markets if necessary before exporting. "The contract specifies the delivery of 39 million cubic feet a day from
Venezuela, which corresponds to just over 3% of daily supply in Colombia,"
the statement said. Colombian state oil company ECOPETROL has asked PDVSA to
give a new date by which the exports could begin. (Reuters, http://www.reuters.com/article/colombia-venezuela-gas-idUSL1N14L0EH20160101;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2402783&CategoryId=10717;
El Universal, http://www.eluniversal.com/economia/160104/venezuelas-pdvsa-blames-el-nino-for-halt-in-gas-export-to-colombia)
Maduro says Venezuela oil
price finishes 2015 below US$30
The price Venezuela receives for its mix of
heavy oil continued tumbling throughout December finishing the year below US$ 30
a barrel, according to President Nicolas Maduro. "The oil price today closed at US$ 29.26," Maduro said. "That's the key foreign exchange earnings of
the country. However, Venezuela is not going to stop. We have to generate the
national wealth. With that in mind, I have been preparing a set of actions to
shield us and prepare for 2016 and take decisions that guaranteed the works
delivered in 2015 to the people." He then promulgated 4 new laws as
his ability to rule by decree ended that evening. According to Venezuelan government figures, the average price in 2015 for
Venezuela's mix of heavy and medium crude was US$ 45.23 for the year. (Latin
American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2402814&CategoryId=10717)
Venezuela says a meeting between OPEC and
non-OPEC countries is necessary
Eulogio del Pino, Minister of Petroleum and
President of state-run oil company Petróleos de Venezuela (PDVSA) has stressed
the need to hold an urgent meeting with oil producing countries members and
non-members of the Organization of Petroleum Exporting Countries (OPEC) in
January. "We have been discussing
the need to urge leaders of OPEC and non-OPEC countries to hold an urgent
meeting in January, since this is statistically the month with the lowest
energy consumption worldwide, and with current supply levels, the price of the
oil barrel could drop some US$ 10 more. That is why a joint action by all oil
producing countries is necessary, in accordance with the fundamental principles
of the OPEC (...), including the defense of fair prices of a non-renewable
natural resource," Del Pino stressed. (El Universal, http://www.eluniversal.com/economia/160104/venezuela-deems-necessary-a-meeting-between-opec-and-non-opec-countrie)
Economy
& Finance
Maduro limits Congress's
power over Central Bank
President Nicolas Maduro has limited the National Assembly's powers over
the Central Bank. The president will now
no longer need legislative approval to hire and fire Central Bank directors. The
change was announced shortly before a new assembly, controlled by an opposition
coalition, is due to be sworn in later on Tuesday. Maduro approved the change
to the law governing Venezuela's Central Bank on 30 December, one day before his
power to legislate by decree expired. The amended law not only curtails the
powers of the assembly over Central Bank appointments, it also allows the bank
to withhold data if it deems its publication a threat to national security or
economic stability. Under the new law, the Central Bank can also allocate money
to the state without the approval of the National Assembly. Opposition
politicians said it was the latest in a series of moves to undermine the power
of the legislative following last month's elections. "The reform [of the Central Bank law] is a legal monstrosity to protect
a highly questioned president," opposition lawmaker Jose Guerra said.
The opposition had announced that it would make economic reform one of its
legislative priorities. (BBC News, http://www.bbc.com/news/world-latin-america-35231562)
New law now penalizes dollar transactions
President Nicolás
Maduro has decreed that the use of an informal dollar FOREX rate to set prices
for goods and services nationwide is now illegal and carries penalties of up to
12 years in jail. The new law creates a domestic production certificate as a
new way to obtain FOREX for the government. More in Spanish: (El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/hasta-12-anos-de-carcel-por-fijar-precios-a-dolar.aspx#ixzz3wMlLFL2O; Ultimas Noticias, http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/las-nuevas-sanciones-por-ilicitos-cambiarios.aspx; http://www.ultimasnoticias.com.ve/noticias/actualidad/economia/hasta-12-anos-de-carcel-por-fijar-precios-a-dolar-.aspx; AVN; http://www.avn.info.ve/contenido/prohibici%C3%B3n-fijaci%C3%B3n-precios-d%C3%B3lar-especulativo-proteger%C3%A1-ingresos-venezolanos)
Maduro enacts new laws
to increase taxation
President Nicolás Maduro has enacted several
laws that aim to increase taxes and government revenue. One is a tax on large
financial transactions which will now be charged 0.75% per transaction. Maduro
claims this new tax will apply only to some 3,000 people and entities who hold
large amounts of capital and will not hurt workers. He also announced that the
government will henceforth not allow companies to adjust for inflation in order
to avoid “fiscal evasion” More in Spanish: (AVN; http://www.avn.info.ve/contenido/impuesto-grandes-transacciones-financieras-generar%C3%A1-ingresos-para-inversi%C3%B3n-social; http://www.avn.info.ve/contenido/contribuyentes-gran-capital-pagar%C3%A1n-impuestos-ajustados-sus-ganancias)
Law on Labor Stability
extended for three years
President Nicolás Maduro has extended
Venezuela’s Labor Stability Law for three years, through 2018, which forbids
companies from laying off workers and employees without government approval.
Business has criticized the decree, saying it does not foster productivity. More in Spanish: (AVN;
http://www.avn.info.ve/contenido/ley-inamovilidad-laboral-se-extiende-tres-a%C3%B1os;
El Mundo, http://www.elmundo.com.ve/noticias/economia/politicas-publicas/en-gaceta-oficial-ley-que-establece-inamovilidad-l.aspx)
Maduro says he may
decree a national emergency on the economy, announce new cabinet
President Nicolas Maduro announced that he has
received a proposal to set forth a constitutional national emergency plan for
economic recovery: “I am evaluating,
within the framework of a national economic recovery plan, decreeing a
constitutional national emergency to face the great challenges of the economy
and raise production, trade, distribution and price regulation…and I expect the
National Assembly to support and approve it”. He said “specific plans are
being drawn up by segments: milk, beef, cleaning goods, consumer
products”. Maduro added that “within the
next few hours I will announce the makeup of the new Bolivarian government, its
new structure”. More in Spanish: (Noticias24, http://www.noticias24.com/venezuela/noticia/306748/maduro-evalua-decretar-una-emergencia-nacional-constitucional-para-la-economia/)
2015 inflation was 270.7%, the highest in
Venezuela’s history
Inside sources at
Venezuela’s Central Bank are reporting 2015 inflation was the highest in the
nation’s history, and closed at 270.7% for the year. President Maduro has
ordered the bank to conceal all economic statistics. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Inflacion-cerro_0_769123206.html)
China study says Venezuela
is the riskiest nation on earth for Chinese investments
A study by the Institute of World Economics and
Politics of the Chinese Academy of Social Sciences, published by Zhou Xin in
the South China Morning Post, evaluates 57 nations that receive Chinese
investment funds, and finds that Venezuela is the riskiest market for Chinese
investors, worse even tan Iraq and Sudan. More in Spanish: (El Nacional, http://www.el-nacional.com/economia/Venezuela-riesgos-inversiones-China_0_767923241.html)
Politics and
International Affairs
Opposition taking over
Congress, showdown looms
Venezuela's opposition is taking control of
Congress for the first time in 16 years, setting up a power struggle with
President Nicolas Maduro amid a worsening economic crisis. The Democratic Unity
coalition won a two-thirds majority in December's legislative election by
capitalizing on anger over a shrinking economy, soaring prices and chronic
product shortages reminiscent of Soviet-bloc economies. The coalition plans to
swear in all of its 112 elected deputies but the Supreme Court has ruled that
three of them cannot take office because their election victories face legal
challenges. The court did not describe the underlying arguments against the
election of the deputies, all of whom are from the rural and sparsely populated
southwestern state of Amazonas. Disputing all the results in that state
required the Socialist Party to contest the seat won by its own candidate. The
opposition dubbed the ruling a "judicial coup" meant to strip it of
its two-thirds majority in the National Assembly. Opposition lawyers say the
ruling is "incoherent" and
insist it cannot take precedence over election results. But former Supreme
Court justice Luis Martinez has warned that swearing in the blocked deputies
could allow the Socialist Party to argue that Congress has been illegally
constituted and thus its decisions are null and void. Legislator Henry Ramos,
who was tapped by the opposition coalition to be the National Assembly's next
speaker, said the legislature's microphones have been sabotaged and television
equipment removed from Congress to impede a live broadcast of the change of
leadership. Opposition leaders accuse the government of undermining the
incoming assembly with last-minute appointments of Supreme Court justices and
by changing a central bank law to eliminate congressional control over the
bank's leadership. Maduro has dismissed the new assembly as "right-wing" and "bourgeois. Government allies and
opposition sympathizers have planned marches to downtown Caracas today, a scenario
that has in the past has led to street violence as protesters clash with one
another or with security forces. Although the opposition's victory was driven
by anger over the economy, it has few options to resolve the crisis because
Maduro's government handles economic policies. Opposition lawmakers have
instead promised to take up an amnesty law seeking the freedom of opposition
activists jailed for protesting against Maduro, and a measure to grant property
titles to those who received homes from the government. President Maduro made a
last minute call for a peaceful event saying “Tomorrow let us contribute so that the Assembly is installed in peace,
as the Constitution mandates, with respect toward the Constitution, the laws
and all branches of government”. He ordered the Ministry of the Interior,
Justice and Peace to protect all political party movements called for this day.
(The New York Times, http://www.nytimes.com/reuters/2016/01/05/world/americas/05reuters-venezuela-politics.html);
and more in Spanish: (AVN; http://www.avn.info.ve/contenido/bienvenida-instalaci%C3%B3n-asamblea-nacional)
Opposition picks leader ahead of Congress takeover
Venezuela’s newly elected opposition lawmakers
have chosen Henry Ramos Allup as president of Congress, as they prepare to take
power with a legislative majority in the recession-battered country for the
first time in sixteen years. The legislators, who are set to take control of
Congress today, voted in a secret ballot, said Jesus Torrealba, secretary
of the anti-government coalition. Ramos Allup, 72, heads the Democratic Action
political party that is part of the coalition.
“We’re
going to legislate,” Ramos Allup said Monday, promising to probe
allegations of corruption within President Nicolas Maduro’s government. “We’re going to regulate. Many ministers and
government officials will be called in for questioning.” Ramos Allup reported
on Monday that the security chief of the administrative headquarters of the
Parliament, located in downtown Caracas, banned him from entering that
building. He was also insulted by gangs of Maduro regime supporters in the
area. Ramos Allup later said he has information that the Armed Forces will
guarantee order today when the new Assembly takes office, by “ensuring the perimeter”. He called upon
the government to “tell their people”
to join their representatives “in peace
and quiet”. (Bloomberg, http://www.bloomberg.com/news/articles/2016-01-04/venezuela-opposition-chooses-henry-ramos-allup-to-lead-congress;
The Miami Herald, http://www.miamiherald.com/news/nation-world/world/americas/venezuela/article52817875.html;
Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2402847&CategoryId=10717;
El Universal, http://www.eluniversal.com/nacional-y-politica/160104/opposition-deputy-henry-ramos-banned-from-entering-the-congress;
BBC News, http://www.bbc.com/news/world-latin-america-35220773?utm_source=Sailthru&utm_medium=email&utm_campaign=New%20Campaign&utm_term=%2AMorning%20Brief;
and more in Spanish: Infolatam, http://www.infolatam.com/2016/01/04/impiden-ingreso-del-nuevo-presidente-del-parlamento-venezolano-al-legislativo/)
US says Venezuelan
government interfering in new National Assembly
The United States expressed concern on Monday
about what it said was interference by the Venezuelan government in the
country's National Assembly, which convenes on today for its first session with
an opposition majority in more than 16 years. "We are concerned by the Venezuelan government's efforts to interfere
with the newly elected National Assembly exercising its constitutionally
mandated duties," State Department spokesman John Kirby told reporters.
(Reuters, http://www.reuters.com/article/us-venezuela-usa-idUSKBN0UI1Y520160104?feedType=RSS&feedName=worldNews)
Is Venezuela's
opposition strong enough to rule?
Venezuela turned staunchly against the ruling
United Socialist Party (PSUV) in parliamentary elections Dec. 6, giving the
opposition a two-thirds supermajority in the National Assembly. MUD leaders
have two different ideas on how to move forward. One option is to forcefully
dismantle the legal protections built up over 17 years to guard the presidency
and to eventually call a referendum against Maduro. The other is to negotiate
legislative solutions to the country's political and economic problems.
Regardless of which option opposition leaders choose, they will have to
negotiate with the most powerful components of Venezuelan politics, including the
security elements, dissident chavistas and, most challenging of all, the
multiple and unstructured political patronage networks known colloquially as
'colectivos.' The opposition announced in late December that it intends to
remove Maduro in 2016 through legal maneuvers; and in the short term,
government officials are not likely to negotiate with MUD, but as civil strife
intensifies, with the almost certain political gridlock ahead, leaders and
supporters of the ruling party will become more willing to work with MUD
leaders. In the meantime, Venezuela’s economic problems will only worsen in
2016. (Stratfor, https://www.stratfor.com/analysis/venezuelas-opposition-strong-enough-rule)
SPECIAL REPORT:
Venezuela into the abyss? Through the opposition victory in the December 6 Venezuelan elections,
it is possible to foresee an eventual end to 17 years of populist socialism
which has destroyed the Venezuelan economy and governing institutions and
polarized its people. Yet in approaching
that end, Venezuela is arguably passing through one of the most dangerous
periods in its contemporary history. The
actions taken by all parties in Venezuela, by the United States, and by the
rest of the international community, will have an enduring effect far beyond
Venezuela’s borders. (Special report
by Dr. R. Evan Ellis)
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.
