International
Trade
Value of Venezuela-U.S. trade plunges 42%
The
value of trade between oil-rich Venezuela and the U.S. totaled US$23.88 billion
in 2015, a 42.2% reduction from 2014, says the Venezuelan American Chamber of
Commerce and Industry (VenAmCham). Venezuela’s trade surplus with the U.S. fell
62% last year to $7.25 billion, mainly due to the plunge in prices for Venezuelan
crude oil.
Oil accounts for the vast bulk of Venezuelan exports to the United States. Imports of U.S. goods and services into Venezuela were US$ 8.32 billion last year, 25.32% less than in 2014, VenAmCham said. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2406828&CategoryId=10717)
Oil accounts for the vast bulk of Venezuelan exports to the United States. Imports of U.S. goods and services into Venezuela were US$ 8.32 billion last year, 25.32% less than in 2014, VenAmCham said. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2406828&CategoryId=10717)
Oil & Energy
Venezuela says PDVSA revenue down 27% in 2015
Venezuelan
state oil company PDVSA'S total revenues fell 27% to US$ 88.5 billion in 2015,
while its total financial debt dropped 4% to US$ 43.9 billion, according to
government documents published this week by congress. The Oil Ministry's annual report also said the
OPEC nation's export revenue fell 40%, or US$ 38.5 billion, last year due to the
plunge in global oil prices. PDVSA's profit in 2015 was US$ 8.5 billion, down
from US$ 11.1 billion the previous year, according to the report, whose figures
were unaudited. (Reuters: http://af.reuters.com/article/commoditiesNews/idAFL2N16B01I)
Venezuela cut oil shipments to PETROCARIBE 17% in
2015, exports rose to China, India, US
Venezuela
sent 17% less oil and fuel to the 18 member nations of PETROCARIBE in 2015, for
an average 84,000 barrels per day, according to Oil and Mining Ministry data.
It dispatched an average 101,000 barrels per day in 2014. In both years the
established quota was to be 129,000 barrels per day. The nation overall
increased hydrocarbon exports 3.9%, most of which went to Asia, mainly China
and India – which received 1,085 barrels daily for a 13.9% increase. North
America received a 3.46% increase in shipments. More in Spanish: (El Universal:
http://www.eluniversal.com/economia/160303/venezuela-redujo-en-17-los-envios-de-combustibles-a-petrocaribe-en-201)
Venezuela claims upcoming oil meet will discuss production
freeze, possible further actions
Oil
Minister Eulogio Del Pino says over 15 countries will attend an upcoming oil
meeting to discuss an output freeze plan and possible further actions, state
oil company, He says Qatar, Russia, and Saudi Arabia have agreed to a meeting
in mid-March as part of efforts to stabilize oil markets. (Reuters, http://www.reuters.com/article/us-opec-venezuela-idUSKCN0W4263)
Commodities
State-run Café Madrid stops operations for lack of raw
materials
Lack
of raw materials has brought coffee production of state-run coffee manufacturer
Café Madrid to a standstill, says company union representative Benito Molina. Molina
stressed that the company has the capacity to produce 2 million kilos of
coffee, yet now they produce not even one kilo. "We are asking the government to revise prices, to see if they are in
keeping with (money invested by) producers" Molina said as he added
some 1,400 workers are about to become unemployed. (El Universal, http://www.eluniversal.com/economia/160302/cafe-madrid-stops-operations-for-lack-of-raw-materials)
Rice growers report dramatic levels in Venezuela
Mary
Trini Solórzano, CEO of Venezuelan Rice Mills Association, says that "amid
the current rice shortage in the country, rice manufacturers in the association
(65% of white rice supply) report critical stock levels of this raw
material." She adds that al (El Universal, http://www.eluniversal.com/economia/160302/rice-growers-report-dramatic-levels-in-venezuela)
Oatmeal, ketchup and preserve production
paralyzed
Damiano
del Vescovo, President of FEDECÁMARAS Carabobo, reports that industrial state’s
industries are working at 40% capacity, He says food processing plants there have
paralyzed some product lines. Workers and union leaders confirmed his
statement, pointing out that QUAKER oatmeal and gelatin plants have been
paralyzed since 14 December 2015, The same situation arises with the HEINZ
preserves plant at San Joaquín, and with their ketchup in small envelopes and
by the gallon. More in Spanish: (El Nacional: http://www.el-nacional.com/economia/Paralizada-produccion-avena-tomate-compotas_0_804519789.html)
Shortage of hemophilia medicines at 50% in Venezuela
Head
of the Venezuelan Hemophilia National Center Arlette Ruiz de Sáez said the
country's medical institutions are facing serious flaws in distribution and delivery
of medicines for hemophilia patients, since almost half of these drugs are not
available. The scourge has delayed prompt medical assistance in the
regular and long-term administration of drugs to prevent hemophilic arthropathy
and bleeding caused by this disease. (El
Universal, http://www.eluniversal.com/nacional-y-politica/160302/shortage-of-hemophilia-medicines-at-50-in-venezuela)
Economy & Finance
National Assembly threatens to block foreign financing
National
Assembly President Henry Ramos Allup has warned that credit operations the
regime is negotiating abroad will be null if they are not authorized by the
legislature. He wrote in his Twitter account: “Warning to foreign creditors: contracts in the national interest signed
by the chavista government will be absolutely null and void without approval by
the National Assembly”. For his part, Deputy José Guerra, who chairs the
Assembly’s Finance Committee, wrote: “I
second what was said by @hramosallup: credits planned by Merentes (Central Bank
President) and Del Pino (Oil Minister and PDVSA President) will be null if not
approved by the National Assembly. You are warned.” This could put on hold
loan operations for US$ 5 billion recently announced by the Central Bank. More
in Spanish: (http://bancaynegocios.com/crisis-institucional-an-amenaza-con-bloquear-financiamiento-externo/;
http://www.talcualdigital.com/Nota/123706/ramos-allup-prestamos-al-gobierno-sin-aval-de-la-asamblea-son-nulos-de-toda-nulidad)
Venezuela paid US$ 1.54 Billion in principal and
interest on debt
Venezuela has paid US$ 1.54 billion in principal and interest owed to international bondholders, the Banking and Finance Ministry said Saturday. That same ministry said this week that Venezuela’s foreign debt rose to US$ 42.53 billion last year; around US$ 3 billion shy of its record-high debt level registered in 2012. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2406626&CategoryId=10718)
Venezuela has paid US$ 1.54 billion in principal and interest owed to international bondholders, the Banking and Finance Ministry said Saturday. That same ministry said this week that Venezuela’s foreign debt rose to US$ 42.53 billion last year; around US$ 3 billion shy of its record-high debt level registered in 2012. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2406626&CategoryId=10718)
International reserves are vanishing, credit
increasingly expensive
The
optimum level for Venezuela’s international reserves is at least US$ 29 billion
in order to sustain the volume of imports for six months, they are now down to
US$ 13.501 billion, which is less than half of that amount. After paying last
week’s debt, there are only US$ 900 left at the Central Bank, which could rise
to US$ 1.4 billion as ROSNEFT pays for 23% stock in the PETROMONAGAS project.
The Central Bank has been using gold reserves to underwrite expenses, but the
value of gold reserves (estimated at US$ 10.9 billion) has shrunk 30% since
November due to dropping gold prices. Drawing rights with the IMF have also
been reduced by official withdrawals. And further credits, loans, barters or
negotiations are becoming increasingly expensive for Venezuela. More in
Spanish: (Tal Cual, http://www.talcualdigital.com/Nota/123714/desaparecen-las-reservas-internacionales?platform=hootsuite)
S&P says Venezuela has "heightened risk of default"
Standard
& Poor's Ratings Services has affirmed its 'CCC' long-term foreign and
local currency sovereign credit ratings on the Bolivarian Republic of
Venezuela. The outlook on both long-term ratings remains negative. They
also affirmed their 'C' short-term foreign and local currency ratings. In
addition, they affirmed their 'CCC' transfer and convertibility assessment on
the sovereign. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2406806&CategoryId=10717)
World Bank body partially lifts suspension on
Tidewater award in Venezuela case
A
World Bank tribunal partially lifted a stay of enforcement on a compensation
claim payable by Venezuela to oil service company Tidewater, meaning the
company is due US$ 27.4 million plus interest. (Reuters, http://www.reuters.com/article/venezuela-tidewater-idUSL2N1692CH)
Venezuela’s financial struggles must be top U.S.
priority
As
low oil prices shake the global economy, keeping an eye on Venezuela should be
a top priority for the U.S., Robert Kahn, a senior fellow for international
economics at the Council on Foreign Relations, told the Senate Foreign
Relations Committee on Wednesday. “Of all
the countries that are at risk, this is the one we need to be most focused on
right now,” Kahn said. “Because
Venezuela is a country on the edge.” “If
the government responds by further compressing imports, popular support for the
government could collapse,” Kahn said in his written testimony. “Change could come quickly, not because of a
debt payment due but rather because of domestic conditions.” He added that
if Venezuela’s financial struggles lead to a change in government, the U.S. and
international policymakers should move quickly to help set up a plan to: move
Venezuela’s national energy prices to world levels; balance the country’s
budget; recapitalize its banks; and develop a social safety net. (Morning
Consult: https://morningconsult.com/alert/economist-u-s-must-focus-on-venezuelas-financial-struggles/)
Venezuela is running out of money
The
price of oil, which makes up almost all of the country’s exports, has tumbled
75% in the past three years and investors are predicting the country is on
course for the biggest-ever emerging-market sovereign default. No nation in the
world is more likely to miss payments, according to traders of its
credit-default swaps. The country already tops measures of the world’s most
miserable economy, a horrific turnaround for what was once one of the region’s
most stable democracies. If there’s a default, when is it most likely to come? In
October and November of this year, PDVSA needs to pay back US$ 4.1 billion of
bonds and US$ 1 billion in interest. Trading in the credit-default swaps market
suggests there’s a 76% chance Venezuela will default in the next 12 months. What
overseas assets could investors try to seize? PDVSA has refineries, tankers and
receivables. Of course, the value of the oil assets depends in part on the
price of crude. The operating assets of CITGO, PDVSA’s U.S. refining
subsidiary, are already pledged to creditors. Is there any hope that things can
get better? First, the government could implement reforms such as cutting
subsidies on gasoline or devaluing the currency, which would allow it to
stretch its dollar income much further. Second, the political opposition is
gaining ground. Third, China could appear with new financing. Fourth, oil
prices could rise. The country can scrape by with an average price this year of
US$ 50 to US$ 65 a barrel, according to estimates from Barclays, Bank of
America and Nomura. (Bloomberg: http://www.bloomberg.com/news/articles/2016-02-10/venezuela-s-descent-into-world-s-riskiest-sovereign-credit-q-a)
National Assembly moves to take back powers over
Central Bank
A
new law just passed in its first discussion by the opposition majority within
Venezuela’s National Assembly aims at reversing Maduro’s last minute decree of December
2015. MUD’s bill basically claws back
two areas of influence for the Assembly: 1) it allows the Assembly to name 2
(out of 7) board members; and 2) it allows AN to demand information from the
BCV. In the words of the President of
the Subcommittee for Finance and Tax Policies, Rafael Guzman, the reform aims
to restore AN’s role as BCV’s watchdog. (Caracas Chronicles: http://caracaschronicles.com/2016/02/29/51805/)
China and Venezuela ratify investment projects
Venezuelan
and Chinese governments on Monday ratified investment agreements in production
projects signed in September 2015, for diversifying the nation’s economy. The
announcement was made by Planning Minister Ricardo Menéndez. Menéndez, who
heads the China-Venezuela High Level Joint Commission, is in Beijing, briefing
Chinese officials. (El
Universal, http://www.eluniversal.com/economia/160302/china-and-venezuela-ratify-investment-projects)
Politics and International Affairs
Opposition
to go for constitutional assembly if Court continues hampering Assembly
Jesus
Torrealba, executive secretary of the opposition Democratic Unity Roundtable
(MUD) says Torrealba said a National Constitutional Assembly would be called “if the government continues perverting the
functions of the Supreme Justice Tribunal and other institutions”. The opposition is continuing meetings to
settle upon a political plan to end Maduro’s term of office, “because the least costly way of making
changes is the constitutional way…two other instruments are being debated: a
constitutional amendment and a recall referendum”. The Supreme Court is
meanwhile likely to reject any constitutional maneuvers to oust the president
-- which could also include convening a constitutional assembly to draft a new
charter or declaring Maduro in breach of duty. Highlighting the tension
gripping the country, violence broke out Wednesday at a protest over the recent
Supreme Court ruling in the western city of San Cristobal, the cradle of the
protests that shook the country in 2014. Chavistas, in turn, attacked and
wounded an opposition legislator right outside the National Assembly. (Jamaica
Observer: http://www.jamaicaobserver.com/latestnews/Venezuelan-opposition-delays-announcing-plan-to-oust-Maduro;
and more in Spanish: (Ecos del Torbes: http://ecosdeltorbes.net/2016/03/04/mud-apostaria-por-asamblea-constituyente-si-tsj-emprende-nuevas-acciones-contra-an/)
Confrontation
continues between National Assembly and Supreme Court
- The National Assembly ad
hoc committee analyzing the appointment of 34 justices (13 main justices
and 21 alternates) to Supreme Court (TSJ) last December by the
government’s simple majority found 17 irregularities in their appointment.
Among them, that the Nomination Committee was not presided by a legislator
after PSUV Deputy Elvis Amoroso resigned.
- The Supreme Court countered with a sentence
written by magistrate Arcadio Rosales, stripping the National Assembly of
powers to revoke appointments of Supreme Court justices, oversee other
state powers, summon government and military officials, and said the two
thirds majority within the legislature was 112, after having suspended 3
out of 112 opposition legislators.
- National Assembly President Henry Ramos Allup immediately
responded saying the sentence “does
not exist. The Supreme Court law requires the sentence to be signed by 5
out of 7 magistrates in the Constitutional Chamber, and it was signed by
only 4”.
- Ramos Allup further warned pro
government legislators that “To depend only, only on Supreme Court
sentences means something is very wrong with the government. The regime is
very weak, with no popular support, and depends only on Supreme Court
sentences; beware of depending on that Court which appears discredited in
all polls; if this all collapses – as it is on the verge of doing – we all
know what could happen”.
- He also sent a message to the international
financial community: “Warning to foreign creditors:
contracts in the national interest signed by the chavista government will
be absolutely null and void without approval by the National Assembly”
- The National Assembly then voted to ask the OAS
to apply Democratic Charter in Venezuela as the constitutional order has been
violated here, deplored the TSJ ruling and ratified the Congress as an
authority to control and investigate all matters set forth in Article 187
of the Constitution, paragraph 1.
OAS
SG: Main symptom of political failure is lack of talks
Secretary
General of the Organization of American States (OAS) Luis Almagro says
political and social stability in Venezuela is fundamental for the regional
body. In this regard, Almagro reiterated that the OAS seeks peace and democracy
for the country. He stressed that negotiations must be conducted "with much institutional and democratic
respect" adding that "the
first symptom of political failure is lack of dialogue". (El Universal, http://www.eluniversal.com/nacional-y-politica/160301/oas-sg-main-symptom-of-political-failure-is-lack-of-talks)
Obama
extends order declaring Venezuela a national security threat
President
Barack Obama on Thursday extended for one year an executive order declaring the
situation in Venezuela a threat to U.S. national security, saying conditions
there had not improved and that the country's leftist-led government was
continuing to erode human rights guarantees. The U.S. head of state also said
Venezuela was continuing to experience abuses in response to protests against
President Nicolas Maduro, arbitrary arrests of anti-government protestors and
significant public corruption by senior government officials. The executive
order also authorizes the Treasury Department to impose additional sanctions on
those found to have committed either "actions
or policies that undermine democratic processes or institutions" or
rights violations against persons involved in anti-government protests, the
White House said. (Fox News Latino: http://latino.foxnews.com/latino/politics/2016/03/03/obama-extends-order-declaring-venezuela-national-security-threat/)
SPECIAL REPORT: In Venezuela, armed groups find
opportunity in calamity
As
economic and political instability rises, the streets of Caracas will likely
see more violence. So far, the government has not proved capable of pacifying
and retaking the colectivo-controlled neighborhoods, which are essentially
separate political entities. Despite being highly disorganized, the colectivos
have managed to take advantage of the ruling party's fragmentation and its
weakened grip on power, bringing anarchy to the streets of Caracas. Some 80% of
Venezuela's colectivos are concentrated in western Caracas, primarily in the
neighborhoods of Sucre, Petare, Cotiza, Chacao and Catia. For the most part,
Venezuelan security forces are not allowed into neighborhoods controlled by
colectivos without first receiving permission, even if they have search and
arrest warrants. The government has lost its sovereignty in such areas, making
it difficult to enforce the rule of law there. This has given the colectivos
room to pursue illegal activities largely unhindered, including drug
trafficking, extortion, racketeering, contract killings and car theft. The
colectivos' interests align with those of the PSUV, their longtime backers,
particularly when it comes to tamping down on Venezuela's political opposition.
For example, the colectivos used aggressive tactics, including attacks against
political rallies for Venezuelan opposition leaders, in the lead-up to the
country's December 2015 legislative elections. They now harass opposition
lawmakers being sworn into the National Assembly in January. Nevertheless, a
rift is forming between the colectivos and the government of President Nicolas
Maduro, who launched Operation Liberation and Protection of the People in
mid-2015. The effort, which primarily aimed to disarm the paramilitary
colectivos and combat organized crime more generally, sparked an unofficial war
between the colectivos and the government. The feud resulted in the deaths of
350 public officials in 2015; in January, government forces reciprocated by
killing more than 200 alleged members of organized crime. In the meantime, the
colectivos have antagonized Maduro even more by killing off-duty security
personnel and kidnapping a high-ranking military officer. As the Venezuelan
economy continues to fall apart, the colectivos will likely seize the
opportunity to launch contraband operations, stealing trucks carrying food and
basic products with the intent of reselling the stolen goods at much higher
prices. And the Maduro government, already embroiled in a lengthy political
spat with the opposition, will likely be too preoccupied to stop them. Given
enough time, the colectivos could even evolve into organized crime groups — a
threat that would prove even more difficult to eradicate. (Stratfor: https://www.stratfor.com/analysis/venezuela-armed-groups-find-opportunity-calamity?id=be1ddd5371&uuid=b8197835-f1e2-4ca1-9020-b045182a3e1d)
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.
