November 22, 2018

International Trade

Customs Brokers Chamber reports Christmas season imports are down 98% from 2012 due to exchange restrictions and red tape. It adds that high impact imports are carried out by the government. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/economia/camara-de-aduaneros-asegura-que-importaciones-navidenas-cayeron-98)

 

Oil & Energy

PDVSA resumes work at Jose oil port's dock

Venezuela’s state-run PDVSA has reopened a dock at the country’s main oil terminal of Jose that had been closed for almost three months due to a tanker collision, a PDVSA source and a shipper said on Tuesday. Dozens of tankers waiting to load Venezuelan oil were diverted to other PDVSA’s terminals since Jose port’s South dock was shut in late August, causing delays in deliveries to customers and cutting export revenue. (Reuters, https://www.reuters.com/article/us-venezuela-oil-ports/venezuelas-pdvsa-resumes-work-at-jose-oil-ports-dock-sources-idUSKCN1NP24K)

 

Maduro claims US$ 100 is the “fair price” for a barrel of oil

He made his statement at a funeral ceremony honoring for former Oil Minister, PDVSA President and OPEC Secretary General Alí Rodríguez Araque. Year-to-date 218, Venezuela’s oil basket price has averaged US$ 61.74. More in Spanish: (El Universal, http://www.eluniversal.com/el-universal/26375/maduro-estima-que-100-dolares-es-el-precio-justo-para-el-barril-de-petroleo)

 

Commodities

Zulia state governor declares emergency due to drinking water scarcity

Zulia state governor Omar Prieto has declared a state of emergency in the statewide distribution of drinking water and will set “a sales price cap on water casks". More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/gobernador-del-zulia-declaro-emergencia-por-escasez-de-agua-potable)

 

Economy & Finance

Chavez’s ex-treasurer will give up houses, horses and watches

A former national treasurer of Venezuela who admitted taking bribes from a billionaire television mogul will give up the trappings of his fabulous life in south Florida, including real estate, show horses, luxury watches and foreign bank accounts. Alejandro Andrade Cedeno, the treasurer from 2007 to 2010 under late socialist leader Hugo Chavez, pleaded guilty to a US$ 1 billion money-laundering plot in which wealthy Venezuelans converted bolivars to dollars through a rigged exchange system. They then moved money out of the country, which is suffering a crippling economic crisis. The Justice Department detailed the extent of Andrade’s corrupt wealth in unsealing his case Tuesday and revealing his cooperation with prosecutors. They also announced the indictment of Raul Gorrin Belisario, the billionaire who owns the GLOBOVISION television network and has been charged with paying bribes to Andrade and others as well as helping to launder the payments; and the guilty plea of Gabriel Arturo Jimenez Aray, a Venezuelan who owned BANCO PERAVIA in the Dominican Republic. Andrade, once a bodyguard to the late President Hugo Chavez, admitted he took bribes as treasurer to steer contracts to brokerage houses that conducted bolivar exchanges. Andrade chose which brokerages would sell bonds from the treasurer’s portfolio that were denominated in U.S. dollars. His conspirators could then “obtain substantial profits on the exchange transactions,” according to court documents. Even after Andrade moved in 2012 to Wellington, Florida, the bribes continued until last November, he said in pleading guilty. His plea deal requires him to forfeit the Palm Beach County real estate empire and horses. Andrade will give up a six-acre estate in a gated community and 17 horses with names like Tinker Bell, Bonjovi and Anastasia Du Park. He’ll give over his 2017 Mercedes Benz GLS 550 and nine other cars, as well as three dozen watches from makers like Rolex, Hublot and Franck Muller. He’s forfeiting Swiss accounts at BSI Bank and EFG Bank, and at three large U.S. banks. Andrade, 54, was a close ally of Chavez and helped him in a 1992 coup d’etat. Andrade faces as long as 10 years in prison when he’s sentenced on Nov. 27, but he’s likely to get less time as a cooperator. Prosecutors also relied on Jimenez, 50, who spent three years cooperating in “an international criminal investigation against highly dangerous individuals” that “put him in a dangerous position,” prosecutors said in an Oct. 1 filing unsealed Tuesday. “The government of Venezuela’s complicity in this conspiracy renders victim status inappropriate,” prosecutors said in a July 27 court filing. Gorrin, who also owns insurance firm Seguros La Vitalicia, was charged in an indictment unsealed on Monday with violating U.S. anti-corruption laws in efforts to win contracts to carry out currency exchange operations for the government. Between 2008 and 2017, Gorrin facilitated more than US$ 150 million in bribe payments to officials in Venezuela’s treasury for access to currency deals, with funds wired from Swiss bank accounts to accounts in Florida, U.S. prosecutors said. Gorrin allegedly also bought jets, yachts, “champion horses” and luxury watches in Florida and Texas for a government official as a bribe, according to the indictment. GLOBOVISION, once a virulently anti-government station, overhauled coverage and softened criticism of Chavez's successor, Nicolas Maduro, after Gorrin purchased the channel in 2013, reporters said at the time. (BLOOMBERG: https://www.bloomberg.com/news/articles/2018-11-21/venezuela-s-ex-treasurer-will-give-up-houses-horses-and-watches; https://www.bloomberg.com/news/articles/2018-11-20/venezuelan-tv-mogul-charged-in-u-s-bribery-laundering-case; REUTERS: https://www.reuters.com/article/us-venezuela-corruption/venezuelas-former-treasurer-took-1-billion-in-bribes-u-s-prosecutors-idUSKCN1NP1K1; https://www.reuters.com/article/venezuela-corruption/u-s-prosecutors-accuse-venezuela-media-mogul-of-bribery-money-laundering-idUSL2N1XV05P; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469926&CategoryId=10717; Bloomberg, https://www.bloomberg.com/news/articles/2018-11-21/venezuela-s-ex-treasurer-will-give-up-houses-horses-and-watches)

 

Politics and International Affairs

Maduro’s poll ratings dropped six points this month.

A slight gain in President Nicolás Maduro’s popularity registered in October, when he announced some economic initiatives, dropped again in November. The DATANÁLISIS Omnibus poll shows both the government and Maduro himself have again lost popularity. One out of four Venezuelans had rated Maduro favorably in October, probably due to the alleged murder attempt and new economic policy announcements. However, in November only one out of five registered a positive attitude toward the President. He lost 7 percentage points over the past 30 days due to continued hyperinflation and the murder of city councilor Fernando Alban. Overall, 78% of Venezuelans rate Maduro negatively now, although he retains 73.4% support among so-called “chavistas”. The feeling that his economic policy has failed seems to have taken root within the population. More in Spanish: (VENEPRESS: https://venepress.com/article/Evaluacion-del-presidente-Maduro-bajo-siete-puntos1542810004750)

 

U.S. weighs sanctions on Cuban officials over role in Venezuela crackdown

The Trump administration is considering imposing sanctions on Cuban military and intelligence officials who it says are helping Venezuela’s socialist government crackdown on dissent, according to a source with knowledge of the deliberations. Such sanctions would be the first time Washington has targeted a bloc of foreign officials allied with Venezuelan President Nicolas Maduro. The potential human rights-related sanctions would target Cuban officials, possibly including generals, who Washington accuses of advising Venezuela’s government on how to monitor opponents and put down street protests, the source said. The number and identities of the potential targets was unclear. Asked about possible sanctions on Cuban officials, a senior U.S. government official told Reuters in early November: “We are looking at all the potential avenues to deter those who are really helping the Maduro regime stay afloat and giving them the tools they need for repression.” Trump’s national security adviser John Bolton said earlier this month Washington would take a tougher line against Cuba, Venezuela and Nicaragua, calling them a “Troika of Tyranny.” (Reuters, https://www.reuters.com/article/us-venezuela-usa-cuba-exclusive/exclusive-u-s-weighs-sanctions-on-cuban-officials-over-role-in-venezuela-crackdown-idUSKCN1NQ2CV; NBC News: https://www.nbcnews.com/news/latino/u-s-considering-sanctioning-cuban-officials-over-their-role-venezuela-n939111)

 

Police, students clash at protest in Venezuela

Hundreds of anti-riot police in Venezuela have clashed with students staging a protest calling for better conditions at universities as the nation’s economic crisis continues to worsen. Students held a rally at the Central University of Venezuela in Caracas on Wednesday before trying to march off campus. They were stopped by officers and members of the national guard who launched tear gas at them. A dozen students required medical treatment after exposure to the fumes. The anti-government movement has lost steam in recent months, and the march had drawn an unusually large crowd. The demonstrators were trying to leave the university, but the PNB officials blocked the exits of the institution with police fences. (National Post: https://nationalpost.com/pmn/news-pmn/police-students-clash-at-protest-in-venezuela; EFE: https://www.efe.com/efe/english/world/university-students-show-umpteenth-proof-of-polarization-in-venezuela/50000262-3820573)

 

NGO has registered over 10,000 protests this year in Venezuela

Human rights activist Marco Antonio Ponce, coordinator of the Social Conflict Observatory (OVCS), reports there is an average of 47 protests daily protests nationwide in Venezuela. He adds that there have been 10,773 protests here year to date in 2018, which he calls a record year.  More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/nacional/ong-asegura-que-se-han-organizado-mas-de-10-mil-protestas-en-2018)

 

Rodriguez calls on Colombia to comply with agreements with FARC guerrilla

Venezuela’s Communications and Information Minister Jorge Rodríguez has calle don the Colombian government to comply with peace agreements reached by that nation’s government and the FARC guerrilla forces. Rodríguez said he spoke on behalf of President Nicolas Maduro given Venezuela’s role as “guarantor” of such agreements. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/venezuela-exhorta-a-colombia-cumplir-con-acuerdos-de-paz-con-las-farc; El Universal, http://www.eluniversal.com/politica/26334/rodriguez-el-gobierno-no-seguira-tolerando-las-mentiras-y-falsos-positivos-de-colombia; AVN, http://www.avn.info.ve/contenido/colombia-remiti%C3%B3-36-solicitudes-venezuela-para-respaldar-di%C3%A1logos-paz)

 

Ali Rodriguez, Venezuela’s ambassador to Cuba and former OPEC official, dies

Venezuelan Ambassador to Cuba Ali Rodriguez Araque, who also served as secretary-general of OPEC and the Union of South American Nations (UNASUR), died in Havana, President Nicolas Maduro said. He was 81. Cuban President Miguel Diaz-Canel said in a statement on Tuesday that Rodriguez Araque was a politician “inseparable from Cuba.” (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469903&CategoryId=10717)

 

Legislature rejects unconstitutional appointment of ambassadors abroad

Venezuela’s opposition-controlled National Assembly has rejected the appointment of ambassadors abroad by the Maduro regime, and calls them “null” and “unconstitutional”. Francisco Sucre, head of the Foreign Affairs Committee, says that the Constitution requires legislative approval for naming ambassadors, and that such appointments usurp legislative authority “and nullify treaties signed illegally”. More in Spanish: (El Universal, http://www.eluniversal.com/politica/26294/an-rechaza-nombramiento-de-embajadores-en-el-exterior)

 

OAS member state delegation visits Colombia – Venezuela border to assess crisis

On November 19-20, 2018, seventeen OAS member states participated in a field visit to assess the humanitarian crisis along the Colombia - Venezuela border: Maicao, in the Rioacha province, and Cucuta in the Norte de Santander province. The visit was organized by the Colombian government and included representation from the governments of Argentina, Belize, Chile, Costa Rica, Colombia, Ecuador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Panamá, Paraguay, Perú, Saint Lucia, Uruguay and the United States represented by Ambassador Carlos Trujillo. The OAS Working Group on Venezuela migration also participated with representation from three experts on the situation. The purpose of the visit was to raise member state awareness of the extent of the humanitarian crisis, in anticipation of continued action in the Inter-American system regarding Venezuela and address the root causes of the crisis under the Maduro regime. The OAS Inter-American Council for Integral Development (CIDI) is scheduled to meet November 26 to discuss food security and migration impacts and Pan American Health Organization (PAHO) will convene a health ministerial meeting on Venezuela November 29. (US Mission to the OAS: https://usoas.usmission.gov/member-state-delegation-visits-colombia-venezuela-border-to-assess-crisis/)

 

Hunger grows in Venezuela

The United Nations Food and Agriculture Organization (FAO); the Pan-American Health Organization (PAHO); the World Food Program (WFP); and the United Nations International Children’s Emergency Fund (UNICEF) – joined forces to create a report on the undernourishment problem affecting Latin America and the Caribbean. This report – recently made public – shows that the number of undernourished people in Venezuela has increased in both absolute and relative terms: the rate of undernourished people in the country reached 9.8% over the three-year period from 2014 to 2016, while the rate increased to 11.7% over the next three-year period from 2015 to 2017. The first percentage corresponds to an absolute amount of 3.1 million undernourished people, while the second percentage corresponds to an amount of 3.7 million people. This represents an increase of 600,000 new Venezuelans within only a year. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469996&CategoryId=10717)

 

WHO reports Venezuela registers greatest malaria increase worldwide

The World Health Organization’s yearly report on malaria shows Venezuela as the nation with the greatest increase in malaria worldwide and fears the disease will expand to neighboring countries. The report shows 773,500 confirmed cases in Latin America during 2017, a 72% increase over 2015, and 53% of those cases were registered in Venezuela, which is among 10 countries where malaria cases were over 300,000 in 2017. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/salud/oms-venezuela-registra-el-mayor-incremento-de-malaria-en-el-mundo)

 

Voluntad Popular calls for removal of UNDP representative in Venezuela

The Voluntad Popular opposition party led by imprisoned leader Leopoldo López has asked the United Nations to remove Peter Grohmann, UNDP representative in Venezuela, for “silencing” the serious situation here. The party says: “it is unacceptable that, having a budget and technical personnel, that they have not at least prepared a report on what is going on”.  A party spokesperson, legislator Manuela Bolivar, says the case will be taken to the National Assembly. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/voluntad-popular-pide-a-onu-cambiar-al-representante-del-pnud-en-venezuela)

 

OP-ED: What Options Are Left in Venezuela? by Félix Seijas Rodríguez

Nicolás Maduro is set to start a new term as Venezuela’s president on Jan. 10, and the country’s political, social and economic crisis is only becoming more profound. Far from correcting course, Maduro has taken steps to maintain control despite an imploding economy. His opposition is dispersed and lacking a coherent strategy. A solution through dialogue seems farfetched. How might things change for Venezuela? Here are three possibilities, and a look at the likelihood of any of them coming to fruition. Foreign military intervention: For some time now there has been talk of possible military intervention to depose Maduro’s regime. But there are several reasons why intervention is very unlikely. First, there is no consensus among the largest countries in the region on the need to take an active hand in changing Venezuela’s reality. Mexico, especially under Andrés Manuel López Obrador, would oppose such action. The U.S. could decide to act on its own, but a decision to invade Venezuela would need to be approved by the U.S. Congress and the UN Security Council. At the UN, both China and Russia, countries with important economic interests in Venezuela, would most certainly veto any resolution to intervene. But perhaps even more relevant is the precarious situation of the opposition forces in Venezuela. The political leadership in opposition to Maduro is weak and enjoys little support from civil society. Without an internal structure that can take the reins of the country if Maduro is deposed, the consequences of an intervention would be highly uncertain. Public support for Maduro’s regime is still around 20 percent, while the revolution proposed by his late predecessor Hugo Chávez has 35 percent approval. Military action in this circumstance is not a sensible idea. Recent reports that Trump may add Venezuela to the state sponsors of terrorism list shows that the administration still sees the possibility of adding pressure on Maduro without intervening militarily. Chavismo collapses: For Maduro’s political movement to collapse, external pressure would have to be such as to cause a fracture within its power structure. This could come through an explosion of public protest that exceeds the regime’s containment capacity and is big enough to compromise the loyalty of security forces tasked with putting it down. Another possibility is that international pressure asphyxiates the regime, rendering it incapable of maintaining the web of corruption and complicity it has had for the last 20 years. These two possibilities are not mutually exclusive, but a social explosion of the magnitude needed to cause a revolt in the security services is not likely. If popular pressure again starts building on the streets, there is no political leadership or organization with both the know-how and the credibility to use that energy effectively against the regime.  Once again, the weakness of the Venezuelan opposition is an obstacle to any solution to the crisis. Transition within Chavismo: As mentioned, international pressure could cause the power structures to flounder and there might not be a democratic alternative to take control of the situation. That could already be happening, and the international community should be concerned about where that might lead. If the absence of any possibility of a democratic transition, an intermediate alternative comes into view: a transition that leaves Chavismo in place but gets rid of Maduro and his inner circle. It’s possible that the early stages of such a transition are underway. But it would be a difficult path to follow. If successfully navigated by both the international community and domestic opposition, such a transition might eventually pave the way to a democratic opening. But the risks of further entrenchment are apparent. It would be a risky bet. (Americas Quarterly: https://www.americasquarterly.org/content/whats-left-venezuela)

 

OP-ED: More than 40 countries may cut diplomatic ties with Venezuela. Fine, but would it do any good? by Andres Oppenheimer

Venezuela’s dictator Nicolás Maduro may soon face bad news on the diplomatic front: More than 40 countries are considering cutting diplomatic relations or reducing their ties with Venezuela starting Jan. 10, when he is scheduled to start a new six-year term in office. Venezuelan opposition sources tell me that they expect at least 46 countries — including most members of the Group of Lima and the 28-member European Union — to downgrade or sever diplomatic ties with Venezuela. The big question is whether there will be any practical consequences of a formal decision by these countries to cut ties with Venezuela. Some Venezuelan exile leaders are lobbying the Trump administration and those of other countries to simultaneously cut diplomatic ties with Maduro and recognize a caretaker opposition-led government. Their plan would go like this: Since Maduro and his vice president, Delcy Rodríguez, would no longer be considered legitimate leaders once their current terms expire, there would be a power vacuum. The next in line of succession would be the head of the opposition-controlled National Assembly. Venezuela’s National Assembly was democratically elected in 2015 and is the last remaining democratic institution in Venezuela. Maduro stripped the Assembly of most of its powers and created a new Congress to rubber-stamp his decisions. But the international community could recognize the National Assembly’s president as Venezuela’s legitimate leader while new elections are convened, supporters of that plan say. But many countries would be reluctant to go that route for fear of opening a diplomatic can of worms. In addition, some diplomats note that, unlike last year, when more than 150 people died in Venezuela’s street protests, — there is no sense of urgency in the diplomatic community today that would justify taking such extreme measures. For now, the likely decision by many countries to stop recognizing Maduro as a legitimate president will be a mostly symbolic announcement. But if the opposition takes to the streets in January — as some anti-government parties are planning — to protest Maduro’s inauguration and the country’s humanitarian crisis, things could change. There would be a legal base for the next step — international recognition of a provisional opposition government. (The Miami Herald: https://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article222012125.html)

 

November 20, 2018

International Trade

Venezuela, Russia seek to increase bilateral cooperation in agricultural, mining sectors

Venezuela and Russia are seeking to expand bilateral cooperation, including in the agricultural and mining sectors, a Venezuela senior official said Friday. "We've decided to include the areas of agriculture and mining, given the strategic importance of both areas in national development," said Tareck El Aissami, vice president of the economy, at a meeting of the Russia-Venezuela High Level Commission in Caracas. Embracing the agriculture and mining sectors, the core areas of cooperation between the two countries will be expanded to five, which already included the energy, commercial and military technology areas, he said. (Xinhua: http://www.xinhuanet.com/english/2018-11/17/c_137613448.htm)

 

Logistics & Transport

Venezuela: The country with the worst internet connectivity in Latin America

Venezuela, one of the countries with the least amount of freedom in the world, now enjoys yet another dubious distinction: it is among the three nations with the worst internet connection in the entire world. According to the Speedtest Global Index, the country, governed by Nicolás Maduro, was ranked 128th out of 130 countries, ahead of only Algeria (129) and Yemen (130). The study also reveals that Venezuela is the country with the worst internet connection in Latin America. Only in October the global average download speed was 50.88 Mbps (Megabytes per second), and the average upload speed 25,52 Mbps; however, Venezuela had an average of 4.08 Mbps for download, and 1.71 Mbps for upload. And recently, Freedom House’s annual report on internet freedom in 2018 concluded that Cuba and Venezuela continue to lead the list of the least free nations in the region The Institute of Press and Society (Ipys) noted that “the conditions of Venezuelan citizens are precarious, because they exercise their freedom online in the worst digital ecosystem in Latin America, in terms of quality of access to internet.” In this study, the data obtained by the Measurement Lab (MLAB), between January and February of 2018, also reflects the abysmal state of Venezuela in terms of connectivity. The study put Venezuela in last place in an analysis of ten countries, with even Bolivia (1.78 Mbps) and Suriname (2.42mbps) faring better. To date in Venezuela there are more than 2,500 pages that the Nicolás Maduro regime is blocking: these are internet sites to which Venezuelans have restrictions and limitations for entering. (Panam Post: https://panampost.com/sabrina-martin/2018/11/19/venezuela-the-country-with-the-worst-internet-connectivity-in-latin-america/?cn-reloaded=1)

 

Oil & Energy

PDV Marina fleet in critical shape, may halt tanker operations as qualified personnel deserts

On November 16^th, PDVSA’s security department received a report from PDV Marina-Paraguaná about the situation with the company’s tanker fleet, which is becoming impossible to mobilize due to lack of personnel. The report says the situation has become critical as 48% of the trained staff has walked off the job. This includes sailors and officers. Company personnel complain that the quality of life on board has deteriorated, lacking security equipment, supplies, transportation to load or offload, launches, or lodging. According to PDV Marina the result could be a “possible forced collapse” in tanker operations, which would “seriously hit compliance with maritime transport of the product, and directly hit fuel supply in the local market”. More in Spanish: (Venepress: https://venepress.com/article/No-hay-marinos-colapso-de-Pdvsa-llego-a-filial-PDV-Marina1542635749218)

 

Iran and now Venezuela are shaking things up in the tanker market

After the Iranian sanctions, another factor which could shake things up in the tanker market is the fall in Venezuela’s oil production. In its latest weekly report, shipbroker Gibson says: “since January Venezuelan crude output has averaged at 1.4 million b/d, down by 0.6 million b/d over the corresponding period last year. The fall in output is reflected in crude exports. ClipperData indicates that this year the country’s total exports have averaged just under 1.2 million b/d, down by 0.37 million b/d year-on-year. The decline has been witnessed both in the long haul and short haul crude trade. Shipments to Asia Pacific, mainly China and India have averaged 0.57 million b/d during the 1st ten months of this year, down by 80,000 b/d versus 2017 figures. There also has been a notable decline in crude trade to the Caribbean where PDVSA owns/leases crude storage facilities for further shipments. Exports to the Caribbean have fallen in 2018 by 170,000 b/d year-on-year. Without a doubt, the seizure of PDVSA’s assets by ConocoPhillips in May this year has been a contributing factor behind the overall decline. However, some progress in their dispute has been made after a payment from PDVSA to Conoco concluded using a combination of cash and commodities. Finally, Venezuela on average has shipped less crude to the US this year than it did over the same period in 2017, although some minor rebound has been seen in recent months. Overall, between January and October 2018, crude trade has averaged 0.43 million b/d, down by 120,000 b/d when compared to the same period last year”. Gibson said that “interestingly, the decline in Venezuela’s total crude shipments this year has been smaller than the fall in production levels as the problems faced by Venezuela’s refining sector intensifies as well. A lack of funds for upgrades and maintenance as well as skilled staff seeking employment elsewhere has been the driving force behind the issues. Venezuela’s biggest refinery, Amuay, is running at under 20% and other key refineries are barely functioning. The ongoing decline in crude refining runs means an increasing need to import products, mostly from the US. It has been reported that large amounts of heavy naphtha have been shipped south to blend with Venezuela’s deteriorating local crude quality. Apart from more product shipments into the country, there are also logistical issues. Media reports suggest that delays have occurred in unloading fuel cargoes since most of their ports are more orientated for exporting rather than importing therefore contributing to shortages. It was reported that one tanker bringing imported gasoline was highly contaminated forcing PDVSA to withdraw the product from distribution. The incident has been allotted to them having to seek fuel from ‘unreliable suppliers’ due to many companies unwilling to do business with a country carrying US sanctions”, the shipbroker noted. “Going forward, the economic turmoil faced by Venezuela shows no signs of abating. As such, there appears little upside to crude production levels, despite the country having one of the world’s largest oil reserves. Many are seeing 1 million b/d as the floor to Venezuela’s production, although others have mooted the idea of output being as low at 0.7 million b/d by the end of 2019. Nonetheless, Venezuela’s oil minister Manuel Quevedo has stated recently that even with all the problems faced production has stabilized and that the government is hopeful that output will increase to 1.6 million b/d by the end of the year. An ambitious target, perhaps, considering the falling rig count, which is usually an indicator of future production”, Gibson concluded. (Hellenic Shipping News: https://www.hellenicshippingnews.com/iran-and-now-venezuela-are-shaking-things-up-in-the-tanker-market/)

 

Refiners get taste of post-IMO world with gasoline/diesel imbalance

Refineries around the world are squeezing out every last drop of diesel while drowning in gasoline, in what could well become the new normal for the next few years. The imbalance is a confluence of major shifts in oil markets - surging production of light U.S. shale oil, plummeting exports of heavier Venezuelan and Iranian crude, weakening gasoline demand and rising diesel consumption. The coming in 2020 of the biggest change in fuel regulations in decades, when the International Maritime Organization (IMO) will start requiring ships to use cleaner fuel, is likely to prolong this reality, oil executives and analysts say. Refineries that distil crude oil into fuel have always had to adapt their output to shifting demand patterns such as high consumption of gasoline in summer and increased demand for heating oil in winter. (Reuters, https://www.reuters.com/article/us-refining-imo-analysis/refiners-get-taste-of-post-imo-world-with-gasoline-diesel-imbalance-idUSKCN1NO1R4)

 

Venezuela will preside over Ministerial Meeting of the Forum of Gas Exporting Countries in 2019

In the framework of the XX Ministerial Meeting of the Forum of Gas Exporting Countries (FPEG), held on Wednesday, the Bolivarian Republic of Venezuela received the presidency of the Ministerial Meeting for the year 2019 of the FPEG. This decision was announced during the celebration of this meeting held in Trinidad and Tobago. (AVN, http://www.avn.info.ve/contenido/venezuela-will-preside-over-ministerial-meeting-forum-gas-exporting-countries-2019)

 

Commodities

Urban ranching: A socialist commune's response to Venezuela's crisis

A socialist commune has drawn the ire of its neighbors in a wealthy area of Caracas with an unusual response to the hyperinflation and food shortages afflicting Venezuela: turning its backyard into an urban cattle pasture. The leaders of the Apacuana commune, devotees of socialist President Nicolas Maduro, drove six hours to purchase 11 450-kilo (992-lb) cows. They set them to graze behind their 2,000-square meter (21,528 square-foot) home, donated by the state-owned telecommunications company two years ago. The government began transferring billions of dollars to a network of more than 70,000 such community groups under the administration of late President Hugo Chavez, who supported the communes as an alternative to a capitalist economic model. Maduro has called communes “the epicenter of solidarity.” (Reuters, https://www.reuters.com/article/us-venezuela-cattle/urban-ranching-a-socialist-communes-response-to-venezuelas-crisis-idUSKCN1NL1U6)

 

Economy & Finance

576 failed government monopolies

The most serious ailments affecting Venezuela and Venezuelans right now can be traced back to the country having 576 failed or failing state-owned companies, local NGO “Transparencia Venezuela” stated in a report published Friday in Caracas. Transparencia, the local chapter of Transparency International, began researching into Venezuela’s “Empresas Propiedad del Estado” (EPE, the Spanish acronym for “Enterprises Property of the State”) in 2016, it says. The embattled Nicolas Maduro administration now has 576 EPEs to its name, of which only 467 are in operation. Of those companies still in operation, more than half do not make any money and actually lose the cash-strapped Maduro government money. And the vast majority, of them, almost 75%, “have public denunciations for corruption or bad practices”, Transparencia states. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2469742&CategoryId=10717)

 

Maduro regime claims "international experts" approve of the Petro

Although much of the world has refused to do business in the Petro, Caracas claims it has the backing of political and business leaders in Colombia, Brazil, Japan, China, Palestine, Spain and Saint Vincent & the Grenadines. The government of Venezuela claims it has held an international blockchain technology and cryptocurrency consultancy seminar in Caracas, with overseas experts attending to give their take on the state-backed Petro cryptocurrency. State media outlet TELESUR and government tweets claimed that experts from China, Russia, Luxembourg, Spain and Mexico were in attendance. The president’s office quotes Lluís Mas Luque, head of the Spanish Blockchain Institute & Technology, as stating that the Petro “represents a triumph over” conventional financial systems. The president’s offices claimed other speakers at the event included Sri Lanka-based CRYPTO GENESIS managing partner Nilhan de Mel and Spanish peer-to-peer energy market platform Shasta founder Alex Sicart Ramos. Meanwhile, the coin itself has been deemed a scam by various rating sites. Venezuela’s crypto-drive appears to be continuing apace, with department store TRAKI, dubbed by some as the Walmart of Venezuela, recently announcing that it will accept payment in a wide range of cryptocurrencies, including Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Dash. (Cryptonews: https://cryptonews.com/news/venezuela-claims-international-experts-approve-of-the-petro-2943.htm)

 

Politics and International Affairs

U.S. considers adding Venezuela to terrorism sponsors list

United States is considering adding Venezuela to its list of state sponsors of terrorism, but no final decision has been made, a person familiar with the deliberations said on Monday. Discussions on the issue have moved forward in recent days with strong lobbying from Republican Senator Marco Rubio, who has long pressed the administration to take a tougher stand against the government of Venezuelan President Nicolas Maduro, the source said. A time frame for a decision on whether to add Venezuela to the terrorism list had not yet been determined, the source said. A U.S. official, speaking on condition of anonymity, said it would be a challenge for the Trump administration to provide concrete proof linking the Maduro government to terrorism if it decides to put Venezuela on the list. The four countries currently on the list - North Korea, Iran, Sudan and Syria - have been found to “have repeatedly provided support for acts of international terrorism.” Rubio and two other Republican senators sent a letter to Secretary of State Mike Pompeo in September urging him to name Venezuela a state sponsor of terrorism and accusing it of links to Lebanon’s Hezbollah militant group and the Revolutionary Armed Forces of Colombia, or FARC, but they offered no proof. The Washington Post, which first reported that the Trump administration was considering the designation, said the U.S. State Department had been asking for feedback on the proposed move from various agencies in recent days. A State Department spokesperson said it “consistently and on an ongoing basis reviews available information and intelligence, from many sources, on possible state-level involvement in terrorism, evaluating all credible, verified, and corroborated information in its entirety.” The White House declined to comment. A senior U.S. official told Reuters earlier this month that the Trump administration was “looking at all potential avenues” to pressure Maduro’s government. “We believe his presidency to be illegitimate,” the official said, reiterating Washington’s rejection of the outcome of Venezuela’s elections earlier this year. Maduro won a new six-year term in May, but his main rivals disavowed the election and alleged massive irregularities. “The regime really understands that the world is getting smaller for them. And that’s the kind of pressure that is needed to really change minds in the regime. The sanctions are having an effect,” the official said. The designation would ban financial transactions with the country. (The Washington Post: https://www.washingtonpost.com/; The Hill: https://thehill.com/homenews/administration/417541-trump-admin-to-designate-venezuela-as-state-sponsor-of-terrorism; Reuters: https://www.reuters.com/article/us-venezuela-usa/u-s-considers-adding-venezuela-to-terrorism-sponsors-list-source-idUSKCN1NP042; Fox News: https://www.foxnews.com/politics/trump-administration-considers-designating-venezuela-as-state-sponsor-of-terrorism)

 

National Assembly president charges that guerrillas control the border with Colombia

Omar Barboza, President of Venezuela’s opposition-controlled National Assembly, has charged that a “great part” of Venezuela’s border with Colombia is controlled by guerrillas from the neighboring country, “with the acquiescence of military and civilian authorities” here. Barboza made the statement when asked about conditions in his home border state of Zulia. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/politica/presidente-de-la-an-aseguro-que-parte-de-la-frontera-venezolana-esta-tomada-por-la-guerrilla)

 

Top North Korean official to tour Cuba, Venezuela, Mexico

A delegation from the Democratic People's Republic of Korea (DPRK), led by the President of the Presidium of the Supreme People's Assembly, Kim Yong Nam, will make official visits to Cuba, Venezuela and Mexico, confirmed the North Korea Central News Agency (KCNA). In Mexico, the senior DPRK official will attend the inauguration of President-elect Manuel Lopez Obrador, scheduled for December 1, according to KCNA. (Cuban News Agency, http://www.cubanews.acn.cu/cuba/8737-top-north-korean-official-to-tour-cuba-venezuela-mexico)

 

Former Intelligence director reportedly arrested

General Gustavo Gonzalez Lopez, who headed the Bolivarian National Intelligence Service (SEBIN) until his recent replacement, has been taken to the headquarters of the Directorate General of Military Counterintelligence, according to an unconfirmed Nov. 16 report from NOTICIERO DIGITAL. If confirmed, the report indicates that Gonzalez Lopez is being further sidelined from Venezuela's political system as the country's politicians work to consolidate power behind the scenes. President Nicolas Maduro's decision to replace Gonzalez Lopez, who is an ally of influential Venezuelan political figure Diosdado Cabello, may be intended to undermine Cabello's power within the country's security services. Gonzalez Lopez controlled the Venezuelan Interior Ministry and SEBIN from 2014 to 2016. According to an intelligence report STRATFOR Received in 2017, Venezuelan Industries and National Production Minister Tareck El Aissami is Cabello's primary competitor for political power and intends to slowly erode his influence within the country's security services. (Stratfor, https://worldview.stratfor.com/situation-report/venezuela-former-intelligence-director-reportedly-arrested)

 

Maduro regime continues military purge as arrests reach record high

Politically motivated arrests of soldiers and military personnel in Venezuela reached an all-time high in 2018. According to the latest figures, 197 members of the military are facing charges on crimes such as incitement to rebellion, treason to the fatherland, and breach of military etiquette, charges meant to target any dissent within the ranks of dictator Nicolás Maduro’s military. The number now surpasses that arrested former Venezuelan dictators Hugo Chávez and Marcos Pérez Jiménez. As part of their effort to guarantee loyalty, the regime recently began purging high-rankings members of the military who they suspect of disloyalty. In March, Maduro issued a presidential decree announcing that 24 soldiers had been demoted or dismissed from the military over their supposed attempts “to damage the Republic by violent means.” Yet there is growing evidence of widespread discontent among lower military ranks, as thousands of soldiers choose to jump ship amid devastatingly low morale caused in large part by a drastic fall in wages that has left many of them unable to access enough food or living essentials. The higher echelons of the Venezuelan military remain relatively loyal to the government, as the regime continues to subsidize their expensive lifestyles and appoint military leaders to powerful government positions. (Breitbart, https://www.breitbart.com/national-security/2018/11/19/venezuela-maduro-regimes-continues-military-purge-arrests-reach-record-high/)

 

Venezuela's exiled Supreme Court calls on INTERPOL to arrest president Nicolas Maduro

Venezuela’s exiles Supreme Court has requested an international warrant for the country's president, Nicolas Maduro -- but the beleaguered leader isn't getting ready to don a prison jumpsuit any time soon. In a letter to INTERPOL secretary-general Jurgen Stock, the Supreme Tribunal of Justice accused Maduro of corruption. The officials, which call themselves the legitimate TSJ, were exiled to Florida amid Venezuela’s constitutional crisis. They accuse Maduro of accepting money from illegal activity and want the Venezuelan president to serve about 18 years in prison. (Fox News, https://www.foxnews.com/world/venezuelas-exiled-justice-department-calls-on-interpol-to-arrest-nicolas-maduro)

 

Venezuelan TV mogul with U.S. real estate fortune charged in South Florida

A Venezuelan TV network mogul has been charged in South Florida with siphoning hundreds of millions of dollars from Venezuela’s government and laundering the illicit money through U.S. banks and luxury real estate investments, according to an indictment unsealed Monday. The indictment charges Raúl Gorrín, a politically connected Caracas businessman and owner of the GLOBOVISION network, with conspiring to bribe Venezuelan officials and commit money laundering by hiding the embezzled government funds in South Florida and other parts of the United States over the past decade. Federal authorities plan to seize Gorrín’s Cocoplum estate in Coral Gables, which has been on the market for US$ 8 million. The waterfront home is among dozens of his properties in South Florida and New York that are tainted by criminal activity, authorities said. The U.S. investigation of Gorrín initially focused on Alejandro Andrade, a former high-ranking Venezuelan treasury official who had worked as a bodyguard for the late Venezuelan President Hugo Chávez. Andrade, who served as national treasurer between 2007 and 2010, was charged with money laundering in late 2017 and pleaded guilty earlier this year to a conspiracy offense. Andrade was staying at his equestrian ranch in the affluent Wellington community of Palm Beach County while assisting federal authorities in the massive foreign corruption and money-laundering probe. But federal agents eventually seized his property, including prized thoroughbred horses, last week as part of a forfeiture action. Andrade, Gorrín and the other associates in Venezuela’s government, banking and business sectors are accused of enriching themselves by capitalizing on favorable foreign currency exchanges and concealing their huge profits in European and U.S. bank accounts and investments, according to the indictment. (The Miami Herald, https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article221706585.html)

 

Venezuelan 'tyrant' must be isolated, says Colombia's Duque

Colombian President Ivan Duque, who took office in August, has granted an exclusive interview to FRANCE 24 and RFI. He focused on the situation in neighboring Venezuela. Venezuelans are fleeing a severe economic and political crisis at home, creating a migrant crisis in the wider region. "It is important for the international community to understand why we need to isolate the tyrant [Nicolas Maduro] and carry out a democratic transition in Venezuela," he said. (France 24, https://www.france24.com/en/20181114-interview-colombia-ivan-duque-says-venezuelan-tyrant-must-be-isolated-maduro-migrants)

 

Guyana pleased with new US position regarding border dispute with Venezuela

Guyana has welcomed the new position by the United States regarding its border dispute with Venezuela, with Foreign Affairs Minister Carl Greendige saying Washington's position “is an extremely important statement”. Speaking at a farewell reception in honor of the outgoing United States ambassador to Guyana, Perry Holloway, on Friday night, the deputy chief of mission of the US Embassy here, Terry Steers-Gonzalez, said previously Washington had “simply supported the timely resolution of the Venezuelan-Guyana border controversy. In large measure because of Ambassador Holloway, the US government now calls on all parties to respect the 1899 arbitration decision,” Steers-Gonzalez said. “While some might discount this seemingly simple addition, most of us present tonight understand how truly big it was and is. Well done, Sir!” the diplomat added. Steers-Gonzalez said it was while Holloway had been waiting in Washington for confirmation by the US Senate that a decision was taken to shift from “support the timely resolution” to calling on the two countries to “respect” the boundary award. The Government of Guyana, through the Foreign Affairs Ministry, today announced that Guyana has submitted its Memorial of Jurisdiction to the International Court of Justice in the case brought against the Bolivarian Republic of Venezuela. Guyana wants the Court to confirm, in a final and binding judgment, the full legal validity of the arbitral award that established the international boundary between Guyana and Venezuela more than a century ago. The Foreign Affairs Ministry noted that Guyana has no doubt that the Court has jurisdiction to resolve the controversy that has plagued its relations with Venezuela and undermined its ability to develop its sovereign territory and natural resources. (Jamaica Observer: http://m.jamaicaobserver.com/international/guyana-pleased-with-new-us-position-regarding-border-dispute-with-venezuela_149981; News Source, http://newssourcegy.com/news/guyana-files-documents-with-international-court-showing-jurisdiction-in-venezuela-border-row/)

 

Venezuelans flee to Trinidad and risk jail

Trinidad and Tobago is now home to more than 40,000 Venezuelans, many of whom entered the country out of desperation and without documents. While more than 7,000 have applied for asylum or refugee status, they’ve found that the designation doesn’t make them legal residents. They still risk being jailed for working without permission or not having the proper documents. Last week, 78 Cuban migrants — many of them asylum seekers — were detained on charges of blocking the sidewalk as they protested for better conditions outside of the United Nations building in Port of Spain. In September, the government reported that there were 118 people at the Immigration Detention Center west of Port of Spain — about 75% of them there for entering the country illegally — and almost all of them Venezuelan. But activists say they really don’t know how many people are detained at any given time. Living Water Community, a local nonprofit that works with the U.N. to register asylum seekers, says it hasn’t been given unfettered access to the Immigration Detention Center since 2014. While migrants are sometimes offered temporary work permits in Colombia, Peru and Chile, some small nations and territories of the Caribbean have been much less welcoming. On the Dutch island of Curacao, island officials took over the process of registering asylum seekers and refugees in July 2017. Since then, an Amnesty International report found the government had virtually quit approving asylum requests and had stepped up deportations. In 2017, the government repatriated 1,203 Venezuelans, and an additional 386 were deported during the first four months of 2018 — often without the right to seek protection. The backlash comes as some small islands fear being flooded by Venezuelans. In Curacao, 16% of the population is now Venezuelan. In Aruba, Venezuelans represent 15%, and in Trinidad and Tobago, they make up 3% of the population, according to the latest U.N. figures. In the meantime, Venezuelans living in Trinidad and Tobago say they feel stuck in a place where they may have the right to exist but not the right to truly live. And they fear detention and deportation every time they leave home. Facing these hardships, many of the Venezuelans blame the UNHCR — the U.N.’s refugee agency — and other nonprofits for processing their asylum claim but not helping guarantee their rights. But the agencies point out that they’re entirely dependent on the host country. (The Miami Herald, https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article221511330.html)

 

Venezuelan rape-survivor-turned-lawyer finally gets justice

The Inter-American Court of Human Rights found Venezuela responsible on Friday for failing to prevent, investigate or punish extreme violence against a young woman who was kidnaped, raped and tortured in 2001. The ruling sets a much-anticipated legal precedent and could have implications for victims and survivors worldwide. The case centers on the abduction, rape and torture of Linda Loaiza Lopez Soto, who was 18 years old at the time. After being rescued three months after the kidnapping, Lopez had to undergo multiple surgeries for her injuries and disfigurement. She then faced a David-and-Goliath-like quest for justice against her well-connected abductor. In its decision on Friday, the court held Venezuela responsible, "because of its gross omissions", for the torture and the sexual slavery Lopez suffered, as well as for preventing her access to justice. The court ordered Venezuela to revisit the criminal case, pay Lopez and her family compensation, and provide for her lifelong medical and psychological care. The ruling also asked Venezuela to finance any further post-secondary studies for Linda and her siblings, whether in Venezuela or abroad. (Al Jazeera, https://www.aljazeera.com/news/2018/11/venezuela-rape-survivor-turned-lawyer-finally-justice-181117000627036.html)

 

Murder rate soars in Venezuela, forcing population to take extreme precautions

As if coping with constant food and medicine shortages were not enough for crisis-weary Venezuelans, many live in constant fear in a country where three people die violently every hour. The nation registered 26,000 homicides last year, 89 per 100,000 inhabitants and a figure 15 times the global average, according to the Venezuelan Observatory of Violence, a non-governmental group. Almost everyone in Venezuela uses an older cellphone in public, keeping their smartphone out of sight. An application called 'Pana' - a slang word for friend - was created to help ensure people could feel more secure on the road. Recently, bikers with high-visibility vests, dark glasses and radios sped to the rescue of a young medical student in distress on the highway. Thugs often target vehicles with stones, sticks or bottles to force drivers to stop, intent on robbery or even kidnap. In the streets of Venezuela, it's rare to see a car without tinted, reinforced glass. Sundown brings challenges for the citizens of Caracas. Once filled with light and bustle, economic crisis and accompanying crime means the capital now switches off at night. Most people now gather in private homes, being safer and cheaper, and prefer to wait until the light of dawn before they venture home. Most foreign airlines prohibit their crews from staying overnight in Venezuela. (Daily Mail, https://www.dailymail.co.uk/news/article-6405051/Murder-rate-soars-Venezuela-forcing-population-extreme-precautions-amid-shortages.html)

October 23, 2018

International Trade

Mexico prosecutors find fraud in Venezuela food aid program

Mexican Prosecutors say that people linked to the Venezuelan government and Mexican companies conspired to overcharge Venezuela for basic food aid packages. Known as "CLAP" packages, the food is supposedly subsidized by Venezuela's socialist administration to provide a bare level of subsistence to many families facing hunger amid the country's hyperinflation and economic breakdown. But Mexican prosecutors said an investigation found that the Venezuelan officials and Mexican businessmen bought poor quality items in bulk and exported them to Venezuela at more than double their real price. Mexico's top organized crime prosecutor, Israel Lira, said the suspects have agreed to pay US$ 3 million in reparations to the U.N. refugee agency, to be used for its Latin America operations. The agency is focused overwhelmingly now on helping Colombia resettle hundreds of thousands of Venezuelans fleeing the humanitarian crisis. Lira said prosecutors located 1,300 shipping containers with 1.8 million packages but allowed them to continue to Venezuela to avoid affecting recipients. U.S. Treasury Department officials previously compiled a list of suspected shell companies that they believe senior Venezuelan officials have used around the globe to siphon off millions of dollars from food import contracts. Financial forensic investigators from the U.S. and three Latin American allies — Mexico, Panama and Colombia — traced transactions by companies believed to be controlled by a government-connected businessman. Much of the food comes from Mexico, and there have been complaints about its quality. On May 17, three days before Maduro was re-elected, Colombia announced the seizure of 15 shipping containers filled with more than 25,000 CLAP boxes containing beetle-infested rice and other spoiled food. A story published by The Associated Press in 2016 revealed how senior Venezuelan officials and members of the military were enriching themselves by diverting money from food contracts. Alex Saab, from the Colombian city of Barranquilla, has been identified by U.S. officials as a major focus of the investigation. Saab gained some prominence in 2011 after signing an agreement to build social housing for the Venezuelan government on behalf of a Colombia-based construction company. Investigators have said Saab entered the food business through a Hong Kong-based company, Group Grand Ltd., which they said bears the hallmarks of a shell company, including no known track record in the food business, a rudimentary website that is now inaccessible and an address in Caracas shared with Saab's construction company. Group Grand has been awarded contracts to provide at least 11.5 million CLAP boxes, according to a Venezuelan Food Ministry spreadsheet. Among the transactions that have raised red flags is a September 2017 invoice presented to Venezuela's food ministry by Group Grand for US$ 41 million worth of powdered milk at a price of US$ 6,950 per metric ton, or more than double the market price at the time. A copy of the invoice was provided to the AP. (The Miami Herald: https://www.miamiherald.com/news/business/article220266500.html)

 

Oil & Energy

Caracas to divert oil shipments away from Beijing

Venezuelan state-run oil company Petroleos de Venezuela (PDVSA) may begin cutting shipments to China that are used to pay for previous loans in favor of prioritizing shipments to the United States or India, which pay in cash. PDVSA will not receive any further Chinese loans to raise production from joint ventures if the company defaults further on Beijing's loans. Redirecting oil shipments would be a short-term strategy to free up more cash for pressing necessities such as debt and arbitration payments. (Stratfor: https://worldview.stratfor.com/situation-report/china-venezuela-caracas-divert-oil-shipments-away-beijing)

 

Blackouts force Venezuelans to live and work — even perform surgery — in darkness

Blackouts in Zulia state, an area of northwestern Venezuela that includes the country’s second-largest city of Maracaibo, have become commonplace in the last year. Food and medicine were already increasingly scarce in Venezuela, but the power cuts that come without warning — sometimes more than once a day — are a new form of misery. And though some widespread outages have reached the capital of Caracas, Zulia — the heart of Venezuela’s energy industry — has turned out to be particularly vulnerable to the rolling blackouts. The government has blamed the outages on a variety of things — including pesky animals. In an Oct. 20 tweet, Energy Minister Luis Motta Dominguez named “rats, mice, snakes, cats, squirrels” as possible culprits in shorting out lines. He added: “In the list of animals mentioned above, of course iguanas are included.” Critics, however, say insufficient investment by the government is the cause, following the 2007 nationalization of the electricity sector. Zulia has experienced 11,131 power failures between January and September this year, according to a civil association called the Blackouts Committee, which receives daily reports of power cuts from citizens. Public transportation, already diminished by the economic crisis, becomes even more dysfunctional when the power flickers and goes out. Communications work erratically. People’s routines are on hold. Lines of cars are two blocks long at gas stations. Commerce and education are paralyzed. Omar Prieto, Zulia’s governor and a support of President Nicolás Maduro, declared in early October that the electric crisis in Zulia was over. But then a massive power failure in a substation in Carabobo left 11 Venezuelan states, Zulia included, without electricity for 12 to 18 hours on Oct. 15. José Aguilar, a Venezuelan power generation and risk consultant, says the power system has been in trouble since 2009, prompting the late President Hugo Chávez to announce new investment and more emphasis on the power system. He said that more than 80% of power generation in Zulia isn’t working due to lack of maintenance and corruption. “The government is overloading power lines, old equipment, and generation and distribution substations,” he said. And he thinks the crisis is far from over in Zulia and especially Maracaibo, once known for being the third Latin American city to have regular electricity in its streets. He thinks Zulia will experience more blackouts between January and February next year, when the general power demand traditionally grows. One of the most affected districts in Zulia is Guajira, a town next to the Colombian border whose population is mostly indigenous. Recently, the residents have been living without electricity for two or three days at a time until the service comes back up, usually for only four uninterrupted hours. (The Miami Herald: https://www.miamiherald.com/latest-news/article220464510.html)

 

Commodities

RUSORO Mining has received a settlement proposal from Venezuela

RUSORO Mining Ltd. announces that it has agreed on the terms of a settlement proposal with Venezuela by which Venezuela agrees to pay RUSORO over US$ 1.28 billion to acquire the Company's mining data and for full release of the arbitral award issued in favor of the Company in August 2016 by a tribunal constituted pursuant to the Additional Facility of the International Centre for Settlement of Investment Disputes. In addition, it is contemplated that the parties will constitute a Mixed Commission to assess the status of RUSORO's Choco 10 and San Rafael - El Placer former projects and based on such assessments may by the end of January 2019 partner to exploit those projects. RUSORO expects to sign the formal settlement agreement shortly after completion of the schedules to the Settlement Agreement. (RUSORO: www.rusoro.com)

 

Economy & Finance

FEMSA to lay off 2,000 Venezuela workers amid crisis: union

COCA COLA FEMSA is preparing to lay off 2,000 of the 4,800 total workers at its Venezuela soft drink operations due to falling demand in the crisis-stricken country, a union leader said, while the company acknowledged it was “revising” output. The move makes FEMSA, one of the largest soft drink bottlers in the world, the latest multinational to downsize in this country. “The company has said that it needs to reduce headcount and suspend some benefits,” said Daniel Montilla, secretary of the union representing workers at the FEMSA plant in the industrial city of Valencia, where Femsa plans to lay off 300 workers. (Reuters, https://www.reuters.com/article/us-venezuela-femsa/femsa-to-lay-off-2000-venezuela-workers-amid-crisis-union-idUSKCN1MW2G9)

 

Out of cardboard, another COLGATE plant shuts down in Venezuela

A COLGATE-PALMOLIVE plant in Valencia, Venezuela, stopped operating this week due to a shortage of cardboard needed for packaging, said Carlos Rodriguez, an employee union leader. The plant, which produced liquid detergent, fabric softener and dishwasher soap, required cardboard to transport company products to stores, supermarkets and pharmacies. The shortage worsened after the government took over control of paper and packaging manufacturer SMURFIT KAPPA’s Venezuelan operations there earlier this year. This is the second out of five production plants to close in the country, Rodriguez said. (Bloomberg, https://www.bloomberg.com/news/articles/2018-10-18/out-of-cardboard-another-colgate-plant-shuts-down-in-venezuela)

 

Politics and International Affairs

Pompeo: Venezuela's Maduro has to go

Secretary of State Mike Pompeo says Socialist Venezuelan President Nicolas Maduro must go and is urging the people of Venezuela to "restore democracy to the country" during an interview with Greta Van Susteren. "We are searching for a solution which will deliver democracy to Venezuela. It's the Maduro regime that has inflicted this set of horrible living conditions on the people of Venezuela and it will ultimately be on the people of Venezuela to fix it," Pompeo said. On whether the U.S. would issue additional sanctions, Pompeo said he was "confident we can find other places where we think we can exert pressure in a way that will convince Maduro that this isn’t going to work, he’s not going to be able to retain power forever." (Newsmax: https://www.newsmax.com/newsfront/mikepompeo-maduro-venezuela/2018/10/21/id/887293/)

 

Mike Pence: Honduran President told me Venezuela funding migrant caravan

Vice President Mike Pence on Tuesday said Honduran President Juan Orlando Hernández told him that the migrant caravan marching toward the U.S.-Mexico border is “financed by Venezuela.” Pence made the allegation while defending President Donald Trump’s assertion that Middle Easterners make up a part of the 7,000-strong. The Vice President then revealed that Hernández told him that “leftist groups” from the Central American country organized the caravan, “financed by Venezuela” to “challenge our sovereignty, challenge our border.” (Breitbart: https://www.breitbart.com/politics/2018/10/23/mike-pence-honduran-president-told-me-venezuela-funding-migrant-caravan/)

 

Venezuela declares its military ‘fully prepared’ for war with U.S.

Venezuelan soldiers march during a military ceremony to honor President Nicolas Maduro on May

Senior Venezuelan socialist official Diosdado Cabello has claimed his country is “fully prepared” for a war with the United States. Cabello, the leader of the regime’s illegal lawmaking body and a close ally of dictator Nicolás Maduro, claimed that the country’s Bolivarian National Armed Forces would remain loyal to Hugo Chávez’s socialist revolution should the U.S. or any other power try to topple the regime. There is little evidence to support Cabello’s claims. Instead, countless reports detail the growing disaffection and dropout rates among troops, many whose salaries fail to cover basic living resources such as food and medicine. Some soldiers have tried to launch low-level coups and rebellions, although such efforts have so far proved unsuccessful. Cabello’s comments come amid growing international pressure for more action to be taken against the Maduro regime, currently presiding over the worst economic crisis in the country’s history. Cabello’s warning is unlikely to instill fear among leaders in Washington. Trump previously mocked the Venezuelan military for their seemingly cowardly response to a failed assassination attempt on Maduro. (Breitbart: https://www.breitbart.com/latin-america/2018/10/22/venezuela-declares-military-fully-prepared-war-u-s/)

 

Ecuador breaks diplomatic relations with Venezuela

Ecuador has broken formal relations with Venezuela after that country’s communication minister called President Lenin Moreno a “liar.” On Thursday, Ecuador expelled Venezuela’s ambassador. The action followed comments by Jorge Rodríguez, Venezuela’s communication minister, who said that Moreno’s claim that 6,000 Venezuelans a day were entering Ecuador was false. Moreno Tweeted the number in August, at the height of the influx of Venezuelan refugees into Ecuador. In its official statement on the break in relations, Ecuador’s foreign affairs ministry said, “The Republic of Ecuador will not tolerate such disrespect for its authorities.” The statement continued: “Faithful to its democratic and humanitarian principles, Ecuador will continue to provide assistance to Venezuelan citizens entering the country, assisting through economic and social efforts to protect their human rights.” Ecuador secretary of communication was more direct in his response to Rodriguez. “His statements show that this corrupt socialism, murderer and liar of the 21st century, still lives in Venezuela.” In response to the expulsion of its ambassador, Venezuela ordered Ecuador’s chargé d’affaires to leave Caracas. (St. Lucia Times: https://stluciatimes.com/2018/10/22/ecuador-breaks-diplomatic-relations-with-venezuela/)

 

OAS chief urges ICC to open formal probe into Venezuela crimes

Luis Almagro, Secretary General of the Organization of American States, spoke to FRANCE 24 about the current issues facing the Americas, from the caravan of Central American migrants heading to the US to the crisis in Venezuela and the situation in Nicaragua. Almagro called for the ICC to open a formal investigation into alleged crimes against humanity committed in Venezuela. (France24: https://www.france24.com/en/20181023-interview-luis-almagro-oas-americas-migrants-caravan-us-venezuela-icc-probe-nicaragua)

 

How Venezuela complicates peace talks in Colombia

After 52 years of conflict, Colombia’s government and the leftist guerrillas of the Revolutionary Armed Forces of Colombia (FARC) signed a peace deal in 2016. But not all the country’s guerrilla groups demobilized. The National Liberation Army (ELN) remains a formidable presence. It began peace talks with the government of Juan Manuel Santos in 2017 but failed to reach a deal before Iván Duque, a conservative, became president in 2018. President Duque, who had criticized the agreement with the FARC as too lenient, is adopting a tougher stance towards the ELN. He refuses to renew negotiations until the ELN has freed all hostages. And he has also raised an objection to Venezuela’s role as one of five guarantors of the talks, claiming it is a “protector of armed groups”. The ELN’s links with Venezuela date from the 1980s. Its standing in Venezuela improved in the late 1990s with the rise to power of Hugo Chávez, who regarded it as an ideological ally. Venezuela has been a haven ever since, a place where the ELN gathers to plan attacks on Colombia, and where in recent times it has started recruiting new members. Its activity within Venezuela often seems to be ignored—even endorsed—by the authorities. As Nicolás Maduro, Chávez’s successor, turns Venezuela into a mafia state in which drug-traffickers run rife, the ELN is rumored to be colluding with the Cartel of the Suns, a drugs gang, in establishing trafficking routes through the country. If the ELN should demobilize, its role in cross-border drug-trafficking is likely to weaken. In such circumstances, it is not surprising that Colombia should call into question Venezuela’s role as an honest arbiter of the peace talks. For the ELN, the price of a peace deal with President Duque’s government is likely to be the severing of its ties to the Venezuelan dictatorship. It has not yet shown itself to be willing to break that link. (The Economist: https://www.economist.com/the-economist-explains/2018/10/22/how-venezuela-complicates-peace-talks-in-colombia)

 

U.N. special envoy Jolie voices support for Venezuelan refugees

U.N. refugee agency special envoy Angelina Jolie voiced support on Tuesday for Venezuelans forced to leave their crisis-stricken homeland and thanked the South American countries hosting them. Hollywood actress Jolie met with Venezuelan refugees in Lima, Peru this week to draw attention to their plight. “After having spoken to so many people it’s clear to me, very clear, that this is not a movement by choice,” Jolie told reporters in a presentation with Peru’s foreign minister. “I heard stories of people dying because of a lack of medical care and medicine... people starving, and tragic accounts of violence and persecution,” she said. Jolie’s visit comes amid a backlash against Venezuelans in some South American countries where they have settled. Jolie met with Peruvian President Martin Vizcarra and said they discussed ways the international community can help host countries like Peru accommodate Venezuelans. “As in nearly every displacement crisis, the countries that have fewer resources are being asked to do the most,” Jolie said, thanking Peru and other “very generous” countries like Ecuador and Colombia for hosting displaced Venezuelans. (Reuters: https://www.reuters.com/article/us-venezuela-migration-peru-jolie/u-n-special-envoy-jolie-voices-support-for-venezuelan-refugees-idUSKCN1MX2LP)

 

Violent deaths of Venezuelans in Colombia more than triple in 2018

Violent deaths of Venezuelans in Colombia rose more than threefold in the first nine months of the year compared with the same period in 2017, as more desperate migrants flooded across the border to escape an economic crisis back home, a report released on Monday showed. Between January and September there were 310 violent deaths of Venezuelans in Colombia, 244.4% more than the 90 in the last year, the National Institute of Forensic Sciences said in a report. Of the total, 254 were men and 56 were women and 56% were murdered. Most of the violent deaths occurred in border regions such as the departments of Norte de Santander and La Guajira. Some died in car crashes or other accidents, and others committed suicide. Annual violent deaths in Colombia total about 25,000, according to the government. (Reuters, https://www.reuters.com/article/us-venezuela-migration-colombia/violent-deaths-of-venezuelans-in-colombia-more-than-triple-in-2018-idUSKCN1MW28H)

 

Two Venezuelans die attempting to reach Aruba by boat

Two Venezuelans attempting to reach the Caribbean island of Aruba died, authorities said over the weekend, highlighting the increasingly perilous routes migrants take to escape this nation's economic meltdown. Venezuelans routinely travel to the more prosperous Aruba in search of work or staple products that have become unavailable under the socialist government of President Nicolas Maduro. Those who are not allowed to enter Aruba often travel in rickety boats under the cover of darkness. Aruba's government said the pair were undocumented and that three Venezuelans had been detained in relation to the case. In a similar incident in January, four Venezuelans attempting to reach the Dutch Antilles island of Curacao died when their boat broke apart. (The New York Times: https://www.nytimes.com/reuters/2018/10/21/world/americas/21reuters-venezuela-migration-aruba.html)

 

Venezuela is the second most corrupt country, according to the World Economic Forum's index

Venezuela is the second most corrupt country in the world, overtaken only by Yemen, a nation in civil war that, according to the United Nations, can suffer the most lethal famine of the last 100 years. The World Economic Forum (WEF) released its annual index of global corruption, as part of its report on international competitiveness, which ranks Venezuela 127th out of 140 countries surveyed. Venezuela appears in the group of the most conflictual countries of the planet, without its population being subjected to a war or a natural disaster, which makes of this country a particularly important case, because its situation is attributable its institutional situation and political conditions. Venezuela ranks last – 140 – in terms of institutional quality and macroeconomic stability. The country ranks below the top 100 Index countries as markets for quality goods and services (137); business dynamism (139); labor market situation (131); and quality of infrastructure (131). Venezuela ranks after the top 50 countries on issues such as capacity for innovation (95); health system (59); size of the market (56); ICT adoption capacity (97) and quality of the financial system (91). When the indicators presented by the World Economic Forum on Venezuela are examined in more detail, the country ranks last in the world in specific areas. like the quality of police services, the efficiency of the judicial system in the enforcement of regulations, property rights, the effectiveness of dispute resolution systems and the protection of property rights intellectual. Under aspects such as innovation and the application of technology, the country has significantly regressed. Consider an indicator as an example of a button: the assessment of mobile penetration has dropped 64 points in one year and a market representing more than 100% of the penetration of the service is 123rd in the world. Controls, skewed subsidies, the tax burden, and other factors make Venezuela's economy a complex case, but the worst of all is the poor quality of institutions, because it is a key element to correct other imbalances. (NAAJU: https://naaju.com/chile/venezuela-is-the-second-most-corrupt-country-according-to-the-world-economic-forums-index/)

 

Russians detained over 'Gucci' cocaine shipment from Venezuela

Three Russian citizens have been charged in Venezuela over a cocaine smuggling plot aboard a tanker headed to Belgium, local media reported, citing prosecutors. Venezuela’s National Guard reportedly seized 147 kilograms of cocaine in a raid on the Jose Progress tanker earlier this month. Twenty people were detained in connection to the plot, including Russian, Ukrainian, Filipino and Venezuelan nationals, according to media reports. Russian nationals were implicated in a cocaine-smuggling plot earlier this year after over 350 kilograms of cocaine were discovered on the grounds of the Russian Embassy in Argentina. Venezuela’s Justice Minister General Nestor Reverol posted a picture on his Twitter account earlier this month which appears to show that the seized cocaine had been hidden in bags labeled with famous fashion brands, including Gucci and Chanel. The ship, which is currently being held by local authorities, sailed under a Panamanian flag and was headed for the Belgian port of Ghent. (The Moscow Times: https://themoscowtimes.com/news/russians-detained-over-gucci-cocaine-shipment-from-venezuela-media-report-63260)

 

These Venezuelan musicians were struggling on the streets. Then their talent saved them.

The young men hunched over their violins, a piano and a traditional cuatro guitar in a quiet Peruvian suburb never imagined their hard-won musical training might be the secret to surviving so far from home. Brought up under Venezuela’s famed El Sistema classical musical education program, they dreamed of scholarships at conservatories, or being poached by international orchestras — like their colleague Gustavo Dudamel, the kinetic and charismatic director of the Los Angeles Philharmonic. Instead, they’ve joined the millions of Venezuelans fleeing hunger and political chaos. It’s a journey that has stymied their musical careers as they were entering their prime — but also reaffirmed how valuable the determination they developed in the free musical program is to survive in the hard-scrabble world of migrant life. (The Miami Herald: https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article220293305.html)

 

OP-ED: Whitewashing the record of Hugo Chávez, by Christian Alejandro Gonzalez

It is depressing but not altogether surprising that Hugo Chávez still retains some support in Western intellectual life. The ongoing destruction of Venezuelan society should have been enough to discredit his apologists, but unfortunately it has not been so. Did he have authoritarian tendencies? His military background left him with a firm belief in hierarchy. The longer he remained in power, the more entrenched he became, which is why term limits and checks and balances are essential to a healthy democracy. Term limits are indeed important elements of democratic societies — elements which in 2009 Chávez abolished. Dislodging incumbents is difficult enough in advanced democracies; it is even more difficult in countries with little institutional accountability, where the government can fund massive clientelist programs to shore up support whenever it needs to. As Chávez well knew, removing term limits would have allowed him to become president for life. Only his premature death from cancer at age 58 prevented him from taking full advantage of this institutional change.  It is hard to overstate the extent to which Chávez obliterated checks on presidential power during his tenure. Shortly after coming into office in 1998, Chávez began implementing steps to take control of PDVSA, the national oil company, which was then autonomously run. Apart from ruining PDVSA, these policies massively expanded the president’s power by giving him an endless source of funds to use for narrow political goals. Chávez expanded the political power of the presidency as well. He packed the Venezuelan supreme court, took over the CNE (the body that is supposed to oversee elections and ensure their fairness), undermined press freedom by shutting down the opposition’s television stations, politicized the military by promoting officers based on loyalty rather than competence, and through a long sequence of constitutional changes transferred most decision-making power from the legislature to the presidency. Nicolás Maduro’s autocracy, then, did not merely come into existence ex nihilo. Chávez bequeathed him an obsequious legislature, a loyal judiciary, and a personal oil company with which he (Maduro) could exert dictatorial power. Indeed, Maduro’s transgressions against liberal-democratic principles occur only under a specific institutional context that Chávez largely created. (National Review: https://www.nationalreview.com/corner/venezuela-hugo-chavez-new-york-times-whitewashes-history/)