Content from IASW Contributors

Rebuilding Venezuela

By Roger F. Noriega By Roger F. Noriega
Venezuela is collapsing. President Nicolas Maduro’s dash-for-cash to Beijing last week was a humiliating failure. Half-mile food lines wind through the streets of Caracas and other cities. Maduro’s Cuban handlers are abandoning a ship they helped sink, while Venezuelan military officers are pondering the challenge of how to suppress angry, desperate protesters to buy time for an unpopular, incompetent regime.
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Reconstruyendo Venezuela

Por Roger F. NoriegaPor Roger F. Noriega
Venezuela está colapsando. El viaje de Nicolás Maduro a China, donde pidió fondos para sobrevivir, fue un fracaso humillante; filas de casi un kilometro para conseguir alimentos se pueden apreciar en las calles de Caracas y otras ciudades; cubanos que manipulaban el gobierno de Maduro están abandonando un barco que ayudaron a hundir; y los militares están considerando el reto de suprimir a manifestantes enojados y desesperados para regalarle tiempo a un régimen incompetente e impopular. Read More-->

US to impose sanctions on Venezuela officials

| December 11th, 2014 | No Comments »
Financial Times

By Andres Schipani

The US Congress on Wednesday voted to restrict travel and freeze assets on some Venezuelan government officials it accuses of human rights abuses during a crackdown on protests against socialist President Nicolás Maduro earlier this year.

More than 40 people have died during a wave of protests by students and members of the Venezuelan opposition against curbs on democratic liberties, rampant crime and a deteriorating economy in the embattled Caribbean nation.

The US Senate approved the measure earlier this week. Now the House of Representatives has passed it, it will be sent to President Barack Obama to sign it into law.

In late July, after peace talks between the government and opposition came to nothing, the US state department imposed a travel ban on some Venezuelan officials.

On Tuesday Mr Maduro lashed out on national television and radio at the possibility of an “insolent imperialist” move, warning that “if ... Read More

Venezuela, Not Russia, Will Be The First Domino To Fall With The Price of Oil

| December 11th, 2014 | No Comments »
Daily Caller

BY KEITH NAUGHTON

The oil price collapse has brought about excited speculation that the end may be near for Putin, Iran and the American oil shale industry. While the oil price downturn will definitely stress these three players, the prime candidate for political collapse is Venezuela – with significant ramifications for the United States.

And it’s likely the Obama administration is not prepared at all.

Venezuela has all three factors present for an imminent political implosion: 1) severe and worsening economic distress, 2) an organized political opposition, and 3) disunity in its security services. Russia and Iran may be in tough economic straits, but the political opposition in both countries is weak and the armed forces and police are clearly under the control of the existing regime.

For over 15 years Hugo Chavez and his successor Nicolas Maduro have pursued absurd socialist economic ... Read More

EU must act against ‘ever increasing authoritarian practices’ in Venezuela

| December 11th, 2014 | No Comments »
Parliament Magazine

By Dita Charanzová

In a desperate move to preserve the Chavista regime, president of Venezuela Nicolás Maduro has been resorting to extreme and desperate measures to prevent his government from collapsing. Maduro’s struggle to preserve his power is alarming, and the situation is quickly deteriorating.

As a result of the ever increasing authoritarian practices being employed, Venezuelans are suffering further restrictions on their freedom of expression, greater censorship over the media, police brutality – especially against protestors – and the arrest and detention of the political opposition.

The recent arrest of opposition leader and former national assembly deputy Maria Corina Machado on 3 December for allegedly plotting to assassinate president Maduro signalled the continuation of the government’s desperation to silence and punish opposition.

This is why I, together with my colleague Fernando Maura Barandiarán, have initiated a resolution on behalf of ALDE for the European parliament to address the persecution of democratic opposition in Venezuela ... Read More

Venezuela On the Road to Default

| December 11th, 2014 | No Comments »
Legal Insurrection

By Casey Breznick

Over the summer I covered the Argentine government’s default on its debts owed to U.S. hedge funds—its second default in just 13 years.

Now fellow Latin American socialist paradise Venezuela is gearing up for a default of its own, as precipitously falling oil prices have decimated the country’s budget and will continue to pressure its currency reserves. Since mid-June, crude oil prices have declined by more than 30%, with West Texas Intermediate (the benchmark measure for North American oil) dipping to $60.55/barrel before ultimately settling at a 5-year low of $61.54/barrel on Wednesday.

A CNBC report on the prospect of a Venezuelan default cited a Capital Economics report stating that a default could be expected by next September or October when $5 billion in debt payments come due. Only an upswing of oil prices to somewhere around $121/barrel would allow Venezuela to balance its budget, according to some estimates. But with OPEC recently slashing its 2015 ... Read More

U.S. House Passes Bill Sanctioning Venezuelan Officials

| December 11th, 2014 | No Comments »
Wall Street Journal WSJ-01

By JOSÉ DE CÓRDOBA

The U.S. House of Representatives unanimously passed a bill Wednesday sanctioning Venezuelan officials who had allegedly committed human rights abuses earlier this year.

The bill requires the U.S. to lift the visas of the Venezuelan officials and calls for the government to freeze any assets such officials might have in the U.S.

The bill, which passed the Senate on Tuesday by voice vote, is expected to be signed into law by President Barack Obama .

Sen. Robert Menendez (D., N.J.), a sponsor of the bill, called on other governments to deny Venezuelan officials involved in human rights violations “entry into their countries and access to their financial systems.”

On Tuesday in Caracas, Venezuela’s president, Nicolás Maduro, blasted the bill when it passed the Senate. “We don’t accept insolent, imperialist sanctions,” Mr. Maduro said in a nationally broadcast speech to military personnel. He angrily accused U.S. officials of “interfering” in Venezuelan affairs.

Rep. Ileana Ros-Lehtinen (R., Fla.), who ... Read More

What Mexico’s President Must Do

| December 10th, 2014 | No Comments »
The New York Times

BY ENRIQUE KRAUZE

MEXICO CITY — President Enrique Peña Nieto has shown remarkable leadership in passing key reforms to reanimate the economy and further the development of Mexico. But now he must act quickly to re-establish his political credibility and limit damage to his moral standing. The present crisis requires it.

Thousands of young people have been marching in the streets of Mexico since the kidnapping and murder of 43 students (now confirmed by the DNA of a burned body) from a college in Ayotzinapa in the state of Guerrero. According to Mexico’s attorney general, the crime was committed by professional killers working for a narco- gang and under the orders of the former mayor of the town of Iguala, who was a member of the leftist Party of the Democratic Revolution (PRD). Although most of these criminals, including the mayor and ... Read More

U.S. Moves to Penalize Venezuelan Officials

| December 10th, 2014 | No Comments »
Wall Street Journal WSJ-01

BY JOSÉ DE CÓRDOBA

The U.S. government moved closer to hardening sanctions on Venezuelan officials for alleged human rights abuses after Senate lawmakers passed a bill that now heads to the lower house, which has backed a similar proposal, for a vote this week.

The Senate voted late Monday to freeze the bank accounts and assets and decline visas to Venezuelan officials allegedly involved in a violent crackdown this year on Venezuelan protesters in which 43 people were killed. In May, the House overwhelmingly approved, by voice vote, a similar sanctions bill.

Florida congresswoman Ileana Ros-Lehtinen said the Senate legislation would be brought to a vote this week in the House, saying it was important to “not allow the actions of President Nicolás Maduro] to go unpunished.”

In Caracas, Venezuelan Mr. Maduro reacted angrily to the bill. “Outrage and condemnation is what we feel towards the White House,” Mr. Maduro said in a televised speech ... Read More

Sanciones a Venezuela podrían llevar a cambio de política de Estados Unidos

| December 10th, 2014 | No Comments »
El Nuevo Herald

ANTONIO MARIA DELGADO

El proyecto de ley aprobado por el Senado para sancionar al chavismo -que probablemente será ratificado esta semana por la cámara baja- contiene disposiciones que podría forzar un cambio en la política estadounidense hacia el régimen de Nicolás Maduro, obligando al Departamento de Estado a ser mucho más proactivo en asistir a los venezolanos a recuperar la democracia.

La nueva legislación también podría congelar los activos en dólares fuera de Estados Unidos de los funcionarios chavistas implicados en violaciones a los derechos humanos.

El proyecto de ley bipartidista, que en primera instancia congelaría las propiedades de al menos 56 líderes de la Revolución Bolivariana, también fortalece la posición de quienes están a favor de adoptar una posición mucho más agresiva frente a la destrucción de las instituciones democráticas en Venezuela y podría conducir a una mayor distribución de recursos para ese fin, señaló el ... Read More

Oil price plunge means survival of fittest

| December 10th, 2014 | No Comments »
Financial Times

By Anjli Raval

The 40 per cent plunge in the price of oil over the past six months is testing the mettle of the world’s biggest producers, from Venezuela to Iran and Russia. But it is also a survival of the fittest at a more granular level — among the world’s megaprojects.

Energy Aspects, a London-based consultancy, estimates that more than 12 per cent of global oil production would be uneconomic if the majors were to give the go-ahead to existing projects at today’s prices.

Most at risk are those in the Canadian oil sands which has a break-even price of $80 a barrel, US shale plays and other areas of tight oil ($76). Brazil’s deepwater fields ($75) and Mexican projects (around $70) are also vulnerable.

None of this looks pretty, particularly as most new production scheduled to come on line in the next couple of years is set to come ... Read More

Central America ready to commit $5 billion to migration plan – Guatemala

| December 10th, 2014 | No Comments »
Article originally appeared in Reuters

BY ALEXANDRA ALPER

(Reuters) – Three Central American nations that have sent a flood of migrants to the United States are ready to provide $5 billion (£3.2 billion) between them to match a sum Washington says may be needed to help solve the problem, Guatemala’s president said on Tuesday.

Struggling to stop the migrant exodus that sparked a crisis in the summer, Guatemala, Honduras and El Salvador presented U.S. officials with a plan in September to boost their economic growth with infrastructure investment.

Addressing the problem on Nov. 18, U.S. Assistant Secretary of State for Latin America Roberta Jacobson told Congress it could take $5 billion over five years to implement a plan for Central America that the United States has backed.

“It would fall to us to at a minimum put up the same amount, if not more,” Guatemalan President Otto Perez told Reuters in an interview in the Mexican ... Read More

Obama: US Offers Mexico Help on Missing Students

| December 10th, 2014 | No Comments »
ABC News

By DARLENE SUPERVILLE

President Barack Obama said Tuesday that the U.S. has offered to help Mexico figure out what happened to 43 college students who have been missing since September, but he stopped short of saying that aid to the U.S. ally and neighbor should be reconsidered on the basis of the country’s human rights record.

“We’ve offered assistance in tracking down exactly what happened, our forensic capabilities, our capacity to get to the bottom of exactly what happened,” Obama told Telemundo, the Spanish-language television network, in an interview.

On the question of aid, which was posed by the interviewer, the president said what’s more important is helping Mexico build on the progress it has made.

“We’ve got to make sure that we strengthen the criminal justice system, the investigative capacities,” he said. “Mexico is our friend and our neighbor. We want them to thrive.”

Obama said the crime against the missing students has “no ... Read More

Oil Rout Signals Budget Cuts or More Debt for Ecuador

| December 10th, 2014 | No Comments »
Bloomberg

By Nathan Gill

Crude’s slump to five-year lows means OPEC member Ecuador is facing the choice of spending cuts that risk crimping growth or taking on more debt to finance outlays, Jefferies LLC said.

Ecuador, which defaulted on $3.2 billion of its foreign debt in 2008 after crude tumbled 58 percent, will lose an additional $2.5 billion in oil revenue next year if prices remain at current levels and may need to double the amount of cash it seeks from capital markets to $4 billion, according to Siobhan Morden, head of Latin America strategy at Jefferies.

With crude prices down more than 20 percent since the government sent Congress its 2015 budget on Nov. 1, President Rafael Correa has said he plans to cut funds for new schools and police stations before sacrificing spending on oilfields needed to generate revenue. Correa, who has criticized former presidents for cutting social spending and taking on too much ... Read More

CARTA DEL EXPRESIDENTE PASTRANA AL PRESIDENTE SANTOS SOBRE AMNISTÍA AL NARCOTRÁFICO

| December 9th, 2014 | No Comments »
Andres Pastrana

Doctor JUAN MANUEL SANTOS CALDERON  Presidente de la República Ciudad Señor Presidente

Tan pronto las Farc entregaron al general rehén, el señor Presidente de la República correspondió el gesto con una propuesta de amnistía para los delitos relativos al narcotráfico del grupo rebelde. El tema de las drogas ilícitas -que el gobierno daba por resuelto en La Habana- despertó esta vez, por razón de la extemporánea iniciativa presidencial, la indignación nacional.

Ya sea como pago del rescate de un general o claudicación de principios ante la guerrilla para lograr su firma a cualquier costo, el acto presidencial constituye una vergüenza. El amparo del narcotráfico bajo la sombrilla del pretexto político es la genuflexión del estado colombiano ante el poder del crimen organizado.

La excluyente y sectaria política de diálogo del señor presidente y sus amigos – en contravía de la gran mayoría del país- es cada día más débil ... Read More

Oil price plunge raises Mexico energy reform concerns

| December 9th, 2014 | No Comments »
Financial Times

By Jude Webber

Falling oil prices are putting a cloud over the one thing Mexico’s struggling government had been clinging to in its attempts to invigorate a sluggish economy — its historic energy reform.

The government had been planning to auction 169 oil and gas blocks next year. It was to be one of the most ambitious bid rounds the industry had seen in a country whose sector has been closed to private investment for nearly 80 years, and where production is at its lowest level in two decades.

But the oil price fall has sobered what one executive called the “frothy, crazy bidding environment” Mexico had been expecting, unsettling a government reliant on oil revenue for a third of its budget. Officials are hastily striking off shale and other fields that might now look unappealing to bidders. Long-awaited initial tender terms are likely to be published on Wednesday.

“We think we remain very competitive,” said ... Read More

Brazil’s economy in a funk marked by low productivity and ‘creative accounting’

| December 9th, 2014 | No Comments »
From the Washington Post

By Dom Phillips

SÃO PAULO — Valter Barros, co-owner of a small electronics components factory in the São Paulo suburbs, was unimpressed with the Brazilian government’s battle last week to pass a controversial fiscal measure economists dubbed “creative accounting.”

He was not alone. As lawmakers arrived in Brasília this week for a vote on a measure that would effectively permit the government to ignore all of a legally mandated $45 billion budget surplus for this year, protesters jeered and held up 100 Real notes.

This was not the first time the administration of newly reelected President Dilma Rousseff had moved the goalposts to meet its targets.

The government’s budgetary woes are a consequence of Brazil’s underperforming economy. Critics trace the economy’s troubles back to the government’s policies. Brazil, they say, needs to overcome the barriers that hold it back: crippling tax burdens, torturous bureaucracy, expensive labor legislation, rising inflation, poor education and a lack of infrastructure, all of which result ... Read More

Venezuela needs cash, but there’s no easy way to get it

| December 9th, 2014 | No Comments »
CNBC-01

BY SILVANA ORDOÑEZ

Days after OPEC decided not to give into Venezuela’s pleas to cut oil production, President Nicolas Maduro has begun talking up several moves to raise money, including plans to slash 20 percent of “unproductive” spending and an attempt at “perfecting” the country’s foreign exchange system.

“Clearly the government is trying to send signs to the market that they are working on necessary adjustments that the economy needs in order to honor international commitments and keep up with social policies, which are essential for political stability,” said Diego Moya-Ocampos, a senior political risk analyst at IHS. “However, these policy adjustments are not enough. This reflects simply that the government is desperately looking for funds to compensate for the lost revenues from declining oil prices.”

The sharp decline in oil prices—Brent crude is at a five-year low—is making Venezuela’s autocratic government act swiftly. The commodity accounts for 95 percent of the country’s export earnings.

Barclays predicts that ... Read More

The Dark Side of Cuba’s Ebola Economy

| December 9th, 2014 | No Comments »
The Daily Beast

By James Bloodworth

The communist government’s medical missionaries win praise for the regime, but they are victims, too.

If you ask most people what Cuba is famous for they probably will name two things: rum and cigars. But if you ask leftists what Cuba is famous for they will usually say something altogether different: healthcare and education.

Despite all the government oppression and poverty and the endless speeches by el líder maximo and his sibling, the Cuban healthcare and education systems are still held up as justification for the 1959 Cuban revolution in and of themselves.

So good is the healthcare system on the island supposed to be, and such is the abundance of skilled doctors, that Cuba can even afford to export medical personnel to disease- and crisis-stricken parts of the world in a gesture of international solidarity that the capitalist West does not begin to rival.

Estimates suggest ... Read More

U.S. Senate approves Venezuela sanctions

| December 9th, 2014 | No Comments »
The Miami Herald

BY JIM WYSS

The U.S. Senate on Monday passed a bill imposing targeted sanctions against Venezuelan officials responsible for violence and political arrests in the wake of anti-government protests earlier this year.

During a sparsely attended Senate session, the Venezuela Defense of Human Rights and Civil Society Act of 2014 was passed by voice vote. The bill had been caught in a political tug of war since May when the House passed a similar version of the sanctions.

In a statement, Florida Rep. Ileana Ros-Lehtinen (R-FL) applauded the measure and asked her House colleagues to take up the Senate version so “Venezuela’s oppressors will be denied visas to enter the United States and their properties along with their assets will be frozen.”

The Senate bill targets Venezuelan authorities who directed “significant acts of violence or serious human rights abuses against persons associated with the anti government ... Read More

Venezuelan Bond Buyers Pack Into Manhattan Law Office

| December 9th, 2014 | No Comments »
Bloomberg

By Katia Porzecanski

The scores of money managers and analysts who crowded into Cleary Gottlieb Steen & Hamilton LLP’s panel discussion on Venezuela last week are a testament to the deepening concern over whether President Nicolas Maduro can make good on the nation’s debt obligations.

During the two-hour event on the 39th floor of the law firm’s downtown Manhattan office, some 150 attendees pressed the lawyers on an array of potential scenarios if Venezuela defaulted, according to interviews with six attendees who asked not to be identified because the meeting was private. Among the topics debated were whether the state oil company’s U.S. gasoline stations could be seized as collateral and whether it was legally possible for Venezuela to restructure the producer as an empty shell to avoid bondholder claims, they said.

For a country that hasn’t missed a foreign bond payment in decades, the questions reflect ... Read More

Venezuela needs credit to cope with oil price drop -Maduro

| December 9th, 2014 | No Comments »
Article originally appeared in Reuters

BY EYANIR CHINEA AND ANDREW CAWTHORNE

President Nicolas Maduro again fumed against Venezuela’s poor credit rating on Monday, saying the OPEC nation needed external financing to help it cope with oil price declines.

The socialist government has seen bond prices plunge, loan costs rise and market speculation of default emerge this year amid an economic slowdown exacerbated by a declining price of oil, which accounts for 96 percent of export revenues.

In near-daily speeches, Maduro, the successor to the late Hugo Chavez, insists that despite the oil slump, Venezuela has sufficient funds to cover all its external debt commitments and remains a well-resourced nation with the world’s biggest crude reserves.

“The risk rating companies have put the country’s risk at practically the highest in the world, more than countries in war or suffering the ravages of Ebola,” he complained, repeating allegations of a hostile international campaign.

“There is a financial ... Read More

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