Posts Tagged ‘Hugo Chávez’

Venezuela counts on aid from China during financial crisis

| November 24th, 2014 | No Comments »
China Daily


Venezuela is entering the third year of an economic crisis as slumping oil prices threaten to hamper the South American country’s ability to make payments on its foreign debt.

In September, rating agency Standard & Poor’s lowered the country’s credit rating, citing a persistent economic slowdown. As Venezuelan President Nicolas Maduro grapples with chronic shortages of consumer goods and the world’s highest inflation rate at 63 percent, he has turned to China for help.

Maduro said last week that a $4 billion loan from China would be added to the country’s international reserves. Venezuela’s Central Bank said the reserves had fallen to an 11-year low of $19.4 billion on Nov 14.

The loan came from what is called the China Fund, which was created in 2008. It has pumped billions of dollars into state projects in Venezuela. The loans are repaid ... Read More

Venezuela’s Maduro Raises Taxes, Reserves to Help Growth

| November 20th, 2014 | No Comments »

By Anatoly Kurmanaev and Jose Orozco

Venezuela’s President Nicolas Maduro raised taxes on goods ranging from yachts to rum and increased international reserves as the government responds to the lowest oil prices in four years. Bonds rallied by the most in almost six years.

The president said in a four-hour televised address late yesterday that the 28 laws he signed using decree powers will restore growth in an economy suffering the world’s fastest inflation and shortages of basic goods. He ordered that a $4 billion loan from China be added to international reserves.

“Maduro is at last recognizing there’s a need for a fiscal adjustment and stronger reserves,” Orlando Ochoa, economics professor at Andres Bello Catholic University in Caracas, said by telephone. “The measures in themselves are a drop in the ocean given the magnitude of the problem. Rather, this is a signal of bigger steps to ... Read More

Venezuela Bond Exodus Accelerates on Spurned Devaluation

| November 17th, 2014 | No Comments »

By Nathan Gill and Katia Porzecanski 

Bond investors are abandoning Venezuela as President Nicolas Maduro’s administration signals the nation doesn’t intend to devalue the currency with sinking oil prices undermining its ability to pay debt.

The country’s $4 billion of dollar-denominated debt due 2027 plummeted to an almost six-year low of 55.10 cents on the dollar yesterday after Finance Minister Rodolfo Marco Torres said this week that there’s “no devaluation planned.” The securities have fallen 14.1 percent this month, posting the biggest drop inemerging markets over that span.

Concern is deepening that Maduro isn’t moving fast enough to bolster the nation’s finances at a time when the price of its oil, which accounts for about 95 percent of Venezuela’s exports, has plunged 28 percent since June to a four-year low. A devaluation would give the government more bolivars for each dollar of export revenue from state oil monopoly Petroleos de Venezuela SA and narrow its price gap ... Read More

Falling oil prices put Venezuela’s Nicolás Maduro in a vice

| November 17th, 2014 | No Comments »
From the Washington Post

By Nick Miroff

CARACAS, Venezuela — Six months ago, Venezuelan President Nicolás Maduro faced bloody protests demanding his resignation. The streets were clogged with flaming barricades. By the time the smoke cleared, dozens of protesters and national guardsmen were dead, and Maduro’s government was widely assailed for rights abuses.

Those were the good old days.

Venezuelan oil, the lifeblood of the leftist revolution entrusted to Maduro by the late Hugo Chávez, was worth $97 a barrel then. Now it’s middling around $70, and with every dollar it dips, Venezuela’s export-dependent, popularity-challenged government loses $700 million a year.

With the money pot shrinking, Maduro’s approval rating has slumped to 30 percent, according to recent surveys, down from 55 percent in April 2013. The supermarket scarcities and unchecked crime that fueled the protests earlier this year are as bad as ever.

Loath to adopt austerity measures that would hit his softening support base, Maduro has been borrowing money ... Read More

Traders Are ‘Scared As Hell’ Of What’s Happening In Venezuela

| November 14th, 2014 | No Comments »
Business Insider


Venezuelan investors are abandoning ship en masse after the government indicated that it would not take immediate measures to stop the country from sinking deeper into chaos.

“I am scared as hell,” one Latin American bond trader said. “Default [is] likely within 12 months; the oil price collapse [is] just adding to a completely dysfunctional political and financial situation.”

The signal to head for the exits was so subtle that you would have missed it if you were not paying close attention.

This week the Venezuelan government reiterated that it would not devalue its currency, giving it more bolivars for every dollar. It does not want to do that because the country already has the highest inflation rate in the world, at 64%.

The official exchange rate is 6.3 bolivars per dollar, but the black-market rate sits at 113.62 bolivars to the dollar.

... Read More

With goods scarce in Caracas’s stores, street sales boom and officials glower

| November 14th, 2014 | No Comments »
From the Washington Post

By Nick Miroff

CARACAS, Venezuela — The sprawling street market that radiates outward from the metro station in Petare, Caracas’s largest slum, is the retail equivalent of an anti-Target.

There’s no organization to it. Tube socks and school supplies are sold beside giant pyramids of pineapple and piled yucca. Leopard-print hot pants stretch over mannequin buttocks next to the stinky stalls of fishmongers.

The bazaar was known until this month as one of the city’s biggest open-air black markets, the place to find all the scarce items that shoppers must queue up for hours to get in supermarkets, or can’t find at all. Earlier this year, toilet paper and corn­meal were scarce; lately it’s diapers and deodorant that have “gotten lost,” as Venezuelans say.

Authorities mostly turned a blind eye to the informal commerce, but late last month Venezuelan President Nicolás Maduro went on TV to decree a ban on street sales of coffee, eggs, shampoo and ... Read More

Counting Pennies In Venezuela

| November 13th, 2014 | No Comments »
Article originally appeared in Reuters

By Daniel Bases

It was a gloomy, rainy night in Boston last week where emerging market analysts and portfolio managers huddled together before an audience of 75+ people to discuss an equally gloomy situation in Venezuela, specifically whether or not the nation, with the biggest proven oil reserves in the world, is on the precipice of defaulting on its debt.

Trying to figure out what economic and fiscal policies the administration of President Nicolas Maduro will follow to alleviate rampant inflation and shortages is akin to trying to read tea leaves. But a panel put together by EMTA laid out the scenarios and discussed the implications of any potential default. The talk of default really kicked off Sept. 5, 2014 after anarticle published by former Venezuelan planning minister Ricardo Hausmann and Harvard research fellow Miguel Angel Santos asked whether or not Venezuela should default.

Maduro is the hand-picked successor of former President Hugh ... Read More

En Venezuela se necesitan 3.5 salarios mínimos para la alimentación de una familia

| November 6th, 2014 | No Comments »
El Nuevo Herald


En Venezuela, una familia promedio debe peregrinar por “el menor costo posible” para completar una canasta alimentaria que, aún subvencionada, está un 17 por ciento por encima del salario mínimo y que es irreal con un mercado que ignora las regulaciones del Estado.

En el país petrolero, un ciudadano puede pagar por un kilo de café 220 bolívares (34 dólares) en el primer establecimiento que lo consiga, o puede recorrer las calles hasta dar con una tienda que lo venda a 26.50 bolívares (4.2 dólares) y hacer que el precio subsidiado del Ejecutivo se convierta en una realidad.

La distorsión entre los precios establecidos por el Gobierno de Nicolás Maduro y los establecidos por el mercado se extiende sobre los más de 40 productos de la Canasta Alimentaría Normativa (CAN), que, según las autoridades, tiene un valor de 5,741 bolívares (911 dólares).

En 2011, el Gobierno del fallecido Hugo Chávez (1999-2013) ... Read More

Las Naciones ‘Sumergidas’ de Latinoamérica

| November 5th, 2014 | No Comments »
Folha de Sao Paulo

Líderes políticos y diplomáticos de América Latina y el Caribe saben más sobre Cuba y Venezuela que incluso los observadores más astutos en Washington. Por lo tanto, deberían saber lo que le conviene más a su región ¿no?

Entonces, ¿por qué el Grupo de América Latina y el Caribe en la ONU le dio su apoyo a Venezuela para ser el próximo representante de la región ante el Consejo de Seguridad? Y, ¿por qué están determinados en invitar a el déspota cubano Raúl Castro a la Cumbre de las Américas en Panamá en la primavera?; haciendo caso omiso de las objeciones por parte de sus socios comerciales más importantes, como Estados Unidos y Canadá.

Para muchas generaciones de latinoamericanos, Cuba fue el hogar de algunas de las mejores editoriales de lengua española en el mundo, cientos de periódicos y estaciones de radio de calidad, derechos laborales progresistas, altos niveles de alfabetización y ... Read More

In violent Venezuela, bulletproof everything

| November 5th, 2014 | No Comments »
Yahoo News-01

By Patricia Clarembaux

Caracas (AFP) – Venezuela is known for its obsession with beauty contests and plastic surgery. Now, the latest fashion rage is bulletproof clothes and cars to protect against rampant violent crime.

Miguel Caballero, a Colombian designer known for his bulletproof clothing, told AFP that over the past seven months up to 30 percent of his sales are with people sporting his style-meets-safety duds in Venezuela.

The oil-rich country has a huge gap between rich and poor, and sadly, it boasts the world’s second-highest homicide rate.

Costly precautions like protective clothing, armored cars and bodyguards used to be the stuff of presidents and entertainers like pop star Ricky Martin.

But Venezuela is a violent mess. Nearly four kidnappings per week are reported, according to the government, 65 people a day die violent deaths, according to NGOs, and the obsession with survival is spreading everywhere.

Caballero says his customers are Venezuelan ... Read More

Could Low Oil Prices End Venezuela’s Revolution?

| November 4th, 2014 | No Comments »
The New Yorker

By Girish Gupta

In early September, the Harvard economist and former Venezuelan planning minister Ricardo Hausmann wrote an essay, published online at Project Syndicate, suggesting that there were sound economic reasons the country might choose to default on a debt payment of more than five billion dollars that was due to investors the following month. The government might thereby spread the challenges of economic recovery among other creditors, he argued. Already, Hausmann said, Venezuela had “chosen to default on thirty million Venezuelans” by failing to pay suppliers and allow importers access to hard currency, and by leaving its citizens short of basic goods and services. Currency controls enacted more than a decade ago have created shortages of basic products, including shampoo, diapers, and insect repellent. Supermarket lines have stretched for hundreds of metres, with thousands of people waiting to shop, and scuffles sometimes break out when products arrive. Annual inflation is at more ... Read More

Shortages, Inflation Threaten Venezuela Christmas

| November 3rd, 2014 | No Comments »
ABC News

By Hannah Dreier

Venezuela is stepping up efforts to combat shortages and rising prices so families can have a merry Christmas complete with 12-cent sacks of sugar and 50-cent chickens.

President Nicolas Maduro announced Friday that he is deploying hundreds of inspectors to enforce the government’s price regulations, which set the cost of everything from milk to toothbrushes artificially low.

“Today we deploy, and in November and December you will see that we have guaranteed a happy Christmas for the people,” he said during televised remarks.

The move is part of expanded effort to combat chronic shortages, smuggling, and runaway inflation that are putting great stress on consumers in the socialist Latin American country. The new initiatives come as Maduro’s approval ratings have plunged into the low 30 percent range, and his party prepares for congressional elections next year.

Maduro recently announced that his administration had taken over warehouses where “bourgeois criminals” were hoarding food ... Read More

Venezuela, with world’s largest reserves, imports oil

| November 3rd, 2014 | No Comments »

By Peter Wilson

CARACAS, Venezuela — For the first time in its 100-year history of oil production, Venezuela is importing crude — a new embarrassment for the country with the world’s largest oil reserves.

The nation’s late president Hugo Chávez often boasted the South American country regained control of its oil industry after he seized joint ventures controlled by such companies as ExxonMobil and Conoco. But 19 months after Chávez’s death, the country can’t pump enough commercially viable oil out of the ground to meet domestic needs — a result of the former leader’s policies.

The dilemma — which comes as prices at U.S. pumps fall below $3 per gallon — is the latest facing the government, which has been forced to explain away shortages of basic goods such as toilet paper, food and medicine in the past year.

“The government has destroyed the rest of the economy, so why not the oil industry ... Read More

Should We Be Worried about Iran’s Moves in the Western Hemisphere?

| October 31st, 2014 | No Comments »
The National Interest

By Ilan Berman

Sometimes, it’s difficult to see the forest for the trees. Optimism may currently be running high in Washington that next month’s deadline for negotiations will yield some sort of durable deal over Iran’s nuclear program. But amid all of the diplomatic euphoria, one aspect of the Iranian challenge has received remarkably short shrift: its expanding presence and activities in our own hemisphere.

This is surprising, given the fact that the Islamic Republic’s capacity to threaten the U.S. homeland is comparatively well known. Back in October of 2011, U.S. law-enforcement agencies foiled a plot orchestrated by elements of Iran’s feared clerical army, the Revolutionary Guards, to kill Saudi Arabia’s envoy to the United States in a DC restaurant, using Mexico’s notorious Los Zetas cartel as a proxy.

The event jolted Congress awake to Iran’s growing presence in our own hemisphere. The result was the Countering Iran in the Western Hemisphere Act ... Read More

Venezuela’s Decision To Import Oil Is The Perfect Example Of Just How Screwed The Country Is

| October 29th, 2014 | No Comments »
Business Insider

By Mike Bird

Despite being one of the largest oil producers in the world, Venezuela has started buying light crude oil from Algeria for the first time, Bloomberg reports.

Until recently, the Venezuelan government had been buying naphtha on open markets to treat its oil. That’s because the extra heavy crude produced by Venezuela needs to be diluted before it can be exported. But a combination of falling oil prices (which makes the country’s major export less profitable) and devalued currency (which makes buying things abroad increasingly expensive) has created a conundrum.

Naphtha is more expensive than buying light crude, which is mixed with the heavy crude to dilute it. Earlier in October, sources told Reuters that Venezuela was also importing light crude from Russia.

While the government holds an official exchange rate of 6.2 Venezuelan bolivars to the dollar, the bolivar is worth far less on the black market and the dollar is worth far more.

The shortage of ... Read More

Venezuela’s debts to China – well, that’s alright then

| October 29th, 2014 | No Comments »

By John Paul Rathbone

When oil prices fall, it’s a fair bet that Venezuela’s economy will suffer. After all, that has been the case every time oil prices have fallen in the past. When Venezuela’s official gazette then publishes a legal notice on October 10 saying that its oil-for-loans scheme with China had been tweaked, it is also a fair bet that this would be taken as a sign of Venezuelan economic distress and maybe even a default on loans from its closest ally, China. That is how beyondbrics and many others understood it. How wrong one can be — sort of.

A quick re-cap. Under the amended agreement, Caracas no longer has to send a minimum 330,000 barrels per day of oil to Beijing to service some of the $50bn China has loaned to Venezuela since 2006. Instead, Caracas can decide what the minimum oil shipments will ... Read More

Venezuela sees cabinet shakeup amid rift speculation

| October 27th, 2014 | No Comments »
The Miami Herald


Venezuela on Friday ousted Interior Minister Miguel Rodriguez after he was fingered by pro-government “chavista” groups for being responsible for the deaths of a handful of their leaders during clashes earlier this month.

Venezuelan President Nicolás Maduro made the announcement Friday amid a mini-cabinet shuffle. Taking Rodriguez’s place is Carmen Meléndez, who had been Minister of Defense since July 2013. Gen. Vladimir Padrino López, a government loyalist and outspoken U.S. critic, will become the head of the armed forces.

Maduro didn’t mention the controversy swirling around Rodriguez but said the outgoing cabinet member would have “15 days of rest” before being appointed to other duties.

The change comes after an Oct. 7 clash between police and pro-government “colectivos” left at least five of their leaders dead including the head of the “March 5” colectivo Jose Odreman.

The colectivos, formed early in the administration of late President Hugo Chávez, are seen as part of the administration’s informal muscle. Some ... Read More

Venezuela Cancels Plan to Sell US Oil Refiner Citgo

| October 27th, 2014 | No Comments »
Wall Street Journal WSJ-01

By Kejal Vyas

CARACAS—Venezuela has scrapped plans to sell U.S. refining unit Citgo, the country’s finance minister said in an interview published Sunday by a local newspaper, offering the government’s clearest statement yet on the potential divestiture.

Amid severe dollar shortages and economic woes that have roiled this oil-rich country and sparked fears of a default on external debt, officials indicated earlier this year that they were looking to sell Citgo for as much as $10 billion.

But President Nicolás Maduro last month puzzled analysts when he said that Venezuela plans were to “fortify our investment” into the Houston-based refiner, which is wholly owned by state energy giant Petróleos de Venezuela SA.

“The sale of Citgo is discarded and the president already asserted it,” Finance Minister Rodolfo Marco told local daily El Universal in response to a list of questions on the country’s economic situation.

When asked whether banks hired by the government will continue ... Read More

Peter Foster: The limits of Ecuador’s shakedown statism

| October 25th, 2014 | No Comments »
Financial Post

By Peter Foster

The great eighteenth century lexicographer and wit Samuel Johnson described second marriage as the “triumph of hope over experience.” How then might one characterize the tendency of Canadian mining companies to return again and again to the altar of commerce with foreign government partners who recall Glenn Close in Fatal Attraction?

This week, Vancouver-based Lundin Group confirmed that a subsidiary would take over the Fruta del Norte prospect in Ecuador from Toronto-based Kinross Gold Corporation for US$240 million. Ecuador is run by the left-wing caudillo windbag Rafael Correa, whose hero was Hugo Chavez, the man who turned oil-rich Venezuela into a basket case.

Mr. Correa’s  preferred mode of money-raising is the shakedown. The two most spectacular examples in recent years have been an attempt, via the “Yasuni Initiative,” to blackmail the rest of the world into putting up US$3.6 billion in return for Mr. Correa (italics) not (close italics) drilling ... Read More

Low oil prices fuel death spiral of Venezuelan regime

| October 24th, 2014 | No Comments »

By Roger Noriega

Oil prices plummeting to four-year lows has compounded Venezuela’s budget and governability crisis, leading that government to call for an emergency meeting of OPEC member nations. Until now, Venezuela’s petrodollars have prevented a complete collapse. Now that oil prices are declining drastically, the government does not have the revenue to placate its political base and buy off power-hungry rivals. (Ironically, the reliable source of oil revenue from the United States is propping up Maduro’s hostile regime.)

The price of oil benchmark West Texas Intermediate dropped today to its lowest point in over 4 years, reaching just $80.38 a barrel. Experts point to two causes for the steep decline, an excess supply and a decision by Saudi Arabia to cut its prices in hopes of undermining competition from US shale. Oil revenue is vital to Venezuela’s economy, making up 95% of its export earnings and nearly half of its fiscal ... Read More

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