Tag Archives: currency

Feb
3
2012
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In Case You Missed It… Articles Roundup Week of 2/3/12

In this week’s roundup… President Chávez threatens to nationalize the country’s banks and companies if they fail to comply with his orders; Venezuela’s currency has inflated by 528 percent since 2003; the kidnapping of a Mexican envoy to Venezuela underscores the country’s deteriorating security situation; a new anti-terrorism law generates concern that it could be used to target dissidents. Among other news, Henrique Capriles Radonski gains Leopoldo López’s support as he heads into the opposition primaries on February 12, 2012.

Venezuela’s Hugo Chávez warns banks of nationalisation, BBC News
Venezuelan President Hugo Chávez has warned that he could nationalise banks that refuse to finance agricultural projects backed by his government.

Chavez Says He’ll Nationalize Companies That Don’t Limit Prices, Bloomberg
Venezuelan President Hugo Chávez said he will nationalize companies failing to comply with new price controls for consumer goods that the government is preparing to unveil. The price regulations may affect companies including Procter & Gamble Co., Colgate-Palmolive Co. (CL) and Johnson & Johnson.

Venezuela’s accumulated inflation hits 528% in nine years, El Universal
Between February 2003 (when price controls were first implemented) and December 2011, Venezuela’s accumulated inflation has skyrocketed 528 percent. This has hit the worker’s purchasing power, as they can buy 15 percent less than in 1998.

Fear grips Venezuela after kidnapping, The Financial Times
It almost became an international incident when thugs kidnapped the Mexican ambassador and his wife this week in Caracas, shocking the country’s diplomatic community and embarrassing President Hugo Chávez as Venezuelan crime rates continue to soar before October’s presidential election.

Venezuela passes anti-terrorism law; critics warn it could be used for crackdown on dissent, The Washington Post via the Associated Press
Venezuela’s congress has approved a law aimed at fighting organized crime and terrorism, though opposition lawmakers say they fear it could be used to crack down on dissent.

Venezuela’s new chance, The Washington Post
Polls show Mr. Capriles in a dead heat with Mr. Chávez, even though the president has benefited from a wave of public sympathy since revealing seven months ago that he had been treated in Cuba for cancer.

The man who would defeat Hugo Chávez, The Christian Science Monitor
Living with 30 percent inflation, regular power outages, and one of the highest murder rates in the world, however, the middle class has since tired of Chávez. A tough fight lies ahead. The candidate who will take on Chávez in Venezeula’s October Presidential election will be chosen in primaries held on Feb. 12. Young state governor Henrique Capriles Radonski is likely to take that mantle.

Henrique Capriles Radonski, Venezuela Presidential Candidate, Challenges Hugo Chavez, The Huffington Post
Time points out that the Venezuelan president has faced little competition in prior elections — but that changed when opposition frontrunner Leopoldo López threw his support behind fellow challenger Henrique Capriles Radonski, according to The Christian Science Monitor.

 
Aug
17
2011
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E-Alert – ICYMI: Analysis – Chavez seeks to contain voter angst over economy

Reuters - August 15, 2011

By Louise Egan

CARACAS – Venezuela’s economy is plagued by shortages, high inflation and crippling currency controls, but a massive spending spree by President Hugo Chavez will likely keep an incipient recovery alive, at least until a 2012 vote.

Polls show support for the charismatic leftist leader has edged up since he announced in June he had cancer. But unless he can generate as much sympathy for his economic stewardship, his re-election bid could be at risk.
In the short term, Chavez can paper over underlying problems with subsidies, price controls and ramped-up spending on his flagship health and housing programs for the poor.

But eventually, falling oil production by the OPEC nation combined with mounting debt will make it harder to finance his socialist “revolution,” analysts say, leading to sub-par growth and possibly another painful currency devaluation.

“We expect Venezuelan growth to lag behind the rest of Latin America over the coming years,” said David Rees, emerging markets economist at Capital Economics in London.

“Of course Chavez, current health concerns aside, will try to pump the economy ahead of next year’s presidential election with strong government spending.”

Venezuela has the world’s largest oil reserves, according to OPEC. Yet it was the last in Latin America to pull out of recession, returning to growth in the fourth quarter of 2010.

The recovery advanced at a healthy clip in the first half of this year and is on track for 4.5 percent annual growth, the U.N.’s regional economic body ECLAC predicts.

High oil prices and public spending are powering the expansion. Since taking office in 1999, Chavez has nationalized large swaths of the economy, scaring off foreign investors and slowing domestic manufacturing, farm and even oil production as companies are reluctant to bet on new projects.

The 57-year-old former soldier’s illness has slowed him, but he has made an effort to show he remains in charge, displaying his characteristic flair during regular phone calls to state television programs. He has undergone two chemotherapy sessions in Cuba as Fidel Castro’s guest and says he is recovering well.

Oil prices may continue to work in Chavez’s favour, rallying since a sharp sell-off last week over the U.S. and European debt crises and fears of another global downturn.

“Even if we see a Lehmann-style sell-off like we saw in 2008 … as long as oil stays above $70 (42.69 pounds) a barrel, they’re in pretty good shape,” said Russ Dallen, head of Caracas Capital Markets.

To read the rest of the article click here

 
Aug
16
2011
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ICYMI: Analysis – Chavez seeks to contain voter angst over economy

Reuters - August 15, 2011

By Louise Egan

CARACAS – Venezuela’s economy is plagued by shortages, high inflation and crippling currency controls, but a massive spending spree by President Hugo Chavez will likely keep an incipient recovery alive, at least until a 2012 vote.

Polls show support for the charismatic leftist leader has edged up since he announced in June he had cancer. But unless he can generate as much sympathy for his economic stewardship, his re-election bid could be at risk.
In the short term, Chavez can paper over underlying problems with subsidies, price controls and ramped-up spending on his flagship health and housing programs for the poor.

But eventually, falling oil production by the OPEC nation combined with mounting debt will make it harder to finance his socialist “revolution,” analysts say, leading to sub-par growth and possibly another painful currency devaluation.

“We expect Venezuelan growth to lag behind the rest of Latin America over the coming years,” said David Rees, emerging markets economist at Capital Economics in London.

“Of course Chavez, current health concerns aside, will try to pump the economy ahead of next year’s presidential election with strong government spending.”

Venezuela has the world’s largest oil reserves, according to OPEC. Yet it was the last in Latin America to pull out of recession, returning to growth in the fourth quarter of 2010.

The recovery advanced at a healthy clip in the first half of this year and is on track for 4.5 percent annual growth, the U.N.’s regional economic body ECLAC predicts.

High oil prices and public spending are powering the expansion. Since taking office in 1999, Chavez has nationalized large swaths of the economy, scaring off foreign investors and slowing domestic manufacturing, farm and even oil production as companies are reluctant to bet on new projects.

The 57-year-old former soldier’s illness has slowed him, but he has made an effort to show he remains in charge, displaying his characteristic flair during regular phone calls to state television programs. He has undergone two chemotherapy sessions in Cuba as Fidel Castro’s guest and says he is recovering well.

Oil prices may continue to work in Chavez’s favour, rallying since a sharp sell-off last week over the U.S. and European debt crises and fears of another global downturn.

“Even if we see a Lehmann-style sell-off like we saw in 2008 … as long as oil stays above $70 (42.69 pounds) a barrel, they’re in pretty good shape,” said Russ Dallen, head of Caracas Capital Markets.

To read the rest of the article click here