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Mar
22
2013
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In Case You Missed It… Articles Roundup Week of 3/22/13

r CHAVEZ SUPPORTERS CLASH WITH STUDENTS large5702 e1363978984713 In Case You Missed It… Articles Roundup Week of 3/22/13

Courtesy of: Agence France Presse

This week:  With the April 14 election approaching, the “David and Goliath contest” between opposition candidate Henrique Capriles and acting president Nicolás Maduro begins; Capriles launches a nationwide tour as part of his campaign to replace the late President Hugo Chávez; Maduro’s launches anti-U.S. accusations as part of his campaign rhetoric and propaganda; and the Venezuelan government cuts off the last remaining direct line of communication with the U.S. Supporters of the government attack protesting students; as violence continues to spread through Venezuela, many hope for a change post-Chávez; Chávez’s funeral procession offers a harsh reminder of the bleak Venezuela he left behind; and despite having the largest oil reserves in the world, economists predict Venezuela’s inflation will continue to rise in 2013. New Venezuelan foreign exchange system released by Maduro offers little detail and skirts key issues; Schlumberger Ltd. (SLB), the world’s largest oil-services company, reduces work in Venezuela because of difficulties getting paid by state-owned Petroleos de Venezuela SA; by mentioning Chávez’s name around 3,500 times in just 16 days, Maduro continues to use the late president to ramp up support; and the Venezuelan government turns ordinary events like book fairs into de facto campaign rallies for Maduro.

Venezuela’s election: Battling it out, The Economist

On April 14th, Venezuelans will elect a new president. The choice, if one believes what the two main candidates say about each other, is between “a son of the parasitical bourgeoisie” and “a lying, incompetent usurper”.

Henrique Capriles Launches Venezuelan Campaign Tour, The Huffington Post

Venezuelan opposition candidate Henrique Capriles has launched a nationwide tour as part of his campaign to replace the late President Hugo Chavez.

Anti-US Accusations in Venezuela Seen as Campaign Rhetoric, Voice of America

Venezuela’s Acting President Nicolas Maduro has been making unsubstantiated accusations against Washington, also accusing the United States of plotting to kill Venezuela’s opposition candidate for president.

Venezuela Halts Communication With US Diplomat, ABC News

Venezuela’s government has halted lines of communication established by a top U.S. diplomat to protest what it says has been U.S. interference in the country’s internal affairs ahead of an election set next month to replace the late President Hugo Chavez.                                                                                                            

Chavez Supporters Clash With Student Protestors During Demonstration, Huffington Post

Supporters of the late President Hugo Chavez hurled rocks and bottles Thursday in an attack on student protesters who were marching against perceived bias by Venezuela’s electoral council.

Venezuela plagued by violent crime, The Associated Press

On their daily cable car rides to and from home in Venezuela’s capital, Maria Gonzalez and Jose Rafael Suarez soar in a bubble of safety far above the deadly, trash-strewn streets below.

Hugo Chavez Coffin Parades Past Venezuela’s Ills, ABC

The road from the military academy where Hugo Chavez’s body has been lying in state to the hilltop museum where he’ll be displayed indefinitely is lined with some of the most dangerous slums on the planet.

Venezuela to face high inflation in 2013, Global Times

Among the economic challenges facing Venezuela, the country with the largest oil reserves in the world, experts say the worst is sustained high inflation.

Venezuela gives few details of new forex system, Reuters

Venezuela vowed on Tuesday to provide more dollars to importers through a new foreign exchange system, but officials gave only vague details of how it will work and skirted around key issues including what the rate would be.

Schlumberger to Reduce Venezuela Work on Unpaid Bills, Bloomberg

Schlumberger Ltd. (SLB), the world’s largest oil-services company, is reducing work in Venezuela because of trouble getting paid by state-owned Petroleos de Venezuela SA.

How to keep Chavez memory alive? Name him 200 times a day!, Reuters

Hugo Chavez’s protege and the new flagbearer of socialism in Venezuela has lost no time proving his loyalty in public – in fact, 3,456 times in just 16 days.

Venezuelan government turns book fair into another celebration of Hugo Chavez’s legacy, The Washington Post

Near the entrance to Venezuela’s national book fair, an image of the late Hugo Chavez holding a can of paint in one hand and a brush in the other greets visitors.

 
May
11
2012
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In Case You Missed It… Articles Roundup Week of 5/11/12

This week: It’s been a year since Venezuelans first learned that Hugo Chávez was ill; his increasingly-long absences, along with his naming of a six member Council of State, have fueled rumors that he will pick a successor to run in the October elections; the increasing uncertainty over his health is also leading to warnings about potential civil unrest and even violence; investors are bullish on the state oil company PDVSA’s bonds in hopes that the Chávez era appears to be coming to close, but analysts warn that Venezuela’s economy is in need of serious help—no matter who wins the October election. Meanwhile, PDVSA continues to struggle with oil spills, Chávez’s new prescription-drug plan is denounced as a populist ploy, new reports place Venezuela almost last in the world in economic freedom, and Venezuela finds itself on the U.S. Commerce Department’s watch list for intellectual property infringements.

For Venezuela’s president, a year of health struggles, CNN

It started with an unscheduled phone call to an evening TV show. The voice of Venezuelan President Hugo Chavez crackled over the state television speakers.

Chavez reelection bid in doubt, AFP

President Hugo Chavez’s repeated trips to Cuba for cancer treatment and the government’s silence about his health are fueling rumors that he will name a successor to run in October presidential elections.

Warnings of civil unrest in Venezuela, The Financial Times

Politicians across the spectrum in Venezuela are trading dire predictions of impending violence in the vacuum left by uncertainty about the health of President Hugo Chávez.

A modest concession to reality, The Economist

Ever since Hugo Chávez, Venezuela’s president, admitted nearly a year ago that he was suffering from cancer, his spokespeople have insisted that no substitute would be required.

Chavez Cancer Fight Ignites PDVSA Bond Rally, Businessweek

Debt traders are pushing up the bonds of state-owned Petroleos de Venezuela SA as they envision a nation without President Hugo Chavez that may free the oil producer from a tax rate as high as 95 percent.

A post-Chavez Venezuela is no investment bonanza, Reuters

The health of Hugo Chavez has piqued the market’s interest. Long stretches of silence from the cancer-stricken Venezuelan president have brought a certain morbid optimism to investors, who have sent the country’s debt to highs not seen in years.

Venezuela’s PdVSA Reports Oil Leak In Anzoategui State, The Wall Street Journal

Venezuelan state oil company Petroleos de Venezuela SA said Wednesday it has activated a contingency plan to tackle an oil leak at a crude production facility in the eastern state of Anzoategui.

Venezuela: subsidised drugs for all, The Financial Times

While many will praise the noble intentions behind the Venezuelan government’s inauguration of a nationwide network of subsidised pharmacies on Monday, just as many will reject it as a populist stunt ahead of October’s presidential elections.

Venezuela ranks 174 in the Index of Economic Freedom, El Universal

Economic restrictions in Venezuela keep on causing poor results in trade freedom, rule of law, competitiveness and entrepreneurship. This is mirrored in the country score under the 2012 Index of Economic Freedom.

Venezuela among countries with high “piracy” levels, El Universal

Venezuela is among the 12 countries included in the priority watch list of Intellectual Property Right (IPR) violations, according to a report of the United States Department of Commerce.

 
Apr
4
2012
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ICYMI: Venezuela Credit Rating May Be Cut by Fitch on Oil Reliance

Bloomberg
April 4, 2012
By Daniel Cancel

Venezuela’s credit rating may be cut by Fitch Ratings, which cited higher spending, increased dependence on oil and the use of off-budget funds in reducing the outlook for the country to negative from stable.

A jump in government outlays may push the central government budget deficit to 6.8 percent of gross domestic product this year and make the South American country more vulnerable to a slump in commodities, Fitch director Erich Arispe said today in a statement. A drop in crude or gold prices could negatively affect the rating, he wrote.

Venezuelan President Hugo Chavez, who is receiving radiation therapy to treat cancer in Cuba and plans to seek re- election in October, has diverted at least $80 billion to off- budget development fund Fonden since it was created in 2005 and accelerated borrowing in U.S. dollars amid record crude prices. The 57-year-old also decreed a change to the public finance law on March 29 that allows him to issue debt beyond the budgeted amount without seeking congressional approval.

“A markedly expansionary fiscal policy and the transfer of the country’s oil-windfall to opaque off-budget funds have weakened Venezuela‘s external and fiscal credit metrics as well as increased its dependence on high oil prices,” Arispe said in the statement.

The yield on Venezuela’s 9.25 percent benchmark bonds due in 2027 rose 15 basis points, or 0.15 percentage points, to 10.98 percent today at 11:10 a.m. in Caracas, according to data compiled by Bloomberg. The bond’s price fell 0.99 cent to 87.25 cents on the dollar.

Rating Affirmed

Fitch affirmed it’s B+ credit rating for Venezuela, which is four levels below investment grade and in line with the ratings of Bolivia, Ghana, Kenya, Vietnam and Zambia.

Fitch also changed its outlook for Venezuelan state oil company Petroleos de Venezuela SA and government-run utility company Electricidad de Caracas to negative, according to a separate statement.

PDVSA, as the Caracas-based oil company is known, has about $19.5 billion of dollar bonds outstanding while the state utility has about $663 million of bonds due in 2014 and 2018, Fitch said in the statement.

Venezuela depends on oil for 95 percent of export revenue and about 66.7 percent of its international reserves were in gold at the end of 2011, Fitch said.

Borrowing Costs

While Venezuela’s debt-to-GDP ratio of 25.2 percent is lower than peers, interest payments are rising as the country sells more bonds at high borrowing costs, Fitch said. Venezuela sold $7.2 billion of bonds in 2011.

The extra yield that investors demand to hold Venezuelan debt instead of U.S. Treasuries widened 11 basis points to 943, according to JPMorgan Chase & Co.’s EMBI Global index.

Recent polls show Chavez maintains a lead on opposition candidate Henrique Capriles Radonski six months before the Oct. 7 election. Chavez has ruled Venezuela since 1999.

“The risk for political and social instability remains present due to the high concentration of power in the hands of the president, weak institutional framework and the high degree of political polarization in Venezuela,” Fitch wrote. “The likelihood of a close presidential election and concerns about President Chavez’s health add further uncertainty to the political environment.”

To contact the reporter on this story: Daniel Cancel in Caracas at [email protected]

To contact the editor responsible for this story: David Papadopoulos at [email protected]

To view this article on Bloomberg, please click here.