Economy

Sep
4
2013
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ICYMI: Blackouts Hit Nearly Half of Venezuela

Wall Street Journal
September 3, 2013
By Kejal Vyas

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Courtesy of: AFP

CARACAS—A failure in a transmission line cut power across much of Venezuela on Tuesday, leading the government to blame unidentified saboteurs for the widespread disruption.

Electricity outages struck parts of at least 11 of Venezuela’s 23 states in the early afternoon, mostly in the central and western regions, as well as the capital city, Electricity Development Vice Minister Franco Silva said in comments carried on state television.

Information Minister Delcy Rodríguez said in an address about five hours after the initial outage that power had been restored to several states, adding electricity was in the process of coming back online in the oil-rich western states of Zulia and Táchira, and the greater Caracas area.

A shaky power grid remains a thorn in the side of energy-rich Venezuela, leading critics of the current government to point the finger at mismanagement at state-run utility companies. Authorities have periodically turned to power rationing and levied additional surcharges and penalties on heavy electricity users.

Ms. Rodríguez said “complete restoration of this important service will be done in a progressive manner” without specifying how long it would take.

Messages posted on the Twitter account of President Nicolás Maduro said that the power grid was attacked by unnamed enemies of the government.

“It’s evident that behind [the blackout] is the hand of those that want to weaken our country,” said one post. Mr. Maduro didn’t offer evidence to back up his allegations. Calls seeking further comment from officials weren’t immediately returned.

While the government’s detractors accuse authorities of misappropriating investments into the country’s electricity network and falling behind growing consumer demand, the late leader Hugo Chávez often blamed conspirators against his self-styled socialist “Bolivarian revolution.” Mr. Chávez died in March following a nearly two year battle with cancer. Mr. Chávez nationalized much of the electricity sector in 2007.

In recent weeks, his successor Mr. Maduro has disclosed details of various other alleged plots against Venezuela, including several alleged assassination attempts against his life supposedly masterminded by agents of the U.S. and Colombian governments. Critics accuse him of fabricating plots in a bid to boost support.

Venezuela opposition leader Henrique Capriles, who lost April elections to replace Mr. Chávez, said the power failure underscored mismanagement at state companies. “The blackout today demonstrates one more time the terrible incapacity of this government,” Mr. Capriles said in a post on his official Twitter account. “Now they’ll come up with another story to try to cover up the failure.”

In Caracas, the blackouts briefly hit some key government buildings, including the Energy Ministry, which is also the headquarters of state oil company Petróleos de Venezuela, or PdVSA.

In a statement, Oil Minister Rafael Ramírez said refining and production operations in Venezuela’s vital oil industry were unaffected.

The sprawling capital city was furthered tangled by knotted traffic, disrupted subway service and severed water supplies, as several treatment plants went down, authorities said. Power shortfalls and outages are more common in the interior of the country of 29 million residents, while more rarely reaching Caracas.

Between 2009 and 2010, a drought cut production at Venezuela’s hydroelectric facilities that accounted for some 70% of the country’s power. The country has since had to divert more of its crude oil production and imports gas from Colombia to fulfill its own domestic power needs.

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Jul
26
2013
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In Case You Missed It…Articles Roundup Week of 7/26/13

ob xv412 pd0613 g 20130613101301 e1374873855883 In Case You Missed It...Articles Roundup Week of 7/26/13

Courtesy of: Zuma Press

This week: Maduro responded to Samantha Power’s negative comments on Venezuela by halting efforts to improve U.S.-Venezuela relations; the United States leaves door open to improve relations but it does not rectify Power’s statements; Venezuelan Chargé d’Affaires to the United States affirms that the effort to restore relations was ‘suspended’ but that the government is willing to have a “friendly” bilateral relations with Washington; and Venezuela-Colombia relations are improving with country leaders meeting and discussing their responsibility of working together. The Eclac forecasts that Venezuela will have a 1 percent gross domestic product growth in 2013, the lowest in Latin America; Venezuela seeks $5 billion loan with China to finance a state investment fund that was recently involved in a $85 million embezzlement fraud; Venezuela’s dollar auction is seen by analysts as too little of an effort to revamp the price distortions in the economy; and Ferrominera workers halt the state-owned iron company in rejection of the militarization of the firm. Authentic leaked audio recording describes the highest levels of the Venezuelan government as gripped by rivalries and corruption; almost a dozen state institutions were hacked by groups of cyber pirates demanding Maduro’s resignation; Cabello stated that he will make public hard evidence of assassination attempts that were targeted against himself and president Maduro; and medical associations declare a state of emergency in Venezuela’s health system.

Venezuela Stops Efforts to Improve U.S. Relations, New York Times

The nominee for US ambassador to the United Nations, Samantha Power, spoke before a Senate committee last Wednesday and said that one of her roles as an ambassador would be to challenge a “crackdown on civil society” in several countries, including Venezuela. These statements were first lashed out by Nicolás Maduro on Thursday, and late on Friday the Foreign Ministry said it was terminating efforts to improve relations with the US.

US leaves “door open” to Venezuela, says no apologies, El Universal

The US confirmed on Wednesday that the door was open to improve relations with Venezuela, but avoided any sort of rectification as requested by President Nicolas Maduro, who announced the end of discussions to restore relations after the statements issued recently  by the US ambassador nominee to the United Nations, Samantha Power.

Venezuela willing to have friendly relations with the United States, El Universal

Venezuelan Chargé d’Affaires to the United States Calixto Ortega stated on Thursday that a bilateral rapprochement launched in June to restore relations between the US and Venezuela has been “suspended,” but stressed that Nicolás Maduro’s Administration is willing to have “friendly” bilateral relations with Washington.

Venezuela, Colombia Resume Relations After Spat, Latin American Herald Tribune

Venezuela and Colombia renewed relations after two months of Maduro accusing Santos of destabilizing political harmony by meeting with Venezuelan opposition leader Capriles. Santos acknowledged that there are things the two parties don’t agree on, but that the obligation and responsibility of providing prosperity to their countries will enable them to work together.

Venezuela to experience the lowest economic growth in Latin America, El Universal

Venezuela is the country with the lowest forecast gross domestic product growth in Latin America for 2013. In fact, The Economic Commission for Latin America and the Caribbean (Eclac) estimated that Venezuelan economic growth would hit only 1% this year, below El Salvador, with 2%.

Venezuela seeks $5 billion China loan for scandal-plagued fund, Reuters

Venezuela is seeking a loan of up to $5 billion from China to finance a state investment fund that was recently the victim of an embezzlement scheme by the fund’s own employees involving millions of dollars. Eight people were arrested for appropriating $84 million from the fund, which has received two $4 billion tranches from the China Development Bank since its inception in 2007.

Venezuela’s Revamped Dollar Auctions Seen as Too Little, Wall Street Journal

Venezuela revived its system of auctions for putting more hard currency into the hands of importers and travelers, but analysts say the effort is falling short of addressing distortions caused by the country’s restrictive foreign exchange policies.

Venezuela’s Ferrominera comes to a halt amid militarization, El Universal

A group of workers with Venezuelan state-owned iron company CVG Ferrominera on Thursday blocked both the gate seven and the railways leading to the plant, in rejection of the militarization of the firm on Wednesday evening. Demonstrators explained that the company’s board suspended the transport service on Wednesday evening and troops blocked the gates as part of a contingency plan to restart the plant with National Guard troops.

Venezuelan Newspaper: Probe Says Leaked Audio Describing Corruption Is Authentic, Wall Street Journal

And audio recording allegedly describes the highest levels of the government as gripped by rivalries and corruption. Mr. Silva discussed with a Cuban intelligence officer a rivalry between Diosdado Cabello, the head of the national legislature, and recently elected President Nicolas Maduro. The man said to be Mr. Silva also accuses Mr. Cabello of raiding the government’s international reserves through the use of shady import companies.

Massive cyber attack against Maduro’s Venezuelan, Miami Herald 

From the stock market to the army, the air force and the national guard, web pages of almost a dozen Venezuelan state institutions were hacked by groups of cyber pirates demanding Nicolás Maduro’s resignation from a presidency they called fraudulent. The groups Anonymous Venezuela and Venezuelan Hackers claimed joint responsibility for the attacks launched Tuesday night. The targets include web pages of government agencies, ministries, municipalities…

“Overwhelming” Evidence of Plot to Assassinate Venezuela’s Maduro, Global Research

Head of Venezuela’s National Assembly Diosdado Cabello has stated that he will make public “hard evidence of assassination attempts” targeting himself and President Nicolas Maduro “in due course”. Cabello told legislators “We know who they are, what they are, what they want, and we will find them.”

Medical associations on state of emergency in Venezuela, El Universal

The Network of Medical and Scientific Associations declared a state of emergency in the Venezuelan health system and rejected the scale of charges drafted without including health federations, professional associations, private hospitals and other relevant entities. “We declare a state of emergency for multiple reasons. We cannot ignore how serious it would be regulating, over the use of force, charges arising out of clinical services or closing private health centers based in the country

 
Jul
19
2013
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In Case You Missed It…Articles Roundup Week of 7/19/13

capriles denuncia en 16083903 In Case You Missed It…Articles Roundup Week of 7/19/13

Courtesy of: EFE

This week: Henrique Capriles arrives in Chile to meet with President Sebastián Piñera, as well as other ruling party leaders and the Venezuelan community in Santiago; Human Rights Watch says Venezuela should guarantee the right of free speech of its own citizens before offering to defend Edward Snowden; U.S. Secretary of State John Kerry tells Venezuelan Foreign Minister Elías Jaua that Washington will halt all refined-oil sales if Snowden takes refuge in Venezuela; and Nicolás Maduro fumes after U.S. envoy to the United Nations criticizes Venezuela’s regime as “repressive.” Annual inflation reaches 39.6 percent, far exceeding the government’s stated goal of 14 – 16 percent; purchasing power declines 10 percent as a result of rising inflation; and the Venezuelan government recognizes scarcity of dollars as a big problem, but only takes tepid steps to solve it. The devaluation of the bolívar is complete with the Central Bank’s auction of dollars, doubling the exchange rate; a new Fitch Ratings report confirms that the country’s foreign exchange policy continues to face challenges; and Maduro marries his longtime companion and prominent PSUV figure, Cilia Flores.

Capriles arrives in Chile; confirms appointment with Sebastián Piñera, El Universal

Venezuelan opposition leader Henrique Capriles arrived in Chile on Wednesday in the first leg of a tour that will also take him to Peru. He confirmed that he will meet with President Sebastián Piñera, without specifying the time or place. “It is not important whether we will talk at La Moneda Palace, the seat of the Chilean government, or elsewhere,” Capriles told reporters at the airport of Santiago.

Human Rights Watch: Snowden should steer clear of Venezuela, Salon

If US whistleblower Edward Snowden takes refuge in Venezuela he might quickly wish he hadn’t. At least that’s the verdict of Chilean lawyer Jose Miguel Vivanco, who heads the Americas division of Human Rights Watch, the New York-based advocacy group.

Kerry said to give stern warning to Caracas on Snowden, UPI

Washington is reported to have warned Caracas it would be barred from entering any NATO airspace if it flies U.S. secrets leaker Edward Snowden to Venezuela. Secretary of State John Kerry, who Spanish newspaper ABC said made the warning to Venezuelan Foreign Minister Elias Jaua, also said Washington would halt all sales of vital gasoline and other refined-oil products to Venezuela if Snowden gets refuge in that country, the newspaper said.

Venezuela slams U.S. over ‘repressive regimes’ remarks, Reuters

Venezuelan President Nicolas Maduro demanded the United States apologize on Thursday after the Obama administration’s nominee for envoy to the United Nations said there was a crackdown on civil society in the South American country.

Venezuela Inflation at 39.60%, Latin American Herald Tribune

The inflation rate for the month of June was at 4.7%, lower than that of May’s 6.1%, according to the Venezuelan Central Bank. This brings the rate of inflation for just the first half of 2013 to a total of 25% and the annualized rate at 39.6% — far from the Venezuelan government’s stated goal of keeping it between 14% and 16%.

Purchasing power down 10% due to inflation, El Universal

Venezuela’s minimum wage was increased by 20% on May 1 to USD 390, yet soaring prices have made such increase lose strength rapidly. In May-June this year, inflation shot up reducing purchasing power by 10%.Data from the Central Bank of Venezuela (BCV) indicates that since May 1, prices have swollen 17% in the case of food, 11.2% in transport, and 9% in clothing.

Venezuela: let there be dollars, Financial Times

The Venezuelan toilet paper shortage story says a lot about economic management in a country where the greenback fetches five times its official value on the parallel market. While Venezuelans have struggled to get their hands on everything from loo roll to toothpaste, authorities have been in denial about the grinding liquidity crunch that makes ordinary life – and business life – a daily struggle.

BCV sells US dollars at VEB 10.9 and VEB 11.7 in Sicad auction, El Universal

Devaluation of the bolivar was completed upon the auction sale of US dollars conducted by the Central Bank of Venezuela (BCV) through the Ancillary Foreign Currency Administration System (Sicad), where the exchange rate doubled that of VEB 5.30 per US dollar at its predecessor, the Transaction System for Foreign Currency Denominated Securities (Sitme).

Fitch: Venezuela’s Foreign Exchange Policy Faces Challenges, Reuters

Venezuela’s foreign exchange (FX) policy adjustments in 2013 could reduce fiscal imbalances and limit the need of continued external debt issuance. However, the room to stabilize creditworthiness could be constrained by weaker external buffers, limited upside for oil revenues and non-debt capital inflows, a rapidly decelerating economy, and political changes, according to a new Fitch Ratings report.

Venezuelan President Marries Longtime Companion, Wall Street Journal

Venezuela’s President Nicolás Maduro said on Tuesday that he had married his longtime companion, Cilia Flores, a prominent ruling party figure. Mr. Maduro, speaking during a cabinet meeting broadcast on state television, said the small ceremony was held Monday and was conducted by Jorge Rodríguez, a Caracas-area mayor.