Tag Archives: GDP

Jul
26
2013
Posted by
admin
Comments

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

 
Apr
4
2012
Posted by
admin
Comments

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.

 
Feb
7
2012
Posted by
admin
Comments

ICYMI:Save the Prosperity Infrastructure

Save the Prosperity Infrastructure
The Hill
February 7, 2012
By James K. Glassman

In declaring last month that he won’t abide by rulings of the main international forum for settling investment disputes, Venezuela President Hugo Chavez is following in the footsteps of Argentina’s leaders, whose brazen behavior is encouraging other nations to ignore the legal framework that gives investors confidence to invest trillions of dollars in faraway projects essential to global economic growth.

Chavez told a television audience on Jan. 8: “We have to get out of that ICSID, and I tell you, We will not recognize any ICSD decisions.” Venezuela has 21 cases pending before the World Bank’s International Centre for Settlement of Investment Disputes, totaling $40 billion, or one-tenth of the country’s gross domestic product. The claims stem from expropriations of the assets of such U.S. energy companies Exxon Mobil, ConocoPhillips, and Chevron as well as Europe’s Repsol, ENI, and Staoil.

Chavez’s threat is only display of contempt for what can properly be called the “prosperity infrastructure.” One of the great gifts of Western civilization, this is the framework of international law and global trade rules, enforcement of the sanctity of contracts, and the power to ensure that the world’s oceans and air routes are open to commerce. While the infrastructure was developed mainly by the United States and Britain, its positive externalities extend around the globe. Everyone gains.

In their book Invisible Wealth: The Hidden Story of How Markets Work (Encounter, 2011), Arnold Kling and Nick Schulz show that today the most important sources of wealth aren’t natural resources or factories. They reside in what the authors call “the software layer,” which is “a set of expectations and rules about negotiating, financing, and post-purchase obligations” (p. 5). These are among the intangibles that comprise the prosperity infrastructure.

A World Bank study looked at the difference between the total wealth of a nation and subtracted from it natural and produced capital. The result is intangibles, and the study concluded, “The most striking aspect of the wealth estimates is the high values for intangible capital. Nearly 85 percent of the countries in our sample have an intangible capital share of total wealth greater than 50 percent.”

Click here to read more.