Cipriana Ramos, the president of the Consejo Nacional del Comercio y los Servicios [National Commerce and Services Council] (CONSECOMERCIO) announced yesterday that imports between September and October of 2015 are down 50% from their level last year, resulting in the country’s merchants “not having merchandise”.
Ramos said that given the fact that Venezuela produces very little, the country relies overwhelming on imports. In order to import, businesses need to have access to foreign currency (usually US dollars), but the government is not providing them with it.
According to Ramos, the heart of the problem lies with the government’s strict currency control system:
Whatever products that exist in the markets are the ones [the government] is importing, because they are not auctioning [foreign currency]. We can’t import via SICAD I, they’re not selling foreign currency through SIMADI, we can’t import at the third or fourth [exchange rate] because of costs thanks to the Ley de Precious Justos [Fair Prices Law].
The Venezuelan government restricts access to foreign currency via a multi-tiered exchange system that trades for Bolivares at different rates. While the SICAD I rate is set by the government and researched for businesses, the SIMADI rate is free-floating and is open to businesses and individuals.
Lower oil prices since mid-2014 have severely restricted the amount of dollars flowing into Venezuela, a fact that manifests itself in the situation Ramos describes.
Ramos also criticized the government in a broader sense, saying:
The problem isn’t how much you’re important, or how many dollars the government has. The problem is that you have to rationalize and administer what you do have. Venezuelans have realized that we have a government that does not [carry out administrative duties].
CONINDUSTRIA Asks Gov’t To Life Exchange Restrictions
The Confederacion Venezolana de Industriales [Venezuelan Industrial Confederation] (CONINDUSTRIA) asked the national government yesterday to lift currency exchange restrictions.
The president of the organization, Juan Pablo Olalquiaga, made the rest amid a set of other economic reforms the body feel are necessary to help the Venezuelan economy begin to heal:
The measures we need are: 1) Pay the debt with foreign suppliers, which is estimated to be 12 million dollars, 2) Legalize the mercado paralelo [literally, “parallel market”, in this case meaning the black market for currency] to be able to purchase materials and spare parts, 3) price controls continue to affect production because costs cannot be translated to the selling price.
CEPAL: Venezuelan Exports Down 41% in 2015
The Community of Latin American and Caribbean States (CELAC) announced today that exports out of Latin America and the Caribbean will fall by 14% this year, with Venezuela alone seeing a 41% decrease.
The region’s decrease is part of a trend that has seen exports fall for since 2013.
CELAC addressed the Venezuelan situation indirectly, saying:
The decrease in the value of exports and the deterioration in exchange terms are more pronounced in countries that export oil and their derivatives, natural gas and metals.
Bolivia, Colombia and Ecuador were also particularly affected by the decrease, with exports from those countries falling 30%, 29% and 25%, respectively.
Mendoza, Hausmann Likely to Face Charges
National Assembly President Diosdado Cabello said today that a PSUV legislator would file a formal complaint against Lorenzo Mendoza and Ricardo Hausman regarding a private conversation Polar head Lorenzo Mendoza had with economic Ricardo Hausmann regarding the hypothetical intervention of the International Monetary Fund in Venezuela.
Tomorrow, Deputy Pedro Carreño will introduce a formal complaint against these two people that are looking to conspire against the economic interests of the country.
Tachira State of Exception Extended for 2 Months
The state of exception in Tachira state has been extended for two more months. The affected municipalities are: Bolivar, Pedro Maria Ureña, Junin, Capacho Nuevo, Capacho Viejo, and Rafael Urdaneta.
The state of exception severely limits civil liberties, including the freedom of assembly and association.
Gov’t Outlines 2016 Budget
Rodolfo Marco Torres, the Minister of the Economy, Finances and Public Banking, presented the country’s 2016 budget before the National Assembly earlier today. The budget calls for next year’s spending to reach Bs. 1,548,574,000, and relies on the average price of oil for next year to be at 40$ per barrel.
The 2016 budget doubles that for 2015, which was approved at Bs. 741,708,000.
While Torres did not provide exact figures, he did say that the country’s internal debt currently sits at 68%, while the external debt is at 32%.
Rodeo II Hostage Situation Continues
Inmates at the Rodeo II prison continue to hold five Ministry of Penitentiaries staff hostage in the Miranda state institution after a mutiny on Friday.
Ultimas Noticias reports that the mutiny is headed by a 20-year old prison inmate named Francisco “El Pollo” Sivira, who in prison for comitting 13 murders in a four month period in 2013.
On Sunday, the inmates led three of the five hostages to the rooftop of the jail and used them as human shields as they attempted to recover ammunition stashed there. One inmate died after an exchange of gunfire with authorities.
One of the hostages, a doctor by the name of Jesus Guerrero, suffered a gunshot wound, although it’s not clear when exactly he was injured.
National Guard troops continue to surround the prison, and People’s Defender Tarek William Saab has said that the government is willing to negotiate with the prisoners for the safe release of the hostages.
Questions/Comments? E-mail me: email@example.com