While President Hugo Chávez' Government announced settlement of outstanding debt with the World Bank -USD 52 million-, in parallel it has increased domestic debt.

In five months, Venezuelan domestic debt has jumped more than USD 1.2 billion, as the country has launched two issues of Bonds of the South.

In November 2006, Venezuela placed USD 1 billion in Bonds of the South, including USD 500 million in covered interest and capital titles expiring in 2017.

This year, in the second debt issue jointly with Argentina, Venezuela sold USD 750 in covered interest and capital titles expiring in 2019.

Venezuelan debt with the World Bank amounted to a mere 1 percent of overall foreign debt. Seventy-one percent of Venezuelan debt is in bonds, while the rest is with private banks, the Inter-American Development Bank and the Andean Development Corporation.

Yahoo! News - President Hugo Chavez of Venezuela today announced plans to nationalize the country's power and telecom companies.

"All of those sectors that in an area so important and strategic for all of us as is electricity — all of that which was privatized, let it be nationalized," Chavez said in a televised speech after swearing in a new Cabinet.
"C.A. Nacional Telefonos de Venezuela (CANTV), let it be nationalized," Chavez said. "The nation should recover its property of strategic sectors."

Chavez is making good on the promise made after his reelection to make more radical movements in the direction of socialism.

It was indeed the week before Christmas as everything slowed down, politics appeared not to matter as Venezuelans began celebrating the Christmas they did not enjoy a year ago due to the general strike. The Government and the opposition continued trading barbs, the Government accusing the opposition of massive fraud in the petition drive to recall Hugo Chavez, and the opposition refusing to hand in the signatures until the Electoral Council guaranteed that the rules for evaluatoong the signatures would not be changed after the signatures were handed in. On Tuesday the Electoral Council put an end to the threat, announcing by a unanimous vote that the rules would not be changed retroactively as had been suggested by some pro-Chavez lawyers. Thus, tomorrow, if safety and the Chavistas allow it, the 3.4 million plus signatures will be handed in to the Electoral body, giving it thirty days to verify and count whether the required 2.4 million valid signatures are there.

The only negative note before the holiday season was the sudden appearance of violence against reiligious icons. In less than two weeks there have been a number of visible as well as stealth attacks on images of the virgin and churches. Some icons have been desecrated in a twist that is very unusual for a country where most everyone was at least born a Catholic. The first attacks took place during a pro-Chavez march , which the Government tried to blame on the opposition. However, the pictures tell a different story as the Vice-President is seenencouraging the mob in their path of destruction. Other incidents have been ocurring at night, the Government blames the opposition, but the church blames the Government, calling it "irresponsible". Not a pretty affair, not a pretty picture.

Merry Christmas everyone!

-The National Assembly approved the 2004 budget in the amount of US$ 31.22 billion. The budget assumes a dramatic increase in tax collection of 37% and an increase in oil income of 19%. Moreover, the budget assumes the Government will borrow US$ 11 billion between new internal and external debt. Debt payments will be 45.5% of the budget.

-The Chavez administration continued claiming there was fraud in the petition drive for Chavez' recall. Chavez kept saying the Electoral Board would do the "right thing" as the opposition claimed to have gathered 1.2 million signatures more than necessary for Chavez' recall. The Electoral Board will verify the signatures with each verifier fom that office being surrounded by a Chavez supporter, an opposition supporter and one representative of the OAS and another from the Carter Center. Hard to question that process, no?

-The Venezuelan National Assembly approved a new US$ 1.5 billion issue which may come to market as soon as next week and no later than mid-January.

Miguel sent some media links for Venezuela that I've added to the national links section:

El Universal On-line is one of Venezuela's national newspapers, the last one with free content.

Globovision is a site for a 24-hour news network in Venezuela, with live breaking news.

Venezuela Today is a portal site, a "one-stop source for the latest news and information."

I also added a link to the Mexican media magazine Etcetera which has good coverage of economics and politics in Latin America, often from a media perspective.

Chavez supporters began yesterday to gather signatures requesting the recall of opposition Deputies to the National Assembly. While leaders from Chavez' MVR party are calling it a success, the truth is that very few people are seeing in the polling stations. Some sporadic lines formed yesterday when some polling places run out of the electoral material. I have placed some pictures in my site of polling stations around Caracas on Saturday morning. Next week, from Nov. 28th. to Dec. 1st., the opposition will do the same to gather signatures asking for a recall referendum against President Chavez.

-Venezuela's Electoral Board (CNE) decided by a vote of three to two, that Venezuelans abroad will not be able to participe in the petition drive to ask for a recall referendum for Hugo Chavez' mandate. The Board said that there was not enough time to set the petition drive abroad with sufficient supervision, leaving many wondering what good are the country's Embassies and Consulates abroad.

-Separately, the CNE approved regulation severely limiting advertising for the petition drives as well as any broadcast of any unofficial results past the third day of the petition drives. there will be two petition drives. Staring tomorrow and for the next four days, pro-Chavez supporters will attempt to gather sigantures to recall the oppositions Deputies in the National Assembly. On Nov. 28th. the opposition will attempt to obtain the 2.4 million signatures required to have a recall referendum on Chavez' mandate.

-The Venezuelan Ministry of Finnace succesfully placed US$ 1 billion of a bond with 2018 maturity and 7% coupon. The issue was sold at par in local currency but it is dollar denominated, thus the effective yield will be around 11.6% once it starts trading. (It was trading already today in the informal "when and if" market at 67% for an implicit exchange rate of Bs. 2388 per US$)

-MSCI announced that it will no longer be using the official exchange rate in its Venezuela index. Starting next week, it will use the rate obtained from te arbitrage between the stock of the country's largest telephone company CANTV traded locally and that traded in the US. The arbitrage gives a rate of roughly Bs. 2600 per US$ versus the official rate of Bs. 1600 per US$.

-Venezuela, a baseball-centric country, was excited this week with the victories in the qualifying round for the World Cup of its team against Colombia (in Colombia) and Bolivia (in Venezuela). Venezuela has never even come close to qualifying for the Cup.

The Venezuelan Central Bank (BCV) reported that the Venezuelan economy shrank by 7.1% in the third quarter 2003. For the year the Venezuelan economy has shrank by a total of 14.7%. Quarter to quarter there was a slight improvement from -9.4% in the second quarter. The report by the central bank indicates that the oil sector shrank by 9% during the quarter, while the non-oil economy shrank by 6%, demonstrating that PDVSAтАЩs activities are not up to full speed as the Government claims. In fact, the report by the BCV explicitly states that the oil public sector shrank by 12.2% with respect to the same quarter in 2002, but private sector oil activities increased by 30.2% through the strategic associations. Thus, it is the private oil sector that has actually saved the day in terms of oil production. In the private sector, manufacturing continued stalled at -9.9% for the quarter, while constriction (up 33.9 %) and commerce (up 10.0 %) did show some signs of revival.