Tag Archives: Economic Crisis

World Bank ready to help Venezuela if asked: Latam chief

Venezuelan flags are seen during an opposition rally in Caracas, Venezuela, April 8, 2017. REUTERS/Christian Veron - RTX34Q8A

By David Lawder

WASHINGTON (Reuters) – The World Bank Group stands ready to assist Venezuela, a member and shareholder of the institution, if the government asks for help in dealing with a punishing economic crisis, the bank’s top executive for Latin America said.

Jorge Familiar, World Bank vice president for Latin America and the Caribbean, told Reuters in an interview on Monday that the bank has had no engagement with Venezuela since it paid off past loans in 2008 under the late former President Hugo Chavez.

But Familiar said the bank’s officials have been intensely watching growing shortages of food and medicine this year as the oil exporting country sinks deeper into recession, sparking violent protests.

Familiar said that the multilateral lender would be ready to develop an engagement program for Venezuela, but it would need to be “invited” to do so by President Nicolas Maduro’s government.

“As with all shareholders of the institution, if the situation were to arise, we would be ready to engage with Venezuela,” Familiar said. “What we would need is for them to call us.”

On Tuesday, Familiar said that there would be many steps required before a World Bank loan to Venezuela could be discussed, including re-establishing a dialogue with government officials and providing technical assistance and analysis.

“We are far off from lending to Venezuela,” he said. “We could have a conversation that would start on the analytical front.”

Last year, the World Bank approved $2.5 billion in new credit lines for Peru to backstop the country’s financial plans amid falling revenues as commodity prices slumped.

The credit lines carry reform requirements under World Bank programs to support improvements in public expenditure management, public education and to streamline the formation of new private companies.

Familiar said Peru was meeting benchmarks for that program.

Venezuela was the outlier on Tuesday when the World Bank released its latest economic forecasts for Latin America and the Caribbean, predicting that regional growth would turn positive, to 1.5 percent in 2017 as recessions end in Brazil and Argentina, after a regional decline of about 1 percent in 2016.

The World Bank forecast that Venezuela’s growth would fall by 3.1 percent in 2017 after a spectacular 12 percent drop in 2016. It forecast that Venezuela would start to recover by 2018, with 0.6 percent growth amid firmer oil prices, but lag far behind regional growth of about 2.5 percent for 2018.

(Reporting by David Lawder; Editing by Dan Grebler)

Venezuelan opposition to hold ‘mother of all marches’ against Maduro

FILE PHOTO: An opposition supporter waves a Venezuelan flag during a gathering against Venezuela's President Nicolas Maduro's government in Caracas, Venezuela April 15, 2017. REUTERS/Carlos Garcia Rawlins

By Brian Ellsworth and Diego Oré

CARACAS (Reuters) – Venezuela’s opposition says it will stage the “mother of all marches” on Wednesday, accusing President Nicolas Maduro of resorting to dictatorial measures to quash popular outrage over a deepening economic crisis.

In the culmination of a fortnight of violent demonstrations that killed five people, marchers around the country will demand the government present a timeline for delayed elections, halt a security crackdown on protests, and respect the autonomy of the opposition-led legislature.

Maduro, who says recent protests have been little more than opposition efforts to foment violence and topple his government, has called on sympathizers of the ruling Socialist Party to hold a competing march in Caracas.

“This is a government in its terminal phase,” two-time presidential candidate Henrique Capriles told Reuters on Tuesday evening.

“This is going to escalate … and force Maduro, and his regime, to hold free and democratic elections.”

Venezuelans have for years been furious about a collapsing economy in which basic food products are a struggle to obtain and triple-digit inflation is steadily eroding consumer spending power.

But a Supreme Court decision in March to assume the powers of the opposition-led Congress sparked a wave of protests that have not ebbed, even though the court has partly reversed the measure in the face of international condemnation.

Further spurring outrage was a decision by the national comptroller’s office earlier this month to disqualify Capriles from holding office for 15 years, dashing his hopes for the presidency.

The elections council, which is sympathetic to the government, has delayed votes for state governors which were supposed to take place last year. The opposition says this is because the ruling Socialist Party is likely to fare poorly in such a vote.

“QUICK SOLUTION”

Eleven Latin American countries issued a joint statement this week calling on authorities to set a time frame for elections to “allow for a quick solution to the crisis that Venezuela is living through.”

Marches have repeatedly ended in clashes between demonstrators and security forces, with rock-throwing youths squaring off against tear-gas-lobbing security forces in confused melees that drag on well into the evening.

The opposition will congregate at more than two dozen meeting points around Caracas and attempt to converge on the office of the state ombudsman, a guarantor of human rights.

Previous efforts to march there have been blocked by the National Guard, resulting in clashes. As has become common in recent weeks on protest days, Venezuelan authorities will close 27 metro stations and likely set up checkpoints to slow entry to the city.

Socialist Party officials dismiss the opposition marches as efforts to destabilize the government, pointing to protester barricades and vandalism, and have called on supporters to rally around Maduro.

“The great Chavista mobilization toward Caracas has begun,” wrote Socialist Party Vice President Diosdado Cabello on Twitter, referring to late socialist leader Hugo Chavez.

“Let’s all go conquer the peace, defend the fatherland, the constitution, the revolution.”

But pro-government marches no longer have the fervor or numbers of those of Maduro’s predecessor. Opposition leaders also accuse the government of infiltrating marches with violent protesters as a way of discrediting them.

(Reporting by Brian Ellsworth; Editing by Girish Gupta, Christian Plumb and Lisa Shumaker)

Venezuela opposition plans nationwide protests to strain security forces

Demonstrators rally against Venezuela's President Nicolas Maduro carrying a sign that reads "No more dictatorship" in Caracas, Venezuela, April 13, 2017. REUTERS/Carlos Garcia Rawlins

By Alexandra Ulmer

CARACAS (Reuters) – Venezuela’s opposition was planning protests in each of the country’s 335 municipalities on Thursday, in a bid to strain the capabilities of security forces as unrest mounted in the volatile nation.

The oil-rich but crisis-shaken South American country has been convulsed by escalating protests over the last two weeks amid a punishing economic recession and accusations that leftist President Nicolas Maduro has morphed into a dictator.

In a worrying sign for Maduro, people in usually pro-government slums and low-income areas have blocked streets and lit fires during scattered protests this week. A crowd also broke through a security cordon at his rally on Tuesday, heckling at him and throwing stones while bodyguards scrambled.

Four people were killed during protests over the last week, authorities say. Opposition lawmaker Alfonso Marquina said on Thursday a fifth protester had died.

With momentum on their side, the main opposition coalition was urging Venezuelans to take to the streets across the country on Thursday in an effort to leave security forces too thinly spread to break up rallies.

They accuse police and the National Guard of indiscriminate use of tear gas, including gassing clinics and dropping canisters from a helicopter, and of arbitrarily detaining people for simply being within the vicinity of protests.

“This is a struggle of resistance, whose fundamental objective is to wear them out, and see who breaks first,” said opposition lawmaker Freddy Guevara in a video posted on Twitter.

“Will it be our desire to fight or theirs to repress? Will it be our desire to have a better Venezuela or theirs to obey the dictatorship?”

The opposition says Maduro made it clear to the world he was a dictator when the Supreme Court in late March assumed the functions of the opposition-led congress.

Amid global outcry, the court quickly rolled back the most controversial part of its decision, but the move breathed new life into the fractured opposition movement and comforted demonstrators that they had international support.

Last week’s move to ban opposition leader Henrique Capriles from holding office for 15 years also fueled demonstrators’ outrage. Capriles is seen as the opposition’s best presidential hope.

UNREST

Alongside planned opposition marches that have dissolved into clashes, there have also been what witnesses and local media describe as impromptu nighttime protests, where neighbors block streets with trash or burning debris.

Looting has been reported too, especially in the working class community of Guarenas outside Caracas.

While opposition leaders have called for protests to remain peaceful, Maduro’s government has claimed that a business-backed opposition is actually pushing for violence to justify “foreign intervention.”

Maduro has drawn parallels with a brief coup against his predecessor – the late Hugo Chavez – in 2002, and warned that an opposition government would slash social benefits like health care for the poor and subsidized food.

The opposition has responded that any social advances made under Chavez have been wiped out by a devastating economic crisis that has brought widespread shortages of food and medicine.

Some in the opposition accuse “colectivos,” militant grassroots groups whom critics say are thugs paid by the government, of looting and violence to taint the opposition.

Many Venezuelans still worry protracted protests will not bring about political or economic change, but will just increase violence in the already volatile nation.

Major anti-government protests in 2014 eventually fizzled out, though the opposition at the time had nebulous demands, poor neighborhoods largely abstained, and the economy was in better shape.

Venezuelans are gearing up for next Wednesday, when opposition leaders have called for the “mother of all marches.”

(Writing by Alexandra Ulmer; Editing by Bernadette Baum)

Venezuela protests spread to poor areas, two more deaths amid unrest

Riot police fire tear gas during a rally against Venezuela's President Nicolas Maduro's government in Caracas, Venezuela April 10, 2017. REUTERS/Christian Veron

By Alexandra Ulmer and Corina Pons

CARACAS (Reuters) – Venezuelans in poor areas blocked streets and lit fires during scattered protests across the country on Tuesday night, and two people were killed during the growing unrest in the midst of a crippling economic crisis.

In a worrying sign for leftist President Nicolas Maduro, groups in Caracas’ traditionally pro-government hillside slums and low-income neighborhoods took to the streets, witnesses and opposition lawmakers reported.

Maduro foes were galvanized by footage of a crowd in the south-eastern Bolivar state heckling and throwing objects at the closely-protected leader during a rally on Tuesday, before state television cut off the broadcast.

In the western Lara state, two people, aged 13 and 36, were killed during unrest on Tuesday, the state prosecutor’s office said in a statement. Lara’s opposition governor Henri Falcon blamed violence on “infiltrators” and “delinquents” who roamed on motorcycles after an energy blackout.

“They go by neighborhoods and shoot people who are protesting,” said Falcon, a former member of the ruling party, urging a negotiation to end Venezuela’s political crisis.

The opposition says Maduro, a former bus driver and union leader who took office four years ago, has morphed into a dictator after a Supreme Court decision in late March to assume the functions of the opposition-led congress.

The court quickly overturned the most controversial part of its decision, but the move breathed new life into the fractured opposition movement.

Two young men had already been killed in protests during the last week, according to authorities. Many are bracing for further violence in a country that is racked by crime and has one of the world’s highest murder rates.

Witnesses said residents of a number of working-class Caracas neighborhoods blocked streets with trash or burning debris on Tuesday night, describing confused street melees and clashes with security forces. The capital appeared calm on Wednesday, although some roads were charred and littered with broken glass.

Government officials did not provide an official account of the events, and the Information Ministry did not respond to an email seeking comment.

Maduro has said that under a veneer of pacifism, a U.S.-backed right-wing opposition is encouraging violent protests in a bid to topple his government and get its hands on Venezuela’s oil wealth.

On Wednesday night, he said the heckling incident a day earlier in the city of San Felix was an opposition attempt to “ambush” him that was thwarted by his loyalists.

“They had prepared an ambush and the people neutralized it,” he said. “I want to thank the people of San Felix for their expressions of fervor, passion, love and support.”

“MADURO DICTATOR”

Maduro’s adversaries are demanding the government call delayed state elections, which polls suggest would not go well for the ruling Socialists. They also want an early presidential vote after authorities quashed a recall referendum against Maduro last year.

A ban on opposition leader Henrique Capriles from holding office for 15 years drew broad criticism as he was seen as the opposition’s best presidential hope.

But it is Venezuela’s extended economic crisis that has ordinary people fuming.

Venezuelans have been suffering food and medicine shortages for months, leading many to skip meals or go without crucial treatment. Lines of hundreds form in front of supermarkets as people jostle for hours under the hot sun hoping price-controlled rice or flour will be delivered.

The crisis has especially hurt the poor, long the base of support of Maduro and his predecessor the late Hugo Chavez.

Protesters say they have also been encouraged by stronger condemnation from American and European nations in the last two weeks.

“We cannot accept that the regime is willing to sacrifice Venezuelan lives to remain in power,” said Luis Almagro, the head of the Organization of American States, in a video posted on Wednesday, urging elections.

Another round of protests are planned for Thursday in Venezuela’s more than 300 municipalities. Opposition leaders are calling for the “mother of all marches” on April 19.

ARRESTS, LOOTING

Amid what the opposition coalition says is a crackdown on dissent, some 71 people were arrested on Tuesday, according to rights group Penal Forum.

In total, 364 people were arrested between April 4-12 during the most sustained protests since 2014, with 183 people still behind bars, the group added.

A group of young men and teenagers were arrested for throwing “sharp objects” against Maduro’s vehicle on Tuesday night, according to a report by a local National Guard division seen by Reuters. Two sources told Reuters the protesters were hurling stones.

Local media reported lootings overnight in the working class bedroom community of Guarenas outside Caracas, as well as in parts of the capital.

State officials have tweeted images and videos of demonstrators vandalizing public property and throwing rocks at police.

Despite the spiking tensions, many in the opposition worry extended protests will not spur early or fair elections, but rather increase clashes in the already turbulent country.

Major anti-government protests in 2014 eventually floundered, though the opposition at the time did not have as clear-cut demands, poor neighborhoods largely abstained, and the economy was in better shape.

(Additional reporting by Eyanir Chinea, Brian Ellsworth, Diego Ore, Miguel Angel Sulbaran, Liamar Ramos, Maria Ramirez, Deisy Buitrago and Mircely Guanipa; Writing by Alexandra Ulmer; Editing by Andrew Hay and Michael Perry)

Brazil may widen 2018 deficit goal as recovery disappoints: sources

Brazil's President Michel Temer listens to questions from the media during LAAD, the biggest military industry expo in Latin America in Rio de Janeiro, Brazil, April 4, 2017. REUTERS/Pilar Olivares

By Alonso Soto and Marcela Ayres

BRASILIA (Reuters) – Brazil’s government could widen its fiscal deficit target for 2018 as revenue collection remains weak given the slow pace of economic recovery, two officials involved in the policy discussion said on Wednesday.

It was the first time members of Brazil’s economic team have acknowledged a possible change to the primary deficit goal of 79 billion reais ($25.54 billion) for next year, amid efforts by the administration to rebalance its accounts after nearly three years of recession.

“We are keeping 79 billion but with the tendency to revise it,” said one of the officials, who asked for anonymity because he is not allowed to speak publicly. “We will need to seek extraordinary revenues in 2018.”

The market is forecasting a deficit of 118.3 billion reais next year, according to estimates collected by the finance ministry.

President Michel Temer was forced to cancel payroll tax breaks for 50 sectors and freeze 42 billion reais in budget spending to meet this year’s deficit goal of 139 billion reais.

A painfully slow recovery from the country’s deepest recession ever has undermined tax collection and called into question Temer’s capacity to significantly reduce a deficit that cost Brazil its investment grade rating.

The official said the government has ruled out tax increases to meet this or next year’s goals, but stressed authorities will have to seek one-off revenues such as concession fees and the sale of state assets.

To meet this year’s budget, the government considered increasing the Pis/Cofins federal taxes on gasoline, but political pressure forced Temer to backtrack.

With elections looming in 2018 and a sweeping corruption investigation ensnaring dozens of politicians, Temer’s allies in Congress are calling for more action to revive the economy.

A slew of negative data in January raised concerns, but the government still believes the economy will return to positive territory in the first quarter, the official said.

To alleviate its finances this year the government aims to collect more than 10 billion reais in revenues from a program to give amnesty to Brazilians who pay taxes and fines on undeclared assets held abroad, the official said.

The government has until April 15 to deliver its 2018 budget guidelines officially setting its primary deficit goal for next year.

($1 = 3.0928 reais)

(Reporting by Alonso Soto; Editing by Meredith Mazzilli)

Venezuela’s Maduro decried as ‘dictator’ after Congress annulled

Deputies of the Venezuelan coalition of opposition parties (MUD), clash with Venezuela's National Guards during a protest outside the Supreme Court of Justice (TSJ) in Caracas, Venezuela March 30, 2017. REUTERS/Carlos Garcia Rawlins

By Diego Oré and Andrew Cawthorne

CARACAS (Reuters) – Opposition leaders branded Venezuela’s socialist President Nicolas Maduro a “dictator” on Thursday after the Supreme Court took over the functions of Congress and pushed a lengthy political standoff to new heights.

There was swift and widespread international condemnation of the de facto annulment of the National Assembly, where the opposition won a majority in late 2015 amid an unprecedented economic crisis that has seen Maduro’s popularity plummet.

The head of the 34-nation Organization of International States (OAS), Luis Almagro, said the Venezuelan court had dealt the final blows to democracy and accused Maduro’s “regime” of carrying out a “coup.”

Brazil, Argentina, Mexico, Colombia, Chile, Guatemala and Panama expressed strong concerns while Peru withdrew its envoy after what it termed a rupture of democracy.

The United States described the move as a “serious setback for democracy in Venezuela” while the European Union called for a “clear electoral calendar” going forward.

Venezuela’s top court had already overturned most National Assembly decisions since the opposition win. Then late on Wednesday, it explicitly stated it was assuming Congress’ role in a ruling authorizing Maduro to create oil joint ventures without the previously mandated congressional approval.

“As long as the situation of contempt in the National Assembly continues, this constitutional chamber guarantees congressional functions will be exercised by this chamber or another chosen organ,” the court said in its ruling.

The contempt charge stems from vote-buying accusations against three lawmakers from southern Amazonas state. Even though they no longer sit in Congress, the court said parliamentary leaders had not handled their case legally.

Critics of Maduro say it is an excuse for him to consolidate power and muzzle the opposition amid a severe recession, soaring inflation and acute shortages of food and medicine.

Maduro, a 54-year-old former bus driver and foreign minister, was narrowly elected in 2013 to replace late leftist President Hugo Chavez. He has accused Washington of leading a push to topple him as part of a wider offensive against leftist governments.

Stung by the rebukes around Latin America, Maduro’s government condemned what it described as a “right-wing regional pact” against it on Thursday.

“We reject the Peruvian government’s rude support for the violent and extremist sectors in Venezuela,” Foreign Minister Delcy Rodriguez said in a series of tweets.

Leaders of Venezuela’s Democratic Unity opposition coalition renewed their demand for early presidential elections and accused Maduro of duplicating Peruvian leader Alberto Fujimori’s notorious 1992 closure of Congress.

“Nicolas Maduro has carried out a ‘coup d’etat’ … this is a dictatorship,” said National Assembly President Julio Borges, before tearing up a copy of the Supreme Court ruling at a news conference in the gardens of the legislature.

“This is trash from people who have kidnapped the constitution, rights and freedom of Venezuelans … The National Assembly does not recognize the Supreme Court.”

PROTESTS

The opposition promised new street protests starting from Saturday – but that tactic has failed in the past despite marches that have drawn hundreds of thousands of protesters.

Last year, the opposition pushed for a referendum to recall Maduro and force a new presidential election, but authorities thwarted them and also postponed local electoral races that were supposed to have been held in 2016.

Maduro’s term in office ends in January 2019.

Around a dozen opposition lawmakers trying to march to the Supreme Court on Thursday clashed with National Guard soldiers and pro-government supporters lined up to stop them.

Pockets of youths took to the streets in parts of Caracas and attempted to block a major highway. They held flags and banners saying, “No to dictatorship.”

However, numbers were small and they quickly dispersed.

In 2014, a wave of unrest swept the country, leaving more than 40 dead, though now many opposed to the government say they feel protesting is pointless.

“If the international community stays firm, demanding elections, we are sure the government will have to turn back,” another opposition leader and two-time presidential candidate Henrique Capriles said.

Spooked by the opposition’s warning that investment deals bypassing Congress would not be valid, foreign oil companies were closely following the political showdown.

As Venezuela tries to raise funds for bond payments and a reeling economy, it has sought to sell stakes in oil fields. State oil company PDVSA recently offered Russia’s Rosneft a stake in the Petropiar oil joint venture, sources with knowledge of the proposal told Reuters.

“We want to make perfectly clear to all the oil companies that any strategic alliance (that did not go through Congress) is null,” Borges said on Thursday.

While some investors could see the Supreme Court sentence as giving them the green light to invest, others are increasingly worried about Venezuela’s murky legal framework.

“There is reasonable doubt about the legality of all this,” said a source at a foreign oil company.

(Additional reporting by Corina Pons, Eyanir Chinea, Andreina Aponte, Girish Gupta in Caracas, Mitra Taj in Lima, Rosalba O’Brien in Santiago and Enrique Pretel in San Jose; Writing by Andrew Cawthorne and Alexandra Ulmer; Editing by Tom Brown and Andrew Hay)

Exclusive: Venezuela increased fuel exports to allies even as supply crunch loomed

Venezuelan motorists line up for fuel at a gas station of Venezuelan state oil company PDVSA in Maturin, Venezuela March 23, 2017. REUTERS/Marco Bello

By Marianna Parraga and Alexandra Ulmer

HOUSTON/CARACAS (Reuters) – A gasoline shortage in OPEC member Venezuela was exacerbated by an increase in government-sanctioned fuel exports to foreign allies and an exodus of crucial personnel from state-run energy company PDVSA, according to internal PDVSA documents and sources familiar with its operations.

Leftist-run Venezuela sells its citizens the world’s cheapest gasoline. Fuel supplies have continued flowing despite a domestic oil industry in turmoil and a deepening economic crisis under President Nicolas Maduro that has left the South American country with scant supplies of many basic necessities.

That changed on Wednesday, when Venezuelans faced their first nationwide shortage of motor fuel since an explosion ripped through one of the world’s largest refineries five years ago. At the time, the government of then-President Hugo Chavez curbed exports to guarantee there was enough fuel at home.

This week’s shortage was also mainly due to problems at refineries, as a mix of plant glitches and maintenance cut fuel production in half.

Unlike five years ago, Caracas has continued exporting fuel to political allies and even raised the volume of shipments last month despite warnings within the government-run company that doing so could trigger a domestic supply crunch.

Shipments from refineries to the domestic market needed to be redirected to meet those export commitments, the internal documents showed.

“Should this additional volume … be exported, it would impact a cargo scheduled for the local market,” read one email sent from an official in the company’s domestic marketing department to its international trade unit.

Venezuela last month exported 88,000 barrels per day (bpd) of fuels – equivalent to a fifth of its domestic consumption – to Cuba, Nicaragua and other countries, according to internal PDVSA documents seen by Reuters.

That was up 22,000 bpd on the volumes Venezuela had been shipping to those two countries under accords struck by Chavez to expand his diplomatic clout by lowering their fuel costs through cheap supplies of crude and fuel.

The order to increase exports came from PDVSA’s top executives, according to the internal emails seen by Reuters.

Venezuela’s oil ministry and state-run PDVSA, formally known as Petroleos de Venezuela SA, did not reply to requests for comment for this story.

FUEL STRAIN, BRAIN DRAIN

The strain on the country’s fuel system has been worsened by the departure of staff in PDVSA’s trade and supply unit who are key to ensuring fuel gets to where it’s needed and making payments for imports, three sources close to the company said.

The unit has seen around a dozen key staffers depart since Maduro shook up PDVSA’s top management in January. Among those who left was the head of budget and payments, two sources said.

“Every week someone leaves for one reason or another,” said a PDVSA source familiar with the unit’s operations.

Some have been fired, while others have left since the shake-up inserted political and military officials into top positions and bolstered Maduro’s grip on the company that powers the nation’s economy.

The imposition of leaders with little or no experience in the industry has further disillusioned some of the company’s experienced professionals and accelerated an exodus that had already taken hold as economic and social conditions in Venezuela worsened.

A recent internal PDVSA report seen by Reuters mentioned “a low capacity to retain key personnel,” amid salaries of a few dozen dollars a month at the black market rate.

UNPAID BILLS

The departure of staff responsible for paying suppliers, as well as a cash crunch in the company and the country, have led to an accumulation of unpaid bills for fuel imports into Venezuela.

Had those bills been paid, the supply crunch would have been less acute, the company sources said.

About 10 tankers are waiting near PDVSA ports in Venezuela and the Caribbean to discharge fuel for domestic consumption and for oil blending.

Only one vessel bringing fuel imports has been discharged since the beginning of the week, shipping data showed.

PDVSA ordered some of the cargoes as it prepared alternative supplies while refineries undergo maintenance.

The tankers sitting offshore will not unload until PDVSA pays for their cargoes, said shippers and the company sources.

Should PDVSA pay – up to $20 million per cargo – shortages could blow over relatively soon.

The cash-strapped company has struggled since the global oil price crash that began in 2014 cut revenue for its crude exports. PDVSA is tight on cash as it prepares for some $2.5 billion in bond payments due next month.

While the vessels sit offshore, lines of dozens of cars waited at gas stations in central Venezuela on Wednesday and Thursday. The shortages angered Venezuelans who already face long lines for scarce food and drugs.

PDVSA blamed the supply crunch on unspecified problems for shipping fuel from domestic refineries to distribution centers. The company said it was working hard to solve the gasoline situation by boosting deliveries to the worst-hit regions.

A shortage of trucks to move refined products has also caused bottlenecks, oil workers told PDVSA President Eulogio Del Pino during a visit to a fuel facility this week, asking for help. Trucks are in short supply because the country does not have enough funds to pay for imports of spare parts.

It was unclear when fuel supplies would return to normal, although by late Thursday PDVSA appeared to have distributed some fuel from storage to Caracas and the eastern city of Puerto Ordaz. Lines to fill up at gasoline stations shortened in both cities, according to Reuters witnesses.

Workers at the 335,000-barrel-per-day Isla refinery on the nearby island of Curacao operated by PDVSA said on Friday that the refinery had begun restarting its catalytic cracking unit, which could boost fuel supplies in the coming days.

(Additional reporting by Mircely Guanipa in Punto Fijo and Maria Ramirez in Puerto Ordaz; Editing by Simon Webb and Jonathan Oatis)

Nations urge Venezuela on elections, warn of diplomatic ‘last resort’

Venezuela's President Nicolas Maduro speaks during a pro-government rally, next to his wife Cilia Flores (L), in Caracas, Venezuela March 9, 2017. REUTERS/Marco Bello

By Frank Jack Daniel and Matt Spetalnick

MEXICO CITY/WASHINGTON (Reuters) – A group of 14 nations on Thursday urged Venezuela to hold elections and release “political prisoners,” in a joint statement that kept open the option of seeking to suspend the South American country from the Organization of American States.

The statement, which Mexico’s Foreign Minister Luis Videgaray said was aimed at encouraging Venezuela to “re-establish democracy,” called for dialogue and negotiation to resolve a crisis in the oil-exporting country, which is suffering severe food and fuel shortages.

Suspending Venezuela from the OAS was a last resort, the nations said, and something that should be avoided unless other diplomatic efforts have been exhausted.

“We reiterate that inclusive and effective dialogue is the right path to achieve lasting solutions to the challenges faced by the Venezuelan people,” the statement said.

Venezuela has jailed around 100 government opponents it accuses of inciting violence and planning the overthrow of President Nicolas Maduro. Opposition activists and human rights groups say they are prisoners of conscience.

Venezuela’s election board in October suspended the opposition drive for a recall referendum against Maduro despite the country’s crushing economic crisis, the government’s unpopularity and public opinion in favor of a plebiscite.

Venezuela has also delayed until 2017 elections due in December for state governorships.

The declaration by the 14 nations called for the separation of powers, the rule of law and the establishment of an electoral calendar for postponed elections.

The group that signed the declaration, which includes regional powerhouses the United States, Mexico, Canada and Brazil, also called on Venezuela to recognize the legitimacy of the country’s national assembly, which has been defanged by Maduro’s government since the opposition won a majority in 2015.

Delcy Rodriguez, Venezuela’s foreign minister, accused Washington of leading the new push to isolate her country, which has been at loggerheads with the United States since the left-wing government of the late President Hugo Chavez.

“What are they trying? To wound Venezuela?” Rodriguez said on Twitter shortly before the statement was released. “We will denounce these actions country by country. We will not allow any aggression against our sacred homeland.”

The pressure by countries including several former Venezuelan allies follows a call by the head of the OAS to expel Venezuela if it does not quickly hold general elections, a move that would require the support of two thirds of the Washington based body’s 34 General Assembly members.

Luis Almagro, secretary general of the OAS and a former foreign minister of Uruguay, calls Maduro’s government a dictatorship. Earlier this month he said if Venezuela did not quickly comply it should be suspended for violating rules that require members to adhere to democratic norms.

In the past the OAS suspended Cuba and Honduras for breaking with democracy, but was criticized for not taking such action against right-wing dictatorships during the Cold War.

State Department spokesman Mark Toner said the United States was concerned by the state of democracy in Venezuela.

“We urge the Venezuelan government to comply with the constitution … and hold elections as soon as possible,” Toner told a briefing for reporters.

“We’re not pushing for Venezuela’s expulsion from the OAS at this time. We do think that the OAS is the appropriate venue to deal with the situation in Venezuela.”

However, a senior White House official said suspension from the regional body remained an option. Although numbers supporting Thursday’s declaration fell well short of the requirement to take strong action through the OAS, the official said the statement was a significant first step.

“If Venezuela continues down the path that it’s on, the notion that it’s going to belong to an organization committed to democratic principles doesn’t make much sense,” the official told Reuters, adding that the United Sates could also consider sanctions. “There are going to be ramifications,” the official said.

Mexico’s decision to openly take a stance on the situation in Venezuela is a shift from a usual preference by Latin America’s second-largest economy not to interfere in other countries’ affairs.

“We should not continue to be indifferent, we cannot continue to be indifferent,” Videgaray said earlier on Thursday, emphasizing that Mexico would respect Venezuela’s sovereignty and act according to international law and in agreement with the countries of the Americas.

Mexico’s change in tack may reflect an effort to have constructive relations with the administration of U.S. President Donald Trump, who has repeatedly antagonized Mexico.

“Having the Mexicans in the lead is beneficial for us in attracting additional support,” the White House official said.

(Additional reporting by Matt Spetalnick and Lesley Wroughton in Washington, David Ljunggren in Ottawa, Daniela Desantis in Asuncion and Girish Gupta and Diego Oré in Caracas; Editing by Matthew Lewis and Leslie Adler)

In time of crisis, Venezuelans help the hungry

Mariano Marquez (L), a volunteer of Make The Difference (Haz La Diferencia) charity initiative, gives a cup of soup and an arepa to a homeless woman in a street of Caracas, Venezuela March12, 2017. Picture taken March 12, 2017. REUTERS/Marco Bello

By Andreina Aponte

CARACAS (Reuters) – Their clothes torn and dirty, nine barefoot children yell and applaud as a convoy of cars approaches on a busy street in Venezuela’s capital.

Volunteers emerge handing out soup and clothes to the delight and excitement of the children who have come from a town a couple of hours outside Caracas.

“We started this because we see people every day hunting for food in the trash, not only the homeless but people on their way to work,” said Diego Prada, a 28-year-old entrepreneur who began a charity in December in response to Venezuela’s dire economic crisis.

His ‘Make The Difference’ initiative is one of a plethora of solidarity projects springing up around Venezuela, in the fourth year of a crushing recession that has forced many to skip meals and jostle for scarce subsidized food.

Concerned individuals, businesses, church groups and high-end restaurants have started projects across the country to serve food, donate clothing and help with supplies for struggling hospitals.

Long accustomed to living in one of Latin America’s wealthiest nations, many Venezuelans have been shocked by seeing more and more people trying to salvage food from the trash.

Diego Prada (L), a volunteer of the Make The Difference (Haz La Diferencia) charity initiative, gives a cup of soup and an arepa to a man in a street of Caracas, Venezuela March12, 2017. Picture taken March 12, 2017. REUTERS/Marco Bello

Diego Prada (L), a volunteer of the Make The Difference (Haz La Diferencia) charity initiative, gives a cup of soup and an arepa to a man in a street of Caracas, Venezuela March12, 2017. Picture taken March 12, 2017. REUTERS/Marco Bello

According to a recent study by three Venezuelan universities, 93 percent of the OPEC nation’s residents do not have enough money to buy sufficient food and 74 percent have lost around 18 pounds (8 kg) in the last year alone.

Critics say 18 years of socialist rule, exacerbated by a fall in oil prices, are to blame for Venezuela’s economic collapse. But President Nicolas Maduro says he is the victim of an “economic war” waged by the country’s elite and the U.S. government.

“If the bourgeoisie hide the food, I myself will bring it to your house. National production should go to the people in order to defeat the imperialist war,” Maduro said at an event this month to promote the distribution of subsidized food.

In Caracas, six upscale restaurants and chefs have formed a charity – “Full Stomach, Happy Heart” – that provides food for a geriatric home and a children’s hospital.

They take turns to cook and serve meals there.

“We serve large portions so that the children can share the food with their parents,” said chef and blogger Elisa Bermudez, adding salt to a broth ready for the hospital.

At a nursing home, 55-year-old Maria Ramirez is grateful for the outside help she receives.

“Sometimes we worry that we’re down to our last bag of spaghetti but thankfully in our most critical moments, we always receive a donation.”

(Additional reporting by Maria Ramirez in Puerto Ordaz and Anggy Polanco in San Cristobal.; Editing by Andrew Cawthorne and Tom Brown)

Crisis-hit Venezuela halts publication of another major indicator

FILE PHOTO: A man walks past empty shelves at a supermarket in Caracas, Venezuela March 9, 2017. REUTERS/Carlos Garcia Rawlins/File Photo

By Girish Gupta

CARACAS (Reuters) – Venezuela has stopped publishing money supply data, depriving the public of the best available tool to ascertain soaring inflation in one of the world’s worst-performing economies.

The country quit issuing inflation data more than a year ago, but annual consumer price rises are widely seen to be in triple digits, driven by an unraveling socialist system in which many people struggle to obtain meals and medicines.

A money supply indicator known as M2 was up by nearly 180 percent in mid-February from a year earlier, according to the central bank before it halted the release of the weekly data without explanation last month.

In contrast, neighboring Colombia’s M2 was up 7 percent in the same period and the United States’ was up 6 percent.

“If they are not publishing, you know it must be skyrocketing,” said Aurelio Concheso, director of the Caracas-based business consultancy Aspen Consulting.

The central bank and ministry of communications did not respond to a request for comment.

An increase in M2, the sum of cash together with checking, savings and other deposits, means more currency is circulating.

That can accelerate inflation when coupled with a decline in the output of goods and services – such as in Venezuela, which is in the fourth year of a recession.

The money supply indicator suddenly stopped appearing on the central bank’s website on Feb. 24.

The government ceased the dissemination of gross domestic product data more than a year ago. Before that, it put an end to the release of balance of payments figures and its consumer product scarcity index.

For a graphic on Venezuela’s money supply, click http://fingfx.thomsonreuters.com/gfx/rngs/VENEZUELA-ECONOMY/010040800HY/index.html

EXPONENTIAL RISE

Venezuela’s money supply, as measured by M2, has risen exponentially since Hugo Chavez, a leftist, came to power in 1999 and is a major factor behind what is thought to be the world’s highest inflation.

While M2 may seem an obscure technical indicator, the figure was routinely published in Venezuelan newspapers.

In the absence of official data — and highlighting Venezuela’s conflict of powers — the opposition-run National Assembly is publishing its own inflation figure, which it said reached 741 percent in the year to February.

Critics accuse the government of suppressing data in order to hide the magnitude of the economic mess and of stoking price rises by reckless money-printing and overspending.

Socialist Nicolas Maduro, elected president after Chavez’s 2013 death, has long blamed Venezuela’s difficulties on an “economic war” being waged on the government by the opposition and U.S. government.

With no money supply figures available, the closest alternative is “excess bank reserves” data. Still published by the central bank, it represents the total funds that banks have available to make commercial loans though is no substitute for M2, say economists.

The last year for which inflation data is available from the central bank is 2015, when consumer prices rose 181 percent.

(Additional reporting by Corina Pons; Editing by Brian Ellsworth and W Simon)