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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

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)

Chilean president says Trump concerned about Venezuelan crisis

Chile's President Michelle Bachelet speaks during a news conference alongside Argentine President Mauricio Macri at the Olivos presidential residence in Buenos Aires, Argentina, December 16, 2016. REUTERS/Marcos Brindicci

SANTIAGO (Reuters) – U.S. President Donald Trump expressed concern about the political and humanitarian situation in Venezuela in a call on Sunday with Chilean President Michelle Bachelet, the Chilean president told reporters on Monday.

Bachelet said she talked with Trump about the actions regional leaders were taking with regard to Venezuela, which has been wracked by an economic crisis in the last three years and is facing external pressure to make political reforms.

“(President Trump) presented to me his worries about the situation in Venezuela,” Bachelet told reporters at the La Moneda presidential palace in Chile’s capital, Santiago.

“I told him about the actions (Chile’s) foreign ministry is carrying out together with other foreign ministries, and we are staying in contact to see how we can help Venezuela have a peaceful exit from its domestic situation.”

Venezuelans are suffering from severe shortages of basic goods, including food.

The government of Nicolas Maduro blames private businesses for sabotaging the economy with price speculation and routinely denounces opposition activists as coup-plotters, intent on bringing down socialism in the country.

Opposition leaders say the Maduro government has undermined democracy by canceling a key referendum and delaying local elections, among other measures.

Last week, Luis Almagro, secretary general of the Organization of American States, said Venezuela should be suspended from the organization if it does not hold general elections as soon as possible.

Relations between Venezuela and the United States have been rocky since former socialist president Hugo Chavez rose to power in 1999. The South American country has repeatedly criticized the United States for interfering in its domestic affairs.

The U.S. blacklisted Venezuela’s vice president as a drug trafficker in February, and Trump later that month called for the release of jailed opposition leader Leopoldo Lopez.

(Reporting by Fabian Cambero and Gram Slattery, Editing by Rosalba O’Brien and Jeffrey Benkoe)

Venezuela arrests brownie and croissant bakers in ‘bread war’

A saleswoman sells bread at a bakery in Caracas, Venezuela March 17, 2017. REUTERS/Marco Bello

CARACAS (Reuters) – Venezuela this week arrested four bakers making illegal brownies and other pastries as President Nicolas Maduro’s socialist government threatens to take over bakeries in Caracas as part of a new “bread war”.

Maduro has sent inspectors and soldiers into more than 700 bakeries around the capital this week to enforce a rule that 90 percent of wheat must be destined to loaves rather than more expensive pastries and cakes.

It was the latest move by the government to combat shortages and long lines for basic products that have characterized Venezuela’s economic crisis over the last three years.

The ruling Socialist Party says pro-opposition businessmen are sabotaging the OPEC nation’s economy by hoarding products and hiking prices. Critics say the government is to blame for persisting with failed polices of price and currency controls.

Breadmakers blame the government for a national shortage of wheat, saying 80 percent of establishments have none left in stock.

During this week’s inspections, two men were arrested as their bakery was using too much wheat in sweet bread, ham-filled croissants and other products, the state Superintendency of Fair Prices said in a statement sent to media on Thursday.

Another two were detained for making brownies with out-of-date wheat, the statement added, saying at least one bakery had been temporarily taken over by authorities for 90 days.

“Those behind the ‘bread war’ are going to pay, and don’t let them say later it is political persecution,” Maduro had warned at the start of the week.

The group representing bakers, Fevipan, has asked for a meeting with Maduro, saying most establishments cannot anyway make ends meet without selling higher-priced products.

(Writing by Andrew Cawthorne; Editing by Randy Fabi)

Short of options, Venezuela opposition stages flash protests

Carlos Paparoni (C, in yellow), deputy of the Venezuelan coalition of opposition parties (MUD), clashes with Venezuelan National Guards during a protest outside the food ministry in Caracas, Venezuela March 8, 2017. REUTERS/Carlos Garcia Rawlins

By Andrew Cawthorne

CARACAS (Reuters) – A dozen activists alight surreptitiously from cars, walk determinedly toward Venezuela’s heavily-guarded Food Ministry, and dump two bags of garbage at its front entrance.

Soldiers quickly form a cordon and a young opposition lawmaker pounds their riot shields with his fists as government supporters appear from nowhere, throwing punches at the protesters.

The activists, who use garbage to symbolize how people are scavenging for food because of Venezuela’s economic crisis, chant “The People Are Hungry!” and “Democracy!” After a few minutes, they are chased back to their cars by a fast-growing crowd of supporters of socialist President Nicolas Maduro.

The mid-morning fracas in a working-class district of Caracas is the latest of near-weekly “surprise” protests by the opposition this year intended to embarrass Maduro, galvanize street action and highlight Venezuela’s litany of problems.

“Three million Venezuelans are eating out of rubbish today,” said the 28-year-old legislator Carlos Paparoni, nursing a few bruises after the Food Ministry protest.

“No one can shut us up. We will fight wherever we have to.”

While the small, flash protests briefly paralyze streets, turn heads and provide colorful photo ops for journalists tipped off in advance, they are little more than a minor irritant to Maduro.

In fact, they have only been on the rise this year because of the failure of traditional mass marches in 2016.

A year of marches, which peaked with a million-person rally in Caracas, did not stop authorities blocking a referendum on Maduro’s rule that could have changed the balance of power in the South American member of OPEC with 30 million people.

Instead, they led to a short-lived Vatican-championed dialogue that helped shore up the unpopular president and divided the opposition Democratic Unity coalition, leaving rank-and-file activists demoralized.

With Maduro’s term due to finish in early 2019, authorities are now delaying local elections and making opposition parties jump through bureaucratic hoops to remain legally registered.

“We’ll have to stop conventional rallies and use the surprise factor to make the government see it must respect the constitution,” said opposition leader Henrique Capriles, whose First Justice party is a main promoter of the flash protests.

‘NO TO DICTATORSHIP!’

After traditional-style marches around the country on Jan. 23 were again blocked by security forces, Capriles debuted the new strategy the next day with a surprise protest that briefly immobilized vehicles on a highway.

Demonstrators held banners demanding “Elections Now!”

Since then, activists coordinating clandestinely and rotating responsibilities, have popped up regularly to stop traffic, chant slogans and demand meetings with officials. One day, they held three simultaneous protests.

Numbers, however, are small, seldom more than a dozen or two. Security forces normally move them on quickly, and pro-Maduro supporters hang around government buildings precisely to display their political zeal in such moments.

“These fascist coup-mongers are seeking violence. They should go to jail!” shouted Jorge Montoya, 48, wearing a “Chavez Lives!” T-shirt in honor of late leader Hugo Chavez outside the Food Ministry where he helped chase off the protesters.

Officials did not respond to requests for interviews on the flash protests. Maduro and other senior government officials routinely denounce opposition activists as coup-plotters, intent on bringing down socialism in Venezuela.

Another opposition party, Popular Will, which has long promoted civil disobedience tactics, is also a main instigator of street activism.

Its members last month painted a mosaic of their jailed leader Leopoldo Lopez on a highway, decked lamp posts with black “No To Dictatorship!” signs overnight, and on Valentine’s Day handed flowers to security personnel.

“They are actions that have to be creative, have high impact for communication, dent the government’s sense of invincibility, transmit a message … and reduce fear,” said Emilio Grateron, Popular Will’s national head of activism.

The party’s more than 150,000 activists take inspiration from successful models of non-violent protest abroad such as those in the 1980s by then-trade union leader Lech Walesa against communism in Poland and opposition in Chile to the military dictatorship of Augusto Pinochet.

Such heady comparisons, though, seem far-fetched in Venezuela right now where not just government officials but even some cynical opposition supporters scoff at the flash protests as ineffectual stunts.

“No one sees these surprise protests,” said Julio Pereira, 25, a student and long-time supporter of opposition marches. “The government laughs at them.”

Even though the opposition coalition proved it had majority support by winning legislative elections at the end of 2015, and despite the disastrous state of Venezuela’s economy, the prospect of political change has dimmed this year.

“Not so long ago, I was ready to march to Miraflores (presidential palace),” said Pereira, now about to join friends who have found work in Argentina. “Now I’m instead heading to the airport to get out. The government is a disaster, the opposition is a disaster, my country is a disaster. I’m gone.”

(Reporting by Andrew Cawthorne; editing by Christian Plumb and Grant McCool)

Venezuela Congress begins measuring inflation amid cenbank silence

People queue to deposit their 100 bolivar notes, near Venezuela's Central Bank in Caracas, Venezuela December 16, 2016. REUTERS/Marco Bello

By Corina Pons and Brian Ellsworth

CARACAS (Reuters) – Venezuela’s opposition-led congress has started publishing the country’s inflation rate based on its own data collection, as the government of President Nicolas Maduro remains silent about the crisis-stricken nation’s soaring consumer prices.

The legislature has enlisted economics students to collect price data in five cities and asked former central bank employees to process it using the central bank’s methodology, said legislator Jose Guerra, an economist and former researcher at the bank.

Their measurements show prices rose 741 percent in the 12 months to February, 20.1 percent last month alone and 42.5 percent in the first two months of 2017.

Venezuela’s most recent official inflation figures, released last year, showed prices rising 180.9 percent in 2015.

“We’re not trying to substitute the central bank. We are filling the vacuum left by the central bank as a result of it not publishing the figures,” Guerra said in an interview.

The central bank did not immediately respond to an email seeking comment.

Venezuela’s economy has been in free fall since the 2014 collapse of oil prices, which left the socialist economic system unable to maintain an elaborate system of subsidies and price controls that functioned during the oil boom years.

Maduro says his government is the victim of an “economic war” led by political adversaries with the help of Washington.

The government has kept quiet about fundamental economic indicators including economic growth and balance of payments amid an increasingly dire panorama of swelling supermarket lines and worsening shortages.

The absence of inflation figures has everyone from workers to business owners unable to make basic economic calculations.

“Workers don’t know what their salary is, companies don’t know what their costs are,” Guerra said. “There’s no way to calculate the real interest rate. There’s no way to calculate the real exchange rate.”

He said the project already has drawn the interest of Wall Street banks, which are closely monitoring the country’s economy on concerns it could default on its high-yielding dollar bonds.

Measuring inflation is unusually complicated in Venezuela, because consumer products as well as hard currency fetch vastly different prices depending on whether or not they are distributed to the socialist economy’s subsidy system.

Consumers can sometimes obtain basic goods at low-cost prices by waiting for hours in supermarket lines but increasingly have to buy such goods from smugglers on informal markets for more than 10 times the officially mandated prices.

(Writing by Brian Ellsworth; Editing by Alexandra Ulmer and Bill Trott)

Venezuela’s epileptic patients struggle with seizures amid drug shortage

Miguel Anton (C) feeds his son Jose Gregorio Anton, 11, a neurological patient being treated with anticonvulsants, at their house in La Guaira, Venezuela February 20, 2017. REUTERS/Carlos Garcia Rawlins

By Andreina Aponte

MAIQUETIA, Venezuela (Reuters) – Venezuelan plumber Marcos Heredia scoured 20 pharmacies in one day but could not find crucial medicines to stop his epileptic 8-year-old from convulsions that caused irreparable brain damage late last year.

The once giggly and alert boy, also called Marcos, could no longer sit on his own and began to shut off from the outside world.

“I called people in the cities of San Cristobal, Valencia, Puerto La Cruz, Barquisimeto, and no one could find the medicine,” Heredia, 43, said in the family’s bare living room in a windy slum overlooking an international airport in the coastal state of Vargas.

“You can’t find the medicines, and the government doesn’t want to accept that.”

Heredia ended up traveling 860 km (540 miles) by bus to the Colombian border to pick up medicine a cousin had bought him in the neighboring country. He was back at work the next day.

Venezuela’s brutal recession is worsening shortages of medicines from painkillers to chemotherapy drugs.

With 85 of every 100 medicines now missing in Venezuela, anti-convulsants are among the toughest drugs to find, Venezuela’s main pharmaceutical association said.

An estimated 2 million to 3 million Venezuelans suffer from epilepsy at some point in their lives, according to Caracas-based support organization LIVECE. Patients have been struggling to find specific anti-convulsive medicines as far back as 2012.

Due to untreated convulsions, progress has evaporated for otherwise functional people and those with severe disabilities who had managed to improve their mobility or speech.

Like Heredia, patients and families try anything they can to get hold of drugs: barter diapers, frantically engage in WhatsApp groups created specifically for pharmaceutical exchanges, use expired medicines or, if they can afford it, ask friends to bring them in from abroad.

But the shortages are so extreme that patients sometimes take medicines ill-suited for their conditions, doctors warn.

Neurologist Beatriz Gonzalez of LIVECE said she was worried about epileptic mothers giving birth to deformed children because they take the wrong medicine, or losing the child because they cannot find the drugs.

‘HEART IN MY MOUTH’

The problem goes much further than just those with epilepsy. Unexpected convulsions can also afflict feverish children, accident victims or people with other neurological conditions.

Two-year-old Carlos Baute unexpectedly started to shake and choke when he had a fever in January. Holding his tongue down with two fingers to keep him from swallowing it, his mother visited multiple underequipped hospitals before one finally treated him.

Baute’s mother said she could not find medication and was worried that her son, an active boy who has recovered and likes to dash around the clinic where he is being treated, may yet suffer another fit.

Leftist President Nicolas Maduro blames the shortages on a right-wing plot to overthrow him, but in a recent speech, he said he had approved “major dollar investments” to boost drug availability, without providing details. Venezuela is set to open three medical labs with Palestine, he added last week.

“(We must) solve this very delicate issue that has been affected by the economic war,” said Maduro.

Venezuela’s Information and Health Ministries, as well as the Social Security Institute, which oversees some hospitals and drug distribution, did not respond to requests for comment.

Compounding medical issues, some families cannot even eat properly.

Leonardo Colmenares, a 6-year-old with epilepsy and a degenerative neurological disease, weighed 10 kg (22 pounds) in mid-2016 but has lost 2 kg in six months as his mother struggles with his recommended diet.

“I sell bracelets and watches, I buy bread and resell it, I dry hair, I do pedicures, I cook, I rent out the washing machine and I iron,” said the single mother, who had to leave her job as a bank analyst to take care of Leonardo.

When Leonardo convulses, she must rush him to a hospital because she has run out of anti-convulsants.

“I can’t just go to a park (with my son) because maybe I’ll suddenly have to rush away,” Torres said, fighting back tears. “I always have my heart in my mouth.”

Click on http://reut.rs/2lp5dQM to see a related photo essay.

(Additional reporting by Alexandra Ulmer and Diego Ore in Caracas; Editing by Alexandra Ulmer, Girish Gupta and Lisa Von Ahn)

Venezuela opposition parties fear election ban as Socialists dig in

By Brian Ellsworth

CARACAS (Reuters) – Venezuela’s government is pushing forward with measures that could exclude some opposition political parties from future elections, potentially paving the way for the ruling Socialists to remain in power despite widespread anger over the country’s collapsing economy.

The Supreme Court, loyal to socialist president Nicolas Maduro, has ordered the main opposition parties to “renew” themselves through petition drives whose conditions are so strict that party leaders and even an election official described them as impossible to meet.

Socialist Party officials scoff at the complaints. They say anti-Maduro candidates would be able to run under the opposition’s Democratic Unity coalition, which has been exempted from the signature drives, even if the main opposition parties are ultimately barred.

But key socialist officials are also trying to have the coalition banned, accusing it of electoral fraud. Government critics point to this and the “renewal” order as signs the socialists are seeking to effectively run uncontested in gubernatorial elections and the 2018 presidential vote.

Investors holding Venezuela’s high-yielding bonds had broadly expected Maduro to be replaced with a more market-friendly government by 2019.

The prospect of opposition parties being blocked from elections could raise concern in Washington where the Trump administration this week blacklisted Venezuela’s Vice President Tareck El Aissami and called for the release of jailed opposition leader Leopoldo Lopez.

Maduro’s opponents say his strategy is similar to that of Nicaraguan leftist president Daniel Ortega, who cruised to a third consecutive election victory in November after a top court ruling ousted the leader of the main opposition party. That left Ortega running against a candidate widely seen as a shadow ally.

“The regime is preparing Nicaraguan-style elections without political parties and false opposition candidates chosen by the government,” legislator and former Congress president Henry Ramos wrote via Twitter, suggesting the government would seek to have shadow allies run as if they were part of the opposition.

The moves come as Maduro’s approval ratings hover near 20 percent due to anger over chronic food shortages that lead to routine supermarket lootings and force many Venezuelans to skip meals. His government has avoided reform measures economists say are necessary to end the dysfunction, such as lifting corruption-riddled currency controls.

The elections council has ordered parties to collect signatures from 0.5 percent of registered voters on specific weekends.

The opposition estimates parties could in some cases have to mobilize a combined total of as many as 600,000 people in a single weekend and take them to 360 authorized locations, an arrangement they call logistically implausible.

‘YOU HAVE NO PARTY’

Luis Rondon, one of five directors of the National Elections Council who tends to be a lone voice of dissent against its decisions, described the process as blocking the chances for opposition parties to stay on the rolls.

The council did not respond to a request for comment.

There is little question that sidelining the opposition would be the Socialist Party’s easiest way to remain in power.

Socialist Party leaders have sought to delegitimize opposition parties by accusing them of involvement in terrorism. They point to the opposition’s past, which includes a bungled coup attempt in 2002 against late socialist leader Hugo Chavez.

Maduro’s ballot-box weakness was put on display when the Democratic Unity coalition took two thirds of the seats in Congress in 2015, the opposition’s biggest win since Chavez took office in 1999.

Socialist Party legislator Hector Rodriguez described the “renewal” process as a “simple requirement,” insisting that “a political party that does not have the capacity to collect that amount (of signatures) cannot be considered a national party.”

Still, Socialist Party officials have done little to dispel fears they are trying to bar opponents from elections.

Following complaints that gubernatorial elections were being stalled, Socialist Party No. 2 Diosdado Cabello reminded the opposition that they could not take part in any race until they complied with the “renewal” order.

“Who would benefit if we held elections tomorrow?” asked Cabello during a January episode of his television talk show ‘Hitting with the Mallet’, in which he often wields a spiked club. “If you want we could hold elections tomorrow and you wouldn’t participate because you have no party.”

Even without pushing parties aside, the Maduro government has already blocked key opposition figures or laid the groundwork to do so.

Lopez, a former mayor, remains behind bars for leading anti-government protests in 2014 following a trial that one of the state prosecutors involved called a mockery of justice.

And the national comptroller has said he is considering barring state governor and ex-presidential candidate Henrique Capriles from holding office on alleged irregularities in managing public funds.

Pollster Luis Vicente Leon, who is openly critical of the government, said continuing delays to the election for governors is a sign the Socialist Party may do the same for other elections in which it faces long odds.

“Once you seek mechanisms by which you avoid, delay, impede or block an election, why wouldn’t you block the rest?” he said in a recent radio interview.

“It’s not that these elections (for governors) are in jeopardy, it’s that all elections are in jeopardy.”

(Editing by Christian Plumb and Andrew Hay)

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