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Venezuela
Summary
Moody’s Caa3 / S&P CCC / Fitch CCC1
Economy: Agriculture 4%, Industry 34%, Services 63%
Venezuela’s economic performance and the political and social conditions are all deteriorating.
President Nicolás Maduro has established control over the key institutions, but his popularity is at
historical low levels. President Maduro may have a difficult time finishing his presidential term as the
opposition could hold a referendum in 2016 to remove him from power following their victory in
the National Assembly elections in December 2015.2 The economy contracted in 2015 by more than
10% while inflation remained well above 100%. The current account surplus shifted to a deficit in
2015 and the government’s assets continue falling, but the public sector’s external liquidity remains at
comfortable levels, more than enough for the government to service its debt. Still, the exchange rate
pressures continue, and the new exchange rate system has failed to cover foreign currency shortages.
Economic Indicators
2011
2012
2013
2014
2015E
29.1
29.5
30.0
30.5
30.9
31.4
GDP per Capita (USD)
9,575
10,829
7,453
5,657
9,214
16,451
Nominal GDP (USD Billions)
278.4
319.6
223.5
172.3
285.0
516.8
4.2
5.6
1.3
-4.0
-10.0
-6.0
Year-end CPI (%)
27.6
20.1
56.2
68.5
190.0
210.0
Fiscal Balance (% of GDP)
Population (Millions)
Real GDP (%)
2016F
-11.6
-16.5
-14.5
-15.0
-24.4
-25.0
Interest (% of Revenues)
7.8
11.4
12.4
12.7
16.9
13.2
FC Debt/Public Debt (%)
74.1
67.0
71.4
76.0
73.0
75.0
Government Debt (% of GDP)
48.1
48.0
66.7
83.0
60.6
46.2
172.4
203.8
284.6
292.1
334.7
285.5
Current Account (% of GDP)
8.8
3.4
2.4
6.0
-1.8
0.8
FDI (% of GDP)
1.8
0.2
1.1
0.4
0.4
0.2
External Debt (% of GDP)
39.8
37.2
57.1
75.3
42.4
23.0
Foreign Reserves/External Debt (%)
50.0
46.6
36.0
26.6
18.2
13.0
Foreign Reserves (Mo. of Imports)
10.6
8.6
7.7
8.2
6.2
5.2
Foreign Reserves (% of GDP)
19.9
17.3
20.6
20.1
7.7
3.0
Government Debt (% of Revenue)
As of December 2015
Forecasted or estimated results do not represent a promise or guarantee of future results and are subject
to change.
Source: IMF, Central Bank, Ministry of Finance, Haver, and Lazard
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Lazard Emerging Markets Debt
Rating History
Following is a history of the country’s foreign and local currency ratings by the major
agencies dating back to 2000 demonstrating the country’s rapidly deteriorating
fundamentals. We have also included the spread history for the country’s hard currency
external debt against the JP Morgan Emerging Markets Bond Index – Global Diversified.
Rating History
Hard Currency
Local Currency
BB
BB
BB-
BB-
B+
B+
B
B
B-
B-
CCC+
CCC+
CCC
2000
2007
Moody’s
2015
S&P
Fitch
CCC
2000
2007
Moody’s
2015
S&P
Fitch
As of December 2015
Performance represents past performance. Past performance is not a reliable indicator of future results.
Source: Fitch, Moody’s, Standard and Poor’s, Bloomberg
Bond Spreads
4000
3200
2400
1600
800
0
2007
2011
Venezuela
2015
EMBIGD
As of December 2015
Performance represents past performance. Past
performance is not a reliable indicator of future
results.
Source: JP Morgan
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Venezuela
Strengths
Excellent Debt Payment Track Record
Venezuela’s strong willingness to pay its government debt has been tested the past several years.
For example, in the early 2000s, the government remained committed to servicing its debt
when oil prices where close to historic lows (below $20 per barrel for more than six months)
and a major strike paralyzed Petróleos de Venezuela S. A. (PDVSA) for weeks. The government
adopted varying economic measures to have enough funds to repay debt, such as tighter capital
controls and expenditure cuts. In 2009 during another period of relatively low oil prices, the
government made significant cuts in expenditures, 20% in real terms, and increased the valueadded tax (VAT) by 300 basis points (bps).3 The most recent example is the 2014–2015 period
as the government continues to service its debt despite the decline in oil prices by more than
50%. The government continues to pay the external debt despite high social needs, including
a shortage of food.4 Government officials continue to reiterate their strong willingness and
ability to service their debt. Venezuela cannot to afford to default on external debt as PDVSA
depends on the external debt markets to finance its investment projects to increase oil output.
In addition, the government does not want to risk potentially losing some of its assets abroad
in the event that Venezuela defaults. There is always the political risk that the government will
decide to default as the benefits of not paying the debt are not high enough to compensate for
the social costs. In our view if the government takes this road it would be political suicide as the
country depends on access to international capital markets to finance its debt.
Oil Reserves
Venezuela has huge potential if it can exploit its abundant oil and gas reserves. According to
OPEC, Venezuela has the biggest oil reserves in the world. Presuming a 20% recovery rate in
the Orinoco Belt, Venezuela’s oil reserves are estimated at 297 billion barrels, or equivalent
to about 20% of the world’s oil reserves.5 Venezuela currently produces around 2.9 million
barrels per day (according to the authorities), and PDVSA wants to double production to
6.0 million bpd by 2019.6 This is an ambitious goal, especially since PDVSA has consistently
missed their stated targets over the last decade, making them unreliable forecasts. Achieving
this target will be a challenge especially since most of the financing will come from PDVSA,
which is cash strapped given its social projects.
Comfortable Liquidity Levels
Liquidity indicators are still high, reducing the risk of a default. The public sector has a total
of $27 billion in liquid external assets, which is about two times the amount of debt service.
In the last three years, public and private amortization and interest payments have averaged
$15 billion. In the next five years public Eurobond external debt amortization and interest
payments, including PDVSA, will average $7.9 billion compared to $9.0 billion between
2012–2015 thus the debt service is declining. After 2017, the Eurobond debt service
substantially declines to only $5.6 billion.
The main uncertainty remains the quality of the public international liquid assets. The central
bank does not provide the detail of the liquid public assets with the exception of the foreign
reserves whose quality is deteriorating as gold now represents 76% of total foreign reserves. As
of October 2014, foreign reserves totaled $15.1 billion, below the level the government considers ideal of $27.5 billion.7 The other external public assets are in the Venezuelan Economic
and Development Bank (BANDES), the Treasury, the National Fund for National
Development (Fonden), and the Chinese funds (more details below). These funds will not be
used should there be shocks to the system but to finance social projects.
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Lazard Emerging Markets Debt
Relationship with China
The relationship with China continues to improve as both countries benefit from their
alliance. The Chinese are interested in investing in oil and in exploiting the huge oil reserves
of Venezuela. Meanwhile, Venezuela wants to increase oil production and diversify its
export destination away from the United States. China is now the third most important
trade partner after the United States amounting to 36.5% of Venezuela’s total exports while
India accounts for 15.9%.8 Both governments have reached a series of economic agreements
including the creation of different funds to finance infrastructure projects and to develop
key sectors such as energy and mining. Since the creation of the first fund, the Chinese have
disbursed over $30 billion. These funds are mainly used to buy Chinese-made goods such as
oil drills.
Opposition Party
There is a high probability that in the next five years the opposition will be in power, which
we believe the markets would reward. Mr. Maduro’s popularity is likely to decline especially
given the shortage of goods and security problems, and it is not likely to improve unless the
economy improves. Mr. Maduro does not have the charisma of Hugo Chãvez, which helped
the former president maintain his popularity independent of the economic cycle. Thus, Mr.
Maduro may have a difficult time finishing his presidential term in our view. The opposition
may try to hold a referendum in 2016 to remove Mr. Maduro from power following their
victory in the parliamentary elections in December 2015 because they now control two-thirds
of the National Assembly. If the election were to take place today, the opposition led by
Mr. Capriles would likely defeat Mr. Maduro in our view. Mr. Capriles is the most popular
candidate in the opposition, which lost the previous presidential election in April 2013 by
less than 2%.9
Weaknesses
Economic Imbalances
Venezuela’s weaknesses are its economic policies, which are not sustainable in the long term.
The price and exchange rate controls are causing all types of economic distortions while the
lack of business-friendly conditions are taking a toll on growth. Investment is one of the
areas that has suffered the most as entrepreneurs are afraid of making long-term investments.
Hence, the level of private investment as a share of GDP has declined from 14% in 2000
to an estimated 5% in 2011.10 Many multinationals and large domestic companies have
remained in Venezuela because they remain optimistic that the opposition will eventually
come into power. However, these companies are making the minimum amounts of investment required to maintain their businesses. Investment from the public sector continues
to grow, especially the state public oil company PDVSA, increasing inefficiencies in the
economy. Meanwhile, potential economic growth continues to decline given the lack of
investment, the emigration of skilled labor, and the increased inefficiencies caused by
expansion of the public sector.
Moderate Oil Prices
An analysis of balance-of-payments sensitivity to oil prices shows that at current oil prices
Venezuela should be in a comfortable position. According to our estimates, at an oil price
of $80 per flowing barrel, Venezuela is in a comfortable position; at $60 per flowing barrel
it can “muddle through”; and at $40 per flowing barrel or lower it will be in a difficult position. This does not mean that if oil prices were to fall below $40 per barrel the government
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Venezuela
would default because in the past the government has adjusted during times of low oil prices.
However, it will be very difficult for the government to further reduce imports going forward
given its very low popularity in our view. As of November 16, 2015, the price of Brent oil is
at $44 per barrel.11
Inflation
Inflation remains an ongoing problem and is one of the highest among emerging market's
(EM) countries. It had fluctuated between 15% and 35% for most of the last ten years, but
it has been on an upward trend since November 2012 increasing to a historically high level
above 100%.12 While the lack of incentives to invest due to price and exchange rate controls
and expropriation of private property is resulting in a shortage of goods, the surge in money
supply, with M2 growing above 50%, is causing a higher demand for goods. In the past the
government adopted unorthodox measures to control inflation, such as price controls, which
have only resulted in further consumer good shortages. The government is aware of the inflation problem, but it is having a hard time finding a solution to effectively manage it.
Overvalued Exchange Rate
The exchange rate is overvalued by more than 50% according to our estimates. There are
currently three official exchange rates in Venezuela: CENCOEX which is supplied at an
exchange rate at 6.3 VEB/USD,13 SICAD I at around 15.0 VEB/USD, and SICAD II
at around 50.0 VEB/USD. The bulk of the dollars continue to be supplied through the
Commission for the Administration of Currency Exchange (CADIVI) to key sectors such
as food and medicine. The different exchange rates have failed to cover the demand of the
private sector; therefore, the government may plan to come out with a new exchange rate
system. There is also a black market exchange rate currently trading at VEB/USD 389.795
compared to the legitimate VEB/USD 164.6 at the end of 2014, VEB/USD 17.3 at the end
of 2012, and VEB/USD 9.5 at the end of 2011.14
Fiscal Deficit/Debt Level
The government balance sheet is weak and has deteriorated substantially over the last couple
of years, but debt ratios and the debt service levels remain manageable. It is very hard to
measure the fiscal performance given that a large share of the revenues and expenditures are
reported outside the budget. This makes the government fiscal data very unreliable. In addition, the government has stopped publishing the public sector data and now only publishes
the central government data.15 At the central government level the fiscal deficit totaled 1.9%
of GDP in 2013, but the public sector deficit was probably well over 10% of GDP according to most analyst estimates. The best way to track fiscal performance is to analyze the debt
performance, and those latest numbers are as bad as the fiscal numbers. The stock of debt,
including PDVSA and Chinese loans, has increased from $60 billion in 2007 to an estimated
$155 billion in December 2013; as a share of GDP this is an increase from 31.5% in 2007 to
an estimated 68.1% in 2013. Despite the increase in the stock of debt, the debt service is not
very high, and the government has ample access to the domestic markets where it can issue
debt at negative real interest rates.
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Institutions
Institutions are extremely weak and market-unfriendly. Venezuela ranks very low across
multiple governance indicators as measured by the World Bank. Corruption is a major
problem and the respect for contracts is very poor. The government has nationalized or
expropriated over 200 companies in the last 10 years and faces more than 10 cases brought
against Venezuela in international courts for not paying appropriate prices for seized assets.16
The government decided to exit the International Center for the Settlement of Investment
Disputes (ICSID) to prevent new cases from going to international courts.17 There are still
some pending cases, and in one of the most important cases ICSID recently ruled against the
government and in favor of ConocoPhillips. ICSID still needs to determine the compensation amount, which may be as high as $20 billion although Venezuela is likely to appeal
which will extend the final ruling until at least 2016.18 The government is likely to negotiate
and pay with a combination of cash and securities as it did with CEMEX.19 Another case
is the one with Exxon Mobil and the ICSID. Exxon Mobil wants $7.0 billion for its seized
assets while the government is targeting a much lower amount.
Transparency
Transparency is a problem in Venezuela, which makes it challenging to track the fiscal and
external performance. The government reports data with a lag of 12 to 18 months. In addition, a large share of government expenditures and revenues are not reported in the budget.
This makes it hard to track the amount of assets accumulated from PDVSA and central bank
transfers. In the past, PDVSA had to pay royalties and tax earnings to the central government
and deposit the rest at the central bank. This is no longer the case as the bulk of PDVSA
earnings go directly to public funds, and the share of royalties paid directly to the central government has gradually declined. Transparency is not only related to the fiscal data but also to
the export numbers. There is a discrepancy between what the authorities say that Venezuela
exports and what various independent sources report. Another area where there is a lack of
transparency is in the details of the Chinese loans. The Chinese have lent several billion US
Dollars to Venezuela, and it is not very clear as to how these loans are being repaid and at
what interest rates. General market consensus is that the government repays with oil exports,
which have amounted to an estimated 500,000 bpd. Finally, it is very hard to know how
liquid the government external assets are. The government only publishes the details of the
foreign reserves but not the details of the other funds.
Relationship with the United States
The relationship with Venezuela’s main trade partner the United States is poor, but bilateral
economic sanctions would not be in the interest of either side. Three years ago the United
States imposed sanctions on PDVSA for doing business with Iran, but these were mainly
symbolic and served as a warning signal.20 In the past the Venezuelan government has
engaged in these actions as part of its political campaign to increase confrontation with the
United States. However, Venezuela probably will not retaliate as more than one-third of
Venezuela’s oil exports go to the United States.21 We also do not expect the United States to
impose stricter sanctions as it depends on Venezuelan oil imports, which account for 8% of
US oil imports.22 Imposing financial sanctions such as prohibiting US financial institutions
from holding Venezuela bonds is unlikely in our view, as it will punish the US financial
system, which holds a large share of Venezuela's external bonds.
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Venezuela
Country Background
Size
912,050 KM2 (33rd)
Capital
Caracas
Population
29.3 Million
Ethnic Groups
—
Religion
Roman Catholic 96%
Median Age
27.2 Years
Literacy Rate
96.3%
Independence
July 5, 1811
Political System
Federal Republic
Presidents
Nicolas Maduro
Presidential Election
2018
Legislative Election
2020
Legislative Branch
165 Seats (Pro-Government 55, Opposition 110)
Economy
Agriculture 3.6%, Industry 33.4%, Service 63.0%
Labor Force
Agriculture 7.3%, Industry 21.8%, Service 70.9%
Merchandise Exports
Petroleum and Petroleum Products, Bauxite and
Aluminum, Minerals
Export Partners
US 34.6%, India 15.1%, China 12.9%, Cuba 5.3%,
Singapore 4.8%
Currency
Bolivar (VEF)
As of December 2015
Source: CIA
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Country Timeline
Boom and bust
1973
Venezuela benefits from oil boom and its currency peaks against the US dollar; oil and steel
industries nationalised.
1983–84 Fall in world oil prices generates unrest and cuts in welfare spending; Dr Jaime Lusinchi (AD)
elected president and signs pact involving government, trade unions and business.
1989
Carlos Andres Perez (AD) elected president against the background of economic depression,
which necessitates an austerity programme and an IMF loan. Social and political upheaval
includes riots, in which between 300 and 2,000 people are killed, martial law and a general strike.
1992
Some 120 people are killed in two attempted coups, the first led by future president Colonel
Hugo Chavez, and the second carried out by his supporters. Chavez is jailed for two years
before being pardoned.
1993–95 Ramon Jose Velasquez becomes interim president after Perez is ousted on charges of corruption; Rafael Caldera elected president.
1996
Perez imprisoned after being found guilty of embezzlement and corruption.
1998
Hugo Chavez elected president.
1999
Severe floods and mudslides hit the north, killing tens of thousands of people.
2000
Foreign Minister Jose Vicente Rangel discloses plot to kill Chavez. Chavez wins another six
years in office and a mandate to pursue political reforms. Chavez becomes the first foreign
head of state to visit Iraq since the 1991 Gulf war, in defiance of strong opposition from the US.
Reform controversy
2001
November—President Chavez appears on TV to hail 49 reform laws which his government
has introduced, including land and oil industry reforms, under powers which did not require
them to be approved by the National Assembly.
2002
February—National currency, the bolivar, plummets 25% against the US dollar after the government scraps exchange rate controls.
2002
February—Chavez appoints new board of directors to state oil monopoly Petroleos de
Venezuela in move opposed by executives.
2002
April—Trade unions and the Fedecamaras business association declare general strike to support Petroleos de Venezuela dissidents.
Chavez ouster
2002
April—Some 150,000 people rally in support of strike and oil protest. National Guard and proChavez gunmen clash with protesters–more than 10 are killed and 110 injured. Military high
command rebels and demands that Chavez resign.
2002
April—Armed forces head announces Chavez has resigned, a claim later denied by Chavez.
Chavez is taken into military custody. Military names Pedro Carmona, one of the strike organisers, as head of transitional government.
2002
April—Chavez returns to office after the collapse of the interim government.
2002
December—Opposition strike cripples the oil industry. Organisers demand that Chavez
resign. The nine-week stoppage leads to fuel shortages.
Referendum petitions
2003
May—Government, opposition sign deal brokered by Organisation of American States (OAS)
which sets out framework for referendum on Hugo Chavez's rule.
2003
August-September—Opposition delivers petition with more than three million signatures
demanding referendum on Chavez's rule. Electoral body rejects petition saying it fails to meet
technical requirements.
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Venezuela
2003
December—Second petition demanding referendum on rule of Hugo Chavez is delivered.
Opposition says it contains 3.4 million signatures.
2004
March—Several people are killed and many are injured in clashes between opponents and
supporters of President Chavez.
2004
August—President Chavez wins referendum in which Venezuelans are asked whether he
should serve out the remaining two-and-a-half years of his term.
Land reform
2005
January—President Chavez signs decree on land reform which aims to eliminate Venezuela's
large estates. President says land redistribution will bring justice to rural poor; ranchers say
move is an attack on private property. Bitter dispute with Colombia over the capture of a
Colombian rebel Farc leader on Venezuelan soil. The presidents of both nations resolve the
affair at talks in Caracas in February.
2005
June—Venezuela and 13 Caribbean states launch a regional oil company at a summit in
Caracas. Venezuela, a major producer, agrees to supply the nations with cheap fuel. Critics
accuse President Chavez of using oil to increase diplomatic influence.
2005
December—Parties loyal to President Chavez make big gains in parliamentary elections.
Opposition parties boycott the poll, leaving parliament entirely made up of supporters of the
president.
2006
July—President Chavez signs a $3B (£1.6B) arms deal with Russia, including an agreement to
buy fighter jets and helicopters.
2006
December—Hugo Chavez wins a third term in presidential elections with 63% of the vote.
Nationalisation drive
2007
January—President Chavez announces that key energy and telecommunications companies
will be nationalised. National Assembly grants President Chavez sweeping powers to rule by
decree for the next eighteen months.
2007
March—President Chavez says 16 large farms have been seized for redistribution under a
land reform plan.
2007
May—Government takes control of oil projects in the Orinoco Delta as part of the nationalisation drive. Thousands gather in Caracas to mourn, or celebrate, the government's closure of
the RCTV channel which has been critical of President Chavez.
2007
June—Two leading US oil companies, Exxon Mobil and ConocoPhilips, refuse to hand over
majority control of their operations in the Orinoco Belt to the Venezuelan government.
2007
December—Mr Chavez suffers his first defeat at the ballot box, when voters in a referendum
narrowly reject proposals to extend his powers and accelerate his socialist revolution.
Diplomatic crisis
2008
January, February—After President Chavez's mediation with the Farc, the Colombian rebel
group releases six hostages. Relations with Colombia deteriorate after Colombian President
Alvaro Uribe rejects Mr Chavez's call for left-wing rebels to be treated as insurgents instead
of terrorists.
2008
March—Diplomatic crisis after Colombian armed forces make cross-border raid into Ecuador,
a Venezuelan ally, killing senior Farc rebel Raul Reyes. Mr Chavez mobilises troops along
Venezuelan-Colombian border.
2008
July—Relations with Colombia begin to improve again in the wake of the freeing of Farc's
most high-profile hostage, Ingrid Betancourt. Mr Uribe visits Venezuela for talks with Mr
Chavez.
2008
August—President Chavez announces plans to nationalise one of the country's largest
private banks, the Spanish-owned Bank of Venezuela. Mexican cement giant Cemex seeks
World Bank arbitration over Venezuelan nationalisation of local subsidiary, which the company deems illegal. Government lifts some price controls on staple foods in an attempt to
avert shortages.
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Ties with Russia
2008
September—Government approves nationalisation of household fuel distributors and petrol
stations. Venezuela and Russia sign oil and gas cooperation accord. Russian warplanes visit
Venezuela, with Russian warships heading there for November joint exercises–first return of
Russian navy to Americas since Cold War. Venezuela expels US ambassador in solidarity with
similar Bolivian move. US reciprocates.
2008
October—First Venezuelan telecommunications satellite launched from China.
2008
November—Opposition makes gains in regional elections and wins Caracas mayoral poll.
President Chavez's allies retain control of 17 out of 22 governorships. Russia and Venezuela
sign accord on joint civilian nuclear cooperation.
2009
February—Voters in a referendum approve plans to abolish limits on the number of terms in
office for elected officials; this would allow President Chavez to stand again when his current
term expires in 2012.
Tensions with Colombia
2009
July—Relations with Colombia begin to deteriorate again after plans are announced to allow
US troops to use Colombian military bases as part of a drive to curb drug-trafficking.
2009
August—Tensions between the two neighbours increase still further after Bogota accuses
Venezuela of supplying arms to Farc rebels, and Mr Chavez accuses Colombia of allowing its
troops to stray over their common border.
2009
November—The diplomatic row escalates after the Colombian government and the US sign
their long-trailed deal on the use of Colombia's military bases. President Chavez orders 15,000
troops to the Colombian border, citing increased violence by Colombian paramilitary groups.
2010
January—President Chavez devalues the bolivar, by 17% against the US dollar for "priority"
imports and by 50% for items considered non-essential, to boost revenue from oil exports.
Six TV channels taken off air for breaking rules on transmitting government material.
2010
March—Economy shrank by 5.8 % in last three months of 2009, according to the central bank.
2010
July—Venezuela cuts diplomatic ties with Colombia after being accused of harbouring Farc rebels.
2010
August—Colombia and Venezuela restore diplomatic ties.
2010
September—Parliamentary elections. Opposition makes significant gains. The socialist party
of Mr Chavez still controls congress, but with a reduced majority.
Alliance with Iran
2010
October—Mr Chavez visits Iran, where he and the Iranian president promise to deepen their
strategic alliance against US "imperialism".
2010
December—Parliament grants Mr Chavez special powers to deal with the aftermath of devastating floods, which critics say will turn the country into a near-dictatorship.
2011
June—Mr Chavez begins a year-long course of cancer treatment in Cuba, which includes
several extended stays there and a reduced workload.
2011
October—Venezuelan opposition TV channel Globovision is fined $2.1m for coverage of a
prison riot in June, which the media regulator says had "justified crime and fuelled public anxiety". Globovision accuses the government of trying to shut it down.
2011
November—Government introduces price controls on many basic goods in an attempt to
curb the 27% annual inflation rate, one of the highest in the world. Initial price controls on a
few basic goods were imposed in 2003.
2011
December—Venezuela hosts the inaugural meeting of the Community of Latin American and
Caribbean States (Celac), which aims to challenge the US-based Organisation of American
States for regional primacy. It excludes the US, Canada, the Netherlands, and British and
Danish dependencies, but includes Cuba.
2012
April—Government extends price controls on more basic goods in the battle against inflation.
President Chavez threatens to expropriate companies that do not comply with the price controls.
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Venezuela
2012
June—Hugo Chavez registers to run for a third term in October's presidential election, saying
his doctors deem him fit to serve after he completed his course of cancer treatment in Cuba
in May. He will face former state governor Henrique Capriles, who is leading a coalition of
about 30 opposition parties.
2012
July—Opposition TV channel Globovision pays a $2.1m fine to avoid having its assets seized.
The media regulator imposed the fine in October over Globovision coverage of a prison riot.
After a six-year wait, Venezuela becomes a full member of regional trading bloc Mercosur.
2012
October—President Chavez wins a fourth term in office, with 54% of the vote on an official
turnout at about 81%. Opposition leader Henrique Capriles concedes.
2012
President Chavez returns to Cuba for further cancer surgery, after naming Vice-President
Nicolas Maduro as his preferred choice as successor in the case of his health failing.
President Chavez dies
2013
March—President Hugo Chavez dies at age 58 after a battle with cancer.
2013
April—Nicolas Maduro, Hugo Chavez's chosen successor, is elected president by a narrow
margin. The opposition contests the result.
2013
July—Venezuela says it is ending steps towards restoring diplomatic ties with the US, following comments by a senior US official.
2013
August—Venezuela's highest court rejects an appeal by opposition leader Henrique Capriles
against April's contested presidential election result.
2013
September—A massive power cut leaves 70% of Venezuela, including parts of Caracas,
without electricity. President Maduro blames "right-wing saboteurs".
2013
October—President Maduro announces the creation of a new Ministry of Supreme Social
Happiness, which he says will co-ordinate anti-poverty programmes created by the late
President Hugo Chavez. Venezuela expels three US diplomats, whom it accuses of plotting to
sabotage the economy.
2013
November—With inflation running at more than 50% a year, the National Assembly gives
President Maduro emergency powers for a year, prompting protests by opposition supporters. Mr Maduro uses the powers to sign orders limiting companies' profit margins.
2013
December—The ruling Socialist Party and allies win 10% more of the vote than the opposition in local elections seen as a test of strength for President Maduro amid economic
difficulties.
Protests
2014
February-March—Protests over poor security in the western states of Tachira and Merida
spread to Caracas, where they win the backing of opposition parties and turn into anti-government rallies. The government accuses the opposition of seeking to launch a coup and breaks
up the protests. At least 28 people die in the violence.
2014
September—Venezuela's annual inflation rate rises to 63.4%, the highest in Latin America.
One of Venezuela's main opposition leaders, Leopoldo Lopez, appears in court, accused of
inciting violence during anti-government demonstrations. The government says it is expanding a plan to disarm civilians. According to UN figures, Venezuela has the second highest
peacetime murder rate in the world after Honduras. The government announces a mandatory
fingerprinting system in supermarkets to combat food shortages and smuggling.
2014
November—Government announces cuts in public spending as oil prices reach a four-year low.
2014
December—Venezuela's chief prosecutor formally charges leading opposition figure Maria
Corina Machado with conspiracy to assassinate President Maduro. US introduces sanctions
against former and current officials over suppression of protests earlier in year. Economy
enters recession after contracting for the third consecutive quarter.
2015
February—Government devalues currency and raises public transport prices. Antonio
Ledezma, opposition mayor of Caracas, charged with plotting coup with US support. He
denies this, accusing government of stifling criticism.
537
4
Lazard Emerging Markets Debt
US Tensions
2015
2015
2015
March—Diplomatic tension with US rises. Venezuela orders US embassy to cut 80
staff, accusing it of interference in internal affairs.US declares 'national emergency' over
Venezuela, accusing it of threatening national security and foreign policy, imposes sanctions
on seven officials.
September—Guyana says Venezuelan troops build-up on border down to claim on possible oil find
off Essequibo Region coast, seeks UN mediation. Venezuela repeated claim to waters in May.
December—Opposition Democratic Unity coalition wins two-thirds majority in Congressional
elections, ending 16 years of Socialist Party control and allowing it to block legislation proposed by President Maduro.
Source: BBC
Notes
1 As of December 2015.
2 “Maduro’s hollow victory,” The Economist, December 14, 2013, http://www.economist.com/news/
americas/21591575-new-president-has-strengthened-his-grip-power-undermined-both-democracy-and.
3 “VAT Raised by 3% in Venezuela,” Tax News, March 25, 2009, http://www.tax-news.com/news/VAT_
Raised_By_3_In_Venezuela____35791.html.
4 Godfrey, Mike, “Venezuela Is Running Out of Toilet Paper,” Bloomberg, accessed on September 27, 2013,
http://www.bloomberg.com/news/2013-09-27/venezuela-is-running-out-of-toilet-paper-.html.
5 “Annual Statistics Bulletin 2012,” OPEC, http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ASB2012.pdf.
6 “Venezuela Trip Notes: Near-term adjustment prospects support tactical overweight,” JPMorgan,
December 12, 2013.
7 “Indicadores,” Central Bank Statistics, accessed December 14, 2013, http://www.bcv.org.ve/c2/indicadores.asp.
8 As of December 2013, Source: Haver
9 “Venezuela top court rejects Capriles’ election appeal,” BBC, August 7, 2013, http://www.bbc.co.uk/news/
world-latin-america-23610744.
10As of December 2013, Source: Lazard estimates
11As of November 16, 2015, Source: Bloomberg
12“Indicadores,” Central Bank Statistics, accessed December 14, 2013, http://www.bcv.org.ve/c2/indicadores.asp.
13As of December 2013, Source: JPMorgan.
14As of November 16, 2015, http://dolar-paralelo.info.
15“Sector Público Restringido,” Ministry of Finance, accessed on December 14, 2013, http://www.mppef.gob.
ve/index.php?option=com_content&view=article&id=226&Itemid=380.
16Vyas, Kejal and Angel Gonzalez, “Panel Deals a Setback to Exxon in Venezuela,” The Wall Street Journal,
January 2, 2013, http://online.wsj.com/news/articles/SB10001424052970203462304577134571323259982
and “Timeline of Expropriations,” What’s Next Venezuela? accessed on December 14, 2013, https://www.
whatsnextvenezuela.com/media-kit/timeline-of-expropriations/.
17Ripinsky, Sergey, “Venezuela’s Withdrawal From ICSID: What it Does and Does Not Achieve,” International
Institute for Sustainable Development, April 13, 2012, http://www.iisd.org/itn/2012/04/13/venezuelas-withdrawal-from-icsid-what-it-does-and-does-not-achieve/.
18Pitts, Pietro D., “ConocoPhillips Says Tribunal Rules Venezuela Seizure Unlawful,” Bloomberg, September
3, 2013, http://www.bloomberg.com/news/2013-09-04/conocophillips-says-tribunal-rules-venezuela-seizureunlawful.html.
19Vyas, Kejal and Amy Guthrie, “Venezuela to Pay Cemex $600 million,” The Wall Street Journal, December 2,
2011, http://online.wsj.com/news/articles/SB10001424052970204012004577072681601140736.
20Quinn, Andrew and Frank Jack Daniel, “U.S. sanctions Venezuela oil gain for Iran trade,” Reuters, May 24,
2011, http://www.reuters.com/article/2011/05/24/us-iran-usa-sanctions-idUSTRE74N47R20110524.
21As of December 2013, Source: Haver.
22“U.S. Imports by Country of Origin,” US Energy Information Administration, accessed on December 14,
2013, http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_m.htm.
538
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