Tag Archives: Economic Crisis

Venezuela’s indigenous Warao decamp to uncertain future in Brazil

Venezuela's indigenous Warao decamp to uncertain future in Brazil

By Anthony Boadle

PACARAIMA, Brazil (Reuters) – An indigenous tribe that journeyed hundreds of kilometers to flee the economic crisis in Venezuela has been trapped in limbo near the border in Brazil, after it was moved off the streets of the Amazon city of Manaus.

Driven by hunger and illness from their traditional homeland on the Orinoco River delta in northeastern Venezuela, more than 1,200 members of the Warao tribe migrated to northern Brazil to live and beg on the streets.

Brazilian authorities, nongovernmental organizations and churches have helped provide temporary shelter on the border, but the Warao’s future remains uncertain. The tribe insists it will not return to Venezuela, where a deep recession has led to shortages of basic goods under President Nicolas Maduro’s socialist government.

“The children were dying in Venezuela from illness. There was no medicine, no food, no help,” said Rita Nieves, a cacique, or chief, of the matrilineal Warao.

Members of the tribe are still making the arduous journey. Nieves was wearing her best clothes to cross back into Venezuela to bury a 3-month-old Warao baby that had just died in its mother’s arms on the 1,000-km (620-mile) bus ride to Brazil.

“We are staying here because things have not changed in Venezuela,” she said, sitting in a warehouse turned into a living space for 220 Warao in the small border town of Pacaraima.

Children played among dozens of hammocks hanging from metal structures erected by U.N. refugee agency UNHCR. Outside, women cooked broth on wood fires and men sat listening to their shaman talk about the virtues of the moriche palm used to weave baskets and hammocks, as he puffed on a straw cigar.

The Warao have lived for centuries on the Orinoco delta, but some began to leave when fish supplies were depleted by the diversion of the waters to deepen shipping lanes for Venezuelan iron ore and bauxite exports.

Many went to Venezuelan cities to sell craftwork and beg on the streets. However, when the economy tipped into crisis, they began moving to Brazil last year, often just walking across the border without documents.

“They were already begging in Venezuela, but those who gave them money are themselves asking for help today,” said Sister Clara, a missionary from Brazil-based humanitarian organization Fraternidade that runs two shelters for the Warao.

“Who in today’s crisis in Venezuela is going to buy Warao arts and crafts?” she said.

SLEEPING UNDER OVERPASS

Around 500 Warao arrived on the streets of Manaus last year, where they begged from drivers and sold craftwork at traffic lights.

Many slept under a highway overpass until city authorities stopped the begging and moved them into shelters they did not like.

Some then traveled down the Amazon to Santarem and Belem, while others returned to frontier towns, from which they can go back and forth to their delta homeland when they raise enough money.

“They started staying here, sleeping in the streets, and caused a humanitarian emergency,” said Pacaraima social services secretary Isabel Davila.

The town provided an abandoned warehouse with toilets, showers and a kitchen, built with funding from the Mormon church.

Like a similar shelter in the nearby city of Boa Vista that houses 500 Warao, these are temporary landing places, where the Warao can live while they get documents to legalize their status so they can find work, Davila said.

But Chief Rita has no plans to move. Pacaraima’s mayor promised land to grow crops and materials to make Warao craft work, she said, and she wants the Warao children to learn Portuguese.

Half of the land in Roraima state is reserved for indigenous peoples, but an attempt to ask local communities to cede territory to the Warao met with a firm rebuttal.

“We think they might be here for a decade,” said Danusa Sabala, a spokeswoman for Brazil’s Indian affairs office FUNAI, which sees no short-term solution for the Warao.

Ramon Gomez, a Warao chief in the Boa Vista shelter, said their ancestral homeland in the delta was “finished” and the situation in Venezuela was deteriorating rapidly.

“When … this President Maduro took over, everything ended, food, medicine,” Gómez said. “We will be here until Venezuela changes. It will get worse before it gets better.”

(Additional reporting by Sebastian Rocandio and Nacho Doce; Editing by Daniel Flynn and Jonathan Oatis)

China confident Venezuela can handle debt issue

China confident Venezuela can handle debt issue

BEIJING (Reuters) – China’s Foreign Ministry reiterated on Thursday that it believes Venezuela has the ability to handle its debt issue, after the oil-rich country started making interest payments on bonds following a delay that had threatened to trigger a default.

Venezuela has borrowed billions of dollars from Russia and China, primarily through oil-for-loan deals that have crimped the country’s hard currency revenue by requiring oil shipments to be used to service those loans.

On Wednesday, Venezuela won easier debt terms from Russia, as well as a vote of confidence from China – two countries that could provide a lifeline as Caracas seeks to keep its deeply depressed economy solvent.

Asked whether China was concerned that the debt would not be repaid, Chinese Foreign Ministry spokesman Geng Shuang told a regular news briefing that China-Venezuela financial cooperation was proceeding as normal.

“We believe that Venezuela’s government and people have the ability to properly handle their debt issue,” Geng said.

Venezuelan bond prices have been on a roller-coaster over the past 10 days, as President Nicolas Maduro called investors to debt restructuring talks, while pledging to keep honoring the country’s obligations.

But S&P Global Ratings declared it in selective default on two of its sovereign bonds early this week after it failed to make the coupons within a 30-day grace period.

On Wednesday, the country’s Economy Ministry said it had started transferring $200 million in interest payments on those bonds, which mature in 2019 and 2024.

(Reporting by Ben Blanchard, Writing by Michael Martina; Editing by Richard Borsuk)

Venezuela offers chocolates but little else to creditors

Venezuela offers chocolates but little else to creditors

By Deisy Buitrago and Brian Ellsworth

CARACAS (Reuters) – Venezuela’s socialist government gifted chocolates to creditors on Monday, but offered no firm proposals at a brief meeting in Caracas that left investors without a clear understanding of the government’s strategy to renegotiate $60 billion in debt.

President Nicolas Maduro confused investors this month with a vow to continue paying Venezuela’s crippling debt, while also seeking to restructure and refinance it.

Both restructuring and refinancing appear out of the question, however, due to U.S. sanctions against the crisis-stricken nation. A default would compound Venezuela’s dire economic crisis.

Monday’s short and confused meeting, attended by senior Venezuelan officials blacklisted by the United States, gave no clarity on how Maduro would carry out his plan, bondholders and their representatives who participated said afterwards.

That means Venezuela remains with the dilemma of whether to continuing paying debt at the expense of an increasingly hungry and sick population, or defaulting on creditors and burning its bridges to the global financial system.

“There was no offer, no terms, no strategy, nothing,” said one bondholder, leaving the meeting that lasted a little over half an hour at the ‘White Palace’, departing with a colorful gift-bag containing Venezuelan chocolates and coffee.

But bond prices maintained last week’s rally, with one investor saying there was relief the meeting did not include a default announcement.

Nearly $300 million in late interest payments on three bonds – PDVSA 2027, Venezuela 2019 and Venezuela 2024 – was also due on Monday after 30-day grace periods ended. But bondholders appeared unconcerned at the delay, which was due in part to increased bank vigilance of Venezuela transactions.

“My expectation is that the coupon payments will come through as well,” said Jan Dehn, Head of Research at Ashmore Investment Management. “We know that these delays exist and why they exist.”

About 100 investors, including some bondholders from New York and lawyers representing creditors, entered the ‘White Palace’ via a red carpet and were greeted by a poster of Maduro’s predecessor Hugo Chavez at the entrance of the meeting room inside.

SANCTIONS OVERSHADOW MEETING

Chief debt negotiators Vice President Tareck El Aissami and Economy Minister Simon Zerpa – on U.S. sanctions lists for drug and corruption charges respectively – attended the meeting for half an hour.

They met with some bondholders, while others stayed out of the room on concerns about penalties for dealing with officials sanctioned by Washington.

El Aissami told creditors that Deutsche Bank may soon cut off some financial services to Venezuela, participants said.

Deutsche declined to comment.

He read a statement protesting unfair treatment by global financial institutions, including U.S. President Donald Trump’s sanctions aimed at preventing Venezuela from issuing new debt.

“Now Maduro can say: ‘I showed goodwill, the bondholders showed goodwill … but unfortunately because Uncle Sam is not playing ball we can’t (refinance)’,” said Dehn, who did not attend the meeting.

“I’m not hugely surprised nothing’s come out of that meeting.”

Separately, the European Union approved economic sanctions and an arms embargo on Venezuela on Monday, although it has yet to name who will be subject to the sanctions.

Markets continue to remain optimistic that Venezuela will service its debts, noting it has made close to $2 billion in payments in the past two weeks, albeit delayed.

Bond prices were up across the board on Monday, with the benchmark 2022 notes issued by state oil firm PDVSA [PDVSA.UL] rising 3.3 percentage points.

The economic implosion has already taken a brutal toll on Venezuelans. Citizens are suffering from malnutrition and preventable diseases because they cannot find food and medicine or cannot afford them because of triple-digit inflation.

The sight of poor Venezuelans eating from garbage bags has become a powerful symbol of decay. It contrasts sharply with the era of Chavez, when high oil prices helped fuel state spending.

Halting debt service would free up an additional $1.6 billion in hard currency by the end of the year. Those resources could be used to improve supplies of staple goods as Maduro heads into a presidential election expected for 2018.

But the strategy could backfire if met with aggressive lawsuits. A default by PDVSA, which issued about half of the country’s outstanding bonds, could ensnare the company’s foreign assets such as refineries in legal battles – potentially crimping export revenue.

(For a graphic on ‘Venezuela’s economy’ click http://tmsnrt.rs/2pPJdRb)

(Additional reporting by Corina Pons in Caracas and Dion Rabouin in New York; Writing by Andrew Cawthorne; Editing by Andrew Cawthorne, Frances Kerry and Rosalba O’Brien)

Russia, China, others boycott U.S. meeting at U.N. on Venezuela

Russia, China, others boycott U.S. meeting at U.N. on Venezuela

By Michelle Nichols

UNITED NATIONS (Reuters) – Russia, China, Egypt and Bolivia boycotted an informal public United Nations Security Council meeting on Venezuela on Monday organized by the United States, saying the 15-member body should not be involved in the situation.

“The issue is about meddling with the internal domestic affairs of Venezuela,” Russian U.N. Ambassador Vassily Nebenzia told reporters, adding that he hoped the country could settle its issues peacefully without any external interference.

U.S. Ambassador to the United Nations Nikki Haley told the meeting: “The fact that the (Venezuelan) government would go so far as to try and get people not to show up to a meeting is guilt. And that’s unfortunate.”

Venezuela is suffering from a harsh economic crisis and President Nicolas Maduro’s government has clamped down on the opposition, jailing or otherwise barring from office many dissenting leaders and activists.

Dozens of people have died in violence since the opposition began a sustained wave of protests in April. Met by rubber bullets, water cannon and tear gas fired by the National Guard, the protesters say the crisis demands an early presidential election that they are sure Maduro would lose.

His popularity has been pounded lower by triple-digit inflation and acute food and medicine shortages.

“We received pressure from regional partners not to have this meeting,” Haley said. “This goal is not to degrade anyone. This is not to humiliate a region. This is only to lift up the region.”

Uruguay’s Deputy U.N. Ambassador Luis Bermudez attended the U.N. meeting, but said his country did not believe the situation in Venezuela was a threat to international peace and security.

Venezuela’s U.N. Ambassador Rafael Dario Ramirez spoke to reporters as the meeting was being held, flanked by Nebenzia, Chinese Deputy U.N. Ambassador Wu Haitao and Bolivian U.N. Ambassador Sacha Sergio Llorentty Soliz.

“The meeting is a hostile and clearly interfering act of the United States that undermines the principle of sovereignty of a member state of the U.N.,” Ramirez said. “We condemn this act of political manipulation.”

European Union foreign ministers approved economic sanctions, including an arms embargo, on Venezuela on Monday, saying regional elections last month marred by reported irregularities had deepened the country’s crisis.

The United States has also imposed targeted sanctions on top Venezuelan officials.

The U.N. Security Council also met behind closed doors in May, at Washington’s request, to discuss the crisis in Venezuela.

(Reporting by Michelle Nichols; Editing by James Dalgleish)

Venezuelan crisis spawns boom in gambling

Venezuelan crisis spawns boom in gambling

By Andreina Aponte

CARACAS (Reuters) – “The Whale”, “The Dog” or “The Zebra”?

Players line up beside a small kiosk in a poor neighborhood to choose animals in a lottery game that has become a craze in Venezuela even as the oil-rich country suffers a fourth year of brutal recession.

It seems more and more Venezuelans are turning to gambling in their desperation to make ends meet amid the country’s unprecedented economic crisis.

Though more people lose than win overall, the illusion of a payday has become more alluring as Venezuelans endure the world’s highest inflation, shortages of basics from flour to car batteries, and diminished real-term wages.

Among multiple options from race courses to back-street betting parlors, the roulette-style “Los Animalitos” (or the Little Animals) is currently by far the most popular game on the street.

“Most people I see playing the lottery are unemployed, trying to make a bit extra this way because the payouts are good,” said Veruska Torres, 26, a nurse who recently lost her job in a pharmacy and now plays Animalitos every day.

Torres often plays more than a dozen times daily at the kiosk in Catia, spending between 5,000-10,000 bolivars, but sometimes making up to 50,000 or 60,000 bolivars in winnings – more than a quarter of the monthly minimum wage.

When that happens, she splits the money between buying food and diapers for her baby boy, and re-investing in the lottery.

The Animalitos game, whose results appear on YouTube at scheduled times, is hugely popular because it goes through various rounds, holding people’s interest, and provides more chances to win than most traditional betting options.

The cheapest ticket costs just 100 bolivars – a quarter of a U.S. cent at the black market currency rate, and more than 10 times less than that at the official exchange level.

“It helped me a lot,” said Eduardo Liendo, 63, of a timely win. He recently lost his house and lives in a car in Caracas’ Propatria neighborhood, but had a successful punt on the Animalitos, choosing the dog figure after his own had died.

There is no hard data on betting figures, and the government’s betting regulator did not answer requests from Reuters for information. But those behind Venezuela’s gambling businesses, run by a mixture of private companies and local regional authorities, said trade was booming, with lines longer and busier than ever – because of, not despite, the hard times.

“In a crisis like the one we’re going through, people drink and gamble more to escape from reality,” said psychologist Rosa Garcia from the rural state of Barinas.

The latest scarcity in Venezuela is cash – as authorities cannot produce enough notes to keep up with dizzying inflation – so many bars, shops and betting parlors have quickly switched from cash to electronic transactions to keep money flowing.

That has hit the Caracas hippodrome, where cash is still king. But thousands still go there at weekends, pushing against fences in front of the sand track to cheer their horse on as salsa music booms in the background.

(See http://reut.rs/2A2eOEB for a related photo essay)

(Reporting by Andreina Aponte; Additional reporting by Francisco Aguilar in Barinas and Ricardo Moraes in Caracas; Writing by Andrew Cawthorne; Editing by Frances Kerry)

No visas, bad jobs: Venezuelan emigrants reluctantly return home

No visas, bad jobs: Venezuelan emigrants reluctantly return home

By Andreina Aponte and Anggy Polanco

CARACAS/SAN CRISTOBAL, Venezuela (Reuters) – Early last year, Leandro Colmenares sold his car and his apartment and fled Venezuela’s profound economic crisis, joining a wave of emigration to other Latin American countries.

Colmenares, a medical equipment repairman, first set up in Panama with $7,000 in hand. When he could not get a visa and struggled to find work, he ended up with odd jobs like painting houses and doing electrical wiring for $25 a day.

“In Venezuela, I was rubbing shoulders with doctors. Months later I was mopping the floor in a Panama furniture shop,” said Colmenares, who has two sons, including one who is disabled.

He then tried his luck in Colombia, where he again took odd jobs, mostly cooking. He opened a small cafe with other Venezuelans but it failed.

“It was bad, I was going hungry. On weekends I ate once,” he said. And once again, he could not get a visa.

Crushed and having run out of money, Colmenares decided in February he had no choice but return to Venezuela empty-handed and by bus – one of an apparently growing number of Venezuelan emigrants forced to go home after failing to start a new life elsewhere in Latin America.

These recent migrants are often poor, hopping on buses to Latin American capitals with as little as a few hundred dollars and scant prospect of finding a decent job.

“The country I left was bad. When I came back it was worse,” said Colmenares, noting steep prices and ever less food on store shelves. He spends his days in his home in poor central Caracas, scraping out a living making dough for corn patties.

For decades after World War II, Venezuela’s flourishing oil economy made it a destination for mass immigration from southern Europe, with Portuguese bakeries and Spanish bars a common sight across Caracas.

But during 18 years of Socialist rule, an increase in crime, economic decay and political protests have prompted emigration to Miami, Madrid, and the rest of Latin America.

Sociologist Tomas Paez estimates over 2 million Venezuelans have left the country of 30 million, accelerating in the last two years as the OPEC member’s recession has worsened, leading to shortages of vital medicines and food, runaway inflation and lack of formal jobs.

While the early diaspora was mostly a middle-class phenomenon, recent migrants are more likely to be poor, heightening the chances that they will struggle.

There is no data on returnees but Reuters interviewed 10 Venezuelans who had emigrated after President Nicolas Maduro took office in 2013 only to return.

“ALL YOU DO IS SURVIVE”

For Miguel Blanco, a Caracas-based sociologist, the degree of poverty among people now leaving the country has led to more of them returning.

“When migration is triggered by push factors, it can lead the migrant to fail because of lack of money,” said Blanco.

Pockets of Venezuelan economic migrants, once a relatively rare sight in South America, have sprung up in cities from Bogota to Santiago de Chile. They are often seen hawking traditional corn patties on the streets or offering door-to-door beauty treatments.

Panama’s head of migration said in August that some 2,000 Venezuelans were setting up there every week, compared with about 500 to 600 before August, when Maduro’s government created a legislative superbody that was widely condemned by the opposition and other countries as a power grab.

With about 60,000 Venezuelans already in Panama, the government has implemented visas as an entry requirement.

Peru has estimated that in the first half of 2017 some 40,000 Venezuelans entered the country.

Venezuelan government supporters have said the extent of emigration has been exaggerated. Maduro’s administration scoffs at those who leave as selfish and unpatriotic. The Information Ministry did not respond to a request for data.

Colombia, which shares a porous border of some 2,219 kilometers with Venezuela, has estimated that about 36,000 Venezuelans enter daily, and that some 2,000 do not immediately return to their country.

Gerson Lopez, a 30-year-old graphic designer, said he was paid less by a Colombian beauty product company because he did not have legal documents.

“Informal work there is very exploitative,” said Lopez. “Venezuelans are doing the work Colombians don’t want to do.”

Lopez was broke when he returned to Venezuela in late January after being unable to find good work in Bogota.

“You have to think very hard if you’re going to leave,” he said, adding bitterly, “(But) here you don’t have any opportunities. All you do is survive.”

(Additional reporting by Marco Aquino in Lima, Fabian Cambero in Santiago and Anthony Boadle in Brasilia; Writing by Alexandra Ulmer; Editing by Dan Flynn)

Venezuela opposition won’t attend scheduled talks with government

Luis Florido (C), lawmaker of the Venezuelan coalition of opposition parties (MUD) attends a news conference at the National Assembly building in Caracas, Venezuela, September 26, 2017. REUTERS/Ricardo Moraes

By Diego Oré and Andreina Aponte

CARACAS (Reuters) – Venezuela’s opposition said on Tuesday it will not join scheduled talks with President Nicolas Maduro’s government, undercutting a dialogue effort that has been viewed with suspicion by many adversaries of the ruling Socialist Party.

The government has eagerly promoted the talks amid global criticism that Maduro is turning the country into a dictatorship, while the opposition has always insisted the talks should not distract from the country’s economic crisis.

The two sides held separate exploratory conversations with the president of the Dominican Republic earlier this month. But the opposition said the government has not made enough progress on issues such as human rights to warrant full bilateral talks.

“Negotiation is not to go and waste time, to look at someone’s face, but rather so that Venezuelans can have immediate solutions,” opposition leader Henrique Capriles told reporters.

“We cannot have a repeat of last year’s failure,” he said, referring to Vatican-brokered talks in 2016 that fell apart after the opposition said the government was simply using them as a stalling tactic.

The Information Ministry did not immediately respond to a request for comment.

The opposition wants a date for the next presidential election, due by the end of 2018, with guarantees it will be free and fair. It is also calling for freedom for hundreds of jailed activists, a foreign humanitarian aid corridor and respect for the opposition-led congress.

With Spain pushing for the European Union to adopt restrictive measures against members of the Venezuelan government, Maduro may be hoping to dodge further sanctions.

The United States has issued several rounds of sanctions against Venezuela, primarily in response to the creation of an all-powerful super body called the Constituent Assembly that was elected in a July vote the opposition labeled fraudulent.

Many countries have refused to recognize the assembly, which Maduro insists has brought peace to the country of 30 million. He says opposition leaders are coup-plotters seeking to sabotage socialism in oil-rich Venezuela under the guise of peaceful protests.

Amid a fourth straight year of recession, millions of Venezuelans are suffering food shortages and rampant inflation, which the government blames on an “economic war” led by the opposition and fueled by recent sanctions.

(Reporting by Diego Ore and Andreina Aponte, Writing by Alexandra Ulmer; editing by Diane Craft and Dan Grebler)

Latin American nations seek Venezuela crisis mediation

President of Venezuela's National Constituent Assembly Delcy Rodriguez (3-L) talks to the media next to members of the Parlasur, the parliament of the Mercosur trade bloc, after their meeting in Caracas, Venezuela September 15, 2017. REUTERS/Marco Bello

By Jorge Pineda and Andrew Cawthorne

SANTO DOMINGO/CARACAS (Reuters) – Various Latin American nations will join an attempt to mediate Venezuela’s political crisis in new talks later this month, the president of the Dominican Republic said on Thursday.

Danilo Medina hosted high-level delegations from Venezuela’s feuding government and opposition for two days in the latest foreign-led effort to ease a standoff alarming the world.

“We advanced definition of an agenda on Venezuela’s big problems. A commission of friendly countries was agreed,” the Dominican leader told reporters, saying Mexico, Chile, Bolivia, Nicaragua would join the process with others to be announced.

The next talks would be held on Sept. 27, again in the Dominican capital Santo Domingo, he added.

Mexico and Chile have been bitterly critical of President Nicolas Maduro’s socialist government over rights and democracy issues, while fellow leftist-led Bolivia and Nicaragua are staunch allies.

Venezuelan’s government is eager to ease foreign censure of and its delegates came out of Thursday’s talks smiling.

“A dialogue of peace is being installed so that Venezuela can resolve its affairs among Venezuelans,” senior Socialist Party official Jorge Rodriguez told reporters.

Earlier, opposition leaders, who faced a backlash from supporters after failed talks with Maduro last year, insisted they had only traveled to push long-standing demands, including a presidential election and the release of jailed activists.

Decrying Maduro as a “dictator” who has wrecked the OPEC member’s once-prosperous economy, Venezuelan opposition leaders led street protests earlier this year seeking his removal that led to the deaths of at least 125 people.

Maduro says they were seeking a coup with U.S. connivance.

Though both sides met the Dominican president this week, it was unclear if they had also sat down and talked together.

In a statement after Thursday’s meetings, the opposition Democratic Unity coalition said it had accepted an invitation by Medina and the United Nations to an “exploratory meeting” in the hope of advancing Maduro’s exit by constitutional means.

“Only through democratic and non-violent change will it be possible to overcome the current social and economic tragedy afflicting all Venezuelans,” it said.

The coalition said six countries would be acting as guarantors, and any final accord must include a date for a presidential vote, reform of the national electoral board, release of political prisoners, and emergency humanitarian aid.

Any agreement should go to a referendum, it added.

The government delegation included Delcy Rodriguez, leader of Venezuela’s all-powerful and pro-Maduro Constituent Assembly whose creation brought widespread foreign condemnation as it overrides the existing opposition-led congress.

The opposition delegation was led by Julio Borges, head of that congress, fresh from a trip to Europe where he was received by the leaders of Germany, France and Spain.

Maduro routinely calls for dialogue, but his adversaries suspect he may use talks as a stalling tactic to help his image without producing concrete results. A dialogue brokered by former Spanish Prime Minister Jose Luis Rodriguez Zapatero and the Vatican in 2016 did nothing to advance opposition demands.

(Additional reporting by Diego Ore in Caracas; Writing by Andrew Cawthorne; Editing by Jonathan Oatis and Grant McCool)

Venezuela suspends dollar auctions, blames U.S. sanctions

A woman changes dollars for bolivars at a money exchange in Caracas, Febreuary 24, 2015. REUTERS/Carlos Garcia Rawlins

CARACAS (Reuters) – Venezuela on Wednesday temporarily suspended the sale of U.S. dollars through its Dicom auction system, following an announcement last week that it was moving away from the greenback in response to U.S. sanctions.

The United States in August prohibited dealings in new debt from Venezuela and state oil company PDVSA in response to the creation of a new legislative superbody that critics call the consolidation of a dictatorship.

President Nicolas Maduro last week said the crisis-stricken OPEC country would create a basket of currencies to “free” Venezuela from the dollar, using the Dicom auction system.

Upcoming auctions are deferred until “the necessary adjustments are made to our system to incorporate other currencies” and to resolve problems associated with its correspondent bank, Dicom said via its Twitter account.

Dicom as of August was auctioning dollars for 3,300 bolivars. The system serves as a complement to the country’s currency control system that provides greenbacks at 10 bolivars for essential items such as food and medicine.

Dollars on the black market now fetch 22,431 bolivars, according to website DolarToday.com, which is the principal for the black market rate.

Dicom has auctioned only $72 million since it began operations three months ago. Business leaders say this is a fraction of what companies need to pay to import goods, leaving them reliant on the black market.

Economists say the currency controls are the primary driver of the country’s economic dysfunction, which includes triple-digit inflation and chronic product shortages.

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

(Reporting by Corina Pons and Deisy Buitrago writing by Brian Ellsworth; editing by Jonathan Oatis)

France says Venezuela talks to take place, warns of sanctions

Venezuela's President Nicolas Maduro speaks during a meeting with ministers at Miraflores Palace in Caracas, Venezuela September 12, 2017. Miraflores Palace/Handout via REUTERS

PARIS (Reuters) – Venezuela’s government and opposition will hold a round of talks in the Dominican Republic on Wednesday, France’s foreign minister said on Tuesday, warning Caracas that it risked EU sanctions if it failed to engage in negotiations.

Venezuela was convulsed for months by demonstrations against leftist President Nicolas Maduro, accused by critics of knocking the oil-rich country into its worst-ever economic crisis and bringing it to the brink of dictatorship.

“I was happy to learn that dialogue with the opposition would restart tomorrow in the Dominican Republic,” Jean-Yves Le Drian said in a statement after meeting his Venezuelan counterpart, Jorge Arreaza Montserrat, in Paris.

Venezuela’s Democratic Unity Coalition said it would send a delegation to meet with Dominican President Danilo Medina to discuss the conditions under which dialogue could be held, but denied that any talks as such had begun.

“The invitation by (Medina) does NOT represent the start of a formal dialogue with the government,” the coalition said in a statement. “To begin serious negotiations, we demand immediate concrete actions that show true willingness to solve problems rather than to buy time.”

The statement reiterated long standing opposition demands including the release of political prisoners, respect for the opposition-run congress and measures to ease a crippling economic crisis.

Le Drian said Wednesday’s meeting would involve Medina and former Spanish Prime Minister José Luis Rodriguez Zapatero.

United Nations Secretary-General Antonio Guterres expressed his full support for the talks.

“The Secretary-General encourages the Venezuelan political actors to seize this opportunity to demonstrate their commitment to address the country’s challenges through mediation and peaceful means,” U.N. spokesman Stephane Dujarric said in a statement.

Maduro routinely calls for dialogue with the opposition, but his adversaries see dialogue as a stalling mechanism that burnishes the government’s image without producing concrete results.

In a televised broadcast on Tuesday evening, he voiced renewed support for dialogue and said he was sending Socialist Party heavyweight Jorge Rodriguez to represent the government in the Dominican Republic.

A dialogue process brokered by Zapatero and backed by the Vatican in 2016 did little to advance opposition demands.

Many Maduro critics believe opposition leaders were duped in that dialogue process, and have grown suspicious of Zapatero as an intermediary.

Like fellow-EU member Spain a few days earlier, Le Drian also warned Arreaza that if the situation continued there would be consequences.

“I reminded him of the risk of European sanctions and the need to rapidly see evidence from Venezuela that it is ready to relaunch negotiations with the opposition and engage in a sincere and credible process,” he said.

 

(Reporting by John Irish in Paris and Diego Ore and Brian Ellsworth in Caracas; Additional reporting by Michelle Nichols at the United Nations; Writing by Brian Love and Andrew Cawthorne; Editing by Leigh Thomas and Sandra Maler)