EL UNIVERSAL

Year 2005 started with the official strategy of fighting against large estate and enforcing the Lands Law. Beyond the actions of the National Lands Institute, the government broke down on idle or under-productive private facilities. Several companies were taken over and seized for the purposes of co-management. Concomitantly, the Parliament announced the legal reforms needed to give private property a social character. In addition, the year was marked by high public expenditure, purchase of debt from other nations in the hemisphere and the government political expansion through foreign investment by state oil company Petróleos de Venezuela (Pdvsa.)

December 2004

Fixed exchange rate
Finance Minister Tobías Nóbrega said that from January 1st, 2005, fixed exchange rate would be at VEB. 2,150. Following a hike of VEB 200 in the parallel market, he dismissed devaluation.

Petrochemical
President Hugo Chávez announced the organization of the Petrochemical Corporation.

Nóbrega out
Two days after his remarks, Tobías Nóbrega was replaced by Nelson Merentes.

Old
The Deposits Guarantee and Bank Protection Fund (Fogade) started to deliver checks to the account holders affected by the financial crisis of 1994-1995.

Settlement
Pdvsa by-laws are amended to substantiate the appointment of Minister of Energy and Petroleum Rafael Ramírez as president.

Let us fly
Airline Conviasa starts operations.

Integration
Ecuador and Venezuela are formally included as associate members of the Southern Common Market (Mercosur.)

Finance
Merentes announces organization of the Treasury Bank.

New
The National Assembly (AN) authorizes the organization of CVG Telecom.

Lands
Central-western Cojedes state decrees seizure of private wastelands or large estate "to put order." The properties of families Boulton and Branger are affected. While trade unions rebut the action, other governors join the initiative.

Bank debit tax
Extended until December 2005.

PCI
2004 inflation hits 19.2 percent.

January

Strike
Alcasa loses 110 metric tons of aluminum daily due to stoppage.

Directives
A number of local governments prepare and issue decrees, such as the Cojedes ruling in terms of lands. The National Lands Institute (Inti) proposes amendment to the Lands Law. Agroflora advocates title deeds of seized El Charcote farm. Farmers file suits. A proposal to amend the Lands Law is submitted. The National Agricultural Commission is appointed.

Tax Unit
The tax unit heightens USD 13.7.

Adjustment
The parliament announces amendment to the savings method under the Macro-economic Stabilization Fund (FEM.)

Ministry of Agriculture and Lands
Antonio Albarrán replaces Arnoldo Márquez as Minister of Agriculture and Lands.

Expropriation
The parliament endorses expropriation of Venepal assets and takes steps towards co-management.

Social rate
A social rate is set for mortgage loans.

February

Land dispute
The concept of large estate is reviewed as part of the amendment to the Lands Law. Farm owners defend themselves.

Venezuela Industrial Bank
A 33-percent cut in the payroll as part of shrinking.

Proposal of tax reform
The National Customs and Tax Administration Service (Seniat) proposes tax reform.

Corruption
Managers dismissed from Pdvsa. AN investigates irregularities in Citgo, a Pdvsa subsidiary based in the United States. Tort found in Pdvsa Services.

March

Plastic
Use of credit cards abroad heightens 1.217 percent.

Devaluation
Despite denial, the official exchange rate increases from VEB 1,920 to VEB 2,150 per USD.

Values
State-funded food market network Mercal weighs price adjustment. The Corporation for Stock and Agricultural Supplies (CASA) vows to keep prices.

Mines
Central-western Cojedes government seizes local mines and reverses grants.

Pledge
Foreign debt grows USD 12 million; issuance of debt for 1 billion euros.

Premises
The National Lands Institute (INTI) overrules title deeds of Piñero and El Charcote farms.

A step forward
Law of Housing and Habitat approved.

April

Premises
Seizures continue, as well as declaration of large estate and wastelands. AN agrees to include in the Lands Law the articles removed by the Supreme Tribunal of Justice (TSJ.) Farmers enhance legal proceedings.

Magnifying glass
AN preliminary report finds tort in Citgo. The New Herald airs payment of fees in Pdvsa.

Renewed
Movil Phone company Movistar replaces Telcel and wages tariff war.

Starting out
Tender for stage A in Rafael Urdaneta gas project takes off.

Funding
AN prepares law on use of foreign reserves.

Escalation
President Chávez announces growing royalties for partnerships at the Orinoco Oil Belt. Pdvsa is instructed to transfer companies under operational agreements to joint ventures. Seniat dictates to oil companies the payment of a 50-percent VAT. "Openness and internationalization will be reversed," Minister Ramírez says.

Carabobo
Las Trincheras spa is seized. TSJ orders to stop the measure.

Again
National Valve Manufacturer declared public utility.

Offshore
Pdvsa and BIV branches established in Cuba.

May

Support
Government vows aid to co-managed companies; partners with private sector to organize the Venezuelan Endogenous Textile Industry (Invetex.)

Nope!
Purchase of Digitel by state telephone monopoly Cantv is overruled.

Setback
Gasoline shortage in western Zulia state. Glitches linked with troubles in Amuay refinery.

At full stretch
Seniat requests companies to check accounts. Decision to pay operational agreements in Venezuelan bolivars. Minister Ramírez concedes shortage of USD 890 million for the Venezuelan Central Bank (BCV.)
 
Premiere
Law on Housing Lending enters into force.

ADR
Court discontinues purchase of US dollars via ADR. The action is reversed two days later.

Weird
Not all petro-dollars come in Pdvsa. BCV director Domingo Maza Zavala thinks that the relation with Pdvsa is abnormal.

Actions
Landowners occur to the courthouse to advocate title deeds.

Diversification
Venezuelan Bank for Economic and Social Development (Bandes) executes purchase of Argentinean debt bonds.

On the rise
GDP grows 7.9 percent the first quarter.

June

In brief
Seniat withholds USD 7.4 billion from oil companies. BCV president Gastón Parra proposes a hike in oil VAT.

Birth
Pequiven becomes Venezuelan Petrochemical Corporation.

Out
Seniat terminates agreements with import traders.

Under control
BCV regulates fees for cards, leasing and micro-credits.

On the air
Announcement on regulation of air tariffs.

Profitable
Citgo allots USD 2,1 billion in dividends.

National Development Fund
BCV announces falling assets due to transfer of reserves to Fonden, which, according to the government, will back domestic expenditure.

July

Expansion
Petrocaribe starts operations formally.

Integrated
Pdvsa announces USD 1-billion investment in Uruguay and construction in Argentina of oil ships.

Snowball
Liquidity grows 11.6 percent the first half of the year.

Controversy
Despite the doubts cast by a number of sectors, AN endorses the Law on Exchange-Related Offenses.

Need
BIV requires USD 80 million for capitalization.

Portfolio
Finance Ministry announces additional investment in Latin American bonds. Venezuela completes purchase of USD 500 million in Argentinean debt bonds. Growing interest in buying USD 300 million in Ecuadorian debt bonds.
 
Thrust
AN backs amendment to BCV Law and the National Development Fund (Fonden) is organized. This means initial transfer of USD 6 billion.

The wolf is coming
The Ministry of Light Industry and Trade (Milco) announces new prices of meat and milk, and review of prices control to ensure enforcement.

Fedecámaras
José Luis Betancourt is appointed president of the Federation of Trade and Industry Chambers.

Few
Government confirms that only 17,000 houses were built in seven months.

August

Confirmed
According to Pdvsa accounts, 2.7 million bpd of oil were produced in 2003, instead of 3 million bpd as initially stated.

Around the world
Venezuela dispatches the first shipment of 900,000 barrels of oil to Uruguay. Petrocaribe will fund USD 17 billion over the next 10 years.

Veto
The government announces amendment to the Law on Exchange-Related Offenses.

Agro
The National Agrarian Commission records 317 large estates nationwide, for a total area of 3,685,125 hectares

Migration
Authorities and eight companies execute provisional conventions to transfer operational agreements to joint ventures.

Agencies
Establishment of the Treasury Bank and Venezuelan Tourism Corporation (Venetur.)

Lesson
Shell challenges the back tax requested by Seniat, but is instructed to pay a 25-percent fine for such appeal. Seniat closes Shell offices and implements a cautionary measure.

Critical conditions
Squatting affects adversely production of sugar cane in central-northern Yaracuy state.

Unsafe conditions
Two fires unleashed in a refinery compound in western Falcón state.

Escalation
Farmers take over Fribarsa slaughterhouse located in southwestern Barinas state.

Winds of change
Richard Vivas appointed Initi president to replace Eliézer Otaiza.

Barinas
Occupants prevent reception of corn in Promabasa factory.

September

Polar
Suits are brought following takeover of Promabasa. Sideroca, Cumanacoa Sugar Mill and silos of Polar corporation are seized. Polar occurs to the court.

Heinz
The government of northeastern Monagas state orders takeover of Heinz tomato processing plant. Authorities plan decree on expropriation. The company makes a deal and accepts USD 233,000 for the factory.

Chá-Az
Authorities renew attacks on some farms. Seizure of La Marqueseña ranch makes a real fuss. President Chávez announces apportionment of the lands. Then, he meets with Carlos Azpúrua, the farm owner, and proposes the Chá-Az method as a way of negotiation.

Structures
The National Mining Industry is organized.

Securities
Additional USD 500 million in Argentinean debt bonds are purchased.

October

Down
VAT goes down from 15 percent to 14 percent.

Argentina
Venezuela purchases USD 150 million in Argentinean debt bonds.

National Assembly
The new AN is to fit the concept of private property into social interest.

Acceptance
Most oil companies under operational agreements agree to become joint ventures.

Reserves
President Chávez reports that reserves will be placed no more in US banks. BCV acknowledges transfer of reserves to European banks four months earlier. The government ponders on buying yuans and rubles.

Dialogue
The government takes the initiative to meet with Fedecámaras.

Cards
The government vetoes the Cards Law approved by AN.

SEC
Pdvsa submits 2003 financial statements to the Security Exchange Commission.

Silos
Polar requests TSJ to make seizure of its plant null and void.

Effective
Law on Exchange-Related Offenses enters into force.

Money
Venezuelan budget for 2006 set at USD 4 billion; this means extension of IDB for one additional year.

Poor
Venezuela plans to send cheap gasoline to US low-income citizens.

Sidor
President Chávez reports on attempt at renationalizing Orinoco Iron and Steel Company (Sidor.)

Bonds
Government buys USD 300 million in Argentinean debt bonds.

November

Raw materials
Growing pressure at Sidor. A deadline is set for new pricing of raw materials. The company agrees on changing procurement conditions.

Investment
Venezuela interested in buying Colombian refinery. Pdvsa and Brazilian state oil company Petrobrás enter into an agreement to build a refinery.

Injection
Transfer of USD 6-billion reserves to Fonden.

Barinas case
TSJ withholds seizure of Polar silos.

Emergency
Government declares state of emergency in housing and extends freezing of leasing rates.

Play ball
Kicking off the Bolivarian Extraordinary Investment Plan.

Word
Venezuela agrees on buying USD 1.3 billion in Argentinean debt bonds. The Finance Ministry sells them to Venezuelan banks.

Issuance
Government issues USD 3 billion in Eurobonds.