Processing, Not Politics, Kept Venezuelan Minister Out of U.S.
By Kejal Vyas and José de Córdoba
CARACAS--Venezuela's economic czar Rafael Ramirez wasn't able to make it to a much-anticipated investor roadshow last week in New York because of a snafu in the U.S. State Department's visa-processing system--and not any problems with the U.S. government, U.S. officials said Wednesday.
A glitch in the database, which has affected visa operations globally over the past week, continues to prevent Mr. Ramirez from traveling to Wall Street to meet bankers and other investors in an effort to secure much-needed financing for a country suffering from crippling dollar shortages.
"The entire system crashed, it's got nothing to do with Venezuela," said a senior U.S. official. "Ramirez was not able to get a visa because of the global visa crash. We wanted him to come."
U.S. officials said they are trying to accommodate Mr. Ramirez and his entourage, but there is no guarantee of how quickly it can be done, given a large backlog of applications.
"It's a completely centralized system...there's no way to manually go around it," said another official familiar with the matter.
An investor roadshow with Mr. Ramirez is rare for a leftist government that often blames its problems on the U.S. and capitalism. Wall Street analysts had expected Mr. Ramirez, who in addition to being President Nicolás Maduro's top economic adviser also serves as oil minister and head of the state energy giant PdVSA, to use the New York meetings to promote a much-anticipated package of economic measures aimed at remedying the country's woes.
"I think market watchers were surprised that he would cancel so hastily, but then again not surprised because the meeting was so hastily planned, " said Russ Dallen, managing partner at brokerage Caracas Capital Markets.
Delays in the roadshow have added to investor concerns, according to Barclays, pushing yields on some of Venezuela's sovereign bonds higher. Bond markets demand Venezuela pay more yield to its investors than any other country in the developing world because of perceived risk, which Mr. Ramirez will try to ease as the oil-rich nation seeks funds to salvage a crumbling economy and a cumbersome foreign-exchange regime that limits access to U.S. dollars.
The liquidity squeeze is blamed for massive debts that the Venezuelan government has with private companies, ranging from oil partners and airlines, which have reduced flights to Venezuela, as well as importers who can't get paid by the central government.
The resulting shortages of food to car batteries to medicine has made life difficult in the country, eroding Mr. Maduro's popularity since he took over last year following the death of his mentor Hugo Chávez.
U.S. officials say Mr. Ramirez's visa difficulties have nothing to do with the revocation or denial of visas to dozens of unnamed Venezuelan officials for their alleged involvement in human-rights violations during a crackdown on antigovernment protesters earlier this year, one senior U.S. official said. The visa sanctions were announced earlier Wednesday.
Nor is it revenge for Venezuela's success in keeping Gen. Hugo Carvajal, the country's former military-intelligence chief, out of U.S. hands. Gen. Carvajal, wanted in the U.S. on drug charges, was detained in Aruba last week on a U.S. warrant, but after a four-day jail stay was released and flown back to Venezuela where he received a hero's welcome, to the consternation of the U.S.
A spokesman at the Venezuelan Energy Ministry declined to comment on the visa issue, but said Mr. Ramirez has been managing a full agenda, having welcomed Russian officials a day earlier. A spokesman at the Foreign Ministry declined to comment.
The roadshow was initially set to begin last week but has already been pushed back twice. Lazard, the bank hired by Venezuela to arrange the meetings, emailed an urgent message to investors on Tuesday night saying the trip had been rescheduled to the first week of September, as Mr. Ramirez had to stay in Caracas to attend a summit of Mercosur, the South American trade bloc.
"The date and venue of the meeting will be confirmed as soon as possible, " Lazard said. "Please apologize for any inconvenience."
A spokeswoman at Lazard didn't respond to call and emails seeking comment.
The New York meetings also heightened expectations for policy changes, including a potential rise in domestic gasoline prices, devaluation of the bolívar currency, changes to price controls that local businesses complain stymie production, and easing terms for foreign oil partners so they can invest more easily in joint ventures in Venezuela. The South American country, which has to pay off more than $4 billion in debt maturing in October, relies on oil for some 95% of its dollar income.
"The government has said it is working on an adjustment plan, but in practice, it continues to delay the adoption of economic measures, increasing the risk that the country will enter a new electoral cycle that could increase its distortions and imbalances," Barclays said in a note to clients Wednesday.
Throughout this year, analysts have said the government ought to implement any potential austerity measures sooner rather than later, before re-entering a regional election cycle next year.
Write to Kejal Vyas at email@example.com
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