Tensions financial sector Venezuela do not affect Curaçao directly

WILLEMSTAD/CARACAS — It is difficult to verify what is actually going on in the Venezuelan financial sector. President Hugo Chávez is unpredictable in his acting and it is a continuous anticipation as to which decision he will take.

Nevertheless, the banking sector on Curaçao is following the developments in the neighboring country to some extent, where there has certainly been a tense situation during the past two years within the financial sector and these tensions have considerably increased the last weeks.
For example, the Venezuelan minister of Science and Technology, Jesse Chacon has resigned after a corruption scandal, which had involved several local banks. Jesse Chacon’s brother Arne, who is president of Banco Real, was arrested after an investigation regarding irregularities with banks. Chávez had indicated that the resignation of Chacon was the best for them.
The Venezuelan government had recently intervened with seven banks, which had been accused of misusing public money. Plans had been announced to eliminate at least two of them.
Jesse Chacon is by far the most conspicuous victim of the bank scandals whereby it appears there are existing links between the banking people and the top of the government of Chávez. Eight bankers in total have been held, among whom billionaire businessman Ricardo Fernandez.

On Curaçao, Girobank-director Eric Garcia states he has continuous contact with colleagues in Venezuela and has information that there is a certain tension within the banking sector in the country.
Chicú Capriles of Maduro & Curiel’s Bank (MCB) does not really follow the developments at first hand, as it is difficult to obtain reliable information from Venezuela. However, he thinks that possible consequences for the financial sector in Venezuela will hardly be noticeable on Curaçao.
Garcia adds to this that specifically the Girobank will not notice the consequences of actions by the Venezuelan government. The largest shareholder of the Girobank is the Girobank-holding and that is a local incorporated company.
The Girobank does have shareholders, who are also shareholder in the Venezuelan Banco Fondo Comun though, but there are no direct ties between Girobank and BFC, according to Garcia.
He therefore states that interventions of the Venezuelan state in banks there will have no consequences for Girobank on Curaçao. Not a single bank has deposits in Venezuelan banks, according to him. “The opposite could be possible though.”

Venezuelan banks with an establishment on Curaçao, such as Banco Mercantil and Banco Provincial, only function as offshore banks and it is impossible that local people would have their money there.

The current situation in Venezuela has exactly the opposite effect that Venezuelans will withdraw their money from the onshore banks and deposit it with an offshore bank. “That is why Chávez – actually unjustly – stated that there are Venezuelans who steal money and deposit such with, amongst others, banks on Curaçao”, says Garcia.

What could affect Curaçao, according to Garcia, are the credit restrictions by the Venezuelan state. The Venezuelan committee foreign exchange administration Cadivi will be implementing strict norms for tourists. Depending on the destination and the number of vacation days, there is a maximum credit limit of 3000 dollars on a credit card. For Curaçao, which is close to Venezuela, there is a maximum of 820 dollars for holidays longer than 30 days. One could only obtain a maximum credit of 20 dollars per day. Therefore, the times that Venezuelans visit Curaçao for two days and withdraw 5000 dollars and later on 2500 dollars with their credit card, are definitely over.
The new regulation becomes effective per January 1st, 2010. “The so-called plastic tourism will disappear and that will certainly affect us. There has already been a decline this year compared to 2008, but starting next year, the decrease of tourism from Venezuela will definitely make itself felt here” according to Garcia.
Capriles has a different opinion on this issue: “We have also understood that there will be new credit restrictions per January 1st, but the Venezuelan tourist has meanwhile rediscovered Curaçao. They are a creative people. I think that in spite of the new restrictions, they will find a way to continue to visit Curaçao”.

Furthermore, Garcia finds Chávez’ statements on the FOL-bases on Curaçao and Aruba alarming as well. “He brackets Curaçao and Aruba together with Columbia where there are several FOL-bases. We should pay attention that Chávez will not make any statements such as for example that we are favoring the United States and that we end up in a similar conflict as the one between Venezuela and Columbia.”
According to Garcia, Curaçao should also pay close attention with regard to a possible establishment permit for television channel Globovision, with which Chávez is at loggerheads in Venezuela.
“Chávez does many things, which authorities would normally not do. It could happen without any warming that the Venezuelan fruit barks are no longer allowed to come to Curaçao, in which case we will have a problem.”

On the other hand, Garcia thinks that Curaçao does not have to worry about the refinery. “Venezuela has an interest that his oil is refined and that it has storage capacity for the oil which it sells to China. That is why we see that PdVSA is investing in the restoration of the storage tanks at Bullen Bay.”
For the opposition in Venezuela, this bank scandal is the proof that wealthy business people have raked in their fortune through close ties with the socialistic government. However, according to president Chávez it only regards a small group of malafide bankers.
The government of Venezuela has meanwhile declared that it intends to announce statutory reformations in order to obtain more control on the financial systems of the country. One of the considered measures is creating a system of strict and permanent supervision on bank activities.
In that case, private banks will no longer be able to speculate and the activities will be targeted primarily towards the financing of productive activities and not towards financial speculations.
According to the Associated Press, a few bankers have already fled the country to the United States, Spain, Curaçao and Puerto Rico.

(Source: National Newspaper Amigoe)

11 December, 2009

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