Incoming lawmakers vow scrutiny of PdV

OREANDA-NEWS. December 10, 2015. Venezuela's Democratic Unity coalition has drawn up a lengthy list of proposed economic and political reforms that it plans to implement after it takes control of the national assembly on 5 January.

The disparate coalition, known as the MUD, won 112 assembly seats in 6 December elections, consolidating an absolute majority in the 167-member legislature, the government-controlled CNE electoral authority confirmed late yesterday.

The long-ruling PSUV party will hold 55 seats after losing in most of the country, including poor districts and states formerly considered loyal to the radical socialist movement spearheaded by late president Hugo Chavez.

The election was widely seen as a referendum on president Nicolas Maduro, who called the result a "mistake."

"The bad guys won," he said last night, calling for the PSUV to engage in self-reflection to bring about a "Boliviarian renaissance."

Top of the MUD?s list is an amnesty law to free almost 80 political prisoners jailed since 2013 after Maduro narrowly won election.

The new legislative majority is targeting government controls on prices, interest rates, capital and trade flows, national wholesale and retail distribution, labor regulations and entitlements, and property rights, senior MUD officials tell Argus.

The emboldened opposition plans to launch hearings and investigations early next year into the operations and accounts of state-owned oil company PdV, the central bank, state-owned power utility Corpoelec, and the ministries of energy and mines, and electricity.

The campaign is intended to lay the groundwork for an economic recovery. Venezuela?s GDP is forecast to plunge by 9pc in 2015, with more than 200pc inflation and widespread shortages of basic goods. The economic malaise has intensified as oil prices tumble.

An aide to Henry Ramos Allup, tipped to become national assembly president in place of the PSUV's powerful second-in-command Diosdado Cabello, tells Argus that the new legislature "cannot start to address Venezuela's many economic and related social problems without first securing accurate and detailed information on PdV's real financial and operational condition."

The new legislature's energy and finance commissions will likely spearhead audits and investigations of PdV and the central bank, Ramos Allup's aide said. Among government officials likely to be called to testify are current energy minister and PdV chief executive Eulogio del Pino.

Del Pino's predecessor Rafael Ramirez, who served as energy minister and PdV chief executive from 2003-14 and currently is Venezuela's ambassador to the UN, could also be summoned.

"The new assembly must determine precisely whether PdV's stated production and export numbers are accurate," the aide said. "Everything will be reviewed including joint venture contracts, loan agreements with China and other lenders, all foreign and local debts owed by PdV including its debts to the central bank, suppliers and oil services providers, and the company's workers," he said.

PdV's preferential supply agreements like PetroCaribe and its joint ventures in other countries like Nicaragua, Jamaica and Dominican Republic also will be "placed under a magnifying glass," he added. "The wellbeing of Venezuela's people comes first, and that means the new assembly must enact measures to ensure that 100pc of the revenue from PdV's oil exports is invoiced promptly and income booked transparently."

Del Pino has not commented on the leadership?s remarks. But in a Tweet issued the day after the election, he said oil workers would remain "on bent knee with Maduro."

But MUD leaders are also seeking to dampen popular expectations that they can swiftly resuscitate the ailing economy.

"We can't bring down inflation quickly, restock shelves with food and medicine, stabilize the exchange rate and fix the economy," Ramos Allup said today. "But the new assembly can and will pass laws to promote the conditions necessary for an economic recovery."

The MUD has also pledged that social progress made during the Chavez era will remain intact.

Ramos Allup called on Maduro and the outgoing PSUV legislative majority to engage in a dialogue to facilitate reforms.

"We're not going to steamroll the PSUV in the assembly like they did to us when they were in the majority," Ramos Allup said, while dismissing any possibility for a power-sharing deal.

A defiant Maduro administration is working to check the reach of the assembly before the new leadership takes over, but it appears to have little room to maneuver politically. Cabello has pledged to pack the supreme court, and Maduro is talking of a veto that he will not have in the face of the two-thirds legislative majority.