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 kejal.vyas@wsj.com
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