So the Government named Nelson Merentes to be the new (old) Minister of Finance. Incredible! Merentes was already been Minister of Finance, but I digress.
Nelson Merentes is a Mathematician with a Ph.D. from Hungary. Never knew or was interested in anything related to finances. But he was very interested in politics and backed Chavez early on, going to visit Chavez in the Yare prison with the rest of the so called Garibaldi group, a bunch of mostly mediocre academics from Universidad Central de Venezuela. In fact, Merentes was the first person I knew who was educated but was radically pro-Chavez.
Merentes was a founder of Chavez MBR-2000 movement and campaigned strongly in his favor. So much, that Chavez trusted him with his advice on how to promote the pro-Chavez candidates to the Constituent Assembly which violated the principle of minority representation by electing 96% (96 out of 100) members who were pro-Chavez. The story goes that Merentes did not come up with it, but asked a friend from the University to design it.
Merentes was not a candidate for the Assembly, but was appointed by Chavez to the so called “Congresillo” a transition institution with no legal basis whatsoever that ruled Venezuela for the almost five months between the end of the Constituent Assembly and the election of the new Congress. I remember Chavez’ brother defending the “Congresillo” because all of its members had been elected to the Constituent Assembly, but the only one I knew personally, Merentes, had not been. But I digress again.
Merentes began approving expenses in the “Congresillo” beyond the budget to the point that then Minister of the Interior Miquilena had to stop some of them.
The reason Merentes had not accepted any public positions up to that point was that he only wanted one job: The Presidency of his Alma Mater Universidad Central de Venezuela (UCV) an elected position. He ran after the “Congresillo” was over in a three men race for a runoff. He did not even make it to the second round, getting less than 10% of the vote.
A few weeks after, Merentes was appointed Vice-Minister of Finance. We all understood that the Vice-Minister had been removed, but no. Using revolutionary logic, the Ministry of Finance now had two Vice-Ministers, the same way that US companies have dozens of Vice-Presidents. I still wondered what Merentes was doing in Finance, I am that dumb, I believe in order and knowledge and such stupid concepts.
Months later Merentes was appointed Minister of Finance, where he was involved in the scandal of the FIEM, the Macroeconomic stabilization fund, whose “funds’ simply disappeared, but we are only talking about something like 2 to 6 US billion dollars according to the Economic Office of the National Assembly. The opposition tried to charge Chávez for the dissapearnec, but Merentes, ever the loyal soldier, took responsibility and like the April 11th. truth commission, nothing was ever investigated anyway.
From there Merentes was demoted to Minister of Science and Technology and the Minister for Social development and then President of Bandes the Bank for social development that holds US$ 1.6 billion in fund from PDVSA. Thus, Merentes always find himself running institutions with a billion US dollars there or here.
And now, he apparently will run both. In truth, it is likely that Giordani at Planning will be running the show. Giordani, who is also not an economist, believes in a strong Bolivar, which he thinks is simply holding the currency strong, but ahs yet to understand it requires fiscal discipline. This led to the 2002 crisis and devaluation. He also thinks the North Korean economy is healthy. But that is really digressing from the point.
Thus, a new Giordani dominated, Merentes executed era begins. Expect little devaluations, no more bond issues in dollars and inconsistent policies. Jeez, I seem to be missing Nobrega, who never attacked the structural problems, but really knew how to solve the short term ones. And I will not digress into his ethics either.