Mostly More Of The Same In New Maduro Cabinet

April 21, 2013

Ministra

Very few changes in the new Cabinet announced by Maduro tonight. Nelson Merentes moves to the Ministry of Finance, a post he held in 2001 and 2004. He was later President of the Venezuelan Central Bank. Giordani stays in Planning, so that Maduro went the conservative route, splitting the two Ministries. Jesse Chacón is back, as Minister for Electric Energy. He has held at least four Ministries, I lost count. He was also pollster for the Government recently, predicting a 9% Maduro win. Andres Izarra is Minister for Tourism, he is also back to a new Cabinet post. The Head of the intelligence agency SEBIN, becomes Minister of the Interior. The Minister of Health is removed and replaced by Isabel Iturria, the President of the Children’s Cardiological Hospital. And in the Ministry for Sports (picture above), the former Olympian and model Alejandra Benitez.

Maduro shows he either can’t change much or does not know how to. There is still no trained economist in the Cabinet. We thought there would be one. Merentes in Finance is probably good for the Government’s foreign exchange policy, as he is known to be more pragmatic, but bad for debt, as he is likely to restart issuing debt internationally.

58 Responses to “Mostly More Of The Same In New Maduro Cabinet”

  1. sapitosetty Says:

    Awfully conservative-lookin revolution you got there

  2. moctavio Says:

    Actually, she and the new Minister of Health are probably the most qualified for their positions in terms of knowing the subject.


    • I don’t think they were chosen because of their knowledge on the subject but because of their loyalty; case in point, Francis Terán, one of the very few ministers of chavizmo I actually thought was right for the sports ministry, and she was fired because she went to work after the 2002 events. She said she went to work as usual because she wanted to calm down the people at the ministry, and because, unless told differently by the national assembly or the supreme court, or a new government back-up by them, Chávez was still president and she was still minister. Kinda “buisness as usual” approach.

  3. Roy Says:

    Issue debt? With the legitimacy of the government in question? Who is going to buy?

    • TV Says:

      Put a sufficient enough interest on it, and you’ll get vultures in very quickly. It’s questionable how long Venezuelan finances can stand ~100% interest rate, but it’s a short term fix, the very best Chavizmo can hope for.

  4. jctt Says:

    Well the news in Venezuela is that there is no news! that’s practically the same team of the past 14 years. Which means that there will be no substantial change of policies.

    I honestly don’t see how Maduro will honor his promises of more efficiency and less corruption. If that were truth then we should have seen new faces in the cabinet, and a new set of policies.

    So that’s it… really! there is no news, same old same old…

  5. jctt Says:

    BTW this is not a conservative cabinet?? I don’t understand why you guys are labeling Maduro and their team as conservatives, when they are clearly SOCIALIST/COMMUNIST/FASCIST, but I don’t see any libertarian/conservatives right?

  6. AG Says:

    I like this from you post: “We thought there would be one. Merentes in Finance is probably good for the Government’s foreign exchange policy, as he is known to be more pragmatic…..”. However I do not get what do you mean by good for foreign exchange policy…..

  7. Humberto Says:

    Where did Giordani go? Thx

  8. moctavio Says:

    Conservative in the sense of no change.

  9. cuervo Says:

    El mismo musiu con diferente ca-chimboou (de ca y chimbo)

  10. m_astera Says:

    I don’t accept the Maduro government as valid or legal. To me there is nothing to be gained by discussing the new cabinet appointments of an illegal government.

    • concerned Says:

      I agree. They should be packing instead of floundering around in their self made cesspool.

      The opposition better take a firmer stand on the audit, and keep pounding away in the media about the violations and documented cheating. If allowed to complete the “checkup” of the system as it is now called and adjust accordingly, chavismo will blast the opposition for even questioning the results from the most perfect system in the world. Then they will go on full attack to demand justice for the 8 fatalities that they claimed the opposition was responsible for post election.

      If you don’t keep the obvious vote violations fresh in the media, the international community will lose interest and eventually will recognize maduro. They will soon have the feeling that if the opposition accepts it, why should we care and not accept it?

      Go big or go home.

      • Ronaldo Says:

        Just as it is getting late to complain about an unfair election, it is past any deadlines to prosecute the opposition for the deaths of 8 people who no details have been given about their deaths or who they are.

  11. gordo Says:

    Maduro acknowledged many times that there were persistent problems that were not handled well enough by the revolution. He promised to do things “better” in some way. This cabinet, however, doesn’t give me much hope. For example, Giordani remains the minister of Economy & Finance.

    Einstein was quoted: “Insanity: doing the same thing over and over again and expecting different results.” Maduro just might be insane enough to finish off the economy for good!

  12. megaescualidus Says:

    Musical chairs, again and again

  13. O.W. Says:

    “Merentes in Finance is probably good for the Government’s foreign exchange policy, as he is known to be more pragmatic, but bad for debt, as he is likely to restart issuing debt internationally.”

    If Merentes handles the exchange rate correctly why would the government need more debt? Handling the exchange rate all probably means devaluing more, or at least selling more at the lower rates, and as a result the government would have lots more money thereby making debt unnecessary. So I’m not sure how he would simultaneously handle the exchange rate in a more pragmatic way and yet run up more debt.

    Also, who would be in charge of things like deciding when to stop giving away gasoline for free? Ultimately Maduro, but of his ministers would it be Giordanni or Merents?

    • moctavio Says:

      He will not do it “correctly” as long as Giordani is there, so he will be more pragmatic, but will likely use a combination of a higher rate, but not sufficiently high, with more flow, while issuing bonds to provide PDVSA (or the Government) with more cash flow. PDVSA needs to move out 2014 maturities, some sort of offering with exchange might be what they need. The problem is the black marker at four times the official rate. There are not enough dollars to bring it down, unless you sell bonds to temper the insatiable demand at those levels. A US$ 3 billion issue could do the trick. tHe alternative? Devalue CADIVI, SICAD to mid-teen levels or so, neither Merentes, nor Giordani is ready for that (I think)

      I dont see free gasoline going away, nor free electric rates (13 years at the same level) going away either, any economist with rudimentary knowledge of economics, independent of ideology, would do something about it, but neither of them has that knowledge. I was hoping an economist would come n, no such luck.

      • O.W. Says:

        First, you don’t necessarily have to be an economist to understand things like “opportunity costs” and that giving away gasoline and electricity for free starves the government of money that is really needed for other things. In fact most Venezuleans would understand it if it were properly explained to them rather than continuously being lied to about it by politicians on all side.
        Second, and this is key, is that Maduro has to know that “conservative” or the status quo simply won’t cut it. Without some significant accomplishments under their belts they are almost guaranteed to lose the next elections. No matter what rhetoric he puts out I really can’t believe that Maduro doesn’t know that. He must. Maybe he will make policies more radical. Maybe he will make them more “pragmatic”. Whatever. But what he can’t do is keep things as they are.
        Actual events could prove me wrong but I would really expect to see some significant changes in policies over the next 6 months.

        • NorskeDiv Says:

          There are no solutions on the radical side, unless you mean as radical as east Germany or Stalinist Russia (work or die, ration coupons, etc.) Otherwise all the solutions lie on the pragmatic side and include pricing signals, private sector involvement and competition.

    • NorskeDiv Says:

      Pragmatic in the sense he’ll actually attempt to supply enough currency for domestic producers, non-pragmatic in the sense that in doing so he will run up more debt.

      Correctly handling the exchange rate would mean a massive devaluation, based on reserve ratios a devaluation to at least 20 bolivars to the dollar. That’s not going to happen.

      As to “selling more at lower rates and as a result the government would have lots more money,” WHAT?????. Selling more at lower rates simply increases the governments loss, exchanging a valuable thing for a less valuable thing. The only way foreign exchange becomes profitable for the government is if it devalues so much that the currency is undervalued, a la China. Never ever going to happen in Venezuela.

      The way you’re presenting it reminds me of the old joke: “We lose money one each unit, but we make it up in volume”

      • moctavio Says:

        There are no dollars to sell “more”

        • Mick Says:

          Since oil is paid for in dollars, I don’t get why they don’t just give up bolivars. Then inflation would reflect the cost of goods sold (2-3%) and not the ever increasing government spending(20-30%). Low inflation means people can actually save money, which means more middle class.

          • NorskeDiv Says:

            You answered your own question. Chavismo will never dollarize because it would mean a growing middle class and a loss of control.

      • O.W. Says:

        I worded it incorrectly but I meant devalue so that the government gets more Bolivares for its dollars which as we all know gives the government more money.

        • NorskeDiv Says:

          OK, that makes sense.

          • With Giordani there and now his follower Edmee in BCV there will be no reasonable devaluation. Maduro had his chance and he decided to go to for consensus, given the problems, he is in trouble. I went to a restaurant yesterday, I paid almost twice as much as in February. That is what the black rate does to prices.
  • gordo Says:

    I thought that the idea to give vouchers to each citizen to buy gasoline and electricity that offsets the some of the increased cost makes sense. The same vouchers should be applicable to public transportation and to energy efficiency products. So people without cars can benefit, and energy efficiency can be put into the mix.

  • m_astera Says:

    Who first said that the definition of insanity is to do the same thing over and over and expect different results?
    Answer:

    The answer isn’t really known but current consensus is that it came from the author Rita Mae Brown in her book Sudden Death on Pg. 68 from 1983.

    Quote: “Insanity is doing the same thing over and over again but expecting different results.”

    Most people will attribute this quote to Albert Einstein but there is no evidence to suggest that he made this statement.

    http://wiki.answers.com/Q/Who_first_said_that_the_definition_of_insanity_is_to_do_the_same_thing_over_and_over_and_expect_different_results

  • Kepler Says:

    Ow,

    An old lady with two years of schooling as one aunt I have knows very well about opportunity costs.
    Another aunt who studied, became teacher but is a Chavista – the remaining chavista of the maternal part of my family -, does NOT get opportunity cost quite well…because she is a radical. A radical here is beyond the economic-political world. It has to do with “they screwed us, they won’t do it again” (never mind my first aunt is poorer, never mind this goes across classes).

    Many people understand these things, but the closer you are to the top of Chavismo politically or ideologically, the more difficult it gets…unless you are someone like Diosdado, who probably knows but thinks he can’t say anything about it less they think “the last proof you are an escuálido” (well, I don’t know even if Diosdado is capable of getting it).

    Chavismo went on as in evolution. Evolution doesn’t mean progress, it means adaptation, perhaps an increase in complexity but that’s all.

    At this stage Miguel is right: the most likely candidate among top chavistas to feel more compelled to get it is an economist. Being at the top of Chavismo, only a heavy education on that seems to help

    Chávez mentioned at least twice publicly petrol prices should go up…and he did nothing. His honchos fear to do so. They were mostly selected by virtue of their utter loyalty to him.
    You have the following parameters: {loyalty,intelligence,probity, competence for the job at hand,flexibility}
    I put them without any order I might consider important.

    For Hugo the sine qua non was loyalty to him, by far. You didn’t have that? You were out.
    He also wanted people to believe in whatever fuzzy thing he was believing. That required inflexibility.
    He surrounded himself by loyal people who would honestly believed “we” (where we are 50 or 30 or 15 years old) screwed them, that we screwed the country and so on and that they would rescue it.

    Hugo might have got one or two clever people but if they were so utterly inflexible and loyal to him, they were and are not going to understand opportunity costs. Or they would, but as they are dishonest and they want to go on profiting from the status quo, they won’t do it.

    Maduro is rather thick. He doesn’t have a clue about anything. He doesn’t know how to look for competent people.

  • island canuck Says:

    What’s happening with the typeface.

    I’m seeing all sorts of different styles in Chrome.

  • Mick Says:

    Ouch! Now they are threatening to stop taking the money that is propping up this banana socialism. What is next, will they refuse to give money to the companies that provide many of the goods the people buy. Oh yeah, they are already doing that!

    I saw Venezuelan oil was down quite a bit. You should post pictures of the empty shelves in the stores and the ensuing food riots. Island Canuck: have you kept up with that grocery price comparison worksheet you published a while back?

  • Bill S. Says:

    Looks like he may have gotten Sports right?

  • The Rider Says:

    Good luck on your new government. Still a beautiful country- wish I could visit it!

  • Mick Says:

    It is funny how hypocritical all the Chavez supporting countries are when they tell the US that it should not interfere with Venezuela. So far their subversiveness and espionage has amounted to flagrant and demanding statements like “we are not ready to make that decision yet” and “an audit might help clear things up and reduce tensions”. If it weren’t for the US being cautious with its recognition of the questionable election results(as is it’s right to be), I think Caprilles would already be in jail. They bullies make lots of threats, but in the end they are afraid of what the really big boys think.

    If oil trade stopped, the US would have to buy 10% of its imported oil from somewhere else(probably the Saudi’s). This would probably mean an extra $1 at the pump. I think it would put the Venezuelan government out of business, as well as all sectors relying on dollars.

    Reminds me of a child threatening to hold their breath.

  • m_astera Says:

    Arena pan is what it the corn flour for arepas is called in Venezuela, probably because is looks like sand grains.

  • Giulia Carbone Says:

    Not all the same: 11 Army or ex-army ministers more


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