Archive for August 13th, 2013

Did The “Pragmatists” Win A Battle In Venezuela Today?

August 13, 2013

triadThe pragmatists “triad” Merentes, Porras and Tovar.

When you come down to it, about the only positive silver lining in the 100-plus days that Nicolas Maduro has been President of Venezuela has been the apparent (so far) more flexibility of PDVSA, in that Rafael Ramirez seems to be operating independently and trying to be more pragmatic about increasing the country’s oil production.

When Maduro first shuffled the Cabinet he inherited form Hugo, people were disappointed in that, while he named the more pragmatic Nelson Merentes to the Ministry of Finance, he split the Planning and finance Ministry into two, leaving the ever present and influential Jorge Giordani as Minister of Planning. Even worse, a Giordani ally, Edmee Betancourt, was named as President of the Venezuelan Central Bank, making everyone wonder whether the pragmatic side had any leverage to do what it wanted.

And the pragmatic side certainly has had a rough time so far, as there has been little change in economic policy, beyond a decree that should concentrate foreign currency in the Venezuelan Central Bank (but hasn’t) and a kluge of an foreign exchange auction system, named SICAD which has been as effective as aspirin for treating cancer.

But something funny happened today, when in a surprise move, the Venezuelan National Assembly approved Nicolas Maduro’s nomination of Eudomar Tovar to the Presidency of the Venezuelan Central Bank.  (Which had something to do with the fact that Bandes’ President, Temir Porras, last Friday went to the Prosecutors office to ask to investigate the bond trading rip off at Bandes, which the SEC had jailed people for. (Edmee Betancourt happened to be President of Bandes when all of that happened).

But, t start with, Tovar happens to be an economist, that rare avis, seldom seeing in the fourteen years of Chavismo in any position where economic matters are discussed or decided. Indeed, Eudomar happens to be a bona fide economist, who even has done graduate work on financial matters, earning a Masters degree and studying for an additional one. Given that I have a soft heart for qualified people, no matter what their ideology is, I can only applaud this.

But more importantly, Tovar is a Merentes ally and buddy, who accompanied him in the Venezuelan Central Bank and Merentes forced in as President of CADIVI, after Maduro assumed office for Chávez in January.

And to top it all off, another economist (did you really think Chavismo had only three?) Jose Khan, was named as the new President of the foreign exchange office CADIVI.

Thus, in one apparent swoop, the “pragmatists” seemed to have wrestled control from the “ideologues”, including Jorge Giordani and, in my mind , that can only be positive for Venezuela.

Then, the Merentes, Porras and Tovar triad now represents a new powerful force on economic matters and it certainly seems as if Giordani’s influence is diminishing. That can only be good for Venezuela.

Maybe I am completely wrong, but I certainly hope that this means that Merentes will now have more autonomy to establish more rational and economically sound policies, within the bizarro world of Chavismo/Madurismo. Because so far, deciion making has not only been slow, but has been dismal in its execution.

Hope I am right. Watch international reserves in the next few days, if parallel funds move their money there in the next couple of weeks, that would be a great sign and a confirmation that I have some basis for being somewhat positive.