Ramírez demotion headlines Venezuela’s cabinet reshuffle


Since 2004, Rafael Ramírez has served as the president of Petróleos de Venezuela, S.A. (PdVSA), the country’s state-owned oil company, and since 2002, Ramírez has served as Venezuela’s energy/oil minister. Venezuela Flag Icon

That all changed on Tuesday, when president Nicolás Maduro announced a reshuffle of his government, the most significant since his controversial and narrow election in April 2013.

Ramírez, after Maduro and after Diosdado Cabello, the president of the Asamblea Nacional (National Assembly), was the most powerful of the chavistas remaining in government in the aftermath of Hugo Chávez’s death almost exactly 18 months ago. Since that time, Ramírez became, in addition to PdVSA head and oil minister, vice president in charge of economic affairs.

A longtime old hand within chavismo, he was among the most pragmatic and moderate of the chavistas. Ramírez may have run Venezuela’s oil industry into the ground, and he may have been as corrupt as anyone in Venezuela’s government. But he didn’t radiate the kind of socialist, true-believer aura of other leading chavistas, such as former planning minister Jorge Giordani and former foreign minister Elías Jaua.

In the Maduro era, Ramírez endorsed reforms, such as reducing the gasoline subsidy that keeps the price of fueling Venezuelan cars lower than anywhere else in the world and otherwise liberalizing the economy, including with respect to the massively overvalued bolívar

Asdrúbal Chávez, the cousin of the late former president, will become the next oil minister, while PdVSA engineer and executive Eulegio Del Pino, a close Ramírez ally, will be the oil company’s next president.

Though he was simultaneously named foreign minister, it’s hard to see how Ramírez hasn’t suffered a demotion for a country where 97% of foreign earnings derive from oil. As PdVSA head, in particular, Ramírez controlled the most enviable element of Venezuelan economic policymaking — he controlled the profits.  So while the move to foreign minister would be a promotion for many ambitious politicians, in Venezuela, it’s a way of sidelining Ramírez. 

Critics argue that Maduro’s switch merely reshuffled the deck and that his move won’t fundamentally reverse Venezuela’s economic woes. That’s true on both counts, to a degree. So long as the bolívar remains set at the official value of 6.3 per US dollar, it will encourage black-market trading of the currency and any number of schemes for arbitraging the difference between the official and real values, from abusing international flights to gasoline smuggling. By diminishing Ramírez, Maduro appears to be backing away front the kind of limited reforms that Ramírez, and even Maduro, seemed to embrace earlier this year. Moreover, it’s true that many top officials will remain in government, notably including finance minister Rodolfo Marco Torres and interior minister Miguel Rodríguez Torres, both of whom began their careers in the Venezuelan military. 

But it’s not the first Venezuelan reshuffle in the Maduro era, however, and after zigging toward liberalization, by suggesting a eduction in the gasoline subsidy or letting the bolívar devalue, and zagging back away, the only thing continuity is that Maduro is gradually displacing the original chavista high guard.

Shortly after taking office, Maduro appointed former central bank president Nelson Merentes as his finance minister, sidelining Giordani (at the time). Merentes, viewed as a pragmatic chavista with some international credibility, didn’t even last a year — in January, Maduro sent Merentes back to head Venezuela’s central bank. In his place, he appointed Marco Torres and in June, he sacked Giordani altogether. Giordani, known for his personal austerity in a regime where officials haven’t exactly hesitated to accumulate personal wealth, guided Venezuela’s economic policy throughout the entirety of Chávez’s presidency. At the time, analysts argued that the radical wing of chavismo was in decline, just as analysts this week argue that the pragmatic wing is in decline.

Jaua, who served as vice president to Chávez between 2010 and 2012 before being replaced by Maduro, was also demoted, vacating the foreign ministry for a role as minister of communes.

Giordani has been fully purged, and Jaua and Ramírez have lost significant power and influence. That leaves Cabello, whose power base in the Venezuelan legislature is less easily dispatched than cabinet ministers. It also leaves Venezuela’s military, which has steadily gained in power over the last year and a half, a result that’s led to more political repression and government-led violence than during the Chávez era. Though it’s not easily confirmed, it may also leave Cuban officials with a significant role in directing Venezuelan policy.

Economic conditions aren’t going to improve anytime soon in Venezuela, short of a massive rise in global oil prices, which seems unlikely as China’s economy cools. Ultimately, that means that Maduro’s reshuffle has less to do with directing policy toward a more socialist or liberal orientation and more to do with consolidating as much power as possible — in his own hands or in the hands of Venezuela’s military — as the economy worsens.

With legislative elections now just over a year away, Maduro could face incredible pressure from within the ruling Partido Socialista Unido de Venezuela (PSUV, United Socialist Party of Venezuela). That will be more difficult if the other heirs of chavismo — like Ramírez, Giordani and Jaua — have been effectively nullified.

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