The other day, we had this epiphany: you can tell the story of Venezuela’s appalling Maduro era economic collapse through its Finance Ministers. The Finance Portfolio is a key power center in any government anywhere: after all that’s the guy (or, less frequently, gal) in charge of the money. In Venezuela, these last four years, we’ve plumbed unimaginable new depths of incompetence in this key post. Bad enough it can read like a bit of a parody, really.
Of course, rapid turnover at Esquina de Carmelitas is not new. Since 1999 the Bolivarian revolution has cycled through a dizzying 14 Finance Ministers, with Nelson Merentes the sole two time recidivist.
But Maduro’s four Finance Ministers are a breed apart. They make up a dismal progression, starting with the Worst Central Banker in the World and going downhill from there.
It’s easy to get the feeling that El Matemático had been running the Central Bank forever — well, “running it” insofar as his extracurriculars with underage girls allowed. Merentes wears the richly-deserved crown as Worst Central Banker in the World — but before all that, lest we forget, he actually ran the Finance Portfolio.
He was appointed in April 2013 just as Maduro took office, and served until January 2014, still before the economy hit the skids. It was a year of constant speculation about inevitable reform: after all, everyone could see the policy mix set out ahead of the 2012 election was an unsustainable catastrophe, everyone could see exchange rate differentials were getting out of hand, everyone figured the time for reform was soon after the election, when you’d have years to absorb the pain and adjust in time to start growing by the time voting came around again.
And so we spent all of 2013 waiting for a reform package that never came.
Merentes knows on which side his bread is buttered, so he walked the walk and talked the talk of the revolution. Meaning: a lot of promises and zero results.
Instead of exchange control reform, Merentes oversaw the development of Sicad, the first in an alphabet soup’s worth of a systems tacked onto the unsustainable Fixed Exchange Rate to make it seem more sustainable than it is. To be fair, Sicad was born a month before his appointment in April 2013. Keeping the tradition alive, the beneficiaries and amounts were determined on a discretionary basis.
In October 2013, Merentes said the Venezuela’s economy would grow in 2014; and by March 2014, at the very beginning of the current recession, he estimated that the GDP would grow 4% in 2014. You could said that he la pego, but he missed the minus sign: the economy contracted by -3.9% in 2014.
In December 2013, Merentes said one of the strategies to try and slow down inflation would be to create savings incentives. Merentes said Venezuelans could save up their dinerito by buying debt in both bolívares or dollars. The dollar part came up short during Sicad II implementation in 2014; and the bolívares part seemed simply ridiculous, when considering that Venezuela’s inflation reached 56.2% in 2013 -the highest inflation rate in the world.
And since the economy was thriving (#Not), when the rumors about the Central Government being in talks with the International Monetary Fund (IMF) stated, Merentes cut them sharply by saying: “neither the Finance Ministry nor the Central Bank of Venezuela have held meetings with the IMF.”
Rodolfo Marco Torres
We didn’t think we could do much worse than Merentes in charge of finance. We lacked imagination.
Next came Brigadier General Rodolfo Clemente Marco Torres. That’s right, some army guy.
He was appointed in January 2014, despite economic credentials one could charitably describe as ‘unknown’ and a stint first as Banco de Venezuela president and as Public Banking Minister.
Marco Torres’s tenure at Carmelitas was, by most accounts, hilarious. Guy understood nothing about the economy, like at all. Zero. He couldn’t fake it, either. In calls with international investors they left reeling at the stream of imbecilities that would fall from his mouth.
He got booted from the Finance Ministry in January 2016 and now serves as Minister for Food, a position where he’s been able to give free rein to his one true passion in life: corruption. However, according to Poderopedia, he’s also a current member of the boards of the BCV —the first military man in that position— and of PDVSA, director of the National Center for Foreign Trade, president of Banco de Venezuela and director of the Fondo Negro Primero. We should also add that he participated with Hugo Chávez in the 1992 coup attempt against former president Carlos Andrés Pérez and he’s being investigated -along side Carlos Osorio- and could face U.S. sanctions for being involved in fraudulent food imports.
At the beginning of Maduro’s fourth year in Office and third consecutive year of recession, Marco Torres’s tenure was mercifully put out of its misery and the Finance Portfolio was handed over to…
We idiotically allowed ourselves to be a little bit hopeful there for a second. Medina is an Economist —like an actual economist. Not a rockstar or anything like that, but a proper, trained economist able to teach econometrics to kids at university level without embarrassing himself. Imagine that!
It felt like a huge step up from the two preceding Finance Ministers, but right away we could tell something was…just off. For one thing, we looked through GoogleImages to find a photo of him to run next to the story of his appointment and came up with…nothing. Zilch.
This didn’t seem…normal. According to Poderopedia, he’d been deputy director of the National Securities Commission, director of the Directorate of Tax Revenue and Expenditures of the National Treasury Office, Director of the Office of the Presidency and Follow-up of Government Management, head of the National Budget Office (Onapre) and Substitute Director of the Treasury Bank, Principal Director of the Bicentenario Stock Exchange and an alternate member of the Commission for the Disposal of Public Goods of the Superintendence of Public Goods. How in God’s green earth do you manage to do all that and never have anyone take a picture of you?! What is he a vampire?
We did eventually get a photo of him, a screen capture more like, taken from his swearing in ceremony…and then nothing again.
Month after month, the mystery only deepened. Rodolfo Medina existed in a state of quantum indeterminacy — somehow both there and not there at the same time. He was Finance Minister for over a year and never spoke publicly. Never appeared in public. Like some weird agoraphobic hermit of a minister, or a ghost actually, amid the most terrifying meltdown in the Venezuela’s economy ever, the Finance Minister just didn’t seem to actually do anything at all.
A year later, when he was relieved of his ministerial duties, that same screen capture from his original appointment ceremony is still pretty much the only image of him on Google! He never once spoke or, well, did anything as far as we can tell. Think about that — that takes real talent. How do you manage to do nothing as the Finance Minister of a fast unravelling economy for a whole year?! The mind boggles.
In 2016 he was ranked the worst Finance Minister of Latin America by América Economía. But even that is a bit too kind for our taste. I mean, that presumes that he exists. We have only the thinnest of evidence to back that.
And now, at the beginning of 2017, Maduro decided to appoint non-other than…
Vino el lobo. Under the Reign of Medina, we longed for a Finance Minister who would speak to the nation every once in awhile. Ramón Lobo has quickly cured us of that longing.
Lobo was a PSUV member of the National Assembly up to his appointment as Finance Minister, and an Economist with a Masters in Business Management. Something that once again should fill us up with hope. The only time he’s run anything was when he was mayor of La Azulita, a town in Mérida home to about 12,000 people, between 2000 and 2008. The rest of his PSUV blog’s (rather poetic) bio: assistant administrator and budget analyst at the Faculty of Pharmacy of Universidad de Los Andes, and professor of accounting, economics and financial mathematics.
Look, not to belittle the budgetary analysis feats achievable at the Pharmacy School in Merida, but we’re in the middle of Venezuela’s biggest economic crisis ever. Is this really the profile of…oh what am I saying, he’s friends with Tareck, that’s all that counts.
In notable contrast to Medina, in less than a month in office he has already said quite a lot… of crap.
Some might say he even sounds a little like Luis Salas (remember him?)
He believes there is such a thing as a guerra económica and that the increase of the minimum wage garanties the purchasing power of the Venezuelan family. *Sigh*. Lobo also claimed that price increases are “simply an instrument of war to subdue the Venezuelan family”.
And only a few days before the 14th anniversary of the current price controls, Lobo stated that the government was considering a “new” (we kid you not) price system to “optimize the monitoring, control and supervision mechanisms within the fight against induced inflation”. Because, according to Lobo himself, “speculation in the prices of inputs and basic goods has an incidence of 70% in the increase of inflation rates in the country”.
But it’s in talking about the dollar exchange rate that the guy’s alarming limitations as an economic thinker really come to the fore. The day after the new Government-regulated exchange bureaus opened their doors in Táchira and Zulia states, Lobo actually said —an apparently believed— that the Voldemort rate had “stabilized along the border”.
That’s not so much a falsehood as gibberish. The whole idea that the dollar can have one stable rate near the border and another (presumably unstable) rate elsewhere is…just…not how any of this works!
Lobo seems to genuinely believe opening up some Forex bureaus around the border counts as a policy initiative. It’s the kind of non-sequitur that lays bare a guy who knows nothing and understands nothing.
The other day, my five year old daughter delighted me saying “daddy, I know what gravity is, it’s an invisible forest!” I went to correct her, but then stopped myself. She doesn’t have any of the conceptual tools she’d need to even understand the idea of an “invisible force” — that’s a category with no meaning for her. That’s sort of the level Ramón Lobo is at on the determinants of the exchange rate: you can’t explain it to him, because he doesn’t seem to have any purchase on the basic concepts involved in the discussion.
Then again, when we had Medina we didn’t think we could do any worse, and when we had Marco Torres too, and with Merentes…the entire progression is terrifying, actually. It really is alarming to consider who (or what) might come after Lobo…Rosa Inés? Pérez Pirela? An elephant in musth?
Es que, de pana…