Sunday, June 15, 2008

Can this man save Venezuela's economy? 

In a surprising move President Chavez today named Ali Rodriguez Araque as the new Minister of Finance.

For those who don't know, Ali Rodriguez has a long history on the Venezuelan left and in the Chavez administration. Rodriguez spent many years in the 1960s fighting in Venezuela's small left wing armed insurgency. Later he turned to electoral politics and was elected to Venezuela's congress where he focused on oil issues and fought tooth and nail, but without success, to reign in the state oil giant PDVSA and stop the nascent privatization of the oil industry.

Later, with his political party Fatherland for All (Patria Para Todos), he joined forces with Chavez. Again focusing on the oil industry he helped carry out the Chavez led revitalization of OPEC which instantly boosted Venezuela's oil revenues and continues to reap huge dividends for the country to this day. For his efforts, he was named President of OPEC, only the second Venezuelan to ever hold that office.

Later, when the Chavez led efforts to reign in PDVSA were confronted by a seditious and devastating oil strike Rodriguez took the helm of PDVSA, restarted the oil industry, and rebuilt PDVSA's productive capacity. His performance in all of this was simply spectacular.

Later he was named Foreign Minister and while this blogger entertained hopes that he would be named Vice-President his age and health problems seemed to put him in a state of semi-retirement.

Until today that is.

Ali Rodriguez brings several important attributes with him. First, he is known and being both conciliatory and pragmatic. Yet as his dealings with the oil strike showed he can be decisive and firm when it is called for.

More importantly, he is known as a doer, not a talker. Suffice it to say, the Chavez administration needs more doers and fewer talkers.

Finally, he is both analytical and intelligent. He does his homework and solves problems.

Even if he is not a trained economist, which he isn't, this would seem to make him well suited for the job. And given that radical, but well thought out, changes are clearly needed in Venezuela's economic policies Rodriguez could be the perfect person.

So the question is - can he change policy and turn around Venezuela's economy?

I highly doubt it. First, lets be real, economic policy is set by Chavez himself and Chavez gives no inkling of even understanding that there are problems, much less what they are and still less how to solve them.

Further, if Rodriguez did have in mind trying to make significant changes in course he almost certainly would have had to tell Chavez that before accepting this position and insisted that no major changes be made until he was in office and had time to evaluate the situation. Yet just last week Chavez announced his economic "reforms".

Sadly, while Rodriguez having been named to this position two years ago may have been cause for celebration it now almost certainly means nothing. Chavez and his economic policies are just too far gone to be fixed by Rodriguez or anyone else.

Ali Rodriguez may very well be the right person but he is almost certainly arriving at the wrong time.


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