Venezuelan President Restructures Cabinet, Prepares Economic Adjustments
Merida, September 19th
2009 (Venezuelanalysis.com) — On Thursday, Venezuelan President Hugo Chavez
announced structural changes to his Council of Ministers, and gave a glimpse of
impending economic measures designed to increase employment, reduce inflation,
and improve production amidst the world economic crisis.
Chavez created six vice presidencies
to take charge of defense, politics, finance, production, social issues, and
territorial development. These positions will be filled by the current Defense
Minister Ramon Carrizalez, Foreign Relations Minister Nicolas Maduro, Planning
Minister Jorge Giordani, Science and Technology Minister Jesse Chacon, Chief of
Staff Luis Reyes Reyes, and Energy and Petroleum Minister Rafael Ramirez,
respectively.
Chavez also added a permanent secretariat
to his cabinet, to be headed up by former Caracas Mayor Freddy Bernal, and an administrative
oversight committee "to solve routine administrative problems, make
administrative tasks more expeditious, and continue the fight against
bureaucracy and delays," he said.
"This is part of the self-criticism
that we have been carrying out in the heart of the high levels of government,"
Chavez explained. He added that the purpose of the structural changes is "to
convert the Council of Ministers into a political entity and not merely an
administrative entity," and "improve cohesion."
Economic
Measures
In an eight-hour meeting on Thursday,
Chavez and his cabinet discussed a series of economic measures that will be
announced in greater detail in the coming days.
One of the measures will be an
"extraordinary plan for employment" aimed at quickly producing jobs through
investments in the agricultural and construction sectors to lower unemployment,
which rose from 7.8% to 8.5% last month.
To increase liquidity on the domestic
market, the government will increase the amount of dollars it issues to small
and medium-sized importers at the regulated exchange rate of 2.15 bolivars to
the dollar, and sell $5 billion worth of domestic bonds, Chavez told the press
on Thursday.
This follows recent announcements by the
head of the Central Bank, Nelson Merentes, that the government was studying
methods of lowering the price of dollars on the informal market, where they are
sold for as much as seven bolivars, as a means of lowering overall inflation.
The funds necessary for these
measures were made available by the recuperation of Venezuela's dollar reserves
to approximately $34 billion so far this year as a result of the increase in
the price of oil, Venezuela's principal export. This is $10 billion more than
the amount of reserves that the government had predicted it would have at this
time, Chavez said.
In its first round of economic
adjustments in reaction to the world crisis last March, the Chavez
administration reduced its overall budget by 6%, adjusted the estimated average
price of oil from $60 to $40 per barrel, increased its domestic debt, raised
the sales tax from 9% to 12%, cut unnecessary government spending, and
maintained social spending.
Re-launch
of Missions
In addition, Chavez said his
government plans to revamp and reorganize the well-known social programs known
as "missions," which provide educational, health, nutrition, and other social
services, and are managed by the national government.
Over the course of the coming months,
Venezuela's missions will be united into one, overarching "system of missions,"
with organizational assistance from the coordinators of Cuba's system of social
services.
Chavez said nearly 2,000 additional doctors
who studied social medicine in Cuba will arrive in early October to serve
low-income communities through the Barrio Adentro mission, which has expanded
access to basic health care to nearly all Venezuelans since its founding nearly
six years ago.
The president urged Venezuela's tens
of thousands of communal councils to assist in the revitalization of the
missions. "On October 8th the new wave of Barrio Adentro will begin
and the communal councils starting now should reactivate themselves and commit
themselves to this re-advance," said Chavez.
October 8th is the 42nd
anniversary of the assassination of the Argentine doctor and leader of the
Cuban revolution, Che Guevara, after whom a Venezuelan social mission dedicated
to the instilling of socialist values is named.