“A Solid Foundation for Socialism of the 21st Century”: Venezuela’s Maduro Restructures Several Government Ministries and Institutions

Mérida, 16th January 2014 (Venezuelanalysis.com) – Venezuelan president Nicolas Maduro has ordered a restructuring of public institutions related to the economy and consumer protection during a four hour speech to the nation.

The shake-up came less than a week after Maduro reshuffled his cabinet, appointing new ministers in the areas of labour, industry, education, higher education, sport, youth and the chief of staff.

During the annual state of the nation address delivered to the National Assembly (AN) yesterday, Maduro also warned he would use an “iron fist” to deliver harsher penalties for “sabotage and speculation”.

“We fully understand what…it’s going to cost to make the Venezuelan economy fortified and sustainable in promoting jobs, diversification of our productive enterprises in providing value to our goods and in socialising the means of production,” Maduro stated during the address, which continued into the evening.

This was his first state of the nation speech since being elected last April. His four hour talk was less than half the length of Chavez’s record 9.5 hour address two years ago.

However, the president issued a defiant warning to his opponents, to not underestimate him.

“For those that underestimate me from the left and the extreme right, I say that I’m a socialist and I know what I’m doing,” he stated.

The president also defied predictions that he would devalue the bolivar currency, stating that the current fixed exchange rate will be kept in place for a “long time forward”.

“Venezuela has sufficient resources to keep the foreign exchange [rate] at [Bs ] 6.30 to the dollar,” Maduro stated.

“We will continue fighting [the currency blackmarket]…Sicad will fulfil its function,” he said, referring to the Complimentary System of Foreign Currency Acquirement (Sicad).

Established last year, Sicad holds foreign currency auctions for individuals and businesses, selling dollars at a higher rate than the fixed exchange value.

Sicad was originally intended to operate parallel to the Foreign Exchange Administration Commission (Cadivi), which used to be the main government body that regulated the distribution of foreign currency. However, yesterday Maduro announced that Cadivi will be merged with the recently announced National Centre of Exterior Commerce.

He also named Commerce Minister Alejandro Fleming as the head of the new centre.

The public banking ministry has also been folded into the finance ministry, which will now be headed by current Minister of Public Banking Rodolfo Marco.

Marco replaces Nelson Merentes, who had been moved from the BCV in April. Merentes was widely viewed as more market-friendly than his predecessor. At the time, Merentes had been urged by Maduro to produce “achieve single digit inflation” within three years. Merentes will now resume his former position heading the BCV. Last year Venezuela’s annual inflation rate was around 56%.

Maduro called on Marco to oversee the construction of “a new financial model that can allow for all these investments that we need, that will allow the expansion of a financial system at the service of the country”.

Marco was imprisoned alongside Hugo Chavez due to his involvement in Chavez’s failed 1992 coup attempt. Like Merentes, Marco is widely viewed as a moderate figure.

Along with heading the banking ministry, Marco has also previously managed the state-owned Banco de Venezuela.

Indepabis and Sundecop Merge

The Institute for the Defence of the People’s Access to Goods and Services (Indepabis) and the National Superintendency for Fair Costs and Prices (Sundecop) will also be merged into a single institution, to be headed by Minister for Women and Gender Equality Andreina Tarazon.

Beneath Tarazon, former Sundecop head Karlin Granadillo has been charged with overseeing costs and earnings calculations sections, while General Luis Motta Dominguez will manage the institution’s fair price oversight mechanisms.

Since being taken over by Eduardo Saman last June, Indepabis has undertaken a nationwide crackdown on price gouging and violations of price controls. Saman was appointed with a mandate to clean up Indepabis to after an alleged extortion ring was discovered operating within the institution. However, in July Saman had some of his authority revoked after he dismissed a number of Indepabis regional heads.

Then in October, Saman survived an attack by three assailants armed with handguns and explosives, which he claimed was an attempted assassination.

Police suspected at the time the incident was an attempted robbery.

Saman’s official position following the merger has yet to be announced.

Speculation

Despite describing Venezuela’s economic growth in 2013 as “very successful”, Maduro stated that he intends to deepen reform to counter what he describes as an “economic war”.

Venezuela’s economy grew by 1.4% in the first three quarters of 2013.

However, Maduro stated that 99% of businesses inspected by authorities last year were inappropriately pricing goods, with “no economic explanation”.

The next law Maduro says he intends to pass with his decree powers will cap businesses’ profit margins to 30%. The law will be drafted in the coming days, according to the president.

Maduro was handed presidential decree powers under the Enabling Law by the AN last November.

A statement released by the AN following the enacting of the Enabling Law said that Maduro had been empowered to pass legislation to “fight corruption, usury, money laundering and the economic war unleashed in recent times against the country by the national oligarchy”.

“While the government makes a big effort to guarantee the quality of some services and the availability of products, the mafias speculate with other products and even medicines,” he stated.

Maduro pledged to continue to use his decree powers to counter “both abuse and outrages” of the economy in 2014, and stated he would put price gougers “behind bars” with tougher penalties for “sabotage and speculation”.

“With the economic war the bourgeoisie have shown a cruelty that is comparable only to the acts of 2002,” Maduro stated, referring to shortages of consumer goods ranging from milk to cooking oil and toilet paper.

“How can you describe someone who hides formula milk for babies [from supermarket shelves]? We cannot create a new euphemism for that,” he stated.

“That person must be described as a criminal,” Maduro said.

Both scarcity and inflation levels spiked in 2013.

“There won’t be any forgiveness to those who keep robbing the people…they’re speculating with food and medicine,” he said.

Investment Plan

Along with promising to chastise businesses that act inappropriately, Maduro also stated his government aims to coax foreign investors to Venezuela. According to Maduro, the government’s plan will focus on promoting investment in 11 key areas, including: petroleum, petrochemicals, construction, industry, agriculture, agriculture, manufacturing, tourism, textiles, mining and communication.

“I call to all national and international entrepreneurs who are investing in Venezuela,” he said.

Some incentives will be provided to investors, though Maduro didn’t go into details.

He also stated Bs 25.5 billion would be invested in public works nationwide in the coming years.

Media and Security

In yet another announcement during the speech, Maduro called for a national review of the country’s media landscape. The president accused the private media of promoting “guns, drugs, violence and betrayal”.

Minister for Communication and Information Delcy Rodríguez along with the board of the National Telecommunications Commission (Conatel) were ordered to undertake an official review, while the president also called for a public debate on the media and violence.

“I think there needs to be an honest, open discussion, open debate,” he stated.

Earlier this week the president slammed Venezuela’s media for turning former Miss Venezuela Monica Spear’s murder into a “show”.

Maduro also stated he would strengthen his government’s anti-crime and anti-violence initiatives, including the Safe Homeland Plan.

“I call upon young men to be able to challenge and demolish the culture of violence, drugs, individualism, hatred and greed,” he stated.

He also urged all governors and mayors to back the Safe Homeland Plan, regardless of political affiliation.

“We have to be building peace for communities, families; peace grounded in values of respect for life, coexistence, social peace based on a new culture that overcomes the negative values of the culture of death, greed, ambition and wealth that are given to us by the great national and international media,” Maduro said.

“We’ll build a culture of work, overcome consumerism as social deviance and cast a solid foundation for socialism of the 21^st Century,” he said.

Maduro also devoted a portion of his speech to reflecting on last year.

“2013 was a year of love, loyalty and victory over pain and difficulties. We turned grief into strength and life in joy,” Maduro stated.

Referring to the April and December elections, Maduro stated that “democracy is only meaningful if it meets the needs of the people and not the accumulation of wealth”.

The president pointed to the death of his predecessor Hugo Chavez as a low point in the year, but emphasised that the Bolivarian Revolution would continue nonetheless.

“The enemies of Hugo Chavez were wrong, the great revolution did not vanish [when Chavez died],” he stated.