VENEZUELA: LATEST CABINET RESHUFFLE

C O N F I D E N T I A L SECTION 01 OF 02 CARACAS 000287 SIPDIS E.O. 12958: DECL: 03/04/2018 TAGS: ECON EFIN PREL EINV PGOV VE SUBJECT: VENEZUELA: LATEST CABINET RESHUFFLE Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b) and (d). ¶1. (C) Summary. On March 3, the Government of the Bolivarian Republic of Venezuela (GBRV) announced a cabinet reshuffling, including the transformation of five existing ministries and the abolition of three ministries. The only new face in the cabinet is Eduardo Saman, a hard line Chavista and former director of the GBRV's Intellectual Property Rights Agency and current Director of the Consumer Protection Agency, who will head the Ministry of Commerce. Other Cabinet changes are expected to follow. The reorganization so far appears to be little more than a GBRV effort to reward Chavez loyalists and possibly cut down on payroll costs. End Summary. -------------- WHAT'S IN A NAME? -------------- ¶2. (SBU) Within a "framework of the start of the third historic cycle of the revolutionary process", Chavez reorganized several ministries. Minister of Communication Jesse Chacon stated the changes were necessary to make "the state administration more effective in building the collective well-being and interest and emphasizing ethics as the most important value in handling public affairs." The Ministry of Science and Technology will become the Ministry of Science, Technology and Intermediate Industry, reflecting a shift of the industrial development portfolio from the Ministry of Light Industry and Commerce (Milco). With the loss of the industrial development portfolio, Milco will become the Ministry of Commerce. The Ministry of Infrastructure (Minfra) will be transformed into the Ministry of Public Works and Housing and will include all social development issues formerly assigned to the Ministry of Housing and Habitat, which was abolished. The Ministry of Health is renamed to the Ministry of Health and Social Development and will include all social development areas covered by the Ministry for People's Participation and Social Development, which was eliminated. The Ministry of Communal Economy has been renamed as the Ministry of Communal Affairs and granted jurisdiction over social participation matters previously assigned to the abolished Ministry of People's Participation and Social Development. ¶3. (C) Recently, the GBRV transformed SASA, the BRV's Animal and Plant Health Authority into INSAI, the Venezuelan National Institute for Agricultural Health. SASA was an autonomous agency with the GBRV, but with the resolutions of last year it has become more dependent on the Ministry of Agriculture. With this change, Post believes INSAI will become more loyal to the Bolivarian philosophy. INSAI, remains unfunded and cannot legally maintain staff, resulting in the layoff of 2,000 employees nationwide. According to Embassy contacts, it will take approximately two months for the new agency to be funded. In the interim, "laid off" employees work without pay for the new organization and will reportedly have to take some kind of loyalty test to ensure their position once the organization receives funding. -------------- WHAT'S OLD IS NEW... -------------- ¶4. (C) The only new face in the Cabinet is the Commerce pick, Eduardo Saman, an avowed Marxist. Saman is the former director of SAPI (Venezuela's Intellectual Property Rights Agency) and current Director of INDEPABIS (the BRV's Consumer Protection Agency.) While at SAPI and INDEPABIS, he attacked property rights, refused to issue medicinal patents and argued that anything that hinders the fabrication of generic medicines should be considered a monopoly, which is illegal under Venezuelan law. ¶5. (SBU) Among the "newly appointed" ministers, several are essentially reconfirmed in the new Ministries and others have been recycled from previous cabinets: -- Ramon Carrizales Rengifo was reconfirmed as Vice President and named acting Defense Minister. -- Jesus Maria Mantilla Oliveros stays as head of the Ministry of Health and Social Development. -- Nuris Oriheula Guevara remains Minister of Science, Technology and Intermediary Industries. (Note: Oriheula is the former President of the Venezuelan Space Center, the institute responsible for successful launch of the Simon Bolivar Satellite. End Note.) -- Former Vice President and longtime Chavist loyalist, CARACAS 00000287 002 OF 002 Diasdado Cabello had been named Minister of Public Works and Housing. -- Erika Fariasm, the former Minister of Food, has been tapped as Minister of Communal Affairs. -- Displaced Milco Minister and Former Minister of Employment, Maria Cristina Iglesias was appointed Minister for Tourism, replacing Olga Cecilia Azuaje. -------------- COMMENT -------------- ¶6. (C) We believe that this is the first and least controversial of two waves of widely anticipated Cabinet changes. The second wave may come as early as the weekend of March 7. Chavez routinely changes ministers in his cabinet, such that no minister gains significant experience -- or power -- in any particular area. In a particularly tight budget environment, the restructuring and transformation of several Ministries may allow the GBRV to cut its payroll costs for a short period, without idling government workers. Post doubts this latest restructuring will add efficiency to the government bureaucracy, but rather, it is simply another tool used by Chavez to promote loyalty and the continuation of the revolution. GENNATIEMPO