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.

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WHAT'S IN A NAME?
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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.

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WHAT'S OLD IS NEW...
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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,

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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.

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COMMENT
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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