Identifier
Created
Classification
Origin
09CARACAS548
2009-04-30 20:34:00
CONFIDENTIAL
Embassy Caracas
Cable title:  

NEW CENTRAL BANK PRESIDENT NOMINATED

Tags:  EFIN PGOV PINR VE 
pdf how-to read a cable
VZCZCXRO3848
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RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #0548 1202034
ZNY CCCCC ZZH
P 302034Z APR 09
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC PRIORITY 2988
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHNSC/NSC WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY
C O N F I D E N T I A L CARACAS 000548 

SIPDIS

HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR RJARPE
NSC FOR RKING
USDOC FOR 4332 MAC/ITA/WH/JLAO

E.O. 12958: DECL: 04/29/2019
TAGS: EFIN PGOV PINR VE
SUBJECT: NEW CENTRAL BANK PRESIDENT NOMINATED

Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b)
and (d).

C O N F I D E N T I A L CARACAS 000548

SIPDIS

HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR RJARPE
NSC FOR RKING
USDOC FOR 4332 MAC/ITA/WH/JLAO

E.O. 12958: DECL: 04/29/2019
TAGS: EFIN PGOV PINR VE
SUBJECT: NEW CENTRAL BANK PRESIDENT NOMINATED

Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b)
and (d).


1. (U) President Chavez designated former Finance Minister
Nelson Merentes as President of Venezuela's Central Bank
(BCV) on April 28, filling the vacancy left by the December
2008 death of the former president. Also on April 28, the
National Assembly approved Merentes' nomination, and the
Official Gazette published the appointment, making it
official. Merentes is a mathematician by training. He was
an early political supporter of President Chavez. He claims
to have been one of the founders of the Fifth Republic
Movement, Chavez's former political party, serving on its
strategic committee and helping to develop its strategy for
the 1999 National Constituent Assembly elections. Merentes
served twice as Minister of Finance, from 2001 to 2002 and
2004 to 2007.


2. (SBU) Merentes' appointment has already caused
consternation among opposition-oriented economists. They
claim Merentes does not have 10 years of financial and
economic experience and is a political activist, both of
which would make him ineligible by law. They also question
his judgment and/or integrity given various actions
undertaken by the Ministry of Finance during his tenure, such
as the acquisition of Argentine bonds and "structured notes"
by the National Development Fund.


3. (C) In an April 2008 meeting with Econoff, Merentes, who
was seeking a visa, showed a mixture of realism and
pragmatism. He noted Venezuela's current economic model was
not sustainable unless the country could diversify its
revenue sources, suggesting software, information technology,
and tourism as possible growth sectors. He stressed the
importance of controlling the parallel foreign exchange rate,
though he noted issuance of dollar-denominated debt payable
in bolivars was not a sustainable strategy for controlling
it. He said he had received the U.S. Ambassador during each
of his tenures as Minister of Finance, doing it "discreetly"
the second time as he did not have permission. He noted that
not everyone in the Venezuelan government felt the U.S. was
the "enemy."


4. (C) Comment: For anyone under the illusion that the BCV
was an autonomous institution, Merentes' appointment might
come as a blow. However, no one should be under that
illusion. Merentes will almost surely loyally carry out the
policies necessary to support President Chavez's plan to
finance the 2009 budget deficit, as well as any other
directives from Miraflores. End comment.


5. (U) Biographic information: Nelson Jose Merentes Diaz
was born May 6, 1954. He received a bachelors degree in
mathematics from the Universidad Central de Venezuela (UCV)
in 1978 and a PhD in mathematics from the Science University
of Budapest in 1991. He served in various administrative and
faculty positions at UCV beginning in 1978 through at least
1999, when he was elected to the National Constituent
Assembly. In between his tenures at the Ministry of Finance,
he served as Minister of Science and Technology. End
biographic information.
CAULFIELD