Transitions

The Venezuelan Economy's Rising Czar

Rafael Ramírez, Venezuela's oil minister, is a bookish-looking engineer. A tall, impeccably dressed, light-skinned man who speaks almost in a hush, he stands in contrast to the rest of Venezuela's boisterous political leadership. But one should not be fooled by appearances: Ramírez may seem like the odd man out, but he is now arguably the most important person in the government. A few months ago, President Nicolás Maduro promoted Ramírez to vice president of economic affairs -- essentially putting the mild-mannered man in charge of the country's economy. And he's determined to make some big changes.

Ramírez was not a public figure during the rise of Hugo Chávez. He was not a military man, nor was he a hard-line Marxist, two recurring characteristics of the chavista leadership. Instead, he was a medium-to-high-ranking executive in the nation's oil and gas industry. His fate, though, dramatically changed in 2002, when he was named to the board of PDVSA. It's difficult to overstate how important the company is to Venezuela: In 2012, the company reported revenues of $124 billion, roughly 30 percent of Venezuela's GDP. Ramírez's appointment was part of Chávez's mission to establish a politically-oriented board in what had then been a "technocratic," state-owned company -- and the move sparked a crisis that led to a brief coup against Chávez. A few months after surviving the coup, Chávez named Ramírez his oil minister, and he has held onto the job since, 12 years and counting. (In the photo above, Ramírez opens the valve of a new pipeline in southeastern Venezuela.)

Among other achievements, Ramírez was instrumental in helping the government survive a shutdown of the oil industry in December 2002. With Ramírez's support, Chávez fired tens of thousands of the company's best and brightest that had decided to go on strike -- sacrificing the company's crucial knowledge base in order to preserve power. Ramírez is also infamous for being captured on video saying that PDVSA was "red, very red" ("roja, rojita," referring to the crimson color of the governing party) and that if anyone was uncomfortable with that, they should leave. Instead of backtracking when the video surfaced, Ramírez doubled down, repeating his statement over and over again since. His words have proven prescient: PDVSA now finances the government's electoral campaigns, and the entire government likes to boast that the nation's cash cow belongs to them, paraphrasing Ramírez's infamous remark.

It is not surprising to find that, in a populist petro-state such as Venezuela, the man with the checkbook holds considerable sway. But with Maduro's rise to power, Ramírez has seen his power grow even more.

A few months after taking office, Maduro named him to head the Economic Cabinet, something akin to being "first among equals" with regards to other ministers. His main obstacle to complete domination over economic policy seemed to be the country's previous economic czar, Jorge Giordani, who is now on his way out. (Maduro fired him for failing to correct the country's deep imbalances.) Giordani is now making quite a ruckus. On June 18, he published an open letter in which he accuses the president of a "lack of leadership," and warns that Maduro (aided by Ramírez) is going to undo most of Hugo Chávez's "socialist" policies.

With Giordani out of the picture, Ramírez is in charge. What does he expect to do with his power?

He has already hinted at where he wants to take the economy. In a high-profile speech in front of investors in London last week, he said that Venezuela had to "unify" its exchange rate, i.e. do away with the massive distortions caused by multiple exchange rates. He has insisted that the price of gasoline (the cheapest in the world) needs to go up. He is also aware that Venezuela needs to offer better terms when dealing with multinationals looking to invest in the oil sector.

Whether he has the power to implement this "pragmatic" agenda is unknown. There is strong resistance to his ideas among some of the members of the cabinet, particularly from the foreign minister, Elías Jaua. Furthermore, it is not clear whether Venezuela can be made viable simply by tinkering with the exchange rate -- the country has been running double-digit deficits for a few years, pointing to deeper problems with the way it runs its business. Finally, Venezuela faces parliamentary elections next year, and with the government's popularity in free fall, they may need to postpone unpopular measures such as increasing the price of gas.

Given the government's terrible political situation, Ramírez may not have much room to maneuver. Implementing tough decisions may prove too costly for the government, and Ramírez may not have the time to convince the rest of the cabinet about the wisdom of his measures.

Yet after years of dealing with the world's oil companies, he could be described as a skilled negotiator. Ramírez will need all the skills he possesses to navigate the waters of power in Caracas. Regardless, his is a star on the rise.

Juan Nagel is the Venezuela blogger for Transitions, editor of Caracas Chronicles, and author of Blogging the Revolution. Read the rest of his posts here.

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Transitions

A Terrorist's Arrest Sets Off a Backlash in Libya

American forces in Libya have reportedly captured Ahmed Abu Khatallah, the key suspect in the Benghazi attack that killed U.S. Ambassador Chris Stevens and three other Americans in 2012. The suspected terrorist is said to be on his way to the United States to face justice. U.S. investigators also named Abu Khatallah as one of the key suspects behind the killing of rebel army leader Abdul Fatah Younis on July 28, 2011. Yet the Libyan authorities were unable to enforce the law and bring Abu Khatallah to justice -- even after Abu Khatallah challenged the country's authorities to arrest him in an interview with CNN's correspondent in Libya.

This is the second operation that American Special Forces have conducted within Libya to apprehend suspected terrorists wanted by the United States. The first took place in October 2013, when a Special Forces unit captured Abu Anas al-Libi in a raid outside his home in Tripoli. It is not clear if the Libyan government played any role in the capture of these suspected terrorists. After the United States captured Abu Khatallah, Rear Adm. John Kirby remarked that U.S. officials had notified Libya about the operation, but declined to say whether the government assisted in the raid. The Libyan authorities, meanwhile, tried to distance themselves from the raid, issuing a statement a few hours later condemning the violation of Libya's sovereignty and demanding an explanation from Washington.

Back in October, Libi's capture sent shockwaves through Libya. Many Libyans were outraged at what they perceived to be an infringement of Libya's sovereignty -- and the Libyan authorities bore the brunt of the criticism, as many assumed that the government must have played some kind of role in the operation. The security agents who kidnapped former Prime Minister Ali Zeidan on Oct. 10, 2013, hinted that their attack was in retaliation for the raid to capture Libi.

And extremist groups seem to be gearing up to retaliate yet again. Following the reports of Abu Khatallah's capture in Benghazi, reports emerged from Tripoli that the Libya Revolutionaries' Operations Room (LROR), an umbrella group for Islamist militias, had seized the prime minister's office in the capital. This is likely just the beginning of the detrimental effects of Abu Khatallah's capture: Rebel and extremist groups are expected to attempt to seize government buildings or kidnap government officials suspected in facilitating the arrest.

Extremist groups like Ansar al-Sharia and LROR are coming under increasing pressure -- and that may push them to take extreme action. Abu Khatallah's capture comes at a critical time for Libya, after forces loyal to General Khalifa Haftar launched a nonstop air and ground military campaign to push Islamist militias like Ansar al-Sharia out of eastern Libya. (The photo above shows Haftar's men taking position during clashes in Benghazi in early June.) The offensive will limit the extremist groups' ability to retaliate militarily -- but they are likely to make use of these attacks to further their propaganda campaign decrying a Libyan "crusade on Islam" supported by the United States.

Some Libyans welcomed the U.S. operation to arrest Abu Khatallah, saying that this will bring those suspected of atrocities against Libyans and foreigners inside Libya to justice. Yet others are worried about the consequences this action will have on the already fragile situation in Libya, which continues to face tremendous challenges on both the political and security fronts. But U.S. Secretary of State John Kerry did not see the abduction as a challenge to Libya's democratic mission: "The Libyan people face great challenges, but the vision of a peaceful and productive new nation will guide Libya's future, and they will have a friend and partner in the United States," said Kerry.

Though the majority of Libyans reject terrorism and extremism, the United States' unilateral actions could further destabilize Libya and undermine its democratic transition. Instead, the United States should engage in a way that supports Libya, working alongside its counterparts in Libya's justice system and law enforcement agencies in the fight against extremism.

The capture of Abu Khatallah and Libi before him should not be the end of the United States' work in Libya. It must go on to use its political and diplomatic influence to push for a political deal between the different political factions based on democratic values and the rule of law, where extremism and terrorism are rejected completely. This would ensure that the United States has a friend and partner in the fight against terrorism in Libya.

Mohamed Eljarh is the Libya blogger for Transitions and a nonresident fellow at the Atlantic Council's Rafik Hariri Center. Read the rest of his blog posts here.

STR/AFP/Getty Images