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.