Wednesday, April 29, 2009

Nelson Merentes, noted crook, to become president of Venezuela's Central Bank

This one is for the annals of the "you got nerves" chapter of Venezuela contemporary history. Former finance minister, Nelson Merentes, has been named president of what is left of the Venezuela's Central Bank. It is like putting the Fox in charge of the Chickens.

Merentes is by trade a Mathematician, if memory serves me well. Where memory serves me is that before Chavez his career was not particularly noteworthy but since Chavez he has risen to the top of the mafia mob that rules in the shade.

His first "genius" stroke was when he designed the famous "kino" that used an electoral trick to make sure that with 60% of the cast votes chavismo got 97% of the seats of the constituent assembly. It is easy to say in hindsight that today's dangerous situation is the result of a constituent assembly where debate was limited resulting in writing a constitution that made no difference between rights and wishes.

Based on this success, and at a time where chavismo still hoped to garner the good will of the thinking class of Venezuela, Merentes was sent to run for the UCV presidency. But his colleagues knew better, having worked with the man in the past, and Merentes was roundly defeated, a margin to chavismo surprise it must be noted.

But within chavismo where sycophancy and mean guile are the only qualities appreciated, the defeat was not going to stop Merentes ascension as he soon became Finance Minister. During his tenure (twice), as well as the one of Nobrega, the Finance Ministry became a den of sweet deals where money was placed in dubious accounts instead of being duly spent for the betterment of the country. That is, public officials were more interested in dividend returns from government placed bonds of which they were receiving juicy commissions from the bankers they worked with. And these were only the "acceptable" practices as when exchange controls came to be in 2003 way more creative ways to skim public funds were implemented. You just need to consult Miguel's Blog for an endless series of posts on that matter since he opened it.

Let's just say that it is common suspicion (knowledge?) that Merentes was in charge to finance the constant campaigns that Chavez has been submitting us to; because you may be assured of one thing: the lavishness of Chavez campaigns that include refrigerator distribution, cannot be paid only with the donations of the supporters.

But the scandalous ways of Merentes were on occasion a tad too much and believe it or not there is even a dossier about him at the silent comptroller office where he is investigated from transferring money form an account to another government account, a practice that is forbidden in Venezuelan law unless there is a parliamentary vote on the subject. It is necessary to say that for the same "crime" Carlos Andres Perez was removed from office in 1993. But it is needless to say that for moving amounts of money several folds bigger than what Perez moved, Merentes and Chavez have not been perturbed in their sleep, even though Merentes received a slap on his fingers at the National Assembly. Times have changed, it seems.

Still, the dossier on Merentes exists, investigations have not proceeded further and Merentes will become without a doubt the next Central Bank president.

You may wonder why Chavez will have the nerve to name such a tainted character as Merentes to the Piggy Bank of Venezuela. After all he could place there some more palatable characters such as Rodrigo Cabezas (even though he is a nullity on his own right).

You may find a preliminary answer to this intriguing question by reading a detailed article in El Universal on how Venezuela is bucking the trend in Latin America in its dealing to the world crisis that we all suffer. The article is in English, by the way, so you really might want to read it to understand better what is coming Venezuela's way. Venezuela is the only country of the area which is dealing with the crisis with budget cuts and more taxes. Then again it makes some sense if you consider that the private sector is agonizing and so Chavez cannot expect much help from there, even if he were to change his attitude towards private enterprise.

Merentes is coming to the Central Bank to liquidate it. Oh, no! He will not close it, that would not look good on paper though a name change is always a possibility with the glorious revolution. Merentes task at the Central Bank is to scour for any possible dime that can be found to finance Chavez pipe dreams. When there is no more money left at all then probably Venezuela will start operating like Cuba where the Peso is worthless and only allowed for its populace. The government will control any hard currency and thus pay its bills whenever, if ever. After all it worked for the Castros for 5 decades and they did not have the assured revenue that oil will bring to Chavez. No matter in what bad shape PDVSA is, something will always trickle to the thugs in charge to split among themselves as payment of the dirty job they will do to keep Chavez in office forever.

There is also another thing that Merentes will duly perform: the discarding of any serious statistics still left inside the Central Bank. These have become increasingly questionable, though not necessarily untrue: it is a matter on how you can present them to make them look better than what they do. Economists are still able to see through the numbers and make decent economic analysis. But this is not going to be enough as Venezuela is running out of money: Merentes has the credentials to start fudging outright the Central Banks statistics. Remember, you read it here first.

-The end-

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