Ramírez’s report card is in

Rafael-Ramirez-01On July 3rd, our Twitter TLs were filled with the rumor that Rafael Ramírez would leave PDVSA to occupy the Executive Vice-Presidency of Venezuela.

On July 8th, President Maduro said that Ramírez would stay in the cabinet “because he is the leader of the economic cabinet, the economic team, and the goal is to destroy him because they know that our strategy is the correct one.”

This month marks the twelve-year anniversary of Rafael Ramírez in the cabinet – yes, twelve years. He was first appointed Minister of Energy and Mines – now Petroleum and Mining- in July of 2002. Since then, he has steadily accumulated more responsibilities and greater power in areas ranging from housing to macroeconomic management.

Ramirez currently holds five – yes, five – simultaneous high-level positions in the central government. His latest gig was getting tapped for the chairmanship of Simon Bolívar Reconstruction Fund in May of this year, a special slush fund for infrastructure projects.

But all these jobs are side shows. Ramirez has held the presidency of PDVSA, his most important position, since November of 2004. The state-owned oil company is the source of 96% of the currency that enters the country.

Ramírez also became the “vice president of the cabinet’s economic team” in October of 2013. This position, which is kind of hazily defined, signals that he is above other ministers in the economic areas, and from there he (so he says) promotes reforms in the exchange rate system and in fiscal and monetary policies in order to achieve “economic equilibrium” – whatever that is.

Ramirez has been charged with addressing the difficult economic situation, in which shortages and inflation are exacerbated and dollars are rationed in an attempt to meet growing import needs while safeguarding what little reserves we have left.

So, in his long tenure, how has he done? Here is a short summary of Ramírez’s report card.

  1. Between 2004 and 2013, oil production fell by 250,000 barrels per day. At current prices, this amounts to roughly $9 billion in lost income for the country.
  2. Between 2004 and 2013, debt with PDVSA suppliers grew by a factor of 6.
  3. Between 2004 and 2013, PDVSA’s financial liabilities grew by a factor of 12.
  4. Since 2003, at least 255 people have been injured in PDVSA work-related accidents, and 78 people have died. There have been 217 reported accidents in the nation’s refineries alone.
  5. Between October 2013 and May 2014 (latest available data), annual inflation averaged 58.03%. Those were the 8 months with the highest annual inflation levels since the BCV started to register the national price index in January 2008. Even though the Central Bank has not published the inflation rate for June, sources say that is was a whopping 5.5%.
  6. The general shortage index averaged 25.7% between October of 2013 and April of 2014 (latest available data). This means one in four items was in short supply … as if you didn’t know that already.
  7. In October 2013, Ramírez said “people, listen carefully: we will not devalue (the BsF).” Barely three months later, the exchange rate for travelers, Internet, and remittances –among others- was transferred from Cadivi (now Cencoex) to Sicad 1, shifting from BsF 6.3 per dollar to a rate of about BsF 11. Now, more sectors are expected to be passed to Sicad II, which hovers at around BsF 50 per dollar.
  8. On July of 2014, Ramirez reiterated that “the economy has plenty of available currency” and stated that “we have already allocated in our foreign exchange budget $42 billion to pay for imports, so there will be no problem with commitment debt”. But by the first quarter of 2014, the public debt of the Central Government Budget was $122 billion, which implies an increase of 10.6% ($11.6 billion) since September 2013, and an increase of 29.9% ($28 billion) in the last year alone. Moreover, some estimate that the debt with private sector providers ranges from $8 to $12 billion, while others think it’s $14 billion.

For more facts, check our article (in Spanish) for Prodavinci.com.

Ramírez’s report card seems clear. His tenure has been marked by a failure to fulfill his word, and Venezuela’s numerous economic problems lay at his doorstep. In spite of this, he has proven to be a faithful soldier of the revolution, which ultimately is the only thing that counts.

8 thoughts on “Ramírez’s report card is in

  1. Quite sure the assesment given of Ramirez performance is a failed grade ( if not a criminal indictment) but there is something which we musnt forget, in that quite a few of those failures attributed to him weren’t his decisions or neglects alone that did the damage but the ignorant and destructive decisions of the supreme galactic leader and his sycophantic entourage . He became the zealous and blindly loyal executioner of decisions , measures and policies which were thought up and inspired by the crazed ideological fantasies of Chavez and those that followed him .!!

    The Failed grade goes to him but also to the regime that he served !! to its corrupt , inept , destructive view of things . Pdvsa has been destroyed root and branch , he wielded the ax but the inspiration came from a whole system of governance and thought .

    I also feel the list of failures made by the authors is incomplete , not only beause some things already known are left out but because there are so many ruinous measures taken and implemented that have not come out and which would make the assesment of Minister Ramirez performance even more culpable !!


  2. Correction : Please insert ‘in’ after the word ‘that’ in the second line of the 1st paragraph. .


  3. Just another puppet, in a position well above his “peter’s” to be a focal point of people’s ire, while in the background the really powerful steal their way to golden exiles. A fool.

    Many of the grey, unknown figures enjoy their money and power without their tainted reputation.


  4. if possible, I would add some comparisons and references in order to remain objective: the economic results are clearly disastrous, but I have no idea if 217 accidents over a 12 year span is a lot for an oil company the size of PDVSA, or if the magnitude of its debts is comparable to other State-owned oil companies.


  5. Not certain about whether the number of accidents has increased these last 10 years because these can include some very minor ones and in any large operation accidents are inevitable but people who worked there, before Pdvsa became roja rojita, assure me that the magnitude of the accidents and the frequencly of large accidents have risen to much much higher levels than was the case in the past , Back then managers who had accidents on their watch were ‘crucified’ , chewed raw while explaining to the top manager boards how those accidents happened and why they werent prevented !!

    Part of the problem of course is that safety is a matter of maintaining strict protocoles and practices and for that you need to have experienced highly professional managers and technical personnel and as we all know all these were fired massively in 2002 during the oil strike.

    In this regard i find very suspicious the silence of Pdvsa about the payment of the insurance on the Amuay accident and failure to make public the proof of their allegations ( a year after the accident) that it had been caused by sabotage. This silence is indicative that the insurance underwriters abroad may have taken the position that the accident ocurred as a result of lack of proper maintenance or operational neglect.

    Maybe Setty should put his sights on this accident and finding out why nothing is known about it at this late date. !!


  6. And as expected from any ineptocracy, he’s going to get promoted.
    Where do i get a job with these people? Maybe i’m not useless enough.


  7. Assume the decline in oil production was a continuous straight line. Then the loss in production over eleven years was about 500M barrels.

    Assuming an average price of oil of $100/bbl; then the lost income is about $50B, not $9B.

    This posting is remarkable, in contrast with previous posts identifying Ramirez as the most rational and pragmatic of chavistas.


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