Removal of Planning Minister Reveals and Creates Tensions in Chavismo

Hugo Pérez Hernáiz and David Smilde

The removal of Planning Minister Jorge Giordani announced by president Maduro this week has turned into an open political row within Chavismo. Giordani has been one of the key architects of the government’s economic policy over the past fifteen years. He is from the left of a leftist coalition and is a hardline supporter of economic controls and planned economy.

Analysts in Venezuela agree that Giordani’s exit could mark a more pragmatic government approach to the economy. And it was not a surprise given that Giordani had been removed from the board of directors of the Central Bank the week before. However the most immediate impact of the event has been political.

Giordani published an extensive open letter in the Chavista independent web page Aporrea almost immediately after Maduro’s announcement. The letter makes strong criticisms of Maduro and has renewed criticisms of the government from within the ranks of Chavismo.

In the text, Giordani protests his progressive exclusion from government decisions after the death of Chávez. He reveals that he suggested himself as the head of the foreign exchange control mechanism CADIVI, to try to get a handle on illicit dollar requests. He also suggests that he repeatedly urged for the reduction of public expending.

Interestingly, perhaps incredibly, Giordani does not describe any relation between the economic controls he helped to establish and the current economic problems faced by the government. Analyst Luis Vicente Leon suggests that instead of a mea culpa, the statement amounts to an “it wasn’t me” letter. Leon says he has a difference of opinion with Giordani. “He thinks the cause of the crisis is that they didn’t pay enough attention to him. I think the cause of the crisis is that they paid too much attention to him.”

Giordani blames the situation on corruption, the “lack of design and previous studies,” the “reinstallation of capitalist financial mechanisms,” and the independent power he argues PDVSA has acquired. The latter amounts to an only slightly indirect criticism of one of his main rivals in economic policy over the past year, Rafael Ramirez, Minister of Oil and Mining and President of the state oil company PDVSA.

Most important is his direct criticisms of Maduro as lacking leadership and competence: “It is painful and alarming to watch a presidency that does not show leadership,” says Giordani. He adds that Maduro’s leadership is marked by a lack of comprehension of economic issues.

Some in Aporrea accused Giordani of “stabbing Maduro in the back,” but others praised him for his revolutionary zeal, and even warn that the event could mean the end of the “accomplishments of the Revolution.”

Maduro himself seemed to refer to Giordani last week when he asked for “maximum loyalty” from his newly appointed ministers and said: “there is no excuse for anyone’s treason to the revolutionary project…There are some compañeros that have become favorite analysts (cronistas) for the right.”

But critical voices immediately answer from Aporrea: Toby Valderrama and Antonio Ponte, -the same commentators that accused Maduro of tampering with Chavez’s political testament in January- alerted that “Giordani is not a traitor” and his “alert cannot be dispatched with a few high tempered disqualifiers…[That] is not the revolutionary way.”

Politically, the debate is a prelude to the upcoming third Congress of the Socialist Party (PSUV) to be held at the end of July. Jorge Rodríguez, Mayor of Caracas and leader of the PSUV asked the party ranks to be “loyal” in the face of future difficulties last week during a meeting in preparation to the Congress. The party leadership would like to frame the Congress as a show of unity, but there is concern that there is increasing discontent among the ranks, among whom Giordani is popular.

Economically, Giordani’s exit could mean a more pragmatic direction in economic policy. However his criticisms of Maduro’s lack of leadership and incomprehension of economic issues, as well as the autonomy described among other actors in the government, suggest that reforms will not be clear and decisive. They will likely continue to be piecemeal, contradictory, and not consistently implemented.