VZCZCXRO3848
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHHA RUEHHO RUEHMC RUEHMT RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #0548 1202034
ZNY CCCCC ZZH
P 302034Z APR 09
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC PRIORITY 2988
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHNSC/NSC WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY

C O N F I D E N T I A L CARACAS 000548 
 
SIPDIS 
 
HQ SOUTHCOM ALSO FOR POLAD 
TREASURY FOR RJARPE 
NSC FOR RKING 
USDOC FOR 4332 MAC/ITA/WH/JLAO 
 
E.O. 12958: DECL: 04/29/2019 
TAGS: EFIN PGOV PINR VE
SUBJECT: NEW CENTRAL BANK PRESIDENT NOMINATED 
 
Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b) 
and (d). 
 
¶1.  (U) President Chavez designated former Finance Minister 
Nelson Merentes as President of Venezuela's Central Bank 
(BCV) on April 28, filling the vacancy left by the December 
2008 death of the former president.  Also on April 28, the 
National Assembly approved Merentes' nomination, and the 
Official Gazette published the appointment, making it 
official.  Merentes is a mathematician by training.  He was 
an early political supporter of President Chavez.  He claims 
to have been one of the founders of the Fifth Republic 
Movement, Chavez's former political party, serving on its 
strategic committee and helping to develop its strategy for 
the 1999 National Constituent Assembly elections.  Merentes 
served twice as Minister of Finance, from 2001 to 2002 and 
2004 to 2007. 
 
¶2.  (SBU) Merentes' appointment has already caused 
consternation among opposition-oriented economists.  They 
claim Merentes does not have 10 years of financial and 
economic experience and is a political activist, both of 
which would make him ineligible by law.  They also question 
his judgment and/or integrity given various actions 
undertaken by the Ministry of Finance during his tenure, such 
as the acquisition of Argentine bonds and "structured notes" 
by the National Development Fund. 
 
¶3.  (C) In an April 2008 meeting with Econoff, Merentes, who 
was seeking a visa, showed a mixture of realism and 
pragmatism.  He noted Venezuela's current economic model was 
not sustainable unless the country could diversify its 
revenue sources, suggesting software, information technology, 
and tourism as possible growth sectors.  He stressed the 
importance of controlling the parallel foreign exchange rate, 
though he noted issuance of dollar-denominated debt payable 
in bolivars was not a sustainable strategy for controlling 
it.  He said he had received the U.S. Ambassador during each 
of his tenures as Minister of Finance, doing it "discreetly" 
the second time as he did not have permission.  He noted that 
not everyone in the Venezuelan government felt the U.S. was 
the "enemy." 
 
¶4.  (C) Comment:  For anyone under the illusion that the BCV 
was an autonomous institution, Merentes' appointment might 
come as a blow.  However, no one should be under that 
illusion.  Merentes will almost surely loyally carry out the 
policies necessary to support President Chavez's plan to 
finance the 2009 budget deficit, as well as any other 
directives from Miraflores.  End comment. 
 
¶5.  (U) Biographic information:  Nelson Jose Merentes Diaz 
was born May 6, 1954.  He received a bachelors degree in 
mathematics from the Universidad Central de Venezuela (UCV) 
in 1978 and a PhD in mathematics from the Science University 
of Budapest in 1991.  He served in various administrative and 
faculty positions at UCV beginning in 1978 through at least 
1999, when he was elected to the National Constituent 
Assembly.  In between his tenures at the Ministry of Finance, 
he served as Minister of Science and Technology.  End 
biographic information. 
CAULFIELD