Venezuela Shakes up Cabinet, Appoints Drug-Indicted General

  • Perez Abad had been at Commerce and Industry post seven months
  • Nestor Reverol is appointed as Interior and Justice minister

Venezuela’s President Nicolas Maduro named new ministers in a Tuesday night shakeup of his cabinet, replacing a pro-market reformer on his economic team and appointing a military general indicted by the U.S. for drug trafficking to head the Interior ministry.

Carlos Faria was named Industry and Commerce minister, replacing Miguel Perez Abad, while General Nestor Reverol, who was charged with conspiracy to distribute narcotics according to documents unsealed in a U.S. federal court in Brooklyn, New York on Monday, was named the Interior and Justice minister.

Perez Abad, appointed in February, was best known for favoring a liberalization of the country’s byzantine currency controls. It wasn’t immediately clear if Perez Abad would remain in Maduro’s government in the parallel post he also held as vice president of the economy.

For a snapshot of Venezuela’s economy, click here for Credit Dashboard.

“I’m going to designate the young professional Carlos Faria as the new Industry and Commerce minister so that he can come in with new energy and force,” Maduro said Tuesday night during his weekly television show, thanking Perez Abad for the seven months he’d served.

The nation’s $4-billion of debt due 2027 fell 1.46 cent to 45.58 cents on the dollar as of 11:23 a.m. on Wednesday, the biggest decline in a week.

“This is definitely a loss for the pragmatist approach as the government appears to have shelved plans for FX unification,” Francisco Rodriguez, chief economist at Torino Capital in New York, said in a report. “While we will have to wait for the appointment of a new economics vice-president to get a clearer signal of the economic policy direction that the administration has chosen, the general thrust of these changes indicates a strengthening of the hard-liners and a sidelining of the reform proposals associated with Perez Abad.”

Imports, Debt

Perez Abad last said in an interview published by news website El Estimulo on Sunday that the country would have a “floating” foreign exchange system within 60 days. Since he took office in February, the bolivar was allowed to depreciate 69 percent on an alternative market known as Simadi or Dicom in a move that accelerated inflation already in the triple digits.

In an interview with Bloomberg News in May, Perez Abad said the country would keep cutting imports in order to stay current on its foreign debt.

Maduro earlier in the night criticized the opposition-controlled National Assembly for the swearing in of three disputed deputies last week and said he would no longer be able to fund an “nonexistent” congress. He said he would wait for a sentence from the Supreme Court on the matter.

To read about Venezuela’s constitutional crisis, click here.

Drug Indictment

Nestor Luis Reverol Torres, the former director of Venezuela’s anti-drug office known as ONA and and Edylberto Jose Molina Molina, the former sub-director of ONA and its current military attache to Germany, were accused of being part of an international cocaine distribution conspiracy for their alleged activities from January 2008 to December 2010. The charges were filed secretly under seal in January, 2015 and unsealed Monday.

Nellin McIntosh, a spokeswoman for Brooklyn U.S. Attorney Robert Capers, declined to comment about the extradition process.

“He has my full support both personally and as head of state and government, as he’s been attacked by the U.S. empire,” Maduro said as as he appointed Reverol to head the Interior and Justice ministry, arguing that the charges were a result of Reverol’s successes in fighting drug trafficking in Venezuela. “The DEA wants him to pay. The narcotrafficking mafia is in the U.S.! They have a few camps in Colombia and Mexico, but at the end of the day all the money ends up in U.S. banks.”

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