MercoPress. South Atlantic News Agency

Chavez names new Finance minister ahead of by-election

Venezuela's President Hugo Chavez named on Sunday Ali Rodriguez, a trusted ally who has also served as head of state oil company PDVSA, as Minister of Finance. Rodriguez is currently ambassador in Cuba and was once secretary general of OPED and has also held the post of Foreign Affairs minister.

"Ali Rodriguez is going to be the new finance minister," Chavez said on his weekly television show. "He is a man of great experience and honesty; a full hearted and proven revolutionary." Venezuela is struggling with high inflation, highest in the continent, during an oil boom despite measures to cool the economy. Chavez refuses to cut public spending to fight inflation, and it is unlikely that Rodriguez will change that in an election year. The policy announcement most keenly awaited by investors is a debt buyback expected to be at least 1.5 billion US dollars and which was leaked in May as "imminent". At 70 years old, Rodriguez has suffered from poor health. As well as being ambassador to Cuba, he is also a top leader in Chavez's new socialist party, which is preparing for key elections for governors and mayors in November. Oil expert Rodriguez is widely respected in crude-exporting Venezuela where he is seen as a negotiator. Chavez frequently recycles his cabinet, keeping trusted people close to him during his nine years in office. Current Minister Rafael Isea was elected last month as Chavez's party's candidate in the state of Aragua for the November elections, where Chavez fears he may lose the capital Caracas and key governorships. Isea's nomination sparked a period of speculation over who would replace the soft-spoken former soldier who oversaw a period of monetary tightening aimed, without much success, at reining in Latin America's highest inflation. The outgoing finance minister, who joined the Cabinet only at the start of this year, implemented a policy that slashed the Bolivar currency rate on the parallel exchange market and helped cut periodic shortages of some basic foodstuffs. But the measures also slowed growth to its weakest since 2003 and inflation remains high, an election-year liability.