Venezuela INTRODUCTION
Figure 1. Administrative Divisions of Venezuela, 1990
VENEZUELA IS A COUNTRY that has glimpsed the prosperity
that
tantalizes so many developing nations. Unfortunately,
however,
global economic trends and domestic problems combined to
nullify
the economic gains of the mid-1970s and to push the
country into
the economic crisis of the 1980s. Although blessed with an
abundance of petroleum and other natural resources,
Venezuela has
been hampered by corruption, mismanagement, and
complacency on
the part of government officials.
Historically, Venezuela has been in many ways a leader
among
Latin American nations. The liberation of colonial South
America
from Spanish rule owed much to the vision of Venezuelans
such as
Francisco de Miranda and Simňn Bolívar Palacios. The
nation's
postindependence domination by a succession of caudillos
was
typical of the pattern followed in most of the former
colonies.
Indeed, until the discovery of oil reserves during the
regime of
caudillo Juan Vicente Gómez (1908-35), Venezuela was a
prototypical, almost stereotypical, Latin American
republic, with
an agrarian economy, an elitist social and economic
structure,
and a tradition of military rule. The transformation of
society
that followed in the wake of expanding oil production,
however,
produced a more educated and politically aware middle
class.
Representatives of this class, members of the so-called
"generation of 1928," led the protest movements that
eventually
brought democracy to Venezuela in 1945. The reactionary
regime of
Marcos Pérez Jiménez (1948-58) appeared to represent the
last
gasp of the old system.
Socially, Venezuelans benefited to a significant degree
from
the oil boom years of the 1970s. Per capita income became
the
highest in Latin America, literacy rates climbed, and the
standard of living rose for many Venezuelans. Beneath the
bright
veneer, however, nagging problems festered. Poverty
persisted for
many. Even for many in the middle class, the prevailing
system
provided an artificial and impermanent brand of
prosperity. The
bloated government bureaucracy and heavily protected
domestic
industries provided employment, but they also strained the
resources of a nation heavily dependent on the export of a
single
volatile commodity. When the bill for years of wasteful
spending
came due in the 1980s and 1990s, many Venezuelans began to
experience a kind of personal privation from which they
had
previously considered themselves immune.
Economically, Venezuela was a beacon for other Latin
American
states, a beacon that both attracted emulation and warned
of
potential danger. The national oil company, Petróleos de
Venezuela, S.A. (POVSA), was a world-class multinational
corporation. The country was also a leading producer of
natural
gas and petrochemicals. By 1990 Venezuela met half of its
electricity needs from hydroelectric production, and
significant
potential power generation remained to be tapped from this
source
alone. The production of other industries, such as
bauxite, iron,
aluminum, steel, and gold, appeared poised for expansion
during
the 1990s if sufficient capital and infrastructure support
could
be secured. Yet by the 1990s, it had become clear that the
public
sector, saddled with an oppressive external debt and still
reliant on income from the stagnant oil market, could not
stimulate the economic growth the required in the next
century.
By the 1990s, Venezuelan politics had changed
considerably
since the reestablishment of democracy in 1958. A
two-party
system, pitting the social democratic Democratic Action
party
(Acción Democrática--AD) against the Christian Democratic
Party
(Comité por Organización Política Electoral
Independiente--
COPEI), gradually took hold, offering an alternative to
direct
military interference in the nation's governance.
Eventually, the
influence of the political parties on many different
spheres of
life--labor unions, public-sector employment, and the
military,
among others--came to shape and define Venezuelan life to
a
significant degree. Beyond its borders, Venezuela also
became a
leader and an example in both regional and global forums.
Oil-
rich and politically stable, the nation sought to shape
global
policy under such activist presidents as Rafael Caldera
(1969-74)
and Carlos André Pérez (1974-79; 1989-). Economic crisis,
however, curtailed such activism in the 1980s and dimmed
Venezuela's star somewhat in the international firmament.
The Venezuelan military, the National Armed Forces
(Fuerzas
Armadas Nacionales--FAN), has also developed since 1958.
By the
early 1990s, the FAN had become a more professional,
better-
trained, better-equipped, and better-disciplined force
than it
was under the regime of Pérez Jiménez. Nevertheless,
although the
FAN was technically removed from politics, it was not an
apolitical institution. Members of the officer corps were
known
by their party inclinations, and the fortunes of careers
rose and
fell with the tides of the national balloting. By the
1990s,
however, the role of the military no longer appeared to be
that
of political arbiter, even though participants in the
surprising
and unsuccessful military coup against President Pčrez in
February 1992 appeared to be at least partially motivated
by a
desire to return to such a role. Therefore, the true role
of the
military was subject to debate. Most signs indicated that
the
majority of Venezuelans respected military personnel for
their
professionalism and their traditional image as guarantors
of
stability and national sovereignty. At the same time,
however,
the absence of a viable external threat (Venezuela has
never
fought a war outside its own borders) undercut the FAN's
most
vital raison d'etre. Although internal security was in
fact a
mission of the FAN, it was not one about which the
institution
was particularly proud or enthusiastic. With the waning of
the
global communist threat and the slow disintegration of
Fidel
Castro's regime in Cuba, the FAN will be forced to
reassess both
its strategic assumptions (e.g., the need for maintain a
capability to project power in the Caribbean Basin region)
and
its order of battle during the 1990s and beyond.
Venezuelan society faced a similar reassessment. By
1992, the
old assumptions about the nation's future appeared to be
no
longer valid. Despite impressive reserves, oil-based
growth had
proved to be as erratic as that based on any other
commodity. The
social welfare system, adequate under normal economic
conditions,
proved insufficient to provide for the basic needs of many
Venezuelans under the extraordinary circumstances that
prevailed
under the second Pčrez administration.
President Pčrez returned to the country's leadership
vowing
to restructure an economic system that had appeared quite
prosperous and successful during his first term. True to
his
word, Pérez proceeded to implement policies aimed at
opening the
Venezuelan economy and reducing state intervention,
control, and
subsidies that distorted that economy's performance. As
was true
elsewhere in Latin America and in Eastern Europe, however,
these
major policy adjustments, among them elimination of
subsidies and
devaluation of the currency, inflicted suffering on the
majority
of the population, especially the poor. Privatization of
state-
owned industry also entailed hardship for both lower- and
middle-
class workers whose jobs were lost in the transition to
private
ownership.
The irony in the domestic economic program lay in the
fact
that, macroeconomically, Pčrez's policies produced
positive
results rather rapidly. During the first half of 1991, the
gross
domestic product
(
GDP--see Glossary) grew at a very
healthy 10
percent annual rate. The administration actually needed to
slow
the economy down somewhat by cutting back on public
spending in
order to avoid boosting inflation. Accordingly, the
monthly rate
of increase in prices slowed from 3.1 percent in July to
1.9
percent in September. Overall, projections held that the
country's oil-related GDP would increase by an impressive
8.7
percent, while non-oil GDP would follow close behind at
7.7
percent. Unemployment figures also showed a positive
trend, with
overall unemployment dropping from 10.9 percent in 1990 to
10.3
percent during the first half of 1991. One worrisome
element in
the positive trends was that some portion of the increased
growth
rate was attributable to a rise in world oil prices.
If many Venezuelans complained privately about economic
conditions and the performance of the government, groups
such as
labor unions and university students took their grievances
to the
street. Some of the worst of these disturbances took place
in
November 1991. On November 7, the main labor
confederations
called for a twelve-hour general strike to press their
demands
for a repeal of gasoline price increases, approval of a
wage
increase equal to 30 percent of inflation, a
reorganization of
the social security system, and a halt to the planned
dismissal
of 300,000 government employees. The actions were
effective,
slowing transportation and economic activity in Caracas,
Aragua,
Bolívar, and Carabobo. Rioting reportedly broke out in
Bolívar.
Confrontations between police and student protesters in
Caracas
on November 20 left three dead.
Another assumption about Venezuelan society--that drugs
were
strictly a Colombian problem--also fell victim to the
events of
the 1990s. It remained true that the major drug
organizations
operated out of Colombia. By the early 1990s, however,
their
encroachment into Venezuela, an encroachment that Caracas
once
viewed as no more than a minor irritant, had become
significant.
Colombian drug traffickers, under increasing pressure at
home,
began to expand their operations into Venezuela. The
porous
frontier region between the two countries had always
facilitated
some level of smuggling, illegal immigration, and
guerrilla
movement. The intensity of transshipment and money
laundering
activity, however, rose dramatically as the Cali Cartel,
allegedly with the assistance of Sicilian organized crime
families, began to exploit the infrastructure of
Venezuela's
export-minded economy. The drug dealers also reportedly
benefited
from contacts with corrupt Venezuelan politicians. As a
result,
estimated annual cocaine exports to the United States
through
Venezuela rose from 88 tons in 1990 to perhaps 220 tons in
1991.
In addition to the possibility of increased domestic drug
consumption, the rapid expansion of this illicit commerce
threatened to eat away at the foundations of a society
already
suffering from the effects of the government's economic
shock
program.
Despite domestic criticsm, Pérez continued, during his
second
term in office, the foreign activism that had marked his
first.
The president was a prominent voice in the debate over
what
policy approach Western Hemisphere nations should take
with
regard to Fidel Castro's Cuba in light of the collapse of
communism in Eastern Europe and the Soviet Union. Pérez
argued in
favor of expanded ties with Cuba in order to promote
democracy in
the island nation. Pérez also sought to expand economic
cooperation with Colombia and moved to allow tariff-free
imports
into the Venezuelan market from the islands of the
Caribbean. The
president's most visible gesture took place in late
September,
1991, when he accepted as an exile the ousted president of
Haiti,
Jean-Bertrand Aristide. The administration strongly
supported
Aristide, a Roman Catholic priest and a devotee of
liberation theology (see Glossary), and helped push for the embargo
of Haiti
eventually adopted by the Organization of American States
(OAS).
In the immediate aftermath, it was not clear what
factors
exercised the most influence over the participants in the
attempted military coup of February 4, 1992. The first
news of
the uprising came as a shock to observers outside of
Venezuela.
Coup rumors apparently had been circulating for some time
in
Caracas; most Venezuelans had heard such talk before,
however.
Shortly after midnight, troops from at least five army
units
attacked key sites in the capital and three other cities.
One
objective of the attacks was to assassinate the president.
Reportedly, some small arms rounds did strike the
president's
office, even leaving bullet holes in his desk. The high
command
and the overwhelming majority of FAN units remained loyal
to
Pérez, however, and quelled the uprising within
twenty-four
hours.
In many ways, the aftermath of the coup attempt proved
more
interesting than the insurrection itself. Although not
supported
by the majority, the conspiracy apparently had attracted a
significant number of mid-level officers (captains through
lieutenant colonels) officers. Some of these young
officers were
considered to be the "best and brightest" in the FAN. The
conspiracy's leader, Lieutenant Colonel Hugo Chávez,
seemingly
struck some resonant national chords with his
post-capitulation
statements condemning the corruption and indifference of
the
government. Some of the residents of Caracas's
ranchos, or
slums, expressed sympathy with the rebellious soldiers.
Some
members of the middle class echoed those sentiments. Just
as the
population at large resented perceived corruption among
the
government leadership and the bureaucracy, so too did
military
personnel harbor bitterness toward those at the top. The
tightening of the defense budget, combined with the
general
economic woes, also had had an impact on the military.
Lower-
ranking officers and enlisted personnel, who once had
believed
that their comparatively comfortable standard of living
was
secure, increasingly objected to the prosperity of their
general
officers, a prosperity allegedly based on corruption. If
nothing
else, the coup attempt almost certainly will prompt
heightened
attention from the government to military pay and
perquisites.
Pérez publically vowed to maintain his economic
policies
despite the coup attempt and marked absence of public
support for
this government. It appeared likely, however, that
government
spending on social programs would increase in an effort to
respond to popular discontent. The return to prosperity,
if it
can be achieved, will have to accomplished with some
degree of
equity. As of the early 1990s, however, that appeared to
be a
daunting, difficult, and demanding task.
Data as of December 1990
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