October 7, 2008
Venezuela—Past and Present-
I. Why study of Venezuela is important?
A. Alternative to neoliberalism—challenge to There is No Alternative (TINA), Washington
Consensus, l—see page 51, 52 of Gott
1 . Origins to term—Locke and Adam Smith—not what McCain and Palin call Obama
2. Key aspects—privatization, ―free trade‖ to encourage production for export, foreign
investment, limited government spending with balanced budget; deregulation—labor,
prices, interest and credit—financial liberalization,. market rules.
Also state as protecting property rights.
3. Supporters Argues that it will reduce inflation, improve balance of payments, encourage
modernization and growth
4. Evidence—may reduce inflation, improve balance of payments—but growing
inequality—no examples of success-Repression
5. Is U.S. neoliberal?
B. Socialism for the 21st Century, Bolivarian Model of Socialism—
Is it alternative to capitalism, centrally planned models—most which no longer exist, social
democracy—What is it, what do we mean by sustained endogenous development?
Does model depend on plentiful oil and high prices.
C. Claim that people needs are increasingly being met—food, health, housing, education,
transportation, cultural, also for women, indigenous, Afro-Venezuelans.
development of people not just things, self-determination—remember Rodney
democracy, sustainability? Are needs increasingly being met?
D. Important for Venezuelans, Latin America, the global South, all of us.
II. Data—Sources—see Mark Weisbrot article, Gott book, Economist Intelligence Unit, Banco
Central de Venezuela, www.bcv.org.ve, http://www.ine.gov.ve (use with caution)
Population—27 million, 87% urban: officially, 1.5% indigenous, 13-14% black,
actual indigenous is probably higher
Per capita income, about $5000 in 2008 (similar to Mexico), 50% of income goes to top
10% of population—significant improvement in real distribution of income-social wage. 30-
35% of population below poverty line, (2007); 10% extreme poverty—substantial decline
from 1999 but high; higher for women, blacks; 80% earn minimum wage or less (Gott, pp.
173). 80% growth of minimum wage in 2006.
Inflation has averaged over 40% per year from 1987 to present; about 20% last few years,
2008, over 20%
High unemployment and underemployment—informal sector ½ of labor force.—some
reduction in unemployment, Advances real—problems still major.
Informal sector—employment not registered, nor is employer. Examples?
Social spending is over 20% of GDP-see Weisbrot article, March, 2007 –from about 8% in
1998—education, health, housing, social security, social development, culture and science—
—growth in 2007, 2008.
Primary education, 272,000 in 1999-2000 to 1.1 million in 2005-2006 (Weisbrot)
Agriculture—only 3% of labor force. Venezuela imports about 2/3 of all of its food.
Oil—large reserves of hydrocarbons—oil and tar oil—2nd -4th largest in world; -
Nationalized in 1976—provides half of state revenues; 80% of exports. 4th largest supplier
to U.S. Even with bad relations, oil exports continue. Oil revenues increasingly used to fuel
social programs—subsidized food, education, health, cooperatives, growth— GDP growth,
10% plus per year since 1st quarter, 2003- 60% in 5 years, 1st quarter 2003-2008. Overall
GDP is 40% higher than when Chavez took office. (Venezuelanalysis.com)
After big decline in output (GDP) drop in 2002-2003, high economic growth rates—
different from revolutionary Chile, Nicaragua. (growth than decline)
Major economic and social problems—housing, jobs, quality and quantity of education, food,
crime—reproductive rights, gender, racism.
Q? Is Venezuela meeting needs of people—decline of poverty significant—how much are
improvements, dependent on rise of oil prices, high oil production—are they sustainable?
III. Time-Line- Brief History, mainly of last 200 years, mainly 1948-present (time line on
A. pre-1496 large indigenous population—nine cultural groupings—diverse—many
enslaved by Spaniards.
B. Enslavement of Africans beginning in 16th century—eastern and southern Venezuela
C. Independence Movement, 1810-1821. Independence 1821
Key figure, Simón Bolívar-different interpretations—wealthy family, military, wanted to
unite Latin America. Analogy to George Washington, although wasn’t President of
Another key figure—intellectually- Simón Rodríguez (Samuel Robinson) teacher,
stressed teaching of indigenous people, blacks, pardos? unique history of Americas,
D. Slavery ended in 1854—
also another key figure—Ezequiel Zamora, 1840’s, 50’s, Barinas-fought for land
redistribution, against wealthy, elections , commons (see Gott, 113)
(Bolivar, Rodriguez and Zamora, all important influences on Chavez, Bolivarian
(1850’s-1948—military rule common, e.g., WWII—some promoted uinternal
E. Military dictatorship of Perez Jimenez, 1948-1958; development of large industry, e.g.,
Sidor steel works, hydroelectric dams, Ciudad Guyana and capital intensive state
industries; Period of import substitution industrialization (ISI) also repressive. Military
has often ruled. Growth of oil drilling, mainly U.S. corporations—from 1930’s
F. Overthrowing of dictatorship, Accion Democratica (A.D.) wins out, one of two major
parties. Romulo Betancourt, (1958-1964) Alliance for Progress-guerilla movement
(inspired by Cuba) and counterinsurgency—Punto Fijo—deal between major parties to
maintain their rule—multiclass, patronage parties. Late 1950’s, 1960’s
G. 1970’s—OPEC and growth of oil revenues—also GDP-some trickle down—
Nationalization of steel in 1975; oil in 1976—formation of Petróleos de Venezuela
(PDVSA), mass emigration to urban areas. Carlos Andrés Pérez of AD president-huge
corruption, Import Substitution Industrialization (ISI) —growth of international debt
H1 —stagnation of economy, high inflation, hyperinflation; Reelection of Carlos Andrés
Pérez in Feb. 1989 on restoring 1970’s, Neoliberal structural adjustment of IMF, (Gott,
pp. 54)—reduction of tariffs, privatization, market prices—gasoline and bus prices
H2. Caracazo—November 1989, rioters from ranchos-400 to 2000 killed-Chavez growing
commitment to overthrow government, not ready in 1989, movement within military
left not directly involved in uprising.
I. Feb. 1992, failed coup—mainly from within military, middle level officers led by
Chavez—allowed to go on TV—said defeated por ahora—for the moment, influenced by
left nationalist military in Peru, Panama—explain?
J Carlos Pérez forced out of Presidency in 1993 for corruption. Chavez released from prison
in 1994; Chavez very popular as conditions worsened for most of population. Rafael
Caldera back in power as President, 1994-1999 from Copei (Christian Democratic Party),
had been President, 1969-1974. In 1990’s continued neoliberal policies—although less
harsh than Pérez
K. Decline of traditional parties, Acción Democrática (AD) and Copei) —growth of La
Causa R, over 20% of vote in 1993—worker’s party—strong in some of the ranchos,
Ciudad Guyana, main university in Caracas—see (Gott, ch. 18, came out of guerilla
movement, Communist Party—believed in movement from below, cooperatives,
sustainable development, Ali Rodriguez (today finance minister) came out of La Causa
R, also main economist in govt today, Jorge Giordani. (left tradition in Venezuela)
L. 1998—Chavez got 56% of the vote, Polo Patriótico
Moviemiento Quinta Republica, ogether with Partido Para Todos (PPT) (from La
Causa R). also Movimiento al Socialismo significant
1. Election of Constituent Assembly—ratification of new Constitution in December,
1999 by 71% of population—progressive, e..g, gender, indigenous people
2. Horrific floods, mudslide—on mountain slopes, near Caracas, 15,-60,000 plus deaths,
many times more lost homes—call for movement to countryside to be given land,
housing—rebuilding of housing.
N. 2000—reelection of President Chávez and national assembly—59% of vote. Depening
and closer economic relations with Cuba, furthered in 2004 but different model-greater
role for private sector, foreign investment than Cuba.
1. 2001--Move left in government policies—housing, land, oil
2. April 12, 2002--Attempted coup by business elites (Pedro Carmona) and military
leadership, main labor federation, CTV, U.S. supported coup; Chávez regained
power—see movie Friday, growing polarization of country—attempt at compromise
3. Economic ―Coup‖ of December 2002, oil company goes on strike. Sabotage, 18,000
managers and workers who go on strike are fired. Strike is defeated.
P. 2003-2005—Rapid economic growth by late 2003, reduction of poverty substantial—
debate on absolute number—see II,
1. Growth of Missions—medical, educations, supermarket with reduced prices. ALBA
(Bolivarian Alternative for the Americas—Anne-next Tuesday, also Wilpert book,
articles—week 7-9 2004.PetroCaribe, Telesur, Investment fund
2. 2004-Hugo Chávez gets 59% of vote in failed attempt to recall him
. 2005—Old parties refuse to run, victory pf Evo Morales in Bolivia and then Rafael Correa
in Ecuador, 2006—closely allied to Chávez and Venezuela
3. Increasingly government and Chávez define itself as socialist-not clearly defined.
growth of parallel institutions, --cooperative, participatory budgeting, and then communal
4. 2005, Chávez promotes Venezuela as a society building Socialism for the 21st Century
Q. 2006 --Elections for President, more land reform --
12/3/06—62% of the vote, 75% of eligible voters voted—big increase in turnout
1. nationalization of 4 Oil fields— also main telephone company (28% Verizon); electric
company—had been privatized under Perez—nationalized with compensation
Non-renewal of RCTV—had supported coup
2. Building of infrastructure—railroads, ports,--big increases proposed in 2008, mass
transit, subway system e.g. Barquisemeto, Enterprises of Social Production (EPS)
Formation of Unified Socialist Party of Venezuela (PSUV)
3. Proposed referendum-
Centralization of Power, can make decrees for 18 months; for end of term limits,
reducing work week to 6 hours per day, free college education; many other
reforms-- failed.—49% of vote in December, 2007—more discussion later
4. anti-Chávez student movement at some universities.
1. Growing inflation, food shortages, continued growth in production, social programs—
health, education, increasingly funded by PDVSA
2. nationalization of Bank of Venezuela-Spanish owned. Growth of Bank of the South—
alternative to World Bank.
3. Worsening relations with U.S.—expulsion of ambassadors in September. Claim by
Venezuela of U.S. fomenting coup in Venezuela and Bolivia. Also worsening relations
with Colombia—claim of Venezuelan support for FARC (guerilla movement there)
4. State and local elections in November 2008
5. Important role for Venezuela in UNASUR, ALBA, growing relations with China,
Overall-clear alternative to neoliberal, moving in a socialist direction, anti-imperialist social
democracy with stress on participation, cooperatives, co-management
Source besides syllabus reading: Tarver and Frederick, The History of Venezuela, which is
conservative-: limited credibility on recent past)