A Brief History of Venezuelan Politics
Posted: Tuesday, February 25, 2003 By: Dawn Gable
Date: Mon, 24 Feb 2003 04:06:58 +0000 From: Dawn Gable morning_ucsc@hotmail.com To: Editor@VHeadline.com Subject: Land of Smiles?
Dear Editor: To all those who don't have a grasp on Venezuelan history and who are being mislead by Gustavo Coronel and others like him, here is a piece I originally wrote for another purpose. You will notice many recurring themes such as coups, CTV strikes, capital flight, corruption, brutal military dictatorships, nationalization of industry, riots, etc. etc.
Brief History of Venezuelan Politics author: Dawn Gable - Bolivarian Fund
Pre-Democracy
Venezuela was emancipated from Spanish rule in 1811. Credit for the liberation is given chiefly to the Caracas-born Simon Bolivar whose vision reached beyond Venezuela to Gran Colombia which included present-day Bolivia, Columbia, Panama, Peru and Ecuador.
Gran Colombia fell quickly apart due to power struggles and bickering. Bolivar was in the end kicked out of Venezuela ... he left saying that Venezuela was ungovernable and that his life had been wasted "sewing the sea."
Military and politics were closely tied for nearly the first hundred years: 22 of the first 30 presidents were generals. This was a time of chronic civil war, approximately 50 coup d'etats, and 25 constitutions.
Oil was discovered in the early 1900s during the brutal 27-year reign of Juan Vincente Gomez.
After Gomez' death the oppressed masses burst with newfound freedom. Political parties sprang up like wild flowers but none were functionally structured. Nearly a decade passed before Accion Democratica emerged via a coup as an organized force and Romulo Betancourt was appointed interim President and the AD held the Palace for a few years. Among other things the party called for tax hikes, education and health reforms, higher royalties from oil industry and a civilian militia. A coup d'etat in late 1948 by dictator Marcos Perez Jimenez ended these efforts.
Perez Jimenez is remembered for his horrific cruelty, blatant thievery, and extreme anti-communism. This last trait earned him a decoration of high honor from Eisenhower. In his ten years, he focused nearly exclusively on developing Caracas at the expense of the countryside causing massive migrations into the "ranchos" (slums) that surround the capital. After he was finally run out of the country, loaded down with gigantic sums of money, the AD party took up where they left off. Literally. The coups benefactor was again the appointed interim president Romulo Betancourt. Somehow, despite Betancourt's avenues to the Palace, he is frequently misnamed "the father of democracy."
1960's AD decade
In the early sixties the country as a whole enjoyed a healthy period of economic growth. However, Venezuela's characteristic gross inequity showed little sign of reprieve for the vast majority. While, in 1965, the GDP rate of increase was 8%, at least 30% of the 1.5 million residents of Caracas lived in the "ranchos" and 40% of all Caracas habitations had no water. According to a UN report, Caracas was the most expensive city in the world at that time.
The AD took a strong stand against communism and banned the Venezuelan Communist Party (PCV) and the Movement of the Revolutionary Left (MIR) provoking leftist guerilla activity ... typical of Latin America in this decade ... by a group called the Armed Forces of National Liberation (FALN). In the short run at least, the FALN were counter-productive in that they made the AD appear centrist and thus allowed them to pick up support on the right. There were various military conspiracies, one coup attempt and at least one Presidential assassination attempt.
The AD carried out a land reform and distributed unproductive private and public lands to more than 166,000 persons. Unfortunately, it was not accompanied by loans or any other support and most of the new owners sold off their land quickly. OPEC was formed and Venezuelan Petroleum Corporation (CVP) was established to oversee the gradual nationalization of the oil industry while industry was protected from foreign competition, and even subsidized through the Venezuelan Development Corporation (CVF). Unionized labor was welcomed and money was allotted to social programs.
A glimpse of democracy
March 11, 1963 ... a milestone was reached in Venezuelan history. For the first time an elected President took office peacefully.
1970s
Rule was barely won by the more conservative COPEI (Christian Democratic Party) in 1970 largely due to a split in the AD party. Caldera promptly reopened relations with the Soviet Union and other European socialist countries as well as with some South American countries under military rule. He legalized the Communist Party, bestowed amnesty on the guerillas and continued carrying out many of the AD reforms. Tax on petro-companies reached 70% in 1971, and the Hydrocarbons Reversion Law was passed handing all oil companies back to the State when their concessions ran out. (These are the same people who today are crying about government intervention in the industry ... I guess it's only OK when they are in power).
1973 Presidential elections introduced the current Vice President, Jose Vincente Rangel ... then candidate of the Movement Toward Socialism (MAS) party which advocated socialist democracy and had split from the Moscow-line PCV. However, using populist campaigning techniques, AD candidate Carlos Andres Perez took the sash and the two-party dominance of AD and COPEI was codified.
International oil prices had set the nation on a giant spending spree ... wages were increased, price controls were instated, imports were subsidized and $350 million worth of farming loans were forgiven.
Iron ore was nationalized in 1973
In 1976, PDVSA was created to oversee the newly fully nationalized oil industry. The culture of "something for nothing," that has plagued Venezuela ever since, was born. Oil would pay for everything, and the government was the paternal, benevolent disperser of abundant riches ... everyone scrambled to get more than their share of the money and corruption abounded.
Venezuela was taking in so much money from oil revenues that it started granting international loans to oil-importing Latin American countries through the Venezuelan Investment Fund (FIV). It also loaned out money through the Inter-American Development Bank (IADB). Venezuela took the lead role among Latin American countries and promoted southern hemispheric independence from US hegemony. This, along with tensions concerning the OPEC oil embargo, the Panama canal, the US involvement in Salvador Allende's overthrow in Chile tainted Venezuela's relationship with the United States.
In 1976, however, oil revenues leveled-off and began to decline in 1978. Careless spending, capital flight, incompetence, graft and corruption quickly put the nation in debt. Perez had in his 5-year term spent more money in real terms than all the other governments to date combined! Voters decided by a slim margin to switch back to COPEI.
1980s collapse
Oil prices recovered considerably in 1980. President Herrera lifted price controls and raised wages and inflation rose too. The new boss, just like the old boss, spent like mad. Between 1979 and 1982 he managed to rack up a $8 billion deficit. Real GDP declined from the past 4 year's average of 6.1% to 1.2% between 1979 and 1983. Unemployment was plus or minus 20% throughout the 80s.
Oil prices settled lower again in 1981 and the country was in debt some $32 billion by 1983. A frenzy of capital flight occurred in anticipation of the impending devaluation of the Bolivar.
PDVSA leadership was politicized and billions of dollars of its reserves were expropriated to pay a bit of the debt ... price controls were again set.
The labor union (CTV) mounted various strikes bringing a mid-80s total of $2.2 million work hours lost since 1960. In 1983 the nation was handed back to AD in shambles and it continued to deteriorate.
In 1989 Perez was reelected at the height of discontent ... he immediately began inflicting an IMF-sponsored neo-liberal program (El Paquete) on the country. Privatization of State-owned industry, elimination of subsidies, devaluation of the currency hit the public hard and they screamed out in protest in the form of labor strikes, student strikes, and violent urban riots.
El Caracazo
A gas price hike was the last straw, and on 27 February, 1989, Caracas and other Venezuelan cities erupted. Spontaneously, the masses struck out against bus drivers who had unfairly raised their fares and shop clerks who were hoarding subsidized inventory for later sales. Joining them for 5 days of chaos were the destitute from the slums in the hills that surround Caracas who converged on the valley city looting stores, breaking windows, stealing cars, and generally wreaking havoc.
- The uprising was finally ended by a vicious massacre of some 2000 persons by the police and military.
1990s
The tone had been set for the next decade. The streets of the capital had become the arena for social discourse. Not only were there demonstrations, protests, and strikes by every imaginable organized group at one time or another, but also different factions of the State, such as the police and military cells began airing their grievances publicly. This practice continues today.
February 4, 1992 (then) Lieutenant Colonel Hugo Chavez Frias led an unsuccessful coup attempt. He was captured and incarcerated. But first he was allowed to address the nation on the television. During his address he admitted defeat "por ahora" (for now) and this statement became the mantra of the movement that would eventually sweep him into the Presidency.
Public displays of discontent became the norm. Choruses of banging of pots and pans out of windows were heard regularly. Violence often sprang out of protests. An attempt was made on President Carlos Andres Perez' life and the Bolivar and the Venezuelan stock market plummeted. In November there was another failed coup attempt and in December COPEI gained several governorships.
Mid-1993 Perez was accused by Congress of corruption and impeached. New elections were held in December. 40% abstained from voting and Rafael Caldera took the sash as an independent, breaking the two-party stranglehold. Caldera formed a following named Convergencia which included MAS (Movement Toward Socialism) together with La Causa R. These two peripheral leftist parties took in more votes than the two traditional parties AD and COPEI.
Chavez was released from prison in March 1994.
Because Congress was still held by the old parties, there was a stalemate and little change occurred in the next 5 years. La Causa R split with its larger faction becoming PPT which fully backed Chavez in 1998. (And still does)
At first loathsome of participating in the electoral process ... which Chavez considered to be a corrupt charade at the time... by 1997, he began to warm to the idea of running for office. He launched the transformation of his MBR200 Bolivarian Revolutionary Movement into a political organization.
By July 1998, he had formed an official political organization which he named MVR, Movimiento Quinta Republica, or Fifth Republic Movement which incorporated PPT and La Causa R, many smaller parties, and his own followers ... he was at this time receiving 45% of the votes in the polls.
Why MVR? Venezuela had had 4 Republics in its history. Two formed in 1811 and 1813 during the wars of independence, the third encompassed Gran Columbia in 1819 and the fourth was founded after the breakup in 1830.
- Chavez describes the 4th Republic as being built by a class of oligarchs and bankers, on the bones of Bolivar and Sucre.
Chavez clearly felt the need for a new beginning. The MVR declaration states:
"Its Mission is to secure the well-being of the national community, to satisfy the individual and collective aspirations of the Venezuelan people, and to guarantee a state of optimum prosperity for the fatherland."
AD and COPEI scrambled to pick up candidates and promptly drop them and choose another when the polls showed little hope of their success. In the end they both backed the same candidate who brought in 39% of the vote among 4 candidates. Chavez walked away with a cool 56%.
February 2, 1999: Chavez was sworn in as the President of Venezuela.
His first Presidential address announced a national referendum would ask the people if the Constitution should be re-written for the 26th time. In April, 88% of voters answered a resounding YES. Elections were held for a Constituent Assembly in July. 119 out of 131 seats were won by Chavez supporters receiving a collective total of 91% of the vote.
The new constitution was approved by 71% of voters on 15 December:
- It radically restructured the judicial system to one much like that of the United States.
- It created a unicameral National Assembly.
- It bestowed rights on indigenous peoples.
The Constitution also changed the name of the country to: La Republica Bolivariana de Venezuela
Hugo Chavez Frias was to become the first elected President of the new Republic and of the new millennium. Along with candidates for the new National Assembly, he subjected himself to the polls after little more than a year in office to be sure the public had stayed with him through the profound new changes.
They had.
The above is a summary of information found in the following publications:
Inside South America John Gunther 1967 (amazon.com) Venezuela a country study Richard A. Haggarty, 1993. (amazon.com) The Street is My Home Patricia C. Marquez, 1999 (amazon.com) In the Shadow of the Liberator Richard Gott 2000 (amazon.com) Reinventing Legitimacy Eds. Damarys Canache & Michael R Kulisheck 1998 (amazon.com)