Latin America Lecture 16 Venezuela

30 terms by jeskauf 

Ready to study?
Start with Flashcards

Create a new folder

Advertisement Upgrade to remove ads

Dutch Disease

-strong international demand for commodity
-national profits boom with soaring int'l prices
-Exchange rate becomes overvalued in good times
-Erodes competitiveness of manufacturing sector
-symptom of resource curse

The Resource Curse

-Countries with abundant natural resources often have slower economic growth and lackluster development than countries with fewer natural resources

Rentier State

-created by resource curse
-gov't mismanage resources amid institutional weakness because citizens are often taxed less and the gov't is therefore less responsible to their needs and interests.
-patronage, rent-seeking, and corruption

Venezuela Case Study

-interesting in how it has differed from rest of LA
-LA has suffered from an over dependence on commodity resources, Venezuela is unique in dependence on oil
-during 1960s and 70s robust democracy among dictators, since '98 has been the poster child for the decline in liberal democracy

Colonial History

-relatively unimportant part of New Granada viceroyalty throughout most of the colonial era
-Caracas became more important city near end of colonial era

Independence: First Bolivarian Revolution

-despite unimportance as a colony, Venezuela very important part of the empire in struggle for independence: Birthplace and launching point for Bolivar
-Along with Argentina, among first centers of open revolt: independence in 1811, overthrown by Spanish in 1813

Independence contd

-emerged from wars as part of Gran Colombia along with Colombia and Ecuador
-Venezuela broke away in 1829

Caudillismo

-century that followed independence saw unending stream of strongmen rise to power
-occasional elections and many presidents, only a few men controlled the levers of power in Venezuela until 1950s

Pre Oil Economy

-After independence the economy shifted from cacao production toward coffee
-Coffee production expanded significantly under Paez
-Volatile world prices left many landowners in serious debt and resulted in economic and political instability

Punto Fijo Democracy

-established a power sharing arrangement that allowed a stable and relatively representative democracy to form after 1959
-Set up a system that kept military appeased and out of politics while creating a spoils system among competing political parties

Oil Economy

-discovered in early 1900s, first concessions in 1914
-decline in agriculture, shift of population to cities
-initially was a means for dictators to further enrich and empower themselves

Punto Fijo system and resource curse

-system went from three to two political parties, COPEI and Accion Democratica
-elections were fair and free, system functioned largely on lavishing of oil money across the country: small minority actually had access to power

Oil in the Punto Fijo System

-Romulo Betancourt's gov't one of the drivers of the foundation of OPEC in 1960
-Increased state involvement in oil sector post-war
-established state run corporation to deal with foreign firms in the sector

The Oil Boom

-during the 70s oil prices were high, system functioned very well: Venezuela avoided authoritarian wave and people enjoyed high standard of living
-Perez presidency marked the high point of this system: economic plan "Gran Venezuela" heavy state spending to foster rapid development

Puntofijismo Breaks Down

-early 80s Venezuelan economy entered period of prolonged malaise
-low oil prices combined with debt crisis abruptly ended boom
-WIthout oil revenues, patronage system could not be funded
-real income and investment declined throughout 80s, poverty soared

Punifijismo break down contd

-Perez suddenly implemented austerity measures and neoliberal reforms shortly after 89 reelection, riots broke out
-Caracazo ended with hundreds of protesters killed by military, and regime's legitimacy damaged
-decline further highlighted by series of coup attempts in 1992, the first led by Chavez

Puntifijismo Break Down Contd

-Though Perez's economic plan did succeed in restoring economic growth, it was though to only benefit the wealthy
-Perez forced to resign amid corruption investigation in 93

The Last Gasp

-Rafael Caldera, one of the signers of the Punto Fijo pact, elected president in 94 as an independent: inherited a series of financial crisis
-The persistently bad economy grew worse and inflation became an issue for the first time
-Despite Caldera running on a platform opposed to the IMF, he eventually implements many of their prescribed policies

Revolution Begins

-In 1998 elections Chavez reenters political scene as presidential candidate: wins 56% of the vote
-Immediately convened a constituent assembly to draft a new constitution: strengthened executive, allowed reelection, created unicameral legislature

Bolivarian Revolution

-very popular among some groups, Chavez deeply unpopular among others
-in 2002, opposition march was met with gunfire from still unknown sources: military seized control for two days before protests brought Chavez back to power, US appeared briefly to back the coup

The Bolivarian Revolution contd

-massive strike of PdVSA workers in 2003 brought economy to a standstill and nearly toppled gov't
-Chavez survives recall election in 2004, wins reelection in 2006 with 63% support

Socialism for the 21st century

-following the victory, Chavez radicalized his domestic and int'l agenda
-State involvement in economy through nationalizations increased dramatically
-Becomes even bigger opponent to US

Illiberal or Participatory Democracy?

-Chavez claims that Venezuela now has more participatory and representative democracy
-power has essentially been concentrated to executive, judicial and legislative independence non-existent

Illiberal or Participatory Democracy? Contd 1

- Constitution written by Chavez supported in 1999 often disregarded
-Numerous opposition media outlets have had licenses revoked
- the "rancid oligarchy" that Chavez sought to replace, has simply been replaced by new elite of gov't loyalists

Illiberal or Participatory Democracy? Contd 2

-constitutional amendment package was narrowly rejected in 2007: would have enabled unlimited reelection
-reelection ban and most of the other amendments were eventually passed in different forms

Oil: Lifeblood of Socialism

-Chavez has been the beneficiary of record high oil prices during a large part of his presidency
-Oil revenues have allowed the state to expand public spending hugely on social programs

Oil and Chavismo

-Oil has also provided Chavez with the spending power to have influence abroad: programs such as PetroCaribe sold discounted oil to Central American and Caribbean countries under special financing terms
-Gave Chavez a degree of leeway in the region to openly confront US as well as engage with controversial figures worldwide

Oil and Chavismo Contd

-While oil has greatly benefitted Chavez, the gov't and economy are now more dependent upon it as ever
-Nationalizations have brought private investment to a standstill, gov't investment often fail to spend as intended

Conclusions

- since the beginning of the 20th century Venezuela has been different than the overall trend in LA
-Oil changed economic and political trajectory of the country
-in the 21st century has been a country moving away from market reforms and liberal democracy, even as they gain traction in most other countries

Looking Forward

-Chavez and his program less popular than at any point since 1998
-in nationwide elections for the national assembly in 2010, PSUV, the official party won only 48% of the vote
-Chavez diagnosed and treated for cancer throughout second half of 2011

Please allow access to your computer’s microphone to use Voice Recording.

Having trouble? Click here for help.

We can’t access your microphone!

Click the icon above to update your browser permissions above and try again

Example:

Reload the page to try again!

Reload

Press Cmd-0 to reset your zoom

Press Ctrl-0 to reset your zoom

It looks like your browser might be zoomed in or out. Your browser needs to be zoomed to a normal size to record audio.

Please upgrade Flash or install Chrome
to use Voice Recording.

For more help, see our troubleshooting page.

Your microphone is muted

For help fixing this issue, see this FAQ.

Star this term

You can study starred terms together

NEW! Voice Recording

Create Set