History of Venezuela

At the time of Spanish discovery, the indigenous in Venezuela were mainly agriculturists and hunters living in groups along the coast, the Andean mountain range, and the Orinoco River. The first permanent Spanish settlement in South America—Nuevo Toledo—was established in Venezuela in 1522. Venezuela was a relatively neglected colony in the 1500s and 1600s as the Spaniards focused on extracting gold and silver from other areas of the Americas.

Toward the end of the 18th century, the Venezuelans began to grow restive under colonial control. In 1821, after several unsuccessful uprisings, the country succeeded in achieving independence from Spain, under the leadership of its most famous son, Simon Bolivar. Venezuela, along with what are now Colombia, Panama, and Ecuador, was part of the Republic of Gran Colombia until 1830, when Venezuela separated and became a separate sovereign country.

Much of Venezuela's 19th century history was characterized by periods of political instability, dictatorial rule, and revolutionary turbulence. The first half of the 20th century was marked by periods of authoritarianism—including dictatorships from 1908–35 and from 1950-58. In addition, the Venezuelan economy shifted after the first World War from a primarily agricultural orientation to an economy centered on petroleum production and export.

Since the overthrow of Gen. Marcos Perez Jimenez in 1958 and the military's withdrawal from direct involvement in national politics, Venezuela has enjoyed an unbroken tradition of civilian democratic rule. This earned Venezuela a reputation as one of the more stable democracies in Latin America. Until the 1998 elections, the Democratic Action (AD) and the Christian Democratic (COPEI) parties dominated the political environment at both the state and federal level.

The Caracazo And Popular Dissatisfaction

Venezuela's prevailing political calm came to an end in 1989, when Venezuela experienced riots in which more than 200 people were killed in Caracas. The so-called Caracazo was a response to an economic austerity program launched by then-President Carlos Andres Perez. Three years later, in February 1992, a group of army lieutenant colonels led by future President Hugo Chavez mounted an unsuccessful coup attempt, claiming that the events of 1989 showed that the political system no longer served the interests of the people. A second, equally unsuccessful coup attempt by other officers followed in November 1992. A year later, Congress impeached Perez on corruption charges.

Deep popular dissatisfaction with the traditional political parties, income disparities, and economic difficulties were some of the major frustrations expressed by Venezuelans following Perez's impeachment. In December 1998, Hugo Chavez Frias won the presidency on a campaign for broad reform, constitutional change, and a crackdown on corruption.

Constitutional Reforms

Hugo Chávez

Current President Hugo Chávez was elected in 1998 on a platform that called for the creation of a National Constituent Assembly in order to write a new constitution for Venezuela. Chavez's argument that the existing political system had become isolated from the people won broad acceptance, particularly among Venezuela's poorest classes, who had seen a significant decline in their living standards over the previous decade and a half. The National Constituent Assembly (ANC), consisting of 131 elected individuals, convened in August 1999 to begin rewriting the Constitution. In free elections, voters gave all but six seats to persons associated with the Chavez movement. Venezuelans approved the ANC's draft in a national referendum on December 15, 1999.

Political Turmoil

In July 2000, following a long and controversial process, voters re-elected President Hugo Chavez of the Fifth Republic Movement (MVR) in generally free and fair national and local elections. The MVR and pro-Chavez Movimiento a Socialismo (MAS) party won 92 seats in the 165-member legislature. Subsequent party splits reduced the pro-Chavez members to 84 seats. In April 2002, the country experienced a temporary alteration of constitutional order. When an estimated 400,000 to 600,000 persons participated in a march in downtown Caracas to demand President Chavez' resignation, gunfire broke out, resulting in as many as 18 deaths and more than 100 injuries on both sides. Military officers took President Chavez into custody, and business leader Pedro Carmona swore himself in as interim President. On April 14, military troops loyal to Chavez returned him to power. A national reconciliation process, with participation by the Organization of American States, the UN Development Program, and the Carter Center, was unsuccessful in stopping further conflict. Opposition leaders called a national work stoppage on December 2, 2002. Strikers protested the government and called for the resignation of President Chavez. The oil sector joined other sectors of the economy and effectively shut down all economic activity for a month. The OAS Permanent Council passed Resolution 833 on December 16, 2002, calling for a "constitutional, democratic, peaceful, and electoral solution" to the crisis in Venezuela. The strike formally ended in February 2003 as political opponents of Chavez sought a recall referendum to revoke the mandate of the president.

The Referendum Process

In September 2003, after an impasse in the National Assembly, the Supreme Court named a new board of directors for the National Electoral Council (CNE). After months of intense deliberations that included two conflicting signature drives overseen by the CNE, political riots over the government's disqualification of questionable signatures, and the intervention of international electoral observers, the CNE certified the opposition's results and set the date of the recall referendum for August 15, 2004. According to the CNE, President Chavez won 59% of the vote. His opponents immediately contested that the results of the referendum were marked by electoral fraud. However, international electoral observation missions carried out by the Organization of American States and the Carter Center found no indication of systemic fraud.

Smartmatic affiliations with government politicians raised suspicions, with instances of an interior vice minister, Morris Loyo Arnáez, being hired to lobby for Smartmatic contracts and with the company paying for the National Electoral Council (CNE) president Jorge Rodríguez Jorge Rodríguez and his sister Delcy Rodríguez to stay at the Boca Raton Resort & Club in Boca Raton, Florida. Vice Minister Loyo was paid $1.5 million by Smartmatic as a "sales commission" and his continual payments with the company eventually doubled.

A lawyer who had worked with Rodríguez, Moisés Maiónica, was allegedly employed by Smartmatic in order to provide legal and financial assistance to help with its selection for its 2004 elections. Years after the election in December 2008, Maiónica pled guilty in the United States District Court for attempting to cover up the Suitcase scandal (Maletinazo scandal), an incident where Hugo Chávez attempted to finance Cristina Kirchner's 2007 Argentine Presidential Election campaign to influence Argentina's presidential election, with Maiónica stating that he was working for Venezuela's spy agency, the National Directorate of Intelligence and Prevention Services.<

After the presidential recall referendum of 2004, a controversy was raised about the use of electronic voting (SAES voting machines). Studies following the 2004 Venezuela recall elections found that Smartmatic's network was "bi-directional" with data being able to be transferred both ways between Smartmatic devices and the telecommunications company CANTV, with alleged irregularities found between the Smartmatic and Venezuela's National Electoral Council election results. Other independent election monitors claimed electoral fraud and submitted appeals, and statistical evaluations including a peer-reviewed article in 2006 and a special section of 6-peer-reviewed article in 2011 concluded that it was likely that electronic election fraud had been committed.

From Referendum To Elections

In the wake of the referendum victory, Pro-Chávez candidates continued to sweep other electoral contests. Chávez supporters won 20 out of the total 22 state governor positions up for election in October 2004 (there are currently two opposition governors). Chavez supporters also won a majority of the seats in the August 2005 municipal council (parroquias) elections. Pro-Chávez parties won all 167 seats in the December 2005 National Assembly elections, after most opposition candidates withdrew one week before the elections over voter secrecy concerns. The final reports of the EU and OAS observer missions to the 2005 legislative elections, which were marked by record-high abstention, noted high levels of distrust in electoral institutions. The reports made specific recommendations to increase transparency and help voters regain the confidence necessary for participation. Most of the recommendations were not implemented. As a signatory of the Inter-American Democratic Charter, Venezuela has an obligation to hold "periodic, free, and fair elections based on secret balloting and universal suffrage."

Prior to the 2005 Venezuela parliamentary election, one technician could work around "the machine's allegedly random storage protocols" and remove voting secrecy. Since the voting systems were Windows based and only randomized data, the technician was able to download a simple software that could place Windows files in order. Following this revelation, voter turnout dropped substantially with only 25% of registered Venezuelans voting and opposition parties withdrawing from the election. This resulted in Hugo Chávez's party, as well as his allied parties, to control 100% of Venezuela's National Assembly.

A New Term and New Administration

Manuel Rosales.

President Chávez was re-elected by an overwhelming majority (63%) in the December 3, 2006, presidential elections. He defeated Zulia Governor Manuel Rosales, whose Un Nuevo Tiempo (UNT) party formed an alliance with several key opposition parties. Though international observers found no evidence of fraud on election day, they did note concerns over abuse of government resources used to support the Chávez campaign, voter intimidation tactics, and manipulation of the electoral registry.

In January 2007, President Chávez named a new Vice President (the former head of the CNE) and cabinet, drawing largely from deputies of the National Assembly. Chávez announced a renewed effort to implement his vision of "21st Century Socialism" in Venezuela. He asked the National Assembly to grant him special constitutional powers via an "enabling law" to rule by decree over a broad range of society and subsequently received those powers for a term of 18 months. He also took major steps to nationalize the telecommunications and electricity sectors, as well as to finalize a majority government share in many oil projects, all sectors with significant foreign investments.

Constitutional referendum 2007

On August 15, President Chávez proposed a package of 33 articles to reform the 1999 Constitution. On 11 September the National Assembly enlarged a number of amendments with other 36 articles, increasing in 69 the number of articles to be voted in the referendum. Finally, the National Assembly passed the reform on 2 November.

The proposals were divided into two blocks: block "A" and block "B". Some of the amendments are:

• Indefinite presidential re-election.
• The presidential term will be increased from six to seven years.
• Five types of property are proposed: public, social, collective, mixed, and private property. The Venezuelan State is to govern four of these new five types of property, as it intends to play a role as owner, partner, and financier.
• Creation of federal territories ruled by vice presidents. The heads of federal territories will be appointed by the President of Venezuela.
• Autonomy of the central bank will be concluded.
• The international reserves will be managed by the president.
• Reduction of the maximum working week from 44 to 36 hours.
• Reduction of voting age from 18 to 16 years.
• Benefits of social security will be expanded to workers of the informal economy.

The constitutional reform was rejected by the opposition to considered it as an attempt of President Chávez to rule the country indefinitely and to create a socialist economy. Marches against the reform were done in many parts of Venezuela. A major role in the protests was played by university students. Some supporters of Mr. Chávez such as the allied party PODEMOS, Raúl Baduel (his ex- Defense Minister) and Marisabel Rodríguez (his ex-wife) rejected the reform and called the electors to vote against the reform.

On 2 December 50% of electors voted against the constitutional reform while 49% of electors voted in favor. The reform was rejected in seven important Venezuelan states, based on the number of voters, namely Zulia, Miranda, Carabobo, Lara, Anzoátegui, and the Capital District (Caracas). It is the first time since Chávez won power in 1998 that the current government lost at the polls.

Abstention, which was more than 44%, is considered an important factor of the government defeat. It is thought many supporters of Chávez refrained from voting because they were not in agreement with the reform.

President Chávez recognized the results, but he announced to the nation that another referendum to modify the constitution will be proposed again in the future. The previous statement was said by the Venezuelan president again on December 5. The National Assembly decided to join the presidential efforts to keep the proposal alive.

Foreign Relations

Chavez and Ahmadineyad.

President Chávez promoted his "Bolivarian Revolution" as a model for other countries to follow. The policy calls for the establishment of a "multi-polar" world devoid of U.S. influence and for greater integration among developing countries. Venezuela is currently advocating regional integration through its PetroCaribe and PetroSur petroleum initiatives, the creation of a South American Community of Nations, and the establishment of the Bolivarian Alternative for the Americas (a social integration project proposed by President Chavez as an alternative to the Free Trade Area of the Americas). In April 2006, President Chávez announced he was withdrawing Venezuela from the Andean Community trade bloc. In July 2006, Venezuela officially joined the Southern Common Market, MERCOSUR. Before it can become a full member of MERCOSUR, Venezuela must conform to the trade bloc's economic regulations. Congressional approval by Brazil and Paraguay is also still outstanding. The Venezuelan Government maintains very close relations with Cuba and advocates an end to Cuba's isolation.

Since 2005, President Chávez deepened relations with Iran, a state sponsor of terrorism, by signing multiple economic and social accords and publicly supporting Iran's controversial nuclear program. President Chávez also reached out to the anti-American and anti-West regimes of North Korea, Belarus and Syria. The Venezuelans have also embarked on a worldwide effort to increase their presence in embassies overseas in Africa and Asia.

President Chávez also launched a major renovation of the Venezuelan Armed Forces by purchasing new advanced weaponry. In 2005-06, Venezuela purchased 100,000 AK-103 rifles from Russia and signed an agreement to construct a rifle and ammunition complex. Venezuela has also purchased dozens of Russian attack and transport helicopters, and began receiving 24 Russian Sukhoi Su-30MK 2-seat fighters. Venezuela has longstanding border disputes with Colombia-aggravated most recently by the capture of a Colombian insurgent leader inside Venezuela—and Guyana, but seeks in general to resolve them peacefully. Bilateral commissions have been established by Venezuela and Colombia to address a range of pending issues, including resolution of the maritime boundary in the Gulf of Venezuela. Relations with Guyana are complicated by Venezuela's claim to roughly three-quarters of Guyana's territory. Since 1987, the two countries have held exchanges on the boundary under the "good offices" of the United Nations.

Relations with the United States

Hugo Chávez on USS Yorktown, 2002.

U.S.-Venezuelan relations have been tense in recent years. President Hugo Chávez continuously defined himself in opposition to the United States, using inflammatory rhetoric to insult President George W. Bush and senior administration officials. For example, in his September 2006 speech to the UN General Assembly, President Chávez called President Bush "the Devil" and other offensive names. The United States continued to seek constructive engagement with the Venezuelan Government, focusing on areas of technical cooperation. Major U.S. interests in Venezuela include promotion of U.S. exports and protection of U.S. investment, preservation of Venezuela's government, closer counter-narcotics cooperation, more vigorous efforts on counterterrorism, and continued access to petroleum imports from Venezuala.

U.S.-Venezuelan commercial ties are deep. As of 2006 the United States was Venezuela's most important trading partner, representing about a third of imports and approximately 60 percent of Venezuelan exports. In turn, Venezuela is the United States' third-largest export market in Latin America, purchasing U.S. machinery, transportation equipment, agricultural commodities, and auto parts. Venezuela's opening of its petroleum sector to foreign investment in 1996 created extensive trade and investment opportunities for U.S. companies. As a result, Venezuela became one of the top four suppliers of foreign oil to the United States. The US Department of State is committed to promoting the interests of U.S. companies in overseas markets.

Venezuela is a minor source country for opium poppy and coca but a major transit country for cocaine and heroin. Money laundering and judicial corruption are major concerns. In 2004 and early 2005, counternarcotics cooperation between the U.S. and Venezuela deteriorated significantly. In March 2005, the Venezuelan National Guard removed its highly experienced members from the U.S.-supported Prosecutor's Drug Task Force. In August 2005, the Government of Venezuela accused the U.S. Drug Enforcement Administration (DEA) of espionage and terminated cooperation with the DEA pending negotiation of a new cooperation agreement, which was unsigned as of October 2006. President George W. Bush decertified Venezuela on counternarcotics cooperation in 2005, 2006, and 2007.

In June 2006, Venezuela was listed at Tier 3 status in the State Department's Report on Trafficking in Persons. Tier 3 status indicates a perceived lack of effort to combat human trafficking.

In May 2006, Secretary of State Condoleezza Rice certified that Venezuela was not fully cooperating with U.S. counter-terrorism efforts. As of October 1, 2006, the United States Government prohibited arms sales and services to Venezuela.

Approximately 23,000 U.S. citizens living in Venezuela have registered with the U.S. embassy, an estimated three-quarters of them residing in the Caracas area. An estimated 12,000 U.S. tourists visit Venezuela annually. About 500 U.S. companies are represented in the country.

Human Rights issues

Situation under Chavez

Venezuelans under Chavez have suffered a loss of basic human rights.

Chavez has shown a marked intolerance for fundamental human rights and is accused of funding insurgent activity outside of Venezuela's borders. Chavez has much control of oil revenues from Venezuela's state owned, state run oil monopoly. While Chavez in public criticizes capitalism, he has sought to manipulate oil prices above $60 per barrel for Venezuela's largest customer, the United States.

The U.S. State Department's Report on Global Antisemitism also recently cited Venezuela for statements by "senior government officials supporting Iraq's Saddam Hussein and Islamic extremist movements" which "raised tensions and intimidated the country's Jewish community. There were several reports of anti-Semitic graffiti at synagogues in Caracas and two reported threatening phone calls made to Jewish community centers. In August, President Chavez cautioned citizens against following the lead of Jewish citizens in the effort to overturn his referendum victory. Anti-Semitic leaflets also were available to the public in an Interior and Justice Ministry office waiting room."

Economy

Puerto Ayacucho, Amazonas.

Real GDP increased by 10.3% in 2006. The economy recovered strongly in 2004 (17.9%) and 2005 (9.3%) after two consecutive years of deep economic recession (in 2003, Venezuelan GDP contracted 7.7%, after contracting 8.9% in 2002). The economic recovery has been driven by a large increase in government expenditures, based on an oil windfall, which in turn generated higher consumption levels.

The Consumer Price Index increase was approximately 17% at the end of 2006, following increases of 14.4% in 2006 and 19.2% in 2004.

As of January 23, 2003, all foreign exchange requests must be approved by the National Exchange Control Administration (CADIVI) and the Central Bank (BCV) completes all legal purchase and sale of foreign currency. The current exchange control regime rates for U.S. dollar exchange rate are: Bs. 2,144.60=U.S. $1.00 for purchase operations, and Bs. 2,150=U.S. $1.00 for sale operations. The national budget for 2007 assumes that the government will not devalue this year. Nonetheless, some local economists expect devaluation in late 2007 due to the increasing disparity between official and parallel market rates.

Central Bank-held international reserves increased to over U.S. $36 billion at the end of 2006. The reserves would have been higher, but the BCV transferred $6 billion to the National Development Fund (FONDEN) during the last quarter 2005, as directed by the Central Bank Law (July 2005) and an additional $4.3 billion in 2006. The level of international reserves is expected to decrease during 2007 after additional transfers of foreign reserves to FONDEN and because the Central Bank Law established that state-owned oil company PDVSA will only transfer the foreign exchange earnings needed for its domestic expenses, taxes, royalties, and dividends to the BCV, and would transfer the rest to FONDEN.

Canaima

Venezuelan sovereign debt, both domestic and foreign, has decreased in recent years in both absolute terms and as a percentage of GDP. Venezuela's external debt/GDP ratio of approximately 16% is low by Latin American standards. Venezuela's Emerging Markets Bond Index investment risk rating, at 202 basis points, dropped somewhat over 2005, but remained higher than many in the region.

There is considerable income inequality. The Gini coefficient was 0.45 during 2006. According to government statistics, the percentages of poor and extremely poor among Venezuelan population were 33.9% and 23.2%, respectively, in 2006. These high ratios are due primarily to lower real wages earned by employees, and high rates of un- and underemployment. On the other hand, the government of Hugo Chavez increased social spending and subsidised food and education. Under Chavez, the poverty rate also decreased from 55.1 percent in 2003 to 30.4 percent in 2006.

Starting January 1, 2008 Venezuela will adopt the "Bolívar Fuerte" as its new currency. The new Bolívar eliminates the three zeros of the older currency. For example, 50,000 Bolívars are equal to 50 Bolívar Fuertes.

Although economic growth has been impressive, as a result of the oil windfall, many in the Venezuelan business community remain very concerned about President Chavez' vision for 21st Century Socialism and what it portends for the private sector.

Decent into chaos, instability, and a military state

Nicolás Maduro.

By 2017, Venezuela was in serious economic and political chaos, having become a virtual military state and becoming a humanitarian disaster. Massive hyperinflation was present in the country. Many non-Venezuelan liberals had praised the nation's slide into this poor state. However, many of the "opposition" did not want to truly end the socialist policies. Venezuela's May 2018 presidential election was derided by many countries as a sham and an illustration of its descent into authoritarianism. In August 2018, the government announced it would deal with its hyperinflation simply by dropping zeros off its currency. In 2018, 40% of all Venezuelan businesses closed after Maduro imposed a massive minimum wage increase. Long lines existed for everything, even to get a passport to leave the country. The country saw nationwide power outages. Several Venezuelans warned the United States not to adopt socialism.

Venezuela's government continued to receive support from Russia and China. Additionally, Cuba's Communist regime helped Venezuela adopt left-wing authoritarian policies.

][María Corina Machado

, the main Conservative leader of Venezuela.]]

Maduro won re-election in 2018, despite banning major opposition parties from participating in the election and despite record low turnout and serious voter fraud allegations. He started his second term despite the fact that about 60 countries did not recognize the election results. Venezuela's parliament, now controlled by the opposition, attempted to remove Maduro from office. On January 23, 2019, opposition leader Juan Guaidó, a socialist, declared himself Venezuela's interim president and was recognized by several countries.

Many experts and technicians fled the country. During electrical blackouts in 2019, which the government was incapable of restoring due to a lack of skilled personnel, Social Justice Warriors began looting shops, stores, and malls. Despite Venezuela's guarantee of healthcare as a right, people contracted E. coli bacteria from contaminated water with no technicians to treat the water and a lack of medical personnel to treat the victims.

The situation in Venezuela demonstrated the importance of an armed citizenry – its population was disarmed and thus unable to free itself from Maduro's grip. Maduro used violent means to keep control of Venezuela. According to the Venezuelan Prison Observatory in 2019, over 7,000 Venezuelans died in the country's prisons since 1999.

Economists argued that Venezuela's economic collapse surpassed even those of the USSR and Zimbabwe, making it the worst economic collapse not due to warfare. Even Venezuela's own central bank admitted the country experienced an economic meltdown under the Maduro regime. The country faced severe blackouts. People resorted to using cigarettes as currency. Maduro was forced to resort to using the currency of his main enemy – the United States – to keep Venezuela's economy from completely dissolving.

Venezuela's government sheltered Colombia's Marxist National Liberation Army.

In July 2023, Machado was banned from holding public office for 15 years. After her replacement candidate Corina Yoris was also denied registration to run, Edmundo González now stands as the joint candidate of the opposition alliance Mesa de la Unidad Democrática, who is also supported by Machado. If she had been able to take part in the elections under regular conditions, she would have been certain to win according to various polls.

Machado supports Edmundo González candidacy for President in 2024 after she was banned.