Venezuela

Venezuela was one of three countries that emerged from the collapse of Gran Colombia in 1830 (the others being Ecuador and New Granada, which became Colombia). For most of the first half of the 20th century, Venezuela was ruled by generally benevolent military strongmen, who promoted the oil industry and allowed for some social reforms. Democratically elected governments have held sway since 1959. Hugo CHAVEZ, president since 1999, seeks to implement his "21st Century Socialism," which purports to alleviate social ills while at the same time attacking capitalist globalization and existing democratic institutions. Current concerns include: a weakening of democratic institutions, political polarization, a politicized military, drug-related violence along the Colombian border, increasing internal drug consumption, overdependence on the petroleum industry with its price fluctuations, and irresponsible mining operations that are endangering the rain forest and indigenous peoples.

Price controls

A January 10, 2006, BBC article reported that since 2003, President Hugo Chavez has been setting price ceilings on food, and that these price ceilings have caused shortages and hoarding. The military was ordered to keep people from smuggling across scarce, price-controlled items like milk and seized about 750 tons of food and 9,000 gallons of fuel. Venezuelan farmers who attempt to smuggle milk or other foods into Colombia seeking a higher profit could have their properties expropriated by the state.

In April, 2008, Chavez ordered the nationalization of the cement industry in response to the industry exporting its products to receive higher prices outside the country.

In February, 2009 Chavez ordered the military to temporarily seize control of all the rice processing plants in the country. He accused some firms of overcharging by refusing to produce rice at prices set by the government.

By 2009, a country that has claimed the world’s biggest oil reserves and is home to its fourth-mightiest river, the Orinoco, has been forced to ration both water and electricity. What has been declared the government’s failure to plan, maintain and invest in the necessary infrastructure, was in 2007 compounded by nationalising what remained of the private power industry. While there have been several national blackouts, the demand for electricity has grown by an annual average of 4.5%. The thermal plants cannot be used to take up the slack. They have been neglected. Meanwhile, the utility rates have been frozen for most of Mr Chávez’s time in office.

In October, 2010, president Hugo Chavez signed a decree to expropriate a leading farm-supply business, promising to bring down prices of seeds and fertilizers as his government takes control. Also, the government planned to increase seizures of farmland deemed underused in order to aid small farmers. An additional 250,000 hectares (more than 600,000 acres) in the coming month should be seized.

Economical characteristics

• Currency: Bolívar fuerte (ISO code: VEF)
• Central bank discount rate: 33.5% (31 December 2008)
• Commercial banks lending rate: 22.37% (31 December 2008)
• Stock of money (M1): $78.09 billion (31 December 2008)
• Quasi money (with M1 makes M2): $10.69 billion (31 December 2008)

Statistics

Statistic / Year	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008
GDP (million USD)	97 974	117 148	122 910	92 890	83 529	112 452	145 513	184 509	228 071	314 150
Govt. debt (% of GDP)
Govt. revenue (% of GDP)	18.960	21.179	21.728	22.842	24.028	24.647	28.262
Govt. expenses (% of GDP)	19.973	21.639	24.083	23.322	25.155	24.707	25.066
Debt to revenue (years)

References

Note: statistical data was rounded. Different sources may use different methodologies for their estimates. Debt to revenue is calculated by dividing the two variables from their original ('unrounded') values. It represents how long it would a government take to repay its entire debt if it used its whole revenue for this purpose.

External links

• Venezuela on Wikipedia
• Central bank of Venezuela
• Country profile (pdf) from the Enterprise Studies page (part of the The World Bank Group)
• Studies from the Library of Congress (1986-1998)
• BBC country profile
• A Tale of Two Shortages by Doug French, September 2009, about the coffee industry
• Power cuts in Venezuela lead to traffic gloom, BBC, January 2010
• Devaluation Sparks Chaos in Caracas by John Lyons and Darcy Crowe, January 2010
• Venezuela's devaluation will cost some U.S. companies by Jessica Wohl, January 2010
• Devaluation ups stakes in Venezuela election year, Reuters, January 2010
• Chavez Devalues Bolivar 50%, First Time Since 2005 by Daniel Cancel, January 2010
• The Fine Print of Central Banking by Jonathan M. Finegold Catalan, May 2010
• Chavez pushes Venezuela into food war by Damien McElroy, June 2010