Economic policy of the Hugo Chávez administration

Edit links
Source: Wikipedia, the free encyclopedia.

The blue line represents annual rates whereas the red line represents trends of annual rates given throughout the period shown (sources: International Monetary Fund, World Bank and Central Intelligence Agency)

From his election in 1998 until his death in March 2013, the administration of the late

populist economic policies as part of his Bolivarian Revolution
.

In the early 2000s when oil prices soared and offered Chávez funds not seen since the beginning of Venezuela's economic collapse in the 1980s, Chávez's government became "semi-authoritarian and hyper-populist" and consolidated its power over the economy in order to gain control of large amounts of resources.[1][2] Domestically, Chávez used such oil funds for populist policies, creating the "Bolivarian missions", aimed at providing public services to improve economic, cultural and social conditions.[1]

As Chávez's successor Nicolás Maduro began to increase domestic spending after the oil price collapse, high inflation, currency controls, an unfriendly environment with private businesses, as well as the risk of default, prevented the entrance of stronger foreign currencies into Venezuela.[3] Previously, the Chávez government turned to China to fund its overspending on social programs.[3] Despite warnings near the beginning of Chávez's tenure in the early 2000s,[1] his government continuously overspent in social spending and did not save enough money for any future economic turmoil, which Venezuela faced shortly before and after his death.[2][4] Other industries suffered as a result of the over-reliance on oil, with the share of manufacturing in GDP dropping from 17.4% in 1998 when Chávez took office to 14.2% in 2012.[5] As a result of Chávez's overspending and policies such as price controls, there were shortages in Venezuela and the inflation rate grew to one of the highest in the world.[6][7][8]

Government policies

Petroleum and natural resources

See also: Energy policy of Venezuela
EIA[9]

Venezuela is a major producer of oil products, which remains the keystone of the Venezuelan economy. Under the Chávez government, crude oil production decreased from 3.12 million barrels a day when Chávez took office in 1999, to 2.95 million barrels a day in 2007,[10] whilst oil prices increased 660%. Stephen Randall, Director of the University of Calgary's Latin American Research Centre, points out that during Chávez's years in power Venezuela increased its dependency on oil exports to 95% (2012) from 80% when he took power in 1999.[11] Furthermore, before the financial crisis in 2008 Venezuelan oil was selling at $129/barrel. It then dropped to $43/bbl by March 2009. Instead of reining in spending Chavez responded to reduced revenues by introducing more exchange controls and continuing with nationalizations. A 2014 article by CNBC stated that under Chávez, oil production declined from 3.5 million barrels per day to 2.6 million barrels per day, though Venezuela only made a profit from 1.4 million barrels per day due to Venezuela giving large amounts of its oil away for free.[12] CNBC continued stating that though oil production decreased, public spending increased to over 50% of the GDP, spending more than received in oil profits which led to foreign loans that amounted to over $106 billion as of 2012.[12] Foreign investment flows by the end of his presidency in 2013 were half what they had been in 1999.[11]

On 13 November 2001, under an

Petróleos de Venezuela S.A. (PDVSA), could have joint control with private companies over industry.[13][non-primary source needed
]

Chávez used PDVSA funds to support political projects. Chávez also explored the liquidation of some or all of the assets belonging to PDVSA's US-based subsidiary, Citgo, which received criticism amongst the Venezuelan public due to corruption.[14][15] According to finance minister Nelson Merentes, the Venezuelan 2006 budget would get more income from taxation than from the petroleum industry, unlike formerly.[16]

In 2012, analysts said that PDVSA was in a "crisis" since "in the last ten years, they haven't been able to grow production". Analysts and OPEC also disagreed with Venezuela's claims of oil output. Critics have also noticed that investments in oil and natural gas production only amounted to US$17.9 billion while the government spent US$30.1 billion on social programs and Russian fighter jets.[17] The secretary general of the United Federation of Petroleum Workers of Venezuela (FUTPV) said "PDVSA is falling apart" and that "lack of direction, investment and maintenance are wrecking the oil and natural gas industries". Critics have also accused Chavez of letting loyalists run PDVSA instead of those qualified for the positions[18] since the company only hires political supporters of the president.[8] In 2013, PDVSA took more than US$10 billion in loans from China and Russia due to an alleged lack of hard currency and had a financial debt of US$39.2 billion.[19]

Cooperatives and economic democratization

Since Chávez was elected in 1998, over 100,000 worker-owned cooperatives—representing approximately 1.5 million people—were formed with the assistance of government start-up credit, technical training, and by giving preferential treatment to cooperatives in state purchases of goods and equipment. There has been an increase in the amount of cooperative enterprises that have tax incentives in the new 1999 constitution.[20][unreliable source?][when?] As of 2005, approximately 16% of Venezuela's formally employed citizens were employed in a cooperative. However, a 2006 census showed that as many as 50% of the cooperatives were either functioning improperly, or were fraudulently created to gain access to public funds.[21][22]

Additionally, several thousand "Communal Councils" (Consejos Communales) were created. In these Communal councils, citizens form assemblies to determine what will be done with government funds in their local area. Groups are made up of 150-200 or more families in urban areas, and starting at around 15-20 families in rural areas, and their decisions are binding to local government officials. 21,000 of these groups were created in 2007, and 30,179 by 2009. As of 2007, about 30% of state funds were directly controlled by communal councils, with a goal of eventually having them control 50%.[23][24]

Banking laws passed in 2001 require that all banks set aside at least 3% of their capital for micro-loans.[21]

Poverty reduction programs and social spending

Data from various sources of Venezuela's poverty rate (%) from 1997–2013. Sources: ECLAC, INE
Venezuela's extreme poverty rate from 1990 to 2013. Source: INE[25][26]
* Interim presidents excluded. One year delay of data transferred during presidential term changes due to new policies, inaugurations, etc.

One of the primary ways that the Chávez administration attempted to fix the problem of

Bolivarian Missions aimed at providing public services (such as food, healthcare, and education) to improve economic, cultural, and social conditions. According to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), poverty rates fell from 49.4% in 1999 to 23.9% in 2012.[27][28][29][30] Data from the National Institute of Statistics (INE) shows that Venezuela's poverty rate decreased between 1999 and 2013 from 48.7% to 32.1%.[31] A 2010 OAS report criticizing Venezuela's human rights standards indicated achievements in addressing illiteracy, healthcare and poverty, and economic and social advances.[32]

The Chávez government overspent in social spending, however, and did not save enough money for any future economic difficulties.[4] On 31 March 2000, Chávez initiated policies that resulted with the Venezuelan government spending more than it received as oil prices began to rise.[33] Poverty in Venezuela began increasing going into the 2010s.[34] During Chávez's campaign before the 2012 presidential election, he tripled Venezuela's deficit while on a "spending spree".[35] In 2014 El Universal reported that in the previous five years that included years under Chávez's policies, purchasing power for those with minimum wage jobs had dramatically decreased compared to other countries in the region, supposedly due to the high inflation rate and the multiple devaluations of Venezuela's currency.[36]

Price controls

The Venezuelan government also set price controls in 2003 on around 400 basic foods in an effort according to The Washington Post, to "counter inflation and protect the poor", and in March 2009, they set minimum production quotas for 12 basic foods that were subject to price controls, including white rice, cooking oil, coffee, sugar, powdered milk, cheese, and tomato sauce.[37][38] However, the lack of free-floating currency meant that the government was overpaying for these foods, which led shortages as limited amount of these foods began to be imported, even while demand was growing.[8][39][40]

Missions and other projects

Chávez created many projects and missions during his presidency, though he often took credit for some started by his predecessors as well.[41] Many projects initiated during his presidency have remained incomplete and have experienced difficulties due to funding issues, political costs, corruption and bad execution.[41] As of late 2013, over 4,000 projects initiated remained incomplete with 25% of those projects beginning before 2006.[41] Despite the investment of billions of dollars, such projects that were not completed and experienced multiple delays included repairs to the Parque Central Complex, moving the Las Mayas garbage center, the clean up of the Guaire River, a National Cancer Center, Plan Vargas 2005, and multiple transportation projects.[41][42]

Chávez also initiated Mission Habitat, a Venezuelan government program to construct new housing units for the poor. The housing mission has also experienced difficulties with El Universal stating that one of the Chávez administration's outstanding weaknesses was the failure to meet its goals of construction of housing.[43] Chávez promised to build 150,000 houses in 2006, but in the first half of the year, completed only 24 percent of that target, with 35,000 houses.[43] In 2013, the Venezuelan government also failed to complete nearly 50% of projected homes.[44] The housing market in Venezuela had also shrunk significantly.[citation needed] Developers have avoided Venezuela due to the massive number of companies who have had their property expropriated by the government.[45]

According to the Venezuelan government, the "Miracle Mission" program had the Venezuela and Cuban governments collaborated to perform free eye care to over 1,139,798 people, with an average of 5,000 operations occurring on a weekly basis in 74 medical centers around Venezuela, as of July 2010.[46][unreliable source]

Agriculture and land reform

From 2003, Chavez set strict

shortages and hoarding.[47] In January 2008, Chavez ordered the military to seize 750 tons of food that sellers were illegally trying to smuggle across the border to sell for higher prices than what was legal in Venezuela.[48] In February 2009, Chavez ordered the military to temporarily seize control of all the rice processing plants in the country and force them to produce at full capacity, which he claimed they had been avoiding in response to the price caps.[49] In May 2010, Chavez ordered the military to seize 120 tons of food from Empresas Polar.[50] In March 2009, Chavez set minimum production quotas for 12 basic foods that were subject to price controls, including white rice, cooking oil, coffee, sugar, powdered milk, cheese, and tomato sauce. Business leaders and food producers claimed that the government was forcing them to produce this food at a loss.[51] Chávez nationalized many large farms. Chávez said of the farmland, "The land is not private. It is the property of the state." Some of the farmland that had been productive while under private ownership is now idle under government ownership, and some of the farm equipment sits gathering dust. As a result, food production fell substantially. One farmer, referring to the government officials overseeing the land redistribution, stated, "These people know nothing about agriculture."[52] Chávez seized many supermarkets from their owners. Under government ownership, the shelves in these supermarkets are often empty.[53] In 2010, after the government nationalized the port at Puerto Cabello, more than 120,000 tons of food sat rotting at the port.[54] In May 2010, after price controls caused shortages of beef, at least 40 butchers were arrested, and some of them were held at a military base and later strip searched by police.[55]

Although the Venezuelan government allows small farmers to work the land, it does not always give them title to the land, and they are sometimes required to work as part of a collective.[52] This reallocation of land does not necessarily lead to better food production; farmers are hurt by the state setting low prices for their produce.[56]

The government also tried to introduce large-scale urban agriculture to the populace, to increase local self-reliance. In Caracas, the government launched Organoponico Bolivar I, a pilot program to bring organopónicos to Venezuela. Urban agriculture was not embraced in Caracas as it has been in Cuba. Unlike Cuba, where organopónicos arose from the bottom-up out of necessity, the Venezuelan organopónicos were clearly a top-down initiative based on Cuba's success. Another problem for urban agriculture in Venezuela was the high amounts of pollution in major Venezuelan urban areas. At the Organoponico Bolivar I, a technician comes every 15 days to take a reading from the small pollution meter in the middle of the garden.[57]

Nationalizations

In 2006, the Chávez government began nationalizing several industries as part of its policy of wealth redistribution and reducing the influence of multinational corporations. As a result of these nationalizations, production of goods in Venezuela had dropped.[58][59]

  • A 3 January 2007 article in the International Herald Tribune reported that price controls were causing shortages of materials used in the construction industry.[60] In 2008, cement production was largely nationalised, with Venezuelan-located plants belonging to Mexico's Cemex, Switzerland's Holcim, and France's Lafarge being bought by the government. Compensations of $552 million for Holcim and $267 million for Lafarge were agreed upon, with both of those companies agreeing to stay on as minority partners and retaining 10 to 15 percent shares; the takeover from Cemex was less friendly and compensation had not been agreed on as of March 2009.[61] According to a 4 April 2008 article from CBS News, Chavez ordered the nationalization of the cement industry, in response to the fact that the industry was exporting its products in order to receive prices above those which it was allowed to obtain within the country.[62] In 2013, it was reported that production of cement dropped by 60%, furnaces stopped and cement had to be imported from Colombia.[63] It was also reported that some stores had shortages of cement and would ration the number of cement bags purchased.[64] Workers of the Socialist Cement Corporation protested against their employers due to not being paid and not being able to receive help at clinics due to company debt.[65]
  • Chavez nationalized Venezuela's largest telephone companies and electric utilities.
    Verizon Communications' 28.5 percent share for $572 million.[67] Since the nationalizations of communication companies, allegations of censorship by the government and CANTV have been made, especially during the 2014 Venezuelan protests.[68][69][70][71][72][73][74][75]
  • The nation's largest private electricity producer, 82-percent owned by US-based AES Corp, was obtained by paying $740 million to AES for its share.[67] Since then, Venezuela's electrical grid has been plagued with occasional blackouts in various districts of the country. In 2011, it had so many problems that rations on electricity were put in place to help ease blackouts.[76] On 3 September 2013, 70% of the country plunged into darkness with 14 of 23 states of Venezuela stating they did not have electricity for most of the day.[77]
  • In 2008 the Venezuelan government nationalized the leading steel company, Argentine-controlled
    Sidor, following months of strikes and labour-management disputes.[78] Since the nationalization of Sidor, the production of the company has dropped every year.[79]

Taxation

The Venezuelan government instituted several new taxes on non-priority and luxury goods, aiming to shift the nation's tax burden from the poor to the wealthy, and to control inflation.[82][83] In 2012, Venezuela's taxes were ranked 188th out of 189 countries due to the high number of payments per year and a 61.7% tax on income per year.[84]

From March 2009 VAT tax rate was raised to 12% to cover for oil price reduction [85]

Infrastructure

Transportation

Despite the large scale of road building beginning in the 1960s that benefitted the aluminum and oil industry; public services, especially within the infrastructure of Venezuela, was poor.[1] At the beginning of August 2008, Chávez announced that Venezuela would partner with Argentina and Brazil to build a train that would connect Venezuela's capital (Caracas) with Argentina's (Buenos Aires), and cities in between.[86][87]

Venezuela's rail project is being put on hold due to Venezuela not being able to pay the $7.5 billion and owing China Railway nearly $500 million.[88]

International economic policies

See also:
Foreign policy of the Hugo Chávez government
ALBA
on 27 November 2008.

One of the Chávez administration's primary goals was to reduce the influence of foreign capitalists in Venezuela, as part of its overall push towards localized economic democratization. Towards this aim, it strongly promoted various forms of Latin American economic and political integration—such as regional currencies (e.g.

Euro
), regional credit/financial institutions such as Bancosur (to remove dependence on the IMF/World Bank), and trade pacts (such as ALBA, Petrosur, or bartering oil for doctors with Cuba).

The SUCRE system is a virtual currency system used mainly by Venezuela and Ecuador. There are some risks such as money laundering and fraud. However, it has been seen as beneficial for trade since Ecuador uses the United States dollar as its national currency and Venezuela's strict currency controls have created a US dollar shortage in Venezuela.[89]

Regional integration

Further information:
Bolivarian Alliance for the Americas and SUCRE

Cuba, Nicaragua, Honduras, Bolivia, and Ecuador joined Venezuela as members of the Bolivaran Alliance for the Americas (ALBA). Chávez described ALBA as "a flexible model for the integration of Latin America that places social concerns in the forefront."[90]

Foreign debt

Chávez announced Venezuela's withdrawal from the International Monetary Fund and World Bank after paying back all his country's debts to both institutions; he charged them with being an imperial tool that aims to exploit poor countries, news sources reported. But as of March 2008, Venezuela is still a member of both institutions.[91][92]

In 2005, the Venezuelan government partnered with Argentina, and Brazil to negotiate their foreign debt as a collective bloc. Chávez also suggested that at least 10% of all Latin American foreign debt be paid into an "International Humanitarian Fund", that would be used to fund social programs without having structural adjustment requirements attached.[93]

The Venezuelan government had been running out of hard currency to pay bills before the death of Chavez.[94] A major railway project in Venezuela was delayed because Venezuela cannot pay US$7.5 billion and owes China Railway nearly US$500 million.[88] Many international airlines such as Air Canada, Air Europa, American Airlines, and United Airlines suspended operation in Venezuela.[95][96][97] The Venezuelan government faced accusations of owing international airlines more than $3.7 billion and violating treaties, with the International Air Transport Association accusing the government of failing to "repatriate" $3.7 billion in air ticket revenue owed to foreign airlines.[98]

Currency and foreign reserves

When initially elected into office in 1998, Chávez promised that he would not create currency exchange controls.[99]

In order to prevent capital flight, and maintain the stability of the

foreign currency reserves, which had reached $35 billion by 2006, which is as high as Canada's (which has a slightly higher population), and on a per capita basis is much larger than Germany's ($55 billion)[100]
By the end of 2013, gold and foreign reserves of Venezuela dropped $9 billion in one year to $21 billion.[94]

Since the currency controls were imposed in 2003, there was a series of devaluations, disrupting the economy;[101][102] the devaluation of February 2013 was the seventh since Chavez took power.[103]

Foreign trade

Foreign trade from Venezuela was ranked 179 out of 185 countries due to many reasons. One was the large number of documents that are needed in order to export and import. The amount of time to export goods from Venezuela is more than 5 times longer than the average country with the time importing is 8 times longer than average. Prices for trade are also 3 times higher than the average country.[84]

Even though Venezuela has been trying to seek autonomy from most foreign countries, the United States has continued to be its largest trade partner. Venezuela sends 39.3% of its exports to the United States and the majority of imports compiling to 31.2% are from the United States.[104][105]

Economic indicators

Economic growth and production

The Chavez government's confiscations of private businesses, especially oil businesses, greatly weakened the private sector; oil production collapsed.[103] The government of Venezuela treats PDVSA as a cash-cow,[106] and the company only hires political supporters of the president.[107] The GDP of Venezuela was approximately the same in 2012 as it was in the 1970s.[12]

For the year 2009, the Venezuelan economy shrank by an average of 2.9% due to the global recession.[108]

Income and poverty

Datos reports real income grew by 137% between 2003 and Q1 2006.[109] The World Bank estimates that 31.9% are below the poverty line.[110]

Social scientists and economists have declared that the government's reported income poverty figures did not fall in proportion to the country's vast petroleum revenues in the last two years, much of which was directed to social spending to decrease the cost of living.[111]

Venezuela's infant mortality rate fell by 18.2% between 1998 and 2006.[112][113]

Consumer prices and inflation

Inflation: 1998-2013 The blue line represents annual inflation rates while the red line represents the trend of inflation rates. Sources: International Monetary Fund: Data & Statistics CIA: The World Factbook Reuters.

When Chávez took office, the annual

inflation rate was at 29.5% and according to Banco Central de Venezuela, inflation dropped to 14.4% in 2005.[114][115] During 2005, imported goods were cheaper than commodities made in Venezuela; variability in the price of goods was linked to import performance and exchange stability.[114] In the second quarter of 2006, gross fixed investment was the highest ever recorded by the Banco Central de Venezuela since it started tracking the statistic in 1997.[116]

In 2009 the inflation rate was 27.1%.[117] According to the Economist, the Chávez government's economic policies, including strict price controls, have led to Venezuela having the highest inflation in the world at the time.[118] When Chávez left office, the inflation rate was at 29.4%, which was .1% less than when he first took office.[119]

Government spending

Teresa A. Meade wrote that Chávez's popularity "rests squarely on the lower classes who have benefited from these health initiatives and similar policies".[120]

Implied value and currency black market

Blue line represents implied value of the hard bolívar (VEF) compared to the US dollar (USD). The red line represents what the Venezuelan government officially rates the hard bolívar. Sources: Banco Central de Venezuela, Dolar Paralelo, Federal Reserve Bank, International Monetary Fund.

The implied value or "black market value" is what Venezuelans believe the

CADIVI, a currency control board charged with handling foreign exchange procedures. Its creation was to control capital flight by placing limits on individuals and only offering them so much of a foreign currency.[121] This limit to foreign currency led to a creation of a currency black market economy since Venezuelan merchants rely on foreign goods that require payments with reliable foreign currencies. As Venezuela printed more money for their social programs, the bolívar continued to devalue for Venezuelan citizens and merchants since the government held the majority of the more reliable currencies.[122]

At the end of 2013, the official exchange rate was

consumers.[123]
The high rates in the black market make it difficult for businesses to purchase necessary goods since the government often forces these businesses to make price cuts. This leads to businesses selling their goods and making a low profit, such as Venezuelan McDonald's franchises offering a Big Mac meal for only $1.[124] Since businesses make low profits, this leads to shortages since they are unable import the goods that Venezuela is reliant on. Venezuela's largest food producing company, Empresas Polar, has stated that they may need to suspend some production for nearly the entire year of 2014 since they owe foreign suppliers $463 million.[125] The last report of shortages in Venezuela showed that 22.4% of necessary goods are not in stock.[126] This was the last report by the government since the central bank no longer posts the scarcity index. This has led to speculation that the government is hiding its inability to control the economy which may create doubt about future economic data released.[127]

Food and agriculture

When agricultural measures of the Chávez administration took effect, food imports rose dramatically, and such agricultural mainstays as beef, rice, and milk saw drops in production.[52] With declining oil revenues, food shortages became more widespread.[128] Venezuela faced serious food shortages, as the Chávez government's price controls distorted the market.[129][130]

In January 2008, Chávez ordered the military to seize 750 tons of food that sellers were illegally trying to smuggle across the border to sell for higher prices than what was legal in Venezuela.[48] In February 2009, Chávez ordered the military to temporarily seize control of all the rice processing plants in the country and force them to produce at full capacity, which he claimed they had been avoiding in response to the price caps.[131] In May 2010, Chávez ordered the military to seize 120 tons of food from Empresas Polar after inconsistencies in reports from the Empresas Polar conglomerate were said to have been detected by authorities.[132]

As part of his strategy of food security Chávez started a national chain of supermarkets, the Mercal network, which had 16,600 outlets and 85,000 employees that distributed food at highly discounted prices, and ran 6000 soup kitchens throughout the country.[133] The food was sold at as much as 40% below the price ceiling set for privately owned stores. Simultaneously Chávez expropriated many private supermarkets.[133] The Mercal network was criticized by some commentators as being a part of Chávez's strategy to brand himself as a provider of cheap food, and the shops feature his picture prominently. The Mercal network was subject to frequent scarcities of basic staples such as meat, milk and sugar – and when scarce products arrived, shoppers had to wait in line.[133]

In March 2009, the Venezuelan government set minimum production quotas for 12 basic foods that were subject to price controls, including white rice, cooking oil, coffee, sugar, powdered milk, cheese, and tomato sauce, which is intended to stop food companies from evading the law. Business leaders and food producers claimed that the government was forcing them to produce this food at a loss.

expropriated and redistributed 5 million acres of farmland from large landowners, saying: "The land is not private. It is the property of the state... The land is for those who work it." But, the lack of basic resources made it difficult or impossible to make full use of the expropriated lands by its new tenants – leading to a lower overall degree of productivity in spite of a larger overall area of land under cultivation.[52]

In 2011, food prices in Caracas were nine times higher than when the price controls were put in place and resulted in shortages of cooking oil, chicken, powdered milk, cheese, sugar and meat.[135] Datanálisis, an independent polling firm found that powdered milk could be found in less than half of grocery stores in Venezuela and that liquid milk was even more scarce in the country.[136] Jose Guerra, former executive of the Central Bank of Venezuela (BCV) explained that Venezuela's large increases on purchasing food in 2012 and reserves that are at their lowest levels since 2004 contributed to dollar shortages that Venezuela suffered in the years following 2012.[137]

In 2007 14,383 tonnes of milk, rice, pasta, beef and chicken, worth $54 million were also abandoned. In 2010, after the government nationalized the port at Puerto Cabello, more than 120,000 tons of food worth 10.5 bolívars sat rotting at the port.[54][138] In May 2010, during a shortage of beef, at least 40 butchers were detained on charges of speculation for allegedly selling meat above the regulated price; some of them were held at a military base and later strip-searched by police.[139]

Employment

According to government figures,

two-month strike and business lockout that shut down the country's oil industry. According to the government, an unemployed person is a citizen above the age of 15 who has been seeking employment for more than one week.[142]

Business environment

According to Gilberto Gudino Millán, president of the Trade Union and Business Services in the Zulia State (UCEZ), 490,000 businesses had left Venezuela from 1998 to 2014 in what he called a "business holocaust".[143] In 2006, the business environment in Venezuela was listed as "risky and discouraged investment", by El Universal. As measured by prices on local stock exchanges, foreign investors were willing to pay on average 16.3 years worth of earnings to invest in Colombian companies, 15.9 in Chile, 11.1 in Mexico, and 10.7 in Brazil, but only 5.8 in Venezuela. The World Economic Forum ranked Venezuela as 82 out of 102 countries on a measure of how favorable investment was for financial institutions. In Venezuela, a foreign investor needed an average of 119 days and had to complete 14 different applications to organize a business, while the average in OECD countries was 30 days and six applications.[144] The International Finance Corporation ranked Venezuela one of the lowest countries for doing business ranking it 180 of 185 countries for its Doing Business 2013 report with protecting investors and taxes being its worst rankings.[84][145]

In January 2013, The Heritage Foundation and The Wall Street Journal gave Venezuela's economic freedom a low score of 36.1, twenty points lower than 56.1 in 1999 and was ranked very low at 174 of 177 countries on its 2013 Index of Economic Freedom report with its freedom trend heading downward.[146]

Foreign investment

In 2006, the business environment in Venezuela was listed as "risky and discouraged investment" by El Universal. As measured by prices on local stock exchanges, foreign investors were willing to pay on average 16.3 years worth of earnings to invest in Colombian companies, 15.9 in Chile, 11.1 in Mexico, and 10.7 in Brazil, but only 5.8 in Venezuela. The World Economic Forum ranked Venezuela as 82 out of 102 countries on a measure of how favorable investment was for financial institutions. In Venezuela, a foreign investor needed an average of 119 days and had to complete 14 different applications to organize a business, while the average in OECD countries was 30 days and six applications.[144]

See also

References

  1. ^
    ISBN 9780789488053
    .
  2. ^ a b Corrales, Javier (7 May 2015). "Don't Blame It on the Oil". Foreign Policy. Retrieved 10 May 2015.
  3. ^ a b "Venezuela's Expensive Friendships". Stratfor. Retrieved 20 January 2016.
  4. ^ a b Siegel, Robert (25 December 2014). "For Venezuela, Drop in Global Oil Prices Could Be Catastrophic". NPR. Retrieved 4 January 2015.
  5. ^ "Divide y ven serás". 21 March 2022.
  6. ^ Lansberg-Rodríguez, Daniel (15 March 2015). "Coup Fatigue in Caracas". Foreign Policy. Retrieved 10 July 2015.
  7. CIA World Factbook. Archived from the original
    on 13 June 2007. Retrieved 26 February 2014.
  8. ^ a b c "Venezuela's economy: Medieval policies". The Economist. 20 August 2011. Retrieved 23 February 2014.
  9. ^ "Total Petroleum Production 2014". United States Energy Information Administration. Retrieved 24 January 2015.
  10. ^ OPEC Annual Statistical Bulletin, online version, Oil and gas data, Table 38, Crude oil production in OPEC member countries since commencement (www.opec.org/library/ )
  11. ^ a b Randall, Stephen. "The Chavez Legacy" (PDF). Hot Topics. Latin American Research Centre, University of Calgary. Archived from the original (PDF) on 21 October 2013. Retrieved 17 March 2013.
  12. ^ a b c Caruso-Cabrera, Michelle. "Why Venezuela is so desperate, in 5 easy charts". CNBC. Archived from the original on 25 February 2016. Retrieved 22 October 2014.
  13. ^ "Ley Orgánica de Hidrocarburos aprobada en 2001" (PDF). Archived from the original (PDF) on 17 August 2006. Retrieved 27 July 2006.
  14. ^ "941 billion bolivars Citgo dividends to fund Misión Ciencia". PDVSA. 19 February 2006. Retrieved 3 January 2007.
  15. ^ Romero, Simon (5 March 2005). "Citgo's Status Is Giving Houston the Jitters". The New York Times. Retrieved 3 January 2007.
  16. ^ "Congreso aprueba presupuesto" (in Spanish). La Prensa. 15 December 2005. Archived from the original on 20 October 2013. Retrieved 27 December 2006.
  17. ^ Wilson, Peter (30 July 2012). "PDVSA´s Lost Decade…". Latin Trade. Archived from the original on 7 April 2014. Retrieved 4 April 2014.
  18. ^ Wilson, Peter (28 May 2012). "Venezuela's PDVSA oil company is bloated, 'falling apart'". USA Today. Retrieved 4 April 2014.
  19. ^ "Venezuela's PDVSA to go $4.5B deeper in debt". Financial Times. 14 November 2013. Retrieved 4 April 2014.
  20. ^ "Venezuela's Cooperative Revolution | Dollars & Sense". dollarsandsense.org. Retrieved 8 May 2015.
  21. ^
    ISBN 978-1-84467-552-4
    .
  22. ^ Betsy Bowman; Bob Stone. "Venezuela's Cooperative Revolution". Dollars and Sense.
  23. ^ Andrew Kennis (6 August 2010). "The Quiet Revolution: Venezuelans experiment with participatory democracy". In These Times.
  24. ISBN 978-1-84467-552-4
    .
  25. ^ "Pobreza". instituto nacional de estadistica. Archived from the original on 27 July 2012. Retrieved 1 September 2014.
  26. ^ "Venezuela Achieves Millennium Goals" (PDF). Embassy of the Bolivarian Republic of Venezuela. Retrieved 1 September 2014.
  27. ^ "Population living below the extreme poverty and poverty lines, by geographic area". CEPAL.org. Economic Commission for Latin America and Caribbean. Retrieved 17 June 2015.
  28. ECLAC
    . 5 December 2013. Retrieved 24 April 2014.
  29. ^ Andres Heno, Luis (5 December 2013). "UN: Reduction of Poverty Slowing in Latin America". Associated Press. Retrieved 24 April 2014.
  30. ^ "Latin America poverty decline slowing as economies cool - U.N." Reuters. 5 December 2013. Retrieved 24 April 2014.
  31. ^ "Institute of National Statistics". Archived from the original on 27 July 2012. Retrieved 17 June 2015.
  32. ^ "Press release N° 20/10, IACHR publishes report on Venezuela". Inter-American Commission on Human Rights (Press release). Organization of American States. 24 February 2010. Retrieved 26 February 2010.
  33. ISBN 978-0143124887
    .
  34. ^ Charlie Devereux & Raymond Colitt. 7 March 2013. "Venezuelans' Quality of Life Improved in UN Index Under Chavez". Bloomberg L.P. Archived from the original on 7 November 2014. Retrieved 7 March 2013.{{cite web}}: CS1 maint: unfit URL (link)
  35. ^ Goodman, Joshua; Devereux, Charlie (2 April 2013). "Dollar-Desperate Venezuelans Get Defrauded on Internet". Bloomberg.com. Bloomberg. Retrieved 19 May 2015.
  36. ^ "Venezuela entre los países con retroceso del salario mínimo". El Universal. 18 May 2014. Retrieved 19 May 2014.
  37. ^ Grant, Will (4 March 2009). "Chavez boosts food price controls". BBC News.
  38. ^ The Washington Post, 8 February 2007, Meat, Sugar Scarce in Venezuela Stores
  39. ^ a b "Venezuela's black market rate for US dollars just jumped by almost 40%". Quartz. 26 March 2014. Retrieved 27 March 2014.
  40. ISBN 978-1285165875
    .
  41. ^ a b c d Wilson, Peter (26 December 2014). "Little Bread, Lots of Circuses in Venezuela". Foreign Policy. Retrieved 4 January 2015.
  42. ^ Guevara, Ariana. "7 obras millonarias del chavismo, todavía inconclusas". El Estimulo. Archived from the original on 4 January 2015. Retrieved 4 January 2015.
  43. ^ a b Chávez' Government has built 24 percent of scheduled houses. Archived 11 April 2008 at the Wayback Machine El Universal (31 July 2006).
  44. ^ "Misión Vivienda incumplió 70% de su objetivo de 2014". La Patilla. 30 December 2014. Retrieved 4 January 2015.
  45. ^ Grant, Will (15 November 2010). "Why Venezuela's government is taking over apartments". BBC. Retrieved 15 December 2013.
  46. ^ Edward Ellis (July 2010). "Venezuela Provides More than One Million Free Eye Operations to Latin Americans" (PDF). Correo del Orinoco International. Archived from the original (PDF) on 15 August 2010. Retrieved 4 August 2010.
  47. ^ Venezuelan shoppers face food shortages, BBC, 10 January 2006
  48. ^ a b Venezuelan troops crack down on smuggling along Colombian border, Associated Press, 22 January 2008
  49. ^ Chavez orders army to seize Venezuela rice mills, Reuters, 28 February 2009
  50. ^ Chavez Government Seizes 120 Tons of Food from Venezuela's Largest Company Archived 30 May 2020 at the Wayback Machine, Latin American Herald Tribune
  51. ^ Chavez boosts food price controls, BBC, 4 March 2009
  52. ^ a b c d In Venezuela, Land 'Rescue' Hopes Unmet, Washington Post, 20 June 2009
  53. ^ A Food Fight for Hugo Chavez, Business Week, 11 March 2010
  54. ^ a b A Rotting Chicken in Every Pot: Venezuela's Disastrous Food Policy, Huffington Post, 2 August 2010
  55. ^ Hugo Chavez's Response to Beef Shortage: Arrest Butchers Archived 23 April 2014 at the Wayback Machine, CNBC, 7 May 2010
  56. ^ "Venezuelan food shortages bode ill for Chavez's re-election". USA Today. 12 August 2012. Retrieved 9 October 2012.
  57. E - The Environmental Magazine. 17. Earth Action Network, Inc.: 18–20. Archived from the original
    on 9 May 2008. Retrieved 18 May 2010.
  58. ^ Cawthorne, Andrew (21 January 2015). "In shortages-hit Venezuela, lining up becomes a profession". Reuters. Retrieved 24 January 2015.
  59. ^ Alayón, Ángel (13 May 2015). "Estatizar a Polar es profundizar la escasez; por Ángel Alayón". Prodavinci. Retrieved 17 June 2015.
  60. ^ Venezuelan businesses say Chávez's price controls create shortages International Heralrd Tribune, 3 January 2007
  61. ^ Reuters, "Venezuela's nationalisations under Hugo Chavez" (cited above); CBS news, Hugo Chavez Nationalizes Cement Industry April 2008;
    NY Times, Venezuela is set to take control of Cemex plants.
  62. ^ Hugo Chavez Nationalizes Cement Industry, CBS News, 4 April 2008.
  63. ^ "Producción de cemento bajó 60% por paralización de hornos". La Patilla. 31 May 2013. Retrieved 4 April 2014.
  64. ^ Rojas, Beatriz (28 May 2013). "Constructores en eterna lucha por conseguir cemento". El Carabobeno. Archived from the original on 4 April 2014. Retrieved 4 April 2014.
  65. ^ "La empresa está en plena decadencia", reclaman obreros de la Corporación Socialista de Cemento". Globovision. 9 December 2013. Archived from the original on 7 April 2014. Retrieved 4 April 2014.
  66. ^ a b Outraged Chávez puts stop to near-complete shopping mall, The Guardian, 24 December 2008
  67. ^ a b c Reuters, "Venezuela's nationalisations under Hugo Chavez" 5 March 2009.
  68. ^ "Táchira militarizada y sin Internet luego de 16 días de protestas". El-nacional.com. Archived from the original on 10 March 2014.
  69. ^ Meza, Alfredo (13 March 2014). "El régimen venezolano estrecha el cerco sobre internet". El Pais. Retrieved 14 March 2014.
  70. ^ Eleonora Delgado. "Táchira amanece sin Internet por segundo día". El-nacional.com. Archived from the original on 10 March 2014.
  71. ^ "Venezuela: Táchira se quedó militarizada y sin internet – Terra USA". Noticias.terra.com. 20 February 2014.
  72. ^ "Denuncian que en el Táchira no hay agua, internet, ni servicio telefónico". Informe21.com. 20 February 2014. Archived from the original on 6 September 2020. Retrieved 2 April 2014.
  73. ^ "Twitter reports image blocking in Venezuela". The Washington Post. 14 February 2014. Archived from the original on 28 February 2014. Retrieved 19 February 2014.
  74. ^ "Venezuelans Blocked on Twitter as Opposition Protests Mount". Bloomberg. 15 February 2014. Retrieved 16 February 2014.
  75. ^ "Diario El Siglo – Cantv desmiente que esté involucrada en fallas de Twitter". Elsiglo.com.ve. Retrieved 21 February 2014.
  76. ^ Toothaker, Christopher (16 June 2011). "Venezuela's Electricity To Be Rationed Following Recurring Power Outages". Huffington Post. Retrieved 14 December 2013.
  77. ^ "Power cut paralyses Venezuela". The Guardian. 4 September 2013. Retrieved 14 December 2013.
  78. ^ Venezuela nationalizes steel industry, CNN, 1 May 2008
  79. ^ "Cae producción de acero y aluminio en Venezuela durante 2014". Reuters. 23 March 2015. Archived from the original on 10 April 2015. Retrieved 5 April 2015.
  80. ^ "Two malls tell a tale of Venezuelan capital flight". Miami Herald. 8 September 2013. Retrieved 2 April 2014.
  81. ^ Chavez Seizes Venezuelan Rice Plants, Associated Press, 28 February 2009
  82. ^ Fifteen Percent Surtax On Non-priority Goods Archived 9 July 2012 at archive.today, El Universal, 7 December 2006
  83. ^ Venezuela OAS Foreign Trade Information System (FTIS), 2007
  84. ^ a b c "Ease of Doing Business in Venezuela, RB". Retrieved 1 December 2013.
  85. ^ Freddy Campos (22 March 2009). "Venezuela increases VAT from 9 to 12 percent". El Universal.
  86. ^ Carlos Chirinos (23 August 2008). "¿Partió el tren del Sur?". BBC Mundo (in Spanish).
  87. ^ "Argentina inicia conversaciones con Venezuela por el "Expreso del Sur"". EmpresasNews.com (in Spanish). 22 August 2008. Archived from the original on 10 July 2011. Retrieved 2 September 2010.
  88. ^ a b Han Shih, Toh (11 April 2013). "China Railway Group's project in Venezuela hits snag". South China Morning Post. Retrieved 14 December 2013.
  89. ^ "Who Needs Bitcoin? Venezuela Has Its 'Sucre'". The Wall Street Journal. 2 January 2014. Retrieved 4 April 2014.
  90. ^ Christina DeFeo (July 2010). "ALBA: How Much of a Turn to the Left in Latin American Governance and Economic Policy?". Council on Hemispheric Affairs.
  91. ^ "Chavez: Venezuela to pull out of IMF, World Bank".
  92. ^ "Chávez: goodbye IMF, WB". Archived from the original on 28 September 2007. Retrieved 3 August 2010.
  93. ^ "Global Humanitarian Fund, Financial Institution Reform, Among Issues at Second Summit Round Table". United Nations World Summit on Sustainable Development. 2 September 2002.
  94. ^ a b "The party is over". The Economist. 1 February 2014. Retrieved 1 April 2014.
  95. ^ Mogollon, Mery (24 January 2014). "Venezuela sees more airlines suspend ticket sales, demand payment". Los Angeles Times. Retrieved 25 January 2014.
  96. ^ Wilson, Peter (24 January 2014). "Airlines keep cutting off Venezuelans from tickets". USA Today. Retrieved 25 January 2014.
  97. ^ Wilson, Peter (10 January 2014). "Venezuelans blocked from buying flights out". USA Today. Retrieved 15 January 2014.
  98. ^ Mogollon, Mery; Kraul, Chris (13 March 2014). "Amid unrest, Venezuela is accused of owing airlines $3.7 billion". Los Angeles Times.
  99. ^ Johnson, Tim (6 December 1998). "This is the day Venezuela changed. Twenty years ago, Hugo Chávez was elected president". Miami Herald. Retrieved 10 December 2018.
  100. ISBN 978-1-84467-552-4
    .
  101. ^ Mander, Benedict (10 February 2013). "Venezuelan devaluation sparks panic". Financial Times. Retrieved 11 February 2013.
  102. ^ "Chavez Devaluation Puts Venezuelans to Queue on Price Raise". Bloomberg. 11 February 2013. Archived from the original on 17 February 2013. Retrieved 11 February 2013.
  103. ^ a b "Venezuela's currency: The not-so-strong bolívar". The Economist. 11 February 2013. Retrieved 12 February 2013.
  104. CIA World Factbook. 2012. Archived from the original
    on 13 June 2007. Retrieved 25 July 2013.
  105. CIA World Factbook. 2012. Archived from the original
    on 13 June 2007. Retrieved 25 July 2013.
  106. ^ "Brazil's oil boom: Filling up the future". The Economist. 5 November 2011. Retrieved 24 September 2012.
  107. ^ "Venezuela's oil industry: Up in smoke". The Economist. 27 August 2012. Retrieved 24 September 2012.
  108. ^ "Venezuela." CIA World Factbook. 3 August 2010. Retrieved 6 August 2010.
  109. ^ Datos, (2006). Perspectivas Sociales 2006 de VenAmCham Archived 9 August 2007 at the Wayback Machine p.18. Retrieved 29 August 2006. (in Spanish)
  110. ^ "World Development Indicators". World Bank. Retrieved 18 February 2013.
  111. ^ The Economist (16 February 2006), Venezuela: Mission Impossible, The Economist. Retrieved 22 June 2006.
  112. ^ Central Intelligence Agency. (CIA, 1998). The World Factbook 1998: Venezuela Archived 9 March 2021 at the Wayback Machine. Retrieved 18 October 2005.
  113. ^ Central Intelligence Agency. (CIA, 2005). The World Factbook 2006: Venezuela. Retrieved 22 July 2006.
  114. ^ a b Imported goods are cheaper, BCV acknowledges. El Universal (9 August 2006).
  115. ^ Banco Central de Venezuela. (BCV 12 December 2006). INDICE DE PRECIOS AL CONSUMIDOR DEL ÁREA METROPOLITANA DE CARACAS DICIEMBRE 1998. Retrieved 11 August 2006 (in Spanish) "la variación acumulada del IPC para el año 1998, se ubicó en 29,9%"
  116. ^ Banco Central de Venezuela (BCV 15 August 2006). Actividad económica crece en 9.6% durante el primer semestre de 2006 Retrieved 16 August 2006 (in Spanish) "Este resultado, unido al aumento de 9,9% observado en el primer trimestre, ubica el crecimiento del primer semestre en 9,6%." "Desde el punto de vista institucional, el sector público creció en 4,6% y el privado en 10,3%." ""La inversión bruta fija continuó su ritmo expansivo, alcanzando niveles superiores a los observados en toda la serie desde el año 1997."
  117. ^ "South America :: Venezuela — The World Factbook - Central Intelligence Agency". www.cia.gov. 31 May 2023.
  118. ^ "Venezuela's economy: Medieval policies". The Economist. 20 August 2011. Retrieved 23 February 2014.
  119. ^ "VenEconomy: Venezuela's Economy is an Erupting Volcano". Latin American Herald Tribune. Archived from the original on 20 October 2014. Retrieved 20 June 2014.
  120. ^ Meade, Teresa. A History of Modern Latin America: 1800 to the Present (Oxford 2010), p. 313.
  121. ^ CADIVI, CADIVI, una medidia necesaria Archived 5 December 2008 at the Wayback Machine
  122. ^ Hanke, Steve. "The World's Troubled Currencies". The Market Oracle. Retrieved 26 January 2014.
  123. ^ Gupta, Girish (24 January 2014). "The 'Cheapest' Country in the World". TIME. Archived from the original on 24 January 2014. Retrieved 26 January 2014.
  124. ^ Pons, Corina (14 January 2014). "McDonald's Agrees to Cut the Price of a Venezuelan Big Mac Combo". Bloomberg. Retrieved 26 January 2014.
  125. ^ Goodman, Joshua (22 January 2014). "Venezuela overhauls foreign exchange system". Bloomberg. Archived from the original on 14 February 2014. Retrieved 26 January 2014.
  126. ^ Vyas, Kejal (30 December 2013). "Venezuela's Consumer Prices Climbed 56% in 2013". The Wall Street Journal. Archived from the original on 15 June 2015. Retrieved 26 January 2014.
  127. ^ "Venezuela inflation data under scrutiny". Buenos Aires Herald. 31 December 2013. Retrieved 26 January 2014.
  128. ^ "A Food Fight for Hugo Chavez - BusinessWeek". www.businessweek.com. Archived from the original on 14 March 2010.
  129. ^ "Venezuelan food shortages bode ill for Chavez's re-election". USA Today. 13 August 2012. Retrieved 9 October 2012.
  130. ^ Neuman, William (20 April 2012). "With Venezuelan Food Shortages, Some Blame Price Controls". The New York Times. Retrieved 9 October 2012.
  131. ^ Chávez orders army to seize Venezuela rice mills, Reuters, 28 February 2009
  132. ^ Chávez Government Seizes 120 Tons of Food from Venezuela's Largest Company Archived 30 May 2020 at the Wayback Machine, Latin American Herald Tribune
  133. ^ a b c A Food Fight for Hugo Chávez, Business Week, 11 March 2010
  134. ^ Chávez boosts food price controls, BBC, 4 March 2009
  135. ^ "Venezuela's economy: Medieval policies". The Economist. 20 August 2011. Retrieved 21 April 2014.
  136. ^ Neuman, William (20 April 2012). "With Venezuelan Food Shortages, Some Blame Price Controls". The New York Times. Retrieved 16 May 2012.
  137. ^ "¿Por qué faltan dólares en Venezuela?". El Nacional. 8 October 2013. Archived from the original on 22 April 2014. Retrieved 21 April 2014.
  138. ^ "Se pudrieron alimentos valorados en Bs. 10 millones". El Universal. 20 April 2014. Retrieved 21 April 2014.
  139. ^ Hugo Chávez's Response to Beef Shortage: Arrest Butchers Archived 23 April 2014 at the Wayback Machine, CNBC, 7 May 2010
  140. ^ Instituto Nacional de Estadistica. (INE, January 1999) Globales de Fuerza de Trabajo Archived 27 September 2011 at the Wayback Machine. Retrieved 13 June 2006."Tasa de Desocupacion 16.6%" (in Spanish)
  141. ^ Instituto Nacional de Estadistica. (INE, April 2006) Globales de Fuerza de Trabajo Archived 27 September 2011 at the Wayback Machine. Retrieved 18 November 2006."Tasa de Desocupacion 8.9%" (in Spanish)
  142. ^ Instituto Nacional de Estadisticas. Tasa de desocupacion Archived 15 July 2010 at the Wayback Machine Retrieved 19 August 2006 (in Spanish) "Personas de 15 años o más, de uno u otro sexo, quienes declararon que durante la semana anterior al día de la entrevista no estaban trabajando y estaban buscando trabajo con remuneración. Asimismo, se incluyen aquellas personas que nunca han trabajado y buscan trabajo por primera vez."
  143. ^ "490,000 companies disappear in 15 years". La Verdad. 14 May 2014. Retrieved 14 May 2014.
  144. ^ a b A dual economy. Archived 5 January 2010 at the Wayback Machine El Universal (17 August 2006).
  145. ^ "DOING BUSINESS 2013" (PDF). Report. International Finance Corporation. Archived from the original (PDF) on 30 May 2014. Retrieved 1 April 2014.
  146. ^ "2013 Index of Economic Freedom" (PDF). Index of Economic Freedom. The Heritage Foundation. Retrieved 2 April 2014.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Economic_policy_of_the_Hugo_Chávez_administration&oldid=1209704179"