Background Notes: Venezuela
PA/PC
Source: Office of Public Communication, Bureau of Public
Affairs
Date: Nov 15, 199011/15/90
Category: Country Data
Region: South America
Country: Venezuela
Subject: Cultural Exchange, Resource Management,
Military Affairs, Trade/Economics, History,
International Organizations
[TEXT]
Official Name: Republic of Venezuela
PROFILE
Geography
Area: 912,050 sq. km. (352,143 sq. mi.): about the size of Texas and
Oklahoma combined. Cities: Capital-Caracas (metropolitan area
population est. 4.5 million). Other major cities-Maracaibo,
Valencia. Terrain: Varied. Climate: Varies from tropical to
temperate, depending on elevation.
People
Nationality: Noun and adjective-Venezuelan(s). Population (1988):
18.9 million. Annual growth rate: 3%. Ethnic groups: Spanish,
Italian, Portuguese, Arab, German, Amerindian, African. Religions:
Roman Catholic 96%. Languages: Spanish (official), Indian dialects
spoken by some of the 200,000 Amerindians in the remote interior.
Education: Years compulsory-9. Literacy-88.4%. Health: Infant
mortality rate-27.3/1,000. Life expectancy-70 yrs. Work force
(about 6.8 million): Agriculture-6%. Industry and commerce-35%.
Services-26%. Other-33%.
Government
Type: Federal republic. Independence: July 5, 1821. Constitution:
January 23, 1961. Branches: Executive-president (head of
government and chief of state); 26-member Council of Ministers
(cabinet). Legislative-bicameral congress (201-member Chamber of
Deputies, 49-member Senate). Judicial-18-member Supreme Court.
Subdivisions: 20 states, 2 federal territories, one federal district,
and 1 federal dependence (72 islands). Political parties: Democratic
Action (Accion Democratica-AD), Social Christian (Comite
Organizador Politico pro Elecciones Independientes-COPEI) and the
Movement to Socialism (Movimiento al Socialismo-MAS) are the
major parties in the Venezuelan congress. Nine smaller parties are
also represented in the legislature. Flag: Three horizontal bands-
yellow, blue, and red, with a crest in a corner of the yellow band
and a semicircle of seven stars in the middle of the blue band. The
colors come from the banner flown by Simon Bolivar; the stars
represent the 7 provinces.
Economy
Real GDP (1989): $38.9 billion. Rate of Growth (1989-90):
-8%. Real per capita income: $2,058. Avg. inflation rate (1989):
81%. Natural resources: Petroleum, natural gas, coal, iron ore, gold,
other minerals, hydroelectric power, bauxite. Agriculture (6% of
GDP): Products-rice, coffee, corn, sugar, bananas, and dairy, meat,
and poultry products. Industry (17% of GDP): Types-petrochemicals,
oil refining, iron and steel, paper products, aluminum, textiles,
transport equipment, consumer products. Trade (1989): Exports-
$12.9 billion: petroleum ($10 billion), iron ore, coffee, steel,
aluminum, cocoa. Major markets-US, Canada, Italy, Japan, Spain,
FRG. Imports-$7.1 billion: machinery and transport equipment,
manufactured goods, chemicals, foodstuffs. Major suppliers-US,
Japan, Canada, FRG, France, Italy, Brazil. There is no official
exchange rate. In February 1989, Venezuela eliminated a multi-
tiered exchange rate system adopted in 1983; the bolivar floats
against the dollar. Fiscal year: Calendar year.
Membership in International Organizations
UN and some of its specialized and related agencies; Organization of
American States (OAS); International Coffee Agreement; Andean
Pact; Rio Pact; Organization of Petroleum Exporting Countries; Non-
aligned Movement ; Rio Group (informal group of Latin American
states which deals with multilateral regional issues).
PEOPLE
Most Venezuelans are of European, Amerindian, and/or African
descent. The most recent period of European immigration dates to
the early 1950s, when many Spanish, Italian, and Portuguese
immigrants arrived. The 1981 census showed that 94% of the
people are native born; of foreign born, most came from Spain, Italy,
Portugal, Africa, and Colombia. Venezuela is sparsely populated.
Most of the population is concentrated in the Andes and along the
coast. Although almost half of the land area lies south and east of
the Orinoco River, that area contains only 4% of the population.
HISTORY
The indigenous peoples of Venezuela ranged from
sophisticated agriculturalists-the Timotes, who used irrigation and
terracing-to primitive groups living on islands offshore. Coastal
Carib tribes, especially the Teques and the Caracas, proved
formidable enemies to the Spanish who followed Columbus after his
1498 visit. Carib leader Guarcaipuro mobilized as many as 10,000
warriors to resist Spanish settlement. The first permanent Spanish
settlement in South America-Nuevo Toledo-was established in
Venezuela in 1522. Spanish explorers noted natives using a black,
oily liquid-petroleum-in their daily chores and took some of it to
Spain as a curiosity in 1500. The Spanish were interested in
yellow, rather than black, gold, however, and looked for treasure
elsewhere in their colonial empire. Even Venezuela's agricultural
potential was not appreciated by the Spanish. Other Europeans,
especially English adventurers and Dutch and French traders took an
interest in the region and developed important commercial
connections there. Eventual efforts by Spain to limit these inroads
and develop the colony proved counterproductive, and Venezuelans
began to grow restive under colonial control. Armed uprisings broke
out in 1795, 1797, and 1799. In 1806, Francisco de Miranda-a
Venezuelan aristocrat who was also a lieutenant general in the
French Revolution and an acquaintance of Washington, Hamilton,
Adams, and Paine-launched an unsuccessful rebellion. Independence
was not achieved until 1821 and then under the leadership of Simon
Bolivar, Venezuela's native son and continental hero. Venezuela,
along with what are now Colombia, Panama, and Ecuador, was part
of the Republic of Gran Colombia until 1830, when it separated and
became a sovereign country. Venezuela's 19th-century history is
characterized by frequent periods of political instability,
dictatorial rule, and revolutionary turbulence. The 20th century has
been marked by long periods of authoritarianism: dictatorships of
Gen. Juan Vicente Gomez (1908-35) and Gen. Marcos Perez Jimenez
(1950-58), and a democratic interlude between 1945 and 1948.
Since the overthrow of Perez Jimenez on January 23, 1958,
democratic elections have been held every 5 years, and democratic
institutions are flourishing. Action Democratica (AD) won five of
these elections (1958, 1963, 1973, 1983, 1988), and the Social
Christian (COPEI) Party won two (1968 and 1978).
GOVERNMENT
Venezuela's history of periodic competition for political
power based on free and open elections has earned Venezuela a
reputation as one of the more stable democracies in Latin America.
In December 1989, governors in 20 states and mayors in 269
municipalities were elected for the first time in the country's
history. This election also was the first to use a system allowing
the voter to choose individual candidates by name, rather than
selecting only among party slates. Opposition parties won nine
gubernatorial contests. As Venezuela pursues political and
economic reform, it maintains an influential role in foreign
affairs. Venezuela, joined by Colombia, Mexico, and Panama, sought
a regional solution to Central America's problems through the
Contadora process. Venezuela's political parties played a prominent
role in helping Nicaragua organize its own elections in 1990.
Caracas has hosted peace talks between the El Salvador and the
rebel Farabundo Marti National Liberation Front. Venezuela also is
active in international fora such as the Non-aligned Movement.
POLITICAL CONDITIONS
After a 10-year, constitutionally mandated hiatus from
power, Carlos Andres Perez took office again as president on
February 2, 1989, for an unprecedented second 5-year term. He has
abandoned economic nationalism, import substitution, and state
intervention, the trademarks of his first term (1974-79). The
decline of oil prices in the mid-1980s and changes in policy have
forced austerity on consumers accustomed to subsidies. Perez is
trying to diminish the role of the state in economic affairs and the
country's dependence on oil exports. To reduce the scope of public
sector intervention in the economy, authorities have moved to a
floating exchange rate and eliminated many interest rate and price
controls, as well as the level of subsidies for consumer goods. This
adjustment is likely to be painful in the short term and already has
resulted in inflation and economic contraction. Economic hardship
and the austerity program sparked violence in February 1989. On
February 27-28, crowds, reacting to a sharp increase in bus fares,
began burning buses. The violence grew when mobs, frustrated by
reduced food supplies, began widespread looting of groceries and
other businesses. When police no longer could maintain order, the
government temporarily suspended some constitutional rights and
used military force to restore order and to feed the population.
ECONOMY
Rich in oil and other mineral resources, Venezuela has the
highest per capita income in Latin America. More than 80% of its
citizens live in cities along the coast, where most industry is
concentrated. The economy is dominated by the petroleum industry,
which accounts for 80% of exports and more than 50% of
government revenue. Other resources, such as iron ore, coal,
bauxite, and gold are in various stages of development. The Guasare
coal field is one of the larger underdeveloped fields in the
Americas, and the government hopes to produce 10 million metric
tons a year by the mid-1990s, making Venezuela a leading exporter
of coal. Venezuela discovered large bauxite deposits near its
eastern border in 1977 and is rapidly developing an aluminum
industry; seven smelters are planned. As projects come on line over
the next 5 years, mineral exports are expected to at least double in
volume. Agriculture accounts for only 6% of GDP, 12% of the labor
force, and 20% of the land area. The sector is highly inefficient and
depends on a network of subsidies and trade barriers. Venezuela's
main export crops are coffee and cocoa. The staple crops are maize
and sorghum; most of Venezuela's wheat is imported. Venezuela
manufactures and exports petrochemicals, steel, aluminum,
textiles, apparel, beverages, and foodstuffs. It also produces
cement, tires, paper, and fertilizers, and assembles cars for the
domestic market. Manufacturing accounts for 17% of GDP but is
highly inefficient, having been protected by high tariff walls and
import quotas. Small and undercapitalized, the financial sector has
been declining as a percentage of GDP in recent years because of
unrealistic exchange rates and negative domestic interest rates.
Total banking assets at the end of 1989 were the equivalent of $18
billion, of which the public sector controls 25% through 8 mixed or
public banks. Three of the smaller banks are targeted for
privatization this year. Of the 41 commercial banks, 6 hold more
than 50% of commercial bank assets. Venezuela has an extensive
road system. With the exception of air service, transportation and
communications have failed to keep pace with the country's needs.
Caracas has a modern subway, but only one functioning rail line
serves the rest of the country. The labor force of about 6.8 million
is growing at more than 3% a year. High demand for labor in the
1970s ensured near full employment and attracted large numbers of
immigrant workers, particularly from Colombia. Unemployment
rose from 5.9% in 1980 to more than 12% in 1989. The informal
sector's participation in total employment rose to an estimated
38% in 1988, reflecting rising underemployment. The public sector
employs 19% of the work force, while less than 1% work in the
capital intensive oil industry. The labor force is 35% unionized. The
government hopes to get more than $16 billion in new multilateral
financing (excluding commercial bank lending) for the next 5 years.
Venezuela has secured $4.7 billion in International Monetary Fund
(IMF) and $750 million in World Bank financing and hopes that Japan
will match the IMF's 3-year extended fund facility. For more
economic information, write the US Department of Commerce,
International Trade Administration, Publications, Sales ∧
Distribution Room 1617M, Washington, DC 20230, to obtain the
semiannual Foreign Economic Trends report. For additional
commercial information, call 202-377-4303.
DEFENSE
The armed forces total 58,000 personnel in four service
branches-army, navy (including the marine corps), air force, and the
Armed Forces of Cooperation (FAC), commonly known as the national
guard, whose primary mission is to enforce internal security. Since
1959, the armed forces have come to reject a direct role in national
politics. In general, civil-military relations in Venezuela are good.
FOREIGN RELATIONS
The government traditionally has said that its international
conduct will be governed by:
-- respect for human rights;
-- the right of all peoples to self-determination;
-- non-intervention in the internal affairs of other nations;
-- peaceful settlement of disputes between nations,
including border disputes;
-- the right of all peoples to peace and security;
-- support for the elimination of colonialism; and
-- higher export prices for developing countries' primary
products.
Venezuela has numerous border disputes with its neighbors
but seeks to resolve them peacefully. Relations with Guyana are
complicated by Venezuela's claim to the area up to the Essequibo
River, more than half the area of Guyana. With the concurrence of
both parties, the border issue was referred to the UN Secretary
General for a determination of suitable means for settlement in
1987. Since 1970, Venezuela and Colombia have held sporadic talks
about the maritime border in the Gulf of Venezuela. Bilateral
mediation efforts were recently reinvigorated by the presidents of
both nations. A maritime boundary settlement with Trinidad and
Tobago has been submitted to the legislatures of both countries for
approval. Despite economic challenges, Perez has remained active
on the international stage. Venezuela has joined the Non-aligned
Movement. In the Western Hemisphere, he helped monitor
preparations for elections in Nicaragua and tried to rally
hemispheric support behind a plan to oust former Panamanian
military strongman General Manuel Noriega.
US-VENEZUELAN RELATIONS
The United States and Venezuela have similar global views-of
strengthening democratic institutions around the world; furthering
human rights; accelerating sound economic, social, and cultural
development through orderly and progressive change within the
framework of a free society; and cooperating in the defense and
security of the Western Hemisphere against aggression or
subversion. Venezuela not only endorses the theoretical goals of
democracy but also works with the United States to promote
democracy and human rights. For example, Venezuela has adopted
the American Convention on Human rights and supports the Inter-
American Commission on Human Rights. Along with the United
States, Venezuela supports the goals of nuclear non-proliferation in
the hemisphere, conventional arms restraint, anti-terrorism, and
the promotion of hemispheric economic development. Venezuela and
the United States have similar views on the importance of
democratization as a key element in a solution to the long-term
problems of Central America. President Perez made a state visit to
the United States in April 1990, at which time he and President
Bush continued their frequent discussions on a broad range of
issues. The United States is Venezuela's most important trading
partner, representing more than 45% of its international trade. The
United States exports machinery, transportation equipment,
agricultural commodities and auto parts in exchange for oil and
other natural resources. The United States budgeted $700,000 in
fiscal year 1990 for anti-narcotics assistance to Venezuela, which
also receives $125,000 in International Military Educational
Training (IMET) funds.
Principal US Officials
Ambassador-Michael M. Skol
Deputy Chief of Mission-Robert C. Felder
Political Counselor-William W. Millan
Economic Counselor-Frank S. Parker
Commercial Attache-Kenneth Moorefield
Labor Attache-Robert A. Millspaugh
Consul General-Daniel R. Welter
Administrative Counselor-Michael A. Boorstein
Regional Security Officer-Kevin M. Barry
Public Affairs Counselor-Stephen M. Chaplin
Principal Government Officials
President-Carlos Andres Perez
Foreign Minister-Reinaldo Figueredo Planchart
Ambassador to the United States-Simon Alberto Consalvi
Ambassador to the United Nations-Andres Aguilar Madslewy
Ambassador to the OAS-Guido Grooscors
Venezuela's embassy in the United States is at 1099 30th St.
NW, Washington, DC 20007 (tel. 202-342-2214). Consulates are in
Baltimore, Boston, Chicago, Houston, Los Angeles, Miami, New
Orleans, New York, Philadelphia, Portland, and San Francisco. Only
consulates issue visas.
The US Embassy is on Avenida de Miranda and Avenida
Principal de la Floresta, Caracas (tel. 58-2-285-2222). Office
hours are 8 am to 5 pm, Monday through Friday. The consulate in
Maracaibo is in Edificio Sofimara, Piso 3, Calle 77 con Avenida 13
(tel. 58-61-84253/84254). Office hours are 8 am to noon and 2 pm
to 4 pm, Monday through Friday.
Published by the United States Department of State -- Bureau of
Public Affairs -- Office of Public Communication -- Washington,
DC November 1990 -- Editor: Jim Pinkelman. Department of State
Publication 7749. Background Notes Series -- This material is in
the public domain and may be reprinted without permission;
citation of this source is appreciated. For sale by the
Superintendent of Documents, US Government Printing
Office,Washington, DC 20402. (###)