page_title: Economic history of Venezuela
section_title: 1990 - 2012: Hugo Chávez
hierarchical_section_title: Economic history of Venezuela / Economic and political events from 1913-2002 / 1990 - 2012: Hugo Chávez
caption_attribution_description: English: Historic rates of inflation and oil revenues in Venezuela from 1980 to present. Sources: EIA 1, EIA 2, International Monetary Fund: Data &amp; Statistics (1980-2016), CIA: The World Factbook (2009–2014), Business Insider (2014, 2015), BBC (2016)
context_page_description: Venezuela, officially the Bolivarian Republic of Venezuela, is a country located on the northern coast of South America. It is known for its large proven oil reserves. Before oil was discovered, Venezuelan production was primarily agriculture, such as coffee and cocoa. After the first commercial drilling for oil in 1917, oil production increased drastically due to the oil boom of the 1920s and was later furthered by World War II, as Venezuela supplied oil to the United States. From 1958 to 1989, democratic leaders attempted to use the large oil revenues to invest in other industry through various policies such as import substitution and other programs designed to diversify the Venezuelan economy away from a highly specialised export range. These attempts, for the most part, were unsuccessful as Venezuelan government revenues continued to be highly volatile due to the fluctuating price of oil, which was reflected especially throughout the 1980s due to the oil price crash.
context_section_description: In 1992, the then Colonel Hugo Chávez and his made 2 coup attempts, resulting in 2 years jail time. During this time, Chávez met with Luis Miquilena, a left-wing activist who ultimately advised Chávez to pursue his political ambitions through the electoral process. Consequently, after his release in 1994, Chávez began to pursue politics instead of military power, and created the party 'Movement for the Fifth Republic'. After the election of 1994 in which Raphael Caldera, the Copei party leader was elected President, Chávez began to gain support and in 1998, both major parties were defeated and Chávez was successfully elected. Chávez's party offered an anti corruption, anti poverty programs and a more pacifistic democracy, where the major concerns would be the welfare of the people. He began his presidency by proposing a new Constitution and held a referendum to decide if the people would support this. Chávez received 71% of the votes in the referendum, allowing for the creation of a new Venezuelan constitution. This constitution was later created by the people electing delegates to a constitutional assembly in order to form the new constitution. When the project was submitted to the public in December 1999, it received a 72% yes vote, allowing Chávez to introduce the new constitution, named the Constitution of the Bolivarian Republic of Venezuela, named after Simon Bolivar, a military hero from the Wars of Independence in South America Throughout this time, multiple referendums and elections were used to enact various constitutional reforms to strengthen power over these institutions.
  Before Chávez took office on the 2nd of February 1999, he visited the leaders of the OPEC countries and later the OPEC countries convened in Caracas, Venezuela for the second OPEC summit in September 2000. The meeting involved reestablishing OPEC as a leader in the world oil market as well as recovering oil prices, as Venezuela had become one of the cartel's most unreliable producers in regards to the quotas set by OPEC.
  In 2001, Chávez used the enabling act, which allowed the President to enact various laws without legislative approval, to enact over 49 laws designed to redistribute land and wealth in Venezuela. This action caused some business and labour circles to grow vary of attempts to consolidate economic and political power. During this time, the new Hydrocarbons Act was also introduced, increasing the taxes companies were required to pay for oil exploitation. Tensions within the country came to a head in 2002 when a coup removed Chávez from power for several days, exploiting the media in Venezuela in order to promote the coup and associated strike as well. This continued for several days until business leader Pedro Carmona and his vice president Diosdado Cabello were removed from Miraflores Palace and Chávez was restored to power. After the coup, Chávez began to purge political opponents from the armed forces, solidifying his power over the institution, as well as later firing 18000 workers at PDVSA who went on general strike in an attempt to force Chávez out of power. The general strike and the aftermath of it allowed Chávez to retake control of PDVSA. The strike cost Venezuela approximately 13.5 billion dollars in direct loses due to the shutdown of PDVSA for over two months and the need to import oil and gas from Brazil to run transport and other facilities.
  In 2004, Chávez and his government returned to furthering their programs promoting welfare and the redistribution of wealth across the Venezuelan people, particularly focused on the poorer areas of the country. These programs were known as 'misiones' and allowed (and were staffed by) many Cuban teachers, doctors and paramedics to practice in Venezuela and were financed by oil export revenues. After winning the referendum (a 'recall' referendum designed to oust Chávez), he continued to forward the programs established beforehand and further consolidating power by increasing control over the judiciary sector. In 2003, the central bank suspended auctions of dollars.
  After Presi
caption: Venezuela historic inflation vs. oil revenue
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