page_title: Hugo Chávez
section_title: Economic and social policy
hierarchical_section_title: Hugo Chávez / Policy overview / Economic and social policy
caption_attribution_description: English: Chart of oil price evolution based on data made freely accessible by BP in Statistical Review of World Energy 2013
context_page_description: Hugo Rafael Chávez Frías was a Venezuelan politician who was president of Venezuela from 1999 until his death in 2013. Chávez was also leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when it merged with several other parties to form the United Socialist Party of Venezuela, which he led until 2012.
  Born into a middle-class family in Sabaneta, Barinas, Chávez became a career military officer and, after becoming dissatisfied with the Venezuelan political system based on the Puntofijo Pact, founded the clandestine Revolutionary Bolivarian Movement-200 in the early 1980s. Chávez led the MBR-200 in an unsuccessful coup d'état against the Democratic Action government of President Carlos Andrés Pérez in 1992, for which he was imprisoned. Pardoned from prison after two years, he founded a political party known as the Fifth Republic Movement and was elected president of Venezuela in 1998 with 56.2% of the vote. He was re-elected in 2000 with 59.8% of the vote and again in 2006 with 62.8% of the vote.
context_section_description: From his election in 1998 until his death in March 2013, Chávez's administration proposed and enacted populist economic policies. Domestic policies included redistribution of wealth, land reform, and democratization of economic activity via workplace self-management and creation of worker-owned cooperatives. The social programs were designed to be short-term, though after seeing political success as their result, Chávez made the efforts central to his administration and often overspent outside of Venezuela's budget.
  With increasing oil prices in the early 2000s and funds not seen in Venezuela since the 1980s, Chávez created the Bolivarian Missions, aimed at providing public services to improve economic, cultural, and social conditions, using these populist policies in order to maintain political power. According to Corrales and Penfold, "aid was disbursed to some of the poor, and more gravely, in a way that ended up helping the president and his allies and cronies more than anyone else". The Missions, which were directly overseen by Chávez and often linked to his political campaigns, entailed the construction of thousands of free medical clinics for the poor, and the enactment of food and housing subsidies. A 2010 OAS report indicated achievements in addressing illiteracy, healthcare and poverty, and economic and social advances. The quality of life for Venezuelans had also improved temporarily according to a UN Index. Teresa A. Meade wrote that Chávez's popularity strongly depended "on the lower classes who have benefited from these health initiatives and similar policies". Following elections, social programs saw less attention from the government and their overall effectiveness decreased.
  The Gini coefficient, a measure of income inequality, dropped from .495 in 1998 to .39 in 2011, putting Venezuela behind only Canada in the Western Hemisphere. Venezuelans aged 15 and older, 95% could also read and write, with Venezuela having one of the highest literacy rates in the region, though some scholars have disputed that literacy improvements during Chavez's presidency resulted from his administration's policies. The poverty rate fell from 48.6% in 1999 to 32.1% in 2013, according to the Venezuelan government's National Statistics Institute (INE). The drop of Venezuela's poverty rate compared to poverty in other South American countries was slightly behind that of Peru, Brazil and Panama with the poverty rate becoming higher than the Latin American average in 2013 according to the UN. In the two years following Chávez's death, the poverty rate returned to where it had been before his presidency, with a 2017 NACLA analysis stating that "reductions in poverty and inequality during the Chávez years were real, but somewhat superficial ... structural poverty and inequality, such as the quality of housing, neighborhoods, education, and employment, remained largely unchanged".
  Chávez's populist policies eventually led to a severe socioeconomic crisis in Venezuela. The social works initiated by Chávez's government relied on oil products, the keystone of the Venezuelan economy, with Chávez's administration suffering from Dutch disease as a result. Economist Mark Weisbrot, in a 2009 analysis of the Chávez administration stated that economic expansion during Chávez's tenure "began when the government got control over the national oil company in the first quarter of 2003". Chávez gained a reputation as a price hawk in OPEC, pushing for stringent enforcement of production quotas and higher target oil prices. According to Cannon, the state income from oil revenue grew "from 51% of total income in 2000 to 56% 2006"; oil exports increased "from 77% in 1997 ... to 89% in 2006"; and his administration's dependence on petroleum sales was "one of the chief problems facing the Chávez government". In 2012, the World Bank also explained that Venezuela's economy is "extremely vulnerable" to changes in oil prices since in 2012 "96% of the country's exports and nearly half of its fiscal revenue" relied on oil production, while by 2008, according to 
caption: Historical crude oil prices, including the period of the Chávez administration (1998-2013).
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