Venezuela

Area: 916,445 sq Km (353,841 sq mi)

Population (2006 est. (26,754,000)

Capital: Caracas

Head of state and government: President Hugo Chávez Frías

Venezuelans elected Hugo Chávez to a second consecutive six year term as president on December 3, 2006. His total vote, 63% of all valid ballots cast, surpassed by almost 400,000 the number of ballots he received in the 2004 Recall Referendum. Chávez’s Fifth Republic Movement (Movimento Quinta República - MVR) received the largest amount of ballots; but there were four other organizations supporting Chávez, namely “We are Able” (Podemos) 610,000 ballots, the Fatherland Over All (Patria Para Todos -PPT) 461,000 ballots, the Venezuelan Communist Party (Partido Comunista de Venezuela – PCV) 284,000 ballots, and the People’s Electoral Movement (Movimento Electoral del Pueblo –MEP) 75,000 ballots.  While the entire opposition united behind the governor of Zulia, Manual Rosales, he received only 37% of the total popular vote. Regarding the number of votes the parties backing Rosales obtained: A New Time (Un Nuevo Tiempo - Rosales' party), 1,304,000 ballots; while his allied organization Justice First (Primero Justicia) obtained 1,184,759 votes and the Social Christian Party (Partido Social-Cristiano-COPEI), 215,000 ballots.

 The proportion of Venezuela’s electorate voting for Hugo Chávez on December 3, 2006 remained where it was in the presidential elections of 1998 and 2000, and the revocatory referendum of 2004, at roughly sixty percent. Abstention in the 2006 presidential election fell to 25%, the lowest level since the presidential election in1988. International observers from the Organization of American States and the European Economic Union concluded that the balloting was free of overt coercion and that the votes were accurately counted. Nevertheless, they chided the government for inundating the mass media with propaganda on behalf President Chávez’s candidacy and pressuring state employees to help in president’s reelection campaign. In his concession speech Governor Rosales offered similar criticisms, but nevertheless he congratulated President Chávez on his victory. Rosales called upon his supporters to continue the fight on behalf of their vision of Venezuela and called upon the newly reelected president to open up political space for a loyal opposition.

President Chávez cast the 2006 presidential election as a key juncture on the Venezuelan path to “Twenty-First Century Socialism.” Throughout the campaign he promised that if victorious he would change the country’s political institutions in 2007.  On the day following his reelection President Chávez stated that the assorted groups that supported his presidential candidacy should dissolve themselves and integrate into the single revolutionary party that he was creating. He also informed his countrymen of his intention to call form a referendum that would empower a Constituent Assembly to draft a new socialist constitution to replace the Constitution of 1999.  This announcement led his defeated opponent, Manual Rosales, to appoint a commission to orient the upcoming constitutional debate along social democratic lines. Specifically, high priority was to be given to guaranteeing minority rights, safeguarding private property and protecting political pluralism. Cardenal Jorge Urosa Savino, Arzobishop of Caracas added his voice to calls for respect for minority rights amid constitutional change. President Chávez responded that he was always open to dialogue with the democratic opposition, but he repeated that nothing would stand in the way of making twenty-first century socialism the law of the land. Some disagreement did exist within the Bolivarian Movement over the operational characteristics of twenty-first century socialism; however, many in the opposition feared that that Venezuela’s political and economic system was on the cusp of a transformation into Cuban style communism. Their fears were reflected in a report by German’s Konrad Adenauer Foundation that gave Venezuela one of the worst scorings in the Latin American Index of Democratic Development.

Venezuela’s economy grew at an annual rate of 9.2% between the second quarters of 2005 and 2006.  In the third quarter of 2006 it accelerated to 10.2%.  However, the economy was still climbing back from the “tremendous fall” experienced in 2003 and was only expected to close in 2006 at the level of per capita Gross Domestic Product (GDP) that existed in 1998. Of even greater concern, the United Nations Human Development Program Report of 2006 estimated Venezuela’s GDP at US$110.1 billion, for a per capita income of US$ 6,043. This figure falls short of the highest level ever recorded in Venezuela of US$8,255, in 1977. Furthermore, the UN Report found that 8.3% of Venezuela’s population (2,182,900) subsisted on US$ 1 of daily income, which placed them in the category of living in “extreme poverty.”  The Report also classified 7,258,800 Venezuelans as living below the poverty line, subsisting on less US$2 of daily income. Figures on income-based poverty alone in the Report were favorable for the Venezuelan Government, but the opposite occurred when viewed from the broader perspective of the Human Poverty Index. In 2005 the UN Human Development Program Report ranked Venezuela in the 14th position among the developing countries with “less poverty rates.” But in its 2006 survey, Venezuela dropped two places (to the 16th position), even though the number of poor people fell drastically in 2003-2004. The reasons behind this performance are stagnating basic indices such as life expectancy at birth, literacy rates, access to clean water and nutrition. These indicators showed no improvement in 2004 and 2005.

Increased income from petroleum in 2006 provided additional resources for the Venezuelan government “Missions” that focus on alleviating poverty and building support for the government. In the third quarter, the price of a barrel of Maracaibo crude approached an all-time high of $70 a barrel before stabilizing at just under $60 a barrel. This facilitated a positive trade balance that was 37% higher than in 2005. It also allowed Venezuelan foreign reserves to surpass $30 billion. Proven domestic reserves of liquid petroleum stood at 86.7 billion barrels in 2006, and preliminary findings from Ministry of Energy and Petroleum project to count and certify Venezuela’s viscous petroleum suggested additional reserves of at least 260 billion barrels of oil. This addition to the proven reserves of liquid petroleum would create a total reserve of 346.7 billion barrels, the largest in the world. On the other hand, as of 2006 Venezuelan oil production had not returned to the level of 3.3million barrels/day that prevailed prior to the crippling strike by petroleum workers in January 2003. The International Energy Agency, the Organization of Petroleum Exporting Countries and the United State Information Agency all estimate Venezuelan oil production at around 2.5million barrels/day, attributing this decline to the large number of producing wells that have become inoperable due to poor maintenance.  In 2006 Petróleos de Venezuela –PDVSA, Venezuela’s state petroleum company, intensified negotiations with the state oil companies of Iran, Russia, China and Brazil to provide the technical expertise and capital that would raise Venezuela’s production capacity to 6.8 million barrels/day. 

President Chávez intensified his campaign during 2006 to create a confederation of South American states that would serve as a counterweight to United States influence in the Western Hemisphere.  He boasted at having pumped $16 billion of oil profits into three dozen countries, mostly in South America, since taking power in 1999. Some estimates say this outflow has been even higher, possibly as much as $27 billion. Either way, it easily outstrips US government spending of $13 billion in Latin America over the same period. On April 29, President Chávez joined with Evo Morales and Fidel Castro for a tripartite summit in Havana. At this gathering Bolivia joined the Bolivarian Alternative for the Americas (ALBA). The stated purpose of ALBA is to advance “the process of integration,” including “the exchange of goods and services which best correspond to the social and economic necessities of its members.”  However, on more than one occasion President Chávez has referred to ALBA as an organization focused on reducing United States influence in Latin America. After July, President Chávez sought to fill the void on the radical left that opened following Fidel Castro surgery for internal bleeding. Even before the Cuban dictator’s became incapacitated, Venezuela had become the dominant partner in the Venezuela-Cuba relationship. Hugo Chávez now stands on the cusp to assuming Castro’s mantle as a leftist icon and his control over vast oil and gas reserves allow him to operate as a major player in Latin American international relations. Within two days of his reelection as president Chávez journeyed to Brazil, Uruguay and Argentina where he urged his fellow presidents to strengthen the South American Common Market (Mercosur).  On December 8, President Chávez participated in the South American continental summit at COCHABAMBA, Bolivia. There he assumed a high profile and again sounded the theme of opposition to United States plans for a free trade zone in the Americas.