Of course, the primary reason for Venezuela's wealth has been its huge oil
reserves. These oil reserves have also been Venezuela's economic downfall. In
the 1970s, the government overborrowed against assumed future oil revenues and
then squandered much of the money. However, after the 1979 oil shock, oil
prices declined and then leveled off while interest rates stayed high,
increasing Venezuela's national debt. The result has been a national economic
crisis accompanied by high inflation, increasing unemployment, and currency
devaluations. Many things that middle-class Venezuelans had taken for granted
have become impossibly expensive luxuries.
After President Carlos Andres Perez was elected to a second term of office in
1988 (his first term was 1973-1978), the public became increasingly
disenchanted with Perez's hardship-bringing free-market economic policies and
perceived widespread corruption in the government. This reached a peak with an
attempted military coup in February, 1992 which was supported by a large
percentage of the population, despite Venezuela's nearly 35 year tradition of
democratic rule. After another coup attempt and further allegations of
corruption, Andres was forced to resign in May, 1993 and an interim president
named.
The December, 1993 elections were a curious affair in which a 78 year-old
former president was elected as an outsider. Rafael Caldera has been a fixture
in Venezuelan politics since the 1930s and was the principal founder of COPEI,
one of Venezuela's two main political parties. Caldera had run unsuccessfully
for president four times before winning in 1968. Venezuelans consider Caldera
to be totally honest and his 1968-1973 term to have been without corruption.
After the February, 1992 coup, Caldera was one of the few political leaders to
not only denounce the coup leaders, but to also denounce the government for
creating conditions which made public support for the coup possible. This
rejuvenated political support for the aging politician, and he pursued the
COPEI presidential nomination for the upcoming elections, but was soundly
rejected by the party leadership. Undaunted, Caldera put together a coalition
of several smaller parties with himself at the head. In a very divided
election, Caldera won with just thirty percent of the vote. The Congressional
elections were similarly factious, with minor parties increasing their numbers
dramatically. While Caldera's vote total may seem small, it is not necessarily
unusual. In fact, in 1968 he won with only twenty-eight percent.
Caldera's policies have been somewhat of a mixed bag. He has continued some
of Andres Perez's programs of lower government subsidies and privatizing
government-owned firms, but has been careful to avoid anything that would
cause a great deal of hardship among the populace. For example, gasoline
continues to cost just four cents (U.S.) a liter, although there is talk of
doubling that to eight cents. He has also placed more control on particular
elements of the economy, such as banks. All of this has earned a certain
amount of wrath from the international business community. For example, in the
fall of 1994 Forbes magazine published a rather venomous anti-Caldera
editorial. National Review was only slightly kinder at about the same
time. The Economist, on the other hand, has taken more of a wait-and-
see approach.
I suspect that Venezuelans have realized that times are going to be tough for
a few years and are giving Caldera's government a fair chance to do what it
can. The Bolivar has been falling steadily for several years, but the drop
from 112 to 170 from March to December, 1994 was the steepest yet. By
comparison, the Bolivar was at 13.40 in March, 1985 and 45 in March, 1990.
Predictions are that the Bolivar will gradually drop to around 250 by the end
of 1995. Although this will bring accompanying inflation and further
deteriorate the Venezuelan standard of living, the certainty of continued
devaluations seems to be generally accepted as long as it is done slowly.
One positive sign of public acceptance of the economic situation was in early
January when the government announced that it would raise the price of
electricity by three to four percent every month for the rest of the year,
rather than ignore the problem until the price had to be raised by fifty or
sixty percent later in the year. Although no one liked the price increase,
everyone I spoke to and the newspaper editorials that I read all agreed that
this was a sensible approach. I suspect if the price of gasoline is to be
raised, it will be by the same gradual approach.
An interesting sign of Venezuela's economic preoccupation is that the Mexican
economic crisis was the number one international news story during my visit.
Indeed, the only national stories that even came close were Venezuela's own
economic problems and the on-going national baseball championship. Venezuelans
seemed to want to avoid the sudden economic shock as happened in Mexico, and
this may strengthen support for Caldera's slow but consistent policy.
MERIDA. The city of Merida is the capital and only large city in the
state of the same name. The population is somewhat over 200,000. Merida is the
site of Venezuela's second largest university, the Universidad de Los Andes, a
very well-respected institution with around 35,000 students from all over
Latin America, as well as exchange students from North America and Europe.
Merida's second claim-to-fame is its well-developed tourism industry. Merida
is beautifully situated among the Andes with numerous picturesque colonial
villages just an hour or two away. The city itself has dozens of green parks,
many colonial buildings and a huge handicraft market. Nearby are three
historical theme-parks and several national parks. The capstone of Merida's
tourism industry is the teleferico, the world's longest and highest cable car
ride to the top of one of the snow-covered peaks. It, however, has been closed
for repairs for a year-and-a-half, although the necessary parts to fix it had
just arrived in the city and work was expected to be started by February.
The result of all this is a well-balanced tourism industry that appeals both
to those wanting a more restful vacation of visiting picturesque places and
going shopping as well as to those who would go out into the mountains on long
back-packing excursions. Merida is a prime destination spot for middle and
upper class Venezuelans from elsewhere in the country, as well as large
numbers of Europeans (particularly Germans, Italians, and Spanish). However,
the domestic economic situation has caused a decrease in domestic tourism over
the past two years, while the closure of the teleferico has lead to a lower
number of international tourists. Overall, tourism is down by about twenty-
five percent or more.
It is generally conceded that the university is the dominant force in politics
and economics in Merida state, with the tourism industry getting most of the
control that is left over. Merida is a very educated town (due to the
university) and one with a heavy flow of outside income (from tourism and
students). Large parts of the city consist of either row after row of
attractive high-rise apartment buildings or upper-middle and upper class
neighborhoods. There are poor neighborhoods, but they are not as widespread in
Merida compared to elsewhere in Venezuela and, especially, to many other
places in Latin America. Merida is very much a middle class city.
EL VIGIA: El Vigia is a business and agricultural trading
center on the Panamerican Highway in the lowlands of Merida state,
near the south end of Lake Maracaibo. The population is around 50,000
and the town has an airport. El Vigia was founded as a railway
terminal just slightly over one hundred years ago and, from figures I
have seen, the population has really grown over the past two or three
decades. Perhaps for that reason, the town seemed particularly modern.
The people seem very "small town" in their attitudes, and this was
easily the most openly friendly place I visited in Venezuela. It is
very much a working class town with mostly low-middle class housing.
VALERA: Valera is the major business and commerical center for
Trujillo state. Merideños told me that Valera was a
campo town ("hick" in US slang), and while this is somewhat the
prejudice of the educated looking down on the less-educated, there is
some truth in the statement. Valera is about the same size as Merida
in population, but it very much feels like an overgrown small town. In
fact, at one point during my visit I decided that Valera is
Venezuela's version of Mason City, in reference to a town in rural
north-central Iowa. Overall, Valera is a very working class city.
Housing is mostly low-middle class and below. However, Valera's slums
appeared more like the poor parts of rural towns in Latin America than
like urban slums. Near the downtown, there was a small upscale
shopping center that clearly was built for more wealthy patrons, but
that was the only sign of upper-middle class or higher that I saw
in Valera. Certainly there are wealthier Valerans, but that I saw so
little sign of them I think shows that they are relatively few in
number.
TRUJILLO: This is the state capital of Trujillo state and it is
about an hour away from Valera on a wonderful four-lane paved highway
built during the rule of an earlier president whose wife was from the
city. The population is around 50,000. Trujillo is known as a center
of colonial architecture, and that is true in the sense that there are
many small colonial-style buildings and the streets are very
picturesque. However, it is also a very poor, run-down, lower-class
town. It is colonial in character because it is poor and whatever
money there is in the state appears to end up in Valera. Nobody builds
anything new in Trujillo. It is the only place I visited in Venezuela
that I would describe as dirty.
There is a sizable small-townish business district, with the stores
clearly marketed toward the low-end shoppers. Trujillo is also the
site of the state's main university, which I rode by on the bus. It is
a rather small run-down place with just a few buildings in the middle
of a field. It is by no means in the same league as the university in
Merida. I am certain what I saw was the main campus, as I later saw a
picture of the same in a book about Trujillo state.
SAN CRISTOBAL: San Cristobal is the capital of Tachira state
and the largest city in the Western Andes. Including the suburbs, the
population is over half a million. Merideños told me that San
Cristobal is very commercial, and indeed it is. There are two main
avenues running through the center of town (5th and 7th) lined with
large office buildings and shiny stores. These two wide avenues and
the sidewalks beside them are constantly crowded with autos and
pedestrians. Downtown San Cristobal very much belongs to the middle
class and higher. It is obvious that business is king here. For
example, the state legislature and a number of state agencies have
their offices in the top seven floors of a magnificent twin-towered
ten story building downtown. The bottom three floors and basement are
leased out to up-scale shops, restaurants, hair-dressers, etc, with
one area reserved for the state art museum.
However, San Cristobal is a very mixed city from an economic and class
perspective. There are numerous modern high-rise apartment buildings
and neighborhoods of beautiful walled upper-middle and upper class
houses. There are also some large urban slums not far from the
prosperous city center. In this sense, San Cristobal is a true Latin
American city, unlike elite Merida or small-townish Valera. There is a
state university in San Cristobal as well as a branch campus of
Merida's Universidad de Los Andes, including a reportedly good
journalism department.
SAN ANTONIO: San Antonio is a business and commercial center
literally on the border with Colombia. The international boundary is
only about twelve blocks from the main plaza. The population is about
50,000. The Colombian city of Cucuta (population 600,000) is eight
miles away on the other side of the border. Local traffic moves freely
between the two cities. In fact, in a morning visit to Cucuta, I
walked across the busy international bridge without anyone even
bothering me. There are, however, rigorous customs and migration
checks just beyond San Antonio in Venezuela (and, I'm told, just
beyond Cucuta in Colombia).
San Antonio's border location has been the mainstay of its economy. In
the past, Colombians would flock here to buy imported products which
were cheaper in Venezuela due to lower tariffs. When Venezuela's
currency was stronger, Cucuteños would change their Pesos to
Bolivares and bank in San Antonio. There has also been not a little
smuggling of foreign goods into Colombia to avoid that country's
higher tariffs. Presently, Venezuela's current economic hard-times and
currency devaluations have made these all these transactions less
profitable. However, the San Antonio-Cucuta road is the only main
landlink between Colombia and Venezuela and recent free trade
agreements between the two countries are expected to bring even
greater prosperity to San Antonio in the future.
Because of San Antonio's past as a cross-border shopping center, it is
a very commercial town. The business district would be appropriate for
a city three times the size, except the stores are heavily oriented
towards more expensive goods such as electronics, appliances, and
watches and there are very few clothing and food stores. With so many
stores, San Antonio seems very much a middle-class town. The housing I
saw was mostly low-middle class and middle-class.
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GENERAL BACKGROUND
INTRODUCTION
The information in this study was compiled in a visit to the western Andean
region of Venezuela by the author from December 27, 1994 to January 15, 1995.
It is largely based on the author's own observations and on discussions with
Venezuelans, primarily Venezuelan radio station personnel. My wife, Theresa
Bries, who is a former journalist, was with me on the trip until January 6 and
she also contributed some valuable insights. I also wish to thank Jeff White,
who sent me a copy of a media study he did of the Caracas area in 1992.
Although I did not get this until I was back in the US, it has allowed me to
make some interesting comparisons.
POLITICAL/ECONOMIC SITUATION
Venezuela ranks as one of the more prosperous and more developed nations in
Latin America. Indeed, depending on which statistic and year one is looking
at, Venezuela even sometimes ranks at the top of some specific social and
economic indicators. In real terms this means that Venezuela has a very
educated population and a large middle class, at least by Latin American
standards. True, there is still a lot of poverty to be seen, but it is not at
the bare survival level commonly seen in places like Guatemala, Honduras,
Peru, and Bolivia. Even the poor are better off in Venezuela.PUBLIC PERCEPTIONS
In contrast to the state of crisis of 1992, which Jeff White very vividly
portrays in his 1992 media study of Venezuela, I found a Venezuela which seems
to have resigned itself to its economic troubles. I heard complaints about
corruption and about the economic situation. But I did not see, hear, nor read
any strong opposition to Caldera and his government. I saw no signs of support
for a military coup. It is possible that the Andean region, which I visited,
is less politicized than the Caracas area, where Jeff White wrote about and
where most of the troubles of 1992 took place. On the other hand, Andean
Venezuela is traditionally the most conservative part of the country and it
should not be forgotten that a string of five military dictators from Tachira
state ruled the country for all but three years from 1899 to 1958.THE WESTERN ANDES
As mentioned above, my visit took me to Venezuela's western Andean region.
Specifically I visited a major and a minor city in each of three states, for a
total of six cities. I also saw much of the countryside in-between and paid
brief visits to several small towns. The cities visited were:
Association of North American Radio Clubs
DXer of the Year for 1995.