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Introduction

Venezuela was one of three countries that emerged from the collapse of Gran Colombia in 1830 (the others being Ecuador and New Granada, which became Colombia). For most of the first half of the 20th century, Venezuela was ruled by generally benevolent military strongmen, who promoted the oil industry and allowed for some social reforms. Democratically elected governments have held sway since 1959.

Venezuela is the sixth-most populous country in Latin America, after Brazil, Mexico, Colombia, Argentina and Peru. About 85% of the population lives in urban areas in the northern portion of the country. While almost half of Venezuela's land area lies south of the Orinoco River in the states of Bolivar and Amazonas, this region contains only 5% of the population. The population of Venezuela is comprised of a combination of European, indigenous, and African heritages.

The political situation in Venezuela is highly polarized and volatile. Current concerns include: a weakening of democratic institutions, political polarization, a politicized military, drug-related violence along the Colombian border, increasing internal drug consumption, overdependence on the petroleum industry with its price fluctuations, and irresponsible mining operations that are endangering the rain forest and indigenous peoples.

Venezuela's prevailing political calm came to an end in 1989, when Venezuela experienced riots in which more than 200 people were killed in Caracas. The so-called Caracazo was a response to an economic austerity program launched by then-President Carlos Andres Perez. Three years later, in February 1992, a group of army lieutenant colonels led by future President Hugo Chavez mounted an unsuccessful coup attempt, claiming that the events of 1989 showed that the political system no longer served the interests of the people. A second, equally unsuccessful coup attempt by other officers followed in November 1992. A year later, Congress impeached Perez on corruption charges.

Deep popular dissatisfaction with the traditional political parties, income disparities, and economic difficulties were some of the major frustrations expressed by Venezuelans following Perez's impeachment. In December 1998, Hugo Chavez Frias won the presidency on a campaign for broad reform, constitutional change, and a crackdown on corruption.

President Hugo Chavez was elected on a platform that called for the creation of a National Constituent Assembly in order to write a new constitution for Venezuela. Chavez's argument that the existing political system had become isolated from the people won broad acceptance, particularly among Venezuela's poorest classes, who had seen a significant decline in their living standards over the previous decade and a half. The National Constituent Assembly (ANC), consisting of 131 elected individuals, convened in August 1999 to begin rewriting the Constitution. In free elections, voters gave all but six seats to persons associated with the Chavez movement. Venezuelans approved the ANC's draft in a national referendum on December 15, 1999.

The constitution of December 15, 1999 changed the name of the country from the Republic of Venezuela (República de Venezuela) to the Bolivarian Republic of Venezuela (República Bolivariana de Venezuela). The ideological cornerstone of President Chávez's "Bolivarian" foreign policy is to build a "multipolar" world with regional alliances that would counterbalance U.S. domination of world affairs.

In 2000 voters elected President Hugo Chavez of the Fifth Republic Movement (MVR) in generally free and fair elections. In April 2002, the country experienced a temporary alteration of constitutional order. When an estimated 400,000 to 600,000 persons participated in a march in downtown Caracas to demand President Chavez' resignation, gunfire broke out, resulting in as many as 18 deaths and more than 100 injuries on both sides. Military officers took President Chavez into custody, and business leader Pedro Carmona swore himself in as interim President. On 14 April 2002, military troops loyal to Chavez returned him to power.

The Chávez government's relations with the United States, Colombia, and Spain have been particularly tense since the abortive coup attempt in April 2002, which these countries appeared to welcome. Chávez also accused the United States of being behind the coup attempt.

Continued dissatisfaction with the Chavez administration led to a national work stoppage on December 2, 2002. Strikers protested the government and called for the resignation of President Chavez. On December 4, 2002, the petroleum sector joined the strike. Other sectors of the economy also joined the work stoppage and effectively shut down all economic activity for a month. Venezuela's presidential recall referendum was held August 15, 2004. Following two months of extensive campaigning efforts, President Chavez won 59% of the vote.

According to the Ministry of Finance, from 2003 to 2006, President Chavez had spent US$12.9 billion to create 24 "missions" - government funded social programs - in a variety of areas. The first missions focused on basic needs of the poorest sectors of society. Chavez then took advantage of a strong brand created around the term "mission" to expand into other areas, such as subsidized food distribution, land reform, and housing. The most popular missions (by number of users) are Mercal, the subsidized food network, the education missions (Robinson, Ribas) and Barrio Adentro, the primary health care network.

Reliable poverty statistics are hard to come by in Venezuela since the National Statistics Institute (INE) changed its methodology under political pressure from Chavez in late 2004. Unsurprisingly, since then, it has shown a steady decrease in the number of people living in "poverty and "extreme poverty" and is used to justify the claim that, under Chavez, poverty in Venezuela has fallen 10 percentage points, from 44 percent of the population at the end of 1998 to 34 percent of the population as of the first half of 2006.

Datanalisis, the largest polling and market survey firm in Venezuela, has a different method that calculates socio-economic status (SES). Their research divides Venezuela into five SES groups: A, B, C, D, and E, with A being the most well off. These groups are defined by income, education, type of housing, and geographic residency, with members of classes A and B (3 percent of the population) earning at least USD 4,000 a month, C (16 percent) earning an average of USD 900 a month, D (38 percent) averaging USD 415 a month, and E (43 percent) averaging USD 238 a month (all at the official exchange rate). By 2007 Groups A, B, and C had seen real declines in their incomes of 23 percent since 1999. Group D made about as much in 2007 in real terms as it did at the start of Chavez's presidency, and group E had seen its income rise by 14 percent in real terms during this period.

While civilian authorities generally maintained control of the security forces, there were instances in which elements of the security forces acted independently of government authority. Politicization of the judiciary, restrictions on the media, and harassment of the political opposition continued to characterize the human rights situation during 2005. The government used the justice system selectively against the political opposition and implementation of a 2004 media law threatened to limit press freedom.

In the interest of diversification, the Chávez government sought to develop military relations with China, Cuba, Russia, and Ukraine. China's defense minister visited Venezuela for the first time in September 2001. Venezuela signed a military cooperation agreement with Russia in 2001. The arrangement facilitates the acquisition by Venezuela of Russian military aircraft or helicopters and other weapons.

In April 2004, Venezuela's Ministry of Defense embarked on a US$2-billion arms-acquisition program and subsequently signed an agreement, which was expanded later in the year, with Russia for various armaments for the army. In February 2005, Venezuela also was evaluating Russian MiG-29 fighters as replacements for its US-made F-16s and seeking to purchase 24 Super Tucano multipurpose fighter aircraft from Brazil. In January 2005, Spain agreed to sell Venezuela up to four offshore patrol boats or light corvettes and a number of Casa military transport aircraft. In September 2004, Ukraine began providing light to medium military equipment to Venezuela, and negotiations were underway for Ukraine to supply more sensitive and strategically important military equipment.

Chavez continued a close relationship with Cuba's dictator Fidel Castro. Castro had a long history of fomenting subversion in Latin America and elsewhere. Under Castro, Cuba -- also a state sponsor of terrorism -- hosted and provided sanctuary to members of the FARC and the ELN, as well as to militants of the Basque terrorist group ETA. Castro and Chavez are using a variety of means to try to help individuals who share their worldview come to power via the electoral route. Some Cuban advisers reportedly have been posted in the Ministry of Defense's General Directorate for Military Intelligence (Dirección de Inteligencia Militar-DIM), and some Cuban military advisers reportedly are engaged in training the military. In early 2005, Venezuela's National Assembly ratified a 1999 security agreement with Cuba intended to facilitate cooperation between security personnel in Venezuela and Cuba.

The Chavez government concluded a number of agreements with Iran, ranging from investment pacts, to cultural exchanges, to pledges of support against military aggression -- ostensibly by the United States. In March 2006, Chavez defended Iran's quest to develop nuclear energy without any oversight by the UN or the International Atomic Energy Agency, dismissing the concerns of the international community.




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