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Geography
The Republic of Venezuela has an area of
916,442 sq. km,bordered by Colombia to the
west, Brazil to the south , Guyana to the
east and the Caribbean to the north.
Demography
In 1992, Venezuela's population was estimated
at 20.9 million. The population growth rate
fell to 2.5% between 1981 and 1990 compared
to 3.7% in 1970s. There is a high proportion
of young people : 39% are aged under 15 and
49% under 20, while only 3.6% of the population
is over 65 years of age. According to World
Bank figures the average annual growth rate
of the urban population was 4.8% between
1965 and 1980, falling to 2.7% in the 1980-89
period. Almost a sixth of the population
live in the capital, Caracas (2.78 million).
The second largest city is Maracaibo (1.36
million), which is the centre for the oil
industry. Other important cities are Valencia
(1.03 million), for vehicle assembly, Barquisimeto
(745,000), a market town, and Maracay (800,000),
the centre of a major agricultural area and
also significant for its industries.
The literacy rate in 1989 was 91.8% of the
population over 10 years of age. Enrolment
in secondary schools increased from 27% of
the age group in 1965 to 54% in 1988, while
that in higher education went up from 7%
to 27%. The ethnic composition of the population
in 1981 was 69% mestizo, 20% white, 9% black
and 2% Indian. Income distribution is extremely
unequal, with the white population tending
to be better off than the general population.
The labour force is expanding even more rapidly
than Venezuela's population. It grew by 3.8%
a year between 1985 and 1991 to reach 7.42
million. 57.1% of the work force are engaged
in services, 15% in manufacturing, 10.6%
in agriculture, 7.6% in construction and
0.9% in oil and mining. The unemployment
rate in 1991 was 8.8%. The public sector
provided jobs for 1.13 million workers in
1991, about 15% of total employment.
History and Political Situation
Venezuela was first sighted by Christopher
Columbus on his third voyage in 1498 later
becoming a Spanish colony. Venezuela was
one of the first colonies to declare its
independence from Spain, but this was only
achieved in 1819 after a protracted war led
by Simon Bolivar, the national hero and one
of the most important figures in the continent's
history. Venezuela initially joined Colombia
and Ecuador to form the Republica de Gran
Colombia, but broke away to become an independent
republic in 1830.
For the next century Venezuela's history
was marked by long stretches of dictatorial
rule, brief periods of democratic instability
and numerous civil conflicts. Until 1958
the military was the most important political
force in the country. Since 1958 Venezuela
has enjoyed its longest period of democracy
and has been regarded as something of a model
for the rest of the region. During the 1960s,
however, there was a spate of guerrilla activity
in poorer parts of the country.
In the constitution adopted in 1961 the presidency
is the most important branch of government.
The president is elected for a five year
term by direct vote. Congress consists of
a Senate (49 members) and a House of Representatives
(201 members) and is selected by proportional
representation. A wide range of parties compete
in Congress, but the presidency has been
dominated by just two parties, Accion Democratica
(AD) and Comite de Organisacion Political
Electoral Independiente (COPEI).
In February 1989 large scale riots erupted
following the severe economic adjustment
measures implemented by the incoming government
of Carlos Andres Perez. Since then there
have been frequent popular disturbances and
in February 1992 a group of disgruntled junior
officers, led by Colonel Hugo Chavez, staged
a military uprising. The plotters succeeded
in much of the country, but failed to gain
control of Caracas or to capture the president.
While most Venezuelans rejected the idea
of military rule, there was little popular
support for President Perez. His government
spent most of 1992 fighting off attempts
to shorten its term. The government, and
indeed the whole political class, is blamed
for falling living standards, run-down public
services and widespread corruption. Perez
has formed the lightning-rod for generalised
dissatisfaction culminating in his impeachment
on corruption charges in May 1993.
Economy
Petroleum has been the mainstay of the Venezuelan
economy since the late 1920s. Venezuela is
the only OPEC member outside the Middle East
and in mid-1991 it was the world's 7th largest
oil producer. Consequently, economic progress
has been heavily influenced by the developments
in the world oil market, with the post-1973
oil price increases resulting in a burst
of investment and growth - and a major effort
being made to diversify into steel, aluminium,
hydroelectric power and other non-oil activities.
Massive capital flight and the closure of
international capital markets after the eruption
of the Latin American debt crisis in August
1982 led to a foreign exchange crisis in
early 1983. The collapse in world oil prices
in 1986 and the ensuing failure to adopt
appropriate adjustment measures led to the
near exhaustion of international reserves
by the end of 1988.
The Venezuelan manufacturing sector, mainly
consumer goods, metal working industries
and petrochemicals, which was developed later
than other Latin American countries with
heavy government involvement, was protected
by high tariffs and import quotas and had
operated at a high cost in the past. However,
in the present stage of development, a greater
role has been assigned to foreign and domestic
private participation in new projects.
After the introduction of stiff adjustment
measures, the economy fell into a deep recession
in 1989. Activity began to recover mid-way
through 1990 and the upturn gathered momentum
in 1991, when real GDP rose by 10.4% compared
with its depressed level during the previous
year. This renewal of economic growth has
been driven above all else by massive investment
outlays by the state oil industry and greater
government spending on social programmes
and public works projects. In spite of political
instability, the Venezuelan economy grew
continuously in 1992. However, growth in
1992 was led by the private sector and this
trend is likely to continue in 1993.
There is only a narrow stock market since
many companies are still tightly controlled
by family groups, but efforts are underway
to modernise share trading and transfer systems.
The government is gradually privatising the
state-owned companies including the telephone
network (CANTV) airline (VIASA) bought by
Iberia of Spain, now controlled by GTE, electricity
and finance companies.
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