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  U.S. Department of State, December 1999
Bureau of Western Hemisphere Affairs

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Background Notes:
Venezuela

 
  
Official Name:
Republic of Venezuela

PROFILE

Geography

Area: 912,050 sq. km. (352,143 sq. mi.); about the size of Texas and Oklahoma combined.
Cities: Capital--Caracas (metropolitan area pop. est. 2.8 million, 1990 census). Other major cities--Maracaibo, Valencia, Barquisimeto.
Terrain: Varied.
Climate: Varies from tropical to temperate, depending on elevation.

People

Nationality: Noun and adjective--Venezuelan(s).
Population (1999 est.): 23.7 million.
Annual growth rate (1988-99 est.): 2.1%.
Ethnic groups: Spanish, Italian, Portuguese, Arab, German, African, indigenous people.
Religions: Roman Catholic 96%.
Languages: Spanish (official), numerous indigenous dialects.
Education: Years compulsory--9. Literacy--90.7%.
Health: Infant mortality rate--28.5/1,000. Life expectancy--73.31 yrs.
Work force (about 9.9 million in 1998): Services--66%. Manufacturing--14%. Agriculture--10%. Construction--9%. Other--1%.

Government

Type: Federal Republic.
Independence: July 5, 1811.
Constitution: January 23, 1961.
Branches: Executive--president (head of government and chief of state; five-year term); Council of Ministers (cabinet). Legislative--bicameral congress (203-member Chamber of Deputies, 53-member Senate) elected for five-year term. Judicial--18-member Supreme Court.
Subdivisions: 22 states, one federal district (Caracas), and one federal dependency (72 islands).
Major political parties: Fifth Republic Movement (Movimiento V Republica--MVR, President Chavez's party), Democratic Action (Accion Democratica--AD), Social Christian (Comite Organizador Politico por Elecciones Independientes--COPEI), Homeland for All (Patria Para Todos--PPT), and the Movement to Socialism (Movimiento al Socialismo--MAS).

Economy

GDP (1999 est.): $95.1 billion.
Growth rate (1999 est.): -5% (negative growth).
GDP per capita: $4,013.
Natural resources: Petroleum, natural gas, coal, iron ore, gold, other minerals, hydroelectric power, bauxite.
Agriculture (4.7% of GDP, 1998): Products--rice, coffee, corn, bananas, dairy, meat, and poultry products.
Petroleum industry (27.4% of GDP): Oil refining, petrochemicals.
Manufacturing (20.0% of GDP): Types--iron and steel, paper products, aluminum, textiles, transport equipment, consumer products, and petroleum refining.
Trade (1999 est.): Exports--$17.6 billion: petroleum $14.1 billion, aluminum, steel, chemical products, iron ore, cigarettes, plastics, fish, cement, and paper products. Major markets--U.S., 1998--53%, Colombia, United Kingdom, Mexico, Japan, Ecuador, Peru, Brazil, and Netherlands. Imports--$12.0 billion; machinery and transport equipment, manufactured goods, chemicals, foodstuffs. Major suppliers--U.S., 1998--48%, Colombia, Japan, Brazil, Germany, Italy, Canada, and France.
Exchange rate (December 1999): 641 bolivars=U.S.$1.

PEOPLE AND HISTORY

The Venezuelan people comprise a combination of European, indigenous, and African heritages. 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, this region contains only 5% of the population.

At the time of the Spanish discovery, the indigenous people were mainly agriculturists and hunters living in groups along the coast, the Andean mountain range, and along the Orinoco river. The first permanent Spanish settlement in South America -- Nuevo Toledo -- was established in Venezuela in 1522. Venezuela was a relatively neglected colony in the 1500s and 1600s as the Spaniards focused on extracting gold from other areas of their empire in the Americas.

The Venezuelans began to grow restive under colonial control toward the end of the 18th century. After several unsuccessful uprisings, the country achieved independence from Spain in 1821 under the leadership of its most famous son, Simon Bolivar. Venezuela, along with what are now Colombia, Panama, and Ecuador, was part of the Republic of Gran Colombia until 1830, when Venezuela separated and became a sovereign country.

Much of Venezuela's 19th century history was characterized by periods of political instability, dictatorial rule, and revolutionary turbulence. The first half of the 20th century was marked by periods of authoritarianism--including dictatorships from 1908-35 and from 1950-58. The Venezuelan economy shifted after the first World War from a primarily agricultural orientation to an economy centered on petroleum production and export.

Since the overthrow of Gen. Marcos Perez Jimenez in 1958 and the military's withdrawal from direct involvement in national politics, Venezuela has enjoyed an unbroken tradition of civilian democratic rule. Until the 1998 elections, the traditional political parties Accion Democratica (AD) and the Christian Democratic (COPEI) Party controlled the political environment at both the state and federal level.

GOVERNMENT

A National Constituent Assembly is currently in the process of drafting a new constitution to replace the 1961 Constitution currently in force. Venezuelans will vote on December 15, 1999, on the new draft Constitution. The political system described below is that defined by the 1961 Constitution.

The President is elected by a plurality vote with direct and universal suffrage. The term of office is 5 years, and a president cannot be re-elected until at least two terms have been served by others. The President decides the size and composition of the cabinet and makes appointments to it with the involvement of the Congress. The executive branch initiates most legislation, which the legislature debates and approves, alters, or rejects. The Congress has the authority to override a presidential veto but the President can ask the Congress to reconsider the portions of bills found objectionable.

The Congress is bicameral, and elections for the Senate and the Chamber of Deputies are held at the same time every five years. Until 1993, voters cast ballots for a party list of candidates. The 1993 national election permitted, for the first time, the direct election of one-half of the Chamber of Deputies by name and district. When the Congress is not in session, its delegated committee acts on matters relating to the executive and in oversight functions.

All courts in Venezuela are part of the federal system. The 18 members of the Supreme Court of Justice are elected by a joint session of the Congress to 9-year terms; one-third of the court is elected every 3 years, and each justice can serve only one term. The Judicial Council oversees the selection of judges to the lower civilian courts, which include district courts, municipal courts, and courts of first instance.

Principal Government Officials

President--Hugo Chavez
Foreign Minister--Jose Vincente Rangel
Ambassador to the United States--Alfredo Toro Hardy
Ambassador to the United Nations--Carlos Bivero
Ambassador to the OAS--Virginia Contreras

The Venezuelan Embassy in the United States is located at 1099 30th St. NW, Washington, DC 20007 (tel. (202)342-2214). Venezuela maintains consulates in Boston, Chicago, Houston, Miami, New Orleans, New York, San Francisco, and Puerto Rico.

POLITICAL CONDITIONS

Venezuela's history of free and open elections since 1958 and its prohibition of military involvement in national politics earned it a reputation as one of the more stable democracies in Latin America. Although the country suffered a series of political and economic crises at the beginning of the 1990s, Venezuela has enjoyed political stability and social peace since that time.

Venezuela experienced political turbulence in response to a 1989 economic austerity program launched by then-President Carlos Andres Perez. Disgruntled military officers unsuccessfully mounted two coup attempts in 1992 and in 1993 Congress impeached Perez on corruption charges. Lt. Col. Hugo Chavez Frias, leader of a coup attempt in February 1992, won the presidency in December 1998 after campaigning for far-reaching reform, constitutional change, and a crackdown on corruption. His election was associated with deep popular dissatisfaction with the traditional parties, income disparities, and the nation's economic difficulties.

Chavez was a leading advocate for rewriting the 1961 Constitution through a constitutional congress. The National Constituent Assembly (ANC), a 131-member group, was elected on July 25, 1999, and began work in August. The ANC had a six-month period to write a new draft constitution. The draft was completed in November and Venezuelans will vote on it in a referendum on December 15, 1999.

ECONOMY

Venezuela is rich in oil and other mineral resources. Its per capita income is about average for Latin America. The country's public external debt (excluding the obligations of the central bank and PDVSA, the parastatal oil company) stood at approximately $22.6 billion in 1998. The economy contracted by 0.7% in real terms in 1998. Consumer prices rose only 29.9% in 1998, compared to the record 103% of 1996. The government is projecting an inflation rate of 20% for 1999.

The Venezuelan economy made significant strides under the "Agenda Venezuela" of the 1990s, propelled primarily by the opening of the petroleum sector to foreign investment (the "apertura"), by a far-reaching privatization program and by public sector reform. Oil prices began to decline at the end of 1997 and dropped sharply in 1998, resulting in a budgetary deficit of 4.2% in 1998. For 1999, the government projects a lower fiscal deficit (3.1% of GDP), due to a strong rebound in oil prices.

The Venezuelan Government and the IMF have an ongoing dialogue on structural reforms. The World Bank and Inter-American Development Bank are contributing to efforts to promote fundamental structural reforms -- in the judiciary, in the electoral system, and with social security/severance pay programs.

Petroleum and Other Resources

Venezuela's economy is dominated by the petroleum sector, and oil sector investments have continued to drive the pace of growth. The country is a founding member of the Organization of Petroleum Exporting Countries (OPEC). Venezuela's renewed cooperation with this group under the Chavez Government was one factor in a doubling in oil prices. In 1998, this sector accounted for more than one-quarter of GDP, almost three-quarters of export earnings, and more than half of central government's revenues. Venezuela is the United States' leading supplier of imported crude and refined petroleum products.

The Government of Venezuela has opened up much of the hydrocarbon sector to foreign investment, promoting the establishment of massive new petrochemical joint ventures and the reactivation of inactive fields. Almost 60 foreign companies representing 14 different countries participated in one or more aspects of Venezuela's oil sector opening. The Venezuelan national oil company Petroleos de Venezuela, S.A. (PDVSA) and foreign oil companies signed 33 operating contracts for marginal fields inthree bidding rounds. These contracts are expected to generate more than $15 billion in foreign investment. The government also passed new legislation further opening the sector, with a strong emphasis on natural gas and petrochemicals. A new domestic retail competition law was also passed.

A range of other natural resources, including iron ore, coal, bauxite, gold, nickel, and diamonds are in various stages of development and production. In 1996, CVG, the state-owned mining firm, announced its first joint venture with a foreign company to develop the Las Cristinas gold mine. President Chavez personally announced the beginning of mine operations in May 1999. Low gold prices have forced the joint venture to put the project on hold. Acting under the Enabling Powers granted by Congress in April, the Executive decreed updates to Venezuela's 1945 mining law in order to encourage greater private sector participation in mineral extraction. Venezuela has vast hydropower resources that it has developed to supply power to the nation's industries. The recently enacted national electricity law is designed to provide a legal framework and to encourage new investment in the sector. The government is proceeding with plans to privatize the various state-owned electricity systems, although at a slower pace than previously expected.

Manufacturing, Agriculture, and Trade

Manufacturing contributed 20.0% of GDP in 1998. Manufacturing output decreased 3.9% in 1998 and has fallen further in 1999 in an ongoing recession. Venezuela manufactures and exports steel, aluminum, textiles, apparel, beverages, and foodstuffs. It produces cement, tires, paper, and fertilizers and assembles cars both for domestic and export markets.

Agriculture accounts for 4.7% (1998) of GDP, 10% (1998) of the labor force, and at least one-fourth of Venezuela's land area. Venezuela exports rice, cigarettes, fish, tropical fruits, coffee, cocoa, and manufactured products. The country is not self-sufficient in most areas of agriculture. Venezuela imports approximately two-thirds of its food needs. In 1998, U.S. firms exported $524 million worth of agricultural products, including wheat, corn, soybeans, soybean meal, cotton, animal fats, vegetable oils, and other items to make Venezuela one of the top three U.S. markets in South America. The U.S. supplies more than one-third of Venezuela's food imports. U.S. agricultural exports to Venezuela have shown their most explosive growth potential in the consumer-oriented, ready-to-eat product category, with 1999 sales growing by 13% to an estimated $90 million, despite the fact that overall consumption is down by 10% this year.

Thanks to petroleum exports, Venezuela usually posts a trade surplus. In recent years, non-traditional (i.e., non-petroleum) exports have been growing rapidly but still constitute only about one-fifth of total exports. The United States is Venezuela's leading trade partner. During 1998, the United States exported $6.5 billion in merchandise (about 46% of Venezuela's total) and purchased $9.3 billion in imports (about 53% of Venezuela's total). Venezuela's trade with other Andean Pact members, particularly Colombia, has been growing in importance, although it fell off in 1999 due to recession in both countries.

Labor and Infrastructure

Venezuela's labor force of about 9.9 million is growing faster than total employment. At the end of June 1999, official unemployment was 15.2%, but unofficial estimates are higher. The public sector employs 16% of the work force, while less than 1% work in the capital-intensive oil industry. About 25% of the labor force is unionized. Unions are particularly strong in the public sector.

Venezuela has an extensive road system. With the exception of air service, transportation and communications have failed to keep pace with the country's needs. Much of the infrastructure suffers from inadequate maintenance. Caracas has a modern subway but only one functioning rail line serves the rest of the country.

FOREIGN RELATIONS

Venezuela traditionally has said that its international conduct will be governed by:

  • Respect for human rights;
  • The right of all people to self-determination;
  • Non-intervention in the internal affairs of other nations;
  • Peaceful settlement of disputes between nations, including border disputes;
  • The right of all people to peace and security; and
  • Support for democracy.
The Chavez government has made hemispheric cooperation and integration its foreign policy priorities. Venezuela worked closely with its neighbors following the Summit of the Americas in many areas, particularly energy integration, and championed the OAS decision to adopt an Anti-Corruption Convention. Venezuela also participates in the UN Friends groups for Haiti, El Salvador, and Guatemala. It is pursuing efforts to join the Mercosur trade bloc to expand the hemisphere's trade integration prospects.

Venezuela has long-standing border disputes with Colombia and Guyana but seeks to resolve them peacefully. Bilateral commissions have been established by Venezuela and Colombia to address a range of pending issues, including resolution of the maritime boundary in the Gulf of Venezuela. Relations with Guyana are complicated by Venezuela's claim to more than half of Guyana's territory. Since 1987, the two countries have held exchanges on the boundary under the "good offices" of the United Nations.

U.S.-VENEZUELAN RELATIONS

U.S. relations with Venezuela are close and we share a strong mutual commitment to democracy. Venezuela is the number-one supplier of foreign oil to the U.S. market, and U.S.-Venezuelan commercial ties are close. Major U.S. interests in Venezuela include promotion of U.S. exports and protection of U.S. investment; continuation of the economic reform program; preservation of Venezuela's constitutional democracy; closer counternarcotics cooperation; and continued access to a leading source of petroleum. Underscoring the importance of this bilateral relationship, President Clinton's October 1997 visit launched a "Partnership for the 21st Century" to promote common solutions for energy development, trade and investment, and protection of the environment, as well as a strategic alliance against crime and drug trafficking.

The United States is Venezuela's most important trading partner, representing approximately half of both imports and exports. In turn, Venezuela is our third-largest export market in Latin America, purchasing U.S. machinery, transportation equipment, agricultural commodities, and auto parts. Venezuela's opening of its petroleum sector to foreign investment in 1996 created extensive trade and investment opportunities for U.S. companies. New legislation is expected to open up investment opportunities in natural gas and mining. The Department of State is committed to promoting the interests of U.S. companies in overseas markets. For contact information and a list of government publications, please refer to the last page of this document.

Venezuela is a minor source country for opium poppy and coca but a major transit country for cocaine and heroin. Money laundering and judicial corruption are major concerns. The United States is working with Venezuela to combat drug trafficking. In FY 2000, the United States is planning $700,000 for counternarcotics assistance and about $400,000 for Venezuelan participants in the International Military Education and Training program. There is no USAID or Peace Corps mission in Venezuela.

Approximately 23,000 U.S. citizens living in Venezuela have registered with the U.S. Embassy, an estimated three-quarters of them residing in the Caracas area. An estimated 12,000 U.S. tourists visit Venezuela annually. About 500 U.S. companies are represented in the country.

Principal U.S. Embassy Officials

Ambassador--John F. Maisto
Deputy Chief of Mission--Nancy M. Mason
Political Counselor--Thomas Ochiltree
Economic Counselor--Gary Maybarduk
Commercial Counselor--Charles Ford
Consul General--Marilyn Jackson
Administrative Counselor--Robert Weisberg
Regional Security Officer--Henry Jenkins
Public Affairs Counselor--Philip Parkerson

The U.S. Embassy is on Calle F and Calle Suapure, Colinas de Valle Arriba, Caracas (tel. 58-2-975-6411). Office hours are 8 a.m. to 5 p.m., Monday through Friday.

NATIONAL SECURITY

The armed forces number 80,000 personnel in four service branches -- Army, Navy (including the Marine Corps), Air Force, and the Armed Forces of Cooperation (FAC), commonly known as the National Guard.

OTHER GOVERNMENT CONTACTS

Department of State
Bureau of Western Hemisphere Affairs, Venezuela Desk 202-647-3338
Overseas Citizens Services 202-647-5225

Department of Commerce

14th and Constitution Avenue, NW
Washington, DC 20230
Venezuela Desk: 202-482-0475
800-USA-TRADE
Home page: http://www.ita.doc.gov

Venezuela-American Chamber of Commerce
Torre Credival, Piso 10
2nda Avenida de Campo Alegre
Campo Alegre, Apartado 5181
Caracas 1010A, Venezuela
Tel: 582-263-0833
Fax: 582-263-1829/0586
E-mail: Venam@ven.net
Home page: http://www.venamcham.org

U.S. Government Publications

Consular Information Sheet 202-647-3000 (by fax)
Economic Trends Report 202-736-7760 (fax on demand)
Country Commercial Guide 202-736-7760 (fax on demand)

These publications are available through the State Department's World Wide Web page http://1997-2001.state.gov

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program provides Consular Information Sheets, Travel Warnings, and Public Announcements. Consular Information Sheets exist for all countries and include information on entry requirements, currency regulations, health conditions, areas of instability, crime and security, political disturbances, and the addresses of the U.S. posts in the venezuela. Travel Warnings are issued when the State Department recommends that Americans avoid travel to a certain venezuela. Public Announcements are issued as a means to disseminate information quickly about terrorist threats and other relatively short-term conditions overseas which pose significant risks to the security of American travelers. Free copies of this information are available by calling the Bureau of Consular Affairs at 202-647-5225 or via the fax-on-demand system: 202-647-3000. Consular Information Sheets and Travel Warnings also are available on the Consular Affairs Internet home page: http://travel.state.gov. Consular Affairs Tips for Travelers publication series, which contain information on obtaining passports and planning a safe trip abroad are on the internet and hard copies can be purchased from the Superintendent of Documents, U.S. Government Printing Office, telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad may be obtained from the Office of Overseas Citizens Services at (202) 647-5225. For after-hours emergencies, Sundays and holidays, call 202-647-4000.

Passport information can be obtained by calling the National Passport Information Center's automated system ($.35 per minute) or live operators 8 a.m. to 8 p.m. (EST) Monday-Friday ($1.05 per minute). The number is 1-900-225-5674 (TDD: 1-900-225-7778). Major credit card users (for a flat rate of $4.95) may call 1-888-362-8668 (TDD: 1-888-498-3648). It also is available on the internet.

Travelers can check the latest health information with the U.S. Centers for Disease Control and Prevention in Atlanta, Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm give the most recent health advisories, immunization recommendations or requirements, and advice on food and drinking water safety for regions and countries. A booklet entitled Health Information for International Travel (HHS publication number CDC-95-8280) is available from the U.S. Government Printing Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements, currency and customs regulations, legal holidays, and other items of interest to travelers also may be obtained before your departure from a venezuela's embassy and/or consulates in the U.S. (for this venezuela, see "Principal Government Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in dangerous areas are encouraged to register at the U.S. embassy upon arrival in a venezuela (see "Principal U.S. Embassy Officials" listing in this publication). This may help family members contact you in case of an emergency.

Further Electronic Information

Department of State Foreign Affairs Network. Available on the Internet, DOSFAN provides timely, global access to official U.S. foreign policy information. Up1299d daily, DOSFAN includes Background Notes; daily press briefings; venezuela Commercial Guides; directories of key officers of foreign service posts; etc. DOSFAN's World Wide Web site is at http://1997-2001.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an annual basis by the U.S. Department of State, USFAC archives information on the Department of State Foreign Affairs Network, and includes an array of official foreign policy information from 1990 to the present. Contact the Superintendent of Documents, U.S. Government Printing Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To order, call (202) 512-1800 or fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S. Department of Commerce, the NTDB contains a wealth of trade-related information. It is available on the Internet (www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at (202) 482-1986 for more information.

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