Bolivarian Republic of Venezuela
Area: 912,050 sq. km. (352,143 sq. mi.);
slightly more than twice the size of California.
Cities: Capital--Caracas (metro. area
pop. 3.6 million, 2004 est.). Other major
cities--Maracaibo, Valencia, Barquisimeto,
Maracay, Merida, Ciudad Bolivar.
Terrain: Andes Mountains and Maracaibo Lowlands
in northwest; central plains; Guiana Highlands
Climate: Varies from tropical to temperate,
depending on elevation.
Nationality: Noun and adjective--Venezuelan(s).
Population (2005 est.): 26,577,423.
Annual population growth: 1%.
Religion: Roman Catholic 96%, Protestant 2%,
Language: Spanish (official), numerous
Education: Years compulsory--9.
Literacy--93.4% (male 93.8%, female 93.1%)
Health: Infant mortality rate--26.17
deaths/1,000 live births. Life expectancy--73.81
Ethnic groups: Spanish, Italian, Portuguese,
Arab, German, African, Amerindian.
Type: Federal Republic.
Independence: July 5, 1811.
Constitution: December 30, 1999.
Branches: Executive--President (head of
government and chief of state; 6-year term);
Council of Ministers (cabinet, appointed by
Congress (5-year term). Judicial--32-member
Supreme Court (elected by Congress; 12-year
term). Electoral--National Electoral
Council (elected by Congress; 7-year term).
Citizen Power--Attorney General, Ombudsman,
Comptroller General (elected by Congress; 7-year
Subdivisions: 23 states, one federal district
(Caracas), and one federal dependency (72
Major political parties: Fifth Republic Movement
or Movimiento V Republica (MVR), Democratic
Action or Accion Democratica (AD), Christian
Democrats or Comite Organizador Politico por
Elecciones Independientes (COPEI), Homeland for
All or Patria Para Todos (PPT), Movement to
Socialism or Movimiento al Socialismo (MAS),
Radical Cause or La Causa R, First Justice or
Primero Justicia, and the National Convergence
Suffrage: Universal, age 18 and over.
Principal government officials: See
listing under History and Political
GDP (2005 est.): $130 billion.
Annual growth rate (2005): 9.3%.
GDP per capita (2005): $4,900.
Government expenditures: 27.4% of GDP.
Natural resources: Petroleum, natural gas, coal,
iron ore, gold, diamonds, bauxite, other
minerals, hydroelectric power.
Petroleum industry (16 % of GDP): Oil refining,
Manufacturing (17% of GDP): Types--iron
and steel products, paper products, aluminum,
textiles, transport equipment, consumer
Agriculture (3% of GDP): Products--corn,
sorghum, rice, bananas, vegetables, coffee,
beef, pork, milk, eggs, fish.
Trade: Exports (2005)--$55.5 billion:
petroleum ($47.1billion), aluminum, steel,
chemical products, iron ore, cigarettes,
plastics, fish, cement, and paper products.
Major markets (2005)--U.S. 55%, Colombia
9%, Mexico 4%, the Netherlands 2%, Ecuador 3%,
Japan 2%, Brazil 2%. Imports
(2005)--$24 billion: machinery and transport
equipment, manufactured goods, construction
materials. Major suppliers (2005)--U.S.
33%, Colombia 11%, Brazil 8%, Mexico 5%, Germany
3.4%, Japan 3%, China 3%.
Exchange rate (Dec. 2005): 2,150 bolivars=U.S.
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
HISTORY AND POLITICAL CONDITIONS
At the time of Spanish discovery, the
indigenous in Venezuela were mainly
agriculturists and hunters living in groups
along the coast, the Andean mountain range, and
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 and silver from other areas of the
Toward the end of the 18th century, the
Venezuelans began to grow restive under colonial
control. In 1821, after several unsuccessful
uprisings, the country succeeded in achieving
independence from Spain, 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 separate 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. In addition, the
Venezuelan economy shifted after the first World
War from a primarily agricultural orientation to
an economy centered on petroleum production and
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. This earned Venezuela
a reputation as one of the more stable
democracies in Latin America. Until the 1998
elections, the Democratic Action (AD) and the
Christian Democratic (COPEI) parties dominated
the political environment at both the state and
The Caracazo And Popular Dissatisfaction
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
Current 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
political system described below is that defined
by the 1999 Constitution.
The president is elected by a plurality vote
with direct and universal suffrage. The term of
office is 6 years, and a president may be
re-elected to a single consecutive term. The
president appoints the vice president. He
decides the size and composition of the cabinet
and makes appointments to it with the
involvement of the National Assembly.
Legislation can be initiated by the executive
branch, the legislative branch (either a
committee of the National Assembly or three
members of the latter), the judicial branch, the
citizen branch (ombudsman, public prosecutor,
and controller general) or a public petition
signed by no fewer than 0.1% of registered
voters. The president can ask the National
Assembly to reconsider portions of laws he finds
objectionable, but a simple majority of the
Assembly can override these objections.
The National Assembly is unicameral,
consisting solely of the Chamber of Deputies.
Deputies serve 5-year terms, and may be
re-elected for a maximum of two additional
terms. These legislative agents are elected by a
combination of party list and single member
constituencies. When the Congress is not in
session, a delegated committee acts on matters
relating to the executive and in oversight
The Constitution designates three additional
branches of the federal government--the
judicial, citizen, and electoral branches.
The judicial branch is headed by the Supreme
Tribunal of Justice, which may meet either in
specialized chambers (of which there are six) or
in plenary session. The justices are appointed
by the National Assembly and serve 12-year
terms. Under the 1999 Constitution, the Supreme
Tribunal of Justice is composed of 20 justices.
The 1999 Constitution was amended in 2004, and
the total number of justices was expanded by 12
to a total of 32. In December 2004, the National
Assembly selected new judges to fill the
expansion. The judicial branch also consists of
lower courts, including district courts,
municipal courts, and courts of first instance.
The citizens branch consists of three
components--the attorney general ("fiscal
general"), the "defender of the people" or
ombudsman, and the comptroller general. The
holders of these offices, in addition to
fulfilling their specific functions, also act
collectively as the "Republican Moral Council"
to challenge before the Supreme Tribunal of
Justice actions they believe are illegal,
particularly those which violate the
Constitution. The holders of the "citizen power"
offices are selected for terms of 7 years by the
The "Electoral Power," otherwise known as the
National Electoral Council (Consejo Nacional
Electoral or CNE), is responsible for
organizing elections at all levels. Its five
members are also elected to 7-year terms by the
National Assembly. In the event of a hung vote
in the National Assembly, the Supreme Tribunal
of Justice can be called on to appoint the
In July 2000, following a long and
controversial process, voters re-elected
President Hugo Chavez of the Fifth Republic
Movement (MVR) in generally free and fair
national and local elections. The MVR and
pro-Chavez Movimiento a Socialismo (MAS) party
won 92 seats in the 165-member legislature.
Subsequent party splits reduced the pro-Chavez
members to 84 seats.
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 April 14, military troops loyal to Chavez
returned him to power. In an effort to promote
national reconciliation, the Tripartite Group
was formed in August 2002 to facilitate dialogue
between the government and the opposition. The
group included representatives from the
Organization of American States, the UN
Development Program, and the Carter Center.
Formal direct talks between government and
opposition dialogue representatives began in
November 2002. 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. The OAS Permanent Council
passed Resolution 833 on December 16, 2002,
calling for a "constitutional, democratic,
peaceful, and electoral solution" to the crisis
The Referendum Process
In February 2003, opposition supporters
coordinated a nationwide effort collecting 3.2
million signatures for possible recall
referenda, including constitutional issues and a
presidential recall. The newly appointed
National Electoral Council (CNE) ruled in
September 2003 that the signatures were
collected prematurely (before the President’s
mid-term in office as required by the
Constitution) and that a new signature
collection effort would be necessary for
possible recall referenda. Opposition supporters
petitioned the CNE for the right to collect
signatures again, and the CNE set the dates for
November 28-December 1, 2003. During their
signature drive, the opposition collected 3.4
million signatures. However, after reviewing the
opposition petition for two months, the CNE
determined in February that 1.5 million of the
total signatures were either invalid or of
questionable authenticity. Several months of
intense deliberations culminated in a highly
controversial signature verification process
from May 28-30, 2004. During this process, the
opposition validated enough signatures to
trigger a national referendum on the mandate of
President Hugo Chavez.
Venezuela’s presidential recall referendum
was held August 15, 2004. Following two months
of extensive campaigning efforts, President
Chavez won 59% of the vote. His opponents
immediately contested that the results of the
referendum were marked by electoral fraud.
However, international electoral observation
missions carried out by the Organization of
American States and the Carter Center found no
indication of systemic fraud.
Beyond the Referendum
On October 31, 2004, Venezuela held
gubernatorial and mayoral elections nationwide.
Following an upsurge in political support for
President Chavez after the recall referendum,
pro-government candidates won control of 20 out
of the total 22 state governor positions up for
election. On August 7, 2005, Venezuela held
municipal elections across the country. The
National Electoral Council publicly announced
that there was a 69% abstention rate for these
elections. Supporters of President Chavez won a
majority of the seats up for election. Venezuela
held legislative elections on December 4, 2005.
In the week prior to the legislative elections,
the vast majority of the Opposition’s candidates
withdrew from the race, citing concerns over the
Electoral Registry and a lack of protections for
secrecy of the vote. On December 4, 2005,
candidates aligned with President Chavez
captured all 167 seats in the new National
Principal Government Officials
President--Hugo CHÁVEZ Frias
Vice President--José Vicente RANGEL
Minister of Foreign Affairs--Alí RODRIGUEZ
Minister of Defense--Orlando MANIGLIA Ferreira
Ambassador to the United States--Bernardo
Ambassador to the Organization of American
States--Jorge VALERO Briceńo
Ambassador to the United Nations--Fermin Toro
in the United States is located at 1099 30th St.
NW, Washington, DC 20007 (tel. (202) 342-2214).
In addition to Washington, DC, Venezuela
maintains consulates in Boston, Chicago,
Houston, Miami, New Orleans, New York, San
Francisco, and Puerto Rico.
Real GDP increased by 9.3% in 2005. The economy
recovered strongly in 2004 (17.9%), after two
consecutive years of deep economic recession (in
2003, Venezuelan GDP contracted 7.7%, after
contracting 8.9% in 2002). The 2004 and 2005
economic recovery was driven by a large increase
in government expenditures, based on higher than
expected oil prices, which in turn generated
higher consumption levels.
The Consumer Price Index increase was
approximately 14.4% at the end of 2005,
following increases of 19.2% in 2004 and 27.1%
As of January 23, 2003, all foreign exchange
requests must be approved by the National
Exchange Control Administration (CADIVI) and the
Central Bank (BCV) completes all legal purchase
and sale of foreign currency. The current
exchange control regime rates for U.S. dollar
exchange rate are: Bs. 2,144.60=U.S. $1.00 for
purchase operations, and Bs. 2,150=U.S. $1.00
for sale operations. The national budget for
2006 assumes that the government will not
devaluate this year. We expect a small
devaluation in 2007.
Central Bank-held international reserves
increased to U.S.$30.4 billion at the end of
2005. The reserves would have been higher, but
the BCV transferred $6 billion to the National
Development Fund (FONDEN) during the last
quarter 2005, as directed by the Central Bank
Law (July 2005). The level of international
reserves is expected to decrease during 2006
because the Central Bank Law established that
state-owned oil company PDVSA will only transfer
the foreign exchange earnings needed for its
domestic expenses, taxes, royalties, and
dividends to the BCV, and would transfer the
rest to FONDEN.
Venezuelan sovereign debt, both domestic and
foreign, has been increasing. The government
announced plans to prepay some of its most
expensive foreign debt and to extend the debt
profile of the domestic debt, reducing near-term
debt service. Despite increases in domestic and
foreign debt, Venezuela’s debt/GDP ratio is low
by Latin American standards. Venezuela’s
Emerging Markets Bond Index investment risk
rating, at 213 basis points, dropped somewhat
over 2005, but remained higher than all
countries in the region except Argentina and
There is considerable income inequality. The
Gini coefficient was 0.514 during 2005.
According to private sources, the percentages of
poor and extremely poor among Venezuelan
population were 67% and 35%, respectively, in
2005. These high ratios are due primarily to
lower real wages earned by employees, and high
rates of un- and underemployment.
Petroleum And Other Resources
Economic prospects remain highly dependent on
oil prices and the exportation of petroleum. In
2005, the oil sector accounted for roughly 16%
of GDP, 87% of export earnings, and about half
of the central government's ordinary revenues.
Venezuela remains the fourth-leading supplier of
imported crude and refined petroleum products to
the United States. Even as oil prices increased
in 2005, the Venezuelan government sought more
income from the petroleum sector. The most
prominent example was a unilateral decision in
late 2004 to increase the royalty rate on
production from the Orinoco heavy crude
"strategic associations" with international oil
companies from 1% to 16.67%.
The Government of Venezuela had historically
opened up much of the hydrocarbon sector to
foreign investment, promoting multi-billion
dollar investment in heavy oil production,
reactivation of old fields, and investment in
several petrochemical joint ventures. Almost 60
foreign companies representing 14 different
countries participate in one or more aspects of
Venezuela's oil sector. On November 13, 2001,
under the enabling law authorized by the
National Assembly, President Chavez enacted the
new Hydrocarbons Law, which came into effect in
January 2002. This law replaced the Hydrocarbons
Law of 1943 and the Nationalization Law of 1975.
Among other things, the new law provided that
all oil production and distribution activities
were to be the domain of the Venezuelan state,
with the exception of the joint ventures
targeting extra-heavy crude oil production.
Under the new law, private investors cannot own
50% or more of the capital stock in joint
ventures involved in upstream activities. The
new law also provides that private investors may
own up to 100% of the capital stock in ventures
concerning downstream activities, in addition to
the 100% already allowed for private investors
with respect to gas production ventures, as
previously promulgated by the National Assembly.
During the December 2002-February 2003
general strike, petroleum production and
refining by PDVSA, the state-owned oil company,
almost ceased. Despite the strike, these
activities eventually were substantially
restarted. Out of a total workforce of 45,000,
19,000 PDVSA management and workers were
subsequently dismissed because the government
asserted they had abandoned their jobs during
the strike. Current levels of production remain
a subject of debate, with considerable
difference between the levels cited by the
Venezuelan government and those cited by private
sector observers. With world oil prices high,
there remains significant international interest
in investing to develop Venezuela’s oil
resources. However, as of late 2004 there had
been no major new deals announced under the new
Hydrocarbons Law. Venezuela’s Gaseous
Hydrocarbons Law provides significantly more
liberal terms and two large natural gas projects
are in different stages of development.
In early 2005, the government informed
companies with operating contracts that they
must migrate the contracts to joint ventures
that conform to the 2001 Hydrocarbons Law. The
government threatened to seize fields operating
under the services contracts on December 31,
2005 if oil companies did not sign transition
agreements to migrate their contracts. All but
one company signed the agreements and are
currently negotiating the terms of the joint
venture companies with the government. The
company that did not sign the agreement was
bought out by its partner.
Trade, Manufacturing and Agriculture
Thanks to petroleum exports, Venezuela usually
posts a trade surplus. In recent years,
nontraditional (i.e., non-petroleum) exports
have been growing but still constitute only
about one-fifth of total exports. The United
States is Venezuela's leading trade partner.
During 2005, the United States exported $6.4
billion in goods to Venezuela, making it the
27th largest market for the U.S. Including
petroleum products. Venezuela exported $34
billion in goods to the U.S., making it our 9th
largest source of goods.
The government of Venezuela has taken a vocal
role against the proposed Free Trade Agreement
of the Americas. Its stated goal is to develop a
South American bloc prior to engaging in
negotiations with the U.S.
Manufacturing contributed an estimated 17% of
GDP in 2005, growing by 9%. The manufacturing
sector continued its recovery started in 2004,
but remained hindered by a marked lack of
private investment. Venezuela manufactures and
exports steel, aluminum, textiles, apparel,
beverages, and foodstuffs. It produces cement,
tires, paper, fertilizer, and assembles cars
both for domestic and export markets.
Agriculture accounts for approximately 4% of
GDP, 10% 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 about two-thirds
of its food needs. In 2005, U.S. firms exported
$419 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 two U.S.
markets in South America. The United States
supplies roughly one-quarter of Venezuela's food
Labor and Infrastructure
Official unemployment statistics registered 12.9
% in January 2006. Unofficial estimates are
significantly higher. The public sector employs
about 13% of the work force, while less than 1%
work in the capital-intensive oil industry.
About 18% of the labor force is unionized, and
unions are particularly strong in the petroleum
and public sectors. The "informal" sector
accounts for some 48% of the work force, or 4.9
Labor unions allege the government repeatedly
violates International Labor Organization (ILO)
agreements on freedom of association and the
right to organize and bargain collectively.
Specifically, the Constitution and laws permit
undue influence in the internal elections of
unions. The government has told the ILO it will
correct the problem; draft legislation remains
pending in the National Assembly.
Venezuela has an extensive road system. With
the exception of air service, transportation has
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.
Hemispheric cooperation and integration are two
pillars of President Chavez's foreign policy.
Venezuela worked closely with its neighbors
following the 1997 Summit of the Americas in
many areas--particularly energy integration.
Venezuela is currently advocating regional
integration through its PetroCaribe petroleum
initiative, the creation of a South American
Community of Nations, and the establishment of
the Bolivarian Alternative for the Americas (a
social integration project proposed by President
Chavez as an alternative to the Free Trade Area
of the Americas). In October 2005, Venezuela was
officially invited to join MERCOSUR. Before it
can become a full member of MERCOSUR, Venezuela
must conform to the trade bloc’s economic
regulations. The Venezuelan Government maintains
close relations with Cuba and advocates an end
to Cuba's isolation. Venezuela promotes a
"multi-polar" world based on ties among Third
Venezuela has longstanding border disputes
with Colombia--most recently over the capture of
a Colombian insurgent leader inside
Venezuela--and Guyana, but seeks in general 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 roughly
three-quarters of Guyana's territory. Since
1987, the two countries have held exchanges on
the boundary under the "good offices" of the
U.S.-Venezuelan relations have been tense in
recent years. President Hugo Chávez has
continuously defined himself in opposition to
the United States, using incendiary rhetoric to
publicly insult President Bush and senior
administration officials. The United States
continues to seek constructive engagement with
the Venezuelan Government, focusing on areas of
Major U.S. interests in Venezuela include
promotion of U.S. exports and protection of U.S.
investment, preservation of Venezuela's
constitutional democracy, closer
counternarcotics cooperation, more vigorous
efforts on counterterrorism, and continued
access to petroleum.
U.S.-Venezuelan commercial ties are close.
The United States is Venezuela's most important
trading partner, representing about half of both
imports and exports. In turn, Venezuela is the
United States’ 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. As a result,
Venezuela is one of the top four suppliers of
foreign oil to the United States. 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 go to the end of this
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. In 2004
and early 2005, counternarcotics cooperation
between the U.S. and Venezuela deteriorated
significantly. In March 2005, the Venezuelan
National Guard removed its highly experienced
members from the U.S.-supported Prosecutor’s
Drug Task Force. In August 2005, the Government
of Venezuela accused the U.S. Drug Enforcement
Administration (DEA) of espionage and terminated
cooperation with the DEA pending negotiation of
a new cooperation agreement. On September 15,
2005 President Bush decertified Venezuela on
In June 2004, Venezuela was listed at Tier 3
status in the State Department’s Report on
Trafficking in Persons. Tier 3 status indicates
a perceived lack of effort to combat human
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
Deputy Chief of Mission--Kevin Whitaker
Political Counselor--Robert Downes
Economic Counselor--Andrew Bowen
Commercial Counselor--Sean Kelley
Consul General--Dan Keller
Management Counselor--Sandra Muench
Regional Security Officer--Daniel Garner
Public Affairs Counselor--Salome Hernandez
Calle F and Calle Suapure
Colinas de Valle Arriba
Office hours are 8 a.m. to 5 p.m., Monday