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Volume 55 / Social Sciences

ECONOMICS: VENEZUELA


ROBERT PALACIOS, Economist, World Bank


MANY OF THE WORKS CITED BELOW represent an initial reaction to the economic collapse of 1989. With "El Paquete", as the austerity measures have come to be known, President Pérez began to reverse many of the policies initiated by his own administration 15 years earlier. Less than two decades after massive nationalizations, airlines and telephone companies were put on the privatization block. After years of broad consumer subsidies, targetted social programs were espoused as more efficient in the fight against poverty. Even a shift from higher to primary education was a dramatic shift for a president who had emphasized the expansion of the university system during his first term. The historic reversals were perhaps a fitting end to a period which was tragic in terms of opportunities lost since 1974.

These measures permanently altered the view held by many Venezuelans about their economic and political system and led to a rethinking of the role of the State in the economy. Some of the literature annotated in this chapter relates to emerging issues such as privatization (item bi 94000253) and fiscal decentralization (item bi 95012812). Other authors grapple with the impact of the first few years of austerity on different aspects of the economy. Cartaya and D'Elia (item bi 94000245), Fajardo Cortez (item bi 93008761), and Lovera (item bi 94003594) look at poverty, unemployment, and housing respectively, while Jongkind (item bi 94004232) provides a first glimpse at the effects of the 1989 economic policy changes on the country's industrial base.

Another major contrast between the first and second Pérez administrations was the leader's relationship with multilateral development institutions. During his first administration, Pérez used massive oil revenues to increase his international stature and influence hemispheric politics. Venezuela became a net creditor to institutions like the World Bank and the Inter-American Development Bank. By 1989, with international reserves depleted and a huge external debt, the second Pérez administration began to borrow from these institutions and to take some of their advice on structural adjustment measures. This new relationship helps explain the recent surge in the number of World Bank works on Venezuela covering topics such as health (item bi 95019195), education (item bi 95019194) and labor policy (item bi 95019193).

Many of the economists from the Instituto de Estudios Superiores en Administración (IESA) served as technocrats in the first years of the second Pérez administration, which may explain the decline in published output from that institution as compared to previous years. Nevertheless, IESA authors continue to produce economic analysis of high quality, including the excellent study by the team of researchers directed by Márquez under the auspices of the Inter-American Development Bank (item bi 94001936) and the exhaustive study of the telecommunications privatization by Francés et al. (item bi 95012804). From Washington, IESA professor and former Pérez minister Moisés Naim adds to his earlier post-mortem analyses of the 1989-91 reforms (item bi 94002592). A somewhat contrasting view of the same period is found in the account by Bottome (item bi 94001703).

The remainder of the chapter is comprised of economic history (which, as in past writings by the same authors, is more history than economics) and several useful statistical publications. The new statistics from the Oficina Central de Estadística e Informática (OCEI) include 25 years of industrial survey data (item bi 95012801) and the detailed, state-level results of the housing census conducted as part of the 1990 population census (item bi 95012805).


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