Venezuela - Prodecop

Contents

Chapter 1: Introduction 1

Chapter 2: Research Objective & Question 3

2.1 Project Objective 3

2.2 Main Research Question 3

2.3 Subquestions 3

Chapter 3: Method of Data Collection 4

3.1 Research Procedure 4

Chapter 4: Research Results 5

4.1 What is the PRODECOP program about, and specifically what did it aim/promise to change? 5

4.2 How did PRODECOP change over the years? 7

5.3 What were the actual positive and negative changes/effects the PRODECOP program achieved? 9

5.4 What is the opinion of the Venezuelan people on the PRODECOP program? 13

5.5 How does PRODECOP compare to other programs as for example the Brazilian Bolsa Familia program? 14

Chapter 6: Conclusion 17

Bibliography 18

Chapter 1: Introduction

The Venezuelan protests are one of the most cited issues in world media nowadays. The current situation in Venezuela is defined by a deep political division between the right and left wing, and the roots of such polarization can be explained by political, economic and social steps adopted throughout the last 14 years when the emblematic and populist government of Hugo Chávez was in office (G1, 2014).

The first sign of Hugo Chávez on the political sphere was in 1992, when he tried to overthrow the government of Carlos Andrés Pérez through a military coup. By that time, Venezuela was facing huge economic instability mainly because of the fall in oil prices and the adoption of policies to satisfy the IMF (International Monetary Fund) requirements, such as the implementation of economic austerity that increased the unemployment rates and the social inequality and all of these factors ended up in a political crisis. The military coup failed and Chávez was arrested, where he spent only 2 years in jail (O Globo, 2013).

Hugo Chávez resurged on the 1998’s presidential elections, where he won with 56% of votes by making a campaign based on promising the end of corruption and poverty and also being compromised on promoting deep changes on the old order (Economist, 2013).

The first move of the new government was to write a new constitution, which expanded the presidential term from 5 to 6 years and from that point on, reelections were allowed. The new constitution was approved by a popular referendum, which endorsed political changes that ended up on the reinforcement and centralization of the power on the president figure, but according to Chávez all changes were legitimized by the popular vote. Later on, such changes motivated the opposition denominates the Chávez government of a “disguised dictatorship” (O Globo, 2013).

When Chávez was reelected to govern the period between 2001 and 2007, he took more leftist measures, for instance, he began to nationalize the strategic sectors of the industry, starting with the steel and oil companies and then he extended to the mining, telecommunications and even the food industry. Particularly, the nationalization of PDVSA (Petróleos de Venezuela S.A) brought one of the most critical moments of the 14 years of Chavismo in Venezuela. The crisis erupted on 2002, when Chávez put people on his trust to manage PDVSA and then he dismissed all the other administrative bodies. This fact was the last motivation for a military coup being formed against Chávez and indeed they managed to remove Chávez from power, but only during 47 hours, when his allies and the public outcry put him back in the power (O Globo, 2013).

After the military coup, a huge change took place on the Venezuelan international relations. Hugo Chávez intensified his criticism against the US interventionism in Latin America and he narrowed political ties with Cuba, one of his main allies since his rise to power. The partnership with Cuba created ALBA (Bolivarian Alliance for the Peoples of Our America - Peoples’ Trade Treaty) in 2004, which is an economic block whose main objectives are strengthen political, economic and social integration among Latin American and Caribbean countries and diminish the US influences on the region. Most of the countries that today are members of ALBA received Venezuelan money to sponsor allied governments (O Globo, 2013), however this way to spend the public money was harshly criticized by the opposition and it still is one of the issues claimed by the current protestors (G1, 2014).

Not only the external affairs were affected by the coup attempt, but many others internal policies were changed and it led to a more centralized position of the political power. Chávez staffed several public institutions, the government and the senior positions of the army with people on his trust instead of select those people by merit and he also obscured how money from the revenues of PDVSA and the Central Bank were being spent (Economist, 2013). Hugo Chávez also weakened the media power through censuring radios and TV. He even approved the so-called Law on Social Responsibility in Radio and Television that raped international standards of expression freedom, since it compelled the suspension of programs that criticized the government (Associação Nacional de Jornais, 2008).

Although he was the mentor of several centralizing policies and he was very criticized by the opposition, Hugo Chávez won the sympathy of the poorest layers of society mainly because he promoted social reforms that had good results on reducing poverty and, partially, inequality. Indeed, according to the World Bank (2014), during the Chavismo the GDP increased from US$ 98 billion in 1999 to US$ 381,28 billion in 2012, and in the same period the unemployment total rates fell from 14,5% to 8,1% and the GINI coefficient decreased from 22,1 to 15,3.

All the populist policies made in that period were sponsored by the oil exports, which, according to IMF data, increased between 1999 and 2012 from US$ 12,178 billion to US$ 95,188 billion. Nevertheless, the high dependency on oil prices on the international market is one of the sources of many economic problems and consequently social and political issues that have happened in Venezuela over the past years (Exame, 2013).

One of the most addressed issues during the Chavismo was the redefinition of the rural areas throughout the country, where several policies towards development and