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COUNTRY PROFILES


PROFILE

Did You Know?

-- Longest river is Orinoco (2,574km) Largest lake in South America: Maracaibo in Zulia State
-- Highest waterfall in the world: Angel Falls (978m)

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HEALTH

Under the 1999 constitution, the Chavez Government guaranteed a publicly funded health service. The Government has since invested large sums of money in social programmes to provide health services to local communities through Misión Barrio Adentro. Cuba has provided a large number of doctors and nurses for these programmes. Residents of some of the poorest areas of Venezuela now have access to basic free health care where before there was nothing.

Basic Health Facts

Life Expectancy: 73 years
Infant Mortality Rate: 20 per 1,000 births (2011)
Percentage of the population living in poverty: 18.7% (2007) (World Bank)
Access to safe water: 79 % of population

Environment

Venezuela is classified in the top 10 of the world's most ecologically diverse countries. Venezuela has subscribed to the following UN pacts: the Montreal Protocol on Substances that Deplete the Ozone Layer, the Vienna Convention for the Protection of the Ozone Layer, the Convention on Biological Diversity, the Framework Convention on Climate Change, the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, the World Conservation Union's Convention on International Trade in Endangered Species of Wild Fauna and Flora.

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ECONOMY

Basic Economic Facts

GDP: US$ 344.2 billion (2010)
GDP per head: US$ 12,600 (2010)
Annual GDP Growth: 18.3% (2004), 10.3% (2005), 9.9% (2006), 8.2% (2007), 4.8% (2008), -3.3% (2009), -1.9% (2010
Inflation: 17.7% (2004), 13.5% (2005), 15.8% (2006), 20.5% (2007), 28% (2008), 27.1% (2009), 27.2% (2010)
Major Industries: Oil, Gas, Telecoms, Consumer Goods, Mining, Agriculture
Major trading partners: United States, Colombia, Brazil, Cuba, Japan, China
Venezuela's natural resources make it a country of vast economic potential. The petroleum sector dominates, accounting for 55% of central government revenue and around 95% of exports. It has the world's largest conventional oil reserves outside the Middle East and also one of the largest natural gas reserves. The economy experienced twenty-two consecutive quarters of sustained high growth up until March 2009, fuelled by high oil prices and historically low interest rates. With the global economic crisis and down turn in oil prices, the country’s income was substantially reduced. Sustained growth came to an end during the second quarter of 2009, when the economy contracted by 2.4%. Venezuela's current account is still in surplus ($22.07 bn in 2010). International reserves at the Central Bank totalled approximately US$29 bn by December 2010. Debt is around 25.5% of GDP. In December 2010 the dual exchange rate system was eliminated and the exchange rate unified at 4.3 Bolivars per US dollar. In January 2011 President Chavez announced the second devaluation of the Bolivar within twelve months. Price controls are in place for many key items.

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HISTORY

1498 Christopher Columbus lands on Paria Peninsula
1681 Spanish crown takes over control of the colonies
1739 Political and military unification of Venezuela
1811 Venezuela proclaims independence from Spain
1812 Simón Bolívar establishes the Second Republic; is proclaimed Liberator
1823 Spanish are defeated in Battle of Carabobo
1830 Dissolution of Gran Colombia (Colombia, Ecuador and Venezuela)
1845 Spain recognises independence of Venezuela with Treaty of Madrid
1922 Venezuela discovers oil transforming agrarian economy
1958 Overthrow of dictatorship of Perez Jimenez; beginning of democratic era
1960 OPEC created through Venezuelan initiative
1989 Numerous protests and riots in Caracas and surrounding area. Led to state of emergency
1992 Two unsuccessful coup attempts including one by Lt Col Hugo Chávez Frias
1998 Lt Col Hugo Chávez Frias wins Presidential elections
1999 Referendum approves new constitution. Establishment of the Fifth Republic. The official name of the country is changed to: Bolivarian Republic of Venezuela
2000 Presidential elections: won by Hugo Chávez Frias
2002 President Chávez temporarily ousted by coup; returns to power two days later
2002 Two month long general strike begins in December. Paralyses the economy and in particular the oil industry.
2004 President Chávez survives recall referendum and remains in power
2005 Pro Chávez coalition wins all seats in elections for National Assembly as opposition withdraws.
2006 President Chávez wins a second term in Presidential elections.
2007 Government’s Constitutional Reform proposals narrowly rejected in a referendum.
2009 Government’s Constitutional Reform proposals to allow elected officials to stand indefinitely approved in a referendum.
2010 September - Opposition win 67 seats in the National Assembly elections.
2010 December - National Assembly passes Enabling Law to allow President Chavez to rule by decree for 18 months.
2011 New National Assembly convenes on 5 January for the period 2011-2016

Recent History

Following independence from Spain, military rule persisted until the trienio (a democratic experiment) in 1945-48. Military control was resumed in 1948 after a coup against the Acción Democrática AD) Government. Oppression under the military regime led to AD and their rival political party, the Comité de Organización Política Electoral Independiente (COPEI), joining forces to remove the military government in 1958.

President Rómulo Betancourt (1958 to 1964) is said to be responsible for establishing democracy as the norm for Venezuelan Government. Between 1958 and1988 the country was politically stable with AD and COPEI dominating national elections. Sharp fluctuations in oil prices from 1973-83 were partially to blame for Venezuela's period of recession in the 1980s. In response to the economic crisis of 1989, the Government of President Carlos Andrés Pérez started to implement a programme of free market reforms. The stabilisation and economic structural adjustment measures were deeply unpopular with a significant sector of the population. The situation reached breaking point on 27 February 1989 when there were widespread protests and severe civil unrest, now known as the Caracazco. The Government responded with force and introduced an extended state of emergency.

The ultimate result was a political crisis that undermined the Government and created the conditions for the attempted coup of 1992 led by Lt Col Hugo Chavez. The coup failed, but Chavez emerged on to the political scene. He appeared on national television to instruct his co-conspirators to stand down and said he had failed 'por ahora' (for now). Chavez's supporters grasped this phrase as a sign that his time would come, and waited for his return from prison.

In 1998, 6 years after the attempted military coup, Chavez won Presidential elections. Voters approved a new constitution in 1999 that launched the 'Fifth Republic' and a process of reform. Chavez consolidated power in the presidential elections of 2000. He survived a coup attempt in April 2002 that removed him from power for two days. Chavez's opponents then focused on collecting a sufficient number of signatures to stage a recall referendum. They did so, but in August 2004 Chavez won the vote and is therefore still in power.

Chavez was re-elected for a second 6-year term in December 2006. After this victory the President asked his allies to merge into a single party: the Venezuelan United Socialist Party (PSUV), which had its Foundational Congress in early 2008. In December 2007, voters rejected a constitutional reform project drafted by the Government (by a narrow margin – 51% against, with 49% in favour).

On 15 February 2009 Venezuelans voted by 54.9% to 45.1% in a referendum to accept a constitutional amendment to allow elected officials to stand for an unlimited number of terms. Chavez has stated his intention to stand for re-election in late 2012.

Following their gains in the September 2010 elections, the opposition returned to the National Assembly in January 2011 after a 5 year absence. With 67 deputies this now creates a blocking minority against the 98 deputies of the PSUV. However, on 20 December 2010, following severe flooding across Venezuela, the outgoing National Assembly granted President Chavez exceptional legislative powers for 18 months through the passing of an Enabling Law.

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INTERNATIONAL RELATIONS

Relations with Neighbours

Venezuela has no history of armed conflict with its neighbours, but low-key territorial disputes with Guyana and Colombia persist. A bilateral commission with Colombia and a UN Good Offices process, in the case of Guyana, are addressing these issues. Venezuela was invited to join Mercosur in late 2005 and duly accepted in 2006. It is now going through the long process of adaptation and cohesion to the norms and requirements of Mercosur and waiting for the parliaments of existing member states to ratify its membership. Currently, the Paraguayan Congress still needs to ratify Venezuela’s membership, after Argentina, Brazil and Uruguay have already done so.
Chavez and then President Uribe of Colombia exchanged harsh words in late 2007, following Uribe's decision to end Chavez's formal mediation role to encourage the release of hostages by the Colombian narco-terrorist group the FARC. Relations deteriorated in the first months of 2008. President Chavez ordered military battalions to the border with Colombia in response to a Colombian military incursion into Ecuadorian territory. Following an OAS meeting that situation subsided and diplomatic relations improved. In July 2008, following the success of a Colombian military operation to rescue 15 FARC hostages (including former presidential candidate Ingrid Betancourt), Presidents Chavez and Uribe met in Punto Fijo, Venezuela, with the aim of normalising relations.

Tensions subsequently resumed in July 2009 when it was announced that US military personnel would be permitted use of Colombian bases. In the dispute that followed, Colombia accused the Venezuelan Government of providing arms to the rebel FARC group in Colombia. President Chavez denied the allegations and recalled his Ambassador. He later announced the cessation of economic ties and signed various deals with Argentina to replace Colombian imports. A UNASUR summit held in Argentina in September focussed on the issue. In July 2010 Chavez severed diplomatic ties with Colombia after being accused of providing a safe-haven for FARC rebels. Relations with Colombia have improved recently following the election of Juan Manuel Santos in August 2010.

In April 2011 Colombia and Venezuela signed 16 bilateral agreements, mainly directed to strengthen the countries’ bilateral commerce and to assure enough supplies for the ‘Venezuela Grand Housing Mission’ (Gran Misión Vivienda Venezuela). Both Presidents signed an agreement to update the cooperation in the fight against global drug-trafficking and approved a joint working plan to address illicit drug-trafficking.

Relations with the International Community

Venezuela is a founder member of the Organisation of Petroleum Exporting Countries (OPEC). In this context, Venezuela is influential on global energy issues. President Chavez is actively pursuing stronger relations with Latin American and Caribbean nations (through initiatives such as Petrocaribe) and major emerging markets such as China, Russia and India.

Relations with the UK

Venezuela and the UK have strong historical links. These date back principally to British involvement in Venezuela's independence struggle and support for both Francisco de Miranda and Simon Bolivar, the 'Liberator', both of whom spent time in London. President Chavez visited the UK as a guest of the British Government in October 2001 and on a private working visit in May 2006.

Venezuela and the UK enjoy a cordial and constructive relationship. An informal UK-Venezuela bilateral action plan was signed by Lord Triesman and Europe Minister Rodrigo Chaves in June 2007, which laid out a framework of cooperation in areas such as Trade and Investment, Drugs and Organised Crime, Security Reform, Energy, Health, Agriculture, Human Rights, Education and Culture and Environment and Climate Change. A further agreement on Counter Narcotics was signed in October 2009 between then Minister for Latin America Chris Bryant and the Head of the Anti-Narcotics Office Colonel Reverol. The UK also has significant trade links and important consular responsibilities to British nationals visiting and resident in Venezuela.The Embassy receives visa applications for Venezuelan and other nationals wishing to visit study or work in the UK.

The Embassy runs a programme of co-operation projects with the Venezuelan Government and civil society, to further cooperation outlined in the informal bilateral action plan.

Cultural Relations with the UK

The British Council's work in Venezuela covers the arts, English language teaching and education, and administration of the Chevening scholarship programme, which provides funding for Venezuelan students to undertake postgraduate level studies. Since the scheme began in the mid 1980s, more than 300 scholarships have been awarded.

British Council, Venezuela (http://www.britishcouncil.org.ve/)

Recent Inward Visits

President Chavez visited the UK in October 2001 accompanied by his Foreign, Health, Energy, and Planning Ministers. The Venezuelan Minister for Energy and Mines visited the UK in 2004.

The President visited the UK again in May 2006 with a full Ministerial team, this time for a private working visit which included meetings with members of parliament and the Mayor of London. A delegation from the Venezuelan National Assembly visited the UK in October 2006 on a visit organised by the British group of the Inter Parliamentary Union.
Former Europe Minister Rodrigo Chaves visited the UK in June 2007, during which he signed the informal UK-Venezuela bilateral action plan with Lord Triesman. Mr Chaves also visited a number of UK commercial companies in Scotland, with focus on the Scotch Whisky industry, and oil & gas.

Europe Minister Alejandro Fleming visited the UK in October 2009 and met with Chris Bryant, then Foreign & Commonwealth Minister.

Recent Outward Visits

Home Office Minister, James Brokenshire, visited Venezuela at the end of September 2010. Chris Bryant, then Foreign Office Minister visited Venezuela in October 2009. David Lammy, then Minister for Culture visited Venezuela in May 2007 and Dr Howells, Foreign Office Minister visited Venezuela in October 2006. The then Foreign Office Minister Bill Rammell visited Venezuela in December 2004. Lord Levy, the Prime Minister's Special Envoy for Latin America, visited in 2003. A delegation organised by the British Group of the Inter Parliamentary Union then visited in June 2002.

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GEOGRAPHY

Venezuela has 4 well-defined regions - Maracaibo lowlands in the northwest, Northern mountains stretching from the Colombian border along the Caribbean Sea, the Central Orinoco plains (llanos), and the Guyana highlands in the southeast. The climate varies from tropical humid to alpine depending on elevation, topography and prevailing winds. The rainy season for most regions runs from May through to November. The 2010 rainy season was unusually heavy and caused serious flooding, with a state of emergency declared in 10 of the 24 states and more than 124,000 people forced to leave their homes.

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TRADE AND INVESTMENT

Trade and Investment with the UK

The UK has important trade links with Venezuela. It is one of the top ten investors in the Country. UK exports to Venezuela were worth £256m in 2010, a slight increase on 2009 of 2.4%. Chief UK exports are beverages, pharmaceutical products, power generating machinery, chemicals and general industrial machinery. In 2010 Venezuela was the UK's fifth largest export market in Latin America (after Brazil, Mexico, Chile and Argentina).

UK imports from Venezuela totalled £382m worth of goods and were mainly Petroleum, Petroleum Products and Related Material. The main UK investors are BP, Shell, Anglo American Mining, GlaxoSmithKline, AstraZeneca, Diageo, The Vesty Group, Unilever, British Telecom, Invensys and British American Tobacco.

Venezuela has significant economic potential with the Oil and Gas Sector dominating the market's economy. The current plans of the national oil company Petróleos de Venezuela S.A (PDVSA) to develop new oil fields in the Orinoco basin, known locally as the "FAJA", provide huge opportunities for UK energy companies. Other promising sectors for UK companies include, power generation, infrastructure, telecommunications, education and training, healthcare, alternative energy, waste management and the Environment.

UK Trade & Investment Country Profile: Venezuela (http://www.uktradeinvest.gov.uk/ukti/venezuela)

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POLITICS

Political Background

President Chavez's pre-election campaign in 1998 promised radical political reform and an economic 'third way'. On assuming the Presidency, Chavez, as promised, pushed through an ambitious programme of political reform.

His first 18 months in power brought the new 'Bolivarian' Constitution and new unicameral National Assembly. The Constitution strengthened the executive in a number of ways, introducing a six-year Presidential term with the possibility of re-election, an executive Vice President to reduce the administrative burden on the President, the power to dissolve Congress and strengthened Presidential authority over promotions within the Armed Forces. The Constitution established checks on the executive in the form of a Public Ombudsman, a strengthened Judiciary and guarantees on human rights. These aspects have since been subject to significant criticism from opponents of Chavez for failing to be sufficiently independent or function effectively.

In September 2000, President Chavez announced a programme of social-welfare schemes; housing, school building and other public works aimed at 'creating equality, solidarity and justice' in Venezuela. Investment in these 'Social Misiónes' increased substantially in 2003 and 2004 prior to the recall referendum of August 2004, and in 2006 prior to the Presidential elections. Amongst others, there are social programmes to eradicate adult illiteracy, educate the youth who have left the traditional school system, and a large-scale project to set up community health centres (Misión Barrio Adentro).

Recent Political Developments

Despite opposition allegations of fraud, President Chavez survived the recall referendum of August 2004 with close to 60% of votes in his favour. The disparate opposition movement struggled to recover from that setback, withdrawing their candidates from the December 2005 Parliamentary elections in protest against the voting system. Pro-Chavez parties therefore stood unopposed and won 100% of the seats in the Assembly, albeit with a turnout of approximately 25%. The opposition did, however, manage to unite around a single candidate, Manuel Rosales, who stood unsuccessfully against Chavez in the December 2006 Presidential elections, winning 37% of the vote to Chavez's 63%.
Following his election victory President Chavez spoke of pushing forward with his reform programme. Chavez created a new single governing party - Partido Socialista Unido de Venezuela (PSUV) - to be made up of the existing parties that support the President. The President suffered a significant setback at the end of 2007 when the electorate narrowly voted against the Government’s planned reforms of the Constitution in a referendum.

Following defeat President Chavez committed his movement to re-launching and re-examining the course of the Bolivarian revolution. That has involved high levels of public spending, in particular on the Misiónes and the programme of seizing land/buildings deemed to be lying idle. And the Government has continued to speak about empowering the people and pushing power down to a local level, through ideas such as community councils (local decision making bodies with budgetary powers).

On 15 February 2009 Venezuelans voted on a constitutional amendment to allow elected officials to stand for an unlimited number of terms. Venezuela voted by 54.4% to 45.6% to accept the constitutional amendment, thereby enabling Chavez to stand for re-election in 2012. Accepting victory, President Chavez spoke of addressing inefficiency and corruption, and of ‘consolidating the revolution’.

Since February 2009, President Chavez pursued his programme of changes, which has included several new laws such as the Education Law and the Urban Land Law. It remains to be seen what the effect of these laws will be.

In January 2010 the Venezuelan Government announced a currency devaluation of the ‘Strong Bolivar’. The fixed exchange rate of 2.15 Bolivares to $1 was replaced by two exchange rates: 2.6 Bolivares to $1 for “essential items” and 4.3 Bolivares to $1. Despite the devaluation relatively high inflation and negative growth continued to present issues for the Government. In June 2010 the Venezuelan Government announced a new variable exchange rate which ranges between 5 and 7 Bolivares to $1. Businesses and some individuals based in Venezuela were able to make applications to the Central Bank for these funds. Visitors making withdrawals from ATMs obtained money at the 4.3 Bolivares to $1 rate (minus banking charges). In December 2010 the dual exchange rate system was eliminated and the exchange rate unified at 4.3 Bolivars per US dollar. In January 2011 President Chavez announced the second devaluation of the Bolivar within twelve months.

Over 70% of Venezuela’s electricity is derived from hydro-electric power sources. Following an unusually long dry-spell, a country-wide electricity emergency was declared in February 2010 which meant widespread power rationing and power outages in parts of Venezuela. Water supply was also rationed in some areas. In May 2010 President Chavez said the emergency restrictions would be lifted “progressively”. In May 2011 a power-rationing plan for most Venezuelan states was announced with the aim of stabilising the power grid.

Elections

The executive is elected for a six-year term by direct vote and can be re-elected indefinitely following an electorally approved change to the constitution. The current presidential term will end in December 2012. The last National Assembly elections were held on 26 September 2010 and the next ones will be in 2015.

Presidential elections will be held in December 2012, while primaries to select a unified opposition candidate have been announced for February 2012.

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HUMAN RIGHTS

Venezuela is party to the following international human rights treaties:

-- International Covenant on Civil and Political Rights (ICCPR)

-- First and Second Optional Protocol to the ICCPR, aiming at the abolition of the death penalty

-- International Covenant on Economic, Social and Cultural Rights

-- Convention on the Elimination of All Forms of Discrimination against Women

-- International Convention on the Elimination of All Forms of Racial Discrimination

-- Convention against Torture and Other Cruel, Inhuman or Degrading Treatment of Punishment

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Last Updated: May 2011

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