learns to diversify after turbulent political times

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Introduction | Discovery and conquest | Colonial life | The independence movement | A series of dictatorships | The transition to democratic rule | Triumph of democracy | Chavez rule


A crisis in Asian financial markets in 1997 and a slump in world oil prices in 1998 caused a downturn in the Venezuelan economy. In the December 1998 presidential election, Hugo Rafael Chávez, a former military officer who participated in two failed coup attempts in 1992, won the presidency. Chávez ran without support from Venezuela's two major political parties. During the campaign he promised to end government corruption and to provide better economic conditions for the large number of Venezuelans living in poverty.

In April 1999 voters approved a referendum calling for the election of a constituent assembly to write a new constitution. The constituent assembly was elected in July, with candidates from Chávez's Patriotic Pole coalition winning most of the 131 seats. When the constituent assembly convened in August, it assumed most of the National Congress's duties, in addition to drafting a constitution.
In a referendum in December 1999 more than 70 percent of those casting ballots voted in favor of the new constitution, which renamed the country the Bolivarian Republic of Venezuela and gave the President more power. The presidential term was increased from five to six years, and Presidents were no longer barred from serving consecutive terms in office. A unicameral National Assembly replaced the bicameral National Congress. The constitution gave the executive branch of the federal government many powers previously held by state and local governments and reduced civilian control of the military. Provisions promoted as anticorruption measures allow voters to revoke legislation or recall elected officials, including the President, through referenda.

Chavez's Oath when he took over the office in front of Caldera

Also in December 1999, torrential rains caused devastating floods in the northern coastal states. Mudslides destroyed whole villages. It was estimated that more than 400,000 Venezuelans lost their homes and as many as 30,000 died.

While the nation dug out from the disastrous mudslides, the new constitution took effect. The constituent assembly resigned in January 2000, its work completed. presidential and congressional elections were scheduled for May, but Venezuela's Supreme Court postponed them, citing concerns with the electoral process. The elections were held in July 2000. Chávez easily won reelection, and his coalition won a simple majority in the new unicameral assembly.

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© World INvestment NEws, 2002.
This is the electronic edition of the special country report on Venezuela published in Forbes Global Magazine.
April 2002 Issue.
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