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Originally inhabited by Carib and Arawak Indians, Venezuela was claimed as a Spanish territory by Christopher Columbus in
1498. Spanish rule was administered from a distance, leaving the various regions to develop separately from the capital, Caracas,
which was founded by Diego de Losada in 1567. In the 18th century, an attempt to inject a measure of unification by the Spanish
was met with widespread resistance and uprisings led by Simón Bolívar (after whom the currency is named). In 1830, Venezuela
became a sovereign state, led by José Paéz. The precise territorial limits were not, however, well defined and Venezuela’s
borders have since been the subject of periodic disputes with its neighbours.
The dictatorship of Juan Vincente Goméz, between 1909 and 1935, was a period of rapid economic development. This was largely
driven by the exploitation of the country’s substantial oilfields, which began in 1918. Venezuela is now essentially an oil
economy and the national producer, PDVSA, is one of the world’s largest companies (see Economy). In 1936 and 1937, Venezuela held democratic elections for the Presidency and National Assembly for the first time but the
experiment in pluralism lasted only until 1945. The first of a rapid succession of military dictatorships lasted until 1961.
That year, the current Venezuelan constitution came into force.
From then until the 1990s, Venezuelan politics were dominated by the struggle between the Partido Social Cristiano, known as COPEI, and the social democratic Acción Democrática (AD). Following the 1973 price hike, Venezuela had enjoyed the benefits of large oil revenues accruing throughout the 1970s,
and ran up a substantial overseas debt (although not on the scale of those burdening other Latin American countries). The
country’s oil wealth was far from evenly distributed – a relatively small section of the population enjoyed the benefits,
while the vast majority was excluded. In the 1980s, successive Governments struggled to stabilise the country and the economy
in the face of persistent social and labour unrest, as well as external pressure from creditors pursuing scheduled loan repayments.
At the turn of the 1990s, the Government’s opponents found support from sections of the army who considered themselves ill-equipped
and badly paid. In February 1992, a number of army units launched a completely unexpected military coup. It was suppressed
by loyal army units but the Perez Government was fatally undermined and it was little surprise when Perez was removed from
office by Congress the following year, before completing his term. Elections at the end of 1993 resulted in Rafael Caldera,
who had served as President in the mid-1970s, assuming the post once again.
Meanwhile, the leader of the 1992 coup attempt, Colonel Hugo Chavez, was seeking to establish himself as a national political
figure, drawing on the support of millions of disaffected poor people, who had been disregarded during the oil boom. The established
parties, dominated by wealthy and increasingly corrupt interests, held little attraction for them. In 1997, Chavez announced
the formation of his own party, the Movimiento Quinta República (MVR, the Fifth Republic Movement), and his candidacy at the 1998 Presidential election. He won, while his party – with the
support of other smaller groupings – was able to take control of the National Assembly. Further polls in July 2000 secured
his position and, de facto, an endorsement of the constitutional changes that he planned to increase Presidential powers.
Chavez’s problems now began in earnest. Always a controversial figure, as a result of the 1992 coup attempt and his courting
such Heads of State as Iraq’s Saddam Hussein and Cuba’s Fidel Castro, Chavez has attracted powerful enemies both inside and
outside Venezuela. In April 2002, a right-wing alliance of dissident military officers and prominent businessmen led by Pedro
Carmona failed in a coup attempt against Chavez. Many believe that the United States had a hand in the plot: while that remains
unproven, there is no doubt that the Bush administration would be happy to see the back of Chavez.
The Government was certainly shaken by the coup. The economy was in serious difficulty following a currency collapse in February
2002 and remains so two years later (see Economy). In December 2002, the opposition tried a different strategy. With the support of key union leaders, especially in the all-important
oil industry, Venezuela was brought to a virtual standstill by a general strike. However, after more than two months, the
strike petered out. The anti-Chavez alliance now turned to a constitutional device, exploiting a clause which allows for a
referendum requiring a Presidential election, before the end of the normal six-year term, on the basis of a petition signed
by at least 20 per cent of the electorate (about 2.5 million people). Such a petition was submitted in August 2003 but controversially
rejected by the national electoral commission. A second petition was drawn up in December 2003, containing 3.4 million signatures.
This tension culminated in clashes in between opponents and supporters of Chavez in March 2004. A referendum was triggered
in August 2004, which Chavez won, with 59 per cent of people agreeing that he should serve out his remaining two-and-a-half
years of term. The opposition is driven exclusively by its dislike of Chavez: with his removal, the alliance of business,
unions, the old political parties (COPEI and AD) and assorted interest groups will fragment. However, for now, Chavez's future
is secured. In the 2005 parliamentary elections, Chavez's party won 114 seats in the 167-seat National Assembly. Voter turnout
was low and the main opposition parties boycotted the elections, protesting against what they saw as a biased electoral board.
However, despite the opposition's doubts regarding the election's legitimacy, a two-thirds majority in parliament now paves
the way for Chavez to alter the constitution, which currently limits a President to two terms in office.
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