Thayer Watkins
Silicon Valley
& Tornado Alley

The Regions of Venezuela and Their Economic History

Venezuela (Little Venice) has a number of distinct regions. In the northwest there is Maracaibo Bay with its fabulous petroleum reserves. There is some urbanization around Maracaibo Bay but the surrounding territory is arid. The major urban development is in the vicinity of Caracas, the capital city. Most of the revenue Venezuela receives from petroleum goes to Caracas. Consequently the urban infrastructure and amenities are better in Caracas than anywhere else in Venezuela. Caracas lies in a farming belt that extends east and west across Venezuela. Near Caracas, on the west, lie Maracay and Valencia. Farther to the west there is Barquisimeto and near the western border there is San Cristobal. On the eastern end of this zone there is Barcelona.

To the south of the farming belt in which Carcas is located there is a band of forests that provide forest products. South of the forest land there is a zone in which ranching is carried out. Finally south of the ranch country there is the tropical forests similar to the Amazon rain forest.

The Guayana Program of Venezuela

At the east end of the ranching zone there is place where two major rivers join. The rivers are the Rio Orinoco and the Rio Caroni. This river junction is a natural location for a major city and Venezuelan Government promoted the planning and development of Ciudad Guayana at the site. There was already an iron and steel mill built by the Government a few miles west of the city site and a community called San Felix to the east of the site.

The Venezuelan government set up an administrative agency, Corporación Venezolana de Guayana (CVG), for formulating a strategy of economic development of the region. CVG contracted with the Joint Center Urban Studies of the Massachusetts Institute of Technology (MIT) and Harvard University to handle the detailed analysis and planning. The plan called for a focus on iron and steel, aluminum, metal products, machinery, electrochemicals and forest products. The Government allocated about $2 billion of its budget for the period 1965-75 and expected to have a comparable amount provided by private industry or that same period.

The city plan for Ciudad Guayana called for the construction of a civic and commercial complex at a high point (Alta Vista) between the steel mill and the community of San Felix. There was also to be built a recreational and cultural center at a scenic location on the Rio Caroní. An industrial area near the steel mill was also in the plan. CVG owned all the land of the city site so it was feasible to specify land use in detail. The planning also included the construction of residential areas. The sequence was to expand the residential development from San Felix to the west as the city population grew.

The planning was reasonable and impressive, but there does not appear in the literature any description of how Ciudad Guayana worked out in practice.

Recent Political History of Venezuela

In the nineteenth century Venezuela was ruled by a chaotic series of caudillos --strongmen. One caudillo, Juan Vicente Gómez, ruled Venezuela from 1908 until his natural death of old age in 1935 despite some serious attempts, particularly in 1928, to overthrow him. He came to be known as the Tyrant of the Andes. The basis for Gómez' rule was the control and backing of the national army. In particular Gómez had the backing of officers from the Venezuelan province of Táchira in the Andes which had formed a clique which dominated the Venezuelan army for decades. Gómez promoted the coffee industry and after 1918 the development of the petroleum industry. The royalties from the petroleum industry enabled Gómez to pay off the national debt and fund a series of public works projects.

When Gómez died in 1935 the minister who served out his term of office, General Elazar López Contreras (from Táchira Province) decided that his survival required liberalizing Venezuela's politics. He allowed leaders of several major political parties to return from exile. Two political parties emerged about this time which were later to dominate politics in Venezuela:

When labor unions and some political parties became too active López clamped down on political expression. As his successor in 1942 López chose another military man from Táchira Province, Isías Medina Angarita.

Another party was important in the early years of democracy in Venezuela, the Democratic Republican Union (Unión Republicana Democrática URD). It was more centrist than than the Social Christian Party COPEI. The URD was more or less the political party of Jovíto Villalba, an activist in the efforts to depose Gómez in 1928.

In 1945 a political coalition of the AD party and an organization of junior officers in the military, the Patriotic Military Union (Unión Patriótica Militar UPM) overthrew Medina. Romulo Betancourt of the AD party headed the junta that took power. The junta extended the vote to all men and women over eighteen and called for elections for the Constituent Assembly in 1946. Although all political parties were legalized and there was real political competition the AD party got 79 percent of the vote. The victorious candidate of the AD was Romulo Gallegos. After his inauguration the AD members of the Constituent Assembly passed an extensive land reform bill which Gallegos signed. The other member of the coalition which overthrew Medina, the UPM, objected to some of the measures being implemented and demand some political concessions, including the sharing of power with the Social Christian party COPEI. In addition, the UPM demanded Romulo Betancourt be exiled from the country. Gallegos refused the UPM's demand the UPM overthrew his government. There were other parties of the extremes but they captured only a small fraction of the vote. Some of them were politically tied to the Castro Regime of Cuba.

More on the GDP of Venezuela

HOME PAGE OF applet-magic
HOME PAGE OF Thayer Watkins