by Greg Grandin – LONDON REVIEW OF BOOKS
VENEZUELANALYSIS.COM | June 26, 2017
President Hugo Chávez with residents of the Caracas barrio of Antímano. (Archive)
By the end of the last century, Venezuela’s old constitutional order, which for four decades had rotated power between two ideologically indistinguishable parties, was close to collapse. The crisis had started decades earlier, in 1983, when the bottom fell out of the world oil market. Then, as now, Venezuela derived most of its state revenue from the export of petroleum. By that point, the country had become heavily urban: 16 of its 19 million people lived in cities, a significant majority below the poverty line, with many in extreme poverty. Most of these urban poor resided in shanty towns sprawling up along the mountain walls that encircle Caracas, where the better-off live. In 1989, the government tried to solve the crisis of cheap oil with IMF-brokered austerity, which drove the poor down into the city, where they rioted and looted for three days. According to some observers, the military killed more than a thousand people, though the number is disputed and there has never been an official tally. The Caracazo, as the uprising became known, marked the beginning of increasingly focused opposition throughout most of Latin America to post-1970s economic orthodoxy, which held that high interest rates, balanced budgets, low tariffs, privatised industries, weakened labour laws and reduced social spending were the keys to development. Brazil, Argentina, Ecuador, Bolivia, Uruguay, Chile and El Salvador would all eventually come to elect governments trying to find a way out of the neoliberal straitjacket.
