Historical evolution of the Venezuelan oil economy

1. Introduction

Petroleum in Venezuela is studied as a set of Political-Economic events from 1908. Despite the fact that Petroleum was already known by the Indians, its exploitation began in 1878 with the formation of the Petrolea del Tachira company, the which built a small refinery with space for fifteen barrels a day.

In 1914 the oil boom begins, that is, it begins its exploitation on a large scale with the Dictatorial Government of General Juan Vicente Gómez and it is from this Government and until today that our study will be deepened to determine the evolution of oil and the incidence that each ruler of our country had in it.

It is in the second decade of the twentieth century that oil forms a fundamental part of the Venezuelan economy, the income from the oil company displaces the income from Coffee, Cocoa, Agriculture and Livestock from the first place and currently it is possible to define Venezuela as a monoproducer country due to the policies imposed by our rulers.

2. Historical Review

Even though at the end of the XIX century, the Venezuelan Government granted some oil concessions occasionally, it is from the year 1907, when the international oil consortia began their activities in Venezuela.

It is in the first decades of the 20th century when the oil companies expanded worldwide, coinciding with the rise of the capitalist economies of the United States, England, Germany and France. While the first concession to exploit asphalt was granted a few months after the first Mining Code was promulgated in 1854, it is eleven years later, in 1865, when the First Petroleum Concession of Venezuela was granted, which expired before turn one year old. After the first Venezuelan commercial oil company was established with the name of Petrolia del Tachira in 1878, some oil concessions were occasionally granted until the end of the 19th century.

Meanwhile in the United States and in Europe two gigantic oil monopolies with the names of Standard Oíl Company and Royal Dutch Oíl Company, respectively, were developed, from where a group of subsidiaries emerged that penetrated the main oil areas of the world, among which Venezuela occupied a privileged place. In that sense, these two large international oil consortiums began their activities in Venezuelan territory intensively, starting in 1907, aggressively competing for the best concessions, under the new Mining Law.

According to this legal instrument approved by Cipriano Castro in August 1905, the Oil Companies received the concessions for fifty years with the commitment to start exploiting them within the four years following the granting of the title. The companies, for their part, had to pay the State an annual tax of sixty cents per hectare given in concession, plus a royalty of one dollar and twenty cents per ton exploited. The first concessions under this regime were ceded to Venezuelans who later transferred them to international oil consortiums, although the granting of concessions was temporarily suspended due to conflicts between the Cipriano Castro Government with the European Powers and with the United States. However, with the arrival of Juan Vicente Gómez to power in 1908,the handover of concessions on the Venezuelan subsoil to the International Oil Monopolies was restarted.

Oil dictatorship of the Gomez period:

3. Juan Vicente Gómez 1908 - 1935

The Government of Juan Vicente Gómez widely favored foreign investments in the country, with most of them concentrated in the oil sector that was beginning to develop. In this sense, during the Gomez regime a legal framework was defined through which a large part of the national territory is granted in concessions, according to the interests of the international oil consortiums. The foreign investments in the country that had begun in the Guzman Blanco era, and that had stumbled during the government of Cipriano Castro, were generously favored by the Gomecista regime.

Indeed, since Gomez came to power, one of his main concerns was to reestablish international credit paralyzed in the days of his predecessor, for which he again granted the American company New York and Bermúdez, the concession for fifty years. of the exploitation of asphalt that Castro had suspended. In addition to managing to regenerate the confidence of the outside world in Venezuela, and to reestablish the diplomatic relations broken by Castro, Gómez's benevolent attitude towards foreign investments sought to increase Fiscal Revenue to face the internal and external obligations of the previous governments.

Gomez's favorable inclination towards international capital coincided with the emergence of the United States as a landscape of the western capitalist systems, especially in the 1920s, after the First World War. During this period, the industrialization achieved by the United States caused an accumulation of surplus capital, which was channeled towards the backward countries that produce raw materials, which, like Venezuela, allows them to monopolize the exploitation of these basic resources for the continuation of their accelerated development. economic. It was in this way that North American capital, together with European capital to a lesser extent, penetrated Venezuela, becoming one of the Latin American countries that attracted the most foreign investment during that time.Apart from the advantageous economic conditions in which the International Capital in Venezuela operated, the Gomez regime guaranteed them a peaceful environment achieved by the repression, eventually granting oil concessions throughout much of the national territory.

The Gomez regime came to favor foreign investment in the country in such a way that it changed to a Minister and the Mining Law was modified, according to the requirements formulated by International Capital, as indicated by Federico Brito Figueroa in his work "Economic and Social History of Venezuela", from whose text the following paragraph is extracted: "The oil monopolies were not yet satisfied, they demanded more and the oil dictatorship of Juan Vicente Gómez readily agreed to everything that their protectors requested. Minister Gumersindo Torres was dismissed and the representatives of three North American companies were summoned to collaborate in the elaboration of a law adapted to their aspirations.

The government of calm and sanity:

4. Eleazar lopez contreras 1936 - 1941:

During the presidency of General Eleazar López Contreras, an oil strike began, which began on December 11, 1936, and lasted forty-three days, until January 22, 1937, which ended and although what was achieved by the oil field strikers del Zulia and Flacón was very little in relation to what was requested, however, this confrontation of the oil industry workers with foreign concession companies set a precedent in the country's labor history.

The Zulia oil workers, who were the most numerous, lived in subhuman conditions and received discriminatory treatment from foreign foremen. In such a situation, the unions in the area decided to submit to the Labor Inspectorate two conflicting specifications in which they requested, among other things, the fixing of the Minimum Wage, salary increases, weekly paid rest, home improvements, provision of medical services and removal of the chain-link fences surrounding the workers' residential areas.

Given the lack of knowledge of the oil companies of these just requests, the workers of Falcón and Zulia stopped, until all the oil production in the west of the country was completely paralyzed. The organization shown by union leaders allowed them to resist several attempts by the oil companies to break the strike, which together with the national support received by the oil workers, made the oil strike last for forty-three days, from December 11 from 1936 until January 22, 1937.

On this last date, President López Contreras decreed the immediate resumption of paralyzed activities of the oil industry and an increase of one bolívar daily for workers who earned seven, eight and nine bolívares, as well as an additional bolívar on this increase for workers. not to occupy rooms of the companies in conflict.

In this way, the first major labor strike that was carried out under the protection of the new Labor Law of 1936 is ended. Benefitting the international oil companies, since the other demands were not attended to, thus beginning a police persecution. of the leaders of the left parties that had organized or supported the frustrated oil strike. One of the organizers of the Oil Strike Juan Bautista Fuenmayor, who wrote a 1936 book "1928-1948 Twenty Years of Politics", when analyzing the causes of the failure of that labor conflict, points out that it had been sobering, as it follows from the following paragraph: «All in all, the oil strike was a great lesson for Venezuelan workers, because it showed that all demands for economic improvements are resolved,ultimately, in a political conflict, in which the privileged classes resort to the state apparatus so that it intervenes in their favor.

General's presidential administration

5. Isaias Medina Angarita 1941-1945:

In which Venezuela was economically almost bankrupt

Because of the Second War, Venezuela had to face a sudden and difficult storm of an economic nature; the year 1941 was a very good prospect for the country, as oil gave it the unimaginable sum of 228 million barrels of oil.

This situation brought about as an immediate consequence that due to the fall of Pearl Harbor, an important North American stronghold that was fed with Venezuelan oil, the German submarines, allied with the Japanese, on the night of February 14, 1942 torpedoed seven oil tankers that were transporting our crude oil to the Curaçao and Aruba refineries. This forces us to lower our production to 148 million barrels, which necessarily reduced the income with which the government supported its works policy for the benefit of the community. An important measure was the review of oil policy. Due to the drop in production, the government asked for a basic revision of the oil legislation.

After many studies and discussions. Medina called the congress to extraordinary sessions: thus, on March 13, 1943, Venezuela had a new Petroleum Law whose most outstanding aspects were:

* Unification of all the measures adopted on oil in the previous governments.

* Obligation for the Companies to expand in Venezuela, and at their expense the refining facilities.

* Increase in taxes and royalties, until matching tax revenues with the profits of the consortia.

* Renewal by the Government of all the titles granted and extension of its validity for forty years and to renounce all legal trials against the oil industry.

The benefits of the new law were of immediate effect, large amounts of money entering the state coffers. This encouraged the Government to deliver thirteen million acres in new concessions. Naturally, this situation, openly favorable to the industry, increases production, which was set at 300 million barrels per year above the established brand. Before the entry into force of the Hydrocarbons Law of 1943, the oil concessions granted were subject to different laws, and the control exercised by the state in the activities of the companies, as well as the benefits they obtained, were insufficient. In this sense, the new hydrocarbons law represented a set of advantages for the country from the legal and economic point of view, as of its enactment in March 1943.

As far as the economic advantages are concerned, the elevation of the royalty, royally or exploitation tax stands out, reaching one sixth or sixteen with two third percent of production. Likewise, the initial exploitation tax was increased to eight bolivars per hectare and the exploration tax was raised to six bolivars per hectare during the three years that this activity lasted, while the surface tax increased progressively to as the concession aged to compel the concessionaire to exploit it. Along with these special taxes, the oil industry was subjected to pay general taxes, in accordance with its income tax law, and the mandatory exemption from customs tax payments was eliminated.

6. Revolution of October 18, 1945

It was a civic-military movement that openly rebelled against the legitimate government of the republic. The Revolutionary Government Junta chaired by Romulo Betancourt governed the country's destinies from October 18, 1945, until February 15, 1948, the latter date when the novelist Romulo Gallegos, elected by vote, assumed the Presidency of the Republic universal, direct and secret. Among the achievements of the Revolutionary Government Junta in that hectic period of the History of Venezuela, the 1945 oil reform, the creation of the Venezuelan Development Corporation and the 1946 Electoral Statute, as well as the promulgation of the National Constitution, stand out. 1947. One of the most important measures taken by the Revolutionary Government Junta was established by Decree N.-112 of December 31, 1945, by means of which the percentages to be paid for Income Tax were modified. In this way, a more adequate participation of the treasury in the profits generated by the oil industry was achieved until reaching fifty percent of them, for what the result of that policy was called, the regime of 50-50 (Fifty-fifty) in oil matters.

7. Presidency of Don Romulo Gallegos, 1948

Don Romulo Gallegos was sworn in on February 15, 1948. The country's political panorama was, as in the government of the Revolutionary Junta, totally respectful of public liberties. This government management highlights an abundance of excellent educational, economic, healthcare, labor, etc. measures.

Listing the most outstanding of this brief period of government, we find the following aspects:

* The creation of a preparatory commission to study and plan the possibilities of oil exploitation, by a National Company, which would also study the initiation of the crude oil refining industry.

* Logrose in this administration with a well-planned oil policy, a doubling of income to the treasury, for oil income concepts.

* European immigration was imposed with the entry into the country of 20,000 immigrants of various nationalities, in 1948.

* The national road network was considerably increased; Other aspects of communications were also addressed, including the construction of more than 25 second-category airports in different towns in the interior of the Republic, as well as the improvement and expansion of others.

8. Government Military Junta 1948

The military movement that overthrew President Romulo Gallegos, on November 24, 1948, was called «Revolution of 1948», and from that moment a Military Government Junta assumed control of the situation in the country. That board was made up until November 13, 1950, by Lieutenants or Colonels Carlos Delgados Chalbaud, who was chaired by Marcos Pérez Jiménez and Luis Felipe Llovera Pérez.

The reasons given by the Military Government Junta to overthrow President Romulo Gallegos, through the movement known as the "1948 Revolution," were exposed by the Armed Forces to the nation on November 25, 1948.

According to this statement, the military had decided to fully assume control of the country's situation due to the inability of the National Government to resolve the existing crisis, as well as the interference of extremist groups in national life that promoted a general strike with incalculable consequences.

On the other hand, the National Armed Forces argued that the Democratic Action party had implanted political sectarianism in the country, taking advantage of power for its own benefit, and that the modification of the National Constitution of 1947, even though it had introduced progressive principles, without However, it suffered from vices aimed at the abusive exercise of power. It is noteworthy that the military coup of November 24, 1948 did not provoke violent reactions from the people who mainly chose Romulo Gallegos, a phenomenon that could be explained in the following trial issued by Miguel Ángel Mudarra: “there has been a militaristic recurrence that caused national perplexity in the country and spread despair in the suffragant people,although this suffered from visible fatigue before the intense environmental politicization and the conflict between political parties ».

9. Ministerial cabinet from 1948 to 1950

Its representative was Colonel President Carlos Delgado Chalbaud; not only did it assume the executive power of the nation, but the legislative power was also repealed.

Second stage of the Military Government 1950 - 1952:

With the disappearance of Colonel Carlos Delgados Chalbaud the second stage of government began, of a purely military nature, the constitution of the second stage of government began immediately after the assassination occurred. Its representative was Guzman Suarez Flamerich and the most outstanding aspect of this second stage occurs on April 19, 1951 when the government enacted the electoral statute traced in the democratic molds according to the 1947 constitution and elections were held which had character fraudulent and on December 2, 1952 the victory of the Oficializo represented through Pérez Jiménez was announced.

Government of the new national ideal

10. Marcos Pérez Jiménez 1953- 1958

The government of Marcos Pérez Jiménez that lasted five years, between December 2, 1952 and January 23, 1958, was characterized by being a dictatorial and personalist type regime, in which the abundant income of the treasury was used mainly in the execution of an extensive program of public works, as well as the provision of the necessary resources to the police and military forces that would allow it to maintain it in power. This was accomplished through the repression of political and union activities, on the one hand, and through the persecution and imprisonment of their adversaries, on the other.

During the Marcos Jiménez government, tax revenues doubled from Bs. 2,534 million in 1953 to Bs. 5,405 million in 1957, due to the fact that the revenues from the oil industry more than doubled, reaching representing the same 71% of the fiscal income in 1957. Of these numerous resources that the country received at that time, more than half were destined to the expenses of security and defense of the dictatorial regime, and to the construction of public works.

During the Pérez Jimenista Dictatorship, the economy mechanized agricultural activities, provoking them. a favorable growth of agricultural and industrial activities, at the same time as the internal market expanded. The latter was achieved mainly due to the considerable increase in public and private investments, although from the social point of view the results obtained were not flattering, especially due to the increase in migration from the countryside to the cities that was motivated by an increase in world demand for hydrocarbons, after the end of World War II, Venezuela's oil production doubled between the years 1945 and 1951.

For its part, the quantity of barrels of oil extracted during the Pérez Jiménez government followed the upward trend, going from 1.8 million barrels per day in 1957. This translated into a considerable increase in exports, as well as in a substantial increase in tax revenues, which were channeled back to the economy through public spending. During the jimenista Pérez regime, specifically in the years 1956 and 1957, new concessions were granted to international oil companies, according to the Hydrocarbons law of 1943.

According to this legal instrument, the companies that received concessions had the right to exploit the hydrocarbon resources found in the assigned area for forty years, paying the State special taxes, apart from the income tax on the income obtained by the concessionaire company.

In order to publicize the way in which the new oil concessions would be granted, the Minister of Mines and Hydrocarbons Edmundo Luongo Cabello convened a meeting of the Superior Council of Production, in which representatives of the various economic sectors and the press participated. Minister Luongo Cabello began his presentation, pointing out in that meeting held on January 11, 1956, the technical and economic reasons that supported the decision of the National Executive regarding the granting of new concessions. In this sense, I emphasize that through this policy, the national oil industry could be maintained in the world hierarchy that it had at that time, at the same time that the proven reserves of hydrocarbons would be increased by the new explorations carried out by the concession companies,since at the production rate of the time, the country's oil reserves lasted less than fourteen years.

On the other hand, Minister Loungo evaluated the participation that the State had had in the benefits originated by the exploitation of hydrocarbons during the period 1943-1954, indicating that Bs. 12,300 million had been received, while the net profit of the industry in that period had risen to Bs. 9,700 million, which represented 56% for the government and 44% for the oil companies, surpassing the 50-50 ratio that had been stipulated by the oil reform of the Revolutionary Government Junta in December 1945 Once the granting of new concessions was decided, in 1956-1957, the oil companies received a total of 821,091 hectares to be explored and exploited, with Lake Maracaibo being the most productive.

For its part, the Pérez Jiménez government received in those same years an exploration tax and an initial exploitation tax of Bs. 3,116 million, paid by the companies Creole, Shell and Mene Grande, as well as by ten oil companies additional internationals.

The granting of new oil concessions during the years 1956-1957 accentuated the dependence of the Venezuelan economy on the outside, as confirmed by JL Salcedo Bastardo: «the Venezuelan dependence on foreigners and on oil increases; the import of merchandise grows without stopping, Venezuela changes its oil for perishable and luxury goods to a great extent. Administrative corruption favors the looting of the country; the regime serves foreign desires and in them finds, reciprocally, its greatest base of support ».

Constitutional government of

11. Romulo Gallego Betancourt 1958-1963

The effective work of the administration of President Betancourt shows many outstanding aspects in which they stand out: The Agrarian Reform law established as its main objective transformations of the country's agrarian structure. In order to achieve the latter, as well as the incorporation of the rural population into the nation's economic, social and political development, the one mentioned in its first article established the replacement of the latifundista system by a system of land ownership and exploitation based on its equitable distribution, together with comprehensive assistance to farmers in the field.

On the other hand, the Agrarian Reform Law guarantees the right of private land ownership based on the principle of social function that it must fulfill, so that those lands that are worked are not subject to being expropriated unless in the place of the endowments or neighboring regions do not exist, or are insufficient or inappropriate, vacant lands or other rustic properties belonging to public entities. In order to comply with all the provisions of the Agrarian Reform Law, the national Agrarian Institute was created, in its capacity as an Autonomous Institute, attached to the Ministry of Agriculture and Breeding.

It was created by decree of President Betancourt dated April 19, 1960. THE VENEZUELAN OIL CORPORATION (CVP): as a national company of the Minister of Mines and Hydrocarbons. According to the CVP statute, this company was intended to explore, exploit, refine and transport hydrocarbons, as well as to buy, sell and exchange them in any way, within or outside the country.

As the state increased its participation in the benefits derived from the oil industries, the Venezuelan nation was gaining in knowledge about the hydrocarbons business, at the same time that a nationalist consciousness was developing. With reference framework, the need for the State to participate directly in its main resource, as contemplated by the Hydrocarbons Law of 1943, that the exploratory activity of foreign private companies had decreased as a result of the policy of not more concessions announced by the National Government. In view of the foregoing, the creation of the state company Corporación Venezolana del Petróleo (CVP) was decided by Decree N. 260 of April 19, 1960, to explore, exploit, refine and transport hydrocarbons,or it will be dedicated to the purchase, sale and exchange of the same in any form, inside or outside the country.

On the other hand, the CVP was given the power to promote other companies in the capital of said companies. Regarding its basic characteristics, the CVP would have legal personality and own and independent patrimony of the National Treasury, attached to the Ministry of Mines and Hydrocarbons and with domicile in the city of Caracas, although it could establish dependencies anywhere in the national territory that it considered necessary.. However, the CVP was mainly engaged in the domestic market for petroleum products and gas distribution in the metropolitan area, engaging in small-scale exploration and international trade, key activities for the development of the national oil industry, becoming in a subsidiary of the parent company Petróleos de Venezuela, SA on August 30, 1975,within the framework of the nationalization of the oil industry.

In addition, the Venezuelan Corporation of Guayana was also created on December 29, 1960, as an Autonomous Institute Attached to the Presidency of the Republic. According to the organic statute of the development of Guayana, the economic and social progress of this rich area of Venezuela, which included the Bolívar State and the Delta Amacuro Federal Territory (currently Delta Amacuro State) would be in charge of the CVG, as the governing body of the Guyana region. Despite the most important achievements of this Government, in terms of Oil, they refer to the creation of the state-owned company Corporación Venezolana del Petróleo (CVP), the policy of no more concessions, and the efforts made to create the organization of oil exporting countries (OPEC).

Constitutional government of

12. Raúl Leoni 1964-1969

Until 1966, the oil companies declared their income, for the purpose of paying income tax, based on the realization price, that is, the effective sale price received by the companies. In view of the fact that the latter price was below that prevailing in the international market, the Government of Leoni decided to change the system of oil price fixing, introducing the reference prices for tax purposes, which would be determined in common agreement with oil companies.

The sale prices of oil in international markets were determined in the 1960s, due to a set of factors, among which we can mention the supply of new exporters such as the case of the Soviet Union, and competition by other energy sources, as well as the pressures exerted by some producing countries to increase their exports. This situation had unfavorable effects on the Venezuelan economy by reducing the income of the Treasury from the income tax paid by the oil companies, which was calculated based on the income declared by the mines, using for this purpose, the price of realization or sale price at which our oil was effectively placed in international markets.

However, this price was contested by the Government, arguing that it was below the real market price, and therefore objections were made to the income statements of the concessionaire companies, corresponding to several years prior to 1966. The oil companies for their On the other hand, they agreed to pay the National Treasury the agreed amounts to offset the taxes owed, agreeing at the same time with the government, the use of a reference price system for tax purposes.

According to this new system of oil price fixing, adopted in 1966 during the Leoni government, the prices at which the oil companies would calculate their income for the purposes of paying income tax, for the period 1967-1971, would be the prices agreed with the National Executive, as long as the reported sale price is lower than the reference price. In the event that it effectively sold at a price higher than the reference price, that realization price would be used for tax purposes.

1st constitutional government of

13. Rafael Caldera 1969-1974

Among the most outstanding points that in the general panorama should be pointed out as important in this official management, are:

* In oil trade policy, a better deal was achieved for Venezuelan oil and the increase in the price per barrel. It also approved the unilateral fixing of oil prices and in 1971, the law by which the state reserves the natural gas industry comes into effect. the concessionaires had slowed down oil activity in Venezuela and expanded their operations in the Middle East and African countries. (In 1970, oil production fell to 1,086.3 million barrels).

Rafael Caldera denounced Venezuela's trade agreement with the United States at a time of economic decline. Two devaluations of the monetary sign occur.

* The application of a development policy in the various June 1969, 8 Administrative Regions were created.

* Implementation of a policy of achievements, by complying with the IV Plan of the Nation.

* A reorientation of public spending was sought, while better living conditions for Venezuelans were promoted.

* Endeavored to carry out public works, such as: roads, highways, airports, school buildings, sanitary and hospital buildings.

* The necessary and beneficial mechanisms were established to adapt fiscal and monetary policy to the real needs of the moment.

* As a trade policy with respect to internal trade, an attempt was made to level the prices of basic necessities, in relation to what was received by wages and salaries, through instruments of regulation and supervision.

* Exports were boosted and the relation of terms of trade was duly applied, in an effective way whose positive result was the increase in the active balance of the balance of payments, from Bs. 84 million in 1970 to Bs. 267 million in the year 1972.

* The necessary incentives and aid for the development of the different regions of the country were established.

* Industrialization increased in its most varied branches.

* In foreign policy, diplomatic and commercial relations were maintained with all countries, without distinguishing between ideologies.

* The "Protocol of Puerto Espino" related to our claim on the territory of Guayana Esquiva was signed.

* The total amnesty that was granted at the beginning of the Copeyan government brought tranquility to the Venezuelan family.

1st constitutional government of

14. Carlos Andrés Pérez 1973-1978

Among the most outstanding points that in the general panorama should be pointed out in this management we have that in 1974 on March 22 the Presidential Commission of Revision was created, whose purpose was to analyze the different options to achieve the nationalization of the main industry of the country, oil.

The nationalization of the oil industry was carried out on January 1, 1976, achieving it in a harmonious and well-planned way. Through the Organic Law that Reserves the Industry and Commerce of Hydrocarbons to the state, all the previously granted concessions are extinguished as of this date.

This is how the company Petroleos de Venezuela, SA had to assume as a public holding company, the direction and control of the Venezuelan oil industry, guaranteeing the operation of non-concessionaire companies. The latter were paid compensation of 4,348 million of which 3,854 were paid in bonds and the rest in cash, while signing technical assistance agreements, through which permanent advice would be received in all phases of this activity..

Petroleos de Venezuela, SA or parent company of the nationalized oil industry, had to face from the beginning the cessation of exploration and investment activities, since the concession companies had neglected these key aspects of the industry for several years, before the proximity of the end of the concessions regime.

On the other hand, the V National Plan was decreed, which contemplated the essential guidelines of the economic and social development of the Republic for the period covered by the same plan and contemplated strategic objectives to be achieved in approximately two decades. Planning matters arose from the increase in oil prices in late 1973 and early 1974 at the same time that it was influenced by the nationalization of the oil industry.

Constitutional period of

15. Luis Herrera Campis 1978-1983:

The Venezuelan economy during the presidency of Herrera Campis evolved unfavorably, as production decreased at the same time as inflation and external indebtedness accelerated, along with capital flight. This behavior was influenced by a set of factors of external and internal origin, revealing a series of contradictions in economic policy, which contributed to creating a climate of uncertainty and mistrust that is not conducive to the recovery of the growth rate of economic activities..

During the Luis Herrea Campis government, a readjustment of the economy began, after the resizing that all economic variables underwent during the presidency of Perez, one of those variables that had a determining influence on the explanation of the passage of accelerated growth of the economy to the stagnation and recession was private investment, which decreased substantially from 1978 to 1983, mainly due to the flight of capital that occurred in those years.

As for the material works, the construction of the first section of the Caracas metro, of the Teresa Carreño Cultural Complex, stands out, which were inaugurated in 1983, the year in which the bicentennial of the birth of the Liberator Simon Bolivar was commemorated with numerous public events.

Constitutional government of the doctor

16. Jaime Lusinchi 1983-1988:

The strategy followed by the government of the President of the Republic, Jaime Lusinchi, to recover the Venezuelan economy, basically consisted of negotiating the refinancing of the country's external debt. For these purposes, President Lusinchi adopted a package of economic measures through which new exchange rates for the bolivar, austerity measures were decreed for the public administration, and the price of gasoline was increased. Similarly, to mitigate the effects of these measures on the poor population, a series of compensatory decisions were made

One of the main concerns of the government of the President of Jaime Lusinchi was to solve the problem derived from the massive, concentrated and apparent maturity of the Venezuelan external debt. In order to achieve an appropriate climate to be able to refinance this debt and lighten the pensions that it has on the country's economy, President Lusinchi took a series of highly demanded economic measures on the day of his inauguration on February 8 1984, ensuring that Venezuela would pay every last penny of foreign debt.

On the other hand, President Lusinchi, made an unprecedented decision which was the dismissal by decree of the President of the Central Bank of Venezuela Leopoldo Díaz Bruzual, considering it a disturbing factor for the implementation of economic and financial policies required to face the economic crisis that the country was going through. Subsequently, with President Jaime Lusinchi, he issued a series of decrees during the first three months of a government in order to achieve a return of confidence in the country's economy, a factor that had caused serious inconveniences in the previous government. In the same way, the National Congress decreed in June 1984, the Organic Law that it authorized for one year, to adopt measures for the public interest.

This legal instrument, known as the enabling law, gave special powers to the President of the Republic to impose the urgent corrective measures necessary to progressively recover the Venezuelan economy, strongly affected by erroneous and incoherent economic policies taken by the previous administration, as expressed in the explanatory memorandum of the aforementioned law. Because the economic decisions made in the first months of the Lusinchi government affected the lower-income sectors, a set of compensatory measures of a social nature were decreed to mitigate these effects.

In order to announce the strategy to follow to recover the Venezuelan economy, President Jaime Lusinchi summoned the representatives of national life to the Miraflores Palace on February 24, 1984. On that occasion, the President of the Republic stated: «Basic requirement of this strategy aimed at overcoming the crisis is the definition of clear guidelines by the government, and the establishment of a climate of trust based on understanding and understanding and on the joint productive effort of the government, workers and entrepreneurs ».

Although it cannot be denied that the Government of President Lusinchi had to face serious economic difficulties, as oil prices had been cut in half in 1986, however, in the following two years, a series of adjustment measures had to be taken, according to the criteria of the Central Bank of Venezuela and some international organizations, which if applied, would have prevented the year 1988 from ending with serious internal and external imbalances in the Venezuelan economy.

2nd Presidency Of

17. Carlos Andrés Pérez 1988-1993

The second Presidency of Perez begins by implementing economic measures in accordance with the strategy of the International Monetary Fund.

The aim is to transform a mixed Venezuelan economy into a market economy that allows economic growth supported by the substitution of traditional imports, mainly oil.

The state found itself in the need to abandon the economic and social interventionism that it carried out supported by commercial oil income, tending to encourage national production and the application of a tariff policy that favored imports and thus create competition.

The application of economic measures unleash speculation and shortages, falling real wages and rising prices without increasing wages. The devastating effects of the economic measures led to the disorganized social outbreak of February 27, 1989, and to two coup attempts in 1992.

Controlled the coup and subversive outbreaks followed the political unrest, since in December 1992 some leaders of opposition parties filed an accusation against President Perez for improper use of the secret party and in May 1993, the Court declared that there were merits to prosecute the President and he was suspended from his duties.

Acting President

18. Ramon J. Velasquez 1993

He was appointed by Congress to govern the country on an interim basis until the end of the Perez period. To facilitate its functions, Congress approved an enabling law through which the President would have extraordinary powers to decree on economic and fiscal matters, with the purpose of activating the country's highly contracted economy.

2nd Presidency of

19. Rafael Caldera since 1993

The most outstanding fact during Rafael Caldera's second presidency in oil matters has been the preparation of the Business Plan that Petroleos de Venezuela (PDVSA) has structured for the next 10 years, and which contemplates the oil opening, which is a fact, when important deposits were awarded to foreign investors in June, after a fruitful auction process.

Among the main opening plans are operating agreements for the reactivation of the fields, shared profits and strategic partnerships.

So far under the operating agreements scheme, 25 companies are exploiting 14 marginal fields, the strategic associations will put into operation 5 refineries in the José area (Anzoategui), and as for the shared profit scheme with risk exploration, 10 were offered areas of which eight were granted.

Doubling oil production implies oil opening and its respective impact on the economy, which has been analyzed from three areas:

* in the balance of payments: it is considered that the bulk of production is for export, therefore export earnings in 10 years will be close to 200 million dollars, highlighting that in 1996 it was close to 18,500 million.

* oil tax revenue will grow as production grows

* Domestic investment is important for there to be a recomposition of spending with an increase in the generation of infrastructure that allows for the deterioration of the national physical plant that depends on the government.

Internationalization gives a lot of stability to Venezuela's oil income, since it is vertically integrated. As the price of crude oil falls, refining margins increase and when crude oil prices rise, refining markets decrease.

20. Conclusion

History allows us to determine how Venezuela has evolved in Oil-Policy matters during each Presidential period from 1908 to date, in addition to involving the different transitory expansions that the Mining and Oil Economy has undergone.

On the other hand, it is considered relevant to mention that the periods of greatest oil boom were observed during the presidency of Guzman, (Expansion of concessions and state enrichment), GAP (Nationalization) and Rafael Caldera (Oil Opening).

The advent of oil constitutes the most significant economic event in the country's economic history.

Oil stands out as a fundamental factor that sustains and dynamites the national economy in its various areas and sectors. For this reason, Venezuelan economic development showed, with outstanding characteristics, a close correlation between the expansion of the oil sector and gross domestic growth.