For Georgetown University, Latin American Studies, School of Foreign Service
Countries in Latin America have gone through a history of corrupt governments that have not only resulted in economic and political crises but also steepened societal rage to seek justice and equality. Venezuela is not the exception.
After the dictatorship of Marcos Pérez Jimenez, the political pact of Acción Democrática, Comité de Organización Política Electoral Independiente, and the Unión Republicana Democrática called Punto Fijo seemed like the perfect consolidation where the most important political parties in Venezuela would go hand-in-hand to lead democratically the diverse of thoughts of all Venezuelans. “The pact between the main political forces implied an agreement to act jointly and in solidarity around aspects such as the defense of constitutionality and the right to govern according to the electoral results. It was established that the political forces that were not victorious in the elections could not contemplate the use of force to change the said result. They also called for the formation of a “government of national unity” based on a “coalition government”, where none of the three parties could have total hegemony in the executive cabinet. (Punto Fijo, 1958).” (Wainer, Lewit, 2012)
Unfortunately, Punto Fijo did not result in the perfect consolidation. Scandals, corruption, and the domination of the elite class enraged most of Venezuelan society. The most hurt sector was the poorer class who believed the elite had control of the land in Venezuela.
“Puntofijismo allowed Venezuela the emergence of a working-class reduced in number, but with a strong nucleus linked to the oil industry, a fact that made it a sector with important political weight due to its position in the economic structure. Towards the beginning of the eighties, only 3% of Venezuelan workers generated the product of 90% of exports; a scene that would become more complex due to the place that the urban middle class began to acquire, consolidated around the increased consumption of certain goods provided by the distribution of oil income.” (Wainer, Lewit).
Venezuela’s poorer class became disentranced from an elite controlling the land, production, and wealth—thus they elected Hugo Chávez and consequently, began the struggle against the latifundios.
¡La guerra contra el latifundio es escencia de la revolución bolivariana! -Hugo Chávez
In the year 2002, Hugo Chávez passed along with the newly formed National Assembly, Ley de Tierras. The purpose of Ley de Tierras was to remove from the hands of a few the ownership of most of the land in Venezuela. 70% of Venezuela’s land belonged to 3% of the population.
Before la Revolución Bolivariana began, “the country’s Gini index stood at 50.7; in 13 short years, it had fallen more than 11 points to 39.4 (UN, 2010).” (Bhatt, 2012). The year after the implementation of Ley de Tierras, (2003), poverty stood at a rate of 46.8% of the population, in 2010, eight years into Hugo Chávez’s mandate, poverty stood at a rate of 27.8%. This reduction was a direct result of social policies and laws implemented by Hugo Chavez’s administration. “When the statistical series of chronic poverty is analyzed, we can see that during the first semesters of the 2002-2011 period it has decreased from 20.2% to 11.1%”, explains Elías Eljuri, president of the INE (Instituto Nacional de Estadísticas).” (Mucientes, 2013).
The number of pensions also increased under Chávez and his administration. In 1999, less than 500,000 Venezuelans were receiving a pension, in 2011 nearly 2 million Venezuelans were receiving pensions. Wages and GDP also increased—a direct result of social reforms, like state nationalization of land and property.
Although Ley de Tierras did diminish inequality and poverty in Venezuela, Ley de Tierras and constitutional reforms undertaken by Chávez, also expanded the size of the government. “Ley de Tierras gave the state broad authority over agricultural land, including exploitation, the production system, and productivity. The law restricted the scope and autonomy of deliveries, facilitated expropriations and even the confiscation of private property even though productive activity was carried out at full speed on the confiscated land when, in the opinion of the authorities, the law was not complied with the condition to ensure food self-sufficiency. The law eliminated certain institutions for the protection of peasants and indigenous people, such as the Law of Agrarian Courts and Procedures and the Agrarian Prosecutor’s Office and created new vaguely defined centralized administration institutions. As a result of its opacity and regulatory insufficiencies, the law was ineffective and contributed to generating a notorious legal uncertainty in terms of land tenure…” (Alegrett). Many of the farms with the best land and location were given to Chavez’s family members and government friends such as Elías Jagua, who at one point was Minister of Agriculture, and as minister launched a great number of expropriations of private property (Garavito, 2022). Although there are no official statistics on the exact amount of land expropriated, according to public declarations of MPPAT (Ministerio Poder Popular para la Agricultura y Tierras) and INTI (Instituto Nacional de Tierras) officials, from 2001 to 2016, the number of land expropriations could round up to 5.7 million hectares.
“Exprópiese”, said Chávez in the program Aló Presidente while expropriating property on live television. Expropriation of property became a political strategy to woo the population when the election year arose.
Ley de Tierras was one of the first laws passed after the constitutional reforms undergone by Chávez which increased the size of government and power. It could be said that it was the gateway to the policies passed that increased the size of government, for example, El Plan de Desarollo Económico y Social de la Nación passed in 2007 declared that “the state will retain full control of productive activities that are of strategic value for the development of the country.” El Plan de Desarollo Económico y Social de la Nación allowed the government to expropriate not just unused lands and corporations, but also small businesses. “Leading chains in the distribution and sale of food at the national level such as Automercados Cada, Hipermercados Éxito, Lácteo Los Andes, Café Fama de América, Café Madrid, Empresas Diana, came under the management of the regime and soon became unproductive, generating scarcity and unemployment gradually…” (Garavito, 2022).
“The sugar sector was one of the first in which the government of Hugo Chávez decided to participate as a producer. In 2001, after the approval of the Ley de Tierras, Chávez gave the recently created Corporación Venezolana Agraria the responsibility of activating “a sugar mill that is to start the project that will be the most of South America and that we are going to build in Sabaneta de Barinas and that is going to be called Central Azucarero Ezequiel Zamora” (Informe de Empresas de Propiedad del Estado).
In 2013, Venezuela faced a shortage of staple foods, sugar was one of those. Economists say local businesses were struggling to satisfy levels of consumption that went up when Chavez boosted imports of all kinds to benefit his campaign for reelection in the 2012 elections—consumption increased faster than production and availability. In 2016, three years after the death of Hugo Chávez, 40% of sugar canes planted for production stayed in the camps. This was a direct cause of the 25% loss of production in that year. In that same year, La Azúcarera Pío Tamayo paralyzed completely their production for 10 months. In 2021, after failing to administrate adequately the production of sugar in la Azúcarera Pío Tamayo, Pío Tamayo was sold to private entities.
Out of 47 farms that were expropriated under Ley de Tierras, 11 are completely abandoned and militarized by government officials. The plantain production in Venezuela, one of the most productive in the world, finds itself invaded by pests “for reasons related to their distribution among the population and their subsequent exploitation (Rebollo, 2016). The lack of timely advice to the beneficiaries from poor urban centers, without experience or vocation in working the land, or the lack of technical support or planning from official entities for those who were peasants, quickly led to chaos.” (Rebollo, 2016). Another affected area, also expropriated by Ley de Tierras, was the dairy industry in the Andean region, which as of 2021 is only working at 15% of its capacity.
In 2013, the year of Hugo Chávez’s death, 1.3 million people immigrated from Venezuela. The immigration crisis in Venezuela has been called one of the worst in Latin America’s history. The number of people leaving Venezuela continues to escalate. One of the explanations for this mass migration is the political reforms undergone by Chávez such as the expropriation of private property. After the expropriation of 5.7 million hectares under Ley de Tierras, 85% to 90% of lands “rescued” under this law are unproductive. As a consequence of this policy, illegal invasions and the killing of cattle are normal occurrences.
“…operational activity of companies or the role of entrepreneurs is important because they combine the factors of production such as capital, labor, technology, and land to obtain a result. That implies a commitment and dedication that not everyone has and cannot do. The economist adds that when a country enters into this dynamic in which the public sector wants to manage different sectors of the economy, in the end, it implies greater pressure on the Treasury, which has to finance all these companies. The financing needs of the government are increasing and, not having it, the Central Bank of Venezuela ended up putting the money. When we talk about high inflation, this is a direct consequence of the size of the State. When it is expropriated, what is done is that the public sector is bigger. Consequently, the BCV finances public spending and the problems of society are not only focused on the loss of employment but also on the low purchasing power due to the inflation that it is experiencing.” (Figueroa, 2022).
The loss of private land and property at the hands of the state that resulted in food scarcity, unemployment, and state expansion in the political, economic, and social aspects of the country has led millions of Venezuelans to immigrate. It is important to also note that as of 2022 lawsuits against the Venezuelan government by previous owners of expropriated property who have not received their fair compensation round up to 300 million dollars.
In conclusion, Ley de Tierras promised to redistribute the land that under Puntofijismo belonged to 3% of the population. As stated, after the implementation of Ley de Tierras, there was an increase in pensions, GDP, employment, and a poverty reduction, but the negative consequences outweigh the positive ones. In terms of unemployment rates, government statistics do not take into account the number of business owners that left after their land was expropriated. As of 2020, the unemployment rate stood at a 9.14% a two percent increase since 2013 due to the continued food shortage crisis in Venezuela; the land expropriated for products such as sugar and plantain continues to be unproductive producing food scarcity and a demand for imports. As of recently, cacao producers in Venezuela fear expropriation at the hands of the government. “However, this year’s harvest brought him a new concern: meddling in business by the socialist government. According to what he denounced, trucks full of cocoa have been detained as soon as they leave their warehouse by checkpoints of the Army and the sacks have been held for days. Sometimes, the drivers were forced to unload the merchandise in government warehouses and, after several operations that occurred this year, the merchant determined that he was missing some 87 tons of cocoa, with a value equivalent to about 130,000 dollars.” (Cohen, 2018).
As of 2022, the Maduro government, to ease the crisis, is returning expropriated lands to previous owners or selling them to private entities.
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