The Temperature Rises in the Crucible of Reform
Rosen, Fred
Two reform movements are playing themselves out: decentralization of the political system, and privatization and deregulation of the economy. The one empowers politically, just as the other...
...In the 1950s, the rentier political model became associated with the import-substitution industrialization (ISI) model of development...
...It will also draw upon some elements of the paquete: the development of micro-industry, selective privatiza- tion, and a much greater openness to the international economy...
...The Temperature Rises in the Crucible of Reform 1 "22 muertos este fin de semana," El Nacional, January 17, 1994...
...27F refers to the spontaneous nation-wide rioting and looting that broke out on February 27, 1989, following the rise of bus fares and then-president Carlos Andrds Perez' announcement that the country had accepted the IMF's deficit-reduction austerity measures...
...With export earnings falling and the cost of debt service rising, Venezuela transferred an estimated 54.8% of the country's export earnings to the exterior in the form of service payments on its $30 billion debt between 1982 and 1986...
...It called for selective subsidies for industries which would produce for that internal market...
...V enezuela's State Office of Statistics and Information (OCEI) reports that in 1993, eight mil- lion Venezuelansabout 40% of the popula- tionwere living in poverty, of whom nearly half were living in extreme poverty.'4 According to OCEI's figures, this is a jump from a poverty rate of 34% in 1986...
...That leaves a third, social-democratic project: the incorporation of the poor not simply for purposes of dialogue, but in the logic of the plan itself...
...Political-economic questions are increasingly being taken to the streets...
...The country's symptoms of poverty do not stem solely from falling rev- enues...
...Quoted in Naim, "The Political Management of Radical Economic Change," p. 147...
...3 In any case, the wellbeing of Venezuela's rentier stateand its clients was mortally damaged during the debt crisis...
...The debt crisis," says Mexican political scientist Jorge Castaneda, "and its endless negotiations, together with the stepped up conditionality that each new agreement brought had dramatically weakened the so-called welfare state...
...34.See, for example, Victor Fajardo, "El colapso del paquete econOmico...
...Unofficial estimates run well over a thousand...
...This position is usually expressed sub rosa, but one cannot avoid it in conversations with members of the country's business community...
...29.Luis Zambrano, "Sobre lo que hemos hecho," pp...
...1 2.Luis Zambrano Sequin, "Sobre lo que hemos hecho," p. 91...
...The Caracas daily El Nacional reports that 42,000 teachers recently left their jobs, mostly to seek work in the country's burgeoning informaloff the books sector...
...In the month leading up to the February 2 inauguration of Venezuela's new president, Rafael Caldera, the old colonial city of Barcelona, near the Caribbean coast, the adjacent resort town of Puerto La Cruz, and dozens of smaller cities in the interior of the country were burned and looted in spontaneous uprisings that began as protests over increases in local bus fares...
...Many studies put the number of the poor at about double the OCEI estimate...
...The results are an 11% school-dropout rate, and a first- grade failure and repetition rate of 28...
...32.Victor Fajardo, "El colapso de paquete econOmico...
...16 Those children who remain in school have fewer teachers and less physical equipment to work with...
...The short-lived VATit was suspended soon after the disturbancescoupled with the recent abolition of price controls on all but a handful of goods, had led to a wave of speculative price hikes...
...The one empowers politically, just as the other impoverishes economically...
...Bottom, a young girl sits i n the courtyard of a public school in the Cat/a section of Caracas...
...He says of Perez that following the collapse of the Eastern bloc, "profound disillusionment with the possibilities of state action in a developing country, more than trust in the workings of the free market, seemed to be the underlying thrust of his...
...13.Jorge Castaneda, Utopia Unarmed: The Latin American LeftAfter the Cold War (New York: Alfred A. Knopf, 1993), p. 245...
...The shortage of nurses in public hospitals is a result of the same phenomenon...
...Al 40% aumentO cifra de pobreza critica," El Nacional, November 25, 1993...
...The idea behind the latter reform was to "depoliticize" the use of monetary policy in order to accomplish some "necessary but unpopular" tasks initially to slow the growth of the money supply in order to stabilize and build confidence in the bolIvar.2' Taken as a whole, these measures amounted to an austerity program: the working population saw its pur- chasing power cut, while fewer services were provided by the state...
...3 NaIm confirms this conflation of models, even though he denies its ideological ramifications...
...152-156...
...27.lnter-American Development Bank, Economic and Social Progress in Latin America: 1993 Report...
...If the center-Left is to administer capitalism any differently from the Right, it must do so in a way that builds and maintains not just a safety net for the poorest, but the bonds of solidarity that come from sharing the hardships and benefits of daily life...
...Caldera had campaigned on an anti -paquete platform launched by his dramatic televised indictment of the hardshipgenerating reforms on the day the first coup attempt was put down...
...The January riots are in keeping with Venezuela's precarious social and political situation over the last five years...
...The Presidential Commission for the Reform of the State (COPRE), created in 1984, successfully pushed for reforms which opened up political culture: among them, the decentralization of powers to local communities, direct election of local and regional officials, the election of (some) congressional representatives by name instead of party slate, and democratic party primaries...
...Many Venezuelans believe that then-president P6rez might not have been impeached for misappropriating $17.2 million in May, 1993, were he not associated with the pain inflicted by his economic reforms...
...Balancing the budget meant cutting public spending, establishing the VAT, and raising the domestic prices of publicly produced goods.2 Estab- lishing an autonomous monetary authority meant separating the country's Central Bank governors from the direct political control of the electoral cycle...
...Because of the small size of Latin American markets, ISI always implied a model of Latin American economic integration, and this will remain on a socialdemocratic agenda...
...economic thinking...
...31 Aided by the proliferation of U.S.-supported free-market think tanks, Perez' thinking was not atypical in late-1980s/early-1990s Latin America...
...The official death toll was 276 in those riots...
...Also see Jere R. Behrman, "Investing in Human Resources," in InterAmerican Development Bank, Economic and Social Progress in Latin America: 1993 Report (Washington, DC: Johns Hopkins Press, 1993), pp...
...In the most egregious example, the average price of medicines rose 513% between 1989 and 1991.25 The Perez government never developed adequate policies to cushion the impact of the paquete on the poor, or to distribute fairly the burdens of sacrifice...
...4. See Gustavo Marquez et al, "Fiscal Policy and Income Distribution in Venezuela," in R:cardo Hausmann and Roberto Rigobon, Government Spending and Income Distribution in Latin America (Washington, D.C.: Johns Hopkins Press, 1993), pp...
...The popular sectors were the hardest hit by the price rises...
...Neither was, however, a critique of the class determinants of that system...
...ence points, known simply as 27F, 4F and 27N to the traumatized citizens of South America's longeststanding constitutional democracy...
...As Venezuela searched for a way out of its social crisis, it became a cru- ciblewithin the limits imposed by its class structureof economic and political reform...
...Nannies hired off the books, for example, earn higher salaries than the average $170 per month paid to public school teachers, or the similar amount paid to nurses in public hospitals.'7 According to the most conservative estimates, 2.6 million peopleabout 38% of the labor forcework in the informal economy, about two thirds in the "commercial sector," mostly selling in the street.'8 While the paquete has exacerbated the situation, it is by no means to blame...
...The continental trend provided an opening for the continental solutionsometimes referred to as the "Washington consensus"of the market-oriented adjustment of each country's economic structure.33 The Washington consensus"structural adjustment"is cut from very general, abstract cloth, seldom taking local con- ditions into account...
...Because of the oligopolistic structure of Venezuela's private sector, the elimination of price controls sent prices not to market-driven competitive levels, but to company-set oligopoly mark-up levels...
...214 and 218...
...the foreign debt...
...Guid- ed by the belief that growth will produce a better distribution if it goes into the formation of human capital, the model will attempt to increase productivity by supporting education, training, and health care.34 In contrast to other Latin American experiences, Venezuela's political reforms have produced more democracy, precisely at the time the austerity-producing economic measures were introduced...
...Perez' ministers frequently argued the specific conditions, but typically applied the generic rules...
...224-244...
...24.Moises Naim, "The Launching of Radical Policy Changes," p. 53...
...26 Most Venezuelans had been so hard hit by the declining incomes of the 1980s that even the slightest increases in prices stretched their family budgetsand political toler- anceto the breaking point...
...Perez speech to business and political leaders in Davos, Switzerland on February 3, 1992, the eve of the first attempted coup...
...and "Mas muertes violentas que en cualquier guerra, "InterPress Serv/ce, December 27, 1993...
...These two positions conform to the neoliberal logic that the pain is inevitable, and that in order to attract private investment, the pain cannot be directed to the wealthy...
...This has resulted in continuing social and political clashes...
...government and civil society are all up for grabs...
...11 .Luis Zambrano Sequin, "Sobre lo que hemos hecho y atm podemos hacer en politica econOmica," Andres Serbin etal, eds., Venezuela: Ia democracia bajo presiOn (Caracas: Editorial Nueva Sociedad, 1993), p. 89...
...If a genuine neoliberal program can only be imposed by authoritarian meanson a contin- uum running perhaps from Salinas to Pinochetthe only democratic alternative currently on the table is some form of "protected capitalism," or social democracy...
...2. "Mas muertes violentas que en cualquier guerra, "InterPress Service, December 27, 1993...
...This position is associated with the country's traditional parties, AD and Copei...
...the creation of popular purchasing power through policies that encouraged higher wages and salaries...
...and neoliberal export-oriented strategies...
...This is a volatile mixture...
...Several explanations are unique to Venezuela, but many are shared with other Latin American countries...
...20, (May-August, 1992...
...6. Moises Naim, "The Political Management of Radical Economic Change: Lessons from the Venezuelan Experience," in Joseph S. Tulchin and Gary Bland, eds.,Venezue/a in the Wake of Radical Reform (Boulder, Co.: Lynne Rienner Publishers, 1993), p. 161...
...10.Moises Naim, "The Launching of Radical Policy Changes," in Venezuela in the Wake of Radical Reform, p. 34...
...5-20...
...Below, the 1989 riots in the Barcelona...
...Venezuela is wracked by increasing violence, not all of it political...
...Top , patients line up at a Caracas public clinic...
...Much depends on the political role played by the incoming Caldera coalition, and by Causa R. The center-Left must find creative, humane and democratic solutions to the short-run problems of fiscal balance and inflation, and to the long-mn prob- lem of economic growth...
...After three years in which economic growth averaged about 8%the high- est rate of growth in Latin AmericaVenezuela's GDP declined in 1993 by 2.2%, the fiscal deficit 26 NftIA2LA REPORT ON THE AMERICAS THE NUMBERS Population (thousands, 1992) Total: 20,186 Urban: 18,905 (94%) Below Age 35: 15,140 (75%) Below Age 15: 7,873 (39%) Economy (US$ millions, 1992) Gross Domestic Product: 78,564 External Debt: 35,477 Debt Service Paid: 4,207 Total Exports: 13,955 Oil and Gas Exports: 11,014 GDP Growth and Inflation: 1990-1993 1990 1991 1992 1993 GDP Growth 6.5% 9.7% 6.8% -2.2% Inflation 36.5% 30.7% 35.0% 46.0% Sources: Inter-American Development Bank, Economic and Social Progress in Latin America: 1993 Report (Washington, D.C.: Johns Hopkins Press, 1993), and Central Bank of Venezuela (BCV) reported by the National Council for Investment Promotion (CONAPRI), 1993.REPORT ON VENEZUELA grew to $1.9 billion, and the rate of inflation rose to 46%, the second highest level in the country's history.27 T he paquete failed because it began to destroy the social pro- tections that must accompany the development of capitalism...
...As the gap between rich and poor continues to widen, resentment and frustration build, tearing the country's social fabric.4 The VAT and the higher gasolineand therefore transportationprices were two of the cornerstones of the past administration's program of market-oriented reforms, known to Venezuelans as the "paquete...
...also see Ricardo Hausmann, "Venezuela" in John Williamson, ed., Latin American Adjustment, pp...
...The World Bank reports, for example, that while Venezuela spends 20% of its centralgovernment budget on educationthe highest percentage in South America 70% of those expenditures are for payroll and bureaucratic operations...
...The major structural reforms attempted to make the economy more export-oriented and driven by private capital...
...And above all, he must stimulate growth and development under the aegis of social solidarity and protection...
...While rentier politics created the important political expectation that the state city of should function as a repository of rights for the poor, these rights were accepted passively, without the active participation required of a truly democratic citizenry...
...The old paradigm of the populist rentier state has not yet been fully superced- ed...
...dependency on transnational capital...
...Some may well stem from the inefficiencies of a corrupt and clientcentered public sector...
...The active involvement of popular organizations, independent unions and political parties not controlled by elites may yet yield a democratic and pop- ular solution...
...25.Victor Fajardo, "El colapso del paquete econOmico," p. 41...
...33.See John Williamson, "What Washington Means by Policy Reform," in Williamson, ed., Latin American Adjustment, pp...
...18.See, for example, OCEI statistics cited by Victor Fajardo, "El colapso del paquete econOmico," p. 51...
...Economist Victor Fajardo persuasively argues that one of the paquete' s problems was that it was designed not for Venezuela, but for a textbook country: a country with autonomous, risk-taking entrepre- neurs, perfectly competitive markets, and abstract, malleable poor people.32 The problem is, that while each Latin American country's development strate- gy had its own internal contradictions, the collapse of each economy in the 1980s was part of a continental trend, in large part due to the debt crisis...
...While the February coup attempt failed, says P6rez' first minister of industry, Mois6s Nafm, it "mobilized other individuals and groups that had not been very active in the political debate, and soon thereafter, traditional politicians were put on the defensive...
...and dissidents in general made strong showings in the congressional races...
...Venezuela: pobreza agobia a mas de ocho milliones de personas," lnterPress Service, December 22, 1993...
...22.For the full range of measures, see Hausmann, "Venezuela...
...The parties dominated political and social life, civil society was weak, and a "clientoriented style of politics became the rule...
...Defenders of the tax argue that if the government were to eliminate the VAT, and not raise the domestic price of state-produced gasoline, it would remove up to $2 billion from the 1994 budget...
...Both were critiques of an increasingly closed and corrupt political-economic system...
...Stabilization measures fell in three categories: "getting prices right," balancing the fiscal budget, and establishing an "autonomous monetary authority...
...6 Soon, the paquete, and not the coup, became the hotly debated issue...
...8. Carlos Blanco, "The Reform of the State in Latin American Perspective," in Venezuela in the Wake of Radical Reform, p. 100...
...To this end, trade rules were liberalized, financial markets deregulated, direct foreign investment welcomed and promoted, and many state companies privatized.22 The elimination of exchange-rate con- trols led to a devaluation of the bolIvar, a further reduction of internal purchasing power, and a boost to the export sector.23 The paquete also abandoned subsidies in favor of "more focused efforts directly targeting the most vulnerable groups of society...
...Causa R, the workers' party, captured 22% of the presidential vote...
...Naim, "The Launching of Radical Policy Changes...
...International lending agencies push it because it is supposedly easy to collect, and hence a reliable way to balance fiscal budgets...
...Thus, the reasoning goes, the pain must either be explained or imposed upon the poor by a strong and determined state...
...26.Victor Fajardo, "El colapso del paquete econbmico," p. 41...
...This past Christmas day, over 100 homi- cides were committed in Caracas, and on virtually every weekend, 20 or 30 Caraquelios are killed.' While the homicides are frequently attributed to the lack of any police presence in the poorer neighbor- hoods of the city, police chief Orlando Hernandez blames the killings on "the city's advanced state of social decomposition...
...The shape of the new political system will play a major role in determining how Venezuela'sand Latin America'songoing development crisis is resolved...
...corruption and the bloated state agencies...
...Perez, an international figure always mindful of the winds of history, positioned himself on what he perceived to be the winning side of late-twentieth century global politics...
...He proposes to make up the lost revenue with progressive alternatives, such as a luxury tax, selective wholesale taxes, and a collectible income tax.5 So as Caldera' s center-Left coalition settles in, Venezuela's fiscal balance remains caught in a standoff between the country's haves and have-nots...
...23.Luis Zambrano, "Sobre lo que hemos hecho," p. 93...
...By combining state planning with private profit-seeking, the Venezuelan model of ISI created a set of state-sanctioned oligopolies which were immune from competitive pressures, social responsibility, and democratic accountability...
...At a recent forum sponsored by the indepen- dent National Academy of Medicine, for example, it was estimated that Venezuela's "critical" poverty rate those suffering from serious malnutri- tionwas about 40%, with another 40% living in more bearable, "relative" poverty.'5 While there are many ways to define and measure poverty, every estimate is dramatically rising...
...5. Rafael Caldera, quoted in "El pals requiere de un pals que gobierne dentro del estado de derecho," Venpress, February 2, 1994...
...He must figure out a way to cut deficits without making the price of gasolineestimated to be well below the cost of productionand everything that flows from oil too expensive for the population...
...31.Moises Naim, "The Launching of Radical Policy Changes," p. 52...
...J n this ever-worsening economic climate, the maverick, grandfatherly Rafael Caldera was elected president...
...The one empowered politically, just as VOL XXVII, No 5 MAR/APRIL 1994 25 As state resources declined in the 1980s, the traditional parties lost credibility when they could no longer perform the only function expected of them: delivering the goods.REPORT ON VENEZUELA the other disempowered economically...
...and various bulletins published by CONAPRI, the Council for the Promotion of Investment (Caracas...
...Caldera has indicated he will do just that...
...Average real incomes peaked in Venezuela in 1978, midway through the country's oil boom...
...When Carlos Andres Perez was elect- ed in 1988, the swollen informal sector already accounted for 35.8% of Venezuela's workforce.'9 B y the mid-1980s, it had become clear that the country's political-economic crisis demanded a strong response...
...The paquete may have been technically impeccable, but it didn't emphasize distribution, and ignored popular expectations and the lack of real political consensus.29 The paquete also failed because it misinterpreted the fall of Soviet socialism...
...30.Jorge Castaneda, Utopia Unarmed, p. 246...
...But it will not be enough for Caldera to oppose the neoliberal programs of his predecessor...
...The second position is neoliberalism with a human face: a better safety net, more efficient targeting of social services to the neediest, and a convincing explanation to the poor of the virtues of market-oriented reform...
...24 In many cases, this has meant the privatization of social services to religious groups and non-governmental orga- nizations (NGOs...
...20.Moises Naim, "The Launching of Radical Policy Changes," p. 53...
...When oil prices collapsed in 1986, its fate was probably sealed...
...At the end of the Cold War, the paqueteros thought they saw the unambiguous vic- tory of "free markets" and "democracy" over state intervention and authoritarian/totalitarian governments...
...This wasand remainsa volatile mixture: on the one hand, greater democracy and participation...
...XXVII, No.3 (November/December, 1993...
...He must make good on his inaugural promises to institute a progressive set of alternatives to the VAT...
...1 6.For World Bank findings see "Venezuela: sistema educativa es caro e ineficiente," lnterPress Service, December 29, 1993...
...42 mil docentes han desertado de Ia profesion," El Nac,onal, January 15, 1994...
...The VAT is a frankly regressive tax, which operates just like a sales tax...
...7. See Steve ElIner, "A Tolerance Worn Thin: Corruption in the Age of Austerity," NACLA Report on theAmericas, Vol...
...As investor confidence flagged, the Central Bank of Venezuela estimates that private investment fell from 24.1% of GNP in 1982 to 17.2% of (a lower) GNP in 1986, and that nearly $20 billion left the country over that period as capital flight.'2 Venezuela, of course, was not alone in its mountain of debt...
...This "paradigm crisis" may become a creative one as decentralization creates a new sense of the public sector...
...These reforms have opened the political culture to the participation of outsiders, and have closed the divide between "civil" and "political" society...
...The most dramatic disturbances of this period have become iconographic referVoL XXVII, No 5 MAR/APRIL 1994 23 Fred Rosen is editor of NACLA Report on the Americas.REPORT ON VENEZUELA An increase in bus fares sparked nationwide riots in February, 1989 Above, people board a bus in Caracas...
...ISI was an attempt to develop the country's internal market...
...In a country where the majority of the population is poor, and with socialism off the agenda for now, there are currently three positions in the national debate...
...4F and 27N refer to the two unsuccessful coup attempts-the intentonas-led by middle-level, "populist" officers, on February 4 and November 27, 1992...
...Though the uprisings were quickly put down by the loyal officer corps, and the coup leaders remain in jail, most Venezuelans agree that the intentonas-especially 4F-proved successful in slowing down the country's neoliberal economic reforms...
...on the other, fewer social rights and protections...
...The free marketfor all its dynamismdestroys those bonds...
...More than fluctuating oil prices," says economist Luis Zambrano, "it's the excessive external debt, incurred in the 1970s, that forms the origin of Venezuela's economic problems...
...According to former industry minister NaIm, the old ISI model "did create an industrial base, but it also created fertile conditions for major economic distortions to emerge...
...The conflation of the problem leads, of course, to conflated solutions...
...They have steadily declined ever since, and the daily struggle to make ends meet is becoming more and more difficult for the vast majority of the population.3 Meanwhile, the conspicuous consumption of a small minority of Venezuelansmany enriched by the country's recent marketoriented reformsprovides a telling contrast...
...This is the position taken by most of the socialists and dissident social Christians in the coalition around Caldera, and by his likely congression- al allies, Causa R. If some version of a social- democratic strategy does emerge from the Caldera Administration, the model will inevitably draw upon the past "structuralist" ISI models: incorporation of the poor through wage-led growth, development of the internal market, and selective protection of nationally critical firms and industries...
...Its "trickledown" assumption was that "social equity was a subproduct of economic growth...
...All the models which involved some state intervention werein a neoliberal sleight-of-handlumped into one, and that one model was declared a failure...
...Falling oil prices, together with rising international interest rates, transformed Venezuela's debt problem into a crisis...
...9. Ricardo Hausmann, "Venezuela," in John Williamson, ed., Latin American Adjustment: How Much Has Happened...
...Crumbling, dangerously overcrowded public schools have become emblematic of the bloated, inefficient state...
...The other major response to the crisis was the neoliberal paqueteofficially called "el gran viraje," the great turnaroundintroduced by the government of Carlos Andres Perez in 1989...
...9 As state resources declined in the 1980s, the traditional parties lost credibility when they could no longer perform the only function expected of them: delivering the goods...
...Washington, D,C.:lnstitute for International Economics, 1990), p. 224...
...The poor have let it be known by "disturbing the peace"as the wealthy always do by sending "market signals"that it will not be easy to balance the budget on their backs...
...In the old "rentier political model," the centralized state-frequently through its agents, the major political parties-distributed the national rent, and promoted national industrial development...
...Now, however, per- haps linked to the country's unrest, the paquete's short spurt of impressive economic growth has come to a grinding halt...
...28 But if painful transitions are to pay off in a democratic setting, the pain must be perceived as somehow shared, and be accompanied by some perceptible benefits...
...Luis Zambrano, "Sobre lo que hemos hecho," p. 97...
...From right to left, the first position calls for the imposition of a neoliberal program a Ia Pinochet or Fujimori...
...The population, following a decade and a half of declining incomes, responded violently...
...As reforms are devised, floated and put into practice, the roles of the state, private capital, local selfMost Venezuelans had been so hard hit by the declining incomes of the 1980s that even the slightest increase in prices stretched their family budgets and political toleranceto the breaking point...
...His announcement to the world was that "painful transitions toward free markets pay off, and that a democratic regime can indeed survive the unpopu- lar decisions required by economic reforms...
...The paqueteros had always said that their reforms would exacerbate some hardships in the short run, but that the resulting economic growth would benefit everybody in a few years' time...
...3. Victor Fajardo, "Colapso del Paquete EconOmico: Causas, Efectos y Perspectivas, Venezuela 1989-92," Cuadernos del CENDES (Caracas), No...
...Spontaneous demonstrations and scuffles also broke out throughout the country as merchants attempted to collect the country's new value-added tax (VAT) which, on most goods, amounted to a 10% sales tax...
...and the broadening of that market through integration with other economies at similar NACIA REPORT ON THE AMERICAS 24REPORT ON VENEZUELA levels of development...
...The explanations unique to Venezuela tend to revolve around the way the country had become accustomed to living off its oil rents, and the consequent creation of a "rentier mentality"-the generalized expectation of living off someone else's work and investment...
...According to this simplistic reading of events, Germany, (Thatcher's) England and Japan all rose to power on the backs of autonomous private investors supported by states which only set the rules of the game and then went away, while Poland, (the Labor Party's) England and Venezuela remained bogged down in the old state-run, inefficient economies...
...Getting prices right meant leaving things to the market: eliminating exchange-rate controls, interest-rate controls and most private-sector price controls...
...More to the point, in a rentier setting, it created fertile conditions for the emergence of a state based on patron-client relationsthe clientistic state...
...8 Neoliberal economist Ricardo Hausmann's critique of this brand of "populism" is not without justification: "Citizens had a positive claim on the state to a decent standard of living, but no duties to contribute to collective spending....populism amounted to entitlements without duties, absolute rights with no trade-offs, redistribution without a budget constraint...
...94-95...
...19.Victor Fajardo, "El colapso del paquete econOmico," p. 51...
...21 .Ruth de Krivoy, "The Changing Role of Central Banks in Latin America: the Venezuelan Case," address to the Council of the Americas, New York, N.Y., November 10, 1993...
...The paquete sought to stabilize the economy at the same time as it opened and privatized it through restructuring...
...The model will recognize private capital as the motor force of the economy, but a force to be guided and reined in by a democratic, decentralized public sector...
...2 Social decomposition, in turn, may be linked to deteriorating living standards...
...7 tence of Venezuela's economic crisis, which have more or less credibility depending on one's social situation and ideological predisposition: dependency on oil and consequent lack of planning...
...More than anything else, it was the debt crisis of the 1980s that signalled the exhaustion of the rentier state...
...and Jere R. Behrman, "Investing in Human Resources...
...Two reform movements having dramatically different consequencesfound support within the government: decentralization of the political system, and privatization and deregulation of the economy...
...Vol XXVII, No 5 MAR/APRIL 1994 27REPORT ON VENEZUELA Overcrowding and shrinking resources characterize the public sector...
...Not only in Venezuela, but throughout Latin America, says Jorge Castafleda, obvious historical distinctions were lost "in the ideological fervor of the early 1 990s...
Vol. 27 • March 1994 • No. 5
