Venezuela

VENEZUELA IS A resource-rich country in South America. Because of large deposits of petroleum and other minerals, the country is among the wealthiest in the region. From the 1920s through the 1970s, Venezuela enjoyed great prosperity. Like much of Latin America, the country suffered economically through the “lost decade” of the 1980s and into the 1990s.

Indeed, by 1995, the Venezuelan economy was on the verge of collapse. By 2005, high world oil prices again led to economic growth in the South American nation. Despite this overall wealth, however, much of the country's population has not benefited economically or socially. Economic and social development in Venezuela has been uneven, and poverty and inequality are widespread. Historically, wealthy Venezuelans and foreign companies have profited most from the coun-try's natural wealth.

In a 2002 report, the World Bank claimed that Venezuela had suffered through a “vicious circle” for at least 30 years of weak governance, inefficient public-sector expenditures, and economic mismanagement that have led to poor economic performance and growing poverty. Statistics for the 1990s and early 2000s demonstrate the extent to which poverty and inequality have grown in Venezuela because of the decline in economic growth. Between 1990 and 2002, real wages in the country fell by 25 percent. Unemployment grew by four percent to a rate of around 14 percent. The rate would be even higher if it were not for the fact that many Venezuelans participate in the informal economy.

The number of poor Venezuelans who earned less than $2 per day increased from 32 percent of the population in 1991 to 49 percent in 2000. The number of those living in extreme poverty and earning less than $1 per day grew in the same period from 12 to 24 percent. By 2000, the richest 20 percent of Venezuelans earned 55 percent of the national income, while the poorest 20 [Page 1135]percent earned only three percent. Several characteristics can be found among the poor in Venezuela. The majority of the poor live in urban areas, although poverty can actually be more intense in rural areas. Households headed by females are more likely to be poor than those headed by men. Many poor Venezuelans are old. At the same time, poor families on average have twice as many children as the middle and upper classes. Poor Venezuelans tend to be those with the least education. Furthermore, Venezuelans of African or Native American descent are more likely to be poor than the rest of the population.

One concrete illustration of poverty in Venezuela is the widespread presence of shantytowns, known as ranchos, in the country's cities. In particular, the hillsides surrounding the capital city of Caracas are lined with the often makeshift houses of the poorest Venezuelans. Housing in the ranchos often features poorly constructed homes made of low-quality materials. Conditions in the overcrowded ranchos are poor, lacking such basic services as water and sewers. Residents sometimes “pirate” electricity and water, while sewage collects on the ground. In recent years conditions in some of Venezuela's ranchos have improved, with residents receiving certain basic services and building sturdier homes. However, progress has been uneven, as the ranchos are still marked by unemployment and crime.

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