Venezuela 34 years after Chavez's rise to power

By: Beatrice E. Rangel - 03/02/2026

Exactly 34 years ago, an obscure lieutenant colonel initiated the process of destroying what, until then, had been considered the most prosperous economy and the most stable democracy in Latin America. The efficiency with which this destructive project was carried out has drawn the attention of the entire world.

But the event was perhaps the inevitable consequence of the rentier culture of the Venezuelan elites. The country, like all nations born from what is now Spain, shares the historical condition that subsoil wealth belongs not to the landowner but to the state. This is because the institutions established by the then Crown of Castile and Aragon were feudal. And within a feudal system, land is the element that determines the relative power of the rulers. Since the colonization process was based on the principle of increasing Spain's wealth so that it could act freely in a European context where the formation of nation-states involved many wars of conquest and occupation, this principle ensured the political preeminence of Spain and its representatives. Spanish rule in Latin America lasted approximately three centuries, spanning from the initial conquests in the late 15th and early 16th centuries to the independence movements that largely concluded between 1810 and 1824. This period fostered a rentier culture in the region, where leaders extracted the region's resources to send to the crown and enrich themselves. A pan-regional elite emerged, deriving its livelihood from extracting rents from the state.

Independence did not change the model, since the rentier model financed the processes of separation from the metropolis. The region continued within a system that clearly hindered the development of each nation's economic potential.

In the case of Venezuela, the 1914 explosion of the Zumaque I oil well brought forth the greatest subsoil wealth in the world. Oil became the driving force of development and began to transform the sleepy agricultural country that depended on exports of coffee, cacao, and cattle. The state was poor and sustained itself through taxes, tariffs, and participation in gold and diamond mining. But from that moment on, the Venezuelan state grew rich and powerful, becoming the engine of modernization and growth. Thus, the well-being of any Venezuelan leader depended on control of the state.

A business class emerged that, financed by oil and protected by a tariff wall, had no need to innovate, much less compete.

The entire country became a byproduct of oil. And while the population remained below ten million, oil revenues were sufficient to finance urbanization and the development of public services, including universities. But when the population reached 20 million, it became clear that without a change in the economic model, the burgeoning middle class was headed for impoverishment.

Discontent arose, and with it came the election of Carlos Andrés Pérez, who was seen as the person who would take oil prices to stratospheric levels, thus resolving the stagnation. Pérez, however, had spent years out of power studying the secrets of development and was convinced that without a change in the model, Venezuela would never become a developed nation. But the change in model had the slight drawback that it would force businesses to create wealth; political parties to empty the public administration of patronage and make it efficient; and the military to concentrate on combating organized crime. The negative response was swift. An alliance formed between business leaders, the military, and politicians to get rid of the government, which, instead of jeopardizing the wealth of future generations, demanded a radical change in their behavior to achieve development. And from within the ruling party emerged the conspiracy that paved the way for Hugo Chávez to seize power. Later, when the situation worsened instead of improving, those same elites tried to get rid of Chavez in 2002, but the lack of statesmanship led the uprising to end with Chavez's return and the handover of Venezuela to Fidel Castro's strategy, who, like Chavez, destroyed Cuba, even though the feat took him longer.

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