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Venezuela under Hugo Chávez and Beyond
MGT-321: Intro to International Business
Instructor’s Name: Dr. Ganesh Dash
Question 1: Under Chávez’s leadership, what kind of economic system was put in place in
Venezuela? How would you characterize the political system?
Hugo Chavez’s power was characterized by authoritarian socialism policies. A deep
recession was being experienced by Venezuela before a charismatic paratrooper named Hugo
Chavez assumed the presidency after the elections held in 1998. He was a former military
officer, went to jail for attempting to erect a coup d'é·tat, and campaigned to fight against
corruption, social injustices, economic mismanagement, and the “harsh realities of global
capitalism. He mentioned that the economic history of Venezuela was the worst state in recent
history. His economic policy was mainly socialism where he intended to deliver an equitable
distribution of wealth to poor communities. He took control of the economy. Socialism is a
populist economic and political system based on public ownership of the means of production
(Kenton, 2019). The three main socialism policies that Chavez enacted when he assumed office
were (1) the widespread nationalization of private industry specifically the oil industry, currency
and price controls, and the expansion of poorly planned welfare programs (Di Martino, 2019).
The Venezuelan government owned majority of the factors of production with the noble intent of
achieving equality and solidarity among the constituents. Di Martino (2019) further opined that it
was socialism – not cronyism, corruption, falling oil prices, or US sanctions – that caused the
looming crisis in Venezuela.
The Venezuelan parliament that was mainly comprised of his political allies gave Chavez
the power to legislate by decree. Chavez was given the power to control the important branches
of the government that enabled him to enact and manipulate laws that restricted Venezuelan
freedoms and civil rights and his actions catapulted to the dissolutio...
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