Economic policy of the Hugo Chávez administration
From his election in 1998 until his death in March 2013, the administration of the late Venezuelan President Hugo Chávez proposed and enacted populist economic policies as part of his Bolivarian Revolution.
In the early 2000s when oil prices soared and offered Chávez funds not seen since the beginning of Venezuela's economic collapse in the 1980s, Chávez's government became "semi-authoritarian and hyper-populist" and consolidated its power over the economy in order to gain control of large amounts of resources.[1][2] Domestically, Chávez used such oil funds for populist policies, creating the "Bolivarian missions", aimed at providing public services to improve economic, cultural and social conditions.[1]
As Chávez's successor Nicolás Maduro began to increase domestic spending after the oil price collapse, high inflation, currency controls, an unfriendly environment with private businesses, as well as the risk of default, prevented the entrance of stronger foreign currencies into Venezuela.[3] Previously, the Chávez government turned to China to fund its overspending on social programs.[3] Despite warnings near the beginning of Chávez's tenure in the early 2000s,[1] his government continuously overspent in social spending and did not save enough money for any future economic turmoil, which Venezuela faced shortly before and after his death.[2][4] Other industries suffered as a result of the over-reliance on oil, with the share of manufacturing in GDP dropping from 17.4% in 1998 when Chávez took office to 14.2% in 2012.[5] As a result of Chávez's overspending and policies such as price controls, there were shortages in Venezuela and the inflation rate grew to one of the highest in the world.[6][7][8]