Blackwell Reference Online

Extract

The Caracazo , also known as 27 F, was a spontaneous rebellion that began on February 27, 1989 in Venezuela's capital city of Caracas and which lasted about five days. The popular revolt – in response to a package of economic measures applied by the government – not only led to the worst state-led massacre in twentieth-century Venezuela, but is also seen by many as the starting point of a mass movement that a decade later brought Hugo Chávez to power. On February 16, 1989, Carlos Andrés Pérez, president of Venezuela's social democratic Acción Demócrata (AD) Party, announced a series of economic adjustments which he referred to as “the Package.” Pérez, sworn in as president just three weeks before in a costly ceremony commonly known as “the coronation,” coordinated the measures with the International Monetary Fund (IMF) as the basic conditions for a US$4.5 billion loan that it was hoped would remedy Venezuela's debt crisis, which followed years of economic boom dependent on petrodollars. Between 1986 and 1988, the country had accumulated an external debt of $7 billion. In the midst of falling oil prices, there were no foreign currency reserves to depend on. The measures Pérez and the IMF agreed upon seem to have been drawn from a Chicago Boys' textbook: the termination of price controls, the discontinuation of subsidies, and the deregulation of the currency rate, a macroeconomic ... log in or subscribe to read full text