Blackwell Reference Online

Extract

When Hugo Chávez assumed the presidency in 1999, Venezuela was in a serious longstanding crisis. Capital flight and deindustrialization had led to the closure of thousands of production sites since the early 1980s. The goal became to diversify the production of the largely oil-dependent economy, begin the further processing of natural resources, and transform as much property and means of production as possible into collective forms of ownership and management. Beyond the oil revenue, the prospects looked bleak as the new government set out to build what it defined as a “humanistic and solidarity economy,” putting Venezuela on the path to a “socialism of the twenty-first century.” Democracy was central to this agenda. In 1998 only 700 cooperatives existed, so to fulfill the goal of building a social and solidarity economy, the government in 2001 simplified the creation of cooperatives. They were made exempt of institutional charges and, if they fulfilled the statutory framework, income tax. Credits at favorable terms were handed out through specially established state banks and funding institutions. Small cooperatives could even get interest-free loans. Cooperatives also received preferential loans to buy abandoned companies. These conditions led to a boom in the foundation of cooperatives. At the end of 2006, 37,552 working cooperatives were officially registered. However, the ... log in or subscribe to read full text