A Timeline of Venezuela’s Economic Rise and Fall

Oil prices crashed, and exporting countries came under economic strain, after Saudi Arabia unleashed pent-up production to punish OPEC members that had contributed a glut in the oil market by producing in excess of their quotas.

With Venezuela’s oil-dependent economy in a tailspin, the newly elected administration of Carlos Andres Perez implemented IMF-backed austerity measures that included the removal of gasoline subsidies that were long considered a birthright in the oil-rich country. Riots broke out across the country and lasted a week, and the government responded by imposing martial law. Hundreds, if not thousands, died in the rioting, crippling Perez’s political capital and inspiring Chavez to plot an overthrow.

Two coup attempts in 1992 further weakened Perez and set the stage for his impeachment a year later. Hugo Chavez led the first attempt and, while in prison, inspired the second attempt months later. Though unsuccessful, the events thrust Chavez into the spotlight. Decked out in his trademark red paratrooper beret, he was allowed to go on national television at the end of the first coup to call on his followers to surrender. He said he had failed only "por ahora" ("for now"), a phrase that later became a rallying cry.

Perez was impeached in 1993 for embezzling from a presidential discretionary fund. Shortly afterward, Chavez and other insurgents were pardoned to soothe unrest while a domestic banking crisis hammered the economy.

Fresh out of jail, Chavez traveled to Cuba to meet President Fidel Castro for the first time in what would evolve into the island nation’s most relevant political alliance. Chavez’s rise to power coincided with the collapse of Cuba’s main patron, the Soviet Union, which led to economic hardship. The alliance was a huge victory for Castro, who had been attempting to gain influence in Venezuela since the 1960s, when Cuba supported insurgent groups in the oil-rich country.

Oil prices tumbled in 1998 in the wake of the Asian financial crisis, worsening Venezuela's economy in an election year.

Chavez’s bare-knuckles presidential campaign demonizing Venezuela’s two traditional political parties was well received in a country weary of endemic corruption and economic decline. He won with 56 percent of the vote and began his term in 1999 with a strong mandate for change.

One of his first moves as president was to visit fellow OPEC nations and promote unified action to reduce global oil supplies and lift depressed prices. Chavez visited Saddam Hussein in Iraq during the OPEC tour, drawing ire from the U.S. and positioning himself as one of Washington’s most vocal critics.

During Chavez’s first months in office, when low oil prices made his government reliant on international capital markets, he often displayed pragmatism and political moderation. During a trip to the U.S., he rang the closing bell at the New York Stock Exchange, and his administration even held formal talks with the IMF until oil prices rose enough to let the government rule out the need for any financial assistance.

Venezuela held a referendum to approve a new constitution extending the president’s term to six years and reducing Congress to a unicameral National Assembly. Chavez was re-elected in 2000 under what he called a new Magna Carta, and members of his MVR party won a majority in the nascent National Assembly. Chavez’s leftist allies in Ecuador and Bolivia would later install their own constituent assemblies to weaken traditional political parties.

The rewriten constitution gave Chavez an opening to glorify his hero, Latin American liberator Simon Bolivar, by tacking the word "Bolivarian" onto the name of the country, which became the Bolivarian Republic of Venezuela. Chavez went on to tinker with the country’s flag several years later, adding an eighth star and replacing a subdued, almost pensive horse with a more muscular colt sprinting at full speed——this time to the left, instead of right.

Chavez strengthened ties with Fidel Castro by providing Cuba with 53,000 barrels a day at cut-rate prices. Years later, when oil prices were on a tear, Chavez started offering oil to Caribbean nations at preferential terms under a program known as Petrocaribe to gain influence in the region. He went as far as accepting local products such as bananas or sugar in exchange for oil.

Distrustful of state-owned oil company PDVSA’s top management, Chavez began stacking the board with loyalists, prompting an outcry from the company’s existing management. Venezuela’s biggest business federation of labor unions called a general strike in April to support the oil company’s autonomy. This happened at a time when members of the military were becoming uncomfortable with Chavez’s growing ties to Cuba. Then an opposition march on April 11 turned violent after it changed course and headed toward the presidential palace, where Chavez supporters were holding their own rally. Shots broke out, and by evening 19 people were dead, including both supporters and opponents of the government. Prominent businessman Pedro Carmona, who had helped organize the general strike, named himself president, detained Chavez, and dissolved the National Assembly. But much of the military and the population were still with Chavez, and a countercoup was quickly launched. Chavez was restored to office shortly after his ouster, and Carmona fled the country. Chavez took advantage of the episode for years to effectively paint his political opponents as terrorists and coup-mongers.

Opposition to Chavez remained strong at PDVSA, even after the coup, with career professionals accusing the government of undermining the company’s history of meritocracy. Military officers who had been dismissed for participating in the April coup began organizing street protests, and a general strike began on Dec. 2 to demand that Chavez resign. After Chavez stood firm, he eventually regained control of the oil company and gradually restored production. Chavez then launched a campaign to blacklist oil workers who had participated in the strike from working at PDVSA or its foreign partners in Venezuela. The coup and the oil strike also pushed Chavez farther from the U.S. and closer to Washington’s political rivals, including Cuba and Iran. Venezuela’s oil production never fully returned to pre-strike levels of 3.3 million barrels a day.

The government pegged the local currency to the dollar and set price controls for basic goods in an attempt to contain capital flight and inflation following the two-month strike. The result was a booming black market for dollars and shortages of the basic goods being sold at a loss under price controls.

Chavez started plowing rising oil revenue into a host of social outreach programs, known a missions, to provide education, medical services and subsidized food to low-income communities. The hugely popular programs helped Chavez win re-election campaigns and improved living standards. The spending was ultimately unsustainable and poverty returned with a vengeance after oil prices crashed in 2014.

Political persecution accelerated after electoral authorities published a list of more than 2.4 million Venezuelans who had signed a petition to recall Chavez. Tascon’s List, named after a ruling party lawmaker who was instrumental in making it public, was used to deny government jobs, benefits and even documents for the opposition's rank and file. The recall referendum went ahead, and Chavez prevailed. While international observers including the Carter Center endorsed the results as fair, opposition leaders claimed fraud and went on to boycott elections for governors and mayors later that year, giving Chavez’s party near-total control of state governments.

Fresh off a landslide re-election victory and with an oil boom bankrolling social programs at home and oil diplomacy abroad, a confident Chavez traveled to the United Nations and positioned himself as Washington's leading critic among global leaders. Speaking a day after George W. Bush, Chavez grabbed the international spotlight by insulting Bush and accusing him of perpetuating a system of global domination. "Yesterday, the devil was here, right here, and it still smells like sulfur,'' Chavez said.

The Chavez administration began forcing foreign oil companies to accept higher taxes and smaller, non-controlling stakes in oil projects amid what it described as an oil nationalization. Exxon Mobil Corp. and ConocoPhillips refused to accept the new terms and went to international arbitration, while other producers that included Chevron Corp. and Norway’s Equinor ASA reached deals with the government. The following year, he nationalized CANTV, Venezuela's biggest phone company, and the utility Electricidad de Caracas as his administration moved farther leftward. He quickly focused on other parts of the economy: Venezuela wound up nationalizing more than 1,000 companies during Chavez's 14 years in office. The moves eventually backfired by crippling domestic production and leaving the country more reliant on imports.

Chavez took his first major step at censoring media critics when the government let television station RCTV’s license expire after 53 years. Chavez cited RCTV’s support for the opposition during the 2002 coup as justification for taking it off the air.

Chavez cruised Venezuela’s countryside in an open jeep with Oscar-winning actor and fellow Bush critic Sean Penn. Chavez’s initial success at using the oil windfall to reduce poverty made him popular throughout the developing world and a darling among left-wing celebrities, including Danny Glover, Oliver Stone and Michael Moore.

In his first electoral defeat in nine years, Chavez lost a referendum that would have amended the 1999 constitution to abolish presidential term limits and end the central bank’s autonomy. University students who were unaffiliated with Venezuela’s opposition parties played a crucial role in defeating the initiative. Chavez did manage to remove term limits through a more limited referendum approved by voters in 2009.

The global financial crisis sent oil prices plunging at a time when Venezuela’s influence in OPEC had faded. Venezuela’s oil industry had never fully recovered from the extended oil strike; for years, the country had been producing below its official production quota. Venezuela regularly called for larger production cuts than other OPEC members were willing to embrace.

Russia offered Venezuela $1 billion in credit to purchase weapons in a sign of its growing influence in Caracas.

Chavez fired his electricity minister amid a mounting crisis in the country’s highly subsidized power industry, which had been suffering blackouts. Sporadic power outages in the capital and other major cities were increasing just as the worst drought in 50 years was curbing output at the nation’s biggest hydroelectric dam, aggravating the crisis.

Chavez announced that Cuban doctors had removed a cancerous tumor from his body just a week after government officials denied reports that he had cancer. Chavez went on to undergo four rounds of chemotherapy in Cuba and Venezuela, and in October he declared he had beaten cancer.

Venezuela surpassed Saudi Arabia for the first time in proven oil reserves, in a ranking published by OPEC after the organization started including heavy grades of oil from the Orinoco region. Despite the vast resources, Venezuela’s production remains a fraction of Saudi Arabia’s.

Chavez began campaigning against Henrique Capriles at a time that polls showed the two contenders in a dead heat. Saying he was "totally free" of cancer, he started holding campaign rallies across Venezuela and hosting foreign leaders to show he remained fit for office. Chavez ramped up social spending during the campaign, helped by billions of dollars in oil-backed loans from China, and won by a comfortable yet narrower margin than in previous elections. Capriles accepted the results and rejected claims of fraud by some members of the opposition. Still, Capriles said the election wasn’t balanced, due to Chavez’s institutional advantages.

Chavez died at a military hospital in Caracas. A sobbing Nicolas Maduro, Chavez's chosen successor, announced he would carry out Chavez’s legacy of socialism for the 21st century.

Maduro defeated Capriles by the narrowest margin for a Venezuelan presidential election since 1968 and inherited a country crippled by galloping inflation and shortages of consumer goods. Unlike his response to the previous election, Capriles refused to concede and demanded a recount, citing irregularities he said had impacted hundreds of thousands of votes. The disputed results triggered protests that turned violent and claimed seven lives.

Venezuela’s central bank stopped regularly releasing economic data, including economic growth, inflation and public spending. The economy has shrunk by more than 50 percent since 2013, according to the opposition-controlled National Assembly, and gets more dysfunctional by the day. Annual inflation has surged into the hundreds of thousands of percent, by some measures. Others see it climbing into the millions.

Leopoldo Lopez, an opposition leader and former mayor of a Caracas municipality, turned himself in to authorities who accused him of arson and inciting crimes for his role in protests that had broken out on Feb. 12 against rampant crime, inflation and shortages of food and medicine. He was the highest-profile opposition leader to be detained, and the protests intensified with dozens killed during the first few months of the year. Lopez remained under arrest, blocking him from participating in any elections, which drew criticism from the international community and undermined support for Maduro’s increasingly autocratic administration.

The opposition won a majority of the National Assembly as recession and a collapse in the currency turned the public against Maduro. The following year, the National Assembly called for a recall referendum and a constitutional amendment to shorten term limits in an effort to remove Maduro from office.

Amid rising turmoil after electoral authorities derailed a recall vote against Maduro the previous year, Maduro called for a Constituent Assembly to rewrite the constitution in a blatant effort to undermine the opposition-controlled National Assembly.

With the economy in disarray and oil production collapsing, Maduro said he would seek a restructuring of foreign debt at a time when U.S. sanctions against Venezuela made it difficult to negotiate with creditors. The bonds went into default.

Maduro’s election to a second six-year term was marred by the jailing and disqualification of opposition politicians and had the lowest turnout for a presidential election in decades. Most of the opposition joined a boycott of the vote, while government workers were coerced to turn out amid reports of fraud. The result was dismissed as illegitimate by the U.S., the European Union and the 14-nation Lima Group that had been formed to help restore democracy to Venezuela. More than 60 nations refused to recognize the results, setting the stage for National Assembly President Juan Guaido to declare himself the head of state when Maduro’s first term ended in January 2019.

Two drones packed with explosives were launched during a military parade in Caracas in an alleged attempt to assassinate Maduro. One exploded near Maduro, who was not harmed. Still, hundreds soldiers on parade panicked and fled in an episode that embarassed the regime. Maduro blamed opposition leaders for the attack and claimed that "hired assassins" had been trained in Colombia and offered $50 million to kill him. The attack came three months after the arrests of some high-ranking members of Venezuela’s armed forces who were accused of plotting a coup against Maduro ahead of the presidential election.

The number of Venezuelans fleeing escalating crime, hyperinflation and food shortages reached 3 million in what became the world’s largest migration crisis in recent years. The mass exodus has created social tensions in neighboring countries, including Colombia, which is hosting more than a third of the migrants.

Guaido declared himself interim president at a rally in Caracas just weeks after Maduro began his second term. Claiming that Maduro was elected in a flawed election, Guaido invoked a constitutional amendment allowing the head of the legislature to lead a caretaker government until new elections can be held. The U.S., Canada and Brazil swiftly recognized Guaido as the legitimate head of state, while Russia, China and Cuba voiced support for Maduro.

Guaido attempted to bring humanitarian aid from neighboring countries in what Maduro lambasted as an attempt to overthrow his government. A violent standoff ensued on the Colombian border and trucks full of supplies caught fire in the melee. Maduro shut the country's borders to block U.S.-sponsored attempts to deliver the aid. Sir Richard Branson organized a concert that drew more than 300,000 in the Colombian town of Cucuta ahead of the aid mission, bringing more international attention to the conflict.

Guaido called for the military to support an uprising and break a months-long impasse to "definitively'' remove Maduro. Military defectors freed Guaido's mentor Leopoldo Lopez from home arrest and they jointly led protests outside a military base in Caracas that turned violent. The U.S. was quick to support the actions while other countries including Spain and Mexico cautioned against potential bloodshed. Maduro said he had the full support of the military.